Free Minnesota Real Estate Practice Exam

Q1.To protect against wire fraud at closing, a best-practice approach is to:

• A.Send wiring instructions via text message instead of email
• B.Use only cashier's checks for all transactions above $10,000
• C.Request that the title company encrypt all emails with a password
• D.Verbally confirm wiring instructions by phone using a number independently obtained — not one from the email

Q2.Under Minnesota law, a real estate salesperson receives an earnest money check from a buyer. What must the salesperson do with the funds?

• A.Deposit the funds into the salesperson's personal checking account until closing
• B.Hold the check uncashed in a safe place until instructed by the buyer
• C.Turn the funds over to the supervising broker, who must deposit them into a separate trust account
• D.Deposit the funds into the listing broker's operating account to ensure availability

Q3.A buyer's attorney discovers that a parcel of residential property in Hennepin County is registered Torrens land. The seller's title evidence consists of a traditional abstract of title. Which of the following statements BEST describes the legal situation in Minnesota?

• A.The abstract is sufficient evidence of title for Torrens property because both systems are recognized interchangeably under Minnesota law.
• B.An abstract of title cannot serve as the primary evidence of title for Torrens property; the seller must provide a current Registered Property Abstract (RPA) or the Certificate of Title issued by the court-appointed examiner of titles.
• C.The buyer may rely on the abstract alone, provided the title insurance company agrees to insure over any Torrens-related defects.
• D.Torrens property automatically converts to abstract property upon sale, so the abstract becomes valid evidence of title at closing.

Q4.Under Minnesota Statutes § 82.67, a broker intends to practice designated agency in a transaction where two of the broker's affiliated salespersons each represent opposite parties. Which of the following is the broker's primary obligation before proceeding with designated agency?

• A.The broker must obtain written informed consent from both the buyer and the seller acknowledging the designated agency relationship and its inherent conflicts.
• B.The broker need only disclose designated agency verbally at the time the purchase agreement is signed, as written consent is optional under Minnesota law.
• C.The broker must withdraw from the transaction and refer both parties to outside brokerages to avoid any conflict of interest.
• D.The broker must automatically convert the relationship to dual agency without obtaining additional consent, since designated agency is a subset of dual agency.

Q5.Under the Truth-in-Lending Act, which transaction would require a borrower to receive a three-day right of rescission?

• A.A purchase money mortgage on a primary residence
• B.A home equity line of credit on a primary residence
• C.A construction loan for a primary residence
• D.A commercial real estate loan secured by business property

Q6.Which federal law requires lenders to provide borrowers with a Good Faith Estimate of settlement costs within three business days of receiving a loan application?

• A.Truth in Lending Act (TILA)
• B.Fair Housing Act
• C.Real Estate Settlement Procedures Act (RESPA)
• D.Equal Credit Opportunity Act (ECOA)

Q7.A landlord refuses to rent to a family with children under 18 years old. This practice violates which provision of the Fair Housing Act?

• A.Familial status discrimination
• B.Disability discrimination
• C.Age discrimination
• D.Sex discrimination

Q8.Which federal environmental law created the Superfund program to clean up contaminated sites?

• A.Clean Air Act
• B.Clean Water Act
• C.Safe Drinking Water Act
• D.CERCLA

Q9.Under RESPA Section 8, which of the following would constitute an illegal kickback arrangement that could result in criminal penalties for a real estate licensee?

• A.Accepting a referral fee from another licensed real estate agent for sending a client
• B.Receiving a commission split from a cooperating broker in an MLS transaction
• C.Getting paid marketing fees from a title company in exchange for referring clients to that company
• D.Earning a bonus from their employing broker for exceeding annual sales goals

Q10.A Minnesota real estate broker receives an earnest money check from a buyer on a Friday afternoon after banking hours. Under Minnesota Rules governing trust fund handling, what is the broker required to do?

• A.Deposit the funds into the broker's general operating account until the transaction closes.
• B.Hold the check uncashed until the offer is accepted and then deposit it promptly.
• C.Deposit the earnest money into a separate trust account by the close of the next business day after receipt.
• D.Return the check to the buyer and require a wire transfer instead.

Q11.Under Minn. Stat. § 507.02, which of the following conveyances of Minnesota homestead property would be VALID without the non-titled spouse's signature?

• A.A warranty deed conveying the homestead from the titled spouse to their adult child as a gift.
• B.A deed conveying the homestead from the titled spouse pursuant to a divorce decree signed by both parties.
• C.A quitclaim deed from the titled spouse to a third-party buyer in an arm's length sale.
• D.A mortgage on the homestead executed only by the titled spouse to secure a home equity loan.

Q12.Under Minnesota law, which of the following conduct by a real estate licensee would violate the standards of conduct established in Minnesota Statute Chapter 82?

• A.Recommending that a buyer obtain a home inspection before closing
• B.Knowingly making a false statement about a property's condition to induce a buyer to purchase
• C.Disclosing to both parties that the licensee is acting as a dual agent with written consent
• D.Presenting a low offer to the seller along with the buyer's reasoning

Q13.A broker is supervising a transaction in which the seller has agreed to pay the buyer's closing costs up to 3% of the purchase price. At settlement, the HUD-1/Closing Disclosure shows the actual closing costs are only 1.8%. Under RESPA's prohibition on unearned fees and kickbacks, what is the correct treatment of the unused seller credit?

• A.The unused credit must be reduced to match actual costs; the seller cannot pay more than the buyer's actual documented closing costs.
• B.The buyer may pocket the remaining 1.2% as cash back at closing because it was a negotiated seller concession.
• C.The broker may retain the unused credit as a transaction coordination fee without further disclosure.
• D.The unused credit automatically rolls into an escrow reserve account held by the lender.

Q14.Under Minnesota law, if a married person acquires real property during the marriage using funds that are clearly traceable as that spouse's separate (non-marital) property, how is the property classified upon divorce?

• A.It is automatically marital property because it was acquired during the marriage.
• B.It may be classified as non-marital property if the separate-property source is properly documented and traced.
• C.It is always divided equally between spouses regardless of the source of funds.
• D.It is classified as marital property unless a prenuptial agreement specifies otherwise.

Q15.In Minnesota, a general contractor who has not been paid for work performed on a residential property wishes to protect its claim against the property. Under the Minnesota Mechanic's Lien Statute, within what period must the contractor generally record a lien statement with the county recorder after last providing labor or materials?

• A.90 days
• B.30 days
• C.180 days
• D.120 days