Free Montana Real Estate Practice Exam

Q1.An amendment to an already-signed purchase contract is legally effective when:

• A.The listing agent verbally confirms the change to the buyer's agent
• B.All parties sign the written amendment
• C.The buyer signs first — the seller's signature is not needed for amendments
• D.The escrow company receives a copy of the proposed change

Q2.Radon gas is a naturally occurring radioactive gas that can accumulate in buildings. Which of the following statements about radon and real estate transactions is MOST accurate under federal guidelines?

• A.The EPA requires sellers to test for radon and remediate before listing any property
• B.Radon testing is federally mandated for all residential sales transactions
• C.The EPA recommends mitigation when radon levels reach or exceed 4 picocuries per liter (pCi/L)
• D.Radon is only a concern in commercial properties and is not regulated in residential real estate

Q3.Under MCA Title 37, Chapter 51, which of the following activities performed for compensation would MOST LIKELY require a Montana real estate license?

• A.A licensed Montana attorney who, in the course of legal representation, drafts a purchase agreement and earns a legal fee
• B.A resident apartment manager who, as part of their employment, shows vacant units and executes leases for the building owner
• C.A business broker who facilitates the sale of a franchise restaurant that includes the assignment of a commercial lease but no transfer of real property
• D.A mortgage loan originator who refers clients to a real estate agent and receives a referral fee

Q4.A designated broker cannot act for 20 days. Which action fits A.R.S. § 32-2127(D)?

• A.Make a written designation lasting no more than 30 days and retain it for one year.
• B.Use an oral designation for 60 days.
• C.Allow an unlicensed person to serve as broker.
• D.Make no record if the absence is temporary.

Q5.Under Montana law governing agency relationships, what is the effect of a Montana licensee acting as a 'dual agent' without obtaining proper written informed consent from both the buyer and the seller?

• A.The transaction is automatically void and must be restarted with proper agency disclosures.
• B.The licensee may face disciplinary action by the Montana Board of Realty Regulation, including possible license suspension or revocation.
• C.The licensee is only required to refund the commission to correct the violation.
• D.There is no penalty provided the licensee discloses the dual agency relationship before closing.

Q6.Under contract law, what is the primary purpose of a contingency clause in a real estate purchase agreement?

• A.To allow the seller to cancel the contract without penalty
• B.To make the contract legally binding on both parties
• C.To provide a condition that must be satisfied for the contract to remain in effect
• D.To establish the closing date for the transaction

Q7.Which amount may fall within Arizona's repair-and-deduct remedy if all other statutory conditions are met and monthly rent is $1,000?

• A.A reasonable $450 qualifying repair
• B.A $700 cosmetic upgrade
• C.Any $1,000 repair without notice
• D.A tenant-caused $450 repair

Q8.Under the federal Truth in Lending Act (TILA) and Regulation Z, a broker who also arranges financing and meets the definition of a 'creditor' must provide a Loan Estimate to a residential mortgage applicant within how many business days of receiving a completed loan application?

• A.1 business day
• B.3 business days
• C.5 business days
• D.7 business days

Q9.After a licensing agency revokes a broker's license, the broker immediately forms a new LLC, obtains a new entity license using a different designated broker, and resumes operations in the same office location. The original broker is listed as a 50% member of the LLC but holds no license. The agency seeks to take action against the new entity. Under typical licensing agency powers, which of the following enforcement tools is most appropriate?

• A.The agency may refuse to issue or may revoke the LLC's entity license on the ground that the revoked broker's continued control and beneficial ownership constitute unlicensed practice and an evasion of the disciplinary order.
• B.The agency has no authority over the LLC because it is a separate legal entity from the individual broker whose license was revoked, and the designated broker holds a valid license.
• C.The agency may only sanction the designated broker for associating with a disqualified individual, but may not act against the LLC itself.
• D.The agency must first obtain a court injunction establishing that the LLC is an alter ego of the revoked broker before it can take any administrative action against the entity.

Q10.Under MCA Title 37, Chapter 51, which of the following correctly describes the continuing education requirement for a Montana real estate salesperson to renew an active license?

• A.Salespersons must complete board-approved continuing education hours each renewal cycle, which must include mandatory Montana-specific topics
• B.Continuing education is only required for salespersons who have held a license for fewer than five years
• C.Montana does not require continuing education for salesperson license renewal, only for broker upgrades
• D.Salespersons may satisfy the continuing education requirement by retaking the original PSI licensing examination

Q11.In Montana, real estate salesperson licenses must be renewed on what cycle?

• A.Every year
• B.Every two years
• C.Every three years
• D.Every five years

Q12.In Montana, a supervising broker discovers that one of their salespersons has been depositing client earnest money into the salesperson's personal checking account rather than the broker's trust account. Under MCA Title 37, Chapter 51, this conduct constitutes:

• A.A minor procedural error correctable without disciplinary action if funds are transferred promptly
• B.Commingling, which is a prohibited practice that may result in license suspension or revocation
• C.Acceptable practice if the salesperson maintains accurate records and the client consents in writing
• D.A civil matter between the salesperson and client that the Board does not regulate

Q13.A seller rejects an offer and no binding contract results. What is the minimum retention period under subsection (I)?

• A.At least one year.
• B.Exactly 30 days.
• C.Always five years.
• D.No retention.

Q14.A Montana broker supervises three affiliated salespersons and discovers that one of them has been verbally agreeing to represent buyers without obtaining a written buyer representation agreement before showing properties. Under Montana's requirements governing licensee activities, which of the following best describes the broker's obligation and the applicable regulatory framework?

• A.The broker must immediately terminate the salesperson's license affiliation and report the conduct to the Montana Board of Realty Regulation, as verbal agreements for buyer representation are categorically void under Montana law.
• B.The broker has a supervisory duty under Montana ARM 24.210.641 to ensure affiliated licensees comply with agency disclosure and written agreement requirements, and must take corrective action — which may include retraining and documented supervision — but is not required to report absent a pattern of willful violations.
• C.The broker has no liability because Montana law places sole responsibility for written agreement compliance on the individual salesperson, and the broker's duty of supervision does not extend to the salesperson's pre-contract activities.
• D.The broker need only ensure written agreements are in place before closing, so the salesperson's practice of showing property without a signed buyer representation agreement does not constitute a violation at this stage.

Q15.Under HUD's 2022 guidance on online advertising, which targeting practice is MOST likely to constitute illegal discrimination?

• A.Targeting users who follow real estate accounts
• B.Targeting users by income level above a stated threshold
• C.Targeting users who searched for "homes for sale"
• D.Targeting users by ZIP code that closely mirrors racial composition (close-proxy discrimination), or by "lookalike audience" trained on a discriminatory seed list