Free Montana Real Estate Practice Exam

Q1.Under Montana law, a real estate salesperson who receives an earnest money deposit from a buyer must ensure the funds are delivered to the employing broker within what timeframe?

• A.Immediately, or as soon as practicably possible
• B.Within 3 business days of receipt
• C.Within 5 calendar days of receipt
• D.By the close of the next banking day

Q2.An easement appurtenant differs from an easement in gross in which fundamental way?

• A.Easements appurtenant are always recorded while easements in gross need not be
• B.Easements appurtenant are permanent while easements in gross are temporary
• C.Easements appurtenant benefit adjacent land while easements in gross benefit a person or entity
• D.Easements appurtenant require compensation while easements in gross do not

Q3.A Montana seller's agent learns during a listing appointment that the property has a history of a leaking basement that was never professionally repaired. Under Montana's property disclosure requirements, the listing broker must:

• A.Disclose this known material defect to prospective buyers, regardless of the seller's instructions to the contrary
• B.Keep this information confidential as part of the fiduciary duty owed exclusively to the seller
• C.Disclose the defect only if the buyer specifically asks about the basement in writing
• D.Recommend that the seller fill out the Montana Seller's Property Disclosure form but take no further action

Q4.Under Montana law, a licensed broker who operates a branch office must ensure which of the following requirements is met regarding that branch location?

• A.The branch office must be registered with the Montana Board of Realty Regulation and supervised by a broker who holds an active Montana broker license.
• B.The branch office may be supervised by any licensee with at least two years of active experience, regardless of license type.
• C.The branch office requires only a separate trust account but no additional registration with the Board.
• D.The branch office must be physically located within 50 miles of the principal office to share the same license.

Q5.A lender denies a loan application from a married couple without providing any written explanation. Under the Equal Credit Opportunity Act (ECOA) and Regulation B, within how many days of taking adverse action must the lender provide the applicants with a written notice of the adverse action and the specific reasons for it?

• A.10 days
• B.15 days
• C.30 days
• D.45 days

Q6.In Montana, a licensee acting as a dual agent—representing both the buyer and the seller in the same transaction—may do so ONLY under which condition?

• A.Dual agency is permitted in Montana without any special disclosure as long as both parties are represented fairly
• B.Dual agency requires written informed consent from both the buyer and the seller before the licensee may proceed
• C.Dual agency is permitted only when the transaction involves commercial property, not residential property
• D.Dual agency is permitted when the broker verbally informs both parties and they agree to proceed

Q7.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

Q8.Under Montana law, which of the following acts by a real estate salesperson constitutes a prohibited practice that could result in license revocation or suspension?

• A.Representing both the buyer and seller in the same transaction with written informed consent from both parties.
• B.Accepting a referral fee from a mortgage lender without the knowledge or consent of the salesperson's client.
• C.Advertising a listed property on a national real estate website without prior approval from the seller.
• D.Showing a buyer properties listed by competing brokerages as a buyer's agent.

Q9.Under Montana law, when a licensee acts as a seller's agent, which of the following duties is owed to the buyer as a non-client third party?

• A.Fiduciary loyalty, including promoting the buyer's best interests above the seller's
• B.Honest and good-faith dealing, including disclosure of adverse material facts known to the licensee
• C.A duty to present all offers regardless of the seller's instructions
• D.Confidentiality of the buyer's financial information from the seller

Q10.A property is held in joint tenancy with right of survivorship. One owner dies. How does title pass?

• A.Through the probate court based on the deceased owner's will
• B.Automatically to the surviving joint tenant(s) without probate
• C.To the deceased owner's heirs equally regardless of survivorship language
• D.By court order after creditor claims are resolved

Q11.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

Q12.Under the Equal Credit Opportunity Act (ECOA), which of the following actions by a lender would be considered illegal discrimination?

• A.Requiring higher down payments for investment properties
• B.Charging higher interest rates based on credit score
• C.Asking about marital status on a joint application
• D.Requiring income verification for all applicants

Q13.A broker is opening a new branch office and plans to supervise three affiliated salespersons from that location. Under general licensing principles applicable in most jurisdictions, which of the following statements best describes the broker's federal and licensing obligations when hiring those salespersons?

• A.The broker must verify that each salesperson holds a valid, active real estate license before allowing them to perform any licensed activities on behalf of the brokerage.
• B.The broker may allow a salesperson with an expired license to continue working as long as a renewal application is pending.
• C.Federal law requires the broker to register each salesperson with HUD before they may assist clients in residential transactions.
• D.A salesperson's license automatically transfers to the new branch office upon the broker's request without any affirmative action by the salesperson.

Q14.Under the Truth-in-Lending Act (TILA), which disclosure must lenders provide to borrowers within three business days of receiving a loan application?

• A.Closing Disclosure
• B.Good Faith Estimate
• C.Loan Estimate
• D.HUD-1 Settlement Statement

Q15.Montana's written brokerage agreement requirements under MCA §37-51-313 and ARM 24.210.751 obligate a broker entering a listing agreement to provide a copy of the signed agreement to the seller. If the broker fails to provide the executed copy promptly, what is the most accurate statement about the consequences?

• A.The listing agreement is automatically void and unenforceable against the seller.
• B.The failure to promptly provide a copy constitutes a violation of broker conduct rules and may subject the broker to disciplinary action, even though it does not automatically void the agreement.
• C.The seller may rescind the listing agreement within 72 hours of discovering the omission, rendering it retroactively void.
• D.No consequences attach unless the seller can prove actual monetary damages resulting from the failure to receive the copy.