Free Montana Real Estate Practice Exam

Q1.Montana's Written Agency Agreement Act requires that a licensee provide a written agency disclosure to a buyer or seller at what point in the transaction?

• A.Only at the time the purchase and sale agreement is signed
• B.At the first substantial contact with the buyer or seller
• C.Before any listing agreement is executed
• D.Within 24 hours of showing a property

Q2.Under the Truth in Lending Act (TILA), the Annual Percentage Rate (APR) disclosed to a borrower differs from the stated interest rate because the APR:

• A.Reflects only the base interest charged on the principal loan balance.
• B.Includes the interest rate plus certain fees and costs of credit, expressed as a yearly rate.
• C.Is always lower than the stated interest rate to benefit the consumer.
• D.Is calculated by the borrower's state government and may vary by jurisdiction.

Q3.Under RESPA, which of the following practices is prohibited when a real estate professional refers a client to a mortgage lender?

• A.Receiving a fee from the lender for the referral without proper disclosure
• B.Providing the client with multiple lender options
• C.Discussing the benefits of different loan programs
• D.Recommending a lender based on competitive rates

Q4.Under Montana law, what is the maximum length of time a real estate purchase contract must specify for buyer financing contingencies before a seller may have the right to void the contract for non-performance?

• A.Montana law sets no specific statutory deadline; the parties negotiate the timeline in the contract
• B.10 days from the date of acceptance
• C.30 days from the date of acceptance, as mandated by statute
• D.60 days from closing, as set by the MBRR

Q5.Under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), which party can potentially be held liable for hazardous substance cleanup costs on a property?

• A.A current property owner, even if they did not cause the contamination
• B.Only the original party who deposited the hazardous substances on the site
• C.Only the government agency that issued the original building permit
• D.A neighboring property owner whose runoff contributed to the contamination, but not the current owner

Q6.Under the Fair Housing Act, which of the following lease provisions would be considered a discriminatory practice when applied selectively to tenants based on familial status?

• A.Requiring all tenants to maintain renter's insurance
• B.Requiring families with children to pay an additional security deposit while not requiring the same from tenants without children
• C.Prohibiting children under 12 from using the swimming pool without adult supervision
• D.Limiting occupancy to two persons per bedroom for all units

Q7.What is the primary difference between a conventional loan and an FHA loan?

• A.Conventional loans have higher interest rates than FHA loans
• B.Conventional loans require mortgage insurance while FHA loans do not
• C.FHA loans can only be used for investment properties
• D.FHA loans are insured by the government while conventional loans are not

Q8.A metes and bounds legal description reads: 'Beginning at the iron pin at the southeast corner of Lot 12, thence N 45°30'15" E for 150.75 feet to an iron pin, thence N 30°15'45" W for 200.50 feet to a concrete monument...' What does the notation 'N 45°30'15" E' specifically indicate?

• A.45 degrees, 30 minutes, 15 seconds north of due east
• B.A bearing that runs northeast at exactly 45.5 degrees from north
• C.45.30 degrees northeast from the starting point
• D.45 degrees, 30 minutes, 15 seconds east of due north

Q9.Under the Fair Housing Act, which of the following properties is generally EXEMPT from the Act's prohibition against discrimination based on familial status and religion, provided no discriminatory advertising is used?

• A.A 200-unit apartment complex owned by a real estate investment trust
• B.A single-family home sold through a licensed real estate broker
• C.A four-unit owner-occupied building where the owner lives in one of the units
• D.A 55-and-older community that does not meet HUD verification requirements

Q10.A Montana property owner owns six residential rental units in three different buildings. Under MCA Title 37, Chapter 51, which statement BEST describes the owner's licensing obligation when personally managing and renting those units?

• A.The owner requires a property management license because the portfolio exceeds five units
• B.The owner is exempt from licensing requirements when managing and renting property the owner owns
• C.The owner must hold at least a salesperson license supervised by a broker to collect rent legally
• D.The owner is exempt only if the units are located in the same county

Q11.When using the cost approach to determine a property's value, which of the following is the correct sequence of steps?

• A.Estimate land value, add reproduction cost, subtract accrued depreciation
• B.Estimate replacement cost, add land value, subtract accrued depreciation
• C.Estimate land value, add replacement cost, subtract accrued depreciation
• D.Estimate accrued depreciation, add land value, add replacement cost

Q12.A Montana real estate salesperson advertises a property on social media using only her personal name and a phone number, omitting her broker's name entirely. Under Montana Board of Realty Regulation rules, this advertisement is:

• A.Permissible if her license number is included instead of the broker's name
• B.A violation, because all advertising must include the employing broker's name
• C.Permissible for social media, which is exempt from advertising rules
• D.A violation only if the property is listed with a different brokerage

Q13.Under Montana Code Annotated Title 37, Chapter 51, which of the following individuals is EXEMPT from holding a real estate license when performing real estate activities in Montana?

• A.A salaried employee of a property management company who negotiates lease renewals on behalf of the company's clients
• B.An attorney-in-fact acting under a duly executed power of attorney who sells a single parcel of real property on behalf of a principal
• C.A resident manager of an apartment complex who is paid a commission for each new tenant lease signed
• D.A licensed auctioneer who regularly conducts real estate auctions for a fee and advertises properties for sale

Q14.After receiving a seller's property condition disclosure statement in Montana, a buyer discovers a material defect that was not disclosed. What is the buyer's right under Montana law?

• A.The buyer may rescind the purchase agreement within a reasonable time after discovering the undisclosed defect
• B.The buyer must complete the purchase but may sue for damages only after closing
• C.The buyer has no remedy if the purchase agreement has already been signed
• D.The buyer must contact the Montana Department of Justice within 48 hours

Q15.Under the Equal Credit Opportunity Act (ECOA), which information may a lender legally consider when evaluating a mortgage application?

• A.The applicant's marital status to determine household stability
• B.The applicant's verified employment history and income documentation
• C.The applicant's religion to assess community ties and stability
• D.The applicant's national origin to determine immigration status