Free North Dakota Real Estate Practice Exam

Q1.Under N.D.C.C. Chapter 43-23, a real estate salesperson whose license has been denied or revoked by the North Dakota Real Estate Commission has the right to:

• A.Appeal the decision directly to the United States District Court
• B.Request a hearing before the Commission to contest the decision
• C.Automatically continue practicing real estate during the appeal period
• D.File a complaint with the North Dakota Insurance Department

Q2.How does A.R.S. § 32-2153(F)(1) characterize a letter of concern?

• A.A license suspension.
• B.An advisory letter used when discipline is not warranted.
• C.A civil penalty.
• D.A criminal conviction.

Q3.A broker supervises four affiliated salespersons and recently expanded by opening a branch office. Under general licensing principles applicable in most jurisdictions, which of the following statements BEST describes the broker's supervisory liability when a branch office salesperson violates the Fair Housing Act during a showing?

• A.The broker bears vicarious liability for the salesperson's Fair Housing Act violations only if the broker had actual knowledge of the discriminatory conduct before it occurred.
• B.The broker can avoid all liability by demonstrating that the salesperson acted outside the scope of their employment at the time of the violation.
• C.The broker may be held liable under respondeat superior and HUD enforcement because the broker has an affirmative duty to establish, communicate, and enforce Fair Housing compliance policies for all affiliated licensees.
• D.The broker is insulated from liability because Fair Housing Act enforcement actions under Title VIII can only be brought against the individual salesperson who committed the discriminatory act.

Q4.Which description most accurately states the designated broker's document duty under R4-28-1103?

• A.Personally preapprove every paper before signature.
• B.Review only documents selected by a salesperson.
• C.Review and inspect documents that may materially affect a party's rights or obligations.
• D.Review only closing statements.

Q5.A North Dakota salesperson wants to advertise real estate services independently under their own name without referencing their supervising broker. Under North Dakota Real Estate Commission rules, this practice is:

• A.Permitted as long as the salesperson includes their personal license number in the advertisement
• B.Permitted for online advertising but prohibited for print advertising
• C.Prohibited because all advertising by a salesperson must identify the supervising broker
• D.Permitted if the salesperson has held an active license for at least two years

Q6.A contract clause states that if the buyer fails to close by the agreed date, the seller retains the earnest money deposit as the sole remedy. This type of contract provision is known as a:

• A.Contingency clause
• B.Liquidated damages clause
• C.Specific performance clause
• D.Rescission clause

Q7.A PM firm receives an undisputed rent payment on Monday, and no banking holiday intervenes. What rule controls the deposit timing?

• A.Deposit within three banking days after receipt
• B.Deposit by the end of the calendar month
• C.Deposit only after the owner statement is approved
• D.Deposit within ten business days

Q8.A property sold for $240,000. The listing agent received a 3% commission and the selling agent received a 2.5% commission. What was the total commission paid?

• A.$7,200
• B.$6,000
• C.$13,200
• D.$12,000

Q9.Under North Dakota law, when must a licensee provide the agency disclosure to a prospective buyer at an open house who appears to be seriously interested in the property?

• A.Before the buyer signs any offer to purchase
• B.At the first substantive contact with the buyer
• C.Only after the buyer requests representation
• D.Within 24 hours of the initial meeting

Q10.Which of these listing descriptions is SAFEST under § 3604(c)?

• A."3-bed, 2-bath single-family home with fenced yard and 2-car garage"
• B."Perfect family home in a Christian neighborhood"
• C."Adult community — no children allowed"
• D."Walking distance to mosque/church/synagogue"

Q11.Under N.D.C.C. Chapter 43-23, the North Dakota Real Estate Commission has the authority to adopt administrative rules governing licensee conduct. Through which process must these rules be formally adopted to have the force of law?

• A.A majority vote of the North Dakota Legislature
• B.The North Dakota Administrative Agencies Practice Act rulemaking process
• C.Direct approval by the Governor's office
• D.Ratification by the North Dakota Association of REALTORS®

Q12.A buyer includes a financing contingency in their purchase contract that requires them to obtain a loan commitment within 30 days. On day 25, the buyer's lender denies the loan application due to insufficient income. What is the buyer's best course of action to protect their earnest money deposit?

• A.Wait until day 30 to notify the seller of the loan denial
• B.Continue looking for alternative financing until day 30
• C.Immediately notify the seller in writing of the financing contingency failure
• D.Proceed to closing and secure financing after closing

Q13.A broker who holds an active license is also a 50% owner of an LLC that purchases, rehabilitates, and resells residential properties. The broker personally negotiates the purchase and sale of all LLC properties without paying a commission to any brokerage. Under general licensing law principles recognized in most jurisdictions, what obligation does the broker MOST likely have when the LLC sells a property to a member of the public?

• A.Because the broker is acting as a principal (owner) rather than as an agent, no licensing law obligations apply and the broker need not disclose their licensed status to buyers or sellers.
• B.The broker is exempt from all agency disclosure requirements because broker-owners selling their own property are treated as consumers, not licensees, under the National Association of REALTORS® Code of Ethics.
• C.The broker must disclose their licensed status in writing to the other party in the transaction, and most jurisdictions impose heightened standards of disclosure on licensees acting as principals because of the knowledge and expertise asymmetry between a licensed broker and a typical consumer.
• D.The broker's obligation is limited to ensuring the LLC files a seller's disclosure form; no brokerage-specific duties apply because the LLC, not the broker individually, is the seller of record.

Q14.The North Dakota Real Estate Commission derives its authority to adopt rules governing real estate licensees primarily from which source?

• A.The National Association of REALTORS® Code of Ethics
• B.N.D.C.C. Chapter 43-23, which grants the Commission statutory rule-making authority
• C.The Federal Real Estate Settlement Procedures Act (RESPA)
• D.Executive orders issued by the North Dakota Governor on a case-by-case basis

Q15.A broker receives an earnest money deposit of $15,000 from a buyer. The transaction falls through and both the buyer and seller submit conflicting written demands for the deposit. The broker cannot determine who is entitled to the funds. Under general broker statutory duty principles applicable in most jurisdictions, what is the broker's BEST course of action?

• A.Disburse the funds to the seller, because the seller is the broker's principal in a listing agreement
• B.Return the funds to the buyer immediately, because the transaction did not close and the buyer retains equitable title to the deposit
• C.Continue to hold the funds in the trust account and initiate an interpleader action or follow the prescribed dispute resolution procedure (such as mediation or filing with the regulatory authority) to obtain legal direction on disbursement
• D.Disburse the funds to the party who submitted their written demand first, as first-in-time priority governs earnest money disputes