Free North Dakota Real Estate Practice Exam

Q1.Under N.D.C.C. Chapter 43-23, which statement BEST describes a key distinction between a North Dakota real estate salesperson and a real estate broker?

• A.A salesperson may operate an independent brokerage and supervise other licensees, whereas a broker may not.
• B.A salesperson must be affiliated with and work under the supervision of a licensed North Dakota broker, whereas a broker may act independently.
• C.A salesperson and a broker have identical authority under North Dakota law, but brokers pay higher licensing fees.
• D.A salesperson may hold escrow funds in a personal account, whereas a broker must use a trust account.

Q2.A purchase contract includes a provision that the sale is contingent upon the buyer selling their current home within 60 days. If the buyer's home does not sell within this timeframe, what happens to the contract?

• A.The contract automatically renews for another 60 days
• B.The seller can sue for specific performance
• C.The buyer must proceed with the purchase regardless
• D.The contract becomes voidable at the buyer's option

Q3.An investor purchases a commercial property for $850,000. The land is assessed at $150,000 and the improvement at $700,000. Using straight-line depreciation over 39 years (commercial property per IRS guidelines), what is the annual depreciation deduction the investor may claim?

• A.$17,949
• B.$21,795
• C.$13,462
• D.$25,641

Q4.A real estate salesperson is working with a buyer and has not yet disclosed which party she represents. The buyer begins sharing confidential financial information, including the maximum price he is willing to pay. Which agency concept best describes the salesperson's obligation at this point?

• A.The salesperson must disclose her agency relationship before accepting any confidential information that could benefit the other party.
• B.The salesperson may retain the confidential information and disclose it to the seller because no agency agreement has been signed.
• C.The salesperson has no duty to the buyer until a written buyer-broker agreement is executed.
• D.The salesperson may proceed as a dual agent without disclosure because no offer has been made yet.

Q5.Which illegal practice involves a lender refusing to make mortgage loans in certain geographic areas, often based on the racial or ethnic composition of those neighborhoods?

• A.Steering
• B.Blockbusting
• C.Redlining
• D.Panic selling

Q6.Under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), which party is typically held liable for environmental cleanup costs at a contaminated property?

• A.Only the party that originally caused the contamination
• B.The current owner, regardless of when the contamination occurred
• C.Only parties who knowingly purchased contaminated property
• D.The local municipality where the property is located

Q7.When acting as a designated agent for a buyer using FHA financing, RESPA requires specific disclosures about settlement costs. If the agent fails to provide the required RESPA disclosures, this breach most directly violates which fiduciary duty?

• A.Duty of loyalty to the buyer's interests
• B.Duty of reasonable care and competence
• C.Duty of confidentiality regarding financial information
• D.Duty of accounting for client funds

Q8.In a joint tenancy, what happens to a deceased owner's interest in the property?

• A.It passes to the deceased owner's heirs according to their will
• B.It is distributed equally among all remaining joint tenants
• C.It reverts to the state through escheat
• D.It automatically passes to the surviving joint tenant(s) by right of survivorship

Q9.A seller accepts a buyer's written offer, but before the buyer receives notice of the acceptance, the seller accepts a higher offer from a second buyer. Under general contract law, which statement BEST describes the status of the first contract?

• A.The first contract is valid and enforceable because acceptance occurred when the seller signed.
• B.The first contract is void because the seller had the right to revoke acceptance before it was communicated.
• C.The first contract is enforceable only if the buyer can prove the seller acted in bad faith.
• D.The first contract is enforceable only if the buyer had already paid earnest money.

Q10.Under the federal Fair Housing Act, which of the following is NOT a protected class?

• A.Race
• B.Familial status
• C.Occupation
• D.National origin

Q11.A brokerage's leasing agent conditions a showing on a sexual favor, without the broker's knowledge. Under the FHA, which statement is correct?

• A.The brokerage has no liability because the broker did not know
• B.Only the agent is personally liable
• C.The brokerage may face vicarious liability because the agent acted within the scope of employment
• D.The brokerage is only liable if the conduct was part of a pattern

Q12.A buyer purchases a home built in 1978 and the seller fails to provide the federally required Lead-Based Paint Disclosure. Under the Residential Lead-Based Paint Hazard Reduction Act (Title X), what is the maximum civil penalty that can be imposed per violation on the seller?

• A.$1,000 per violation
• B.$10,000 per violation
• C.$25,000 per violation
• D.$50,000 per violation

Q13.A property was purchased three years ago for $200,000 and has since appreciated 15% in total value. What is the property's current estimated value?

• A.$230,000
• B.$215,000
• C.$235,000
• D.$220,000

Q14.A North Dakota broker is the subject of a disciplinary complaint filed with the North Dakota Real Estate Commission. The Commission's investigator has concluded the investigation and the Commission intends to hold a formal hearing. Under NDCC § 43-23-11 and the North Dakota Administrative Agencies Practice Act (NDCC ch. 28-32), which of the following best describes the broker's procedural rights at such a hearing?

• A.The broker has no right to appear because all Commission disciplinary hearings are conducted solely on written submissions
• B.The broker is entitled to written notice of the charges, the right to appear personally and through counsel, the right to present evidence and cross-examine witnesses, and the right to a written decision with findings of fact and conclusions of law
• C.The broker may appear but has no right to cross-examine witnesses because the Commission operates under an informal hearing standard
• D.The broker must waive the right to an attorney in order to appear before the Commission in a disciplinary proceeding

Q15.RESPA requires lenders to provide borrowers with a Loan Estimate within how many business days of receiving a loan application?

• A.1 business day
• B.2 business days
• C.3 business days
• D.5 business days