Free Oregon Real Estate Practice Exam

Q1.A principal broker in Oregon discovers that an affiliated broker on her team has been depositing earnest money into a personal bank account rather than the brokerage trust account. Under OAR 863-015-0130 and ORS 696.241, which is the principal broker's FIRST legally required action?

• A.Terminate the affiliated broker's employment agreement immediately and notify clients
• B.Report the trust account deficiency to OREA and ensure all client funds are immediately deposited into the properly designated trust account
• C.Conduct an internal audit and wait 30 days before deciding whether to report to OREA
• D.Transfer the personal account funds to the brokerage operating account to offset any future disbursements

Q2.CERCLA (Comprehensive Environmental Response, Compensation, and Liability Act) is primarily concerned with which environmental issue?

• A.Air pollution from factories
• B.Cleanup of contaminated properties
• C.Water conservation requirements
• D.Noise pollution standards

Q3.A lender denies a loan application from a married couple, citing only the wife's income and ignoring the husband's income because he works part-time. The couple believes the denial was improper. Which federal law most directly addresses this type of income discrimination in credit transactions?

• A.The Truth in Lending Act (TILA), because it requires full disclosure of all income sources considered in underwriting.
• B.RESPA, because it prohibits settlement service providers from conditioning services on the source of income.
• C.The Equal Credit Opportunity Act (ECOA), because it prohibits creditors from discounting or refusing to consider income on the basis of sex or marital status, including part-time income.
• D.CERCLA, because environmental contamination on the property may have affected the property's appraised value used in underwriting.

Q4.A managing broker is responsible for a property management trust account holding security deposits for 40 residential tenants. During the monthly three-way reconciliation, the broker discovers that the bank statement balance is $2,400 higher than the sum of all tenant ledger balances. The most appropriate immediate action for the broker is to:

• A.Transfer the $2,400 overage into the operating account because it represents unidentified funds that may be brokerage income.
• B.Investigate and identify the source of the discrepancy before taking any action, and document all findings to prevent commingling or misappropriation.
• C.Leave the overage in the trust account indefinitely, because an excess balance poses no regulatory risk to the broker.
• D.Refund the $2,400 proportionally to all 40 tenants to resolve the discrepancy as quickly as possible.

Q5.In a designated agency arrangement, what is the primary advantage for clients compared to traditional dual agency?

• A.Lower commission rates
• B.Separate agents providing undivided loyalty
• C.Faster transaction processing
• D.Guaranteed transaction completion

Q6.A real estate broker verbally agrees to represent a buyer for six months. After four months, the buyer purchases a home through the broker. The seller refuses to pay a cooperating commission, and the broker seeks to collect a fee directly from the buyer. What is the MOST likely outcome regarding the broker's ability to enforce the fee agreement?

• A.The broker will likely be unable to enforce the fee against the buyer because an oral brokerage agreement is generally unenforceable under the Statute of Frauds.
• B.The broker can enforce the oral agreement because agency relationships do not need to be in writing to be valid.
• C.The broker can collect a fee because the buyer's purchase of the home constitutes implied ratification of the oral agreement.
• D.The broker is entitled to a fee from the seller's proceeds regardless of the commission agreement's form.

Q7.A licensed Oregon broker holds a property management agreement with an owner that grants the broker authority to lease units, collect rents, and make routine repairs. The owner verbally instructs the broker to also purchase a new HVAC unit costing $8,500 without amending the written agreement. Under ORS Chapter 696 and Oregon Real Estate Agency (OREA) rules, what is the broker's most appropriate course of action?

• A.Proceed with the purchase because the owner's verbal authorization is sufficient under agency law to expand the broker's authority.
• B.Refuse to proceed and obtain a written amendment to the property management agreement before authorizing the expenditure.
• C.Proceed with the purchase because routine maintenance authority in the existing agreement implicitly covers major capital expenditures.
• D.Refer the matter to the Oregon Real Estate Agency for guidance before taking any action.

Q8.Under ORS 696.301, the Oregon Real Estate Agency initiates a disciplinary proceeding against a broker for making a material misrepresentation to a buyer. The broker argues that the buyer suffered no financial harm. How does the absence of actual financial harm affect the Agency's ability to impose discipline?

• A.The Agency cannot impose discipline unless the complainant demonstrates a quantifiable financial loss
• B.The Agency may still impose discipline because ORS 696.301 authorizes sanctions for violations of license law regardless of whether actual harm resulted
• C.The absence of harm limits the Agency to issuing a written reprimand and prohibits license suspension
• D.The Agency must defer the proceeding until the buyer initiates a private civil action and obtains a judgment

Q9.An Oregon broker's license was revoked by OREA three years ago. The former broker now applies for reinstatement. Under ORS 696.270 and OREA's reinstatement procedures, which condition is MOST accurately required before the license may be reinstated?

• A.Payment of a $500 civil penalty is the only prerequisite; no additional education or examination is required
• B.The applicant must satisfy any conditions imposed in the revocation order, demonstrate rehabilitation, and may be required to re-examine or complete additional education at OREA's discretion
• C.Oregon law mandates automatic reinstatement after three years regardless of the circumstances of revocation
• D.The applicant need only file a new original license application and pay the standard application fee

Q10.Under the Fair Housing Act, which of the following lease provisions would be considered discriminatory and therefore illegal?

• A.A clause requiring all tenants to maintain renter's insurance
• B.A clause requiring a security deposit equal to one month's rent
• C.A provision requiring 30 days written notice before lease termination
• D.A provision stating 'no children under 12 allowed in this adult community'

Q11.Under Oregon law, when must a real estate broker provide the Oregon Initial Agency Disclosure Pamphlet to a prospective buyer or seller?

• A.At the first in-person meeting with the prospective client where real estate services will be discussed
• B.Only after a written agency agreement has been signed
• C.At the time an offer to purchase is presented
• D.Within three business days of the first contact with the prospective client

Q12.Under Oregon law, which of the following practices is PROHIBITED for a licensed real estate broker?

• A.Placing a 'for sale' sign on a property without the written consent of the owner
• B.Representing both the buyer and seller in a transaction with written consent from both parties
• C.Advertising a listed property on a personal social media page
• D.Referring a client to a home inspector and disclosing any referral relationship

Q13.Under the Truth in Lending Act (TILA), when must a lender provide the initial Truth in Lending disclosure to a mortgage applicant?

• A.Within 3 business days of receiving a completed application
• B.Within 7 business days of loan closing
• C.At the time the loan application is submitted
• D.Within 30 days of loan approval

Q14.What is the licensee's personal liability for discriminatory conduct, even if the seller or broker instructed it?

• A.Personal liability for civil damages, civil penalties, attorney fees, ADRE discipline, and possible loss of license — instructions from a seller or broker are NEVER a defense
• B.None — agents follow principal instructions
• C.Only the seller is liable
• D.Only the broker is liable

Q15.In states that require attorney involvement in real estate closings, the attorney typically represents which party?

• A.The party who retains their services
• B.Always the buyer
• C.Always the seller
• D.Both buyer and seller equally