Free Rhode Island Real Estate Practice Exam

Q1.A broker lists a property and, during due diligence, discovers that the site may contain buried underground storage tanks from a former dry-cleaning operation. Which federal environmental statute primarily governs liability for cleanup of such hazardous substance contamination at the site and would be most relevant to disclosing potential cleanup cost liability to a prospective buyer?

• A.The Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA)
• B.The Real Estate Settlement Procedures Act (RESPA)
• C.The Residential Lead-Based Paint Hazard Reduction Act
• D.The Clean Water Act (CWA)

Q2.A lender denies a mortgage application from a married couple and cites 'insufficient income.' The couple suspects discrimination and asks the broker who referred them for help. The broker discovers the lender disregarded the wife's income entirely because she is of childbearing age. Under the Equal Credit Opportunity Act (ECOA), which statement is CORRECT?

• A.ECOA does not apply because the lender's decision was based on income, which is a financial factor, not a protected characteristic.
• B.ECOA prohibits creditors from discounting or excluding income on the basis of sex or marital status, and the lender's action constitutes a per se ECOA violation; the broker should advise the couple to file a complaint with the CFPB.
• C.The couple's only remedy is to file a complaint under the Fair Housing Act, because ECOA does not cover mortgage transactions.
• D.ECOA requires only that the lender provide a written denial notice; once that notice is issued, no further liability attaches regardless of the reason for denial.

Q3.What is the primary purpose of the Equal Credit Opportunity Act (ECOA) in real estate financing?

• A.To regulate interest rates on mortgage loans
• B.To establish minimum down payment requirements
• C.To require mortgage insurance on all loans
• D.To prohibit discrimination in lending based on protected characteristics

Q4.A Rhode Island real estate broker refuses to show rental listings in a particular neighborhood to a prospective tenant because of the tenant's country of ancestry, directing them instead toward a different part of the city. Under the Rhode Island Fair Housing Practices Act, this practice is best described as:

• A.Permissible steering if the broker can demonstrate that the alternative neighborhood has comparable housing stock
• B.Blockbusting, which is a separate violation only applicable to ownership sales, not rentals
• C.Illegal steering, which constitutes a violation of the Rhode Island Fair Housing Practices Act regardless of the broker's stated justification
• D.A permissible business practice because licensees have discretion in selecting which properties to show

Q5.A Rhode Island seller's agent is also representing the buyer in the same transaction. Under Rhode Island General Laws Chapter 5-20.6, what is this relationship called and what is required to lawfully proceed?

• A.Dual agency; it is prohibited outright under Rhode Island law and cannot be consented to
• B.Designated agency; only the broker's written consent is needed
• C.Dual agency; informed written consent of both the buyer and seller is required
• D.Transaction brokerage; verbal disclosure to both parties is sufficient

Q6.When must a lender provide the Closing Disclosure under the TILA-RESPA Integrated Disclosure (TRID) rules?

• A.Within 3 business days of application
• B.No later than at the time of consummation
• C.Within 3 business days after consummation
• D.At least 3 business days before consummation

Q7.Which type of encumbrance is a non-financial restriction on how property may be used?

• A.A mortgage or deed of trust
• B.A deed restriction or CC&R (covenant, condition, and restriction)
• C.A mechanic's lien filed by a contractor
• D.An IRS federal tax lien

Q8.A mortgage lender provides a borrower with a Loan Estimate within three business days of receiving a completed loan application. Under the Truth in Lending Act (TILA) and its implementing Regulation Z, which of the following disclosures is the Loan Estimate specifically designed to provide?

• A.A good-faith estimate of loan terms, projected monthly payments, and closing costs so the borrower can compare loan offers.
• B.A final, binding statement of all settlement charges that the lender guarantees will not change at closing.
• C.A disclosure of the lender's annual percentage yield used to calculate compound interest on the loan balance.
• D.A HUD-required itemization of all third-party service fees paid directly to the settlement agent.

Q9.Under Rhode Island law, an exclusive right-to-sell listing agreement MUST be:

• A.Oral, to avoid creating a binding obligation on the seller
• B.In writing and signed by the parties to be enforceable
• C.Filed with the Rhode Island Real Estate Commission before the property is advertised
• D.Approved by the local municipality where the property is located

Q10.Which appraisal approach is most commonly used for single-family residential properties?

• A.Sales comparison approach
• B.Cost approach
• C.Income approach
• D.Gross rent multiplier approach

Q11.In Rhode Island, a real estate salesperson license must be renewed on what basis, and what continuing education is generally required to renew an active license?

• A.Annually, with no continuing education requirement for salespersons
• B.Every two years, with the completion of state-approved continuing education courses as a condition of renewal
• C.Every two years, with no continuing education requirement for salespersons in their first renewal period
• D.Every three years, with continuing education required only for brokers

Q12.Elena's buyer is making an all-cash offer. The seller asks for proof of funds. What is an acceptable form of proof of funds?

• A.A letter from the buyer's employer confirming their annual salary
• B.A current bank or investment account statement showing liquid assets sufficient to close
• C.A pre-qualification letter from a mortgage lender
• D.An earnest money check made payable to the escrow company

Q13.The Rhode Island Fair Housing Practices Act extends protected class status beyond the federal Fair Housing Act. Which of the following characteristics is a protected class under Rhode Island law but is NOT a protected class under the federal Fair Housing Act?

• A.Race
• B.Sexual orientation
• C.National origin
• D.Religion

Q14.When selling a home built before 1978 in Rhode Island, which federal and state-required disclosure must the seller provide to the buyer regarding a known environmental hazard?

• A.A lead-paint disclosure, including any known lead-based paint hazards and available records or reports
• B.An asbestos disclosure form required by the Rhode Island Department of Health
• C.A radon disclosure form required by Rhode Island law for all pre-1978 homes
• D.A mold inspection report commissioned by the seller within 90 days of listing

Q15.Which type of title insurance policy protects the mortgage lender's interest in the property?

• A.Lender's policy
• B.Owner's policy
• C.Extended coverage policy
• D.Standard coverage policy