Free South Carolina Real Estate Practice Exam

Q1.Under South Carolina law, which duty is owed to a CLIENT but NOT to a CUSTOMER?

• A.Providing honest and accurate information
• B.Disclosing known material defects about the property
• C.Maintaining the client's confidential information
• D.Accounting for all funds received

Q2.Under the OLDCAR fiduciary duties, which duty requires the agent to place the client's interests above the agent's own financial interests?

• A.Disclosure
• B.Loyalty
• C.Confidentiality
• D.Reasonable care

Q3.At a South Carolina residential closing, real property taxes are prorated between the buyer and seller. The county tax bill is paid in arrears and covers the calendar year January 1 through December 31. If closing occurs on September 1, which of the following correctly describes how taxes are typically handled on the settlement statement?

• A.The seller receives a credit for taxes already paid through September 1, and the buyer is debited for the same amount.
• B.The buyer receives a credit and the seller is debited for the portion of the year the seller owned the property, from January 1 through August 31.
• C.No proration is necessary because South Carolina law requires the seller to pay the full year's taxes before closing.
• D.The lender collects the full year's taxes into escrow at closing and the proration is handled directly between buyer and seller after the tax bill is issued.

Q4.A South Carolina real estate brokerage opens a second office location in a neighboring county. Under South Carolina Real Estate Commission requirements, which of the following must occur before the second office may conduct brokerage business?

• A.The firm must hire a separate, dedicated broker-in-charge for the new office location
• B.The main office broker-in-charge may supervise both offices without any additional designation
• C.The firm must notify the Commission within 30 days after the second office opens
• D.Each salesperson wishing to work at the second office must obtain a branch office license

Q5.The maximum civil penalty for a first Fair Housing Act violation under the current HUD-adjusted schedule is approximately:

• A.$21,663
• B.$5,000
• C.$10,000
• D.$54,157

Q6.Under South Carolina law, a licensed property manager who collects security deposits and rental payments on behalf of property owners must deposit those funds into:

• A.The property manager's personal business operating account
• B.A separate trust or escrow account maintained in a federally insured depository
• C.The property owner's personal bank account as directed by the owner
• D.Any interest-bearing account as long as the interest is paid to the broker

Q7.Under RESPA Section 8, a listing broker negotiates a marketing services agreement (MSA) with a title company whereby the title company pays the broker $500 per closed transaction in exchange for the broker's salespersons recommending the title company to clients. The broker argues that the payments are permissible 'marketing fees' for services rendered. Which analysis is MOST accurate?

• A.The MSA likely violates RESPA Section 8 because the payments are tied to referrals of settlement service business, and unless the broker is performing bona fide, distinct services proportionate to the fee, the arrangement constitutes an illegal kickback.
• B.The MSA is lawful because RESPA Section 8 only prohibits unearned fees between lenders and mortgage brokers, not between real estate brokers and title companies.
• C.The MSA is lawful provided the broker gives clients a written disclosure of the arrangement at or before the time of first substantive contact.
• D.The MSA violates the Truth-in-Lending Act rather than RESPA because the payments affect the effective APR disclosed to borrowers at settlement.

Q8.A South Carolina salesperson receives an earnest money deposit from a buyer. According to South Carolina real estate law, what must happen to those funds?

• A.The salesperson may hold the funds personally until closing to ensure they are not lost
• B.The funds must be deposited into the salesperson's personal bank account for safekeeping
• C.The funds must be delivered to the salesperson's broker-in-charge, who places them in a separate escrow or trust account
• D.The funds may be commingled with the brokerage's operating account as long as they are tracked separately

Q9.Under CERCLA (Comprehensive Environmental Response, Compensation, and Liability Act), which party would be considered a Potentially Responsible Party (PRP) for contamination at a property that was previously used as a dry cleaning facility?

• A.Only the current owner if they knew about the contamination
• B.Only the party that originally caused the contamination
• C.The current owner, past owners, operators, and waste generators, regardless of fault
• D.Only parties who can be proven negligent in causing the contamination

Q10.Under South Carolina law, how many members serve on the South Carolina Real Estate Commission, and which entity appoints them?

• A.Ten members appointed by the Governor, including eight licensees and two consumer members
• B.Seven members appointed by the Governor, including five licensees and two consumer members
• C.Nine members appointed by the Lieutenant Governor, including seven licensees and two consumer members
• D.Six members appointed by the SC Department of Labor, Licensing and Regulation, all of whom must be licensed brokers

Q11.Under South Carolina law, a person or company that sells timeshare interests in South Carolina must register the timeshare project with which agency before any sales or offers to sell may occur?

• A.The South Carolina Real Estate Commission (SCREC)
• B.The South Carolina Secretary of State's Office
• C.The South Carolina Department of Consumer Affairs
• D.The South Carolina Department of Revenue

Q12.A South Carolina broker-in-charge is audited by the SCREC and is found to have failed to maintain brokerage agreements in writing for three buyer clients whose transactions closed in the prior year. Under S.C. Code Ann. § 40-57-350 and SCREC regulations, which statement regarding written brokerage agreements is MOST accurate at the broker level?

• A.Written brokerage agreements are required only for seller representation; buyer representation may be established orally as long as it is memorialized in the closing documents.
• B.The broker-in-charge is responsible for ensuring that written brokerage agreements are executed with all clients before or at the time brokerage services are first provided, and failure to do so is a sanctionable violation.
• C.Written brokerage agreements must be executed no later than the time an offer is submitted, so transactions that closed without prior written agreements may still be compliant if the closing documents referenced the brokerage relationship.
• D.The absence of written brokerage agreements automatically voids the closed transactions, entitling the clients to a full refund of all commissions paid.

Q13.What does a quiet title action accomplish in Arizona?

• A.It forces a neighbor to remove a fence that crosses a property boundary
• B.It removes an HOA's ability to enforce its deed restrictions
• C.It establishes legal ownership when title is disputed or clouded by competing claims
• D.It cancels an outstanding mortgage that has been fully paid off

Q14.Which 1968 federal law is the foundational statute prohibiting housing discrimination based on race, color, religion, sex, national origin, familial status, and disability?

• A.The Civil Rights Act of 1964
• B.The Fair Housing Act (Title VIII of the Civil Rights Act of 1968)
• C.The Housing and Community Development Act of 1974
• D.The Americans with Disabilities Act of 1990

Q15.Under the Federal Fair Housing Act, which of the following is NOT a protected class?

• A.National origin
• B.Familial status
• C.Sexual orientation
• D.Religion