Free South Carolina Real Estate Practice Exam

Q1.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.

Q2.Under RESPA (Real Estate Settlement Procedures Act), which practice is specifically prohibited regarding escrow accounts?

• A.Requiring borrowers to deposit two months of property taxes at closing
• B.Conducting an annual escrow analysis to adjust monthly payments
• C.Maintaining a cushion of more than two months of escrow payments
• D.Requiring flood insurance premiums to be escrowed

Q3.Under South Carolina law, which of the following acts would constitute a prohibited practice by a licensed salesperson?

• A.Presenting all offers to the seller promptly, even if the seller has already accepted an offer
• B.Placing a 'For Sale' sign on a property without the written consent of the owner
• C.Advertising a listed property on the brokerage's website with the broker's approval
• D.Disclosing to a buyer that the seller is motivated to sell quickly

Q4.Under the South Carolina Real Estate License Law, commingling of funds is strictly prohibited. Which of the following scenarios constitutes commingling as defined under South Carolina law?

• A.A broker-in-charge deposits earnest money into a dedicated trust account that holds only client funds.
• B.A salesperson collects a security deposit and promptly delivers it to the broker-in-charge for deposit into the trust account.
• C.A broker deposits a client's earnest money into the brokerage's general operating account along with commission income.
• D.A broker maintains a trust account at a federally insured financial institution located outside the county where the office is located.

Q5.Which of the following advertising practices would most likely violate the Fair Housing Act?

• A.Advertising 'wheelchair accessible apartment'
• B.Stating 'no pets allowed'
• C.Advertising 'perfect for Christian families'
• D.Specifying 'non-smoking building'

Q6.A buyer's broker is representing a purchaser of a pre-1978 residential property. The seller's broker provides the EPA-mandated Lead-Based Paint Disclosure and the EPA/HUD pamphlet 'Protect Your Family from Lead in Your Home.' The buyer's broker advises her client to waive the 10-day lead-based paint inspection contingency to strengthen the offer. Which of the following BEST characterizes the buyer's broker's potential liability?

• A.The buyer's broker may face liability for breach of fiduciary duty if she recommended waiving the inspection without ensuring the buyer fully understood the legal right to conduct an inspection and the potential health and financial risks of lead-based paint.
• B.The buyer's broker has no liability because the EPA disclosure requirement is solely the seller's obligation; once the seller complies, all inspection decisions become the buyer's sole responsibility.
• C.The buyer's broker is immune from liability because the buyer, as an adult, signed the disclosure form and voluntarily elected to waive the contingency.
• D.The buyer's broker violated the Toxic Substances Control Act (TSCA) directly by recommending waiver of a federally mandated inspection period.

Q7.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

Q8.Under the Fair Housing Act, which of the following is NOT considered a protected class at the federal level?

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

Q9.A married couple applies for a mortgage loan. Under the Equal Credit Opportunity Act (ECOA), which of the following actions by the lender would be prohibited?

• A.Requesting information about the applicants' employment history
• B.Requiring both spouses to sign the loan application
• C.Verifying the couple's current income and assets
• D.Asking about the wife's plans for having children

Q10.A South Carolina salesperson receives a buyer's earnest money deposit on a Friday afternoon after the broker-in-charge's office has closed. According to South Carolina Real Estate Commission regulations, by when must the salesperson deliver the funds to the broker-in-charge or the designated escrow account?

• A.Immediately upon receipt, regardless of office hours
• B.Within 48 hours of receipt
• C.By the next business day following receipt
• D.Within three calendar days of receipt

Q11.South Carolina imposes a deed recording fee (deed stamps) on the transfer of real property. Which party is legally obligated to pay this fee under South Carolina law, and how is the fee generally calculated?

• A.The buyer is obligated to pay; the fee is calculated based on the loan amount secured by the mortgage.
• B.The seller is obligated to pay; the fee is calculated based on the consideration paid for the property (i.e., the sales price).
• C.The buyer and seller split the fee equally; it is calculated as a flat fee regardless of the sales price.
• D.The lender is obligated to pay; the fee is calculated based on the appraised value of the property.

Q12.Under the Fair Housing Act, which scenario would constitute illegal discrimination based on familial status?

• A.Refusing to rent a studio apartment to a family of four due to legitimate occupancy standards
• B.Advertising 'adults only' for a 55+ senior housing community that qualifies for the housing for older persons exemption
• C.Requiring all tenants to provide references regardless of family composition
• D.Requiring higher security deposits from families with children due to potential property damage

Q13.Under the South Carolina Residential Real Property Disclosure Act and the agency provisions of S.C. Code § 40-57-350, when must a licensee provide the mandatory South Carolina 'Disclosure of Real Estate Brokerage Relationships' brochure to a prospective buyer?

• A.At the time of making an offer to purchase or before, whichever comes first
• B.At the first substantive contact with the prospective buyer
• C.Only after a buyer representation agreement has been signed
• D.At or before the closing of the transaction

Q14.A South Carolina real estate salesperson deposits a buyer's $5,000 earnest money check into the salesperson's personal checking account while waiting to open a separate account. Under S.C. Code § 40-57-710, this action is best described as:

• A.Permissible if the funds are transferred to the brokerage escrow account within five business days
• B.Commingling, which is a prohibited practice under South Carolina License Law
• C.Conversion, but only if the salesperson spends the funds
• D.Permissible because salespersons are not required to use a separate escrow account

Q15.Which of the following tasks may an unlicensed real estate assistant lawfully perform in South Carolina?

• A.Host an open house independently and answer buyer questions about the property's price and terms
• B.Prepare and present a comparative market analysis to a prospective seller
• C.Schedule appointments and perform general office administrative duties such as answering phones and filing documents
• D.Negotiate lease terms with a prospective tenant on behalf of the broker