Free South Dakota Real Estate Practice Exam

Q1.Which statement about multifactor authentication is most accurate?

• A.It guarantees no fraud can occur.
• B.It materially reduces account-takeover risk but must be combined with other controls.
• C.It replaces wire verification.
• D.It makes backups unnecessary.

Q2.In a designated agency arrangement, what happens to the confidential information shared by each party?

• A.All information must be shared between designated agents
• B.Each designated agent maintains confidentiality for their respective client
• C.Confidential information can only be shared with the broker
• D.No confidential information can be maintained in designated agency

Q3.A landlord may charge a tenant with an assistance animal:

• A.Damages the animal actually causes to the unit, but no pet fees, pet deposits, or pet rent
• B.A monthly pet rent up to $50
• C.A non-refundable pet deposit
• D.Nothing — landlords must absorb all costs

Q4.Under South Dakota law, the Real Estate Commission initiates a formal investigation against a broker based on a written complaint alleging misappropriation of trust funds. The broker demands immediate access to all investigative files and witness statements compiled by Commission staff before any hearing is scheduled. Which statement most accurately reflects the Commission's authority and the broker's rights at this stage under SDCL Chapter 36-21A?

• A.The Commission may conduct its investigation confidentially and is not required to provide the broker with investigative files or witness statements prior to the formal hearing, though the broker retains due process rights to respond at the hearing itself.
• B.The Commission must provide the broker with complete copies of all investigative files and witness statements within 30 days of opening the investigation, as SDCL 36-21A mandates full pre-hearing disclosure to the licensee.
• C.The Commission loses jurisdiction over the broker if it fails to schedule a formal hearing within 60 days of receiving the written complaint, regardless of the complexity of the investigation.
• D.The broker may petition the circuit court to immediately suspend the Commission's investigation on the grounds that trust fund matters are exclusively governed by civil litigation between the parties.

Q5.A broker supervises four affiliated salespersons who regularly assist buyers with loan applications at an in-house mortgage desk. Under RESPA Section 8, which arrangement would MOST likely constitute an illegal kickback requiring the broker to take corrective action?

• A.The broker receives a flat fee from the lender for each closed referral regardless of services rendered.
• B.The broker and lender have a written Affiliated Business Arrangement (AfBA) with full disclosure to consumers.
• C.The broker receives desk space rental income from the lender at fair market value under a separate written lease.
• D.The broker's salespersons refer clients to the lender but receive no compensation for those referrals.

Q6.What is the primary purpose of the South Dakota Real Estate Commission as established under SDCL Chapter 36-21A?

• A.To promote real estate sales and increase property values statewide
• B.To protect the public interest through licensing and regulation of real estate professionals
• C.To represent the financial interests of licensed real estate brokers
• D.To collect property taxes on behalf of South Dakota counties

Q7.A South Dakota broker enters into a written independent contractor agreement with a newly licensed salesperson. The agreement states that the salesperson will be paid on commission only, will set their own hours, and will operate as an independent contractor for IRS purposes. Under SDCL 36-21A-82 and SDREC rules, which of the following activities may the broker NOT delegate to the salesperson despite the independent contractor classification?

• A.The broker may not delegate supervisory responsibility over other affiliated licensees, trust account oversight, or ultimate responsibility for the salesperson's compliance with South Dakota license law, as these duties are non-delegable statutory obligations of the broker regardless of the independent contractor agreement.
• B.The broker may not permit the salesperson to show listed properties without the broker being physically present, because independent contractor status removes the salesperson's authority to act unilaterally.
• C.The broker may not allow the salesperson to prepare purchase agreements independently, because only brokers are authorized to draft real estate contracts under SDCL 36-21A.
• D.The broker may not pay the salesperson on a commission-only basis if the independent contractor agreement also imposes any behavioral standards, because such standards create an employer-employee relationship that voids the commission structure.

Q8.A South Dakota licensed salesperson wishes to advertise her real estate services using a personal website. According to South Dakota Real Estate Commission rules governing advertising, which of the following is REQUIRED to appear on the website?

• A.The salesperson's personal cell phone number and home address
• B.The name of the salesperson's supervising broker or brokerage firm
• C.The salesperson's license number and expiration date
• D.A disclaimer stating the salesperson is not a licensed broker

Q9.Under SDCL 36-21A-12, the South Dakota Real Estate Commission is composed of members appointed by the Governor. A managing broker serving on the Commission becomes aware that the Commission is investigating one of the affiliated salespersons at her own brokerage for alleged misrepresentation to a buyer. Under principles of administrative law and Commission governance applicable in South Dakota, what is the broker-Commissioner's most appropriate course of action?

• A.The broker-Commissioner should use her position to gather information about the investigation so she can prepare the salesperson's defense before the hearing.
• B.The broker-Commissioner should recuse herself from all Commission deliberations, votes, and access to investigative materials related to the matter to avoid a conflict of interest.
• C.The broker-Commissioner may participate in the investigation phase but must abstain only during the final vote on sanctions.
• D.The broker-Commissioner should immediately terminate the salesperson's affiliation with the brokerage so that no conflict exists and she may continue to participate fully.

Q10.Which function may a temporarily designated salesperson not perform under § 32-2127(D)?

• A.Receive office communications.
• B.Hire or sever licensees.
• C.Follow the PPM.
• D.Escalate a compliance issue.

Q11.A buyer submits a written offer on a property. The seller makes a material change to the price and initials the change, then signs and returns the document to the buyer. The buyer, without acknowledging the price change, signs the document and delivers it back to the seller's agent. Which of the following BEST describes whether a binding contract exists?

• A.No binding contract exists because the seller's material change to the price constituted a counteroffer, which required the buyer to unambiguously accept the new terms; signing without acknowledging the modification is not a valid acceptance.
• B.A binding contract exists because the buyer's signature on the returned document demonstrates intent to be bound regardless of whether the modification was explicitly acknowledged.
• C.A binding contract exists at the buyer's original price because a unilateral modification by the seller without the buyer's consent is unenforceable.
• D.No binding contract exists because any modification to an offer must be made on a separate counteroffer form to be legally effective.

Q12.What is the term for the situation in which a real estate agent represents both the buyer and the seller in the same transaction?

• A.Subagency
• B.Single agency
• C.Dual agency
• D.Designated agency

Q13.Owner A has a negative $600 ledger while other owner ledgers are positive. What is the correct treatment?

• A.Net the shortage against other owners without disclosure
• B.Treat the negative balance as a red flag and resolve it without using other clients' funds
• C.Delete Owner A from the liability total
• D.Transfer a tenant deposit to Owner A

Q14.CERCLA (the Comprehensive Environmental Response, Compensation, and Liability Act) imposes liability for hazardous waste cleanup on which of the following parties?

• A.Only the party who originally deposited hazardous waste on the property
• B.Only the current owner of the property if the waste was deposited after purchase
• C.Current owners, past owners at the time of disposal, transporters, and generators of hazardous substances
• D.Only federal and state government agencies responsible for environmental regulation

Q15.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