Free South Dakota Real Estate Practice Exam

Q1.A real estate agent represents the seller in a transaction and learns that the buyer is pre-approved for a loan amount significantly higher than the offered purchase price. Under fiduciary duty principles, what should the agent do with this information?

• A.Share the information with the seller to help negotiate a higher price
• B.Keep the information confidential and not disclose it to the seller
• C.Disclose the information only if directly asked by the seller
• D.Use the information to suggest the buyer increase their offer

Q2.Which of the following best describes a 'fiduciary' relationship in a real estate agency?

• A.A relationship in which the agent owes the client the highest level of trust, loyalty, and care
• B.A relationship in which the agent and client share equal responsibility for the transaction
• C.A relationship in which the broker collects a commission on behalf of the client
• D.A relationship that is created only when a written contract is signed by both parties

Q3.A buyer files a HUD complaint alleging a licensee refused to show homes in certain neighborhoods. HUD investigates and finds reasonable cause. What happens next if both parties don't elect federal court?

• A.The complaint is dismissed
• B.The case proceeds before a HUD Administrative Law Judge, who may award damages, civil penalties up to ~$24K (first offense), and injunctive relief
• C.The case is automatically referred to a criminal prosecutor
• D.Only state-court remedies remain

Q4.A South Dakota seller tells the listing salesperson that the basement has experienced water intrusion in the past but has since been repaired and has not leaked in two years. Under South Dakota property disclosure requirements, what must the salesperson do?

• A.Advise the seller that because the repair was successful and no current leaking exists, there is nothing to disclose
• B.Disclose the prior water intrusion only if a buyer specifically asks about basement conditions
• C.Advise the seller to disclose the prior water intrusion history on the South Dakota Seller's Property Condition Disclosure statement
• D.File a written report of the prior water intrusion with the South Dakota Real Estate Commission

Q5.A buyer includes a financing contingency in their purchase contract that requires them to obtain a loan commitment within 30 days. On day 25, the buyer's lender denies the loan application due to insufficient income. What is the buyer's best course of action to protect their earnest money deposit?

• A.Wait until day 30 to notify the seller of the loan denial
• B.Continue looking for alternative financing until day 30
• C.Immediately notify the seller in writing of the financing contingency failure
• D.Proceed to closing and secure financing after closing

Q6.Under the Federal Fair Housing Act, which of the following actions by a landlord would constitute illegal discrimination?

• A.Requiring a higher security deposit from tenants with pets
• B.Refusing to rent to someone who cannot meet the income requirements
• C.Refusing to rent to a family with children because the property has a swimming pool
• D.Charging different application fees based on credit score

Q7.Under SDCL Chapter 36-21A, which of the following individuals is EXEMPT from obtaining a South Dakota real estate license when performing real estate activities?

• A.A property manager who negotiates residential leases on behalf of multiple owners for compensation
• B.An attorney-in-fact acting under a duly executed power of attorney to sell a single property for a principal
• C.A salaried employee of a real estate brokerage who regularly shows properties to prospective buyers
• D.A finder who receives a referral fee for identifying buyers to a licensed broker

Q8.A tenant with a documented disability asks the landlord to allow a live-in caregiver in a unit normally limited to two unrelated adults. The landlord refuses, citing the occupancy rule. Has the landlord violated the FHA?

• A.Yes — failing to grant a reasonable accommodation (waiving the occupancy rule for a caregiver) is itself a violation
• B.No — occupancy limits are facially neutral
• C.Only if the caregiver is a relative
• D.Only if the unit has more than two bedrooms

Q9.A buyer and seller execute a purchase contract, but the buyer is a minor who misrepresented their age. The seller later discovers the truth and seeks to enforce the contract. Which statement BEST describes the legal status of this contract?

• A.The contract is voidable at the minor's option but may be ratified upon reaching the age of majority.
• B.The contract is void ab initio and cannot be enforced by either party under any circumstances.
• C.The contract is enforceable against the minor because of the misrepresentation of age.
• D.The contract is voidable at the seller's option because the buyer committed fraud.

Q10.A property manager collects security deposits from tenants and places them in an interest-bearing account. Which federal consumer protection principle would be most relevant if the manager fails to properly account for these funds?

• A.Fiduciary duty and trust fund handling principles
• B.Truth in Lending Act disclosure requirements
• C.RESPA anti-kickback provisions
• D.Equal Credit Opportunity Act protections

Q11.A South Dakota salesperson lists a residential property and, without the seller's knowledge, tells prospective buyers that the seller is going through a divorce and must sell quickly. Under SDCL Chapter 36-21A, this conduct most directly violates which duty?

• A.The salesperson's duty to disclose all material facts to buyers
• B.The salesperson's fiduciary duty of confidentiality owed to the seller client
• C.The salesperson's obligation to present all offers in a timely manner
• D.The broker's recordkeeping requirements under Commission rules

Q12.In South Dakota, a salesperson who wishes to change their employing broker must do which of the following before beginning work for the new broker?

• A.Notify the previous broker in writing and wait 30 days before transferring
• B.File a new license application and pay the applicable transfer fee to the South Dakota Real Estate Commission
• C.Obtain written permission from the South Dakota Real Estate Commission before leaving the current broker
• D.Complete 10 hours of continuing education before the transfer is approved

Q13.A landlord tells a prospective tenant that no apartments are available, when in fact units are vacant, because the applicant has two young children. This is an example of discrimination based on which protected class?

• A.Disability
• B.Sex
• C.Familial status
• D.National origin

Q14.Under SDCL Chapter 36-21A, which of the following is a requirement for a South Dakota licensee to upgrade from a salesperson license to a broker license?

• A.Completing only a state-approved broker pre-license course with no experience requirement
• B.Holding an active salesperson license and accumulating the required years of active experience under a supervising broker
• C.Passing a federal broker examination administered by HUD
• D.Obtaining a four-year college degree in business or real estate

Q15.Under South Dakota law, which of the following is a prohibited practice that can subject a real estate salesperson to disciplinary action by the South Dakota Real Estate Commission?

• A.Presenting all written offers to the seller promptly, even if a purchase agreement is already pending
• B.Recommending that a buyer obtain a professional home inspection
• C.Representing to a buyer that a property has no known defects when the salesperson knows of a material defect
• D.Disclosing the existence of a dual agency relationship to both parties in writing