Free South Dakota Real Estate Practice Exam

Q1.At closing, a seller's real estate taxes for the current year have not yet been paid. The taxes for the full year are $3,600. If closing occurs on September 30 using a 360-day banker's year (30-day months), how much will the seller owe as a proration credit to the buyer?

• A.$2,400
• B.$2,700
• C.$1,800
• D.$3,000

Q2.Under federal fair housing law, which accommodation must a property manager provide for a tenant with a disability?

• A.Reducing the security deposit amount
• B.Allowing a service animal even in a 'no pets' property
• C.Providing a larger apartment at the same rent
• D.Waiving application fees for disabled applicants

Q3.Under the federal Fair Housing Act, which of the following actions by a landlord would constitute illegal steering?

• A.Refusing to rent to a prospective tenant because of a prior eviction on their record
• B.Directing a prospective tenant of a particular national origin away from certain units and toward others based on the demographic composition of those buildings
• C.Requiring all applicants to submit a completed rental application and credit check
• D.Charging a higher security deposit to a tenant with a known history of property damage

Q4.Under the Fair Housing Act, a person who believes they have been discriminated against in a housing transaction must file a complaint with the U.S. Department of Housing and Urban Development (HUD) within how many days of the alleged discriminatory act?

• A.30 days
• B.90 days
• C.180 days
• D.365 days

Q5.A salesperson begins showing a buyer properties without a signed buyer representation agreement. The buyer later claims the agent represented them. This is an example of which type of agency?

• A.Express agency
• B.Implied agency
• C.Designated agency
• D.Universal agency

Q6.Under SDCL 36-21A-28, the South Dakota Real Estate Commission may adopt rules governing broker trust accounts. A Commission audit of a managing broker's office reveals that the three-way reconciliation (bank statement, trust account ledger, and individual client ledgers) shows a $1,500 shortage. The broker claims the shortage is a bookkeeping error that will be corrected next month. What is the Commission's most likely course of action?

• A.Treat the shortage as a potential violation of trust account rules, initiate a formal investigation, and require the broker to immediately correct the deficit and provide documentation, regardless of the broker's stated intent.
• B.Accept the broker's explanation and close the matter because a single bookkeeping error does not constitute commingling or conversion under Commission rules.
• C.Issue a summary license suspension immediately without a hearing because any trust account shortage constitutes per se conversion under SDCL 36-21A.
• D.Refer the matter solely to the state's attorney for criminal prosecution and take no administrative action until the criminal case is resolved.

Q7.Under SDCL Chapter 36-21A, which of the following correctly describes the commingling prohibition applicable to South Dakota real estate brokers?

• A.A broker may temporarily deposit client funds into the operating account as long as they are moved to the trust account within 30 days
• B.A broker must keep client trust funds in a separate, federally insured trust account and may not mix them with the broker's personal or business operating funds
• C.A broker may commingle up to $500 of personal funds in the trust account to cover bank service charges
• D.Commingling is only prohibited when the trust funds exceed $1,000

Q8.A licensee refuses to show a property to a buyer because the seller said "I don't want my home shown to families with young children." Which of the FHA's "six things you cannot do" has the licensee violated?

• A.Steering only
• B.Blockbusting
• C.Nothing — the licensee was following the seller's lawful instruction
• D.42 U.S.C. § 3604(a) — refusal to sell or rent based on familial status, AND § 3604(d) — making housing unavailable

Q9.Under the Truth in Lending Act (TILA), the Annual Percentage Rate (APR) disclosed to a borrower is best described as which of the following?

• A.The true cost of credit expressed as a yearly rate, including interest and certain fees
• B.The interest rate charged on the principal loan balance only
• C.The total dollar amount of interest paid over the life of the loan
• D.The lender's profit margin on the mortgage transaction

Q10.In an all-cash transaction, what is the most important verification the seller should require from the buyer?

• A.Confirmation that no financing is involved, in a signed addendum
• B.Verifiable proof of funds — such as a bank or investment account statement — by a specified deadline
• C.An independent appraisal, since cash buyers must still meet value requirements
• D.Only the earnest money amount — no other verification is needed in cash transactions

Q11.A South Dakota seller's salesperson discovers during a listing appointment that the home has a cracked foundation that the seller has not mentioned to any buyers. Under SDCL Chapter 36-21A and South Dakota property disclosure requirements, what is the salesperson's obligation?

• A.The salesperson may keep the information confidential to protect the seller's interests as the client
• B.The salesperson must disclose the known material defect to prospective buyers even if the seller objects
• C.The salesperson only needs to disclose the defect if a buyer specifically asks about the foundation
• D.The salesperson's duty is satisfied by advising the seller to disclose it; the salesperson has no independent disclosure duty

Q12.A property is encumbered by a first mortgage of $300,000, a second mortgage of $50,000, and a mechanic's lien for $25,000 that was properly recorded before the second mortgage was executed. If the property sells at foreclosure for $350,000, how will the proceeds be distributed?

• A.First mortgage: $300,000, Second mortgage: $25,000, Mechanic's lien: $25,000
• B.Mechanic's lien: $25,000, First mortgage: $300,000, Second mortgage: $25,000
• C.All liens paid proportionally based on their amounts
• D.First mortgage: $300,000, Mechanic's lien: $25,000, Second mortgage: $25,000

Q13.Under SDCL Chapter 36-21A, which of the following statements most accurately describes an activity that DOES require a real estate license in South Dakota?

• A.A trustee conducting a court-ordered sale of real property as part of administering a decedent's estate
• B.A person who owns a 25% interest in an LLC that owns real property, and who negotiates the sale of that property on the LLC's behalf
• C.A person who, for valuable consideration, advertises and solicits buyers for real property owned by another person
• D.A licensed auctioneer who auctions real property under a specific exemption granted by the South Dakota Real Estate Commission

Q14.Under RESPA (Real Estate Settlement Procedures Act), what is the maximum time frame a lender has to respond to a qualified written request (QWR) from a borrower regarding their loan servicing?

• A.15 business days
• B.20 business days
• C.30 business days
• D.45 business days

Q15.Under the Truth in Lending Act (TILA), which of the following loan types would be exempt from the requirement to provide specific APR disclosures?

• A.A residential mortgage loan for a primary residence
• B.A business loan secured by the borrower's primary residence
• C.A home equity line of credit for personal use
• D.A commercial loan for business purposes not secured by the borrower's residence