Free South Dakota Real Estate Practice Exam

Q1.A broker operates a property management division and a sales division. A property manager employed by the broker refers a tenant-buyer to the sales division, where a designated agent represents the buyer. Under advanced agency principles, which disclosure obligation is MOST critical to the broker's compliance?

• A.The broker must disclose the in-house referral relationship and any compensation the property manager receives, and obtain informed consent from the buyer before the sales representation begins.
• B.No disclosure is required because both divisions are under the same broker license, creating a seamless single-agency relationship.
• C.Disclosure is only required if the broker personally receives a referral fee; compensation to employees does not trigger disclosure.
• D.The designated agent must disclose only after an offer is submitted, as the agency relationship has not yet become material.

Q2.What is the key difference between a mortgage pre-qualification and a mortgage pre-approval?

• A.Pre-qualification involves a hard credit pull; pre-approval uses only a soft inquiry
• B.Pre-qualification guarantees the loan amount; pre-approval is only an estimate
• C.Pre-qualification is required by Arizona law; pre-approval is optional
• D.Pre-qualification is an informal estimate based on self-reported data; pre-approval involves verified income, assets, and credit

Q3.RESPA requires lenders to provide borrowers with a Loan Estimate within how many business days of receiving a loan application?

• A.1 business day
• B.2 business days
• C.3 business days
• D.5 business days

Q4.The most important thing a listing agent can ask a buyer's agent when reviewing a financed offer is:

• A.Whether the buyer has a pre-qualification, pre-approval, or loan commitment — and from what type of lender
• B.Whether the buyer has made offers before
• C.Whether the buyer's agent will reduce their commission
• D.Whether the buyer will waive the inspection contingency

Q5.Under SDCL Chapter 36-21A and South Dakota Real Estate Commission rules, which of the following statements correctly describes the continuing education requirement for a licensed South Dakota salesperson at the time of license renewal?

• A.The salesperson must complete 12 hours of continuing education per renewal cycle, including a mandatory Commission-approved core course component
• B.The salesperson must complete 24 hours of continuing education per renewal cycle, with no mandatory core course requirement
• C.The salesperson must complete 18 hours of continuing education per renewal cycle, all of which may be satisfied through online elective courses
• D.The salesperson must re-take the state licensing examination every two renewal cycles in lieu of continuing education

Q6.Under SDCL Chapter 36-21A, a South Dakota salesperson lists a residential property and agrees verbally with the seller on a commission rate. The seller later refuses to pay, claiming no written agreement exists. Which of the following best describes the salesperson's legal position regarding the commission?

• A.The salesperson can still collect the commission because verbal listing agreements are enforceable in South Dakota
• B.The salesperson may file a lien on the property to recover the commission without a written agreement
• C.The commission is likely unenforceable because South Dakota law requires listing agreements to be in writing to be enforceable
• D.The salesperson can sue the seller for unjust enrichment regardless of whether a written agreement exists

Q7.A listing agent discovers that the property has environmental contamination issues that could trigger CERCLA liability. What fiduciary duty requires the agent to inform the seller of this discovery?

• A.Obedience
• B.Loyalty
• C.Accounting
• D.Disclosure

Q8.A seller asks a South Dakota salesperson to omit a known, significant foundation defect from the seller's property disclosure statement so the defect will not scare off buyers. Under SDCL Chapter 36-21A, how should the salesperson respond?

• A.Comply with the seller's request, because the salesperson represents the seller and must follow all lawful seller instructions
• B.Comply with the request only if the seller agrees to reduce the asking price to compensate buyers
• C.Refuse to comply, because concealing a known material defect is a prohibited practice that can result in license discipline for the salesperson
• D.Comply, but add a general disclaimer to the listing agreement stating that the property is sold 'as-is'

Q9.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.

Q10.A property manager receives a written complaint that one tenant is repeatedly propositioning a neighboring tenant. Under 24 C.F.R. § 100.600(c), the manager must:

• A.Take prompt corrective action within the manager's control
• B.Take no action — tenant-on-tenant conduct is a private matter
• C.Wait for a second complaint before investigating
• D.Report to law enforcement before taking any internal action

Q11.Under SDCL Chapter 36-21A, which of the following statements about the appointment of South Dakota Real Estate Commission members is most accurate?

• A.Commission members are appointed by the Governor and serve staggered terms
• B.Commission members are elected by licensed real estate brokers statewide
• C.Commission members are appointed by the State Legislature and confirmed by the Governor
• D.Commission members serve indefinitely until they voluntarily resign

Q12.Under SDCL Chapter 36-21A, a South Dakota real estate broker is responsible for the supervision of affiliated licensees. Which of the following best describes the broker's supervisory obligation regarding a salesperson's real estate activities?

• A.The broker is only responsible for supervising salespersons during their first year of licensure
• B.The broker must review and approve every offer to purchase before it is presented to a seller
• C.The broker is responsible for ensuring that affiliated salespersons conduct licensed activities in compliance with SDCL Chapter 36-21A and Commission rules
• D.The broker's supervisory duty ends once a salesperson passes the state licensing examination

Q13.A complainant has TWO paths to enforce the FHA. What are the time limits?

• A.HUD administrative complaint: 6 months; federal lawsuit: 1 year
• B.Both paths have a 90-day deadline
• C.HUD administrative complaint: 1 year from the discriminatory act; federal civil lawsuit: 2 years from the discriminatory act
• D.Both paths have a 5-year statute of limitations

Q14.A South Dakota broker operating under SDCL 36-21A-140 wishes to practice designated agency in a single transaction where both the buyer and seller are represented by different salespersons affiliated with the same brokerage. Which of the following statements MOST accurately reflects the broker's statutory disclosure and consent obligations under South Dakota law?

• A.The broker must obtain written informed consent from both the buyer and the seller acknowledging the designated agency relationship before either salesperson provides any agency services, and the broker must remain a neutral party who does not advocate for either client.
• B.Designated agency in South Dakota requires only verbal disclosure to both parties at or before the time of presenting an offer, and no written consent is required as long as the salespersons keep client information confidential.
• C.The broker must convert the transaction to dual agency and obtain dual-agency consent from both parties before the designated salespersons can continue representing their respective clients.
• D.Designated agency is prohibited in South Dakota when both parties are clients of the same brokerage, and the broker must refer one party to an outside licensee.

Q15.Under South Dakota law, a licensee who intentionally misrepresents a material fact about a property to a buyer is subject to which of the following consequences?

• A.A civil fine only, assessed by the South Dakota Real Estate Commission
• B.License suspension or revocation by the South Dakota Real Estate Commission under SDCL Chapter 36-21A
• C.A mandatory 30-day license probation with no further penalty
• D.No Commission action, because misrepresentation is solely a matter for civil courts