Free Utah Real Estate Practice Exam

Q1.A Utah buyer's agent receives an earnest money deposit from the buyer on a Monday. According to the Utah Division of Real Estate rules, by when must that earnest money be deposited into the principal broker's trust account?

• A.Immediately upon receipt, before leaving the buyer's presence
• B.Within one banking day of receipt by the licensee
• C.No later than the next business day after all parties have signed the purchase contract
• D.Within three calendar days of receipt by the licensee

Q2.A Utah principal broker who manages rental properties maintains a property management trust account. Which of the following practices is REQUIRED under Utah Administrative Rule R162?

• A.The broker may commingle personal operating funds with tenant security deposits as long as the total balance is documented
• B.The broker must perform a monthly reconciliation of the trust account, comparing the bank statement balance to the ledger balances
• C.Security deposits may be held in the broker's general operating account if separately labeled in the bookkeeping records
• D.The trust account must earn interest, which is credited to the Utah Housing Corporation

Q3.In a Utah residential closing, the seller has prepaid annual property taxes of $3,600 for the calendar year. If the transaction closes on September 1, how should the proration of property taxes be reflected on the settlement statement, assuming a 365-day year and the day of closing belongs to the buyer?

• A.The seller receives a credit of $1,200 and the buyer receives a debit of $1,200.
• B.The buyer receives a credit of $1,200 and the seller receives a debit of $1,200.
• C.The seller receives a credit of $2,400 and the buyer receives a debit of $2,400.
• D.No proration is necessary because Utah property taxes are paid in arrears.

Q4.Which 1968 federal law is the foundational statute prohibiting housing discrimination based on race, color, religion, sex, national origin, familial status, and disability?

• A.The Civil Rights Act of 1964
• B.The Fair Housing Act (Title VIII of the Civil Rights Act of 1968)
• C.The Housing and Community Development Act of 1974
• D.The Americans with Disabilities Act of 1990

Q5.Under RESPA, which of the following closing costs may a lender require a borrower to pay in advance?

• A.Loan origination fee
• B.Real estate broker's commission
• C.Seller's attorney fees
• D.Home inspection fee paid to the seller's inspector

Q6.In Utah, which entity most commonly serves as the neutral third party that receives, holds, and disburses funds and documents during a residential real estate closing?

• A.The Utah Division of Real Estate
• B.A licensed title and escrow company
• C.The listing broker's trust account
• D.The county recorder's office

Q7.Under Utah Code Title 61, which of the following acts by a sales agent constitutes a prohibited practice that could result in license discipline by the Utah Division of Real Estate?

• A.Presenting all offers to the seller, including offers the agent believes are too low
• B.Entering into a net listing agreement with a seller client
• C.Disclosing to a buyer that the agent represents the seller
• D.Collecting a referral fee from an out-of-state broker for a Utah transaction

Q8.At a Utah closing, the seller's existing mortgage balance of $180,000 is paid off from sale proceeds. How is this payoff reflected on the seller's side of the settlement statement?

• A.As a credit to the seller, reducing the amount owed at closing
• B.As a debit to the seller, reducing the net proceeds disbursed to the seller
• C.It is listed on the buyer's side only, as an assumed liability
• D.It does not appear on the settlement statement because it is handled separately by the lender

Q9.A broker's affiliated salesperson refers a buyer-client to a title company in which the broker holds an undisclosed 15% ownership interest. The salesperson receives no direct compensation for the referral. Which federal law has most likely been violated, and what is the primary basis for the violation?

• A.ECOA, because the referral arrangement may constitute a form of credit discrimination if it affects loan terms.
• B.RESPA Section 8, because the broker's undisclosed ownership interest in the title company constitutes a prohibited referral arrangement involving a thing of value.
• C.TILA, because the broker's financial interest in the settlement service provider must be disclosed on the Loan Estimate.
• D.CERCLA, because undisclosed financial interests in service providers create joint and several liability.

Q10.Under the Fair Housing Act, what is the statute of limitations for filing a discrimination complaint with HUD?

• A.1 year from the date of the discriminatory act
• B.30 days from the date of the discriminatory act
• C.6 months from the date of the discriminatory act
• D.2 years from the date of the discriminatory act

Q11.What is the PRIMARY purpose of the Real Estate Education, Research and Recovery Fund established under Utah Code Title 61?

• A.To compensate members of the public who have suffered financial losses caused by the improper conduct of a licensed Utah real estate agent
• B.To fund the annual salaries of Utah Division of Real Estate employees
• C.To provide grants to Utah universities conducting real estate research
• D.To reimburse real estate licensees for errors and omissions insurance premiums

Q12.The Real Estate Settlement Procedures Act (RESPA) requires lenders to provide borrowers with which disclosure document within three business days of loan application?

• A.Truth-in-Lending disclosure
• B.Loan Estimate
• C.Closing Disclosure
• D.HUD-1 Settlement Statement

Q13.Under Utah Administrative Code R162, a principal broker is audited and investigators find that the broker commingled client earnest money deposits with the brokerage's general operating funds. Which of the following best describes this violation?

• A.A minor procedural error that results only in a written warning on the first offense
• B.A violation of trust account requirements that can result in license suspension or revocation
• C.An acceptable practice if the operating account maintains a balance sufficient to cover all client funds
• D.Permissible only when the earnest money is held for fewer than five business days

Q14.Which federal law prohibits lenders from discriminating against loan applicants based on race, color, religion, national origin, sex, marital status, age, or receipt of public assistance?

• A.Equal Credit Opportunity Act (ECOA)
• B.Fair Housing Act
• C.Truth-in-Lending Act
• D.Real Estate Settlement Procedures Act (RESPA)

Q15.What type of estate does a tenant have under a standard residential lease agreement?

• A.Freehold estate
• B.Leasehold estate
• C.Fee simple estate
• D.Life estate