Free Wisconsin Real Estate Practice Exam

Q1.A broker represents a seller whose property is being conveyed via a general warranty deed. During the transaction, a title search reveals an unresolved mechanic's lien from a contractor who performed work three years ago. The seller insists the lien is invalid and refuses to address it before closing. As the listing broker, what is the MOST appropriate course of action that reflects broker-level statutory duties and advanced agency obligations?

• A.Advise the seller in writing that the lien is a cloud on title that could defeat the covenant of seisin and the covenant against encumbrances inherent in a general warranty deed, recommend the seller cure the lien or escrow sufficient funds at closing, and document all communications; if the seller refuses, disclose the title defect to the buyer as a material fact.
• B.Proceed to closing without raising the issue because the seller has the right to convey property as-is, and the title insurance company will resolve any post-closing claims.
• C.Instruct the closing attorney to simply omit the lien from the HUD-1 or Closing Disclosure so the transaction can close on schedule.
• D.Advise the buyer's agent verbally of the lien but take no further action, since the broker's fiduciary duty runs only to the seller and requires protecting the seller's confidences.

Q2.Under Wisconsin's designated agency rules, once designated agency is established with the informed written consent of both parties, which of the following BEST describes the obligation of the firm's qualifying broker regarding confidential client information?

• A.The qualifying broker may freely share each party's confidential information with the other designated agent to help close the transaction
• B.The qualifying broker must act as a neutral facilitator and may share confidential information only to prevent fraud
• C.The qualifying broker must not disclose confidential information of either party to the other designated agent
• D.The qualifying broker is relieved of all agency duties once designated agents are appointed

Q3.A broker managing a 20-agent office discovers that one of her affiliated salespersons has been steering prospective buyers of a particular national origin exclusively toward listings in two specific neighborhoods while discouraging them from viewing homes in other areas. Under the federal Fair Housing Act, which of the following best describes the broker's potential liability?

• A.The broker bears no liability because the salesperson, not the broker, made the steering decisions.
• B.The broker may be held vicariously liable for the salesperson's discriminatory conduct because a broker is responsible for the fair housing compliance of affiliated licensees acting within the scope of their employment.
• C.The broker's liability is limited to a written reprimand from HUD, provided the broker did not directly participate in the steering.
• D.The broker is only liable if it can be proven that the broker gave the salesperson explicit written instructions to steer buyers.

Q4.A Wisconsin salesperson is the listing agent for a property and also has a buyer-client who wants to make an offer on that same listing. The salesperson wishes to practice multiple representation. Which of the following is required under Wis. Stat. § 452.135 before the salesperson may proceed?

• A.The salesperson must terminate the buyer agency agreement before writing the offer so that only a seller agency relationship exists.
• B.The broker must obtain written informed consent to multiple representation from both the seller and the buyer before the salesperson may proceed.
• C.The salesperson must transfer the buyer-client to another agent in the firm automatically; written consent is only required if no other agents are available.
• D.Verbal consent from both parties at the time of presenting the offer is sufficient to satisfy Wisconsin's multiple representation requirements.

Q5.Under the Federal Fair Housing Act, which of the following is NOT a protected class?

• A.National origin
• B.Familial status
• C.Sexual orientation
• D.Religion

Q6.A Wisconsin property manager collects security deposits and monthly rent on behalf of an owner. Under Wisconsin law, where must these funds be held?

• A.In the property manager's personal checking account to facilitate quick disbursement.
• B.In the owner's personal savings account as directed by the owner.
• C.In a trust account, separate from the property manager's operating or personal funds.
• D.In a money market account held jointly in the names of the manager and the owner.

Q7.Under Wisconsin law, an applicant for a salesperson's license must complete pre-license education and then pass the state examination. Which of the following is a requirement that Wisconsin imposes BEFORE a salesperson license may be issued and activated?

• A.The applicant must have at least one year of prior experience in property management.
• B.The applicant must be sponsored by and affiliated with a licensed Wisconsin real estate broker.
• C.The applicant must submit proof of membership in the National Association of REALTORS®.
• D.The applicant must hold a four-year college degree in business or a related field.

Q8.What is the primary difference between a conventional loan and an FHA loan?

• A.Conventional loans have higher interest rates than FHA loans
• B.Conventional loans require mortgage insurance while FHA loans do not
• C.FHA loans can only be used for investment properties
• D.FHA loans are insured by the government while conventional loans are not

Q9.Under the Fair Housing Act, which of the following lease provisions would be considered discriminatory and therefore illegal?

• A.A clause requiring all tenants to maintain renter's insurance
• B.A clause requiring a security deposit equal to one month's rent
• C.A provision requiring 30 days written notice before lease termination
• D.A provision stating 'no children under 12 allowed in this adult community'

Q10.A Wisconsin salesperson receives a $5,000 earnest money check from a buyer on a Friday afternoon after the broker's trust account bank is closed for the weekend. Under Wis. Admin. Code § REEB 18.03, what is the salesperson's proper course of action?

• A.Deposit the check into the salesperson's personal checking account temporarily and transfer it to the broker's trust account first thing Monday morning.
• B.Hold the uncashed check in a secure location and deliver it to the broker so it can be deposited on the next business day the bank is open.
• C.Return the check to the buyer and ask for a certified check that can be held without risk over the weekend.
• D.Deposit the check immediately into the broker's operating account to keep it safe until the trust account bank reopens.

Q11.NAR Standard of Practice 10-5 applies to REALTOR® conduct in which contexts?

• A.Only in-person client meetings
• B.Professional contexts including open houses, industry events, MLS forums, and professional social media
• C.Only transactions involving the REALTOR®'s own listings
• D.Only conduct occurring at the REALTOR®'s brokerage office

Q12.Which of the following qualifies as valid consideration in an Arizona real estate purchase contract?

• A.The buyer's promise to pay the purchase price in exchange for the seller's promise to convey title
• B.The buyer's promise to love and care for the property
• C.The parties' long-standing friendship and mutual trust
• D.The listing agent's promise to work hard on the transaction

Q13.In Wisconsin, a residential property sells for $350,000. What is the Wisconsin Real Estate Transfer Fee owed, and who is customarily responsible for paying it?

• A.The fee is $1,750, customarily paid by the seller, calculated at $3.00 per $1,000 of purchase price.
• B.The fee is $1,050, customarily paid by the buyer, calculated at $3.00 per $1,000 of purchase price.
• C.The fee is $1,050, customarily paid by the seller, calculated at $3.00 per $1,000 of purchase price.
• D.The fee is $700, customarily paid equally by buyer and seller, calculated at $2.00 per $1,000 of purchase price.

Q14.A Wisconsin residential property closes on March 20. The seller has already paid the annual county real estate taxes of $3,600 for the full calendar year. Using a 365-day proration method, approximately how much will the seller receive as a credit at closing for the prepaid taxes?

• A.The seller receives a credit of approximately $2,695
• B.The seller receives a credit of approximately $905
• C.The buyer receives a credit of approximately $2,695
• D.No proration is needed because the seller paid the full year's taxes

Q15.The primary difference between quid pro quo harassment and hostile environment harassment in a housing context is:

• A.Quid pro quo conditions housing on submission to sexual demands; hostile environment creates an abusive living condition through pervasive conduct
• B.Quid pro quo involves a monetary demand; hostile environment involves physical contact only
• C.Hostile environment claims require a criminal conviction; quid pro quo does not
• D.Only quid pro quo harassment is covered by the Fair Housing Act — hostile environment is not