Free Wisconsin Real Estate Practice Exam

Q1.A broker managing a residential transaction receives an earnest money deposit of $25,000. Before closing, the buyer discovers that the seller failed to disclose a known underground storage tank (UST) on the property. The buyer demands return of the earnest money and cancellation of the contract citing environmental concerns. The seller refuses and instructs the broker to release the funds to the seller. What is the broker's MOST appropriate course of action under broker-level legal and ethical obligations?

• A.Retain the earnest money in the escrow account without disbursing to either party, promptly notify both parties in writing of the dispute, and seek resolution through interpleader, mediation, or as directed by applicable state law — not unilaterally following either party's instructions.
• B.Release the earnest money to the seller immediately because the seller is the broker's principal and the listing agreement creates a fiduciary duty that supersedes escrow obligations.
• C.Release the earnest money to the buyer immediately because CERCLA imposes strict liability for UST contamination, which legally voids real estate contracts involving contaminated property.
• D.Deposit the earnest money into the broker's operating account for safekeeping until the dispute is resolved to prevent either party from accessing the funds prematurely.

Q2.Under the Equal Credit Opportunity Act (ECOA), a dual agent learns that the lender is requesting information about a buyer's marital status for a non-joint credit application. How should the agent handle this situation while maintaining proper fiduciary duties?

• A.Inform the buyer that ECOA prohibits this inquiry and suggest they question the lender
• B.Advise the buyer to provide the information since it was requested by the lender
• C.Contact the lender directly to withdraw the buyer's application
• D.Remain neutral and let the buyer decide without providing guidance

Q3.Under Wis. Stat. § 452.133, a Wisconsin licensee representing a seller as a client learns that the buyer — who is a customer — has made an offer that is $20,000 above the minimum price the seller privately told the agent they would accept. What must the licensee do?

• A.Disclose the seller's minimum acceptable price to the buyer as a material fact
• B.Keep the seller's minimum price confidential and present the offer to the seller
• C.Refuse to present the offer until the buyer raises it further
• D.Immediately withdraw from the transaction to avoid a conflict of interest

Q4.When must agency disclosure typically be provided to prospective clients according to general real estate practice standards?

• A.Only after a purchase agreement is signed
• B.Only when conflicts of interest arise
• C.At the first substantive contact about specific property
• D.At the closing table

Q5.A Wisconsin buyer's agent presents an offer using the WB-11 Residential Offer to Purchase. The seller counters by modifying the closing date on the WB-44 Counter-Offer form. The buyer then makes a second counteroffer using another WB-44, changing the purchase price back to the original amount. Under Wisconsin law, which statement BEST describes the legal status of the original offer at this point?

• A.The original offer remains binding because it was the first document signed by the buyer
• B.The original offer is still enforceable because the buyer reaffirmed the original price in the second counteroffer
• C.The original offer is void because it was rejected when the seller issued the first counter-offer
• D.The original offer can be revived if both parties sign a WB-41 Notice Relating to Offer to Purchase

Q6.An appraiser is using the income approach to value a small apartment building. The property generates $84,000 in annual gross income, has a 10% vacancy rate, and $22,000 in annual operating expenses. If the capitalization rate is 8%, what is the estimated value of the property?

• A.$670,000
• B.$700,000
• C.$525,000
• D.$650,000

Q7.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

Q8.Under a Wisconsin land contract, the vendor sells a property to a vendee for $180,000 with $20,000 down and monthly payments. Which of the following correctly describes the legal relationship between the parties during the contract term under Wisconsin law?

• A.The vendee holds legal title and the vendor holds equitable title until the contract is paid in full.
• B.The vendor retains legal title while the vendee acquires equitable title and the right of possession.
• C.Both parties share legal title equally until the final payment is made and a deed is recorded.
• D.The vendor transfers both legal and equitable title at closing, and retains only a mortgage lien as security.

Q9.A lender denies a loan application from a married couple, citing the income of only one spouse even though both spouses applied jointly. Under the Equal Credit Opportunity Act (ECOA), this practice is:

• A.A violation because ECOA requires lenders to consider the income of all joint applicants
• B.Permissible if the non-applicant spouse has a poor credit history
• C.Permissible at the lender's discretion based on underwriting guidelines
• D.A violation only if the excluded spouse belongs to a protected class

Q10.When dual agency occurs in a real estate transaction, which fiduciary duty is most significantly modified?

• A.The duty of confidentiality
• B.The duty of loyalty
• C.The duty of reasonable care
• D.The duty of accounting

Q11.Under CERCLA (Comprehensive Environmental Response, Compensation, and Liability Act), which party can be held liable for environmental cleanup costs?

• A.Current owners, past owners, operators, and transporters of hazardous substances
• B.Only the party that originally caused the contamination
• C.Only current property owners
• D.Only parties who knowingly participated in creating the contamination

Q12.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

Q13.A rectangular lot measures 100 feet wide by 150 feet deep. What is the area of the lot in square feet?

• A.15,000 square feet
• B.1,500 square feet
• C.250 square feet
• D.10,000 square feet

Q14.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.

Q15.A buyer purchases a home for $200,000 and later sells it for $230,000. What is the percentage of appreciation in value?

• A.15%
• B.13%
• C.30%
• D.115%