Top 37 National Real Estate Exam Questions

Every real estate licensing exam in the U.S. has a national portion. Here's exactly what it tests — and how to prepare for it.

This guide covers the full exam format, all 8 topic categories, and 37 sample practice questions organized by subject (with answer explanations). Read it start to finish or jump to the questions if you need to drill a specific area.

Quick answer: The national portion of the real estate exam has 80 multiple-choice questions. Passing score is 70–75% depending on your state. It covers 8 main topic areas that apply in all 50 states.

National real estate exam practice questions (with answers)

The 37 questions below are organized by topic category, written in the same multiple-choice format you'll see on exam day. Each answer includes a one- or two-sentence explanation of why it's correct.

For a deeper look at the hardest part of the real estate exam and where most students lose points, that post breaks it down by category.

Property ownership

1. A person who holds property in "fee simple absolute" has:

A) The right to use the property but not sell it
B) The most complete form of ownership, with no restrictions
C) Ownership that reverts to the grantor upon death
D) A leasehold interest in the property

Answer: B — Fee simple absolute is the highest form of real estate ownership, giving the owner full rights to use, sell, lease, or transfer the property with no conditions attached.

2. Which of the following is an example of real property?

A) A portable storage shed
B) A mortgage note
C) A built-in dishwasher
D) Furniture in a furnished rental

Answer: C — Real property includes land and anything permanently attached to it. A built-in dishwasher is a fixture — once installed, it becomes part of the real property. A portable shed is personal property.

3. A life estate grants the holder ownership:

A) Only during normal business hours
B) For the duration of a specified person's life
C) For a fixed term of years
D) Until the property is sold

Answer: B — A life estate is an ownership interest that lasts for the duration of a designated person's life (usually the holder's). When that person dies, the property passes to the remainderman.

4. Which type of co-ownership includes the right of survivorship?

A) Tenancy in common
B) Tenancy at will
C) Joint tenancy
D) Tenancy at sufferance

Answer: C — Joint tenancy includes the right of survivorship: when one co-owner dies, their share passes automatically to the surviving co-owners. Tenancy in common does not include this right — each owner's share can be inherited or sold independently.

5. The bundle of rights associated with real property ownership includes all of the following EXCEPT:

A) The right to possess the property
B) The right to exclude others
C) The right to receive government subsidies
D) The right to transfer ownership

Answer: C — The bundle of rights includes possession, control, enjoyment, exclusion, and disposition (transfer). Government subsidies are not a property right.

Land use controls and regulations

6. A property owner wants to use their residentially zoned lot for a small retail shop. They could apply for a:

A) Variance
B) Special use permit
C) Nonconforming use designation
D) Eminent domain action

Answer: B — A special use permit (also called a conditional use permit) allows uses not otherwise permitted in a zone, subject to conditions set by the municipality. A variance allows deviations from dimensional requirements (like setbacks), not changes in permitted use.

7. When the government takes private property for public use, it must:

A) Offer the owner a lifetime lease back
B) Receive approval from neighboring property owners
C) Pay the owner just compensation
D) Obtain approval from the state supreme court

Answer: C — Under eminent domain, the government can take private property for public use, but the Fifth Amendment requires paying the owner "just compensation" — typically fair market value.

8. A "nonconforming use" is best described as:

A) A property that violates a deed restriction
B) A legal use that predates current zoning regulations
C) A use that has been denied a variance
D) A property in violation of a building code

Answer: B — A nonconforming use was legal when it started but no longer complies with current zoning. It's typically allowed to continue but usually cannot be expanded or rebuilt if substantially destroyed.

9. Which of the following is NOT a private land use control?

A) Deed restriction
B) Easement
C) Zoning ordinance
D) CC&Rs

Answer: C — Zoning ordinances are public controls imposed by local government. Deed restrictions, easements, and CC&Rs (covenants, conditions, and restrictions) are all private land use controls created by property owners or developers.

Valuation and market analysis

10. The sales comparison approach is MOST useful for:

A) Appraising income-producing commercial properties
B) Estimating the value of vacant land only
C) Appraising single-family homes in active markets
D) Valuing properties with no comparable sales

Answer: C — The sales comparison approach compares the subject property to recent sales of similar properties. It's most reliable for residential properties in active markets where comparable sales data is available.

11. Which principle of value states that a high-value property surrounded by lower-value properties will tend to decrease in value?

A) Substitution
B) Conformity
C) Regression
D) Contribution

Answer: C — The principle of regression holds that a higher-value property surrounded by lower-value properties will decline toward their level. The opposite — a lower-value property rising toward surrounding higher values — is the principle of progression.

12. An appraiser is estimating the value of a 20-unit apartment building. Which approach would they primarily use?

A) Sales comparison approach
B) Cost approach
C) Income approach
D) Replacement approach

Answer: C — The income approach estimates value based on the income a property produces (net operating income ÷ capitalization rate). It's the primary method for income-producing properties.

13. In appraisal, depreciation refers to:

A) A decrease in the mortgage balance
B) Any loss in property value from any cause
C) Physical deterioration only
D) Appreciation that has reversed

Answer: B — In appraisal, depreciation is any loss in value from any cause — physical deterioration, functional obsolescence (outdated design), or external obsolescence (negative outside factors like a nearby highway).

14. A competitive market analysis (CMA) is typically prepared by:

A) A state-licensed appraiser
B) A real estate agent
C) A mortgage lender
D) A county assessor

Answer: B — A CMA is an informal estimate of market value prepared by a real estate agent using recent comparable sales. It is not a licensed appraisal and cannot be used for loan qualification purposes.

Financing

15. A buyer obtains a mortgage with an interest rate that can change periodically based on a market index. This is called:

A) A fixed-rate mortgage
B) A balloon mortgage
C) An adjustable-rate mortgage (ARM)
D) A wraparound mortgage

Answer: C — An adjustable-rate mortgage (ARM) has an interest rate that adjusts at set intervals based on a market index. The initial rate is often lower than a fixed-rate loan, but it carries the risk of future increases.

16. The loan-to-value ratio (LTV) is calculated as:

A) Purchase price divided by loan amount
B) Loan amount divided by appraised value
C) Monthly payment divided by gross income
D) Down payment divided by purchase price

Answer: B — LTV = loan amount ÷ appraised value (or purchase price, whichever is lower). Lenders use LTV to assess risk. Borrowers with an LTV above 80% typically need private mortgage insurance (PMI).

17. When a buyer assumes the seller's existing mortgage, the buyer:

A) Gets a new loan at current market rates
B) Takes over the seller's existing loan terms and balance
C) Pays off the seller's loan at closing
D) Is automatically released from all future liability

Answer: B — In a loan assumption, the buyer takes over the seller's existing mortgage — same interest rate, remaining balance, and terms. This can be advantageous when the seller locked in a lower rate.

18. The Truth in Lending Act (TILA) requires lenders to disclose:

A) The property's appraised value
B) The annual percentage rate (APR) of the loan
C) The buyer's credit score
D) Whether the property passed inspection

Answer: B — TILA requires lenders to disclose the APR, finance charges, and other key loan terms before a borrower commits. The APR includes the interest rate plus fees, giving a more complete picture of the true loan cost.

19. Private mortgage insurance (PMI) is typically required when:

A) The buyer has a credit score below 700
B) The down payment is less than 20%
C) The property is a second home
D) The loan term is less than 15 years

Answer: B — PMI protects the lender (not the buyer) if the borrower defaults. It's typically required when the down payment is less than 20%, meaning the LTV exceeds 80%.

General principles of agency

20. A listing agent who represents the seller owes the buyer which of the following?

A) Loyalty and confidentiality
B) Honesty and disclosure of material facts
C) Obedience to the buyer's instructions
D) Promotion of the buyer's best interests

Answer: B — A listing agent's fiduciary duties run to the seller. To the buyer — a third party — they owe honesty and disclosure of material facts that would affect the buyer's decision, but not full fiduciary duties.

21. Which of the following BEST describes a dual agent?

A) An agent who represents two sellers simultaneously
B) An agent who works for two different brokerages
C) An agent who represents both buyer and seller in the same transaction
D) An agent who holds licenses in two states

Answer: C — A dual agent represents both parties in the same transaction. This creates a conflict of interest and requires written informed consent from both buyer and seller. It's prohibited in some states.

22. An agent discovers a material defect in the property. The seller asks them to say nothing. The agent must disclose the defect anyway based on the duty of:

A) Obedience
B) Loyalty
C) Disclosure
D) Accounting

Answer: C — The duty of disclosure requires agents to reveal material facts — information that would affect a reasonable person's decision to buy or sell. This duty cannot be overridden by a seller's instructions.

23. A buyer's agent earns a commission. In most traditional transactions, who pays it?

A) The buyer directly
B) The seller, through the listing brokerage
C) The title company
D) The mortgage lender

Answer: B — Traditionally, the seller pays the total commission, which is then split between the listing and buyer's brokerages. Note: commission structures have been evolving following 2024 industry changes — some buyers now negotiate and pay their agent directly.

24. The agency relationship is most commonly created by:

A) The first time an agent shows a property
B) A signed written agency agreement
C) Verbal agreement over the phone
D) The submission of a purchase offer

Answer: B — Agency should be established through a signed written agreement — a listing agreement for sellers or a buyer representation agreement for buyers. Written agreements are required in most states and protect both parties.

Property disclosures

25. Federal law requires sellers of residential property built before 1978 to disclose:

A) The presence of mold
B) The presence of lead-based paint
C) Prior criminal activity on the property
D) The property's energy efficiency rating

Answer: B — The Residential Lead-Based Paint Hazard Reduction Act requires sellers and landlords of pre-1978 housing to disclose known lead-based paint hazards and provide buyers with the EPA's informational pamphlet. Buyers also get a 10-day window to test for lead.

26. A seller's disclosure form is best described as:

A) A warranty that the property has no defects
B) A form where the seller reveals known material defects
C) An inspection report from a licensed inspector
D) A government certification of habitability

Answer: B — A seller's disclosure is a form where the seller discloses known material defects and conditions. It is not a warranty or inspection — it only covers what the seller knows.

27. The Americans with Disabilities Act (ADA) primarily applies to:

A) All residential properties
B) Commercial properties and public accommodations
C) Any property built after 2000
D) Only federally funded housing

Answer: B — The ADA applies to commercial facilities and public accommodations — places of business open to the public. It generally does not apply to private residential homes.

28. CERCLA (the Superfund law) primarily addresses:

A) Lead-based paint disclosure requirements
B) Cleanup of contaminated sites and hazardous waste liability
C) Fair housing requirements
D) Seller financing disclosures

Answer: B — CERCLA (Comprehensive Environmental Response, Compensation, and Liability Act) is the federal law that authorizes cleanup of hazardous waste sites and assigns liability to responsible parties — including prior owners in some cases.

Contracts

29. For a real estate contract to be legally enforceable, it must include all of the following EXCEPT:

A) Offer and acceptance
B) Consideration
C) Legal purpose
D) Notarization

Answer: D — A valid real estate contract requires offer and acceptance (mutual assent), consideration, legal purpose, and competent parties. Notarization is not required for a contract — though it is required to record a deed.

30. A seller responds to a buyer's offer by changing the price. The original offer is now:

A) Still binding on the buyer
B) Dead — a counteroffer is a rejection of the original offer
C) Valid until the buyer responds to the counteroffer
D) Automatically accepted if the buyer doesn't reply within 24 hours

Answer: B — A counteroffer is both a rejection of the original offer and a new offer from the other party. Once the seller counters, the original offer is terminated. The buyer can accept, counter again, or walk away.

31. Earnest money is BEST described as:

A) A non-refundable down payment
B) Proof of the buyer's loan approval
C) A good-faith deposit demonstrating serious intent to purchase
D) Payment to the listing agent for their services

Answer: C — Earnest money is a deposit made by the buyer to show serious intent. It's held in escrow and applied toward the purchase price at closing. Whether it's refundable depends on the contract contingencies.

32. A purchase contract includes a financing contingency. This means:

A) The seller is required to help the buyer obtain a loan
B) The buyer can cancel the contract without penalty if they can't secure financing
C) The buyer is guaranteed to get the loan they applied for
D) The seller must wait for the lender to approve the property

Answer: B — A financing contingency protects the buyer: if they can't obtain a loan under the specified terms within the contingency period, they can cancel the contract and recover their earnest money.

33. "Time is of the essence" in a contract means:

A) The property must close within 30 days of acceptance
B) All deadlines are strictly enforced — missing them can void the contract
C) The seller must respond to offers within 24 hours
D) The listing must be marketed immediately

Answer: B — "Time is of the essence" is a clause that makes all contractual deadlines strictly binding. Missing a deadline can constitute a breach of contract, potentially allowing the other party to cancel and seek damages.

34. Which of the following is an example of an executory contract?

A) A lease that has expired
B) A purchase agreement where the transaction has not yet closed
C) A deed that has been recorded
D) A loan that has been paid off

Answer: B — An executory contract is one that has been signed but not yet fully performed. A purchase agreement is executory until closing — at that point it becomes executed.

Leasing and property management

35. A month-to-month tenancy can be terminated by:

A) Only the landlord, with 60 days notice
B) Either party with proper notice, typically 30 days
C) Neither party until the end of the calendar year
D) Only a court order

Answer: B — A month-to-month tenancy (periodic tenancy) can be terminated by either party with proper notice — typically 30 days in most states. The required notice period varies by state.

36. Under a gross lease, who pays operating expenses such as taxes, insurance, and maintenance?

A) The tenant
B) The landlord
C) Both parties in equal shares
D) A third-party property manager

Answer: B — Under a gross lease, the tenant pays fixed rent and the landlord covers operating expenses. This is common in residential rentals. A net lease shifts some or all of those expenses to the tenant.

37. A property manager's PRIMARY fiduciary duty runs to:

A) The tenant
B) The property owner
C) The local government
D) The homeowners association

Answer: B — A property manager acts as an agent for the property owner. Their fiduciary duties — loyalty, obedience, disclosure, confidentiality, accounting, and reasonable care — are owed to the owner.

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How to study for the national real estate exam

The most effective way to study for the national real estate exam is to take practice tests early and often — not re-read your textbook. Practice tests show you where your actual weak spots are. Re-reading doesn't.

Here's a study approach that works:

Start by taking a full 80-question practice exam with no prep. Don't worry about the score — you're using it to diagnose. After you finish, sort your wrong answers by topic category. That list is your study plan.

Focus extra time on real estate math. Math problems account for 10–15% of the national exam and include commission calculations, loan-to-value ratios, proration, and capitalization rate. Most students underestimate how much they'll see, then get caught off guard.

Build contracts and agency knowledge early. These two categories alone account for about 30% of the national exam. If you know contracts and agency cold, you've got a serious head start.

The benchmark: aim for 75% or higher on practice tests consistently before you schedule the real exam. One good score isn't enough — you want consistency.

How to pass the national real estate exam on your first try

Passing the national real estate exam on your first attempt comes down to time management, preparation benchmarks, and knowing how to handle questions you're unsure about.

Time management. You have roughly 90 seconds per question. If you don't know an answer immediately, flag it and move on. Come back at the end. Spending four minutes on one question you're uncertain about is one of the most common ways students run out of time.

Eliminate first. On tricky questions, start by ruling out the two answers that are clearly wrong. You're now choosing between two options instead of four — those are much better odds.

Know the vocabulary cold. A significant portion of national exam questions test whether you know what terms mean. Work through the key real estate exam acronyms and vocabulary before exam day. If you don't recognize a term in the question, you can't answer it — regardless of how much you studied.

What to do if you fail. Most states allow unlimited retakes with a waiting period between attempts (typically 24 hours to a few weeks). If you pass one section and fail the other, you only retake the section you failed — not both. Check your state's candidate handbook for the specific retake policy.