Free Real Estate Sales Exam Questions That Helps Candidates Pass

Physical deterioration is value loss from ordinary wear and tear, such as peeling paint or roof damage. Functional obsolescence (B) is outdated design. External obsolescence (A) is caused by outside factors. Regression (D) is a value loss principle due to neighboring properties.

Commingling is mixing client funds with personal or business accounts. Conversion (B) is using those funds for personal benefit, an even more severe violation. Puffing (C) is exaggeration. Estoppel (D) prevents denial of agency due to prior conduct.

Tenancy in common allows co-owners to hold unequal shares, and each share is inheritable—there is no right of survivorship. Joint tenancy (A) requires equal shares and includes survivorship. Community property (C) applies in certain states and typically involves equal shares. Tenancy by the entirety (D) is limited to married couples and includes survivorship.

The sales comparison approach (market data approach) is most reliable for residential homes. It compares recent sales of similar properties. Income approach (A/D) applies to income properties. Cost approach (C) is best for unique or new buildings.

Police power allows government regulation of land use for public welfare, including zoning and building codes. Eminent domain (B) allows taking property with compensation. Escheat (C) transfers property to the state when no heirs exist. Taxation (D) collects revenue.