Real Estate Exam Prep: What Topics Are On The Exam?
Real estate licensing exams test national industry principles and state-specific laws and regulations. State content varies, but understanding the national topics is critical regardless of what state you live in.
Whether you're a first-time test taker, repeat tester, or are thinking about making a career change, this article can help you learn how to study for the real estate exam, including the structure of the test, an overview of the major topics, and examples of exam questions and answers. We'll also discuss real estate exam prep courses that can aid you in getting licensed.
Table of Contents
- What Is the Real Estate Licensing Exam?
- How the National Portion of the Real Estate Exam Is Structured
- Real Property vs Personal Property Exam Questions
- Land Use and Zoning Questions on the Real Estate Exam
- Calculating Living Area and Square Footage
- Fair Housing Laws on the Real Estate Exam
- Property Valuation Questions You'll See on the Exam
- Real Estate Finance Exam Topics
- Legal Aspects of Real Estate on the Exam
- How to Study for the Real Estate Exam More Effectively
- Real Estate Exam Prep Resources and Practice Tests
What Is the Real Estate Licensing Exam?
The real estate license exam is a critical step for anyone looking to enter a career that requires a real estate license. The test is always multiple-choice, time-limited, and taken on a computer at a third-party testing center. It's divided into two portions, national and state, and you typically have 3-4 hours to complete the entire test.
The national portion of the real estate exam covers general real estate principles and practices that are applicable across the U.S., so the test is standardized across all states. Regardless of where you intend to be licensed, you'll prepare for the national portion of the exam in the same way by studying the same content. That portion is the topic of this article.
The state portion of the real estate exam focuses on the specific laws and regulations relevant to the state where you're seeking licensure. As a result, the content is state-specific, and you'll need to seek out study materials tailored to the exam you intend to take.
The national and state portions of the exam are scored and passed or failed separately. It's possible to pass one section but not the other. When this happens, you only need to retake the portion of the exam that you failed.
How the National Portion of the Real Estate Exam Is Structured
The national portion of the exam is 85 multiple-choice questions that must be answered within 120 minutes (or 2 hours). Most candidates report having plenty of time to work through the test.
The questions that appear on the national portion stem from a job analysis conducted by Pearson VUE, focusing on the tasks and responsibilities of real estate professionals. This means that the exam focuses on the real estate knowledge you'll need to apply in the real world. You don't need to worry about trick questions.
How The National Portion Is Scored
To pass the national portion, you must correctly answer between 70 or 75% of the questions correctly; the passing score threshold varies by state.
Only 80 of the 85 questions are actually scored. Five questions are not, because they're experimental – they represent question types that the exam authors are testing out. These experimental questions aren't marked or labeled separately, but it's worth keeping in mind that if you're caught off-guard by a few questions, they may not count toward your final score.
Topics on the National Portion
What topics are on the real estate exam, and how important are each?
- Contracts (17-19%)
- Agency & Fiduciary Duties (13%)
- Practice of Real Estate (12-13%)
- Financing (9-10%)
- Property Ownership (8-10%)
- Transfer of Title (6-8%)
- Valuation & Market Analysis (7-8%)
- Real Estate Calculations (6-10%)
- Property Disclosures (6-7%)
- Land Use Controls (5%)
- Property Management (3-5%)
While the topics are universal, the number of questions for each topic varies a little by state. You can find the exact breakdown for your state's exam by looking up the Pearson VUE exam guide for your state.
Question Types
For each topic, you'll be asked three types of questions:
- Knowledge questions, in which you're asked to recall specific facts or definitions.
- Application questions, in which you apply your knowledge to a real-world scenario.
- Analysis questions, in which you're asked to use your knowledge to draw a conclusion or make a decision.
Knowledge questions are the most common, but they're never more than half of the total questions. Application questions are more frequent than analysis questions, but you need to be able to answer all three types correctly to get a passing score.
We'll provide at least one example of each type of question below.
Real Property vs Personal Property Exam Questions
Real property refers to land and anything permanently attached to it, such as buildings and fixtures. Personal property, on the other hand, includes movable items, like furniture and vehicles.
The distinction is crucial in sales transactions, property taxes, and estate planning, and it's more nuanced than it sounds. Personal property can become real property under certain circumstances, and your knowledge of how items change classification is what you'll be tested on.
You'll need to be familiar with concepts like fixtures (personal property that becomes real property when attached to land) and the legal tests used to determine whether an item is considered a fixture.
Real Estate Exam Practice Questions
Sample Question: What determines whether an item is considered a fixture?
- The cost of the item
- Whether the item is movable
- The method of attachment, intention, adaptability, and agreement (MARIA)
- The size of the item
Correct Answer: C. The legal test to distinguish a fixture, which is real property, from chattel, which is personal property, includes the Method of attachment, Adaptability of the item, Relationship between the parties, Intention of permanence or impermanence, and Agreement between the parties. The size and cost of the item are irrelevant, and while fixtures are not easily movable, that is only part of the "Method of attachment" factor.
This is an example of a knowledge question.
Sample Question: If a seller removes a built-in appliance before closing, is this allowed?
- Yes, because the seller owns the home and everything in it until closing.
- Yes, as long as the buyer does not notice before the final walkthrough.
- No, because built-in appliances are typically considered fixtures and must remain unless excluded in the contract.
- No, but only if the buyer has already moved in.
Correct Answer: C. Built-in appliances are generally considered fixtures, so they transfer with the property unless the purchase agreement specifically states otherwise. Removing them without prior agreement is a breach of contract.
This is an example of an application question.
Land Use and Zoning Questions on the Real Estate Exam
Land use and zoning regulations play a critical role in shaping the development and use of property. These laws determine what types of buildings and activities are allowed in certain areas, impacting everything from residential home construction to commercial enterprises.
You'll need to understand the basics of zoning categories, such as residential, commercial, and industrial, as well as more specific designations like agricultural or mixed-use.
Additionally, the exam will test your knowledge of variances, special use permits, and the implications of zoning on property values and use.
Real Estate Exam Practice Questions
Sample Question: Which zoning change allows a property owner to deviate from existing zoning?
- Building permit
- Variance
- Subdivision
- Title transfer
Correct Answer: B. A variance is a form of relief granted by a local zoning authority that allows the property owner to use the land in a way that deviates from the strict requirements of the current zoning ordinance without changing the overall classification.
Sample Question: What happens when a nonconforming use is grandfathered in?
- The property must immediately comply with current zoning laws.
- The existing use can continue legally, even though it does not conform to current zoning.
- The property owner must apply for a variance every year.
- The zoning automatically changes to match the current use.
Correct Answer: B. When nonconforming use is grandfathered in, it means the use was legal under prior zoning laws and is allowed to continue even though zoning regulations have changed. It typically cannot be expanded, though, and may be lost if discontinued for a specific period of time.
Calculating Living Area and Square Footage
The ability to accurately calculate the living area of a property is another essential skill for real estate professionals. This involves measuring the size of homes and other buildings to determine their market value, listing details, and ensuring compliance with local building codes.
The exam may include questions on standard methods for measuring living spaces, including what areas of a home are considered livable square footage and how to account for unique architectural features.
Common mistakes that test-takers make include misapplying formulas to irregular shapes, confusing Gross Living Area (GLA) with total construction area, and failing to convert units correctly.
Real Estate Exam Practice Questions
Sample Question: Which areas are excluded from the gross living area?
- Finished above-grade bedrooms
- Heated living rooms
- Attached garages and unfinished basements
- Dining rooms and kitchens
Correct Answer: C. GLA includes finished, heated, above-grade living spaces. Garages, unfinished basements, porches, and non-heated spaces are generally excluded from GLA calculations.
Sample Question: Does an unfinished basement count toward square footage?
- Yes, always
- No, never
- Only if it is heated and meets local building code requirements
- Only if it is used for storage
Correct Answer: C. In most real estate markets, unfinished basements do not count toward living square footage. Only if the space is finished, heated, and meets local building requirements, it may be included in the total square footage.
Fair Housing Laws on the Real Estate Exam
Fair housing laws are designed to prevent discrimination in the buying, selling, leasing, and financing of properties. As a real estate professional, you'll be expected to have a thorough understanding of how these laws apply to protected classes, including race, color, religion, sex, disability, familial status, and national origin.
The exam will test your knowledge of the Fair Housing Act (FHA), as well as other federal, state, and local anti-discrimination laws. You'll need to be familiar with common violations, the types of practices that are considered discriminatory, and the exemptions to fair housing laws.
Real Estate Exam Practice Questions
Sample Question: Which statement violates Fair Housing laws?
- Two-bedroom home with large backyard and updated kitchen.
- Quiet neighborhood close to public transportation.
- Perfect for young couples with no children.
- Recently renovated condo with hardwood floors.
Correct Answer: C. The FHA prohibits discrimination based on familial status. Option C discourages families with children and expresses a preference based on familial status, which makes it discriminatory. The other options describe property features without referencing a protected class.
Sample Question: A landlord owns a 4-unit apartment building. A prospective tenant who uses a wheelchair asks if she can install grab bars in the bathroom at her o