Free Arkansas Math Practice Test — LicenseIQ

Question 1

An investment property with NOI of $63,000 sells for $900,000. What is the capitalization rate?

Accepted Answer

Cap rate = NOI / value = $63,000 / $900,000 = 0.07 = 7%.

Question 2

A home sells for $389,000. The seller pays a 5% commission, a $212,600 mortgage payoff, $1,200 attorney fee, $1,950 transfer tax and $600 in other costs. What are the seller's net proceeds?

Accepted Answer

Commission = $389,000 x 0.05 = $19,450. Total costs = $19,450 + $212,600 + $1,200 + $1,950 + $600 = $235,800. Net = $389,000 - $235,800 = $153,200.

Question 3

A sale price of $310,000 includes $10,000 for furniture and equipment, separately stated. If the parties use the statutory default split, how much transfer tax does the seller pay?

Accepted Answer

Tax is on real property consideration only: $300,000 × $3.30 per $1,000 = $990. The default under §26-60-106 is an equal split, so the seller pays $495. $511.50 wrongly taxes the furniture.

Question 4

A buyer purchases a home for $425,000 with a loan of $361,250. What is the LTV?

Accepted Answer

LTV = loan / price = $361,250 / $425,000 = 0.85 = 85%. (15% is the down payment percentage.)

Question 5

The seller prepaid $4,320 in property taxes for the calendar year. Closing is April 20, and the seller owns the day of closing. Using a 360-day year (30-day months), what is the proration?

Accepted Answer

Daily = $4,320 / 360 = $12. Seller owned Jan 1-Apr 20 = 3 months + 20 days = 110 days, so the buyer owes for 360 - 110 = 250 days. 250 x $12 = $3,000, credited to the seller (who prepaid) and debited to the buyer.

Question 6

Which may the Commission award from the Recovery Fund?

Accepted Answer

Section 17-42-407 limits awards to actual, compensatory damages and prohibits punitive or exemplary damages and interest on damages.

Question 7

On a $250,000 loan, how much is 2 discount points?

Accepted Answer

1 point = 1% of the loan. 2 points = 0.02 x $250,000 = $5,000.

Question 8

A tenant paid a $1,800 deposit. At move-out there is $250 of unpaid rent and $400 of damage beyond normal wear. How much must be refunded?

Accepted Answer

$1,800 − $250 − $400 = $1,150. Unpaid rent and damages from noncompliance may be deducted with an itemized notice under §18-16-305.

Question 9

When competing brokerages agree to charge the same commission rate, they commit:

Accepted Answer

Agreeing on commissions among competitors is illegal price fixing under the Sherman Antitrust Act; commissions must be set independently and are always negotiable.

Question 10

A licensee pleads guilty to a misdemeanor theft charge. Under AREC rules, the licensee must report it in writing to the Commission within

Accepted Answer

17 CAR 220-1015 requires reporting any non-traffic conviction or guilty or nolo contendere plea within 30 days.

Question 11

A home sells for $260,000 with no personal property included. What is the total Arkansas real property transfer tax?

Accepted Answer

260 × $3.30 = $858. $286 is the base portion alone ($1.10 × 260), and $572 is the additional portion alone ($2.20 × 260).

Question 12

A broker received a 4.2% commission totaling $12,600. What was the sale price?

Accepted Answer

Sale price = commission / rate = $12,600 / 0.042 = $300,000.

Question 13

A listing where the seller may sell themselves without owing commission, but only the listing broker among agents is protected, is:

Accepted Answer

In an exclusive agency listing, the seller pays no commission on a self-sale, but the listing broker is protected if any broker sells it. (Reclassified to section 6 / CORE.)

Question 14

A home sells for $400,000 with a 5% total commission. What is the total commission?

Accepted Answer

$400,000 x 0.05 = $20,000.

Question 15

A lender approves a $276,000 loan and the buyer wants to keep an 80% LTV. What is the maximum purchase price?

Accepted Answer

Purchase price = loan / LTV = $276,000 / 0.80 = $345,000. ($220,800 wrongly multiplies by 0.80.)

Question 16

Under the Code of Ethics, commission disputes between REALTORS associated with different firms are generally resolved through:

Accepted Answer

Article 17 requires REALTORS to mediate or arbitrate contractual and specific non-contractual disputes with other REALTORS through the association.

Question 17

A licensee who holds only a property management associate license is asked by an owner to sell one of the managed properties for a commission. The licensee

Accepted Answer

Section 17-42-311(a)(13) makes it a violation for a property management-only licensee to list, negotiate or sell real estate the licensee does not own, including managed property, or to accept compensation for it.

Question 18

An investor buys a rental house for $350,000; the land is valued at $75,000. Using straight-line depreciation over 27.5 years, the annual depreciation deduction is:

Accepted Answer

Only the building depreciates: $350,000 - $75,000 = $275,000; $275,000 / 27.5 = $10,000. Using the full price gives $12,727 (wrong).

Question 19

A salesperson earns $6,000 on a $150,000 sale. What was the commission rate?

Accepted Answer

Rate = commission / sale price = $6,000 / $150,000 = 0.04 = 4%.

Question 20

After a hearing, the maximum monetary penalty the Commission may impose is

Accepted Answer

Section 17-42-312(a)(4) authorizes a penalty of up to $1,000 per violation. $5,000 is the civil penalty for unlicensed real estate activity under §17-42-109.

Question 21

Which statement correctly describes the makeup of the Arkansas Real Estate Commission?

Accepted Answer

Section 17-42-201 requires three licensee members licensed at least five years and two public members: a consumer representative and an elderly representative age 60 or older. No seats are reserved for attorneys or appraisers.

Question 22

Three unrelated buyers win Commission awards against the same salesperson of $30,000, $20,000 and $40,000. The salesperson pays nothing and does not appeal. What is the most the Recovery Fund can pay in total?

Accepted Answer

Each violation is capped at $25,000, so the awards become $25,000, $20,000 and $25,000, which total $70,000. That is under the $75,000 per-licensee aggregate. $90,000 ignores the per-violation cap.

Question 23

The seller of a rental property collected $1,800 rent for the month on the 1st. Closing is on the 10th, and the seller owns the day of closing (30-day month). What is the rent proration?

Accepted Answer

Daily rent = $1,800 / 30 = $60. Buyer owns days 11-30 = 20 days. 20 x $60 = $1,200, credited to the buyer because the seller collected rent for days the buyer will own.

Question 24

A listing agreement in which the broker earns a commission regardless of who sells the property is a(n):

Accepted Answer

In an exclusive right-to-sell listing, the listing broker earns a commission no matter who procures the buyer, even the owner. (Reclassified to section 6 / CORE.)

Question 25

Which task is a public member of the Arkansas Real Estate Commission barred from performing?

Accepted Answer

Public members are full voting members but by statute do not participate in grading examinations. Nothing bars them from voting on discipline or rules.

Arkansas real estate math practice test

1. An investment property with NOI of $63,000 sells for $900,000. What is the capitalization rate?

2. A home sells for $389,000. The seller pays a 5% commission, a $212,600 mortgage payoff, $1,200 attorney fee, $1,950 transfer tax and $600 in other costs. What are the seller's net proceeds?

3. A sale price of $310,000 includes $10,000 for furniture and equipment, separately stated. If the parties use the statutory default split, how much transfer tax does the seller pay?

4. A buyer purchases a home for $425,000 with a loan of $361,250. What is the LTV?

5. The seller prepaid $4,320 in property taxes for the calendar year. Closing is April 20, and the seller owns the day of closing. Using a 360-day year (30-day months), what is the proration?

6. Which may the Commission award from the Recovery Fund?

7. On a $250,000 loan, how much is 2 discount points?

8. A tenant paid a $1,800 deposit. At move-out there is $250 of unpaid rent and $400 of damage beyond normal wear. How much must be refunded?

9. When competing brokerages agree to charge the same commission rate, they commit:

10. A licensee pleads guilty to a misdemeanor theft charge. Under AREC rules, the licensee must report it in writing to the Commission within

11. A home sells for $260,000 with no personal property included. What is the total Arkansas real property transfer tax?

12. A broker received a 4.2% commission totaling $12,600. What was the sale price?

13. A listing where the seller may sell themselves without owing commission, but only the listing broker among agents is protected, is:

14. A home sells for $400,000 with a 5% total commission. What is the total commission?

15. A lender approves a $276,000 loan and the buyer wants to keep an 80% LTV. What is the maximum purchase price?

16. Under the Code of Ethics, commission disputes between REALTORS associated with different firms are generally resolved through:

17. A licensee who holds only a property management associate license is asked by an owner to sell one of the managed properties for a commission. The licensee

18. An investor buys a rental house for $350,000; the land is valued at $75,000. Using straight-line depreciation over 27.5 years, the annual depreciation deduction is:

19. A salesperson earns $6,000 on a $150,000 sale. What was the commission rate?

20. After a hearing, the maximum monetary penalty the Commission may impose is

21. Which statement correctly describes the makeup of the Arkansas Real Estate Commission?

22. Three unrelated buyers win Commission awards against the same salesperson of $30,000, $20,000 and $40,000. The salesperson pays nothing and does not appeal. What is the most the Recovery Fund can pay in total?

23. The seller of a rental property collected $1,800 rent for the month on the 1st. Closing is on the 10th, and the seller owns the day of closing (30-day month). What is the rent proration?

24. A listing agreement in which the broker earns a commission regardless of who sells the property is a(n):

25. Which task is a public member of the Arkansas Real Estate Commission barred from performing?

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