Free Indiana State Law Practice Test — LicenseIQ

Question 1

Which statement about the two citizen members of the Commission is correct?

Accepted Answer

Citizen members must be Indiana residents who have never been in the real estate business except as consumers. They are at-large seats, not district seats.

Question 2

Acting as a broker in Indiana without a license is classified as a

Accepted Answer

IC 25-34.1-6-2 makes unlicensed brokerage a Class A infraction. Each transaction is a separate offense, and the court adds any fees earned to the fine.

Question 3

Which statement about FHA-insured loans is correct?

Accepted Answer

FHA loans are made by approved lenders and insured by FHA, with down payments as low as 3.5% and mortgage insurance premium (MIP) required on all FHA loans, for 1-4 family homes.

Question 4

A seller wants to net $250,000 after paying a 6% commission and $6,000 in other closing costs. To the nearest dollar, what must the sale price be?

Accepted Answer

Net + other costs = $256,000, which equals 94% of the price (100% - 6%). Price = $256,000 / 0.94 = $272,340.43, about $272,340. Adding 6% to $256,000 ($271,360) understates the price.

Question 5

How many members serve on the Indiana Real Estate Commission?

Accepted Answer

IC 25-34.1-2-1 provides nine congressional-district members, one real estate member at large, and two citizen members, for a total of twelve. Nine is tempting because it is the number of district seats only.

Question 6

Under the Indiana licensing law, commercial real estate means any parcel other than one containing

Accepted Answer

IC 25-34.1-1-2 defines commercial real estate as any parcel other than one with one to four residential units. Individually sold condominiums and townhouses remain residential.

Question 7

Under an open listing, the seller owes a commission to:

Accepted Answer

Open listings are non-exclusive; only the procuring broker is paid, and the owner owes nothing for a self-sale.

Question 8

A broker who is affiliated with a managing broker only to refer prospects to licensed brokers, and who has a CE waiver, is in what status?

Accepted Answer

IC 25-34.1-3-10.5 and IC 25-34.1-9-19 describe referral status based on a waiver for brokers affiliated solely to make referrals.

Question 9

Which person does NOT need an Indiana broker license?

Accepted Answer

Owners acting on their own property are exempt, and so are owners or managers of 12 or fewer units on one or contiguous parcels. The others perform licensed acts for others for consideration.

Question 10

On June 30 of an odd-numbered year the Recovery Fund holds $420,000, and 40,000 licenses are in effect. Under the statutory formula, what surcharge per licensee would apply?

Accepted Answer

The surcharge applies because the balance is below $450,000. Formula: ($600,000 − $420,000) ÷ 40,000 = $180,000 ÷ 40,000 = $4.50. The $0.75 distractor wrongly uses the $450,000 trigger as the target.

Question 11

After the Recovery Fund pays a claim on a licensee's behalf, the licensee

Accepted Answer

IC 25-34.1-7-10 requires suspension, and the person cannot be relicensed until the amount paid is repaid with interest at 12% per year.

Question 12

In real estate, the accessibility requirements of the Americans with Disabilities Act apply mainly to:

Accepted Answer

The ADA's accessibility rules primarily cover public accommodations and commercial facilities; housing accessibility is governed mainly by the Fair Housing Act.

Question 13

Who appoints members of the Indiana Real Estate Commission?

Accepted Answer

Each member is appointed by the governor under IC 25-1-6.5. IPLA staffs the Commission but does not appoint it.

Question 14

Which activity may an unlicensed assistant generally perform?

Accepted Answer

Unlicensed staff may perform clerical tasks like typing licensee-prepared ads, but may not compose ads, negotiate or show property.

Question 15

A broker is finally determined to have engaged in unlawful housing discrimination under the Indiana Civil Rights Law. For licensing purposes this is

Accepted Answer

876 IAC 8-2-7 lists a final determination of unlawful discrimination under IC 22-9 as incompetent practice.

Question 16

Under the Truth in Lending Act (Regulation Z), which phrase in an ad is a 'trigger term' requiring full credit disclosures?

Accepted Answer

Specific terms like the down payment amount, number or amount of payments, finance charge or repayment period trigger full disclosure (including APR). General statements do not.

Question 17

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 18

An agent tells a buyer he will show homes only if the buyer uses the agent's brother as mortgage broker. This is an illegal:

Accepted Answer

Conditioning one service on the purchase of another is a tying arrangement prohibited by antitrust law.

Question 19

A licensee may manage property for an owner for a fee only if there is:

Accepted Answer

Property management agreements must be written and signed; they make the manager a general agent and define duties, authority and fees.

Question 20

Which is the most common and desirable way a real estate sales contract terminates?

Accepted Answer

Contracts ideally end by performance. They can also end by mutual agreement, impossibility, operation of law, or breach.

Question 21

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 22

Under the statute of frauds, a real estate sales contract must be:

Accepted Answer

The statute of frauds requires real estate sales contracts to be in writing and signed to be enforceable.

Question 23

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 24

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 25

A salesperson wants to buy a FSBO home for his own investment. He must:

Accepted Answer

A licensee acting as a principal must disclose licensed status, because the licensee has superior knowledge and expertise.

Indiana real estate state law practice test

1. Which statement about the two citizen members of the Commission is correct?

2. Acting as a broker in Indiana without a license is classified as a

3. Which statement about FHA-insured loans is correct?

4. A seller wants to net $250,000 after paying a 6% commission and $6,000 in other closing costs. To the nearest dollar, what must the sale price be?

5. How many members serve on the Indiana Real Estate Commission?

6. Under the Indiana licensing law, commercial real estate means any parcel other than one containing

7. Under an open listing, the seller owes a commission to:

8. A broker who is affiliated with a managing broker only to refer prospects to licensed brokers, and who has a CE waiver, is in what status?

9. Which person does NOT need an Indiana broker license?

10. On June 30 of an odd-numbered year the Recovery Fund holds $420,000, and 40,000 licenses are in effect. Under the statutory formula, what surcharge per licensee would apply?

11. After the Recovery Fund pays a claim on a licensee's behalf, the licensee

12. In real estate, the accessibility requirements of the Americans with Disabilities Act apply mainly to:

13. Who appoints members of the Indiana Real Estate Commission?

14. Which activity may an unlicensed assistant generally perform?

15. A broker is finally determined to have engaged in unlawful housing discrimination under the Indiana Civil Rights Law. For licensing purposes this is

16. Under the Truth in Lending Act (Regulation Z), which phrase in an ad is a 'trigger term' requiring full credit disclosures?

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

18. An agent tells a buyer he will show homes only if the buyer uses the agent's brother as mortgage broker. This is an illegal:

19. A licensee may manage property for an owner for a fee only if there is:

20. Which is the most common and desirable way a real estate sales contract terminates?

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

22. Under the statute of frauds, a real estate sales contract must be:

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

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

25. A salesperson wants to buy a FSBO home for his own investment. He must:

Sources