Free Massachusetts Math Practice Test — LicenseIQ

Question 1

A Massachusetts broker wants to pay a referral fee to a licensed broker in Florida who sent a buyer. Under Board guidance,

Accepted Answer

The Board points to §87AAA, which contemplates fee sharing with licensees of other jurisdictions, and concludes such referral payments are not prohibited.

Question 2

Annual taxes of $5,400 are paid in arrears at year-end. Closing is June 15, and the seller owns the day of closing. Using a 360-day year, what is the proration?

Accepted Answer

Daily = $5,400 / 360 = $15. Seller owned Jan 1-Jun 15 = 5 months + 15 days = 165 days. 165 x $15 = $2,475. Because the buyer will pay the whole bill later, the seller is debited and the buyer credited.

Question 3

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 4

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 5

One discount point equals what percentage of the loan amount?

Accepted Answer

One point = 1% of the loan amount (not the purchase price), paid to lower the interest rate.

Question 6

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 7

A borrower paid $3,150 in points on a $210,000 loan. How many points were paid?

Accepted Answer

Points = cost / loan = $3,150 / $210,000 = 0.015 = 1.5 points (1 point = 1% of the loan).

Question 8

A salesperson asks her broker to pay her commissions to her single-member LLC, which holds no real estate license. Under Board team guidance,

Accepted Answer

Board guidance allows payment to a licensee's wholly owned entity only if the entity is licensed as a broker; paying an unlicensed entity violates 254 CMR 3.00(8).

Question 9

An 8-unit building rents for $1,100 per unit per month with 5% vacancy. Annual operating expenses are $28,320 (excluding debt service). At an 8% capitalization rate, what is the value?

Accepted Answer

PGI = 8 x $1,100 x 12 = $105,600; less 5% vacancy = $100,320; NOI = $100,320 - $28,320 = $72,000; value = $72,000 / 0.08 = $900,000.

Question 10

When a broker appoints one salesperson to represent the seller and another salesperson in the same office to represent the buyer, this is:

Accepted Answer

Designated agency assigns separate agents within one brokerage; the broker is still a dual agent and written consent is required.

Question 11

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 12

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 13

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 14

A seller says, 'I will pay any broker a 5% commission if they bring me a buyer.' This promise creates a(n):

Accepted Answer

In a unilateral contract only one party is bound (to pay if the act is performed); the other party has no obligation to act. Most real estate contracts are bilateral.

Question 15

A rectangular parcel measures 330 feet by 660 feet. How many acres does it contain?

Accepted Answer

Area = 330 x 660 = 217,800 sq ft; 217,800 / 43,560 = 5 acres.

Question 16

Annual taxes are $3,650. Using a 365-day year, what is the daily proration amount?

Accepted Answer

$3,650 / 365 = $10 per day. (The course's default convention is a 360-day year; this question specifies 365.)

Question 17

A buyer purchases a $275,000 home with an 80% LTV loan and pays 2.5 discount points. What do the points cost?

Accepted Answer

Loan = $275,000 x 0.80 = $220,000; points = $220,000 x 0.025 = $5,500. ($6,875 wrongly applies points to the price.)

Question 18

A commercial space of 2,400 rentable square feet is quoted at $27 per square foot per year. What is the monthly rent?

Accepted Answer

Annual rent = 2,400 x $27 = $64,800; monthly = $64,800 / 12 = $5,400. Commercial rates are quoted per square foot per YEAR.

Question 19

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 20

A home sells for $520,000 with a 5% commission. The listing broker pays 2.5% to the buyer's broker and splits the listing side 60/40 with the listing salesperson (salesperson gets 60%). How much does the listing salesperson earn?

Accepted Answer

Total = $520,000 x 0.05 = $26,000. Buyer broker gets 2.5% = $13,000, leaving $13,000 for the listing side. Salesperson = $13,000 x 0.60 = $7,800.

Question 21

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 22

A salesperson leaves Firm A for Firm B after a sale she negotiated at Firm A goes under agreement. At closing, the commission is paid to

Accepted Answer

Board guidance says commissions go to the broker whose agency was the procuring cause; that broker then pays the former licensee under their contract.

Question 23

A licensed salesperson may accept a commission or fee for brokerage services from

Accepted Answer

Section 87RR bars a salesperson from receiving any fee or commission from anyone other than the affiliated broker. Consent of the broker does not allow direct payment by a seller.

Question 24

A broker pays a "thank-you" share of a commission to an unlicensed friend who found the buyer. This is

Accepted Answer

Section 87AAA lists paying commissions to unlicensed persons as a disciplinary ground. Out-of-state fee sharing is allowed only with licensees of other jurisdictions.

Question 25

Under Massachusetts law, a net listing is

Accepted Answer

254 CMR 3.00(11) prohibits net listings, and taking one is a ground for discipline under §87AAA.

Massachusetts real estate math practice test

1. A Massachusetts broker wants to pay a referral fee to a licensed broker in Florida who sent a buyer. Under Board guidance,

2. Annual taxes of $5,400 are paid in arrears at year-end. Closing is June 15, and the seller owns the day of closing. Using a 360-day year, what is the proration?

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

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

5. One discount point equals what percentage of the loan amount?

6. 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?

7. A borrower paid $3,150 in points on a $210,000 loan. How many points were paid?

8. A salesperson asks her broker to pay her commissions to her single-member LLC, which holds no real estate license. Under Board team guidance,

9. An 8-unit building rents for $1,100 per unit per month with 5% vacancy. Annual operating expenses are $28,320 (excluding debt service). At an 8% capitalization rate, what is the value?

10. When a broker appoints one salesperson to represent the seller and another salesperson in the same office to represent the buyer, this is:

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

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

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

14. A seller says, 'I will pay any broker a 5% commission if they bring me a buyer.' This promise creates a(n):

15. A rectangular parcel measures 330 feet by 660 feet. How many acres does it contain?

16. Annual taxes are $3,650. Using a 365-day year, what is the daily proration amount?

17. A buyer purchases a $275,000 home with an 80% LTV loan and pays 2.5 discount points. What do the points cost?

18. A commercial space of 2,400 rentable square feet is quoted at $27 per square foot per year. What is the monthly rent?

19. 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:

20. A home sells for $520,000 with a 5% commission. The listing broker pays 2.5% to the buyer's broker and splits the listing side 60/40 with the listing salesperson (salesperson gets 60%). How much does the listing salesperson earn?

21. 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?

22. A salesperson leaves Firm A for Firm B after a sale she negotiated at Firm A goes under agreement. At closing, the commission is paid to

23. A licensed salesperson may accept a commission or fee for brokerage services from

24. A broker pays a "thank-you" share of a commission to an unlicensed friend who found the buyer. This is

25. Under Massachusetts law, a net listing is

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