Free Massachusetts State Law Practice Test — LicenseIQ

Question 1

On a closing statement, the purchase price is a:

Accepted Answer

The seller receives the price (credit); the buyer owes it (debit).

Question 2

Which licensee may lawfully recommend a specific home inspector to a buyer?

Accepted Answer

The §87YY½ ban does not apply when a written contract or written agency disclosure establishes that the broker acts exclusively for the buyer. A dual agent is not exclusively the buyer's broker.

Question 3

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.

Question 4

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.

Question 5

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 6

Bay State Homes LLC is a licensed brokerage whose broker of record is Pat Ruiz. Which advertising signature satisfies the broker-name requirement?

Accepted Answer

Board guidance says a licensed entity's name or properly filed d/b/a must appear conspicuously; naming only the individual broker of record does not satisfy the rule for an entity.

Question 7

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 8

A seller refuses to close on a valid contract. Because each parcel of real estate is unique, the buyer may sue to force the sale through:

Accepted Answer

Specific performance compels the breaching party to perform; it is available because land is unique. The buyer could alternatively seek monetary damages.

Question 9

A candidate passes the salesperson exam but does not pay the license fee. Within what period must the fee be paid to avoid retaking the exam?

Accepted Answer

Under 254 CMR 2.00(5) as described by the Board, the fee must be paid within 30 days of notice of passing or the candidate must retest. One year is the life of the PSI exam fee payment, a different rule.

Question 10

Within how many days must a licensee report certain criminal convictions to the Board?

Accepted Answer

254 CMR 3.00(14) requires a report within 30 days. Seven days is the period for returning a license after suspension or revocation.

Question 11

A property manager receives a tenant's security deposit and advance rent. These funds must be deposited in the:

Accepted Answer

Money belonging to others goes into a trust account; depositing it in an operating account is commingling.

Question 12

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 13

After receiving notice that the license has been revoked, a licensee must return it to the Board within

Accepted Answer

254 CMR 3.00(14) requires return of the license within seven days after notice of suspension or revocation. Thirty days is the conviction-reporting deadline.

Question 14

A real estate licensee who is not an attorney may:

Accepted Answer

Licensees may complete attorney-prepared forms but may not draft contracts, amendments or addenda or give legal advice - that is the unauthorized practice of law.

Question 15

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 16

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 17

A broker holds a $25,000 deposit in an interest-bearing escrow account. Which statement is correct?

Accepted Answer

254 CMR 3.00(10) allows interest-bearing or non-interest-bearing escrow and requires a proper accounting of interest; Board guidance says the parties should agree who receives it.

Question 18

How long is a salesperson's Board Educational Certificate valid for passing the exam?

Accepted Answer

Board guidance and the PSI handbook give two years from course completion. If the certificate expires before both portions are passed, the candidate must retake the education.

Question 19

Two brokerages agree that one will work only on the east side of town and the other only on the west side. This is:

Accepted Answer

Dividing territories or customers among competitors eliminates competition and is illegal market allocation.

Question 20

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 21

How many hours of Board-approved prelicensing education must a Massachusetts salesperson candidate complete?

Accepted Answer

Section 87SS requires 40 classroom hours of Board-approved courses before the salesperson exam. A broker candidate also needs 40 additional hours.

Question 22

Every Massachusetts real estate advertisement must include

Accepted Answer

254 CMR 3.00(9) requires every advertisement to include the broker's name. A salesperson's license number alone does not satisfy the rule.

Question 23

On the buyer's side of the closing statement, the earnest money deposit and the new mortgage loan are both:

Accepted Answer

Earnest money and loan proceeds are sources of funds that reduce what the buyer must bring, so they are buyer credits.

Question 24

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 25

When an owner dies with no will and no heirs, the property passes to the state through:

Accepted Answer

Escheat transfers ownerless property to the state when there is no will and no heirs.

Massachusetts real estate state law practice test

1. On a closing statement, the purchase price is a:

2. Which licensee may lawfully recommend a specific home inspector to a buyer?

3. Under Massachusetts law, a net listing is

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

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

6. Bay State Homes LLC is a licensed brokerage whose broker of record is Pat Ruiz. Which advertising signature satisfies the broker-name requirement?

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

8. A seller refuses to close on a valid contract. Because each parcel of real estate is unique, the buyer may sue to force the sale through:

9. A candidate passes the salesperson exam but does not pay the license fee. Within what period must the fee be paid to avoid retaking the exam?

10. Within how many days must a licensee report certain criminal convictions to the Board?

11. A property manager receives a tenant's security deposit and advance rent. These funds must be deposited in the:

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

13. After receiving notice that the license has been revoked, a licensee must return it to the Board within

14. A real estate licensee who is not an attorney may:

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

16. 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?

17. A broker holds a $25,000 deposit in an interest-bearing escrow account. Which statement is correct?

18. How long is a salesperson's Board Educational Certificate valid for passing the exam?

19. Two brokerages agree that one will work only on the east side of town and the other only on the west side. This is:

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

21. How many hours of Board-approved prelicensing education must a Massachusetts salesperson candidate complete?

22. Every Massachusetts real estate advertisement must include

23. On the buyer's side of the closing statement, the earnest money deposit and the new mortgage loan are both:

24. Which activity may an unlicensed assistant generally perform?

25. When an owner dies with no will and no heirs, the property passes to the state through:

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