Free Minnesota Real Estate Practice Test (2026) — LicenseIQ

Question 1

A mortgage lender offers a salesperson $200 for every client referred. Under RESPA this is:

Accepted Answer

RESPA prohibits kickbacks and unearned referral fees between settlement service providers and real estate licensees, even if disclosed.

Question 2

The 'Mrs. Murphy' exemption under the federal Fair Housing Act applies to an owner who:

Accepted Answer

The exemption covers owner-occupied 1-4 unit buildings rented without a broker and never permits discriminatory advertising.

Question 3

A house with only one bathroom and very small closets in a market expecting more suffers from:

Accepted Answer

Functional obsolescence is outdated design or layout inside the property. External obsolescence comes from outside the property and is usually incurable.

Question 4

A landlord sells an apartment building with tenants under 12-month leases. The leases:

Accepted Answer

Leases run with the property; the buyer takes title subject to existing leases and inherits the landlord's obligations.

Question 5

When must a Minnesota seller of residential property provide the written seller's disclosure?

Accepted Answer

Section 513.55 requires the written disclosure before signing an agreement to sell or transfer residential real property.

Question 6

If the agreements are silent, within what time must trust funds be disbursed after a transaction closes or is terminated?

Accepted Answer

Section 82.75, subd. 5(d) requires disbursement within ten business days after the transaction is consummated or terminated if the agreements are silent.

Question 7

A special warranty deed warrants title only against defects that:

Accepted Answer

Special (limited) warranty deeds protect only against problems created during the grantor's ownership; general warranty deeds cover the entire history.

Question 8

The principle that a property's value tends to be set by the cost of an equally desirable substitute is:

Accepted Answer

Substitution: a buyer will pay no more than the cost of an equally desirable alternative.

Question 9

A buyer pays $10,000 for a 12-month option to buy a house for $250,000. During the option period:

Accepted Answer

The option binds only the optionor. The optionee may exercise or let it lapse (forfeiting the option money).

Question 10

The client a broker represents is the:

Accepted Answer

The principal is the client to whom the agent owes fiduciary duties; a customer is a party the agent works with but does not represent.

Question 11

When a Minnesota property tax exceeds $100, the first half is due by May 15. When is the second half generally due?

Accepted Answer

Section 279.01, subd. 1 requires the first half before May 16 and the second half before October 16, that is, by May 15 and October 15. Certain agricultural property has until November 15.

Question 12

The federal law that prohibits price fixing, group boycotts, market allocation and tie-in agreements is the:

Accepted Answer

The Sherman Antitrust Act of 1890 prohibits conspiracies in restraint of trade, including these practices.

Question 13

Within what time must a charge of housing discrimination be filed with the Minnesota commissioner of human rights?

Accepted Answer

Section 363A.28, subd. 3 requires a charge with the commissioner within one year after the occurrence of the practice; the period is suspended during voluntary dispute resolution.

Question 14

For the sale or lease of a pre-1978 residence, the seller or landlord must give the buyer or tenant:

Accepted Answer

Federal law requires the EPA pamphlet, the lead warning statement and disclosure of known lead-based paint and hazards, including for renovated pre-1978 homes.

Question 15

A listing agreement states it automatically renews for 90 days unless the seller cancels in writing. Under Minnesota law, this clause is:

Accepted Answer

Section 82.66, subd. 1(c) prohibits holdover clauses, automatic extensions, and similar provisions in listing agreements.

Question 16

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 17

How long must a Minnesota broker keep transaction records such as listings, purchase agreements, and trust records?

Accepted Answer

Section 82.72, subd. 3 requires retention for six years from closing, or from the date of the document if the transaction did not close. Three years is the complaint file period.

Question 18

At what rate must a Minnesota landlord pay interest on a security deposit?

Accepted Answer

Section 504B.178, subd. 2 requires simple, noncompounded interest at one percent per annum.

Question 19

An owner's title insurance policy protects against:

Accepted Answer

Title insurance covers title defects existing before the policy date, such as forged deeds or undisclosed liens - not physical damage or future events.

Question 20

A zero-down-payment government loan program aimed at low- and moderate-income buyers in eligible rural areas is offered through the:

Accepted Answer

USDA Rural Development loans serve eligible rural buyers who meet income limits, often with no down payment.

Question 21

A seller delivers the disclosure statement to the buyer's agent instead of the buyer. What is the legal effect?

Accepted Answer

Section 513.55, subd. 2 treats delivery to the licensee representing or assisting the buyer as delivery to the buyer, and requires the licensee to provide a copy to the buyer.

Question 22

A modest home located among larger, more expensive homes tends to increase in value due to the principle of:

Accepted Answer

Progression: a lower-value property benefits from surrounding higher-value properties. Regression is the opposite effect on the most expensive home.

Question 23

A buyer contracts to buy a home for $300,000, but it appraises at $290,000. The lender offers 75% LTV. What is the maximum loan?

Accepted Answer

LTV is applied to the LESSER of price or appraised value: $290,000 x 0.75 = $217,500. Using the $300,000 price ($225,000) is the common mistake.

Question 24

Under Minnesota's statute of frauds, which lease must be in writing to be enforceable?

Accepted Answer

Section 513.05 makes a contract to lease for longer than one year void unless in writing and signed; §513.04 excepts leases not exceeding one year.

Question 25

Under §510.02, the homestead exempt from most creditors may include up to how many acres?

Accepted Answer

Section 510.02 states the homestead may include any quantity of land not exceeding 160 acres; the dollar cap is separately set and periodically indexed.

Minnesota real estate practice test

1. A mortgage lender offers a salesperson $200 for every client referred. Under RESPA this is:

2. The 'Mrs. Murphy' exemption under the federal Fair Housing Act applies to an owner who:

3. A house with only one bathroom and very small closets in a market expecting more suffers from:

4. A landlord sells an apartment building with tenants under 12-month leases. The leases:

5. When must a Minnesota seller of residential property provide the written seller's disclosure?

6. If the agreements are silent, within what time must trust funds be disbursed after a transaction closes or is terminated?

7. A special warranty deed warrants title only against defects that:

8. The principle that a property's value tends to be set by the cost of an equally desirable substitute is:

9. A buyer pays $10,000 for a 12-month option to buy a house for $250,000. During the option period:

10. The client a broker represents is the:

11. When a Minnesota property tax exceeds $100, the first half is due by May 15. When is the second half generally due?

12. The federal law that prohibits price fixing, group boycotts, market allocation and tie-in agreements is the:

13. Within what time must a charge of housing discrimination be filed with the Minnesota commissioner of human rights?

14. For the sale or lease of a pre-1978 residence, the seller or landlord must give the buyer or tenant:

15. A listing agreement states it automatically renews for 90 days unless the seller cancels in writing. Under Minnesota law, this clause is:

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

17. How long must a Minnesota broker keep transaction records such as listings, purchase agreements, and trust records?

18. At what rate must a Minnesota landlord pay interest on a security deposit?

19. An owner's title insurance policy protects against:

20. A zero-down-payment government loan program aimed at low- and moderate-income buyers in eligible rural areas is offered through the:

21. A seller delivers the disclosure statement to the buyer's agent instead of the buyer. What is the legal effect?

22. A modest home located among larger, more expensive homes tends to increase in value due to the principle of:

23. A buyer contracts to buy a home for $300,000, but it appraises at $290,000. The lender offers 75% LTV. What is the maximum loan?

24. Under Minnesota's statute of frauds, which lease must be in writing to be enforceable?

25. Under §510.02, the homestead exempt from most creditors may include up to how many acres?

Sources