Free Montana Real Estate Practice Test (2026) — LicenseIQ

Question 1

A licensee acting only as a property manager must disclose:

Accepted Answer

MCA 37-51-314(8)-(9) requires a property manager to disclose the contractual relationship to all customers and clients; when acting only as a property manager, no other relationship disclosure is required. MCA 37-51-321(1)(v) makes failure to do so unprofessional conduct.

Question 2

The federal Fair Housing Act (1968) protects all of the following EXCEPT:

Accepted Answer

Federal protected classes: race, color, religion, national origin, sex, disability and familial status - not occupation.

Question 3

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 4

A new highway interchange built next to a residential subdivision lowers home values. This is:

Accepted Answer

Loss in value caused by factors outside the property boundaries is external obsolescence.

Question 5

An active Montana licensee completes 16 approved CE hours during the licensing year. How many hours carry over to the next year?

Accepted Answer

ARM 24.210.667 requires at least 12 hours each November 1 to October 31 licensing year and bars carry-over credit. The 4 extra hours do not roll forward.

Question 6

Under MCA 37-51-315, a seller is liable for a misrepresentation made by the seller's agent when:

Accepted Answer

MCA 37-51-315 makes a party not liable for an agent's misrepresentation unless the party had actual knowledge of it or the agent was repeating the party's own misrepresentation. Montana rejects automatic vicarious liability.

Question 7

A lien is BEST described as a:

Accepted Answer

A lien is a monetary encumbrance giving a creditor the right to have the debt satisfied from the property. A physical intrusion is an encroachment.

Question 8

Which statement about Montana's radon disclosure law is correct?

Accepted Answer

MCA 75-3-606 provides that compliance shields the seller and seller agent from liability based on radon, that providing results is not a warranty, and that no rescission right is created unless the contract provides one. The section addresses sales.

Question 9

A title search shows owner A conveyed to B, but the next record shows C as owner with no deed from B. This is an example of:

Accepted Answer

Gaps in the chain or unreleased liens are clouds that must be cleared (e.g., by quitclaim deed or quiet title action) before title is marketable.

Question 10

A contract clause stating that 'time is of the essence' means:

Accepted Answer

'Time is of the essence' makes performance by the stated dates essential; missing a deadline can be a breach.

Question 11

Which approach to value is MOST relevant for a single-family owner-occupied home?

Accepted Answer

The sales comparison approach, using recent comparable sales, is the primary method for owner-occupied homes. The income approach is for income-producing property.

Question 12

The largest, most expensive home in a neighborhood of much smaller homes tends to lose value because of the principle of:

Accepted Answer

Regression: a higher-value property is pulled down by surrounding lower-value properties. Progression is the opposite.

Question 13

The EPA action level for indoor radon at which mitigation is recommended is:

Accepted Answer

The EPA recommends mitigation at 4 pCi/L or higher. Radon is the second leading cause of lung cancer.

Question 14

A listing agent knows the seller will accept $20,000 less than list price. A buyer asks, 'Will they take less?' The agent should:

Accepted Answer

The duty of confidentiality bars disclosing information, like the seller's lowest acceptable price, that would harm the client's bargaining position.

Question 15

In a commercial building, the area that includes the tenant's usable space plus a share of common areas such as lobbies and hallways is the:

Accepted Answer

Rentable area = usable area plus a pro rata share of common areas, so it is always larger than usable area.

Question 16

Which fiduciary duty continues even after the agency relationship has ended?

Accepted Answer

Most fiduciary duties end with the agency, but the agent must continue to keep the former client's confidential information private.

Question 17

Under Board rules, when may a Montana licensee announce that an offer has been accepted?

Accepted Answer

ARM 24.210.641 prohibits announcing an accepted offer without possession of a party-signed acceptance. Verbal or texted agreement is not enough.

Question 18

A buyer notices a fill pipe in the yard of a 1960s home that now uses natural gas heat. The most likely concern is:

Accepted Answer

A fill pipe or vent pipe can signal an underground oil tank; older bare-steel tanks corrode and leak, contaminating soil and groundwater.

Question 19

A legal description reading 'Lot 5, Block 9 of the Lincoln subdivision' uses which method?

Accepted Answer

The lot and block method references a recorded plat map of a subdivision.

Question 20

In the cost approach, the appraiser estimates value by:

Accepted Answer

Cost approach: replacement (or reproduction) cost new - depreciation + land value. Land is valued separately because it does not depreciate.

Question 21

An agent signs a contract to sell real property on behalf of the owner. Under MCA 28-2-903, for the contract to bind the owner:

Accepted Answer

MCA 28-2-903(1)(d) provides that when an agent makes a sale or long-lease agreement, the agent's authority must be in writing and subscribed by the party to be charged.

Question 22

Whose certification must accompany a Montana salesperson license application?

Accepted Answer

MCA 37-51-302(4)(b) requires a recommendation from a broker with a supervising broker endorsement, certifying good repute and promising active supervision and training. An ordinary broker license without the endorsement does not qualify.

Question 23

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

Accepted Answer

MCA 28-2-903(1)(d) requires a writing for a lease of real property for longer than one year.

Question 24

What is the maximum term of probation the Board may impose under Montana's general licensing discipline statute?

Accepted Answer

MCA 37-1-312 allows probation with conditions for up to 3 years, and a probationary license on initial issuance for up to 3 years. Longer terms are not authorized by that section.

Question 25

Which statement correctly describes a Montana seller agent's duty to a buyer regarding property condition?

Accepted Answer

MCA 37-51-313(3)(a) requires disclosure of known adverse material facts and states the agent need not inspect the property or verify the seller's statements. A seller agent does owe the buyer limited duties, so 'disclose nothing' is wrong.

Montana real estate practice test

1. A licensee acting only as a property manager must disclose:

2. The federal Fair Housing Act (1968) protects all of the following EXCEPT:

3. 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?

4. A new highway interchange built next to a residential subdivision lowers home values. This is:

5. An active Montana licensee completes 16 approved CE hours during the licensing year. How many hours carry over to the next year?

6. Under MCA 37-51-315, a seller is liable for a misrepresentation made by the seller's agent when:

7. A lien is BEST described as a:

8. Which statement about Montana's radon disclosure law is correct?

9. A title search shows owner A conveyed to B, but the next record shows C as owner with no deed from B. This is an example of:

10. A contract clause stating that 'time is of the essence' means:

11. Which approach to value is MOST relevant for a single-family owner-occupied home?

12. The largest, most expensive home in a neighborhood of much smaller homes tends to lose value because of the principle of:

13. The EPA action level for indoor radon at which mitigation is recommended is:

14. A listing agent knows the seller will accept $20,000 less than list price. A buyer asks, 'Will they take less?' The agent should:

15. In a commercial building, the area that includes the tenant's usable space plus a share of common areas such as lobbies and hallways is the:

16. Which fiduciary duty continues even after the agency relationship has ended?

17. Under Board rules, when may a Montana licensee announce that an offer has been accepted?

18. A buyer notices a fill pipe in the yard of a 1960s home that now uses natural gas heat. The most likely concern is:

19. A legal description reading 'Lot 5, Block 9 of the Lincoln subdivision' uses which method?

20. In the cost approach, the appraiser estimates value by:

21. An agent signs a contract to sell real property on behalf of the owner. Under MCA 28-2-903, for the contract to bind the owner:

22. Whose certification must accompany a Montana salesperson license application?

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

24. What is the maximum term of probation the Board may impose under Montana's general licensing discipline statute?

25. Which statement correctly describes a Montana seller agent's duty to a buyer regarding property condition?

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