Free North Dakota Math Practice Test — LicenseIQ

Question 1

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 2

What is the maximum fine the Commission may impose in a disciplinary action?

Accepted Answer

NDCC 43-23-11.1 caps the fine at $5,000 and lets the Commission add actual costs, including attorney's fees. $25,000 is the minimum indemnity bond for subdivided land registrants, a different figure.

Question 3

A broker earned a $15,750 commission on a $450,000 sale. What was the commission rate?

Accepted Answer

Rate = commission / sale price = $15,750 / $450,000 = 0.035 = 3.5%.

Question 4

A salesperson changes brokers. Written notice must be given to the Commission within:

Accepted Answer

NDCC 43-23-12 requires written notice within five days, and a change made without notice automatically cancels the license.

Question 5

How many of the Commission's members must be active real estate brokers?

Accepted Answer

NDCC 43-23-01 requires three of the five members to be active brokers. 'All five' is wrong because the statute only requires three, leaving room for non-broker members.

Question 6

A North Dakota broker may share a commission with an out-of-state broker who is not licensed in North Dakota only if the out-of-state broker:

Accepted Answer

N.D. Admin. Code 70-02-03-03 permits the split only if the out-of-state broker does not negotiate in North Dakota, whether by entering the state or by electronic or other communication. Negotiating by phone counts.

Question 7

What is the length of a regular term on the North Dakota Real Estate Commission?

Accepted Answer

NDCC 43-23-02 sets staggered five-year terms so that one expires each year. Four years is a common carryover from other states.

Question 8

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 9

A lender offers a 95% LTV loan. The buyer has $18,000 for the down payment. What is the maximum purchase price?

Accepted Answer

At 95% LTV the down payment is 5% of price. Price = $18,000 / 0.05 = $360,000; loan = $342,000.

Question 10

Under the Commission's rules, a real estate 'team' is:

Accepted Answer

N.D. Admin. Code 70-02-03-02.1 defines a team as two or more licensees at the same brokerage, under the designated broker, using a team name, and bars teams from suggesting they are independent firms.

Question 11

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 12

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 13

A seller wants to change several material terms in a buyer's offer. Under the Commission's rule, the best practice is to:

Accepted Answer

N.D. Admin. Code 70-02-03-06 says changes must be initiated and agreed to by the offeror, and material or extensive changes call for rewriting the entire offer.

Question 14

A house is L-shaped: one section is 40 ft by 30 ft and the other is 20 ft by 15 ft. At $185 per square foot, what is the estimated cost to build?

Accepted Answer

Area = (40 x 30) + (20 x 15) = 1,200 + 300 = 1,500 sq ft; 1,500 x $185 = $277,500.

Question 15

For a licensee whose conduct is found only to fall below generally accepted professional standards, the Commission's discipline is limited to:

Accepted Answer

NDCC 43-23-11.1 lists conduct below professional standards as a ground, but for that ground alone discipline is limited to a letter of reprimand. The $5,000 fine is available for the other grounds.

Question 16

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 17

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 18

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 19

A licensee finishes only 8 of the required CE hours by November 15. According to the Commission:

Accepted Answer

The Commission's education page says there is no grace period; a licensee who misses the deadline renews inactive and may transfer to active once the CE is done. Revocation is not the stated consequence.

Question 20

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 21

An Arizona developer's advertising for lots offered in North Dakota states 'Approved by the North Dakota Real Estate Commission.' This statement is:

Accepted Answer

NDCC 43-23.1 provides that advertising may not claim Commission approval or endorsement, even after registration. The $25,000 bond is a separate registration requirement.

Question 22

A buyer purchases a $300,000 home with a $60,000 down payment. What is the loan-to-value (LTV) ratio?

Accepted Answer

Loan = $300,000 - $60,000 = $240,000; $240,000 / $300,000 = 80% LTV. (20% is the down payment percentage.)

Question 23

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 24

On the $20,000 commission above, the listing broker keeps 50% and pays 50% to the buyer's broker. How much does the buyer's broker receive?

Accepted Answer

$20,000 x 0.50 = $10,000 to the buyer's broker.

Question 25

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.)

North Dakota real estate math practice test

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

2. What is the maximum fine the Commission may impose in a disciplinary action?

3. A broker earned a $15,750 commission on a $450,000 sale. What was the commission rate?

4. A salesperson changes brokers. Written notice must be given to the Commission within:

5. How many of the Commission's members must be active real estate brokers?

6. A North Dakota broker may share a commission with an out-of-state broker who is not licensed in North Dakota only if the out-of-state broker:

7. What is the length of a regular term on the North Dakota Real Estate Commission?

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

9. A lender offers a 95% LTV loan. The buyer has $18,000 for the down payment. What is the maximum purchase price?

10. Under the Commission's rules, a real estate 'team' is:

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

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

13. A seller wants to change several material terms in a buyer's offer. Under the Commission's rule, the best practice is to:

14. A house is L-shaped: one section is 40 ft by 30 ft and the other is 20 ft by 15 ft. At $185 per square foot, what is the estimated cost to build?

15. For a licensee whose conduct is found only to fall below generally accepted professional standards, the Commission's discipline is limited to:

16. 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?

17. 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?

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

19. A licensee finishes only 8 of the required CE hours by November 15. According to the Commission:

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

21. An Arizona developer's advertising for lots offered in North Dakota states 'Approved by the North Dakota Real Estate Commission.' This statement is:

22. A buyer purchases a $300,000 home with a $60,000 down payment. What is the loan-to-value (LTV) ratio?

23. 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:

24. On the $20,000 commission above, the listing broker keeps 50% and pays 50% to the buyer's broker. How much does the buyer's broker receive?

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

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