Free South Dakota Real Estate Practice Test (2026) — LicenseIQ

Question 1

Under TRID, the borrower must receive the Closing Disclosure at least how long before loan closing?

Accepted Answer

The Loan Estimate is due within 3 business days after application, and the Closing Disclosure at least 3 business days before closing.

Question 2

A buyer later finds a hidden foundation defect. The listing agent had told the buyer in writing that the foundation information came solely from the seller, and the agent had no knowledge of the defect. Under SDCL 36-21A-78, the agent:

Accepted Answer

36-21A-78 requires substantiating listing information, but there is no violation for latent defects when the licensee disclosed that certain information came solely from the seller.

Question 3

Adding a new financing contingency to an existing sales contract is done by a(n) ____, while changing the existing closing date is done by a(n) ____.

Accepted Answer

An addendum ADDs new terms; an amendment changes existing terms. Both require agreement of both parties.

Question 4

A contract that is missing an essential element, such as consideration, is:

Accepted Answer

Missing an essential element makes a contract void from the start. A voidable contract appears valid but may be canceled by one party.

Question 5

A buyer earns $8,000 per month gross. Using a 28% front-end ratio, what is the maximum monthly housing payment (PITI)?

Accepted Answer

$8,000 x 0.28 = $2,240. $2,880 uses the 36% back-end ratio.

Question 6

To become a responsible broker in South Dakota, a broker associate must have:

Accepted Answer

36-21A-31 requires two years of active service and 24 additional class hours beyond the broker associate level.

Question 7

A seller negligently omits a known basement water problem from the disclosure statement. Which is correct?

Accepted Answer

43-4-42 says noncompliance alone does not invalidate the transfer, but a person who intentionally or negligently violates the law is liable for actual damages and repair costs, with possible costs and attorney fees.

Question 8

A broker associate drafts two purchase agreements with different prices, giving only the higher one to the lender to obtain a larger loan. This is:

Accepted Answer

36-21A-71(18) prohibits using two or more contracts, with one withheld from the lender, to obtain a larger loan.

Question 9

A property owner who wants to deviate from a zoning requirement (e.g., a setback) would seek a:

Accepted Answer

A variance grants relief from a specific zoning requirement; a setback deviation is an area variance. A building permit only authorizes construction that complies with the rules.

Question 10

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 11

Rent is $1,250 per month and there are no special conditions. Which deposit request complies with South Dakota law?

Accepted Answer

The cap is one month's rent, $1,250 (43-32-6.1). $1,875 is 1.5 months and $2,500 is two months.

Question 12

In an option to purchase, the seller who grants the option is the ____ and the option holder is the ____.

Accepted Answer

The seller (optionor) gives the option; the buyer (optionee) holds it. Only the optionor is bound during the option period, making it unilateral.

Question 13

A CMA prepared by a salesperson to suggest a listing price is:

Accepted Answer

A CMA is an informal estimate of a likely price range based on comparables - not an appraisal, which only a licensed appraiser can perform.

Question 14

In a firm using appointed agency, Agent A is appointed to the seller and Agent B, who is not on A's team, is appointed to the buyer of the same property. The responsible broker supervises both. Which is correct?

Accepted Answer

Under 36-21A-141.1, knowledge is not imputed between appointed agents and the brokerage, and a broker does not become a limited agent solely by making appointments.

Question 15

A REALTOR is asked to value a type of property she has never handled. Under the Code of Ethics she should:

Accepted Answer

Article 11 requires competence; if lacking expertise, the REALTOR must get qualified help (disclosed to the client) or decline.

Question 16

A seller refuses to close through no fault of the buyer. The listing broker had earned a commission under the listing. What happens to the buyer's $10,000 deposit?

Accepted Answer

36-21A-77 says the broker has no right to the purchaser's deposit when the seller fails to perform through no fault of the purchaser, even if the commission is earned; the deposit is returned to the purchaser.

Question 17

The 'bundle of rights' in real property includes all of the following EXCEPT:

Accepted Answer

The bundle includes possession, control, enjoyment, exclusion and disposition - never a guaranteed profit.

Question 18

South Dakota's owner-occupied exemption from refusal-to-rent rules in SDCL 20-13-20 covers dwellings with living quarters for no more than:

Accepted Answer

The state exemption covers dwellings for no more than two independent families when the owner occupies one. The federal Fair Housing Act's exemption covers up to four.

Question 19

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 20

A licensee from Firm B wants to act as a subagent for Firm A's seller. Subagency requires:

Accepted Answer

36-21A-143 requires the client's written permission. The subagent then owes the client the same duties as the client's broker.

Question 21

In a triple-net (NNN) lease, the tenant pays base rent plus:

Accepted Answer

Net (N) adds taxes; double net (NN) adds taxes and insurance; triple net (NNN) adds taxes, insurance and maintenance.

Question 22

Which deed provides the GREATEST protection to the grantee?

Accepted Answer

A general warranty deed contains the fullest covenants, warranting title against all defects, including those arising before the grantor owned it.

Question 23

Which document is recorded in the county records and makes the property collateral for a loan?

Accepted Answer

The mortgage creates the lien and is recorded. The promissory note is the borrower's personal promise to repay and is not recorded.

Question 24

Under the Housing for Older Persons Act, a '55 and older' community generally requires that:

Accepted Answer

55+ housing requires at least 80% of occupied units to have one resident 55+; 62+ housing requires all residents to be 62+. The exemption applies only to familial status.

Question 25

A seller authorized a list price of $289,000. The listing agent advertises the home at $279,000 to draw calls. Under SDCL 36-21A-72 this is:

Accepted Answer

36-21A-72 bars advertising a sale price other than the actual price authorized.

South Dakota real estate practice test

1. Under TRID, the borrower must receive the Closing Disclosure at least how long before loan closing?

2. A buyer later finds a hidden foundation defect. The listing agent had told the buyer in writing that the foundation information came solely from the seller, and the agent had no knowledge of the defect. Under SDCL 36-21A-78, the agent:

3. Adding a new financing contingency to an existing sales contract is done by a(n) , while changing the existing closing date is done by a(n) .

4. A contract that is missing an essential element, such as consideration, is:

5. A buyer earns $8,000 per month gross. Using a 28% front-end ratio, what is the maximum monthly housing payment (PITI)?

6. To become a responsible broker in South Dakota, a broker associate must have:

7. A seller negligently omits a known basement water problem from the disclosure statement. Which is correct?

8. A broker associate drafts two purchase agreements with different prices, giving only the higher one to the lender to obtain a larger loan. This is:

9. A property owner who wants to deviate from a zoning requirement (e.g., a setback) would seek a:

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

11. Rent is $1,250 per month and there are no special conditions. Which deposit request complies with South Dakota law?

12. In an option to purchase, the seller who grants the option is the and the option holder is the .

13. A CMA prepared by a salesperson to suggest a listing price is:

14. In a firm using appointed agency, Agent A is appointed to the seller and Agent B, who is not on A's team, is appointed to the buyer of the same property. The responsible broker supervises both. Which is correct?

15. A REALTOR is asked to value a type of property she has never handled. Under the Code of Ethics she should:

16. A seller refuses to close through no fault of the buyer. The listing broker had earned a commission under the listing. What happens to the buyer's $10,000 deposit?

17. The 'bundle of rights' in real property includes all of the following EXCEPT:

18. South Dakota's owner-occupied exemption from refusal-to-rent rules in SDCL 20-13-20 covers dwellings with living quarters for no more than:

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

20. A licensee from Firm B wants to act as a subagent for Firm A's seller. Subagency requires:

21. In a triple-net (NNN) lease, the tenant pays base rent plus:

22. Which deed provides the GREATEST protection to the grantee?

23. Which document is recorded in the county records and makes the property collateral for a loan?

24. Under the Housing for Older Persons Act, a '55 and older' community generally requires that:

25. A seller authorized a list price of $289,000. The listing agent advertises the home at $279,000 to draw calls. Under SDCL 36-21A-72 this is:

Sources