Study Guide
Real Estate License Exam Guide
Complete preparation for the national and state portions of the real estate salesperson and broker licensing exams.
📋 100–150 questions✅ 70–75% to pass🏛️ PSI / Pearson VUE🗺️ National + State portions
1. Exam Overview
The real estate licensing exam is required to legally represent buyers and sellers in real estate transactions in all 50 US states. The exam is administered by PSI or Pearson VUE depending on your state, and is divided into a national (general) portion and a state-specific portion.
National vs. State Portion
National Portion
~80 questions
Property ownership, agency, contracts
Financing, valuation, fair housing
Federal real estate laws
Pass: typically 56/80 (70%)
State Portion
30–40 questions
State licensing laws
State agency disclosures
Local real estate commission rules
Pass: typically 70% of section
You must pass both sections. You can retake individual sections if you fail one. Scores are valid for a limited time (typically 12–24 months) before you must retake both portions.
2. Property Ownership
Property ownership is one of the most heavily tested areas. Know the different forms of ownership and the rights associated with each.
Forms of Property Ownership
Tenancy in CommonHigh frequency
Each owner has undivided interest; shares can be unequal; no right of survivorship; interest can be willed
Joint TenancyHigh frequency
Equal undivided interest; right of survivorship; requires 4 unities (time, title, interest, possession)
Tenancy by the EntiretyMedium frequency
Married couples only; both must agree to transfer; right of survivorship; creditor protection
Community PropertyMedium frequency
9 states only; property acquired during marriage owned 50/50; separate property = pre-marriage assets or gifts/inheritance
Condominium OwnershipMedium frequency
Own unit + undivided interest in common areas; monthly HOA/condo fees; governed by CC&Rs
Cooperative (Co-op)Medium frequency
Own shares in the corporation that owns the building; proprietary lease gives right to occupy; board approval needed
Bundle of Rights
Property ownership includes a bundle of rights: the right to possess, use, enjoy, exclude others, and dispose (sell, will, gift, or mortgage) the property. Government limits these rights through PETE — Police power, Eminent domain, Taxation, and Escheat.
3. Agency Relationships
Agency law is consistently one of the most tested topics. Know the types of agency, duties owed, and disclosure requirements.
Types of Agency
Seller's Agent (Listing Agent)
Fiduciary duty to seller; must disclose buyer's motivation and financial ability to seller
Buyer's Agent
Fiduciary duty to buyer; must disclose seller's motivation; must be disclosed to seller's agent
Dual Agency
Represents both buyer and seller; requires informed written consent from both parties; often limited or prohibited
Transaction Broker
Facilitates transaction without fiduciary duty to either party; used in some states
Fiduciary Duties (COALD)
C
Care
Reasonable skill and care
O
Obedience
Follow lawful instructions
A
Accounting
Handle funds properly
L
Loyalty
Client's interests first
D
Disclosure
Disclose all material facts
4. Real Estate Contracts
Real estate contracts are heavily tested. Know the requirements for a valid contract and the most common contract types.
Requirements for a Valid Real Estate Contract
Competent Parties
Legal age (18+), mental capacity
Mutual Assent
Offer and acceptance (meeting of minds)
Consideration
Something of value exchanged
Lawful Object
Legal purpose
In Writing
Statute of Frauds requires real estate contracts in writing
Description of Property
Adequate legal description
Key Contract Types
Purchase Agreement (Sales Contract)
The main contract between buyer and seller — establishes price, terms, contingencies, and closing date
Listing Agreement
Contract between seller and broker — exclusive right to sell is most common; gives broker the right to a commission regardless of who sells
Buyer Representation Agreement
Establishes agency relationship between buyer and broker
Option Contract
Gives buyer the right (but not obligation) to purchase at a set price within a specified period; seller is bound but buyer is not
Land Contract (Contract for Deed)
Seller finances the sale; buyer gets equitable title; seller retains legal title until paid in full
5. Real Estate Financing
Financing questions test your knowledge of mortgage types, federal lending laws, and loan calculations.
Key Mortgage Concepts
LTV (Loan-to-Value)
Loan Amount ÷ Appraised Value × 100
$180K loan ÷ $200K value = 90% LTV
DTI (Debt-to-Income)
Monthly Debt Payments ÷ Gross Monthly Income
$2,000 debt ÷ $5,000 income = 40% DTI
PMI
Required when LTV > 80%
Protects the lender, not the borrower
Points
1 point = 1% of loan amount
2 points on $200K = $4,000 upfront
Federal Lending Laws
RESPA— Real Estate Settlement Procedures Act
Requires disclosure of settlement costs; prohibits kickbacks; requires Loan Estimate and Closing Disclosure
TILA— Truth in Lending Act
Requires APR disclosure; 3-day right of rescission on refinances; Regulation Z
ECOA— Equal Credit Opportunity Act
Prohibits discrimination in lending based on race, sex, age, religion, national origin, marital status, income from public assistance
HMDA— Home Mortgage Disclosure Act
Requires lenders to collect and report data on mortgage applications to identify discriminatory lending patterns
6. Property Valuation
Know the three approaches to value and when each is appropriate.
Sales Comparison Approach
Best for: Residential properties
Adjusts comparable sales prices up/down based on differences with subject property. Most common for single-family homes.
Cost Approach
Best for: New construction, special-use properties
Land value + cost to replace improvements − depreciation. Best for schools, churches, government buildings.
Income Approach
Best for: Investment/income-producing properties
Net Operating Income ÷ Cap Rate = Value. Also: GRM (Gross Rent Multiplier) = Sales Price ÷ Monthly/Annual Rent.
7. Fair Housing Laws
The Fair Housing Act is consistently one of the most tested topics. Know the protected classes and prohibited practices.
Federal Fair Housing Act (1968) Protected Classes
Race
Color
National Origin
Religion
Sex
Disability
Familial Status
(+ local additions)
Prohibited Practices
Steering
Directing buyers toward or away from neighborhoods based on protected class
Blockbusting
Inducing property owners to sell by suggesting that protected classes are moving into the area
Redlining
Refusing to make loans or provide insurance in certain neighborhoods based on demographics
Discriminatory Advertising
Any advertising that indicates a preference or limitation based on a protected class
ADA & Disability Rights
Landlords must allow reasonable modifications (at tenant's expense) and provide reasonable accommodations for tenants with disabilities. New multi-family housing (4+ units) built after 1991 must meet specific accessibility requirements.
8. Disclosures & Environmental Issues
Required Disclosures
Lead-Based Paint
Federal law requires disclosure for homes built before 1978; buyers get 10-day inspection period
Seller's Property Disclosure
Seller must disclose known material defects that would affect value or desirability
Megan's Law / Sex Offender Registry
Varies by state; agents should direct buyers to public registries rather than personally disclosing
Stigmatized Property
Varies by state; not typically required to disclose murder, suicide, or reported hauntings
Environmental Hazards
Asbestos
Insulation and tiles in older homes; disturbing increases lung cancer risk; professional abatement required
Radon
Radioactive gas from soil; EPA action level: 4 pCi/L; test required in many transactions
Lead Paint
Homes built before 1978; neurological damage in children; disclosure and inspection mandatory
Underground Storage Tanks (UST)
Soil contamination risk; affects value; CERCLA/Superfund liability for owners
9. Real Estate Math
Math questions make up about 10–15% of the exam. Master these formulas to pick up easy points.
Commission
Sales Price × Commission Rate
$400,000 × 6% = $24,000 total; agent split: $24,000 × 50% = $12,000
Proration (365-day method)
Annual amount ÷ 365 × days
$3,650/yr taxes ÷ 365 = $10/day × 100 days = $1,000 credit
Loan-to-Value (LTV)
Loan Amount ÷ Property Value × 100
$180,000 ÷ $200,000 × 100 = 90%
Net Operating Income
Gross Income − Vacancy − Operating Expenses
$60,000 − $3,000 − $20,000 = $37,000 NOI
Cap Rate
NOI ÷ Property Value × 100
$37,000 ÷ $500,000 = 7.4%
Property Tax
Assessed Value × Mill Rate (1 mill = $1 per $1,000)
$200,000 × 20 mills = $200,000 × 0.02 = $4,000
10. State Portion Tips
The state portion tests your knowledge of your specific state's real estate laws. Content varies significantly by state, so use your state-provided study materials in addition to national prep materials.
Key State Topics to Study
→State licensing requirements and renewal periods
→State-specific agency disclosure forms and timing
→State real estate commission rules and disciplinary actions
→State-specific contract forms (purchase agreement templates)
→Transfer taxes and closing procedures in your state
→State fair housing additions beyond federal protected classes
→Escrow and trust account requirements
→State-specific environmental disclosure requirements
11. Study Plan
4 weeks out
Cover all national exam topics systematically. Focus on understanding concepts, not just memorizing definitions.
3 weeks out
Study state-specific content using your state real estate commission's study materials. Take notes on state-specific rules.
2 weeks out
Take full-length national practice exams. Target weak areas identified by analytics. Review math formulas daily.
1 week out
Mixed practice exams. Review fair housing, agency, and contracts thoroughly — they appear most frequently.
2 days out
Light review of key terms and math formulas. Don't cram new material.
12. Test Day Tips
✓Bring valid government-issued photo ID — exam centers are strict about ID requirements
✓Arrive 15 minutes early; late arrivals may be turned away and forfeit fees
✓No personal items allowed in testing room — phones, notes, and food must be stored
✓Read every question fully — real estate questions often contain qualifying language
✓For agency questions: identify who the agent represents before answering
✓For fair housing questions: when in doubt, the most protective answer is usually correct
✓Don't overthink math questions — the formulas are straightforward if memorized
✓Flag questions you're unsure of and return to them; don't spend too long on any one question
Pass rate reality: First-time pass rates vary by state, typically 60–70% nationally. The most common failure areas are fair housing law, agency relationships, and real estate math. These three topics together make up roughly 35% of the national portion.
How FullPracticeTests Helps You Pass
Our real estate practice exams are aligned with the PSI and Pearson VUE national exam content areas, with full explanations and topic-level performance analytics.
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National Exam Coverage
All content areas: property, agency, contracts, financing, fair housing, and math
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Detailed Explanations
Every question explained with the relevant real estate law or principle
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Topic Performance
See exactly which areas need work before your exam date
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Math Practice
Dedicated math questions with step-by-step calculation walkthroughs