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Real Estate Licensing Massachusetts-Real-Estate-Salesperson Exam
Massachusetts Real Estate Salesperson (Page 9 )

Updated On: 7-Feb-2026
Page 5 of 28
PDF with 135 Questions

A broker has a single agency relationship with the seller. Any required property condition disclosure would be completed by the

  1. seller.
  2. broker.
  3. listing agent on behalf of broker.
  4. listing agent on behalf of seller.

Answer(s): A

Explanation:

In Massachusetts, the seller is legally responsible for completing the property condition disclosure form. The listing broker or agent may provide the form and ensure it is delivered to prospective buyers, but they do not complete it on behalf of the seller.

The rationale is that the seller is the party with direct knowledge of the property's condition. Licensees must never fill out the disclosure themselves, as this could expose them to liability for inaccuracies. The broker's duty is limited to ensuring the disclosure is provided in accordance with Massachusetts law (M.G.L. c.93, §114) but not to make representations or complete the document.

Thus, the correct answer is A: seller.


Reference:

Massachusetts Real Estate Salesperson Candidate Handbook ­ Agency & Disclosure Obligations; M.G.L. c. 93, §114.



Which of the following property valuation estimates or reports would have to be prepared by a licensed or certified appraiser?

  1. a broker's price opinion
  2. a comparative market analysis
  3. a reconciliation report for an FHA loan
  4. a value analysis for a non-residential property valued below $250,000

Answer(s): C

Explanation:

Under federal law (FIRREA ­ Financial Institutions Reform, Recovery, and Enforcement Act of 1989), any appraisal used in connection with a federally related transaction (such as FHA-insured or VA- guaranteed loans) must be prepared by a state-licensed or state-certified appraiser.

While brokers and salespersons in Massachusetts may prepare broker price opinions (BPOs) and comparative market analyses (CMAs), these are considered marketing tools and cannot substitute for a certified appraisal in federally related transactions. Likewise, although smaller non-residential properties under $250,000 may sometimes qualify for alternative valuation methods, FHA loan underwriting requires a formal appraisal with reconciliation prepared by a licensed appraiser.

Thus, the correct answer is C: reconciliation report for an FHA loan.


Reference:

Massachusetts Real Estate Salesperson Candidate Handbook ­ Appraisal; FIRREA (12 U.S.C. § 3331­3351).



A licensee lists a property and discovers that the property is too far away to market effectively. The licensee's firm retains the listing, but does not advertise or show it.
Which of the following has been violated?

  1. fiduciary responsibility
  2. Consumer Protection Act
  3. seller disclosure laws
  4. statute of frauds

Answer(s): A

Explanation:

When a broker accepts a listing agreement, they enter into a fiduciary relationship with the seller. This relationship requires loyalty, obedience, disclosure, confidentiality, accounting, and reasonable care/diligence.

If the licensee fails to market, advertise, or show the property, they are breaching their duty of diligence and care as well as loyalty to the seller's best interests. This is a direct violation of fiduciary responsibility.

The Consumer Protection Act (B) addresses deceptive business practices, seller disclosure laws (C) apply to condition disclosures, and the Statute of Frauds (D) requires certain contracts (like real estate sales) to be in writing. None apply as directly as fiduciary duties in this scenario.

Thus, the correct answer is A: fiduciary responsibility.


Reference:

Massachusetts Real Estate Salesperson Candidate Handbook ­ Agency & Fiduciary Duties; 254 CMR 3.00 (Board of Registration).



A seller wants $120,000 for a home and still owes $20,000 of the original loan at 7% interest. The current interest rate is 12%. A buyer can pay $60,000 down and wants to carry a mortgage that includes the seller's $20,000 existing mortgage and the remaining $40,000 for a total of $60,000 at an interest rate of 10%.
What kind of mortgage loan is this?

  1. blanket
  2. equity
  3. wraparound
  4. buydown

Answer(s): C

Explanation:

A wraparound mortgage is a type of seller financing in which the new loan "wraps around" an existing loan. The buyer makes one combined payment to the seller, who continues paying the original loan while retaining the difference.

In this case:

The seller owes $20,000 at 7%.

The buyer wants to borrow $60,000 total ($20,000 existing + $40,000 new).

The new loan is structured at 10% interest, covering both debts.

This is exactly how a wraparound mortgage works: the seller finances the buyer's loan, keeps the existing mortgage in place, and earns the difference between the interest rates.

The other options:

Blanket mortgage (A): covers multiple parcels.

Equity loan (B): based on homeowner equity.

Buydown (D): involves prepaying interest to reduce borrower's rate.

Correct answer: C: wraparound.


Reference:

Massachusetts Real Estate Salesperson Candidate Handbook ­ Financing; Real Estate Finance Principles.



What kind of lease would require the lessee to pay the taxes, insurance, repairs, and other operating expenses of the premises in addition to the regular rental payment?

  1. percentage lease
  2. gross lease
  3. graduated lease
  4. net lease

Answer(s): D

Explanation:

In a net lease, the tenant (lessee) is responsible not only for the base rent but also for additional property expenses such as real estate taxes, insurance, maintenance, and sometimes repairs. This is common in commercial leasing, particularly for office buildings and retail space.

A gross lease (B) means the landlord pays all expenses, while the tenant pays only rent. A percentage lease (A) bases rent partly on tenant sales (common in retail malls). A graduated lease (C) allows rent increases at set intervals.

Because the question describes a tenant paying rent plus taxes, insurance, and operating expenses, this is a net lease.


Reference:

Massachusetts Real Estate Salesperson Candidate Handbook ­ Leasing & Property Management; Commercial Leasing Practices.



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