Missouri Real Estate Salesperson Exam Exam Flashcards

Q: What examination does this flashcard set cover?

It covers the Missouri Real Estate Salesperson Licensing Examination: the PSI National salesperson portion plus the Missouri State salesperson portion. It does not cover the broker examination.

Q: How many scored items are on the Missouri salesperson examination?

PSI lists 100 scored National items and 40 scored State items. PSI may add 5 to 10 experimental questions that are unscored but still use examination time.

Q: How much time is allowed?

The official summary allows 150 minutes for the National portion and 120 minutes for the State portion, for 270 minutes across both portions.

Q: What scores are required to pass?

A candidate must earn at least 70% on the National portion and 75% on the State portion. Passing one portion does not substitute for passing the other.

Q: When may the 24-hour Missouri Real Estate Practice Course be taken?

For the standard salesperson pathway, it must be completed after the 48-hour pre-examination course and before the license application is submitted. The current PSI handbook says it may be taken before or after the examination date.

Q: Does PSI publish a mandatory wait before a retake?

The current Missouri candidate handbook explains the retake registration fee but does not publish a fixed waiting interval or a special delay after three failures. Candidates should confirm current scheduling availability with PSI.

Q: How were the 50 cards allocated across the two portions?

The set assigns 36 cards to the 11 official National percentage domains using largest-remainder allocation and 14 cards to Missouri topics. PSI's State outline labels 40 scored items but its seven printed domain counts sum to 54, so the State card mix treats those counts only as relative emphasis and normalizes them to 14; it is not a claim about the live exam's item arithmetic.

Question 1

What determines whether an item has become a fixture?

Accepted Answer

Look at attachment, adaptation to the property's use, the relationship and intent of the parties, and any agreement. Intent is central; an attached item treated as part of the realty normally transfers with it unless the parties agree otherwise.

Question 2

What distinguishes fee simple ownership from a life estate?

Accepted Answer

Fee simple is inheritable ownership of potentially unlimited duration. A life estate lasts only for the measuring life, after which title passes to the remainderman or returns to the grantor through reversion.

Question 3

How does tenancy in common differ from joint tenancy?

Accepted Answer

Tenants in common may hold unequal shares and have no survivorship right. Joint tenants hold the interests required by state law with survivorship, so a deceased joint tenant's interest passes to the surviving joint tenant or tenants.

Question 4

How does an easement differ from a license to use land?

Accepted Answer

An easement is a nonpossessory interest that permits a defined use of another's land and can bind successors. A license is personal, generally revocable permission that does not create an interest in land.

Question 5

Which four government powers affect private real estate?

Accepted Answer

Police power regulates use, eminent domain takes property for public use with compensation, taxation raises public revenue, and escheat transfers property to the state when an owner dies intestate and without heirs.

Question 6

How does a zoning variance differ from a legal nonconforming use?

Accepted Answer

A variance is permission to deviate from a zoning requirement because of qualifying hardship. A legal nonconforming use lawfully existed before the current restriction and may continue subject to local limits.

Question 7

What does the appraisal principle of substitution predict?

Accepted Answer

A rational buyer will not pay more for a property than the cost of acquiring an equally desirable substitute, assuming no costly delay. This principle underlies the sales comparison and cost approaches.

Question 8

When is each of the three major valuation approaches most useful?

Accepted Answer

Sales comparison fits properties with good comparable sales; cost fits newer or special-purpose improvements; income capitalization fits property purchased primarily for its income stream.

Question 9

How is value estimated by direct capitalization?

Accepted Answer

Divide annual net operating income by the capitalization rate: Value = NOI / cap rate. Use property operating income and expenses; mortgage principal and interest are financing costs, not NOI expenses.

Question 10

What is the difference between a promissory note and a mortgage or deed of trust?

Accepted Answer

The note is the borrower's evidence and promise of debt. The mortgage or deed of trust pledges the real estate as security for that debt.

Question 11

How is a loan-to-value ratio calculated?

Accepted Answer

LTV = loan amount / property value used by the lender. A $180,000 loan on a $225,000 value has an 80% LTV.

Question 12

How do FHA and VA loans differ in their federal support?

Accepted Answer

FHA insures eligible loans made by approved lenders. VA guarantees part of loans for eligible VA borrowers. Neither agency normally supplies the mortgage funds directly to the borrower.

Question 13

What is the defining risk of a partially amortized balloon loan?

Accepted Answer

Periodic payments do not retire the full principal during the loan term, so a large balance is due at maturity. The borrower must pay, sell, or refinance when the balloon comes due.

Question 14

What elements are required for a valid real estate contract?

Accepted Answer

Competent parties, mutual agreement through offer and acceptance, lawful purpose, and consideration. The agreement must also satisfy any legally required form, such as a writing under the statute of frauds.

Question 15

How does a void contract differ from a voidable contract?

Accepted Answer

A void contract has no legal effect from the outset. A voidable contract is valid unless the protected party elects to rescind it, such as when consent resulted from duress or certain misrepresentations.

Question 16

How do bilateral and unilateral contracts differ?

Accepted Answer

A bilateral contract exchanges a promise for a promise. A unilateral contract offers a promise in exchange for performance and is accepted through the required performance.

Question 17

What is the practical effect of the statute of frauds on a real estate sale agreement?

Accepted Answer

It generally requires the agreement to be in writing and signed by the party against whom enforcement is sought. An oral agreement may be unenforceable even when the parties discussed all major terms.

Question 18

What happens to an original offer when the offeree makes a counteroffer?

Accepted Answer

The counteroffer rejects the original offer and creates a new offer. The original offer cannot later be accepted unless the original offeror renews it.

Question 19

How does a contingency protect a party to a purchase contract?

Accepted Answer

It makes performance depend on a stated event or condition, such as obtaining financing or an acceptable inspection. The contract should specify the deadline, notice, and consequence if the condition is not met.

Question 20

What makes an option contract different from an ordinary purchase contract?

Accepted Answer

The optionor is bound to keep an offer open for the stated period, while the optionee may choose whether to exercise it. Consideration supports the option; exercise under its terms creates the purchase obligation.

Question 21

What core fiduciary duties does an agent owe a client?

Accepted Answer

Loyalty, obedience to lawful instructions, disclosure of material information, confidentiality, reasonable care and diligence, and accounting for money or property. Duties to customers are more limited but include honesty and required disclosure.

Question 22

How can apparent authority arise without actual authority?

Accepted Answer

The principal's words or conduct cause a third party reasonably to believe the agent has authority. It is the principal's manifestation—not the agent's unsupported claim—that creates apparent authority.

Question 23

How does an exclusive-right-to-sell listing differ from an exclusive-agency listing?

Accepted Answer

Under an exclusive right to sell, the broker generally earns the agreed compensation regardless of who produces the buyer. Under exclusive agency, the owner may avoid a commission by personally finding the buyer, subject to the agreement.

Question 24

What distinguishes a real estate client from a customer?

Accepted Answer

A client is represented under an agency relationship and receives fiduciary duties. A customer is not represented by that licensee but is still owed honest dealing and legally required disclosures.

Question 25

Which events can terminate an agency relationship?

Accepted Answer

Performance, expiration, mutual agreement, revocation or renunciation subject to possible liability, death or incapacity where applicable, destruction of the property, or operation of law can terminate agency.

Question 26

What is a material fact in a real estate transaction?

Accepted Answer

It is information a reasonable party would consider important to the decision or terms, such as a significant defect or title issue. Latent means hidden from ordinary observation; the defect must also be significant to be material.

Question 27

Why does an 'as is' clause not authorize concealment?

Accepted Answer

It may allocate responsibility for the property's condition, but it does not permit fraud, active concealment, or omission of a fact that applicable law requires the seller or licensee to disclose.

Question 28

Why must a property manager keep owner and tenant funds separate from personal funds?

Accepted Answer

Those funds belong to others and must be accounted for under the management agreement and applicable trust-account rules. Separation prevents commingling and permits accurate reporting and disbursement.

Question 29

When does a deed transfer title between the parties?

Accepted Answer

A valid deed must be delivered by the grantor and accepted by the grantee. Recording gives public notice and protects priority, but recording itself is not a substitute for delivery and acceptance.

Question 30

How does a quitclaim deed differ from a warranty deed?

Accepted Answer

A quitclaim deed transfers whatever interest the grantor has without title covenants. A warranty deed adds stated covenants about title, with the scope depending on whether the deed is general or special warranty.

Question 31

How do steering, blockbusting, and redlining differ?

Accepted Answer

Steering channels people toward or away from areas based on protected status. Blockbusting induces sales through fear of demographic change. Redlining denies or restricts services because of an area's protected-class composition.

Question 32

Why is an agreement among competing brokers to use the same commission rate unlawful?

Accepted Answer

It is horizontal price fixing: competitors are replacing independent pricing decisions with an agreement. Each brokerage must establish its fees independently.

Question 33

What is the purpose of a brokerage policy for safeguarding confidential personal information?

Accepted Answer

It limits access, use, storage, and disposal of sensitive paper and electronic records so client and customer information is not exposed or used beyond legitimate transaction needs.

Question 34

Does calling a salesperson an independent contractor remove the broker's supervisory responsibility?

Accepted Answer

No. Tax or compensation status does not erase the licensing-law duties of the supervising broker. The broker must supervise affiliated licensees as the jurisdiction requires.

Question 35

How is a percentage-based real estate commission calculated?

Accepted Answer

Multiply the transaction price by the agreed commission rate. Then apply any brokerage split to the commission—not to the sale price—unless the agreement specifies a different basis.

Question 36

What is the basic method for prorating an annual property expense?

Accepted Answer

Convert the annual amount to the daily or monthly rate required by the problem, count the period chargeable to each party, and apply the stated ownership convention. Label each result as a debit or credit.

Question 37

With how many Missouri brokers may a salesperson hold an active association at one time?

Accepted Answer

One. Missouri issues an active salesperson or broker-salesperson license only to a person associated with a licensed broker, and the person cannot be licensed with more than one broker during the same period.

Question 38

May a Missouri inactive salesperson perform licensed brokerage activity?

Accepted Answer

No. An inactive salesperson is not associated with a broker and may not engage in activity requiring a real estate license until properly returned to active status.

Question 39

How do Missouri's 48-hour and 24-hour salesperson courses fit around the exam?

Accepted Answer

Complete the approved 48-hour Salesperson Pre-Examination Course on or before the exam date. Complete the 24-hour MREP after that course and before applying for the license; the MREP may occur before or after the exam date.

Question 40

What is Missouri's rule against commingling in a broker's escrow account?

Accepted Answer

Transaction funds belonging to others must be held in the escrow or trust account, and the broker may not mix personal or other funds into it except for the limited amount permitted by statute for account charges.

Question 41

How long must a Missouri broker retain transaction records?

Accepted Answer

At least three years. Required records include business books, accounts, contracts, brokerage relationship agreements, closing statements, and transaction correspondence, and they must be available for Commission inspection.

Question 42

What written authority is needed before advertising or showing Missouri property?

Accepted Answer

A licensee needs the owner's written consent before advertising or placing a sign. To show residential property, the broker must hold a current written seller/lessor agency agreement, transaction-brokerage agreement, or other written authorization.

Question 43

What must a Missouri licensee do when referring a party to an affiliated settlement-service provider?

Accepted Answer

Disclose the controlled business arrangement on a separate signed form before or at substantially the same time as the referral, explain the possible financial benefit, and make clear that the party may choose another provider.

Question 44

What form must a complaint against a Missouri real estate licensee take?

Accepted Answer

It must be written in clear and concise language on a Commission form and sworn to by the complainant. The Commission may also initiate a complaint on its own motion.

Question 45

How are probable violations and sanctions divided between Missouri's two commissions?

Accepted Answer

If investigation shows probable grounds for discipline, the matter goes to the Administrative Hearing Commission to determine whether a violation occurred. After a final violation ruling, MREC determines authorized discipline such as suspension, revocation, or probation.

Question 46

When must Missouri transaction money normally reach the broker's escrow or trust account?

Accepted Answer

No later than 10 banking days after the last contract signatures or initials are obtained, unless the contract provides otherwise. A salesperson must immediately deliver received transaction money to the affiliated broker.

Question 47

What essential timing terms must a Missouri written listing agreement include?

Accepted Answer

It must state a definite beginning date and an expiration date, along with the price, compensation, duties, and required brokerage-relationship permissions or restrictions. It cannot be an open-ended employment agreement.

Question 48

Who remains responsible for Missouri closing statements when a third party conducts the closing?

Accepted Answer

Each broker must require a complete statement, review it for accuracy, and ensure delivery to buyer and seller. When buyer and seller have different brokers, the listing broker bears the delivery responsibility stated by the rule.

Question 49

What brokerage status does Missouri presume when no qualifying written agency relationship exists?

Accepted Answer

Transaction broker. A licensee is treated as a transaction broker unless a designated broker has established a qualifying written agency or subagency relationship or another statutory exception applies.

Question 50

What consent is required for dual agency in Missouri?

Accepted Answer

All parties must consent, with consent presumed through the required written agreement. Without the affected client's consent, the dual agent may not reveal matters such as willingness to pay more or accept less, motivation, alternative financing terms, or prior offer terms.

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