Chapter 5
Preparing for and Taking the Exam
In This Chapter
• Applying for the exam and taking it
• Looking at a typical breakdown of the real estate exam
• Taking a real estate exam-preparation course
• Practicing for the exam
• Employing exam-taking strategies
You’ve completed your prelicensing courses. Now you want to apply for the exam, take an exam-preparation course, and take the exam. You’re almost there. This chapter covers these steps and includes sample exam questions so that you know what to expect when you take the exam.
A Checklist of Exam-Preparation Tasks
Follow a systematic checklist approach when preparing to take the exam. In this manner, you cover all bases, allowing you to walk into the exam with confidence and assurance. These are the steps to take in the following order:
1. Apply to take the exam.
2. Determine exam procedures.
3. Gather information on exam content.
4. Take an exam-preparation course.
5. Simulate the exam conditions.
6. Master exam-taking strategies.
7. Adopt the right attitude.
8. Implement good exam-taking policies.
Apply to Take the Exam
Return to the website for your state’s real estate commission and follow the instructions regarding applying for and taking the exam. Apply to take the exam before you undertake your exam preparatory work so that when you’re done, you’ll be ready to walk into your exam. You should find everything you need online.
FYI!
A sample exam question: Which of the following is the best evidence that the title has been conveyed?
A. The deed has been recorded.
B. The deed has been delivered to the grantee.
C. The buyer is in possession.
D. The deed has been acknowledged.
Answer: B.
After reviewing your state’s requirements, you should be able to answer the following questions:
• Do you need a broker to sponsor you, attest to your good character, or put up a bond for you?
• What is the cost to apply to take the exam, to take the exam, and to have your license issued?
• What documents must you submit, such as proof of age, financial responsibility, high school or college completion, and residency?
• Are you required to submit photographs and/or fingerprints?
• Do you have proof of completion of your state’s course requirements?
• Do you have proof of veteran or disabled veteran status, if it is applicable?
When you have your complete package assembled, send it by priority mail, or drop it off yourself if the office is close by. Keep a copy of everything in case your package is somehow misplaced.
Determine Exam Procedures
Obtain the dates and locations of examinations. Some states offer exams only twice a year and only in one location, typically the state’s capital. Others offer the exam frequently and in many different locations. Depending on your state’s policy, you should be able to schedule your exam date for when you are done with your examination-preparation course. This is the information you want to ascertain when determining exam procedures for your state:
• Examination dates and locations.
• What is the deadline to apply for your exam date of choice?
• Exam format, whether pencil and paper or examination machine.
• What you must bring to the exam: registration confirmation, pencils, scratch paper, application documents, calculator.
• Exam-grading procedure: is each section separately graded or are the sections added up basing your score on an overall score?
• Exam grading: how long will it be before you are notified of your results?
• Exam performance notification: are you directly notified or is someone else notified, such as your sponsoring broker, about how you did on the exam?
• Exam result advisory: are you advised about your score or just informed of whether you passed? Will you be able to review your exam to see where you excelled or where you made mistakes?
FYI!
A sample exam question: We call the instrument used to remove the lien of a trust deed or mortgage from record a …
A. Satisfaction.
B. Release.
C. Deed of reconveyance.
D. Certificate of redemption.
Answer: C.
• License issuance: is your license automatically issued or does it just make you eligible to apply for licensing? How long do you have after passing to obtain your license?
• Retaking the exam: how soon after failing the exam may you retake it and how many times can you retake it?
• Pass score: what is your state’s passing score? (In most states you have to get 70-75 percent of the questions correct to pass.)
• Time allowed to take the exam: most states allow between three and four hours to take the agent exam. A few states allow two to three hours. The broker exam is most often a full day.
• Pass statistics: what is the pass rate in your state? Most states average a 65 percent pass rate for the agent exam.
Gather Information on Exam Content
All exams are multiple choice consisting of 100 to 150 questions. Most state exams consist of two parts: a longer portion and a shorter portion. The longer portion with typically 80 to 100 questions is the general real estate exam covering the real estate principles you studied in your prelicensing course described in the last chapter. The shorter portion, typically 20 to 50 questions, covers licensing laws in your particular state.
Your state’s Real Estate Commission or the company it hires to administer the exam will provide you with a wealth of information about the exam, including sample questions and exam content. Some states give you a breakdown of the percentage of questions relating to certain subjects.
As an example of the information you’ll gather, I’ve noted here a summary of what is on California’s website:
What the exam tests for: Appropriate knowledge of the English language, including reading, writing, and spelling; arithmetical computations common to real estate and business opportunity practices.
An understanding of the principles of real estate and business opportunity conveyancing; the general purposes and general legal effect of agency contracts, deposit receipts, deeds, deeds of trust, chattel mortgages, bills of sale, mortgages, land contracts of sale, and leases; principles of business, land economics, and appraisals.
A general and fair understanding of the obligations between principal and agent; the principles of real estate and business opportunity transactions, and the code of business ethics pertaining thereto; provisions of the law relating to real estate as administered by the Real Estate Commissioner.
Examination topics and percentage of exam coverage:
• Real property and laws relating to ownership (approximately 11 percent of exam), which includes ownership of property, encumbrances, and public power over property
• Tax implications of real estate ownership (approximately 8 percent of exam), which includes knowledge of current tax laws affecting real estate ownership
• Valuation/appraisal of real property (approximately 15 percent of exam), which includes methods of appraising and valuing property and factors which may influence value
• Financing real estate (approximately 17 percent of exam), which includes sources of financing, common clauses in mortgage instruments, types of loans, and terms and conditions
• Transfer of property (approximately 10 percent of exam), which includes title, escrow, and reports
• Real estate practice (approximately 22 percent of exam), which includes listing of real property, sales contracts, and marketing
FYI!
California’s website lists 50 sample questions. You can get there directly by searching on the Internet for “California department of real estate salesperson exam sample questions.” The first listing takes you directly to the sample questions under “the real estate license examinations.” These exam allocations are similar to those described in Chapter 4.
• Broker’s responsibility for agency management (approximately 17 percent of exam), which includes state real estate laws and regulations, laws relating to fair practices, knowledge of trends and developments, and knowledge of commonly used real estate forms and math calculations
Take an Exam-Preparation Course
After you apply to take the exam and gather information on it, take an examination-preparation course. You need it. The real estate exam is unique. You want to take a preparation course that will tutor you in the art of multiple-choice testing and in repetition of the concepts studied in your prelicensing courses. Your intent is to take the exam once and move on into your new career from there. The best way to do that is by taking a preparatory course. The pass rate for the exam is about 65 percent. The pass rate for preparatory-course attendees is 85 percent. Convinced?
The company you took your prelicensing course from also has exam-preparation courses geared toward your state’s exam. Most courses cover about 2000 questions which are very similar to what you will encounter on the exam. These companies have reconstructed the exams so that their sample questions nearly simulate the licensing exam. They are also aware of the topics that cause the biggest problems for examinees and emphasize these problem areas throughout their practice exams.
Generally, real estate math and contracts are considered the most challenging areas. Math is what you took in the seventh grade. You’re just a little out of practice. About 25 percent of the general examination covers math. Most states allow the use of a pocket calculator. Math principles that are covered include commission, interest calculations, depreciation, prorations, and amortization.
def•i•ni•tion
Prorations are the division of a property’s expenses between the buyer and seller as of the property’s transfer date.
Amortization is the gradual paying off of a debt by periodic payments.
Contracts intimidate people because they think that only lawyers can understand them. Don’t buy into this. The principles are easy and pertain to agreements we make every day of our lives. What did you agree to do, and what did they agree to give you in return?
Find the course that is best for you. Courses are offered in person, by correspondence, and online. Find what best suits your needs and your level of discipline. If you feel you will need support from instructors or students, find a course that you can attend in person. Some people consider exam simulation to be highly valuable. The in-person courses put you in a room while an exam is administered under circumstances very similar to those used by your state examiners. If you do not require interaction and want to work at your own speed, go with an online or correspondence course.
Simulate the Exam Conditions
Some states require good old-fashioned pencil and paper while some states require computer usage for taking the exam. Know in advance what your state uses and simulate it many times before taking the exam.
Pencil and Paper or Computer Terminal
Some states use computer answer forms that you fill in with a pencil. The instructions ask you not to write in the exam booklet or on the answer sheet other than filling in your answer choice. You should then indicate to yourself which questions you want to come back to and which questions are math-related problems that require your math analysis hat. Note on a separate piece of paper “to come back to” (for questions you get stuck on) and “math questions” (for all math questions so you can tackle them at one time). Then come back to those groupings of questions after you complete the rest.
Most states are converting to computer entry instead of pencil and paper entry. You are placed in front of a keyboard and monitor similar to what you might have at home or at work. Questions with their answer choices are displayed and you enter your answer on your keypad in the blank provided. You can erase an answer and scroll back and forth to advance and return to questions.
If this is the method used by your state, make sure you are familiar with computer use. The last thing you need is to spend valuable time fumbling with the computer. The exam administrators will provide detailed instructions on use of the equipment and give you a brief practice session. But this is not really enough time to become comfortable with computer test taking if you don’t know the basics of using a computer.
FYI!
A sample exam question: When an obligation is paid on an installment basis, it is known as …
A. Acceleration
B. Conversion
C. Amortization
D. Depreciation
Answer: C
The Simulation Process
If upon completion of your examination preparation course you do not feel comfortable with exam taking, buy one of the many books or online courses and practice more. In this case, practice does make perfect. Sit yourself down with a simulated examination according to the rules that will be followed in your exam. You have probably already done this in your preparation course. Use all the exam-taking strategies discussed in this chapter in your simulation sessions.
Master Exam-Taking Strategies
The national part of the exam is always multiple choice. Most states also use this format while very few states have a true/false or fill-in-the-blank format. If you gather information and take an exam-preparation course, you will know your state’s format in advance. Here are some practical tips on answering questions:
1. For multiple-choice questions, realize that you are looking at the right answer. You do not have to pull it out of your head. It lies before you.
2. Identify keywords. Often these questions have keywords that guide you to the answer. The first step is to locate the keyword and relate it to the answers. Often, keywords come in the following forms: always, never, not, but, if, incorrect, must, best, normally, and except. Make sure you choose the answer that incorporates the keyword distinction. When you see these words, train your mental alarm clock to automatically go off.
3. Go with your first impression. It’s usually correct.
4. Don’t make it complicated. These exams test for minimal levels of competence. Don’t look for the hidden meaning. There is no hidden meaning.
FYI!
A sample exam question: A, B, and C are joint tenants. A conveys his interest to D. This changes the ownership as follows:
A. B, C, and D are joint tenants.
B. B, C, and D are each one-third tenants in common.
C. D owns one third as a tenant in common with B and C, who now own two thirds as joint tenants.
D. None of the above.
Answer: B
Adopt the Right Attitude
Adopting the right attitude is an important step to achieving success on the exam. It consists of the following:
• Shore up your confidence
• Feel good and sleep well
• Look at the worst-case scenario
• Look at the best-case scenario
• Walk into the exam with a positive attitude
Shore Up Your Confidence
If you have been out of school and out of practice taking exams, you can equip yourself to handle any jitters. After completing your prelicensing courses and an examination-preparation course, you will have all the knowledge you need. In your preparation course, you will take several practice examinations. You will probably obtain sample questions from your state licensing body. You know exactly what the exam will consist of, and you will have mastered multiple-choice testing. The only unknown is the exact wording of the questions. In other words, you have taken all the right steps. There is no reason to lack confidence.
Cave!
The lowest pass rates are in Alaska, Arkansas, California, Colorado, Kentucky, Pennsylvania, South Carolina, Tennessee, and Utah.
The following states have the highest pass rates: Arizona, Georgia, and South Dakota.
Sleep Well and Feel Good
Rest and relax the day before the exam. The day before that, do a little studying, especially on subjects you feel weakest in. If you do opt to study the day before, don’t spend more than a few hours studying and make sure you are finished at least two hours before your regular bedtime. Get some exercise the day before and do something to take your mind off the exam. A movie or something that takes your mind off the task of taking the exam is ideal.
Don’t eat a heavy meal the night before or the day of the exam. Get good directions to the test location, including where to park and how to get into the building. Make sure you arrive at your testing location early. If you arrive late, you will not be allowed to take the exam.
Look at the Worst-Case Scenario
The pass rate in most states is 65 percent. The worst that can happen to you is you will be one of the 35 percent who do not pass. If you took the suggested preparation course, your odds of passing have increased to 85 percent. Do you really think you’ll be one of the unsuccessful 15 percent? What is it that makes you feel that you will be among those who fail? The facts before you do not support this conclusion.
Look at the Best-Case Scenario
Chances are almost nine out of ten that you will pass. You’ve taken all the right steps to put yourself into the eighty-fifth percentile. Why wouldn’t you pass? Why look at the glass as half-empty when it’s nearly full?
Have a Positive Attitude
What’s not to feel good about? You’ve looked at your career options and made a decision to have a career in the real estate field. You’ve taken and passed the courses you need to qualify for the licensing exam. You have most likely taken an exam-preparation course to prepare for the big exam. If you have taken your examination-preparation course in person, you have a group of other attendees to support you and positively influence you.
FYI!
A sample exam question: Which is true of a lis pendens?
A. Only a court order will remove it.
B. It may be recorded no matter what the lawsuit is for.
C. It may affect title to property based on the results of the lawsuit.
D. None of the above.
Answer: C
Your life is about to take a turn in a new direction entirely of your own making. Your decision has come out of a desire to make your life better. Keep these thoughts in mind as you take the exam. This is an exciting time for you and everything is looking up. Bring your positive attitude with you when you walk through the examination door.
Implement Good Exam-Taking Policies
The following is a checklist you may want to adopt when you take the licensing exam:
• Don’t pay attention to anyone else. If you do, you will think everyone else is calm and you are nervous. Everyone is nervous, but some people don’t show it as much as others do. Do not look around during the exam when you are stuck. Just move on to the next question. Most states use several different test versions in each sitting. The person in your view will most likely not even have the same test you have.
• Read the instructions. Do this to make sure you understand the rules.
• First answer the easy questions. Some people get stuck on a question, run out of time, and are unable to answer the easy questions. Don’t let your focus and attention become distracted by one question.
Remember, you can get up to 30 percent wrong. If you answer the easy questions first, you will have a number of correct answers already in your bank account. Your primary objective in the exam is to answer as many questions as you can correctly. You will not get more credit for the ones that are more difficult. So, why belabor one when you can move on and potentially get five more correct?
FYI!
A sample exam question:
An apartment building costs $450,000. It brings in a net income of $3,000 per month. The owner is making what percentage of return on investment?
A. 7 percent
B. 8 percent
C. 11 percent
D. None of the above
Answer: B
• Answer the math questions at the same time. In this manner, you can put your “calculating hat” on instead of taking it off and on. You will have your calculator, if your state allows one, and your scratch paper and you’ll save time by working one problem after another.
• Come back to the hard questions after you have answered the easy ones. On your second pass, do the same thing you did initially. Spend a little time with each question. If you’re stuck, move on to the next one. Give yourself a little more time than you did with the first pass. However, don’t struggle or stay on one question too long. You can come back to it, or just leave it as one of the 30 percent you are allowed to get wrong.
• Answer every question. Most exam proctors will provide warnings at certain time intervals before the exam ends. When you receive that warning, make an assessment of where you are in the exam. For instance, if you have ten questions you are stuck on, give yourself enough time to choose an answer. First, eliminate the answers you know are incorrect. Then choose one of the remaining answers. 
Agent to Agent
Some of the professionals you met in Chapter 2 had the following comments about the licensing exam:
“The salesperson exam is definitely not easy. The subject matter is very technical. What helped me the most was the practice exams that were included in my preparation course. They were very similar to the real exam. The exam seemed very familiar to me when I tested, due to the many practice exams I had taken.”
“The exam is difficult. The secret is to take lots of practice tests.”
“The test items are often ambiguous. The best way to pass the test is to take a preparatory course and memorize answers to hundreds of test questions you get in the preparatory course.”
“I rate the exam eight on a scale of one to ten, with ten being the hardest.”
“I made sure that I was averaging 90 percent or better on the practice exams, which made the real thing seem easier. Practice; it makes a difference.”
What’s the lesson to learn here? Although the test might be difficult, the preparatory class and practice questions really do prepare you to pass.
• You should know in advance whether there will be a time warning. If there isn’t one, keep track of time yourself, and make sure you know when there are only 15 minutes left before the exam ends to give yourself the time to make final decisions.
• Don’t leave the exam early unless you feel sure of all of your answers. Spend the extra time to review any questions you have concerns about.
• Every once in a while take a few deep breaths and stretch your arms.
The Least You Need to Know
• The Real Estate Commission for your state can provide information about licensing requirements and the exam.
• The Real Estate Commission for each state often provides a complete breakdown of the exam, so you know what to study for.
• The real estate agent exam is usually half a day long, while the broker exam is usually one day long.
• The main secret to passing the exam is practice.
• A real estate exam preparation course is helpful and highly recommended before you take the exam.
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