Massachusetts-Real-Estate-Salesperson Exam Questions and Answers (Page: 1)

QUESTION: 1 Exam Topic: 1, Section 1

What is the function of a promissory note or bond when used in conjunction with a mortgage?

It furnishes a complete legal description of the property.
It makes the borrower personally obligated to pay the debt.
It provides the elements necessary to make the mortgage valid.
In case of default, it limits the lender's rights to interest only.

Answer(s): B

Explanation:

In Massachusetts real estate law and as covered in the Massachusetts Real Estate Salesperson Study Guide, a promissory note (sometimes called a bond) is a written promise by the borrower to repay a specific amount of money to the lender under agreed terms. The note functions as evidence of the debt and creates a personal obligation for the borrower to pay the debt according to the specified schedule. This personal obligation is what differentiates the note from the mortgage document itself.

While the mortgage creates a lien against the property and provides security for the loan (giving the lender rights to the property in case of default), the promissory note represents the actual debt and the borrower's promise to repay it. Without the note, the mortgage lien alone is insufficient because it only secures the loan; it does not obligate repayment.

The promissory note generally contains the principal amount, interest rate, payment schedule, maturity date, and any penalties for default. If the borrower defaults on payments, the lender can take legal action based on the note. The mortgage provides the lender the right to foreclose on the property if the note is not paid, but the note itself establishes the borrower's personal liability.

This is explicitly stated in official Massachusetts real estate law references and study guides:

"The note is the borrower's personal promise to pay the debt."

"The mortgage is the security instrument that pledges the property as collateral."

Reference:

Massachusetts Real Estate Salesperson Study Guide, Chapter 8: Financing Instruments and Mortgages.

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QUESTION: 2 Exam Topic: 1, Section 1

In a jurisdiction where a seller's property condition disclosure is required, the licensee is responsible for

completing the property condition disclosure.
ensuring that the seller complete the property condition disclosure before closing.
ensuring that the buyer receives the property disclosure before the contract is finalized.
checking the disclosure for accuracy and ensuring that the buyer receives it before closing.

Answer(s): C

Explanation:

In Massachusetts, property disclosure laws are strict about timing and delivery but do not place the responsibility of accuracy on the real estate licensee. The property condition disclosure is completed and signed by the seller, not the agent. The agent's duty is to facilitate compliance with disclosure requirements, specifically ensuring that the buyer has received the disclosure before the purchase and sale agreement is finalized.

This requirement protects buyers by allowing them to make informed decisions about the condition of the property before entering into a binding contract. Licensees are not required to fill out or verify the accuracy of the disclosure; their duty is limited to ensuring delivery. Massachusetts regulations (M.G.L. c. 93, §114) and the Massachusetts Real Estate Salesperson Exam materials clearly emphasize that:

Sellers complete the disclosure themselves.

Buyers must receive the disclosure before signing binding documents.

Licensees are responsible only for delivery, not for content accuracy.

Reference:

Massachusetts Real Estate Salesperson Candidate Handbook; Massachusetts General Laws c.93, §114.

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QUESTION: 3 Exam Topic: 1, Section 1

An example of modular construction is

prefabricated housing.
an apartment building.
a home used as a model.
a log cabin.

Answer(s): A

Explanation:

In real estate and construction terminology, modular construction refers to a building method where sections of the home are manufactured in a factory setting, transported to the building site, and then assembled on a permanent foundation. This is a form of prefabricated housing, but different from mobile homes because modular homes are considered real property once placed on their permanent foundation.

Massachusetts licensing materials classify modular homes under prefabricated housing because they are built off-site to precise specifications and then joined together at the location. This method provides greater efficiency, lower cost, and adherence to state and local building codes. By contrast, apartment buildings (B) are traditionally built on-site, a model home (C) is only a sales demonstration, and a log cabin (D) may be site-built but not considered modular unless pre- manufactured in sections.

Therefore, the correct answer is A: prefabricated housing.

Reference:

Massachusetts Real Estate Salesperson Candidate Handbook Property Ownership and Land Use Controls section; Modern Real Estate Practice, 20th Edition, Construction Methods.

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QUESTION: 4 Exam Topic: 1, Section 1

An owner signed a contract to sell an apartment building. Just before closing, the owner informed the buyers that the owner would NOT sell the property. A lawsuit filed by the buyers would be for

specific performance.
lis pendens.
quiet title action.
a deficiency judgment.

Answer(s): A

Explanation:

In real estate contract law, when a seller refuses to close after entering into a valid purchase and sale agreement, the buyer can sue for specific performance. This legal remedy compels the seller to perform the exact terms of the contract, meaning they must proceed with the sale.

A lis pendens (B) is merely a recorded notice that litigation is pending, not a lawsuit itself. A quiet title action (C) is used to resolve disputes over property ownership or defects in title, not to enforce a sales contract. A deficiency judgment (D) arises when a foreclosure sale does not produce enough funds to cover the outstanding loan, which is unrelated to this scenario.

Massachusetts recognizes specific performance as an equitable remedy available to real estate buyers because each parcel of real estate is unique. Courts often side with the buyer in such cases, ordering the seller to transfer title as originally agreed.

Reference:

Massachusetts Real Estate Salesperson Candidate Handbook Contracts Section; Massachusetts General Laws, Contract Remedies in Real Estate Transactions.

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QUESTION: 5 Exam Topic: 1, Section 1

A couple enters into a purchase contract to buy a house, and their parents are providing a $5,000 earnest money check. The check is deposited in the listing broker's escrow account. The buyers are unable to get financing, and the contract provides for return of the earnest money to the buyers. The buyers and seller agree in writing to the release of the earnest money. The listing broker should

issue a $5,000 check to the parents.
issue a $5,000 check to the buyers.
return the earnest money check, minus expenses, to the parents.
return the earnest money check, minus expenses, to the buyers.

Answer(s): B

Explanation:

Under Massachusetts escrow laws, once an earnest money deposit is given, it becomes part of the transaction and must be held in the broker's escrow account until proper written instructions are received. The critical rule is that the earnest money belongs to the buyer, not to the third party who may have supplied the funds.

Therefore, even though the parents wrote the $5,000 check, the funds legally belong to the buyers under the purchase and sale agreement.
When the contract is canceled due to financing failure, and both parties (buyer and seller) agree in writing to release the deposit, the broker must issue the refund to the buyers, not the parents.

Massachusetts regulations (254 CMR 3.00) require brokers to handle escrow strictly according to the agreement and prohibit deductions for "expenses" unless explicitly authorized. Thus, the correct action is to issue the $5,000 back to the buyers in full.

Reference:

Massachusetts Real Estate Salesperson Candidate Handbook Trust Funds & Escrow; 254 CMR 3.10 (Board of Registration of Real Estate Brokers and Salespersons).

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QUESTION: 6 Exam Topic: 1, Section 1

The need to protect the public's health and safety against poor construction practices has resulted in the enactment of

zoning ordinances.
restrictive deed conditions.
building codes.
zoning committees.

Answer(s): C

Explanation:

Building codes establish minimum standards for construction and materials to protect public health and safety. These codes regulate structural integrity, electrical systems, plumbing, mechanical installations, and fire prevention requirements.

In Massachusetts, the State Building Code (780 CMR) governs these practices and is enforced by local building inspectors. Building codes ensure that properties meet safe construction standards and prevent hazardous conditions.

Zoning ordinances (A) regulate land use (e.g., residential vs. commercial), restrictive deed conditions (B) are private limitations placed in deeds, and zoning committees (D) are administrative, not regulatory. Therefore, only building codes directly address the protection of health and safety from poor construction practices.

Reference:

Massachusetts State Building Code (780 CMR); Massachusetts Real Estate Salesperson Candidate Handbook Land Use Controls.

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QUESTION: 7 Exam Topic: 1, Section 1

Which of the following is true of a quitclaim deed?

It cannot be used to transfer a title held in fee simple.
It has warranties similar to a special warranty deed.
It can be used to remove a cloud on a title.
It cannot be recorded.

Answer(s): C

Explanation:

A quitclaim deed is commonly used in Massachusetts to transfer whatever interest the grantor may have in the property, without any warranties of title. The grantor does not guarantee that they own the property or that the title is clear; they are simply releasing ("quitting") any claim they might have.

This makes quitclaim deeds useful for curing defects or removing a cloud on title, such as correcting a name, releasing an interest, or resolving minor disputes.
While Massachusetts typically uses quitclaim deeds even in regular sales transactions (where other states may prefer warranty deeds), their primary legal function is still to transfer without guarantees.

The other options are incorrect:

A: It can transfer fee simple interest.

B: It provides no warranties, unlike a special warranty deed.

D: It can be recorded.

Reference:

Massachusetts Real Estate Salesperson Candidate Handbook Transfer of Title; M.G.L.
Chapter 183 (Conveyances of Land).

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QUESTION: 8 Exam Topic: 1, Section 1

The purpose of Regulation Z is to

control the use of credit.
regulate interest charges.
set maximum interest charges.
inform the borrower of credit costs.

Answer(s): D

Explanation:

Regulation Z, part of the Truth in Lending Act (TILA), was enacted to ensure that consumers are fully informed of the true cost of borrowing. It requires lenders to disclose credit terms, including the annual percentage rate (APR), finance charges, payment schedule, and total repayment amount.

The purpose is not to control or limit credit (A), regulate or set interest rates (B or C), but to provide transparency. This allows borrowers to compare loan offers on equal terms.

In Massachusetts, lenders must comply with both federal TILA (Regulation Z) and state consumer protection laws (M.G.L. Chapter 140D Massachusetts Truth in Lending). Borrowers receive a Loan Estimate and Closing Disclosure summarizing credit costs, ensuring informed financial decisions.

Reference:

Federal Truth in Lending Act (TILA) Regulation Z; Massachusetts General Laws Chapter 140D; Massachusetts Real Estate Salesperson Candidate Handbook Financing.

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Real Estate Licensing Massachusetts-Real-Estate-Salesperson Exam (page: 1)
Real Estate Licensing Massachusetts Real Estate Salesperson
Updated on: 07-Feb-2026

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QUESTION: 1 Exam Topic: 1, Section 1

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QUESTION: 2 Exam Topic: 1, Section 1

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Real Estate Licensing Massachusetts-Real-Estate-Salesperson Exam (page: 1)
Real Estate Licensing Massachusetts Real Estate Salesperson
Updated on: 07-Feb-2026