Alaska Real Estate Practice Exam
(Free Questions & Answers)

Explanation

The Alaska Real Estate Commission (AREC) regulates real estate licensees in Alaska. It operates under the Division of Corporations, Business and Professional Licensing within the Department of Commerce, Community, and Economic Development.

Explanation

A seller's agent owes limited statutory duties to unrepresented buyers, including honesty, fairness, and disclosure of known material facts. The full fiduciary duties of loyalty, confidentiality, and undivided allegiance are owed only to the seller-client.

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Under the Statute of Frauds, contracts for the sale of real estate must be in writing and signed by the party to be charged to be enforceable. Oral agreements to sell real estate are generally not enforceable in Alaska.

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In a lien theory state like Alaska, the borrower retains legal title to the property, and the mortgage creates a lien on the property as security for the loan. The lender does not hold title; they hold the right to foreclose if the borrower defaults.

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ANCSA was landmark federal legislation that settled Alaska Native land claims by conveying approximately 44 million acres and nearly $1 billion to Alaska Native regional and village corporations, replacing traditional tribal land claims.

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The sales comparison approach is the most commonly used method for valuing single-family residential properties. It compares the subject property to recently sold comparable properties and adjusts for differences. In rural Alaska where sales data may be limited, the cost approach may also be used.

Explanation

The federal Fair Housing Act protects seven classes: race, color, religion, sex, national origin, familial status (families with children under 18), and disability (handicap). Sexual orientation and gender identity are not yet federal protected classes under the FHA, though some states and localities provide those protections.

Explanation

A lender's (mortgagee's) title insurance policy protects the lender against losses from title defects up to the loan amount. It does not protect the buyer's equity. A separate owner's policy is needed to protect the buyer's full ownership interest.

Explanation

Down payment = $350,000 × 20% = $70,000. Loan amount = $350,000 − $70,000 = $280,000. A 20% down payment eliminates the need for PMI on a conventional loan.

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A legal nonconforming use (also called a grandfathered use) was lawfully established before current zoning regulations took effect. It may continue but typically cannot be expanded, and if discontinued for a specified period, the right to continue the use may be lost.

Explanation

Underground storage tanks are a known material fact that must be disclosed. Leaking USTs can contaminate soil and groundwater, creating significant environmental liability. Licensees must disclose known environmental hazards affecting property value or use.

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Alaska requires salesperson applicants to complete 40 hours of pre-license education from an approved provider before they are eligible to sit for the state licensing exam.

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Ratification occurs when a principal approves an unauthorized act performed by an agent after the fact. The ratification makes the act as binding as if it had been originally authorized.

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Under the Uniform Vendor and Purchaser Risk Act, which Alaska follows, the seller bears the risk of loss if the property is substantially destroyed before title or possession passes to the buyer. The buyer may rescind the contract and recover their deposit.

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A fully amortizing mortgage has equal monthly payments that cover both interest and principal. Early payments are mostly interest; over time, more of each payment reduces the principal until the loan is fully paid at the end of the term.

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In Alaska, subsurface rights including oil, gas, and minerals can be severed from surface rights and owned separately. Buyers should investigate whether mineral rights are included in a property sale, as these rights have significant value in Alaska.

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In remote areas of Alaska with very few transactions, finding adequate comparable sales is a significant appraisal challenge. Appraisers may need to use sales from larger geographic areas, older sales, or rely more heavily on the cost approach.

Explanation

Steering is the illegal practice of directing buyers toward or away from certain neighborhoods based on their race, color, religion, national origin, sex, disability, or familial status. Even if the buyer does not object, steering violates the Fair Housing Act.

Explanation

A cloud on title is any outstanding claim, lien, encumbrance, or other issue that may cast doubt on the owner's clear title. Examples include old unsatisfied mortgages, unresolved court judgments, or conflicting ownership claims.

Explanation

Total commission = $750,000 × 6% = $45,000. Each broker's share = $45,000 ÷ 2 = $22,500. Listing salesperson's share = $22,500 × 70% = $15,750.

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A variance grants relief from specific zoning requirements when strict enforcement would cause undue hardship due to unique characteristics of the property. Variances are granted by the zoning board of appeals and do not change the underlying zoning classification.

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CERCLA (also known as Superfund) authorizes the federal government to clean up contaminated sites and hold potentially responsible parties (including past and current property owners) strictly liable for cleanup costs. In Alaska, this is particularly relevant due to the legacy of military and industrial contamination.

Explanation

The Alaska real estate licensing exam contains 150 questions and candidates are given 4 hours to complete it. A passing score of 70% is required.

Explanation

A buyer's agent owes fiduciary duties to the buyer, including obedience to lawful instructions. The agent must NOT disclose the buyer's financial limitations to the seller, as this would breach the duty of confidentiality owed to the buyer-client.

Explanation

An offer can be revoked by the offeror at any time before it is accepted. Once the seller communicates acceptance, a binding contract is formed and the offer cannot be revoked.