1. Maria has just passed the Washington broker examination and is completing her application to be licensed under RCW 18.85. To which body must she submit her license application and fee, and which body will actually issue her broker license and later have authority to discipline it?
- A. The Washington State Department of Licensing (DOL), acting through its Director and Real Estate Program ✓
- B. The Washington Real Estate Commission, which issues licenses independently of any state department
- C. The Washington Department of Financial Institutions (DFI), which licenses all real estate and mortgage professionals
- D. The Washington Department of Commerce, Real Estate Division
Under RCW 18.85 (the Washington Real Estate Brokerage Act), the Director of the Department of Licensing issues, renews, suspends and revokes real estate broker, managing broker and firm licenses and administers the licensing examination and license fees (RCW 18.85.041, 18.85.101, 18.85.121). The Washington Real Estate Commission (RCW 18.85.081) is an advisory body chaired by the Director that helps develop the exam and advises on education and rules; it does not itself issue licenses. The Department of Financial Institutions licenses mortgage loan originators and mortgage brokers, not real estate brokers. The Department of Commerce has no real estate licensing role. Note also that since July 1, 2010 Washington no longer issues 'salesperson' licenses; the entry-level license is 'broker' and the supervisory license is 'managing broker.'
2. Sara was issued her Washington real estate broker license (the entry-level license that replaced the former 'salesperson' license when the license law was restructured in 2010) on March 15. Under RCW 18.85, when will her license first expire if she does nothing further?
- A. March 15 of the following year, because Washington licenses expire annually
- B. March 15 two years after issuance, because Washington licenses have a two-year term ✓
- C. March 15 three years after issuance, because Washington licenses have a three-year term
- D. December 31 of the year of issuance, because all Washington licenses expire on a common calendar-year date
Under RCW 18.85.211 and WAC 308-124A, a Washington broker or managing broker license is issued for a two-year term and expires two years from the date of issuance (on the licensee's anniversary date, not a fixed calendar date). To renew, the licensee must complete the required continuing education (90 clock hours for the first active renewal, 30 clock hours including the 3-hour Core Curriculum for later renewals) and pay the renewal fee to the Department of Licensing. Note that Washington has not issued 'salesperson' licenses since July 1, 2010; the entry-level license is now the broker license, and the former 'broker' license became 'managing broker.'
3. Which of the following activities REQUIRES a real estate license in Washington State?
- A. Selling your own personal residence
- B. Acting as a property manager for a fee on behalf of another ✓
- C. Auctioning personal property under a court order
- D. Selling cemetery lots on behalf of the cemetery company as a salaried employee
Under RCW 18.85.011, managing real property for compensation on behalf of another constitutes brokerage services requiring licensure. Selling one's own property, court-ordered auctions of personal property, and cemetery lot sales by salaried employees of the cemetery are among the statutory exemptions from licensure.
4. Maria has passed the Washington broker examination, paid all fees, and been issued a broker license by the Department of Licensing, but she has not yet been hired by any real estate firm. Which statement correctly describes her situation under Washington law?
- A. Her license is held in inactive status; because a Washington broker may perform brokerage services only as an agent of a licensed firm under the supervision of that firm's designated broker (or a managing broker), she cannot practice until she affiliates with a firm and her license is issued to and retained by its designated broker. ✓
- B. Her license is fully active and she may independently list and sell property for up to 90 days while she searches for a firm to join.
- C. The Department of Licensing will withhold her license entirely until she documents two years of full-time experience, since only managing brokers may hold a license without a firm.
- D. Her license is active but limited to residential transactions, and she may work for compensation directly from clients until she finds a firm.
Under RCW chapter 18.85 (the Real Estate Brokerage Act, as restructured effective July 1, 2010, which replaced the old salesperson/broker categories with broker, managing broker, and designated broker), a broker license is issued in the name of the licensee and the licensee's firm, and must be delivered to and retained by the firm's designated broker. A broker may only render real estate brokerage services as an agent of a licensed firm under the supervision of the designated broker or a managing broker. A broker who is not affiliated with a firm holds an inactive license (RCW 18.85.221) and may not perform brokerage services or receive compensation for them (WAC 308-124A). There is no 90-day grace period, no residential-only exception, and no experience prerequisite for the entry-level broker license itself; the two-year/three-year experience requirement applies to qualifying for the managing broker license, not to being issued a broker license.
5. How many clock hours of pre-licensing education must an applicant complete before sitting for the Washington real estate salesperson examination?
- A. 40 hours
- B. 60 hours
- C. 90 hours ✓
- D. 150 hours
Washington requires 90 clock hours of approved pre-licensing education for salesperson applicants under RCW 18.85.101 and WAC 308-124H. This is divided into specific courses covering real estate fundamentals and Washington law topics.
6. A Washington real estate broker leaves her firm and asks the Department of Licensing to place her license on inactive status. Under RCW 18.85.211 and WAC 308-124A, how long may the license legally remain inactive?
- A. Indefinitely, as long as she renews the inactive license every two years and pays the renewal fee; continuing education is required only before she reactivates ✓
- B. No more than one renewal period (two years), after which the license automatically expires
- C. No more than three years, after which she must retake the broker licensing examination
- D. No more than six months, after which she must reaffiliate with a designated broker or lose the license
Under RCW 18.85.211 and WAC 308-124A-785, a Washington license may be placed on inactive status and may remain inactive indefinitely, provided the licensee continues to renew it on the normal two-year cycle and pays the renewal fee. A licensee on inactive status does not have to complete continuing education to renew, but must complete the required clock hours (including the current core curriculum) before the license can be returned to active status, and may not perform brokerage services while inactive. Washington law sets no fixed maximum inactive period; the license only expires or is canceled if the licensee fails to renew it. Note also that Washington has used the title 'broker' rather than 'salesperson' since the 2010 license-law restructuring.
7. A Washington designated broker wishes to open a branch office. Under DOL rules, which of the following is required for the branch office?
- A. A separate designated broker license for the branch office location
- B. A managing broker must be licensed and designated to supervise the branch office ✓
- C. The branch must obtain its own errors and omissions insurance policy independent of the main firm
- D. Branch offices are prohibited from conducting residential sales transactions
Washington rules require a branch office to be licensed and to have a licensed managing broker designated as responsible for supervising the branch office's activities. The firm's designated broker remains ultimately responsible for the firm and its branches. A separate designated broker license is not issued for the branch, the branch does not need a separate independent E&O policy, and branch offices may conduct residential sales transactions.
8. The Washington DOL may deny a real estate license application based on which of the following findings?
- A. The applicant is under age 21
- B. The applicant has a prior felony conviction that is substantially related to real estate brokerage ✓
- C. The applicant has not resided in Washington for at least one year
- D. The applicant currently holds an active license in another state
Under RCW 18.85.321 and RCW 18.235, the DOL may deny a license if the applicant has a prior conviction for a crime substantially related to the practice of real estate. Washington does not require applicants to be 21 (the minimum age is 18), does not impose a residency requirement, and holding an out-of-state license is not a disqualifying factor.
9. Under Washington law, a real estate firm's trust account records must be retained for a minimum of how many years?
- A. Two years
- B. Three years ✓
- C. Five years
- D. Seven years
Under WAC 308-124C-105, Washington real estate brokers must retain trust account records, transaction documents, and related records for a minimum of three years. This requirement applies to both paper and electronic records maintained by the firm.
10. Which of the following individuals is EXEMPT from the Washington real estate licensing requirement when performing property-related activities?
- A. A person who negotiates commercial leases for multiple property owners for a fee
- B. A licensed Washington attorney acting within the scope of their legal practice ✓
- C. A property manager who collects rent and negotiates lease renewals for an investor client
- D. A person who lists and sells rural farmland for compensation on behalf of others
Under Washington law, RCW 18.85.151 exempts licensed attorneys when they perform real estate-related acts within the scope of their legal practice. By contrast, negotiating leases, managing property for another for compensation, or listing and selling farmland for others generally constitutes real estate brokerage activity requiring a Washington real estate license unless a specific exemption applies.