Exam cue: opinions are safe; facts must be true; known defects must be told
Before you read
Test yourself first: 5 questions
Question 1 of 5
A salesperson saying 'this home has the best view in town' is an example of:
Answer: A. Puffing is non-factual sales exaggeration/opinion and is legal. Stating a false material FACT would be misrepresentation or fraud.
Question 2 of 5
Knowingly stating a false material fact to induce a sale is:
Answer: A. Fraud is an intentional false statement of material fact; negligent misrepresentation is a careless one; puffing is mere opinion.
Question 3 of 5
The term 'puffing' in real estate advertising refers to:
Answer: B. Puffing is non-actionable exaggeration or opinion such as 'a fantastic view'; it crosses into misrepresentation only when stated as fact about a material matter.
Question 4 of 5
A contract induced by misrepresentation is generally:
Answer: A. Fraud or misrepresentation makes a contract voidable at the option of the deceived party, who may rescind or affirm it.
Question 5 of 5
An agent who stays silent about a known cracked foundation may be liable for:
Answer: A. Concealing a known material defect can be actionable nondisclosure (negligent misrepresentation or fraud), even without an outright false statement.
Keep the streak going with more questions like these, each with a full rationale.
Must-know rules
- Puffing: opinion/hype ('best view in town') — legal
- Misrepresentation: false statement of material FACT — negligent or innocent, still liability
- Fraud: KNOWING false statement intended to deceive — damages + rescission
- Silence counts: concealing a known material defect = fraud
- Exam cue: opinions are safe; facts must be true; known defects must be told
Puffing vs Misrepresentation vs Fraud: FAQs
Is Puffing vs Misrepresentation vs Fraud on the real estate exam?
Yes. Agency & Fiduciary Duties is a scored domain on the real estate licensing exam, and this topic appears in the national portion.
Is this cheat sheet free?
Yes — every page on Cinna RE's resource library is free to read, print and share. The app adds practice questions, mock exams and a readiness score.
