PRACTICAL APPLICATIONS FINAL EXAM

Transcription

1 PRACTICAL APPLICATIONS FINAL EXAM 1. According to Commission Rules, who is responsible for the closing statement as it applies to the party with whom the brokerage relationship has been established? a) The Real Estate Commission b) The employing broker of the buyer's agent c) The licensee who has established a brokerage relationship d) The associate broker 2. Which of the following is not one of an employing broker's responsibilities regarding supervision? a) Sign all contracts on behalf of the employed licensee b) Review documents throughout the process c) Maintain an office policy manual d) Supervise carefully both experienced licensees and licensees with less than two years experience 3. Which of the following is true regarding an employment agreement between an employing broker and another licensee? a) The agreement may contain no limits as to the time, place, or manner of performance of the licensee's activities b) An employing broker may not delegate supervisory authority to other experienced licensees c) Supervision is limited to employees such as secretaries, bookkeepers, and personal assistants d) The agreement must be in writing 4. Where should the student look for information regarding the process for taking the Colorado real estate exam? a) The Colorado Real Estate Manual b) MacIntosh Real Estate School Catalog c) The Colorado Exam Guide d) The public library 5. Which of the following would best comply with Commission rules regarding an ad for a property being marketed by an associate broker, Jane B. Roker. a) "Call Jane B. Roker, Associate Broker" b) "Jane B. Roker, Broker for Millenium 3 Real Estate. (Each Office Independently Owned and Operated.)" c) "Jane B. Roker for John M. Ployer Brokerage" d) "Call Jane, the Broker who can get the job done!" 117

2 6. Is a licensee who makes "cold calls" by telephone for the purpose of soliciting a listing, subject to the Colorado laws regulating telemarketers? a) yes b) no c) yes, unless the licensee is not regulated by the real estate commission d) no, if the licensee has obtained exemption from the Federal Trade Commission 7. Which of the following is untrue regarding renewal of licensure? a) Licensees have the right to reinstate an expired license without retesting for three years following expiration b) There is no grace period for expired licenses c) The expiration date is always December 31 of the final year of the license d) The licensee should send the reinstatement to the P.O. Box listed on the renewal card 8. The definition of "Single Agent" includes which of the following? a) Landlord's Agent b) Subagent c) Transaction Broker d) Dual Agent 9. A broker would be considered a "Transaction Broker" in all of the following, except: a) when dealing with a buyer after seller has signed the Change of Status Disclosure b) unless otherwise agreed in writing with a party c) when the broker and the parties sign a Dual Agency Addendum d) upon execution of a Transaction Broker Listing Contract 10. A brokerage relationship shall continue until: a) the broker is engaged by a party b) funds are deposited with the closing agent c) receiving compensation d) the earlier of the expiration, termination or one year after engagement 11. The Real Estate Commission receives many anonymous complaints about the conduct of brokers. According to the Commission, which of the following common anonymous complaints is not acceptable? a) When a licensee advertises his/her own property for sale or lease and that property is not listed through a brokerage, the licensee's brokerage name need not be included in the ad b) Two or more separate brokerages collude to set a specific commission rate in an area, contrary to free-market negotiations of commissions c) Payment of a referral fee to an unlicensed person, if the payment is simply for the referral of a name (i.e., potential buyer) to the broker d) A brokerage advertise an commission rate that is well below the common industry rate as a result of reduced services or a "Shown by Owner" program 118

3 12. Regarding the ERHC: a) it is used by real estate licensees to help borrowers take advantage of new secondary mortgage market programs b) it makes available to the public environmentally-related housing c) seller shall reimburse buyer for all out-of-pocket expenses d) seller may terminate the license-buy-out agreement at any time 13. Under the Licensee Buy-Out Addendum to the Contract to Buy and Sell Real Estate a) is always used to assist seller to purchase another property b) the buyer shall be relieved of further obligation under the contract if seller is unable to purchase an alternate property c) seller shall reimburse buyer for all out-of-pocket expenses d) seller may terminate the licensee-buy-out agreement at any time 14. Regarding listings: a) every office should maintain a record of all showings b) if a property is re-listed, it is sufficient to copy information from a previous MLS insertion c) a listing agent should take actual measurements of the square footage d) zoning changes are beyond the expertise of the licensee, who should not attempt to verify them 15. Concerning the designation of the brokerage relationship, a written office policy must contain provisions for all of the following, except: a) when an individual team member enters into a listing contract, the designated brokerage relationship applies to all members of the team b) that a broker working with both buyer and seller is either a transaction broker for both, of a single agent for one party and treats the other only as a customer c) that a broker working with both buyer and seller must obtain both party s written consent in the form of a Dual Agency addendum d) that the employing broker reserves the right to substitute other brokers as a designated broker in a particular transaction 16. Regarding agency disclosures: a) licensees unsure of the appropriate duration of a buyer agency relationship, should not enter a termination date on the Buyer Agency Agreement b) licensees unsure of the appropriate duration of a buyer agency relationship, should rely on the one-year termination provisions of C.R.S c) it is currently the position of the Commission Rule E-35 that agency disclosures do not apply to residential management situations d) all agency agreements must have a definite date for termination 119

4 17. Which of the following is untrue regarding Energy-efficiency ratings? a) The ratings are included in the Seller Property Disclosure Form b) Energy-efficient homes may increase front- and back-end debt-to-income ratios by 2% c) A newly-constructed house obtaining a score of (3+*) or 70 points qualifies for "energyefficient" mortgage rates d) Colorado is the Energy Mortgage pilot State for FHLMC and FNMA 18. Monroe is a licensed broker, who is selling her own home without listing it through her own brokerage. Which of the following is true regarding Monroe's transaction? a) The licensee must advertise through the listing company b) Monroe must list through her brokerage in order to use the Multiple Listing Service c) The Licensee Buy-Out Addendum must be used in this instance d) A licensee acting on his or her own behalf is beyond the jurisdiction of the Commission 19. Exclusive Buyer Agency: a) is an exclusive contract, automatically entitling the broker to a commission b) can result in disciplinary action for failure to explain the exclusivity provisions c) is most effective when broker takes the transaction after buyer finds a suitable property d) may exist concurrently with an exclusive seller or co-operating agency agreement 20. Which of the following is true regarding the Americans with Disabilities Act? a) The ADA directly impacts residential property because the Fair Housing Act Amendments ignore residential property b) Lending institutions may now deny a loan if a person experiences a disability c) The ADA exempts private businesses, such as real estate brokerages, from being accessible to persons with a disability d) Real Estate brokerages may be required to have materials printed in Braille for people who are sight-impaired 21. According to the Fair Housing Act and court cases which have interpreted it: a) landlords may consider the safety of children when making the decision of whether to rent to a family b) After the age of five, children run a greater risk of harm c) Landlords should disclose safety concerns to renters in the lease d) It is the licensee's responsibility to determine that a property is unsuitable for children 22. Fair Housing on the Web, concerns: a) readily accessible information on Fair Housing Laws on the Internet b) Federal laws regarding criminal activities in housing complexes c) a licensee's responsibilities regarding the safety and cleanliness of properties they manage d) suggested techniques for advertising ADA-compliant properties 120

5 23. Which of the following is unimportant when including a contingency clause in a contract? a) Precision b) Disclosure c) Acceptability d) Timing 24. Soliciting "bidding" on properties is: a) illegal b) a form of extortion c) in the best interests of the seller d) a violation of Commission rules regarding license law 25. Closing instructions: a) are a mandatory Commission-approved form b) must not be signed until closing c) must be prepared by the closing agent d) must be provided to all parties within 30 days after closing 26. Flood insurance: a) is available only to homeowners in a federally-designated flood zone b) may be acquired during a flood c) is not available to homeowners in a federally-related flood zone d) is normally a part of a homeowners insurance policy 27. Regarding property inspections: a) a licensee should advise the parties as to which inspector to choose b) home inspectors are licensed with the state and subject to rigorous training c) the Real Estate Commission endorses several reputable professional inspection organizations d) A licensee must be knowledgeable of licensing and credentialing requirements for property inspectors and other trades before making a recommendation 28. Property taxes which are due at the time of closing, but not paid in full: a) are not cause for concern, because property taxes do not constitute a lien on title b) result in the property being conveyed free and clear of encumbrances c) are solely the liability of the closing entity d) should be disclosed to all buyers and sellers and accounted for in contracts and closing instructions 29. What should the broker do in the event of an earnest money dispute? a) split the earnest money deposit evenly between buyer and seller after deducting the appropriate commission for the broker b) deduct the brokers commission and place the remaining deposit in the hands of an arbitrator c) the broker may "interplead" the money d) the broker must surrender the money to the Court by way of a "Notice of Appearance" 121

6 30. All of the following are true regarding interest-bearing trust accounts, except: a) brokers must transfer interest earned on a trust account to a fund established to provide affordable housing to Colorado residents b) mobile home landlords may retain interest earned on security deposits as compensation for administering the trust account c) interest under a consummated sales contract belongs to the seller d) interest belongs to the purchaser if the contract fails 31. Which of the following is not a penalty that may be imposed by the Real Estate Commission if a licensee fails to maintain possession of records for four years? a) Probation b) Fine of up to $2, c) Imprisonment in the county jail for up to 60 days d) Revocation of license 32. In the area of dispute resolution, mediation: a) language is contained in the commission approved form b) is mandatory and binding on the parties c) is appropriate for all disputes d) is generally a last-resort in attempting to resolve a dispute between the parties 33. Regarding a licensee's closing responsibilities a) a licensee may disburse funds when the funds have been deposited in a financial institution for a period of 24 hours b) a licensee may receive a fee from a mortgage company if the licensee gets the written consent of the party with whom they have established a brokerage relationship c) a licensee is required to prepare legal documents d) a licensee must immediately deposit all commissions earned in escrow account immediately after closing and prior to disbursing the funds to other licensees 34. Regarding Rule E-43, what is the licensee s responsibility regarding the measurement of the square footage of a property? a) A licensee is required to measure each property to determine accurate square footage b) A licensee measuring property must use the ANSI standard c) If square footage information is obtained from another source, it is sufficient to merely disclose that fact d) A licensee is not required to measure properties, but if they do the standard or methodology used must be disclosed 35. The Statute on Copies and Faxes, states: a) Copies and faxes are inadmissible as evidence in a court of law b) Copies and faxes are admissible in court only if the original is also available for purposes of verification c) Originals may be destroyed and the duplicates be used as evidence in court d) Photocopies are acceptable. However, other electronically-stored data is inadmissible 122

7 36. Which of the following representations, if made in order to secure an FHA-insured loan, would not likely lead to penalties (including revocation of license or jail term)? a) A statement by buyer that the down payment was from purchaser s own funds b) A statement that buyer was purchasing the property for his or her primary residence, when in fact it was to be a rental property c) An assertion that the buyer was purchasing an individual condo unit for his or her own purposes, when actually it was being purchased for a broker to roll-over into another sale d) A declaration that the down payment came from purchaser, whereas it really came from the seller or broker 37. Believe it or not, when a transaction falls through, the broker is often stuck holding onto earnest money unclaimed for quite a long time. After how long does the Unclaimed Property Act apply, allowing broker to purge the funds from his or her escrow account? a) one year b) two years c) five years d) ten years 38. Which of the following actions is not required by the broker when transferring a tenant s security deposit to the owner? a) notify the tenant in writing b) notify the real estate commission in writing c) secure consent of the owner to assume financial responsibility d) disclose the identity of the owner when demand is made by the tenant for return and the owner refuses 39. A bank reconciliation does not perform which of the following functions? a) Ensuring that referral fees are paid only to properly-licensed agents b) Providing a supervisory link between internal cash handling processes and external supervision of those processes c) Telling the broker that there are sufficient funds to pay escrow obligations d) Verifying that transactions reported in the bank statement are the same as those reported in the accounting records 40. Proper use of the Common Interest Community Contract or Addendum would accomplish which of the following? a) Inform condominium buyers of the ownership interests of owners of adjacent units b) Apprise each purchaser of their percentage ownership in the common elements c) Provide the Association by-laws to all buyers in a common-interest community d) Disclose any potential increases in assessments 123

8 41. Why is it important to cooperate with appraisers calling to obtain information from you regarding a property you closed sometime in the past? a) The appraiser is allowed to pay you a fee for providing this information b) Provides more accurate information in determining property values for another broker s transaction c) Discourages the appraiser from intentionally delaying a future closing you may have d) It is simply required by Commission Regulations 42. Which of the following would not be an appropriate form to list under Section 27 of the Contract to Buy and Sell ( Attachments )? a) Legal Description b) Lead-Based-Paint Disclosure c) Additional terms of the buyer s offer d) Square-Footage Disclosure 43. Advances in technology is leading to what current trend? a) Colorado granting a broker s license to someone with an out-of-state license without that licensee having to fulfill the usual educational and testing requirements b) An increase in injunctions to prevent out-of-state licensees from conducting brokerage business in Colorado without a Colorado license c) A national (Federal) broker s license d) Faster enforcement of penalties for license law violations 44. A closing entity is prevented from disbursing seller s proceeds or broker s commissions until which of the following takes place? a) All closing documents have been executed b) Buyer has presented the closing entity with a check in an amount sufficient to pay the Balance Due From Buyer given in the Settlement Statement c) The closing entity has good funds in hand from both buyer and lender d) Proceeds have been deposited by the closing entity, which has verified that the funds have cleared its bank account 45. If the seller is lucky, there will be more than one offer on his or her property. However, the seller s Listing Agent may feel that he or she has the best offer, and want to present only that offer. In such cases, what is the most appropriate action? a) The buyer s agent should encourage the buyer to file a complaint with the Real Estate Commission against the Listing Agent b) The buyer should utilize the Inspection Clause in the Sales Contract to hold seller s property off the market while buyer looks for properties that are possibly more suitable c) The Listing Agent should present all offers, unless the property is currently under contract d) The Listing Agent should present all offers, even those the Listing Agent knows to be inferior to the offer seller has accepted, and go so far as to have the seller check on the offer that the offer is rejected and initial the rejection 124

9 46. Section 7 of the Contract to Buy and Sell deals with the need for an Improvement Location Certificate (ILC) or survey, but its wording has caused some confusion as to when an ILC is needed and who should pay for it. When does Section 7 come into play (and who pays for the ILC)? a) Seller must pay the full cost of an ILC if buyer wants it and checks the box. b) Seller must pay up to only a certain amount (which buyer indicates by filling in the blank) for an ILC, if buyer wants an ILC. c) Either buyer or seller will pay for up to a certain amount, if the other party indicates they want an ILC by checking the box. If the cost of the ILC exceeds the amount indicated in the blank, the party requesting it will pay the excess d) If the title company requires an ILC to provide additional title insurance coverage, then the party indicated by a checked box will pay up to the amount indicated 47. When earnest money is paid directly to and held by the title company, which of the following responsibilities is not required of the broker? a) to copy the earnest money check b) ensure that the earnest money is in the form of good funds c) obtain a dated and signed receipt d) verify the funds are properly accounted for in the settlement statements 48. What does Full License Recognition mean? a) Another jurisdiction (state) will offer an equivalent real estate license to Colorado real estate brokers. No additional education, testing or application is necessary b) Another state will offer a license to a Colorado broker without requiring any additional testing or education c) Another state will offer a license to a Colorado broker who fulfills that state s basic education and testing requirements d) Another state will allow a Colorado broker to conduct business in that state, recognizing the Colorado license as legally valid in that state 49. When property management services are transferred from one brokerage to another, the outgoing broker should do which of the following? a) transfer copies of existing leases to the incoming broker within 10 days b) transfer records of outstanding tenant balances within 60 days c) transfer the owner s funds within 30 days d) transfer tenant security deposits within 45 days 50. The written correspondence course in Practical Applications can introduce the student to many practical subjects that were left uncovered by the other, more theoretical course requirements. However, there is no substitute for experience when it comes to certain practical aspects. According to the MacIntosh Real Estate School course in Practical Applications, which of the following is the best example of this? a) Treatment of earnest money deposits b) Use of computer-generated contracts c) Choosing an employer d) Property inspections 125

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