– Chapter 5 National Practice Questions Pre-License Class – (No Answers, Just Questions)

National Practice Ch5 National Brokerage (Questions ONLY, ANSWERS WILL BE REVEALED WITH PROPER SUBSCRIPTION)

1. What actions demonstrate exercising care when representing a buyer?

2. What exception exists to the duty of obedience when working with a client?

3. An agent’s fiduciary responsibilities to a client usually end when the transaction closes. This is not true of which duty?

National Practice

4. A seller’s agent must disclose what kinds of things to the seller?

5. Typically, what actions are not considered to be part of a broker’s authority?

6. What obligations do licensees owe to their customers?

7. Describe the difference between active and passive fraud.

8. What could happen if a licensee violates a duty to a client or customer?

9. What principles govern an agency relationship?

10. Define implied agency.

11. If a transaction doesn’t complete, under what circumstances would the broker still be entitled to a commission?

12. Describe the difference between constructive notice and actual notice.

13. What is market allocation? Give an example.

14. What’s the penalty for violating the Sherman Antitrust Act?

15. What does the Clayton Act allow private individuals to do?

16. What kinds of discussions about commission rates are brokers allowed to have that would not violate the Sherman Act?

17. An agent is

A.    one who is the source of another’s authority

B.     one who represents and acts for another

C.     one who has conferred authority to another

D.    one who has been paid a commission by another

18. Misrepresenting facts to a buyer might result in

A.    an extended contract and protracted compensation

B.     federal sanctions

C.     loss of a business license

D.    a voided contract and loss of commission

19. Obedience of the agent to the principal means what?

A.    The agent may disobey those instructions in good faith if the agent feels it is necessary

B.     The agent must follow all the instructions of the seller even if they violate state law

C.     The agent must follow those instructions regardless of personal feelings about them, as long as they do not violate the state or federal laws.

D.    The agent must follow all those instructions regardless of the consequences.

20. Murphy, a buyer (customer), does not know about the leaking basement so he proceeds to make an offer. Should the broker (salesperson) who represents the seller have told Murphy about the defect?

A.    No, caveat emptor would apply in this case.

B.     No, the broker is the agent for the seller he should not mention the basement unless he is asked.

C.     Yes, any defects known to the broker should have been disclosed to Murphy.

D.    Yes, the broker owes Murphy a fiduciary relationship.

21. A contract in which an owner hires a broker to market the property creates an agency relationship between

A.    buyer and seller.

B.     buyer and broker.

C.     broker and seller.

D.    broker, buyer, and seller.

22. What do we call the unreasonable restriction of business activities that results from conspiracy among members of a trade?

A.    Market allocation

B.     Group boycott

C.     Restraint of trade

D.    Tie-in arrangement

23. Violations of the Sherman Anti-Trust Act can include prison terms and fines of up to how much per violation?

A.    $50,000

B.     $250,000

C.     $500,000

D.    $1,000,000

24. An agency relationship

A.    can occur through implication (what you might say or do) without a written contract

B.     always require a written contract

C.     is always derived by express act

D.    is better accomplished through implication or ratification

25. Agent Paul is bound to inform his client of all facts that might affect the client’s interests – both what Paul knows and what he “should have known.” Which of these situations would not be something Paul “should know?”

A.    There is a crack in the basement wall.

B.     The air conditioner does not work.

C.     The owner of the property is HIV positive.

D.    The casement windows have broken seals.

26. Which of the following duties is NOT owed to a customer?

A.    Confidentiality

B.     Honesty

C.     Reasonable care and skill

D.    Proper disclosure

27. The principles of an agency relationship include all of these factors except which one?

A.    Mutual consent

B.     Authorization

C.     Compensation

D.    Fiduciary duties

28. What is special about a universal agent?

A.    A universal agent has power of attorney.

B.     A universal agent has veto power.

C.     universal agent has unilateral power.

D.    A universal agent has statutory powers.

29. Which of the following does a principal owe to his or her licensee?

A.    Information

B.     Access

C.     Accounting

D.    Performance

30. Matt Bower is a developer. Will Jones is a builder. Matt agrees to sell Will a lot, but he conditions the sale by insisting that Will agree to list the property with him after the home is built. What is this called?

A.    Market allocation

B.     Price fixing

C.     Coercion

D.    Tie-in arrangement

31.  The broker, who has listed a property for sale, has the obligation to

A.    do whatever the broker believes to be in the best interest of the owner.

B.     do whatever the owner has instructed him to do legally.

C.     discriminate at the owner’s instructions.

D.    accept and sign offers in the name of the owner.

32. The act of creating an agency relationship in which the principal accepts the conduct of someone who acted without prior authorization is called what?

A.    Revision

B.     Reaction

C.     Ratification

D.    Presumptive

33. Seller Joe Needy lists his home for $40,000 and the broker tells the prospective buyer to submit a low offer because the seller is desperate. The buyer offers $38,000 and the seller accepts. Which statement is TRUE about this situation?

A.    The broker was unethical but because no one was hurt, it is not improper.

B.     The broker violated the agency relationship.

C.     The broker’s action was proper in obtaining a quick offer.

D.    Any broker is authorized to encourage bidders.

34. An agent fails to discover flood marks on the walls in the basement of a property. The agent sells the property, and the buyer later sues the agent for failing to mention the problem. Which statement best describes what can happen in this case?

A.    The agent may be guilty of intentional misrepresentation.

B.     The agent has an exposure to a charge of negligent misrepresentation.

C.     The agent has little exposure, since the problem was not mentioned on the signed disclosure form.

D.    The agent is not vulnerable, since the problem was not discovered.

35. Agent Sam told a buyer that the fence line also marked the property line. Agent Sam knew that the property line did not extend to the fence line. Agent Sam’s actions are an example of what?

A.    Passive fraud

B.     Unintended fraud

C.     Active fraud

D.    Puffing

36. Agent Fred fronts his cousin Norm money to buy a client’s house. Shortly after the closing, Agent Fred flips the house and realizes a substantial profit. Agent Fred’s actions might be describe as

A.    across the table.

B.     arms length.

C.     direct intent.

D.    self-dealing.

37. A person who hires an agent to represent his or her interests is known as what?

A.    Customer

B.     Referral

C.     Advocate

D.    Principal

38. What is a form of implied agency relationship created by the actions of the parties involved rather than by written agreement?

A.    Defined agency

B.     Ostensible agency

C.     At-Large agency

D.    Non-Facto agency

39. Which of these is not a violation of Sherman Antitrust laws?

A.    Boycott

B.     Price Fixing

C.     Redlining

D.    Market allocation

40. A special agent is also known as a

A.    single or solo agent.

B.     directed or assigned agent.

C.     limited or specific agent.

D.    general or area agent.

41. Which of the following duties best describes what an agent owes customers?

A.    Fairness, care and honesty

B.     Obedience, confidentiality and accounting

C.     Diligence, care, and loyalty

D.    Honesty, diligence and skill

42. An agency relationship is based on

A.    compensation

B.     commission

C.     authorization and mutual consent

D.    contact and access

43. Which of the following statements best defines agency?

A.    The fiduciary relationship between the agent and the principal

B.     The fiduciary relationship between the agent and the broker

C.     The fiduciary relationship between the agents

D.    The fiduciary relationship between the agent and the customer

44. Paul Shafer is acting as the agent of David Smith. He

A.    can agree to a change in price without Smith’s approval.

B.     may share his commission with a licensed attorney.

C.     must report all offers to Smith.

D.    can make a profit in addition to his commission.

45. “Everyone charges the same so you might as well list with me” is an example of what?

A.    Price fixing

B.     Boycott

C.     Market allocation

D.    Tying agreement

46. Which of the following is NOT a form of agency?

A.    Express agency

B.     Implied agency

C.     Closed agency

D.    Ostensible agency

47. Under what conditions can an agent provide advice and counsel to the customer?

A.    Upon a verbal request by the customer

B.     Upon a written request by the customer.

C.     When the request benefits the agent’s client

D.    Never

48. An agent’s duties to a principal include all of the following except which?

49. The principal of Notice is sometimes called what?

50. Puffing is best characterized as which of the following

51. Which of the following is a common complaint buyers have against brokers?

52. Which of the following best describes “agency coupled with an interest?”

53. An agency relationship is created in each of the following situations EXCEPT which?

54. Which duty requires that the agent act in good faith and obey the principal’s directions?

55. Which BEST describes the role of a fiduciary?

56. Which of the following types of information can a licensee legally provided to both a principal and a customer?

57. When the real estate agent has produced a buyer who is ready, willing and able, the agent has generally done what?

58. Which of the following is a common complaint buyers have against brokers?

59. Which of the following best defines the term procuring cause?

60. Agent Mary forgot to complete a sales contract rider. This resulted in a $300 loss for her client. Agent Mary’s actions can be described as

61. After listing a home with a broker, the seller told the broker NOT to disclose a major structural defect in the house. What should the broker do?

62. When a home is listed, what is the minimum which can be created?

63. What are the three primary areas of disclosure?

64. What is the definition of a single agent?

65. How is subagency created?

66. How does a cooperating broker accept a unilateral blanket offer of subagency?

67. What obligations does a subagent of the seller owe to the seller and what obligations does the subagent owe to the buyer?

68. What is dual agency?

69. What is undisclosed dual agency and what happens in this situation?

70. Under what circumstances will most states allow dual agency and what is it called?

71. What is designated agency and why is it important?

72. What is meant by single agency?

73. Why would a tenant enter into an agency agreement with a broker?

74. What are three advantages to entering into a buyer agency agreement?

75. List four ways an agency agreement can be involuntarily terminated.

76. All of the following may involuntarily terminate an agency relationship except which?

A.    Bankruptcy

B.     Expiration of the agreement term

C.     Agent abandonment

D.    Condemnation of the property

77. Revocation of a broker’s license results in

A.    reassignment of the relationship.

B.     termination of the relationship.

C.     extended agreement.

D.    open offer agreement relationship.

78. What do we call an agent who represents a seller exclusively in a real estate transaction?

A.    Exclusive agent

B.     Single agent

C.     Subagent

D.    Broker agent

79. What is the arrangement called when the agent is accountable only to the buyer?

A.    Buyer’s agent

B.     Seller’s agent

C.     Broker’s agent

D.    Assigned agent

80. Which of the following would be deemed an advantage of a subagency arrangement?

A.    Subagency is an easy way for the cooperating broker to share in the commission.

B.     Subagency relieves the seller and the listing broker from liable for the actions of the subagents.

C.     Subagency requires a written agreement from the buyer.

D.    Subagency allows the subagent to act like a buyer’s agent without the risk of undisclosed dual agency.

81. Sally is a subagent working for Seller Pat. What does Sally owe to Buyer Brad?

A.    Honesty and fair dealing

B.     Confidentiality

C.     Advice on negotiations

D.    Information about Pat’s motivation to sell

82. Which of the following are common types of agency relationships?

A.    Single agency

B.     Each of these

C.     Consensual dual agency

D.    Seller/Landlord agency

83. Which type of compensation is more likely to be used in a commercial rather than a residential transaction?

A.    Kick-back

B.     Percent of sale

C.     Margin payment

D.    Retainer

84.  A seller can agree to accept or reject which of these options when he or she signs the listing contract?

A.    Subagency

B.     Facilitator

C.     Disclosure

D.    Non-agency

85. Licensee Jim listed a property and Licensee Sally sold the property to her client. Jim and Sally work for the same brokerage. This type of sale is known as what?

A.    Dual-agency sale

B.     Principal sale

C.     In-house sale

D.    Net sale

86. What is the term given to an agent who is acting as a buyer’s and seller’s agent in the same transaction?

A.    Co-agent

B.     Tri-agent

C.     Dual agent

D.    Assigned agent

87. Which type of agency would be most advantageous to a buyer?

A.    Broker’s agency

B.     Buyer brokerage

C.     Designated agency

D.    Consensual dual agency

88. What condition occurs when dual agency is not disclosed and agreed to in writing?

A.    Non-disclosed dual agency

B.     Agency by association

C.     Undisclosed dual agency

D.    Dual agency by design

89. What form of limited agency is a good alternative to dual agency?

A.    Non-agency

B.     Undisclosed dual agency

C.     Designated agency

D.    Buyer brokerage

90. Once an agency relationship has been terminated, which of the following responsibilities remain in place?

A.    Compensation

B.     Obedience

C.     Confidentiality

D.    Care

91. What do you call a licensed real estate salesperson, working under the supervision of a real estate broker, who has been assigned to represent a client when a different client is also represented by such real estate broker in the same transaction?

A.    Subagent

B.     Designated agent

C.     Dual agent

D.    Single agent

92. When the agency relationship has been terminated, the licensee is no longer considered the principal’s agent and does not owe any further duties to the principal, except for the following

A.    Loyalty

B.     Obedience

C.     Confidentiality

D.    Care

93. Before a buyer broker shows a property, what must he or she disclose to the seller?

A.    Seller agency relationship

B.     Subagency relationship

C.     Buyer agency relationship

D.    Dual agency relationship

94. A subagent owes customer level services to the buyer which include which of these?

A.    The same fiduciary duties owed to the client

B.     COALD

C.     Honesty, fair dealing and the proper disclosure of pertinent facts that affect the value of the property

D.    Only material facts

95. Which of the following terminations of an agency relationship could result in legal or financial ramifications?

A.    Contract performance

B.     Contract expiration

C.     Mutual agreement between broker and client

D.    Renunciation by the client

96. An agency relationship may be involuntarily terminated by which of the following?

A.    By destruction of the property through fire, vandalism or natural disaster

B.     By performance

C.     By termination of the relationship by mutual agreement

D.    By the expiration of the agency agreement

97. An agency relationship may be involuntarily terminated by which of the following?

A.    Performance

B.     Condemnation of the property

C.     Termination of the relationship by mutual agreement

D.    Expiration of the agency agreement

98. What is the term given to the person who has entered into a listing agreement with a seller?

99. Which of the following is an example of involuntarily termination of agency?

100. Which of the following types of agency is not allowed in most states?

101. Designated agency means the clients do not have the full level of fiduciary duties available to them that they would have if they were fully involved in seller agency or buyer agency. In this situation, the client gives up the fiduciary duty of undivided what?

102. What is the primary purpose for agency disclosure?

103. What exists when a real estate firm or a real estate licensee represents both the seller and the buyer or the landlord and the tenant in the same transaction?

104. If a cooperating broker accepts the offer of subagency from a listing broker, to whom does the cooperating broker owe fiduciary duties?

105. All of the following are common types of agency relationships that exist except which?

106. A broker can enter into a single agency agreement with any of the following except?

107. A broker can enter into a single agency agreement with any of the following except?

108. When a seller gives permission to a broker to submit the property to the MLS, the seller is authorizing the broker to make a blanket unilateral offer of what to all the other members of that MLS?

109. Which of these is not a way a buyer’s agent might receive compensation?

110. In most states, in all residential transactions when must licensees give potential sellers or buyers a written disclosure form?

111. What is an important thing to remember about listing agreements?

 

112. Describe an open listing.

113. What is the major difference between an exclusive right to sell listing and an exclusive agency listing?

114. Give an example of a compensation agreement that is not a listing agreement.

115. Most states require what four components to be on a listing agreement?

116. How can an agent determine who has title to a property he or she is listing?

117. When must the seller receive a copy of the listing agreement?

118. Licensee Tim works for Broker Marty. Tim lists Seller Gary’s home, fills out all the paperwork and signs the agreement. The listing agreement is a contract between whom?

119. What is an MLS?

120. Give some examples of the kind of site information you might collect to submit to the MLS.

121. What are the two most common changes to an original listing agreement?

122. When an amendment is made to a listing agreement, what happens to the terms of the original listing agreement?

123. When is a seller typically required to provide a copy of the Property Disclosure Statement to a buyer?

124. List two types of transfers that are exempt from the Property Disclosure Statement requirement. 

125. If a transaction doesn’t complete, under what circumstances would the broker still be entitled to a commission?

126. Broker Sara has lost her license for unprofessional conduct. What will happen to her listings?

127. Which of the following types of sale does NOT typically require a property disclosure statement?

A.    A sale of a single family home

B.     A transfer made by a trustee in bankruptcy

C.     The sale of a duplex

D.    Newly built homes in a subdivision

128. Which of these sources would NOT be a way to determine who holds title to a property?

A.    Seller

B.     Title Company

C.     County Tax office

D.    Mortgage Bank

129. Licensee Jake found a buyer for seller Norm’s house within three days of taking the listing. Seller Norm has now refused to sell. How does this impact licensee Jake’s compensation?

A.    Licensee Jake would not be entitled to his compensation.

B.     Seller Norm would have to sell as a FSBO and licensee Jake would be out his compensation.

C.     Licensee Jake can appeal to the MLS board for partial compensation payment.

D.    Licensee Jake would still be entitled to his compensation.

130. Broker Jill has an agreement with seller Alice that says Jill will receive compensation if anyone except Alice sells Alice’s home. What kind of agreement is this?

A.    Exclusive agency

B.     Net listing

C.     Exclusive right to sell

D.    Open listing

131. Which of these listing agreements is considered a unilateral contract?

A.    Open

B.     Exclusive Agency

C.     Net

D.    Exclusive Sale and Listing

132. With regard to listings, in which situation would the state licensing authority not get involved?

A.    Broker dies.

B.     Licensee transfers brokers.

C.     Broker loses license.

D.    Firm closes.

133. Which of the following situations might impact a listing agreement?

A.    Death of a Broker

B.     Change of broker’s business address

C.     Transfer of broker to another MLS board

D.    Out of state move by seller

134. Which is TRUE about listings?

A.    A net listing is illegal in all states.

B.     An open listing is an exclusive contract.

C.     A seller can sell his or her own home and owe no commission if he or she signs an exclusive agency listing.

D.    An exclusive listing must always be at least 30 days long.

135. Which component is not required in most listing agreements?

A.    Identification of the property

B.     Specifics of compensation defined

C.     Signatures collected

D.    Escrow company named

136. Which of the following information would you NOT likely find on an MLS listing?

A.    A record of previous property owners

B.     School district

C.     Driving directions to the property

D.    Phone number to call for showing

137. What does a carryover clause do?

A.    Protects the broker if the seller cancels the listing agreement.

B.     Allows an automatic six-month extension to the listing contract.

C.     Prevents the seller from doing a FSBO sale after the listing expires.

D.    Allows the broker to collect a commission for some period of time after the listing expires.

138. In what section on a seller’s disclosure would you find information regarding issues in relation to drainage problems?

A.    Structural

B.     Systems and Fixtures

C.     Water

D.    Environmental

139. What document is submitted to the MLS when a listing agreement is signed?

A.    A copy of the original listing agreement

B.     The original listing agreement

C.     An MLS listing form

D.    Form 45-A

140. What is the best course for a licensee who has been denied compensation due to a fraudulent seller?

A.    The licensee should inform his or her broker.

B.     The licensee should bring a civil suit against the seller.

C.     The licensee should seek damages in a lower court.

D.    The licensee should petition MLS for compensation payment.

141. What are the three most common types of listings?

A.    Open Listing, Exclusive Right to Sell Listing, and Exclusive Agency Listing

B.     Closed Listing, Special Listing and Net Listing

C.     Agency Listing, Basic Listing, and Extended Listing

D.    Comprehensive Listing, Closed Listing, and Market Listing

142. Which of the following is NOT a form of listing contract termination?

A.    Performance

B.     Expiration

C.     Market breach

D.    Termination

143. Which party is responsible for filling out a property disclosure statement?

A.    The cooperating agent

B.     The listing agent

C.     The broker

D.    The sellers

144. In what section of a property disclosure would you find information regarding existing water treatment systems?

A.    Personal Property

B.     Water

C.     Flood Zones

D.    Permits

145. Seller Janet delivers a disclosure statement to Buyer Amanda. Amanda reads it over and decides everything looks good enough to continue with the purchase. A few weeks later, a major hail storm damages the roof and now it leaks. So the original disclosure is no longer accurate. Which statement is false?

A.    Janet should amend the disclosure statement and deliver it to Amanda.

B.     Janet can correct the damage to the roof and tell Amanda nothing.

C.     Amanda can rescind the purchase agreement within three business days after she receives an amended disclosure.

D.    Amanda can require Janet to replace the roof.

146. Which item would NOT appear on a property disclosure statement?

A.    Condition of any outdoor sprinkler system

B.     Basement problems

C.     Deed Number

D.    Pest infestations

147. Licensee Jones is in the process of closing on a sale. However, the property title has been found to have uncorrectable defects. What is the result regarding Jones compensation?

A.    If the property doesn’t close, there will be no compensation.

B.     The title company owes licensee Jones compensation.

C.     Compensation will be prorated based on work performed by licensee Jones.

D.    The seller is still liable for licensee Jones’ compensation.

148. A safety clause in a listing contract means what?

A.    The broker may claim a commission if the owner sells to a person the broker introduced to the property within a certain time after the listing expired.

B.     The owner is protected from any liability from actions the broker performed while the listing was in force.

C.     The broker can extend the term of the listing agreement if a buyer is preparing to make an offer.

D.    The seller may not have to pay a commission if the buyer doesn’t complete the offer.

149. Which of these components is NOT required in most listing agreements?

A.    Property ID

B.     Consent to dual agency

C.     Promise of compensation

D.    Seller signatures

150. Which component is not required in most listing agreements?

A.    Identification of the property

B.     Specifics of compensation defined

C.     Signatures collected

D.    Escrow company named

151. What is the process to make changes to a listing agreement contract?

A.    The broker owns the listing and can make changes as needed.

B.     All parties must agree to in writing to any changes.

C.     The listing agent is the only one that can make changes to the listing contract.

D.    All changes can be made by attaching a hand-written note to the existing contact.

152. What are the two changes most often made to a listing agreement?

153. Which is the best method to identify a property?

154. Sales of manufactured and mobile home

155. Which of the following sales typically do NOT come with a property disclosure?

A.    Single family residence

B.     A foreclosure or deed-in-lieu of foreclosure

C.     New construction

D.    Multi-family dwelling of up to four units

156. Martha signs a listing agreement with Broker Patrick. Which of the following would probably not be found in the agreement they signed?

A.    Patrick’s commission

B.     Martha’s price

C.     Expiration date of the contract

D.    Martha’s average utilities

157. Which of these statements is true?

A.    Once a listing agreement is signed by all parties, it cannot be changed.

B.     The seller can change the listing agreement whenever he or she wants.

C.     A listing agreement can be modified, but only if all parties agree in writing.

D.    A listing agreement can change by the mutual verbal agreement of all parties.

158. The listing type that assures a broker that he or she will receive compensation no matter who procures the buyer is what kind of agreement?

159. Which type of listing allows a seller to sell the property himself or herself without having to pay any commission to any broker?

160. What is the term given to the action when both parties mutually agree to end the listing relationship

161. Broker Alice has a listing agreement with Jack. If Broker Tom procures a buyer for Jack, Tom will get the commission and Alice will not. What kind of listing agreement does Alice have with Jack?

162. When a listing agent signs an agreement, in reality he or she is

163. Which of the following types of transactions typically contain a property disclosure?

164. Licensee Frank works for Broker Harry. Frank lists a home. Licensee Mary, who works for Broker Sam, sells Frank’s listing. With whom does the seller have the agency agreement?

165. In what section on an MLS listing form would an agent look at to determine the type of foundation used in the construction of the home?

166. A multiple listing service (MLS) is an organization of member brokers who agree to

cooperate in the sale of properties listed by other brokers in exchange for a share of the broker’s resulting commission.

167. A listing agreement is a

168. The difference between an exclusive right to sell listing and an exclusive agency listing has to do with what issue?

169. On an MLS listing form, in what section would you find information regarding waterfront footage?

170. Licensee Mike was owed a commission from seller Jane. Jane has refused to make payment. What recourse does licensee Mike have?

171. What is the difference between a void contract and a voidable contract?

172. What is the difference between an express contract and an implied contract?

173. What are the five criteria of a valid contract?

174. When must a suit for damages be initiated?

175. How does a contract for deed differ from a contract of sale?

176. Define an option.

177. What happens when a counteroffer is made?

178. What happens when both buyers and sellers sign the purchase and sale agreement?

179. Name four items that must be present in a purchase and sale agreement for it to be legal.

 

180. What is important to note about the street address of a property when writing a purchase and sale agreement?

181. What does “time is of the essence” mean?

182. What is a right of first refusal?

183. Which type of leasehold estate is commonly referred to as a periodic tenancy?

184. What are a tenant’s primary obligations when leasing a property?

 

185. List three covenants that are essential in a lease.

186. How can a landlord restrict the use of a residential property?

187. Why do landlords collect security deposits?

188. What is the difference between a sublease and an assignment?

189. List three common causes of a lease termination.

 

190. Define a gross lease.

191. Under what type of contract is a seller obligated to sell, but the buyer is not obligated to buy?

A.    Lease

B.     Recission

C.     Option

D.    Purchase

192.  Issues that are not covered in the purchase and sale agreement itself are usually dealt

A.    through verbal agreements.

B.     via handwritten notes.

C.     using preprinted riders.

D.    using a schedule of changes.

193. What do we call the right of a person to have the first opportunity to purchase or lease a property?

A.    Right of first refusal

B.     First right to buy

C.     Right to resend

D.    Right to counteroffer

194. Which kind of lease has no time limit?

A.    Estate for years

B.     Estate at will

C.     Estate from period to period

D.    Estate at sufferance

195. What document is used to make adjustments to an existing sales contract?

A.    Addendum

B.     Repeal

C.     Side bar

D.    Adjunct

196. The Statute of Limitations requires that parties to a contract who have been damaged or who question the contract’s provisions do what?

A.    Act within a statutory period.

B.     Select a specific, limited course of action for recouping their losses.

C.     Arbitrate prior to taking court action.

D.    Wait a statutory period before they may take legal action.

197. A lease is

A.    both an instrument of conveyance and a contract.

B.     neither an instrument of conveyance nor contract.

C.     a promise note.

D.    a document that conveys legal title.

198. Jim signed a six months lease. What type of lease did Jim sign?

A.    Estate at will

B.     Estate for time

C.     Estate for years

D.    Estate at sovereignty

199. Which contract provision allows for the transfer of the contract to another person?

A.    Assignment of a Contract

B.     Operation of Law

C.     Transfer Clause

D.    Execute Clause

200. Which of the following is a characteristic of land leases?

A.    Inherently long-term leases

B.     Inherently short-term leases

C.     Tax advantage limitations

D.    Reduction in finance options

201. Landlord Frank terminated Jerry’s lease because gross sales did not meet expectations. Jerry agreed to what type of lease?

A.    Retail Level Lease

B.     Percentage Lease

C.     Reorder Lease

D.    Market Level Lease

202. Most home sales are

A.    not contingent on financing.

B.     covered by FDIC insurance.

C.     contingent on financing.

D.    based on a cash sale.

203. A contract which neither party can enforce is called

A.    voidable

B.     void

C.     open

D.    denied

204. Which of these items is not included in a lease agreement?

A.    Use provisions

B.     Demising clause

C.     Description of premises

D.    Alienation clause

205. Which of the following summarizes the general terms of a ground lease?

A.    The landlord sells the ground to another, then leases it back.

B.     A tenant buys the landlord’s ground, then leases the improvements.

C.     The landlord leases the ground floor of the building to a commercial tenant.

D.    The tenant leases the ground from the landlord and owns the improvements.

206. Which of the following best defines a marketable title?

A.    A title that has been recorded at the county court house

B.     A title to a property that is free from encumbrances, litigation, and other defects and that can be readily be sold or mortgaged

C.     A title that has been reviewed by an attorney

D.    A title that has at least one lien attached to the property

207. A lease automatically terminates under which of the following circumstances?

A.    The tenant fails to pay rent.

B.     The leased property is foreclosed.

C.     The tenant goes out of business.

D.    The landlord cancels the lease.

208. Jim holds a commercial lease. Last year his rent went up 4% based on a 4% increase in the wholesale price index. What type of lease does Jim have?

A.    Revolving Lease

B.     Wholesale Lease

C.     Index Lease

D.    Leading Indicator Lease

209. Which statement best defines the concept of “quiet enjoyment?”

A.    A tenant’s requirement to comply with contract obligations

B.     A landlord’s obligation to provide the tenant with egress

C.     A landlord’s obligation to provide the tenant with reasonable privacy and freedom from interference

D.    A tenant’s requirement to allow access for inspections and repairs

210. In which contract provision would the length of the lease be outlined?

A.    Statement of Limits

B.     Clear Statement of Term

C.     Clear Notice of Terms

D.    Order of Terms

211. In which of these contracts is the payment of all or part of the sale price deferred?

A.    Lease

B.     Contract for deed

C.     Option

D.    Contract of sale

212. According to contract law, every valid contract is also what?

A.    Void

B.     Enforceable

C.     Enforceable or unenforceable

D.    Voidable

213. What does a rescission contract do?

A.    Releases all parties from any present and future liability.

B.     Makes the buyers liable for damages if they default for no good reason.

C.     Specifies the terms under which either party may sue the other in a default.

D.    Releases the sellers from any responsibility for returning the buyers’ earnest money deposit.

214. A contract that conveys an interest in real estate must

A.    include a title closing entity.

B.     contain default penalties.

C.     include all outstanding liens against the property.

D.    contain a legal description of the property.

215. What is one important difference between a sublease and a lease assignment?

A.    In an assignment, responsibility for the original lease is transferred completely to the assignee.

B.     In a sublease, the original tenant retains primary responsibility for performance of the original lease contract.

C.     A sublease does not convey any of the leasehold interest.

D.    A sublease conveys the entire leasehold interest.

216. What kind of lease contains a recapture clause?

217. Which of the following statements best defines closing costs?

A.      Marketing expenses incurred to sell the property

B.      All listing fees

C.      Expenses above the price of the property that buyers and sellers normally are required to pay to complete a real estate transaction

D.      Expenses not paid by the brokerage

218. What is an important legal characteristic of an option to buy agreement?

A.      The potential buyer, the optionee, is obligated to buy the property once the option agreement is completed.

B.      The optionor must perform if the optionee takes the option, but the optionee is under no obligation to do so.

C.      The contract can be executed at no cost to the optionee.

D.      It is a bilateral agreement.

219. A prospective homebuyer submits a signed offer to buy a house with the condition that the seller pays financing points at closing. The seller disagrees, crosses out the points clause, then signs and returns the document to the buyer. At this point, assuming all other contract validity items are in order, what is the status of the offer?

A.      It’s an accepted offer; therefore a valid contract.

B.      It’s an invalid contract.

C.      It’s still an offer.

D.      It’s an invalid offer.

220. A title that a court of equity considers to be so free from defect that it will legally force its acceptance by a buyer.

221. The best practice is to

A.      have the buyers take possession on the day of the transaction close.

B.      have the buyers take possession at least 2 days after the day of the transaction close.

C.      have the seller remain on the property at least 2 days after the closing date.

D.      have the sellers move from the property at least 5 business days before the close date

222. How might a voidable contract become valid?

A.      If neither party agrees to the terms.

B.      If the party who has reason to disaffirm the contract elects instead to perform it.

C.      If the party who wants to enforce the contract seeks legal relief.

D.      If the party who wants to enforce the contract seeks damages.

223. When a tenant agrees to pay all taxes, insurance, maintenance and repairs, that tenant has what kind of lease?

A.    Gross

B.     Periodic

C.     Net

D.    Graduated

224. Which party has legal authority to sign a sales contract for a property that is part of an estate?

225. When an owner leases her property, she temporarily relinquishes the right to?

226. Among the usual remedies available to the injured party if tenant or landlord defaults on the terms of a lease is the right to?

227. If a lease does not state a specific ending date, when does it terminate?

228. One of the aims of the Uniform Residential Landlord and Tenant Act is to?

229. A lease contract is best described as?

230. An owner leases a property to a business in exchange for rent. The tenant is required to pay all operating expenses as well. This is an example of a

231. Which of the following lease types conveys rights other than the rights to exclusive use and occupancy of the entire property?

232. A landlord and tenant complete a one-year lease. The following week, the landlord dies. Which of the following is true?

233. The percentage lease is most often used by?

234. Which of the following happens when a leased property is sold?

235. A primary theme of the Uniform Residential Landlord and Tenant Act is that both landlord and tenant

236. When a tenant acquires a leasehold estate through a lease, what does the property owner acquire?

237. Buyers Sam and Linda Pope are entering into a contract with sellers, Jim and Alana Jones in which part of the sale price of the property will be deferred. What kind of contract is it?

238. Bill has informed his landlord that he will be moving in 30 days. What action has Bill taken regarding his lease requirement?

239. A lease conveys exclusive use and

240. Jim has part ownership in a house. He has decided to sell his interest. He signs an agreement with a local real estate broker without informing the other two owners. Jim is most likely holding his part ownership as

241. What is the main difference between an employee and an independent contractor?

242. What are the three common-law categories that determine the level of control an employer has?

243. What are the conditions of the IRS safe harbor test?

 

244. Due to the potential for broker responsibility for a licensee’s actions, what do many brokers require their licensees to carry?

245. What are three important questions to ask when negotiating a contract?

246. What are the consequences to the broker if an IRS audit reveals that a contractor is actually an employee?

247. What five topics must be included in every written agreement with an employee or independent contractor?

248. Why should an independent contractor keep expense records?

249. What kind of training do new salespersons need?

250. What kind of training is best for small firms?

251. What types of information might the policy manual contain about advertising?

252. What types of information might the policy manual contain about open houses?

253. How can a broker choose to pay his or her licensees?

254. What is a 100 percent commission plan?

255. What is the compensation for a licensee who sells one of his or her own listings?

256. Jack sells one of his own $225,000 listings for $220,000.  The commission is 7%.  Jack has an 80% commission split with his broker.  What is Jack’s share of the commission?  What is his broker’s share?

257. What are the two most common forms of compensation that brokers use?

A.    Salary draw or escrow draw

B.     Kickback payments and direct deposits

C.     Hourly and flat rates

D.    Salary or a percentage of the commission

258. Most licensees are hired as

A.    employees.

B.     salaried employees.

C.     independent contractors.

D.    quasi-employees.

259. Which of the following is NOT a responsibility that brokers have to their licensees?

A.    Provide and pay for networking opportunities to allow licensee to make business contacts.

B.     Provide access to all the firm’s listings and marketing data.

C.     Provide the appropriate level of office support.

D.    Provide agreed upon training.

260. Gladys sells another broker’s $300,000 listing for $290,000 at a commission rate of 6%. She has a 60% commission split with her broker. If there is also a 50% brokerage split, what commission will Gladys receive?

A.    $5,220

B.     $8,700

C.     $17,400

D.    $3,480

261. If a licensee joins a company as an independent contractor, which of these will he probably have to pay for on his own?

A.    MLS Fees

B.     Social Security Tax

C.     Advertisement Expenses

D.    Utility Expenses

262. Agent Jim works on a flat 2% commission. He sells an in-house listing for $120,000 and also earns a $2,000 bonus from the listing client. What is owed Agent Jim?

A.    $2,860

B.     $2,680

C.     $4,400

D.    $3,220

263. Which of the following must a broker legally provide to an employee?

A.    Pension plan

B.     Unemployment insurance

C.     Health insurance

D.    Sales commission

264. Agent Sue listed and sold the same property. Agent Sue is owed a

A.    listing commission.

B.     a selling commission.

C.     a listing and selling commission.

D.    combination commission.

265. Who is responsible to ensure that all agents in a brokerage are properly licensed?

A.    The broker

B.     The real estate licensee board

C.     MLS licensee board

D.    State Board of Professional Licensing

266. In an IRS audit, which of the following situations would cause the IRS to think that a contractor might really be an employee?

A.    The licensee attends sales meetings.

B.     The licensee gets a commission.

C.     The licensee takes unpaid sick days.

D.    The licensee receives an hourly wage.

267. Which of the following is typically NOT a licensee’s duty to the brokerage?

A.    Work to promote and sell the broker’s listings.

B.     Be appropriately licensed.

C.     Remain knowledgeable about the license laws and rules.

D.    Establish compensation agreements with other ancillary service providers.

268. Work agreements

A.    should be individualized.

B.     should be signed by all parties and a witness.

C.     should be standardized.

D.    should be notarized and a copy sent to the Real Estate Board office.

269. Which training method is conducive for a small brokerage office?

A.    Classroom training

B.     Lecture style training

C.     One-on-one training

D.    Group problem-solving training

270. Which of these statements about an independent contractor is true?

A.    He or she gets a regular salary with bonuses.

B.     He or she is reimbursed for all business expenses.

C.     He or she is paid commission on all sales.

D.    He or she will get three weeks of paid vacation every year.

271. Which of these statements is TRUE?

A.    Salesperson Harry can solicit his own listings.

B.     Salesperson Julie can receive her commission from the cooperating broker in her latest transaction.

C.     Salespersons must perform all of their activities on behalf of their employing broker.

D.    Broker Tom has only limited responsibility for the actions of his licensees.

272. What type of training is frequently conducted by multiple office companies?

A.    Self-study

B.     Organized classroom training

C.     One-on-one

D.    On-the-job

273. Agent Mary sold a listing for another brokerage. Agent Mary is entitled to a

A.    selling side commission.

B.     listing side commission.

C.     shared listing side commission.

D.    finder’s fee commission.

274. Should a policy manual contain a section on referral fees?

A.    No, this should be discussed privately.

B.     No, this should only be shared in the interview meeting.

C.     Yes, provided the MLS Board has a policy.

D.    Yes, all licensees should be given the same information in writing.

275. Agent Norm just started working for Sunshine Realty. He was required to pay an initial fee of $120 for training and $50 for business cards. The $170 is usually referred to as what?

A.    Allowance Fee

B.     Working Costs

C.     Attendance Fee

D.    Start-up Costs

276. What type of methodology works well to ensure that all agents are given and hear the same information?

A.    Memos

B.     Newsletters

C.     Staff Meetings

D.    Office Announcements

277. Behavioral, Financial, and Type of Relationship are

A.    IRS verification levels of control and independence regarding contractor status.

B.     Title IX verification levels of payment.

C.     HUD levels of reimbursement.

D.    compensation levels due a contractor based on performance.

278. Under what type of compensation plan is the agent responsible for the costs of advertising and promotion?

A.    70% plan

B.     80/20 plan

C.     Net plan

D.    100% plan

279. Which of the following statements is FALSE?

A.    A broker may require licensees to carry high levels of automobile insurance.

B.     It’s a good idea for brokers to carry workers’ compensation coverage.

C.     A broker is not responsible for the acts of independent contractors.

D.    Employee status versus independent contractor status is an IRS issue.

280. In a company’s policy and procedures manual, where would you find information regarding acceptable business standards and practices?

A.    Listing Agreements

B.     Code of Ethics

C.     Compensation Policy

D.    Floor Time

281. The policy and procedures manual should include

A.    business agreements.

B.     the firm’s commission policy.

C.     itemization of the managing broker’s short-term and long-term business goals.

D.    the unique role of each individual employee.

290. Which of these statements about an independent contractor is true?

A.    He or she gets a regular salary with bonuses.

B.     He or she is reimbursed for all business expenses.

C.     He or she is paid commission on all sales.

D.    He or she will get three weeks of paid vacation every year.

291. As a listing agent, in most cases your listing will be sold by

A.    yourself

B.     your broker

C.     a cooperating broker

D.    an assigned agent

292. What is the payment program, when an agent starts out at a lower percentage payment but then graduates to higher percentage rates?

A.    Programmed

B.     Step

C.     Graduated

D.    Ramped

292. Which of the following circumstances would concern you about working for Broker John?

292. What item is typically NOT in an independent contractor’s work agreement?

293. Which of the following benchmarks might be used by a licensee when selecting a brokerage?

A.    The firm employs a number of successful agents.

B.     The firm employs a number of unsuccessful agents.

C.     The firm encourages self-training.

D.    Most agents have short term work histories with the broker.

294. Which of these guidelines is not part of the IRS safe harbor test?

A.    Income must be based on sales input.

B.     Contractors must have access to workers compensation benefits.

C.     The contractor must be licensed as a real estate salesperson or broker.

D.    There must be a written contract in place.

295. What is the term given to assigned office duty?

296. Broker Al offers his agents the ability to sell their own homes without any commission owed to the brokerage. In what part of the work agreement might this information be located?

297. As a listing agent, in most cases you listing will be sold by

298. Name and define the two forms of advertising.

 

299. Explain the method used to write good advertising.

 

300. What is important to remember about capturing the reader’s attention?

 

301. What do many firms do to avoid confusion with their advertising plan?

302. What kind of ad is illegal in states?

303. What is the difference between classified ads and display ads?

304. Why is television becoming a more common advertising venue?

305. List three types of web pages that are commonly found on real estate websites.

306. What is bait-and-switch advertising?

 

307. Why is it not prudent to describe buyers in ad copy?

 

308. Give four examples of words or phrases that would be considered discriminatory, and three that would not, with regard to handicap when writing an ad.

 

309. How would you avoid the impression of racial steering when doing newspaper advertising?

310. Salesperson Larry is writing an advertisement for one of his listings. Which of the following phrases should he avoid?

A.    Desirable neighborhood

B.     Apartment complex with chapel

C.     Mother-in-law suite

D.    No wheelchairs

311.  Which form of advertisement works well for an agent that deals with specialized properties?

A.    Billboards

B.     Newspaper Ads

C.     Newsletters

D.    Flyers

312.  If broker Tim advertises a property for sale that he doesn’t intend to sell so that he can attract potential buyers, Tim is practicing

A.    display advertising.

B.     ethical advertising.

C.     product advertising.

D.    bait-and-switch advertising.

313. Ads should be written

A.    from the perspective of all the protected classes

B.     from the perspective of targeting specific classes.

C.     from the perspective of maintaining the culture of the neighborhood.

D.    from the perspective of maintaining familial status in neighborhood.

314. Which of these is a free form of advertising?

A.    Shopping guides

B.     Telephone directory

C.     Press release

D.    Blind ad

315. Which of the following methods allows you to keep track of your advertising results?

A.    Mark outs

B.     Assigning a code

C.     Override notes

D.    Run testing

316. Which of these statements is FALSE?

A.    Radio advertising is not as effective as other methods because listeners can be distracted by their activities and not hear the ads.

B.     Newsletters can be a very effective advertising forum for niche marketers.

C.     Advertising in the telephone directory is cost effective because the directories reach every home in the state.

D.    Magazine ads are significantly more expensive than newspaper ads.

317. Broker Barb takes out a two-page color full-page ad in the weekend paper of her listed properties. What form of advertisement is this?

A.    Service

B.     Institutional

C.     Product

D.    Batch

318. Which of the following real estate ads would not be acceptable?

A.    Property sits on a corner lot with 3 bedrooms, new master bath and large family room.

B.     Great location for empty nesters, close to park and hospitals.

C.     Cozy 2 bedroom cottage in quiet neighborhood.

D.    Home is located in gated community with security entrance.

319. Which of these words or phrases might be considered discriminatory when used in advertising?

A.    No smoking

B.     Couples only

C.     Handicap accessible

D.    Kids welcome

320. Broker Tami has a very low advertising budget. Which of these forms of advertising is she most likely to avoid?

A.    Internet

B.     Magazine ad

C.     Direct e-mail

D.    Newspaper ad

321. What piece of information is missing from a blind ad?

A.    The price

B.     The property’s address

C.     The broker’s identification

D.    The property’s features

322. Which of the following is not in violation of the CAN-SPAM Act?

A.    A deceptive subject line in a commercial e-mail.

B.     Misleading information as to the sender’s identity.

C.     Including an opt-out method for the recipient.

D.    Failing to identify a commercial e-mail as such.

323. Which of the following types of newspaper ad is the most expensive?

A.    Classified Ad

B.     Display Ad

C.     Block Ad

D.    Line Ad

324. Which form of real estate advertisement is typically visible at retail locations?

A.    Shopping Guides

B.     Flyers

C.     Door Hangers

D.    Promotional Items

325. Promotional items are also known as

A.    tossaways.

B.     tradeaways.

C.     giveaways.

D.    runaways.

326. Which kind of advertising aims at increasing sales by informing the public of a company’s capabilities?

A.    Operational

B.     Institutional

C.     Product

D.    Classified

327.  Which of the following phrases should Salesperson Brenda avoid when writing an advertisement for one of her listings?

A.    Kosher meals available

B.     Christian home

C.     Fourth-floor walk-up

D.    Walk to bus stop

328. Which of the following real estate ads would not be acceptable?

A.    Property sits on a corner lot with 3 bedrooms, new master bath and large family room.

B.     Great location for empty nesters, close to park and hospitals.

C.     Cozy 2 bedroom cottage in quiet neighborhood.

D.    Home is located in gated community with security entrance.

329. Which of the following type of advertisement reach the greatest number of people?

A.    Newspaper ads

B.     Flyers

C.     Business Cards

D.    TV ads

330. If broker Tim advertises a property for sale that he doesn’t intend to sell so that he can attract potential buyers, Tim is practicing

A.    display advertising.

B.     ethical advertising.

C.     product advertising.

D.    bait-and-switch advertising.

331. Agent John just listed a home in a mid-range priced neighborhood. Which of these ad headlines would probably be the least effective for this home?

A.    Large Back Yard

B.     Three Bedrooms

C.     $125,000

D.    Needs Paint

332. Based on the National Do Not Call Registry, how long after a company listing has expired may a licensee call the owner to solicit business?

A.    18 months.

B.     Never, if the seller is on the National Do Not Call Registry.

C.     3 months.

D.    1 month.

333. Which of these is not a tool to help evaluate advertising effectiveness?

A.    Telephone log

B.     Code in a print ad

C.     Advertising budget

D.    Designated telephone number

334. Which technique tracks the source of incoming calls and helps with evaluating the benefits of advertisement choices?

A.    Batch Log

B.     Override Log

C.     Schedule Line Log

D.    Telephone Log

335. Which of the following payment arrangements are associated with a press release?

A.    Index payment schedule

B.     Same cost as a display ad

C.     Same cost as a classified ad

D.    Free advertisement

336. At times, the woman’s shelter at St. Mary’s Catholic Church has rental units open to the public. Are they allowed to advertise for female renters only?

A.    Yes, gender based ads for shared living housing is acceptable.

B.     Yes, provided all renters are Catholic.

C.     No, ads cannot target specific gender types.

D.    Religious-type institutions do not have to comply with fair housing laws.

337. The acronym AIDA stands for

A.    Action, Involvement, Detail, and Allowance

B.     Action, Increase, Develop, and Allowance

C.     Attention, Interest, Desire, and Action

D.    Allowance, Involvement, Develop, and Action

338. All of these would be effective at capturing a reader’s attention except which?

A.    Use as little white space as possible.

B.     Use a question as a headline.

C.     Use available color.

D.    Make the headline bold and all caps.

339. How should you follow up on direct mail advertising?

A.    Track and repeat those campaigns that show results.

B.     Repeat the same mailing, until you get results.

C.     Call all homes that received a direct mail piece.

D.    Never repeat a mailing to a previously-contacted neighborhood.

340. What kind of ad usually combines both institutional and product advertising?

A.    Classified

B.     Display

C.     Press release

D.    Classified-display

341. Which of the following is an accurate statement regarding the National Do-Not-Call Registry?

A.    The fine for violations is a maximum of $5,000 per phone call.

B.     Brokerage companies must have a Do Not Call Policy, even if they do not engage in cold calling.

C.     Licensees may call any expired listing within 18 months, whether it is their company listing or the listing of another company.

D.    Companies must access and update the National Registry at least semi-annually.

342. Licensee Judy takes a weekly ad out in the South Side Journal. Judy does not place ads in any of the other neighborhood newspapers. What might be said about Judy’s advertisement practices?

A.    Judy is targeting her market area.

B.     A city-wide ad would be more cost-effective.

C.     Ads in only one local paper may appear to be discriminatory.

D.    Judy is marketing to potential buyers who fit the profile of those already established homeowners and not practicing discrimination.

343. How frequently must companies access and update the Do-Not-Call Registry?

344. The cost of doing direct mail advertising depends on all of these things except which?

345. All but which of the following is an AIDA feature?

A.    Action

B.     Desire

C.     Aspiration

D.    Interest

356. The CAN-SPAM Act requires all of the following EXCEPT:

A.    A valid physical address in all commercial e-mails.

B.     Identification of the party who initiated the e-mail.

C.     Prior permission of the recipient to send commercial e-mails.

D.    An opt-out method for the recipient to unsubscribe.

357. The CAN-SPAM act is federal regulation governing

EXPLANATION: unsolicited commercial e-mails

358. Newsletter Ads

EXPLANATION: Focuses on specialize properties and effectively targets niche markets

359. Which of these is not an AIDA characteristic?

A. Interest
B. Attention
C. Desire
D. Activity

360. An unlicensed person engages in advertising that conveys the clear impression that he is a licensed real estate broker or is an officer or employee of a corporation who knowingly advertises a false statement concerning any land or subdivision. In this scenario, which of the following is not true?

A. The advertiser is subject to a fine.
B. The advertiser can be sentenced to up to a year in prison.
C. The person is breaking the law.
D. The advertiser must prove he was grandfathered in as a licensee.

361. If a couple shows up at the sellers’ door unexpectedly to see the home, what should the sellers do?

A.    Tell them to call your office.

B.     Invite them in and show them around.

C.     Take their names and call your office.

D.    Ask them to leave.

362. What is a good technique to elicit honest feedback regarding the property’s listed price and desirability?

A.    Hold an open house for mortgage lenders.

B.     Seek feedback from HUD field agents.

C.     Hold an open house for agents

D.    Seek feedback from neighbors.

363. Which marketing technique is used to provide information to neighbors about the listed property?

A.    Block Party

B.     Newspaper Flyer

C.     Neighborhood Canvass Letter

D.    Social Calls

364. Why is it important to provide a market analysis to the seller?

365. What is the most common reason a property fails to sell?

366. Angie’s home sold for $324,500 and her mortgage is paid off. She owes her broker 7% commission on the sale. What will Angie net?

367. Brian purchased a lot for $12,500. After the zoning was changed, it is sold for $9,000. What was percentage of loss?

368. What is the primary criticism that sellers have about their agents?

367. When you meet with your sellers after you obtain the listing, what is one of the first things you should share with them to get them involved in the process?

368. What kinds of things should you include in a weekly activity report?

369. How can you prepare your sellers for receiving offers?

370. What is the primary criticism that sellers have about their agents?

371. When you meet with your sellers after you obtain the listing, what is one of the first things you should share with them to get them involved in the process?

372. What kinds of things should you include in a weekly activity report?

373. How can you prepare your sellers for receiving offers?

380. Name four traditional marketing tools that you should use with every listing you get.

 

381. What are some important tips for home tours?

 

382. In addition to office and MLS home tours, what are some other ancillary tools you can use?

 

383. What should you keep in mind when developing your marketing plans?

384. All of these items are important to include on your weekly activity report except which?

A.    Number of calls that week

B.     Agent comments about the property

C.     Classified ads placed on the property

D.    Number of hits on the company website

385. What technique is frequently used to increase attendance when holding an agent’s open house?

A.    Bonus commission points

B.     Drawing for incentives

C.     Home tour punch cards

D.    Compensation awards

386. What strategy should you take when the listing is about to expire?

A.    Let the listing expire and send a seller a letter.

B.     Draw up an extension contract and mail it to the sellers a month before the listing expires.

C.     Schedule a meeting with your sellers a few weeks before the listing is set to expire and review with them your previous marketing plan.

D.    Meet with the sellers on the day the listing expires and determine what to do.

387. You should try to attach a rider strip to your For Sale sign that has what information on it?

A.    Your home telephone number

B.     Your GRI designation

C.     Your cell phone number

D.    Your fax number

388. Jim and Jane’s home sold for $345,800. They owe $240,000 on their mortgage. What will their net be after they pay $10,000 in expenses and a 9% commission?

A.    $53,500

B.     $64,678

C.     $74,678

D.    $82,700

389. What is a major concern regarding virtual home tours?

A.    Picture resolution is of poor quality.

B.     Most homebuyers skip over virtual tours.

C.     Virtual tours don’t capture the type of neighborhood that the property is located in.

D.    Thieves may use the information to their advantage.

390. What is the term given to those items that are attached to a yard sign that provide additional information to the passers-by?

A.    Flags

B.     Rider Strips

C.     Cookies

D.    Stripes

391. Who controls the internet site at www.realtor.com?

A.    Realtor Inc.

B.     National Association of REALTORS®

C.     Realtor Property Inc.

D.    Realtor Corp.

392. What is the best suggestion to give a seller if an interested party shows up at their front door unannounced?

A.    Get the person’s name and then call your office immediately so an agent can come to do the showing.

B.     Tell the seller to conduct a tour.

C.     Have the seller give the visitor a flyer and then tell them to call you.

D.    Tell the visitor when the next open house is scheduled.

393. Video tours

A.    are geared especially towards marketing low-valued homes.

B.     are geared especially towards marketing high-end properties.

C.     are difficult to convert to web formats.

D.    should not be posted on a licensee’s website.

394. What document is prepared and given to a seller outlining the marketing activities on their listing?

A.    A follow-up report

B.     A post-listing report

C.     A marketing evaluation

D.    An activity report

395. Which of these statements is FALSE?

A.    Sellers should be away from home during an open house.

B.     Agents should not invite the next door neighbors to the open house.

C.     Sellers should be sure all yard work is done before the open house.

D.    Before the open house, the agent should open the drapes on all windows to let in the natural light.

396. Harold’s firm bought an investment property for $150,000 and later sold it for $225,000. What was the firm’s percentage of profit?

A.    25%

B.     50%

C.     75%

D.    100%

397. Mr. Smith told his REALTOR® that he wanted to net $140,250 after he paid the 6.5% sales commission. How much did the house have to sell for so that Mr. Smith could net what he wanted?

A.    $142,700

B.     $150,000

C.     $151,800

D.    $163,250

398. Jim bought his home for $250,000 and it sold for $202,500. What was Jim’s percentage of loss?

A.    8%

B.     10%

C.     19%

D.    24%

399. Which of the following actions by an agent would most probably upset the sellers?

A.    Conducting an agent open house

B.     Sending a weekly activity report

C.     Sharing all visitor comments two weeks before the listing ends. 

D.    Placing a classified ad in the weekend paper

400. The Burks received $25,000 profit on the sale of a property. This figure represents a 20% profit. What was the property’s original price?

A.    $100,000

B.     $115,500

C.     $125,000

D.    $150,000

401. Which of these is not a helpful homeowner tip?

A.    Display lots of family photos to impress potential buyers

B.     De-clutter your garage and basement.

C.     Bake muffins or cinnamon rolls to create a “homey” feel.

D.    Make sure all light bulbs and lamps are working and are bright.

402. What is the best suggestion to give sellers when a showing is scheduled?

A.    Leave the property.

B.     Greet the agent at the door.

C.     Assist the agent with the showing.

D.    Move to a private area in the house and remain quiet.

403. Participation in an MLS

A.    decreases the sales inventory available to licensees.

B.     allows a broker to list more properties.

C.     requires a broker to list fewer properties.

D.    increases the sales inventory available to licensees.

404. Mr. Jones wanted to make a $50,000 profit after paying his first mortgage of $21,275 and paying a 6% commission. What would the sale price have to be?

A.    $53,000

B.     $74,275

C.     $75,552

D.    $75,825

405. What marketing technique uses AM/FM radio transmissions that broadcasts a message about the listing?

A.    Talking Sign

B.     Virtual Agent

C.     Talking House

D.    Broadcast Listing

406. Grace and Bill bought a vacation home for $182,000. A serious medical crisis forced them to sell at $110,000. What was their percentage of loss?

A.    30%

B.     40%

C.     50%

D.    55%

407. Which of these marketing tools is not considered a traditional tool?

408. All of these activities are appropriate to do within the first few days of obtaining a listing except which?

409. What is a good technique to use to collect feedback from agents when conducting a property showing?

410. Mr. Smith told his Realtor that he wanted to net $140,250 after he paid the 6.5% sales commission. How much did the house have to sell for so that Mr. Smith could net what he wanted?

A.    $142,700

B.     $150,000

C.     $151,800

D.    $163,250

411. Gary’s Home sold for $140,500. He owes $87,000 on his mortgage. What will his net be after he pays $5,000 in expenses and an 8% commission to his broker?

A.    $25,200

B.     $32,260

C.     $37,260

D.    $42,260

412. If there is no interest in the property on a given week, what should the agent do?

A.    Skip the activity report for that week.

B.     Share that information with the sellers.

C.     Tell the sellers you expect an offer to be coming soon.

D.    Tell the sellers it’s time to reevaluate the price.

413. All of these statements are true except which one?

A.    Virtual tours are an expensive marketing tool to use.

B.     An agent should print off a copy of the listing on the company’s internet site to send to the sellers.

C.     Participation in the MLS increases a licensee’s inventory.

D.    Property evaluations from other agents have valuable information for sellers.

414. Which type of home tour is designed expressly for other licensees?

415. What is another term give to a property flyer?

416. The Deckers want to net $25,000 from the sale of their property. They still have a $70,000 mortgage and will be paying a 7% commission to the broker. What will the sale price need to be?

417. What forms can an earnest money deposit take?

 

418. What type of account must an escrow account be and where must it be maintained?

 

419. In most cases, when must earnest money be deposited?

420. When a transaction has consummated or terminated, when and how must the sponsoring broker disburse the funds?

421. What is a master escrow account log?

422. What does a journal show?

423. In most cases, for how long does the broker need to keep escrow records?

424. What should a broker do if escrow records are stolen, lost, or destroyed?

425. All non-interest bearing escrow accounts

A.    must be maintained at a state-insured depository.

B.     must be maintained at a inter-state depository.

C.     must be maintained at a federally-insured depository.

D.    must be open to private and public annual review.

426. Buyer Norm had his father put up earnest money in the amount of $4,000. The contract fell through. The sponsoring broker should

A.    release the full amount back to buyer Norm’s father.

B.     release the full amount back to buyer Norm.

C.     release $2,000 to Norm and $2000 to Norm’s father.

D.    transfer the full amount to an escrow dispersal company for distribution.

427. Most states require that the broker make available to the real estate licensing agency

A.    all escrow records and related documents.

B.     a ledger of accounts.

C.     a yearly audit report of escrow accounts.

D.    all escrow deposits on a monthly basis.

428. Who holds the escrow money when a dispute occurs?

A.    The sponsoring broker

B.     Title Company

C.     The seller

D.    Mortgage Lender

429. All licensees should give earnest money checks to their sponsoring broker immediately who must deposit said earnest money by

A.    the third day following the contract acceptance.

B.     the next business day of contract acceptance.

C.     within seventy four hours from the time the offer is delivered.

D.    the third day following the final counteroffer.

430. What is the log that identifies all escrow bank account numbers and the name and address of the bank where the escrow accounts are located?

A.    Log of Accounts

B.     Accounts Receivable Escrow Log

C.     Earnest Money Log of Accounts

D.    Master Escrow Account Log

431. What is the legal requirement regarding the number of escrow accounts that can be opened?

A.    No limit

B.     One per transaction

C.     No more than 5 per quarter

D.    One per office licensee

432. Where would you find every escrow entry showing the running balance after each receipt or disbursement?

A.    Escrow Transactions

B.     Summary of Account

C.     Journal

D.    Report of Escrow Transactions

433. Sponsoring Broker Jones received an order from a court of competent jurisdiction directing the disbursement of the escrow moneys. What action should broker Jones take?

A.    Broker Jones must seek agreement from the buyer prior to disbursement of the escrow moneys according to the terms of the order.

B.     Broker Jones must seek agreement from the seller prior to disbursement of the escrow moneys according to the terms of the order.

C.     Broker Jones must disburse the escrow moneys according to the terms of the order.

D.    Broker Jones must direct the request to a State Revenue Tax Board for payment.

434. Under what conditions might a broker hold an authorized disbursement of escrow moneys claim?

A.    Never

B.     To receive compensation from all parties

C.     To allow the escrow agent to move funds into an active account

D.    To allow the listing contract to expire

435. Where would you find the names of all parties to a transaction, the amount of escrow funds the sponsoring broker received, and the date the broker received the funds?

A.    Record of Transactions

B.     Ledger

C.     Summary Journal

D.    Monthly Balance Sheet Report

436. Which of the following statements is TRUE regarding earnest money?

A.    Must be in the form of cash or a check.

B.     Earnest money is required with all contract offers

C.     Personal property can be offered as an earnest deposit.

D.    Earnest money is also known as evidence trust account money.

437. Buyer Jim put down a deposit in the form of a boat title worth $5,000. The boat is owned by Jim’s parents. The transaction was not completed, who should the boat title be returned to?

A.    Jim

B.     Jim’s Parents

C.     The Title Company

D.    The agency that holds the escrow account

438. When must an escrow account be interest bearing?

A.    By default, all escrow accounts are interest bearing.

B.     When all parties make the request

C.     When the escrow account is held in an FDIC backed bank

D.    When the amount is over $2,000

439. What document is used to show the chronological sequence in which funds are received and disbursed by the sponsoring broker?

A.    Summary Account

B.     Ledger

C.     Journal

D.    Master Log

440. Earnest money is usually made in the form of a

A.    check.

B.     money order.

C.     letter of credit.

D.    cash deposit.

441. Which of the following statements best describes an authorized disbursement?

A.    Any release of funds prior to a property inspection

B.     One which is made on behalf of, and at the written direction of, all principals to the transaction or their duly authorized agents

C.     The release of all funds by a civil appellate court

D.    One which is made at the direction of a title company officer

442. Brokers who are responsible for earnest money deposits for property sales (and security deposits for leases)

A.    must be bonded with the state Sponsoring Brokers Insurance Trust.

B.     must maintain a separate business account in any type of financial institution for depositing these monies.

C.     must open special trust (or escrow) accounts in which to deposit the funds they have been given.

D.    must deposit these monies in a brokerage operations account with special accounting procedures to segregate brokerage monies from escrow monies.

443. Broker John received three earnest money checks on Friday. The upcoming Monday is a holiday. When is broker John required to make an escrow deposit?

444. It’s common for a sponsoring broker to be required to keep all escrow records for

445. If any dispute between the parties arises regarding the deposited escrow money, the sponsoring broker should

446. Most states require that the sponsoring broker reconcile an escrow account

447. What happens to escrow monies when the parties are unable to reach a resolution?

448. What happens at the title closing?

449. What is the most important document at closing and why?

450. Define the term marketable title.

451. What is an abstract of title?

452. What does a title search reveal?

453. Who needs title insurance and why?

454. What is escrow?

455. List three activities that take place during the escrow period.

456. Gary carries an insurance policy that equals 60% of the replacement value of his home. He suffers $8,000 in damage on his home after a windstorm. How will his insurance claim be handled?

457. What factors determine whether a company will issue an insurance policy on a property and what premium the company will charge?

458. What does RESPA require lenders to give to borrowers?

459. RESPA does not apply to what kinds of loans?

460. List three items that a buyer usually pays at closing.

461. If an item is paid for in advance by the seller, how will it be handled on the settlement statement?

462. What do you call those items that the seller has incurred but have not been paid and how will they be handled on the settlement statement? 

463. Sally and Sam have sold their home to Tina and Max. The closing is set for August 23. The insurance policy of $1,700 was prepaid. Using the 12-month/30-day method, what will be Tina and Max’s share of the insurance expense and how will it be handled on the settlement statement?

464. Where in the Closing Disclosure will you find the items that are to be prorated between the buyer and seller at closing? 

465. Where on the Closing Disclosure would you find information about the real estate broker’s commission?
 

466. What is important about the last line on page 3 of the disclosure?

467. Who is responsible for reporting the real estate sale to the IRS?

468. Taxes on the property Buyer Alan is purchasing are $3,200 due on December 31. If the closing is set for October 15, using the 365-day method, how much of the taxes will be credited to the buyer? (Assume it is not a leap year and the day of closing belongs to the seller.)

A.    The seller’s share of $2,533.38

B.     The buyer’s share of $666.62

C.     The seller’s share of $2,525.76

D.    The buyer’s share of $674.24

469. In what section of the Closing Disclosure would you find the names and addresses for both the borrowers and sellers and the lender’s name?

A.    Address Section

B.     Loan Information

C.     Closing Information

D.    Transaction Information

470.  The most important document at closing is the

A.    deed.

B.     survey.

C.     settlement statement.

D.    property inspection.

471. Amounts collected by the lender and held in a trust or impound account for future payment are called what?

A.    Advances

B.     Impounds

C.     Trust funds

D.    Reserves

472. How does the buyer know how much money to bring to closing?

A.    The lender calculates what’s owed and tells the buyer what to bring.

B.     The buyer brings a blank check and finds out the final amount at the closing meeting.

C.     The broker finds out from the lender and tells the buyer how much to bring.

D.    The escrow agent will subtract the total of the buyer’s credits from the total debits and the result is what the buyer needs to bring.

473. What is it called when a mortgage loan amount becoming larger than the original loan amount, resulting in a decrease of the equity the borrower has in the property?

A.    Reverse Amortization

B.     Negative Amortization

C.     Regressive Amortization

D.    Progressive Amortization

474. Who is responsible for ordering the preliminary title report?

A.    Buyer

B.     Escrow officer

C.     Seller

D.    Real estate salesperson

475. Who should have title insurance?

A.    Buyer

B.     Seller

C.     The buyer and the lender

D.    The buyer and the seller

476. What action identifies if any liens are on a property?

A.    Title Search

B.     Lien File Dispatch

C.     Application for HUD-2

D.    Opinion of Sale

477. What form notifies the borrower of the total amount of interest and property taxes paid in the previous year?

A.    1098

B.     1099

C.     1199

D.    1198

478. What type of inspection deals with issues such as radon and asbestos?

A.    Environmental

B.     Mechanical

C.     Soil

D.    Geological

479. Which type of inspection covers a home’s major mechanical systems?

A.    Resale Inspection

B.     Structural Inspection

C.     Standard Home Inspection

D.    Soil Inspection

480. What occurs during a walkthrough?

A.    An escrow adjustment

B.     A final inspection

C.     A signing of the deed

D.    An acceptance of occupancy

481. What is the real estate transfer tax based on?

A.    Sale price of the property

B.     The amount of the mortgage

C.     The sale price minus the earnest money deposit

D.    The seller’s profit on the sale

482. Which of the following is not an item that a buyer usually pays at closing?

A.    Fee for clearing the title

B.     Mortgage recording fee

C.     Homeowner’s insurance

D.    Title search

483. Escrow agents are also known as a

A.    party of record.

B.     disinterested third party.

C.     party of deed.

D.    vested party.

484. Which statement is true about accepting referral fees?

A.    It is common business practice.

B.     It could be a violation of state licensing laws.

C.     It is forbidden under any circumstances.

D.    It is permissible in amounts under $50.

485. Which of these would be a CREDIT to the seller at closing?

A.    Pest inspection

B.     Insurance premium paid in advance

C.     Soil test

D.    Survey

486. A preliminary title report

A.    provides insurance for the seller.

B.     shows those items that the title policy must charge extra to cover.

C.     provides insurance for the buyer.

D.    shows those items that the title company would exclude from coverage if a policy is issued at a later time.

487. A homeowner’s insurance policy typically covers all but which of these?

A.    Fire

B.     Flood

C.     Theft

D.    Explosion

488. Most lenders require buyers to purchase? _______________so that their interest in the property is also protected.

A.    a survey of the property.

B.     title insurance.

C.     homeowner’s insurance.

D.    closing insurance.

489. Both the buyer and the

A.    seller should have title insurance.

B.     broker should have title insurance.

C.     lender should have title insurance.

D.    escrow agent should have title insurance.

490. RESPA applies to all of the following EXCEPT which?

A.    Condominium purchase

B.     Seller-financed loan

C.     Loan involving a second mortgage

D.    Federally-insured loan

491. Which statement about the Torrens system is FALSE?

A.    To enter a property in the Torrens system, a court action must first clear title.

B.     It is necessary to search public records to ascertain the status of title.

C.     The Torrens title record is the title itself.

D.    The Torrens registry retains the original registration documents and provides copies to the recorder or other appropriate office.

492. RESPA would apply to which of these?

A.    Second mortgage on a condominium

B.     Seller-financed loan

C.     Hotel mortgage

D.    Loan assumption

493. Which of the following items does the seller usually pay?

A.    Title insurance

B.     Private mortgage insurance

C.     Credit report fees

D.    Satisfaction of existing liens

494. If a seller prepaid the taxes of $2,100 and the closing is set for March 15, using the 12month/30 day method what will the buyer owe the seller as prorated taxes?

A.    $431.62

B.     $437.45

C.     $1,662.55

D.    $1,668.38

495. Which of the following is an item that is not normally prorated?

A.    Title fees

B.     Taxes

C.     Rent

D.    Utilities

496. On what form would you find information regarding itemized closing costs due to other parties, such as tax assessments, recording fees and attorney’s fees?

A.    Closing Disclosure form 

B.     Loan Summary

C.     Mortgage Rate form

D.    Closing Fees form

497. A coinsurance clause requires a homeowner to have what kind of insurance?

A.    Flood and fire

B.     80% of the home’s cost

C.     Equal to home’s replacement value

D.    80% of home’s replacement value

498. Escrow funds also go by the names

A.    holding or kickback funds.

B.     step or holding funds.

C.     impound or reserve funds.

D.    holding or blank funds.

499. On the Closure Disclosure form, homeowner’s insurance and property taxes are classified as what?

A.    Prepaids

B.     Paid Forward

C.     Advanced Payments

D.    Payments in Arrears

500. Money that the buyer or seller needs to pay at closing is called what?

A.    Expense

B.     Credit

C.     Debit

D.    Proration

501. Recording the deed is done through which of these?

502. Which of the following is TRUE regarding the recording of a deed?

A) It is not a legal requirement that a deed be recorded in the County Clerk’s office.
B) It is a legal requirement that a deed be recorded by the selling broker.
C) A deed must be recorded, but a title does not need to be.
D) It is a legal requirement that a deed be recorded in the County Clerk’s office.

503. Proof of ownership of a property is called what?

A) Marketable title
B) Abstract of title
C) Evidence of title
D) Title commitment

504. Where would a borrower look to determine if the mortgage lender intends to service the loan or transfer it to another lender?

A) At RESPA Form 23-B
B) At the Mortgage Servicing Transfer Statement
C) At the Mortgage Servicing Disclosure Statement
D) At the Mortgage Servicer Transfer Form

505. A sponsoring broker must keep all escrow records for

A) 1-2 years.
B) 3-5 years.
C) 5-7 years.
D) 7-10 years.

506. How does a lender normally base the estimate on a loan that is in-progress?

507. What is “chain of title?”

508. What ethical standards guide real estate professionals?

509. Identify two duties to clients set forth in the Code.

510. List two duties to the public set forth in the Code.

511. List two steps a managing broker should take to ensure compliance with fair housing laws.

512. What is significant about the Fair Housing Amendments Act of 1988?

513. Describe the exemption that exists for familial status discrimination.

514. Alex Jones owns a duplex and lives in one unit.  He refuses to rent the other unit to families with children.  What would you say about Alex’s actions?

515. Why is it important for licensees to understand the Americans with Disabilities Act?

516. List three activities that are considered discriminatory in real estate.

517. What is blockbusting?

518. How is “testing” defined?

519. If a person feels like he or she has been discriminated against, how long does that person have to file a complaint?

520. Testing for fair housing compliance must

A.    be reported by the victims to the Real Estate commission.

B.     be treated with indifference.

C.     be recognized as a risk and a cost of doing business.

D.    be ignored.

521. Which of the following is not a source of information for professional ethics codes?

A.    State laws

B.     Licensing regulations

C.     Real estate associations

D.    Real estate schools

522.  Laws tend to set

A.    a very high standard for acceptable behavior.

B.     an unattainable standard for performance.

C.     a minimum standard for acceptable behavior.

D.    an unrealistic standard for behavior.

523. Which of the following items are usually recorded by a fair housing tester?

A.    The age of the licensee

B.     The number of houses that were volunteered as serious possibilities by the agent

C.     The number of years a licensee has been working in real estate

D.    The type and amount of fair housing training completed by the licensee

524. A broker only shows homes in certain neighborhoods based on matching existing residents with similar potential buyers. This broker is guilty of what prohibited activity?

A.    Redlining

B.     Blockbusting

C.     Steering

D.    Misrepresentation

525. Which of the following action is an example of discrimination in mortgage lending?

A.    Advertising that a property is restricted

B.     Discriminating when doing a property appraisal

C.     Changing rental terms based on race

D.    Refusing to sell to any person in a protected class

526. Which of these is not an exemption to fair housing law?

A.    Senior housing for residents 62 or older

B.     A religious organization providing housing to members only

C.     The sale of a single-family home by an owner who owns five residences

D.    Rental of a unit in an owner-occupied four-family flat

527. If a seller will not follow fair housing laws, the licensee should

A.    not take the listing.

B.     take the listing anyway.

C.     list the property with the restrictions.

D.    honor the seller’s wishes.

528. Ethics

A.    deals with stated goals.

B.     tends to deal with what is right.

C.     relies on measurable behavior.

D.    represents the stated purpose of a group of people.

529. To prevent being caught committing Fair Housing violations by testers or anyone else, licensees

A.    should attend a continuing education course in Fair Housing once a year.

B.     should avoid testers.

C.     should treat each buyer with the same respect, dignity, and fairness that everyone deserves.

D.    should not accept any business from members of the protected classes.

530. The penalty an Administration Law Judge can issue for violating the fair housing act is dependent on what factor(s):

A.    The state in which the violation occurred

B.     How long an agent has been licensed

C.     How many previous violations the agent has

D.    How many people were discriminated against

531. Being ethical

A.    limits you success.

B.     results in long-term success.

C.     is not cost productive.

D.    lowers your earning potential.

532. What is the deadline within which HUD must complete a discrimination investigation once a complaint is received?

A.    90 days

B.     100 days

C.     1 year

D.    120 days

533. A client asks you the following specific question: “Would you live in this home or this neighborhood?” How should you answer?

A.    By answering whatever will get a sale

B.     By focusing on factual statements based on various features within the home

C.     By stating opinions based on the local demographics

D.    By stating that you have to turn him in to HUD for asking a question that violates fair housing laws

534. What is the best strategy to use when dealing with a tester?

A.    Treat the tester as any other buyer.

B.     Hand-off the tester to your broker.

C.     Direct the tester to another real estate company.

D.    Refuse to work with a tester.

535. What tool do government agencies use to uncover fair housing violations?

A.    Absent Buyers

B.     Bouncers

C.     Terminals

D.    Testers

536. What are persons called who pose as customers to check on fair housing compliance?

A.    Block watchers

B.     Testers

C.     Compliance officers

D.    Civil rights workers

537. Panic selling is also known as

A.    blockbusting.

B.     streetbusting.

C.     marketbusting.

D.    localbusting.

538. The seller cannot withhold property from a “protected class” individual, and the real estate professional must definitely not be involved should this happen. If this does occur,

A.    both the seller and the agent or broker could be found in violation of the fair housing laws.

B.     only the broker could be found in violation of the fair housing laws.

C.     only the seller could be found in violation of the fair housing laws.

D.    both the buyer and seller could be found in violation of the fair housing laws.

539. What legislation mandates that persons with disabilities have equal access to jobs, public accommodations, government services, public transportation and telecommunications?

A.    Human Rights Law

B.     Americans with Disabilities Act

C.     Brown v. Board of Education

D.    Title IX

540. What is not a reason to understand Fair Housing Laws?

A.    It is right.

B.     It is the law.

C.     It is recommended.

D.    It reduces risk.

541. All real estate offices

A.    should keep a fair housing policy copy on file with their State Board.

B.     should keep a fair housing policy copy on file with HUD.

C.     should have an attorney draft their fair housing policy.

D.    should include a fair housing policy in their policy and procedures manual.

542. Which of these statements about the Americans with Disabilities Act is FALSE?

A.    A broker might need to change the layout of the office to make the aisles wider for clients in wheelchairs.

B.     A duplex owner might need to remodel the kitchen in the rental unit to accommodate persons with disabilities.

C.     An apartment manager might be required to allow a tenant with a disability to widen a doorway.

D.    A shopping center could have to remodel their public restrooms.

543. What is NOT a licensee’s responsibility when complying with fair housing laws?

A.    Know the fair housing laws.

B.     Complete and record all HUD-96 marketing report forms.

C.     Keep accurate records.

D.    Periodically attend fair housing seminars.

544. What are the three keys to good ethical practices?

A.    Knowledge, Power, and Direction

B.     Honor, Skills, and Performance

C.     Communication, Follow-up, and Observation

D.    Trustworthiness, Honesty and Competence

545. Regarding fair housing, licensees

A.    have ethical and legal responsibilities to their clients and customers.

B.     have long-term and short-term responsibilities to their clients.

C.     are exempt from laws passed after 1999.

D.    are required to maintain a Fair Housing Distribution Journal.

546. What does the Supreme Court say regarding fair housing testers?

A.    Testing is legal provided the subject is given 120 days notice.

B.     Testing is illegal, unless testers are pre-approved by State Board of Ethics.

C.     Testing is illegal.

D.    Testing is legal.

547. What is a good policy regarding a seller who refuses to accept an offer from a potential buyer that is in a specific protected class?

A.    Do not advertise and hold open houses on this property.

B.     Do not allow the brokerage’s licensees to show the property.

C.     Document the discrimination

D.    Terminate the listing.

548. What is a person called who is asked to simulate a housing transaction in order to obtain evidence of fair housing violations?

A.    Sampler

B.     Faux Buyer

C.     Blockbuster

D.    Tester

549. If a buyer asks for the “Jewish” area, what do you do?

A.    Answer the buyer’s question to the best of your abilities.

B.     Refer them to a another realtor.

C.     Explain to the buyer that you, ethically and legally, cannot recommend housing based on religion.

D.    Report the buyer to HUD as a Fair Housing violator.

550. Fair housing violations

A.    are covered by general business insurance.

B.     are mostly covered by MLS association insurance.

C.     are mostly covered by errors and omissions insurance.

D.    are mostly not covered by any insurance.

551. What practice helps move low-income persons into previously-owned higher income owner properties?

A.    Layer Down

B.     Filtering Down

C.     Flatten Down

D.    Roll Down

552. During the investigation period, HUD can attempt to resolve the complaint by getting assurance from the person against whom the complaint was filed that he or she will remedy the alleged violation. This is known as

A.    a concessionary mandate.

B.     conciliation.

C.     concurrence.

D.    a warrant of siezen

553. To whom is a property manager responsible? 

554. What is the definition of a resident manager?

555. What is the difference between a management proposal and a management agreement?

556. How do the owner and the property manager arrive at a management fee?

557. What accounting skills are important for a property manager to have?

558. What is a rent roll?

559. List three skills needed by office building managers.

560. What tasks do managers of condos, coops and PUDs do that are different from other property managers?

561. What is a property manager’s first responsibility to the owner?

562. What are the three types of budgets that should be established for each project?

563. How does preventive maintenance differ from corrective maintenance?

564. What kind of reports should a property manager be giving to the owner?

565. What is a property manager’s first responsibility to the owner?

A.    Get liability insurance.

B.     Prosecute delinquent tenants.

C.     Realize maximum profit.

D.    Cure functional obsolescence.

566. Which IREM designation is reserved for individuals who meet a certain level of education and experience?

A.    CPM

B.     ARM

C.     CPR

D.    AMO

567. A property’s rent roll

A.    is an alphabetical listing of each tenant.

B.     can help determine the annual rental income for a property.

C.     is a master list of a property’s marketing plan.

D.    should be updated every 10 years.

568. A property manager working for more than one owner

A.    should have a real estate license.

B.     does not need a real estate license.

C.     should have a mortgage broker’s license.

D.    is illegal under state law.

569. When setting up a rent schedule, a property manager should analyze all of the following EXCEPT

A.    neighborhood amenities.

B.     community growth.

C.     area vacancy rates.

D.    new home sales.

570. When a property manager or management company performs real-estate-related tasks (such as collecting rent) for one owner, and that owner is paying the manager a salary,

A.    the property manager must have a real estate salesperson license.

B.     the property manager must have a real estate brokers license.

C.     the property manager is not required to have a real estate license.

D.    the property manager must have a dual license (real estate and mortgage).

571. A rental space may be unintentionally vacant due to

A.    a high vacancy factor in the area.

B.     a low vacancy factor in the area.

C.     being located in a high traffic area.

D.    having rental rates similar to nearby properties.

572. Which of the following would not be found in a management proposal?

A.    Tenant credit histories

B.     Property description

C.     Schedule of property inspections

D.    Management fee information

573. Preventive maintenance

A.    is the repair or replacement of components which have failed or broken down.

B.     is a schedule of planned maintenance actions aimed at the prevention of breakdowns and failures.

C.     involves remodeling, interior redecorating or new capital improvements.

D.    determines which structures should be demolished.

574. An individual property manager

A.    is usually a real estate broker who manages properties for one owner or a number of owners.

B.     usually manages a single large property.

C.     lives on the property and may be employed on a full or part-time basis.

D.    acts as the property owners’ agent and adviser for the property.

575. The Institute for Real Estate Management (IREM) was created as a subsidiary group of

A.    Building Owners association

B.     National Association of REALTORS

C.     The Multiple Listing Service

D.    American Industrial Real Estate Association

576. When thinking about tenant retention and owner profits, a property manager should

A.    be more concerned with retaining tenants to keep a property fully occupied.

B.     give tenants the most benefits possible while still ensuring a good return to the owner.

C.     limit benefits to tenants as much as possible to maximize owner profits.

D.    only be concerned with the profit they are returning to an owner.

577. It is important for a property management agreement to include provisions defining the responsibilities of

A.    the manager and owner.

B.     the manager and tenant.

C.     only the manager.

D.    it is best not to define these duties as they will change from day to day.

578. When demand falls and the vacancy rates rise, the result is

A.    decreased competition for tenants and increased rental rates.

B.     decreased competition for tenants and reduced rental rates.

C.     fierce competition for tenants and increased rental rates.

D.    fierce competition for tenants and reduced rental rates.

579. A property’s rent roll

A.    is an alphabetical listing of each tenant.

B.     can help determine the annual rental income for a property.

C.     is a master list of a property’s marketing plan.

D.    should be updated every 10 years.

580. What is an annual budget that includes income and expenses for ongoing operations?

A.    Capital reserve

B.     Operating

C.     Fixed

D.    Stabilized

581. Which of the following would NOT be included on a property management report?

A.    Rental receipts

B.     Delinquent accounts

C.     Total expenses for the month

D.    Employee handbook

582. What is an important task for a manager of a condominium or cooperative?

A.    Allocating shares of stock for the units

B.     Evaluating utility services

C.     Physically managing the property

D.    Evaluating tax incentives

583. Class A office buildings

A.    are newer buildings and offer prestige to its occupants.

B.     are older, but very well-maintained buildings.

C.     are older buildings which are not located in prime areas.

D.    have poor location, maintenance is at a bare minimum, and the tenants have no statutory duties to maintain the property.

584. A property manager is responsible to

A.    the property owner.

B.     the tenants.

C.     the property owner and tenants.

D.    the mortgage company.

585. “PUD” stands for

586. Which of the following is NOT a valuable skill for a property manager to have?

587. Which of these usually contributes to the property manager’s fee?

588. What does the management agreement create?

589. Which function is not performed by a property manager?

590. Pedestrian Shopping Streets

591. Which of these items would not be considered a variable expense?

592. Which of these items would be considered a variable expense?

593. What are the subcategories of commercial real estate?

594. Define mixed-use development.

595. What is included in recreational real estate?

596. What makes institutional real estate different from other types?

597. List three reasons why a business might prefer leasing over purchasing property.

598. What factors affect net operating income?

599. Define market rent.

600. What kinds of expenses are normally associated with income properties?

601. Why do retail leases often contain provisions that affect how tenants may or may not operate their businesses

602. Why might tenants leasing industrial property prefer to have very long-term leases?

603. What might you find in a farming lease that you wouldn’t see in other leases?

604. List two advantages of investing in nonresidential property.

605. Which of the following strategies would require a business to outlay the most amount of capital for building space?

A.    Purchasing a building

B.     Renting a building

C.     Leasing a building

D.    Rent with option to buy

606. Market rent is also known as

A.    street value rent.

B.     economic rent.

C.     net rental rent.

D.    transferred rent.

607. Which office location would most likely have a more expensive monthly lease payment?

A.    Top floor with a view

B.     Middle of the building

C.     Basement

D.    Subbasement

608. What is the impact on nonresidential property when a local government requires extensive building safety improvements?

A.    A reduction in property values

B.     A reduction in market value

C.     Required generation of a loss-leader accounting report

D.    A substantial amount of capital outlay

609. Agricultural property is classified under which of the following real estate types?

A.    Residential

B.     Nonresidential

C.     Extended

D.    Rural

610. Older office buildings that become obsolete

A.    are taxed at a higher rate than modern buildings.

B.     frequently become available for warehouse or light industrial use.

C.     frequently become available for retail shops.

D.    frequently become available for recreation centers.

611. Which of the following is NOT a nonresidential property subcategory?

A.    Industrial

B.     Recreational

C.     Institutional

D.    Co-ops

612. Which property lease usually lasts the longest?

A.    Home lease

B.     Apartment lease

C.     Office lease

D.    Sublease

613. Which of the following is a nonresidential property investment advantage?

A.    There are no cost-of-living provisions.

B.     There is little risk of any kind of rent control.

C.     Lease insurance does not cover production interruptions.

D.    Taxes are based on assessed evaluation.

614. Leases for hunting rights

A.    are typically shorter than farming leases.

B.     are typically longer than farming leases.

C.     are typically shorter than motel leases.

D.    must be written for a term of no less than 12 months and 10 days.

615. What are the two major property classifications in real estate?

A.    Opened and closed

B.     Listed and nonelected

C.     Residential and nonresidential

D.    Base and extended

616. Which factor does NOT effect Net Operating Income?

A.    Intended use

B.     Vacancy

C.     Expenses

D.    Market rent

617. What does the acronym NOI stand for

A.    Net operating insurance

B.     Net operating income

C.     Negative operating income

D.    Net open income

618. What type of lease is most often used in industrial complexes?

A.    Net leases

B.     Gross lease

C.     Pro-forma leases

D.    Retracted leases

619. Most shopping centers have what type of lease?

A.    A lease based on traffic flow with minimum rents

B.     A net 50 lease

C.     A lease based on a sales percentage with minimum rents

D.    A lease based on income minus expenses

The length of retail space leases vary considerably, but most shopping centers have percentage leases with minimum rents.

620. Which of the following is considered a variable expense

A.    Real estate taxes

B.     Utilities

C.     Advertising

D.    Insurance

621. Which two factors determine a building’s potential for generating income?

A.    Location and style

B.     Deprecation and insurance expenses

C.     Ability to attract tenants and operating expenses

D.    Overhead and expenses

622. Commercial real estate includes all of the following except which?

A.    Hotel

B.     Condominium

C.     Gas station

D.    Parking lot

623. A shopping center would be primarily categorized as what type of property?

A.    Recreational

B.     Office

C.     Investment

D.    Retail

624. What property type comprises buildings used for light or heavy manufacturing?

625. What is a major downside for a business to own its own building?

626. What is the term given to property that has residential and nonresidential occupant?

627. Condominiums and co-ops are classified as

628. Owning a building typically

A.    increases the flexibility of the business.

B.     allows better market share of the business.

C.     reduces product liability.

D.    reduces the flexibility of the business.

629. Which property lease usually has the shortest occupancy?

A.    Land lease

B.     Mineral rights lease

C.     Office lease

D.    Motel room

630. Which of these factors does not affect net operating income?

A.    Amenities

B.     Vacancies

C.     Market rent

D.    Expenses

631. How should a seller deal with an interested party that shows up at their front door unannounced and wants to see the house?

A.    The seller should conduct a tour.

B.     Take the person’s name and then call the office immediately so an agent can come to do the showing.

C.     Give the visitor a flyer and the agent’s business card.

D.    Tell the visitor when the next open house is scheduled.

632. A building with integrated office and retail space would be considered

A.    a Class A building.

B.     a mixed-use property.

C.     institutional real estate.

D.    a flex-space development.

633. Which of the following is considered a variable expense?

A.    Real estate taxes

B.     Insurance

C.     Advertising

D.    Utilities

634. What is the best approach to establishing a buyer’s possession?

A.    Buyers take possession 2 days after the transaction close.

B.     Buyers take possession on the day of the close.

C.     Sellers should remain on the property at least 3 days after the closing date.

D.    Sellers should move from the property at least 5 days before the close date.

635. Which method can be helpful in tracking your advertising results?

A.    Mark outs

B.     Error codes

C.     Assigning a code

D.    Back testing

636. What type of budget is used to forecast income and expense over some period of years?

A.    Operating

B.     Variable

C.     Capital Reserve

D.    Stabilized

637. Disclosure is sometimes called what?

A.    Openness

B.     Honesty

C.     Notice

D.    Diligence

638. Which type of agreement assures that a broker will receive compensation regardless of who procures the buyer?

A.    Gross listing

B.     Net listing

C.     Exclusive right to sell

D.    Exclusive agency

639. The Brooks’ paid-off property sold for $247,600. What will they net after paying a 7.5% commission to their broker?

A.    $215,830

B.     $219,700

C.     $227,792

D.    $229,030

640. A licensee tells a neighborhood watch group that Vietnamese are moving into the neighborhood. What is this broker guilty of?

A.    Redlining

B.     Typecasting

C.     Steering

D.    Panic selling

641. Which of the following is an advantage of investing in a nonresidential property?

A.    No cost-of-living provisions

B.     Reduced payroll taxes

C.     No lease coverage for production interruptions

D.    Limited rent controls

642. Which party holds the escrow money when a dispute occurs?

A.    Title Company

B.     Court Appointed Escrow Agent

C.     The Sponsoring Broker

D.    Mortgage Lender

643. All closing real estate sales must be reported to the IRS on which form?

A.    Estate Tax Form

B.     Hud-78 Form

C.     Form 1099

D.    Form 1199

644. Which of the following referral fees are NOT prohibited by RESPA?

A.    Title search referral fees

B.     Fees among cooperating brokers

C.     Title insurance referral fees

D.    Inspection referral fees

645. What is the purpose of the Statute of Frauds?

A.    It invalidates certain oral contracts.

B.     It requires certain conveyance-related contracts to be in writing.

C.     It nullifies oral leases and listing agreements.

D.    It eliminates fraud in real estate contracts.

646. What is the purpose of a carryover clause?

A.    Protects the seller if the buyer cancels the sale

B.     Allows a six-week extension to the listing contract

C.     Allows the broker to collect a commission for some period of time after the listing expires

D.    Prevents the seller from doing a FSBO sale up to six months after the listing expires

647. Earnest money is usually made in the form of a

A.    holding draft.

B.     check.

C.     letter of credit.

D.    cash deposit.

648. When agency relationship is terminated, which of the following responsibilities still remains in force?

A.    Skill

B.     Confidentiality

C.     Obedience

D.    Care

649. What process determines how much money the buyer needs to bring to closing?

A.    The escrow agent will subtract the total of the buyer’s credits from the total debits and the result is what the buyer needs to bring.

B.     The buyer brings a open bank draft and finds out the final amount at the closing meeting.

C.     The broker finds out from HUD and tells the buyer how much to bring.

D.    The lender calculates what’s owed and tells the buyer what to bring.

650. AIDA stands for

A.    Allowance, Involvement, Develop, and Action

B.     Attention, Interest, Desire, and Action

C.     Action, Involvement, Detail, and Allowance

D.    Advanced, Intake, Design, and Action

651. What can you do to increase your chances of extending a listing that is about to expire?

A.    Call some friends and ask them to tour the property.

B.     Meet with your sellers a few weeks before the listing expiration and review with them your marketing efforts.

C.     Draw up an extension contract and mail it to the seller’s two weeks before the listing expires.

D.    Meet with the sellers after the listing expires and write a new listing.

652. Owning a building typically

A.    increases marketing abilities for the company.

B.     allows better market share of the business.

C.     reduces the flexibility of the business.

D.    increases the flexibility of the business.

653. Property briefs are also called

A.    property notes.

B.     cheat sheets.

C.     property flyers.

D.    house information pads.

654. What kind of lease conveys a leasehold interest to an owner of a cooperative?

A.    Net-net

B.     Proprietary

C.     Percentage

D.    Index

655. Which statement about property management is FALSE?

A.    Property management is a specialized field in real estate.

B.     A property manager is a fiduciary.

C.     Asset manager and resident manager mean the same thing.

D.    A management agreement is an employment contract between the owner and the manager.

656. If a group of brokers have a meeting to set commission rates, what does this violate?

A.    Fair Housing Act

B.     Sherman Antitrust Act

C.     Civil Rights Act of 1968

D.    Jones v. Mayer

657. What is the definition of a principal?

A.    A broker who owns a real estate firm

B.     A person who delegates another to act on his or her behalf through an agency relationship

C.     Someone who buys a property directly from an owner with no representation

D.    A person who expects loyalty and accounting from the person who purchases the property

658. Most apartment leases are

A.    estates at will.

B.     freehold estates.

C.     estate at sufferance.

D.    estates from period to period.

659. Which document is the most important at closing?

A.    Settlement statement

B.     Deed

C.     Inspection reports

D.    Listing contract

660. Which person is responsible for filling out a property disclosure statement?

A.    Broker’s office assistant

B.     The cooperating agent

C.     The sellers

D.    The listing agent

661. What is the typical time period required to maintain escrow records?

A.    3-5 days

B.     3-5 weeks

C.     3-5 months

D.    3-5 years

662. An agent owes all but which of these to his or her customer?

A.    Disclosure

B.     Funds accounting

C.     Advertising

D.    Skill

663. Which form of agency is illegal in most states

A.    Single agency

B.     Buyer’s agency

C.     Undisclosed dual agency

D.    Subagency

664. What does risk management mean as it applies to property management?

A.    Controlling and limiting risk through proper insurance

B.     Limiting financial risk through the operating budget

C.     Overseeing preventive maintenance

D.    Keeping the grounds cleared to eliminate accident risk

665. Agent Sally has been with Black Realty for over three years and has worked up to the top agent in the firm. Her commission percentage rate is double that of a starting agent. Based on this information, what type of compensation plan does the Black agency have in place?

A.    Graduated

B.     Level Grade

C.     Ramped

D.    Step

666. Which of the following situations would cause the IRS to think that a contractor is really an employee?

A.    The licensee attends sales meetings.

B.     The licensee gets a commission.

C.     The licensee takes paid sick days.

D.    The licensee pays for transportation expenses.

667. Agent Sam gets about 6 hours of floor time each week. What is a major duty for Agent Sam during this time?

A.    File office documents from previous transactions.

B.     Assist other agents.

C.     Prepare mailings.

D.    Respond to incoming sales calls.

668. Which of the following classes are not protected by federal law?

A.    Military status

B.     Sex

C.     Color

D.    Handicap

669. Which type of real estate advertisement is typically located in areas with a high presence of foot traffic?

A.    Billboards

B.     Radio Ads

C.     Door Hangers

D.    Shopping Guides

670. After a listing agreement is signed, and if the agent is a member of a marketing service called a Multiple Listing Service (MLS). What specific form must be completed before the agent can post and market the property to other licensees who are members of MLS?

A.    MLS Form BB-1

B.     A copy of the original listing agreement

C.     The original listing agreement

D.    An MLS form

671. Which of the following situations would give concern about working for the Sunny Valley Brokerage?

A.    The office holds weekly staff meetings.

B.     Most agents appear successful.

C.     Agents seem to come and go quickly.

D.    Office has a selection of training materials.

672. If a buyer asks about homes in the “Muslim” area, what should you do?

A.    Explain to the buyer that you, ethically and legally, cannot recommend housing based on religion.

B.     Refer them to another licensee.

C.     Answer the buyer’s question to the best of your abilities.

D.    Report the buyer to the Fair Housing Board.

673. An agreement in which a seller hires a broker to market a property creates an agency relationship between

A.    the listing agent, buyer, and seller.

B.     buyer and broker.

C.     broker, buyer, and seller.

D.    broker and seller.

674. What are persons called who act as buyers and check on fair housing compliance?

A.    Fair housing guides

B.     Compliance officers

C.     Block watchers

D.    Testers

675. Puffing is a term characterized by which of the following actions?

A.    Providing opinions

B.     Giving fraudulent statements

C.     Giving objective information

D.    Misrepresenting the facts

676. A utility right-of-way is an example of

A.    an encroachment.

B.     a lien.

C.     an encumbrance.

D.    a permit.

677. Which of the following is NOT a resource for information regarding professional ethics?

A.    Federal laws

B.     Licensing regulations

C.     Real estate marketing copy

D.    Real estate associations

678. Which type of contract can have tax benefits for a seller?

A.    Option to buy

B.     Purchase and sale

C.     Contract for deed

D.    Lease

679. A broker can enter into a single agency agreement with

A.    seller and secondary principal.

B.     a renter and landlord.

C.     a buyer.

D.    a seller and buyer.

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