Alabama - State Practice Exam
Ensure the buyer understands the importance of due diligence, including a professional inspection of the property.
A licensee must perform which of the following tasks for a buyer client?
Violating Alabama's license law
A licensee who advises a seller client to break an existing contract to accept a better offer is ________________.
Investigate this discrepancy.
A property is listed as having four bedrooms and two-and-a-half bathrooms. However, when showing your buyer clients the property, you only count three bedrooms. As their agent, what should you do as part of your due diligence?
To replenish the recovery fund
Adele's been a real estate agent in Alabama for the last three years. She just received a notice from the Alabama Real Estate Commission assessing her $30. What's the assessment for?
Montgomery County
Adele's received notice of a complaint and a request for a hearing from the Alabama commission. Where will her hearing most likely be conducted?
Harry has misrepresented the facts of the property. He can face disciplinary actions from the commission.
Alabama broker Harry tells his client, Samantha, that the cracks in the foundation of the property she's buying from Bruce are "normal" and "nothing to worry about." Bruce doesn't know Harry has said this. Shortly after Samantha moves in, the basement floods, and after having the foundation examined, she learns it's in terrible condition. Which of the following is true of this situation?
That he's acting on his own behalf to buy the house
Alabama law requires licensees to disclose personal interest before acting on behalf of themselves or certain individuals with whom the licensee has a personal relationship. Which of the following must Alabama licensee Ross disclose to a seller client?
Amy could be either a salesperson or a broker.
Amy works under the supervision of Corinne at Rolling Hills Realty. Which of the following must be true?
The upstairs bathroom has a leaky toilet.
Assuming licensee Shannon has actual knowledge of all of the following property issues, which of these issues should she disclose to prospective buyers?
She should ask the sellers about these issues and ensure that they are disclosed to buyers.
Beverly is a new licensee. She's at a listing appointment and notices some stains on the ceiling and cracks in the basement walls. What should she do related to these items?
Make a note on the form that she refused to sign it.
Broker Al presents consumer Cathy with the Real Estate Brokerage Services Disclosure form. After they discuss it, he requests that she sign it to acknowledge its receipt. She refuses. What should Al do?
Making a substantial and willful misrepresentation.
Broker Joseph tells his client that a property is zoned as residential even though he knows it's zoned as commercial. This violation is an example of ______.
Samuela must retain a copy of this acknowledgment for three years.
Broker Samuela has just explained her agency disclosure office policy to new agent Kyle. He told her that he understands the policy. She asks him to sign an acknowledgment saying that he has received the policy and understands it, and Kyle does so. What happens next?
She must provide her licensing history to the commission within 120 days before the commission issues the license.
Brynn, a licensee from another state, wants to obtain a reciprocal license in Alabama. Which of the following statements is true?
Yes, he will.
Clint has always had an interest in real estate. He's helped a few friends determine the asking price for their properties, and now he's considering going into business doing this kind of work. Will Clint need a real estate license?
The written consent must be filed with the commission.
David is a qualifying broker for Merit Real Estate. He's also agreed to serve as qualifying broker for First Choice Realty, which is an affiliate company that operates out of the same office. Both companies have agreed in writing, but what else needs to happen in order for this arrangement to be legal in Alabama?
No, because the AREC hasn't yet issued DeVonn his new license.
DeVonn has submitted his transfer request to the AREC, given a copy to his current managing broker, and paid the transfer fee. His new managing broker, Florence, has filed her request and liability statement with the AREC. Can DeVonn start work for Florence now?
Six months' jail time.
Dennis, a broker, has been accused of colluding with an appraiser to get kickbacks on fraudulent appraisals. He'll be appearing soon before AREC for their decision. Which of the following can AREC NOT impose as a penalty?
Accidents, death, or litigation.
Depositing trust funds into a trust account provides protection for those funds should the broker or licensee be faced with ______.
Erica, a broker who works full time
Elite Realty in Tuscaloosa needs a qualifying broker. Which one of these people is qualified for this position?
Inform Margaret about required property condition disclosures.
Estelle is representing seller Margaret. Which of the following tasks is one that Estelle is required to perform as Margaret's agent?
By requiring licensees to have certain education, training, and standards
How does the Alabama requirement for licensing protect the public?
15
How many days do licensees have to request a hearing after AREC issues them a violation notice?
Revoke
If the commission finds that a licensee has committed serious crimes, it will likely _______ the individual's license.
Six
If you don't complete your post-licensing education in your first _____ months of licensure, your temporary license is placed on inactive status.
Misrepresentation
If you, as an Alabama Licensee, make a statement in an ad that you should have known was false, what are you guilty of?
Criminal Conviction
In Alabama, a ___ is grounds for a real estate license suspension.
60 hours of broker pre-licensing education plus an additional six hours of Alabama coursework
In Alabama, what's the broker pre-licensing education requirement?
The client must sign it to acknowledge receipt.
In Alabama, which of the following statements is true about an estimated closing statement?
The seller is the licensee's customer.
In a buyer agency relationship, what relationship does the seller have to the licensee?
The seller
In a seller agency relationship, to which party does the licensee owe undivided loyalty?
It can never be used to replace the disclosure form.
In which of the following situations does Alabama's consumer information statement replace the Real Estate Brokerage Services Disclosure form?
Have held an active salesperson license for at least 24 of the last 36 months
Janice is interested in becoming an Alabama real estate broker. Which of these is a requirement she has to meet?
Give advice to a friend who is negotiating the purchase of a house.
Jimbo doesn't yet have a real estate license. Which activity is he legally allowed to perform without one?
Show that he's not related to Maria.
Joel, an aggrieved claimant, wants to make a claim from the Alabama Recovery Fund. He says that his agent, Maria, defrauded him. Which of the following does he need to do?
To sign an acknowledgment saying that she has received and understands the written policy.
Jojo, a licensee, has just received her annual briefing about her brokerage's agency disclosure office policy. She then received a copy of the policy. Which of the following is her responsibility?
Equity skimming
Jonathan has come up with a plan. He's going to offer to buy property belonging to his neighbor, who's struggling financially, collect rent from his neighbor, and not make the mortgage payments. He'll rake in the rent until the bank forecloses. Which type of mortgage fraud scheme is this an example of?
She must provide it when an offer is signed.
Julie is working with buyer clients and has prepared an estimated closing statement. Which of the following statements is true?
Landon must inform Daria of his decision to transfer to a new managing broker.
Landon wants to transfer his license from his current managing broker, Daria, to a new managing broker, Roy. Landon has had his real estate license for 10 months. Which of the following is true about his situation?
"Have you held a reciprocal license for less than a year?"
Lee is wondering if he really needs to complete his CE requirements during this licensing cycle. Which of these questions should you ask him to help him determine if he has to or not?
Alyse is wrong, because she must deposit the cash immediately.
Leonard, a licensee, has just received $800 in cash from a tenant to cover first months' rent and a security deposit. His broker Alyse tells him, "You need to hand that over to me, and I have three days to deposit this into a trust account." Is she right or wrong?
Six months
Letisha feels she made the wrong decision when she chose to affiliate with her current broker. How long does she need to wait after obtaining her temporary license to affiliate with a different broker?
Criminal record check with fingerprinting.
License candidates must request a ____________ prior to applying for an Alabama real estate license.
Notify her client of the defect and disclose it in writing to the buyer.
Licensee Raina is happy that her seller client's home is under contract, and closing's just a few days away. That is, until she discovers a material defect on the property that hasn't been disclosed to the buyer. What should she do?
Fines, license suspension, license revocation.
Licensees may be disciplined for violating Alabama compensation laws. Which of the following are possible penalties for doing so?
Richard must get Diane's permission in writing.
Lisa wants to transfer her license to another brokerage, where she would be managed by Richard. Currently, her managing broker is Diane. Which of the following is NOT part of the license transfer process?
File a request for the transfer of her license and assume liability for her actions.
Lisa's commute to her current broker's office is too long, so she's found a new broker with whom to affiliate. What must her new broker do?
"It means that you understand and accept the conditions of our agency relationship."
LuAnn is selling some property, and she wants broker Richard to represent her. He explains that she needs to sign a brokerage agreement, and she asks, "What does it mean when I sign this?" What's the best answer Richard can give?
Yes, because by not speaking up, she would be guilty of misrepresentation.
Manda is representing Jim, who's selling his condo. She hears him telling a potential buyer "I think this building was built in 2015." She knows it was built in 2005. Does she have an obligation to provide the correct information?
Kyle
Maria is the buyer's agent, and Julia is the seller's agent in a real estate transaction in Alabama. Jack is Maria's qualifying broker. Julia works for Kyle's firm. From whom can Julia accept compensation?
She's an agent to Cintra, and the seller is her customer.
Mavis is a buyer's agent working with Blaine, an unrepresented seller. Mavis's buyer, Cintra, makes an offer on Blaine's property. Mavis assists Blaine with the paperwork. What's Mavis's relationship to the parties?
Yes, she's done everything right so far.
Meghan filed a notice of appeal and a $200 bond in the circuit court of Montgomery County. She did this 21 days after she received the outcome of her hearing. She is waiting now for the commission to file the case record with the circuit court. Did Meghan file her notice of appeal correctly?
Ads must include the brokerage firm name.
Percy and Jackson have formed a team within their Montgomery real estate brokerage firm. They're drafting some advertisements to help launch their team. What do they need to keep in mind when designing their marketing materials?
Specify best practices for choosing a real estate agent
RECAD was designed to do all of the following EXCEPT which of these?
No, his license will be placed on inactive status.
Robert didn't complete his post-licensing education within six months of obtaining his temporary Alabama real estate license. Can he continue to work as a salesperson?
AREC will order each licensee in the state to pay a $30 assessment to replenish the fund.
Robin, a member of the AREC board, notices that the amount of the Alabama Recovery Fund is $425,000. What happens next?
Phyllis's license has lapsed.
Salesperson Phyllis has had a temporary salesperson license for 13 months. She hasn't completed her post-licensing education. Which of the following is true about her situation?
Alabama Real Estate Commission
The ______ enforces Alabama real estate rules and regulations.
30 days
The commission has received Carol's notice to appeal. How many days does the commission have to file the case record with the circuit court?
Ask a commission member to testify on her behalf
The commission is holding a hearing for licensee Dana. Which of the following is she NOT allowed to do?
The commission can investigate Thomasina without a written complaint.
The commission is investigating the actions and records of Alabama licensee Thomasina. Which of the following is true?
FDIC
The funds places in trust accounts are insured by the ___________.
"Alabama law requires us to keep transaction-related records or else risk penalties."
Tim, an Alabama licensee, is affiliated with principal broker Ashton. After a team meeting, Tim asked him, "Why do we need to keep purchase documents and closing statements?" How should Ashton respond?
A buyer's agent or a seller's agent.
Under RECAD, if operating as a single agent, a licensee may act as what?
When representing a seller and assisting an unrepresented buyer
Under what circumstances would undisclosed dual agency be most likely to occur?
They establish requirements, define activities, and describe standards of conduct.
What are the main ways that license laws ensure consumer protection?
Make sure all parties have copies of the paperwork and that it's retained for the statutory period.
What is a licensee's responsibility related to the paperwork in a real estate transaction?
To protect the public by requiring certain education, training, and standards of licensees.
What is the purpose of licensing?
To recommend a buyer have a professional inspection preformed.
What's an agent's responsibility related to home inspections?
Valid Driver's License
What's one form of documentation the commission will accept as proof of an applicant's age?
Notify the commission by certified or registered mail.
What's one of the steps you need to take if you choose to affiliate with a different broker?
Notify your broker.
What's one of the steps you need to take if you choose to affiliate with a different broker?
You get your temporary license when you pass your exam; you get your original license when you pass your PLE.
What's the difference between a temporary and an original salesperson license in Alabama?
The licensee is permitted to list other properties for sale, even if they're competing properties.
When a licensee represents a seller, which one of the following statements is true about the licensee's ability to list other properties that are for sale?
State statutes and regulations
Where will you find official documentation about the licensing of real estate professionals?
Your buyer requests a specific appraiser.
Which of the following actions might be considered a red flag signaling mortgage fraud?
Benjamin places a lock box in an inconspicuous location on the sellers' property without their permission.
Which of the following actions performed by these licensed salespersons is a common real estate violation?
Selling personally-owned property
Which of the following activities can a person do without a real estate license in Alabama?
Copies of contracts and receipts for escrow moneys received.
Which of the following documents are Alabama brokerages required to retain for three years, according to Alabama law?
Require the licensee to leave the state.
Which of the following is NOT a disciplinary action that the commission may take?
Listing a family member's home, with proper disclosure
Which of the following is NOT considered a license law violation?
Representing the buyer's interests
Which of the following is a buyer's agent's task or duty?
Trust fund monies should be deposited in a timely fashion.
Which of the following is a true statement regarding handling trust funds in Alabama?
Mixing earnest money with personal funds.
Which of the following is an example of commingling?
Complete 15 hours of CE.
Which of the following is one of the requirements necessary to reactivate an inactive Alabama real estate license?
Brock is setting up a new brokerage in Huntsville. He asks himself, "I wonder what's the best way to split commission with my employees?"
Which of the following people would NOT get their questions answered by AREC?
Escrow accounts are managed by escrow agents, and are used to hold funds belonging to others, such as earnest money deposits.
Which of the following statements about escrow accounts is correct?
A material fact may have more or less effect on a buyer based on the buyer's needs and values.
Which of the following statements about material facts is true?
Before you can legally perform any of the same activities that licensed real estate professionals perform, you must have your real estate license.
Which of the following statements about real estate licenses in Alabama is true?
It's informational and doesn't create a relationship between the licensee and consumer.
Which of the following statements about the Alabama Real Estate Brokerage Services Disclosure form is true?
Host an open house
Which of the following tasks would require a real estate license?
Commingling
Which of the following terms describes a situation in which a broker mixes trust funds with the broker's own money?
To provide all licensees with a copy of the agency disclosure office policy
Which of these is a broker's responsibility under RECAD?
Ensure that the buyer receives copies of all signed paperwork.
Which of these tasks must a licensee perform for buyer clients?
Qualifying brokers are responsible for the actions of licensees who work under them.
Which one of the following is a true statement regarding qualifying brokers in Alabama?
A hailstorm damaged some shingles last year.
Which one of the following scenarios describes an adverse condition that would need to be disclosed?
Active temporary licensees
Who's required to take 30 hours of post-license education during their first six months after getting an initial license in Alabama?
Xavier is guilty of commingling and conversion.
Xavier deposited a $3,000 earnest money check into his personal account for safekeeping while he was on vacation. The balance in his account when he left on vacation was $4,200, and when he returned, it was $2,800. He withdrew enough funds from his savings account to cover the earnest money check and delivered the funds to the escrow agent. Which statement best represents Xavier's issue?
Brokerage name
Your license status and ___ need to be included on your business cards.
The commission may reprimand the licensee, revoke or suspend the license, or impose a fine.
hat happens if a licensee is found guilty of a violation?