Brokerage Set 1 - SAE Texas
What's the best definition of a direct expense? An annual expense, such as property taxes An expense paid directly to a vendor An expense that wouldn't exist if no sale had been made An overhead expense like rent that is allocated to sales
An expense that wouldn't exist if no sale had been made - Commissions paid is a perfect example of a direct expense. Without a corresponding sale, no commissions would be owed.
Which of the following sellers would likely benefit most from an unbundled service or a flat-fee listing? - Blake, who has bought and sold a dozen houses as a house flipper - Elliot, who hopes to be a real estate agent someday, although he has never owned his own home - Eva and Kent, first-time homebuyers - Joy, who is selling the first home she's ever owned
Blake, who has bought and sold a dozen houses as a house flipper - Both flat-fee and unbundled services require that clients be knowledgeable about the transaction process (if the transaction is to be successful). Because of this, experienced sellers may benefit the most from these types of services.
Which of the following statements describes business objectives? - Business objectives are derived from business goals and align with the strategies that direct the actions laid out in the company's long-range plan. - Business objectives are derived from situational analysis data and align with and expand upon the company's mission to define what the organization will focus on for the duration of its long-range plan. - Business objectives are derived from the company's strategies and expand upon them to define how much money the company will make by the end of its long-range plan. - Business objectives are derived from the company's vision statement and expand upon it to define what the company's reputation will be at the conclusion of its current long-range plan.
Business objectives are derived from situational analysis data and align with and expand upon the company's mission to define what the organization will focus on for the duration of its long-range plan. - The situational analysis data and company mission form the basis for the creation of business objectives, which will define what the organization will focus on for the duration of its long-range plan.
How do you use an operating budget once it's prepared? - Compare actual income and expense amounts to budgeted amounts. - Compare cash flowing into and out of the firm to budgeted revenue. - Compare forecasted income and expense figures against the budget. - Compare the current year's budget with the previous year's budget
Compare actual income and expense amounts to budgeted amounts. - Perform frequent, regular checks of your budget compared to actual income and expense figures to ensure that you're going to meet the goal projected by your overall budget.
Which economic indicator is defined as the consumer's optimism or pessimism in the economy and his or her willingness to spend? Consumer confidence index Consumer price index GDP Market share
Consumer confidence index
The ______ shows whether the firm has enough assets to cover its obligations. Checking account Current ratio Debt/Worth ratio Loan-to-value ratio
Current ratio - The current ratio shows us the relationship between current assets and current liabilities. It indicates whether there are enough current assets to pay for current obligations.
A budget ______ means that you've overspent your overall budget. Deficiency Deficit Overage Overrun
Deficit - You've spent more than you've earned
What's the goal of the cash flow statement? To compare receivables to payables To match income to expenses in a given month To match budget to firm's liabilities To predict profitability
To match income to expenses in a given month
Writing checks to a vendor that doesn't exist and then cashing those checks for personal use is an example of ______. Mortgage fraud Securities fraud Willful misinterpetation Workplace fraud
Workplace fraud - Because this doesn't involve a mortgage transaction, a contract, or a security, it's considered workplace fraud.
Cultural fit is an important element to explore when determining the compatibility of two companies. Which of the following is an aspect of business culture? Advertising strategies Current value returned Professional development opportunities Reputation in the marketplace
Professional development opportunities - The availability of professional development opportunities is an aspect of business culture.
Which of the following statements in a financing portfolio is most likely to receive a positive response from your lender or investors? - Our cash flow was sufficient every month last year. - Profits increased from $189,000 in 2018 to $287,000 in 2019. - We had a decent profit over the past three years. - We need financing to support our expansion.
Profits increased from $189,000 in 2018 to $287,000 in 2019. - Whenever possible, present quantifiable, verifiable facts to support your funding request.
Tristan refused to let Marla list his property on the MLS, even though Marla told him that more exposure to the property would generate more potential buyers. Which two fiduciary duties are at odds in this situation? Loyalty and confidentiality Loyalty and reasonable skill and care Reasonable skill and care and confidentiality Reasonable skill and care and obedience
Reasonable skill and care and obedience - Marla's skill and expertise tell her that listing the property on the MLS is best for the client because it will provide much more exposure for the property. Her duty of obedience, however, keeps her from going against her client's legal wishes.
Which of the following is an example of the data and transactional management feature of a computer system? Data encryption File storage Report generation Teleconferencing abilities
Report generation - Data and transactional management includes data compilation, sorting, report generation.
In which of the following scenarios is impossibility of contract performance occurring? - Both parties fully meet the terms of the contract. - Due to circumstances beyond their control, the parties can't legally or practically do what they've agreed to do. - One or both parties have completed only a portion of the terms agreed to in the contract. - One party didn't meet the terms of the contract in the specified timeframe and is being required to do exactly what was agreed to in the contract.
Due to circumstances beyond their control, the parties can't legally or practically do what they've agreed to do.
Which type of compensation plan benefits inexperienced real estate agents the most? Employee salary Independent contractor with high commission split Independent contractor with hourly wage Independent contractor with low commission split and bonus incentives
Employee salary
________ is funding received through taking on partners, shareholders, or other investors. Equity financing Long-term debt financing Owner's equity Short-term debt financing
Equity financing - Equity financing involves adding partners or shareholders to your firm in order to raise funds. It also involves giving up at least a portion of your control over the firm's management and operations.
Alison, an aspiring business owner, and her team have done all the upfront work and now they are ready to draft the official planning document for Honesty Homes. She knows that the document will be unique to her business, but there are certain components that are standard and must be included. Which of the following is a standard component of a business plan document? Curriculum vitae Executive summary Financial history Vision statement
Executive summary
What's one reason for the increased mobility or population shifts from one area to another? Increase in jobs offering tenure Increase in tectonic activity that has shifted the placement of housing Increase in the number of jobs people have over their lifetime Increase in the number of jobs requiring travel overseas
Increase in the number of jobs people have over their lifetime
What's one disadvantage of an hourly fee structure? - It compensates brokerages for services performed. - It is complicated to explain to clients. - It is difficult for clients to determine what tasks you are performing. - It may require your firm to generate a lot more sales to be profitable.
It may require your firm to generate a lot more sales to be profitable. - Especially in a hot real estate market, your firm may have to sell a tremendous number of properties to generate income comparable to the commission structure.
What's a downside for a brokerage that opts for a national affiliation? Branding Assistance Less decision-making authority Quicker start-up Recognition
Less decision making authority
Which of the following describes the networking feature of a computer system? - Enables data compilation, sorting, and report generation - Manages the brokerage's intranet - Provides Internet connectivity to the brokerage - Sends information to connected computers
Manages the brokerage's intranet
What type of analysis can help you decide what office systems are best for your brokerage? Financial Analysis Market Analysis Survey of popular office systems by other brokerages Workflow Analysis
Market Analysis
Which of the following is a good cash management technique? Analyze cash flow requirements as soon as it appears that cash is running low. Match revenue and expenses with cash flow. Review your checking account to decide if your firm needs cash. Wait until revenue is low before applying for a line of credit.
Match revenue and expenses with cash flow. - Your budget, financial statements, and financial forecast provide the information you need to decide when revenue and cash available in a given month will not be enough to meet expenses.
Which of the following is often evaluated in order to determine the purchasing power of consumers who live in an area? Census data Medium Income Property appraisals Property taxes
Medium income - Median income is the income level that separates the top 50% from the bottom 50% in income.
Which of the following statements about the EPA's environmental impact study is true? - An EIS is generally conducted in one step. - An EIS is only required for projects that are located near protected wildlife. - Results are often reviewed and approved by a community board. - The primary focus of an EIS is to perform cleanup for landfill areas that are being reclaimed.
Results are often reviewed and approved by a community board. - An EIS is generally conducted in phases and is often followed up by some sort of community forum to discuss the results, as well as to obtain community board approval.
______ is the process of determining what risks your firm faces. Risk analysis Risk Identification Risk Management Risk Mitigation
Risk Identification - Risk identification, the first step in the risk management process, is the process of determining the risks posed to your firm and your licensees.
Lilith is a broker who offers her agents a 100% commission. Which of the following is a potential problem for her with this compensation plan? - She has less control over her agents' activities due to their level of experience. - She may owe more taxes than she can afford to pay. - She's required to supervise her licensees more closely because of their level of experience. - She's responsible for paying her agents even when they aren't producing.
She has less control over her agents' activities due to their level of experience. - All compensation plans have pros and cons. Since it's typically experienced, productive agents who receive a 100% commission, Lilith is likely to have less control over her agents than if they were newer licensees looking for her support.
Which of the following is a characteristic of an informal organization? Official Rigid Social Unambiguous
Social - An informal organization is fluid, adaptable, and primarily social.
______ enforces the Canons of Professional Ethics and Conduct in Texas. REALTOR® associations The Texas Association of Real Estate Ethics The Texas Real Estate Commission TWCCRD
Texas Real Estate Commission - The Texas Real Estate Commission enforces the Canons of Professional Ethics and Conduct.
A listing ad in the Spartanville Tribune states, "Within walking distance to restaurants, nightclubs, shopping, and schools." Does this violate fair housing law? -No, because it lists amenities used by both adults and children. - No, because "walking distance" refers to a property-related factor. - Yes, because it includes the term "walking." - Yes, because it lists specific amenities.
No, because "walking distance" refers to a property-related factor. - Walking distance has been determined to not be a violation, but to avoid offending those who have difficulty walking, consider using the phrase "close to" instead of "within walking distance."
How might you indirectly convey a brand statement to your market? Through consistency between branding and identity Through signage and marketing materials Through use of your logo Through word of mouth
Through word of mouth - Referrals and word-of-mouth recommendations convey your brand statement in an indirect but often effective manner.
Why should a business owner evaluate the competition's affiliations? - To determine market share - To determine what help or hindrance the association provides - To improve advertising results - To improve customer relations
To determine what help or hindrance the association provides
The first step in succession planning is to ______. - Assess existing staff to determine suitability for promotion - Develop a recruitment plan - Identify skills required in critical positions in the firm - Implement a training plan
Identify skills required in critical positions in the firm - In order to effectively evaluate the pipeline of internal candidates, managers must first identify the skills those candidates will need to possess.
How does assignment differ from novation? - Assignment automatically releases the party who assigned the contract from further contract obligations. - Assignment doesn't require agreement of all the parties. - Assignment requires agreement of all the parties in order to be valid. - Novation does not terminate the original contract.
Assignment doesn't require agreement of all the parties.
This management style is often used in high-risk professions, such as the military and emergency operations. Autocratic Coercive Laissez-faire Participatory
Autocratic
Belinda is a licensee whose client asked her to draft an addendum containing complicated terms that even Belinda doesn't fully understand. Belinda should ______. Avoid unauthorized practice of law Hire and attorney Refuse to work with his client Use legalese
Avoid unauthorized practice of law
Which of these is NOT an example of agency coupled with interest? - Carma agrees to list Tera's property for free if Tera signs an agreement to purchase her new home through Carma. - Gene, a real estate professional, is purchasing a home for his personal use. He negotiates a reduction in the sales price in return for taking no commission from the seller. - Jeanine agrees to charge no commission from her buyer's purchase of a four-plex if the buyer agrees to pay Jeanine a 3% fee for each unit for which she finds a tenant after the sale. - Rhoda loans Carl the money to catch up his mortgage payments in return for a listing agreement to sell Carl's home for a 4% commission
Gene, a real estate professional, is purchasing a home for his personal use. He negotiates a reduction in the sales price in return for taking no commission from the seller. -- Agency coupled with interest is an agency relationship in which a licensee is given some sort of interest in or right to a principal's property. A standard commission-based transaction isn't agency coupled with interest.
Danny is willing to take on some risk with his new brokerage, but he wants the support and brand recognition of an established company. Why type of brokerage is Danny considering? He acquired a brokerage. He merged business names with an existing brokerage. He purchased a franchise. He started his own brokerage.
He purchased a franchise. - If you purchase a franchise, you have the support and brand recognition of the company.
Which of the following statements is true regarding legal recourse for independent contractors who experience discrimination from their broker? - If the broker has more than 15 licensees working as independent contractors, federal discrimination laws enforced by the EEOC are applicable to those licensees. - Independent contractors are considered employees for the purposes of most federal labor and employment laws. - Independent contractors aren't protected against discrimination under federal law. - Independent contractors are protected by federal law against discrimination when forming a contract and in the contractual relationship.
Independent contractors are protected by federal law against discrimination when forming a contract and in the contractual relationship. - While independent contractors aren't covered by federal employment law, they may have legal recourse under Section 1981 of the Civil Rights Act of 1866, which protects their rights as a result of entering into a contractual agreement with the broker.
Which training delivery option is best when the topic for training involves skills that can be practiced with role-play between students? - Instructor-led training - Recorded webinar - Self-paced, computer-based training - Video
Instructor-led training - When students will benefit from role-playing or practicing skills with one another, an instructor-led class is the only one of these options that allows students to interact with each other.
Which training delivery option is best when the topic for training involves skills that can be practiced with role-play between students? Instructor-led training Recorded webinar Self-paced computer-based training Video
Instructor-led training - When students will benefit from role-playing or practicing skills with one another, an instructor-led class is the only one of these options that allows students to interact with each other.
Which option best describes what an environmental impact statement is? - It defines the level of drilling that needs to take place in order to build foundations for the development. - It describes and analyzes a proposed action that may have a significant effect on the environment. - It describes local zoning regulations like setbacks, zones, and curb requirements. - It illustrates the benefits of the development to the community to improve community acceptance.
It describes and analyzes a proposed action that may have a significant effect on the environment.
Which of these describes a decentralized management system? - It has a horizontal structure - It's inefficient - It's the best choice for a large firm - It's top-heavy
It has a horizontal structure - A decentralized structure is more efficient for larger organizations. There are few levels of management at the top.
Krenning Realty has been found guilty of running deceptive ads. Which of these statements about the potential penalty is NOT true? - If Krenning violates the cease and desist order, the firm may face penalties in excess of $40,000 for each day a deceptive ad runs. - Krenning may be required to run corrective advertising. - Krenning's broker may face jail time. - The firm may face civil penalties ranging from the thousands to millions of dollars, depending on the infraction.
Krenning's broker may face jail time. - Violations for deceptive ads don't tend to result in jail time. The other options are potential penalties.
Which of these brokerages is covered under the federal Equal Employment Opportunity Act? - One that has 12 unlicensed workers and 60 licensees, all of whom are employees of the brokerage. - One that has 15 licensees who work as independent contractors, and five unlicensed employees. - One that has 30 licensees who work as independent contractors, and eight unlicensed employees. - One that has five licensees who work as independent contractors, and one unlicensed employee.
One that has 12 unlicensed workers and 60 licensees, all of whom are employees of the brokerage. - Employers with fewer than 15 employees aren't covered by most laws enforced by the EEOC, other than the equal pay for equal work requirements.
A budget _____ means that the amount budgeted for a specific line item has been overspent. Deficiency Deficit Overage Overrun
Overrun - If you've budgeted $10,000 for marketing and have spent $12,000, that's a budget overrun.
As part of a transition plan, communicating the appropriate details of a merger to the employees of both firms and the public plays into how the transaction is _______. Accelerated Avoided Decided Positioned
Positioned - How smoothly and quickly a transition occurs after a merger or acquisition depends in part on how well the transaction is positioned.
Sam chose a beautifully preserved Victorian house for her brokerage office. After signing the lease, she realized that it would cost a fortune to make the space completely ADA-compliant. What does the ADA say about situations like this? - Businesses housed in historic homes are exempt from ADA requirements and legislation. - Government financing is available for business owners whose cost of retrofitting is prohibitive. - Some buildings are exempt from strict compliance due to the prohibitive cost of retrofitting. - Strict compliance is required by all buildings, regardless of the cost to the owner.
Some buildings are exempt from strict compliance due to the prohibitive cost of retrofitting. - Some buildings are exempt from strict ADA compliance due to the prohibitive cost of retrofitting.
Often, "strategies" and "tactics" are used interchangeably; however, in business they mean different things. Which of the following statements describes the difference between business strategies and tactics? - Strategies define what the company wants to do, and the tactics define how it's going to do it. - Strategies state what the company will focus on to fulfill its mission, and tactics are plans to achieve certain goals. - Tactics are decided at the leadership level while strategies are defined and carried out by department managers and staff.
Strategies define what the company wants to do, and the tactics define how it's going to do it. - Strategies are set by higher levels of leadership and are the methods through which the company goals and objectives will be achieved. Tactics are decided by department managers and carried out by staff.
Which of the following mediums is best suited for establishing name recognition? Classified ads Listing flyers QR codes TV ads
TV ads - Using your firm's marketing tagline and identity in television ads gets your name in front of a large number of potential buyers and sellers.
According to the Bureau of Labor Statistics, the average predicted growth for the real estate industry over the next several years is 7%. How does this compare to the expected job growth on average? - The average predicted growth for other occupations is lower. - The predicted growth for other occupations is much higher, at 10%. - The predicted growth for other occupations is somewhat greater at 8%. - The predicted growth for other occupations is the same.
The average predicted growth for other occupations is lower. -- The Bureau of Labor Statistics predicts that job growth for real estate licensees will rise 7% from 2018 to 2028, which is higher than the average job growth rate overall.
Many E&O insurance policies have ownership exclusions. What does that mean? - If the insured individual owns the property, it cannot be excluded from coverage. - If the insured individual's spouse owns the property, it cannot be excluded from coverage. - The policy covers all exposures. - The policy doesn't cover claims related to property that the insured or a related party owns or has a financial interest in.
The policy doesn't cover claims related to property that the insured or a related party owns or has a financial interest in. - Ownership exclusion means that the policy doesn't cover claims related to property that the insured or a related party owns or has a financial interest in.
