CO state exam

Which of the following statements is true about brokers accepting security deposits for landlord clients? a. It's authorized in the Deposits section of the Exclusive Right-to-Lease Listing Contract. b. It's authorized with an addendum to the Exclusive Right-to-Lease Listing Contract. c. Only security deposits of less than $5,000 may be collected by brokers. d. This is acceptable if both the landlord and tenant consent to it in writing.

a. It's authorized in the Deposits section of the Exclusive Right-to-Lease Listing Contract. Section 12 of the Exclusive Right-to-Lease Listing Contract authorizes the broker to accept security deposits and deliver them to the landlord or property manager.

A Colorado licensee uses the ________ to describe the terms of employment and working relationship between broker and seller. a. Listing contract b. Notice of brokerage relationship c. Purchase contract d. Working relationship disclosure

a. Listing contract The Exclusive Right to Sell listing contract is an employment agreement between the seller and the licensee. In Colorado, the licensee may be identified as the seller's transaction broker or single agent.

Is there any organizational type that isn't permitted to be licensed as a real estate broker? a. No, because all organizational types are eligible for licenses. b. Yes, corporations can't be licensed. c. Yes, no organization may hold a broker's license. d. Yes, partnerships can't be licensed.

a. No, because all organizational types are eligible for licenses.

Per Colorado's Exclusive Right-to-Buy Listing Contract, if a success fee is identified as compensation, will the listing brokerage firm receive payment if the seller defaults with no fault on the buyer's part? a. No, the success fee is waived. b. Yes, the buyer pays the fee. c. Yes, the seller and buyer split the cost of the fee. d. Yes, the seller pays the fee.

a. No, the success fee is waived. With a success fee compensation arrangement, if the seller defaults during the transaction with no fault on the buyer's part, the fee is waived. If the buyer defaults, the buyer must pay the fee.

When a Colorado licensee has a compensation dispute with an employing broker, what, if anything, is the Colorado Real Estate Commission empowered to do? a. Nothing; this is beyond the scope of the commission's authority. b. The commission can censure the broker or brokerage until the dispute is resolved. c. The commission can hold a hearing to determine how much compensation is owed. d. The commission can suspend or revoke the employing broker's license.

a. Nothing; this is beyond the scope of the commission's authority. The commission has no legal standing in payment disputes. NAR handles disputes between REALTORS®, or they must be handled in the civil court system.

How does a Colorado seller counter the price and closing date offered by the buyer? a. He should make his desired changes to the price and closing date on the contract, initial and date the changes, and sign the form to make it a complete agreement. b. He shouldn't sign the offer, but should write up the new terms he wants to include on a Counterproposal form and sign that instead. c. He should sign the offer and return it to the buyer with a signed counter offer. d. He should sign the offer, since he doesn't want to reject the buyer, but tell the buyer's agent to expect a counterproposal.

b. He shouldn't sign the offer, but should write up the new terms he wants to include on a Counterproposal form and sign that instead.

Which of the following actions would be inappropriate for a Colorado licensee preparing the Contract to Buy and Sell form for a buyer client? a. Add lines at the bottom of each page for the client's initials. b. Complete the blanks of the form using a typestyle that's clearly different from the rest of the form. c. Create an addendum with the client to submit with the form d. Make a legible insertion or modification that follows client's direct request.

c. Create an addendum with the client to submit with the form CREC rules require brokers to use standard forms with certain modifications being permitted, as described in Chapter 7 of the rules. Any addenda must be drafted by an attorney.

Which form should accompany the completed Colorado contract form when offering to buy a property that is in foreclosure? a. Foreclosure Act Addendum b. Homeowner Cancellation Notice (Principal Language) c. Homeowner Warning Notice d. Notice of Cancellation

c. Homeowner Warning Notice The Homeowner Warning Notice is a required attachment to the Contract to Buy and Sell (Colorado Foreclosure Protection Act) which notifies the seller of a three-day right to cancel.

Joshua, a Colorado licensee, presents the Brokerage Disclosure to Landlord form to Bill, the person he's meeting with. What's the relationship between Joshua and Bill? a. Joshua and Bill are preparing to enter into an agency relationship with Joshua as landlord Bill's broker. b. Joshua is interested in representing Bill, a landlord, as his property manager. c. Joshua represents a tenant interested in renting from Bill, who's a landlord. d. Joshua represents Bill, a landlord, and is disclosing the legal limits of his relationship with potential tenants.

c. Joshua represents a tenant interested in renting from Bill, who's a landlord. The Brokerage Disclosure to Landlord form is used when a broker comes into contact with a landlord and discusses the possible leasing of the property on behalf of the broker's tenant client.

How is personal property conveyed in a Colorado sales contract? a. If it's on the property, personal property automatically conveys when the transaction is closed. b. Personal property must convey via a bill of sale or other legal instrument. c. The title to any personal property is legally conveyed by listing the item under the Inclusions section of the Colorado sales contract. d. Via Section 2.5.2, Personal Property - Conveyance.

b. Personal property must convey via a bill of sale or other legal instrument. A bill of sale or other legal conveyance instrument is required when conveying personal property. Personal property isn't conveyed through the Colorado real estate contract.

When your seller client accepts an offer, it's your office's practice to also complete the Closing Instructions form with agreements between buyer and seller. When you do so, which of these parties is NOT required to sign this form? a. The buyer b. The buyer's lender c. The closing company's authorized representative d. The seller

b. The buyer's lender The Closing Instructions are signed by the parties to the transaction, the agent of the closing company selected by buyer and seller, and by the broker who's engaging the closing company to create legal documents on the broker's behalf.

An Open Listing Addendum can be added to which of the following contracts to create a listing that can be marketed and sold by any number of brokers? a. Contract to Buy and Sell Real Estate, Commercial b. Contract to Buy and Sell Real Estate, Residential c. Exclusive Agency Addendum d. Exclusive Right-to-Sell Listing Contract

d. Exclusive Right-to-Sell Listing Contract The Open Listing Addendum may be added to the Exclusive Right-to-Sell or Exclusive Right-to-Lease Listing Contract.

Which of the following forms creates a legally binding agency relationship between a tenant and a Colorado broker? a. Definitions of Working Relationships b. Exclusive Right-to-Buy Listing Contract c. Exclusive Right-to-Lease d. Exclusive Tenant Listing Contract

d. Exclusive Tenant Listing Contract In Colorado, the Exclusive Tenant Listing Contract is used to establish the agency relationship between a broker and a tenant. The contract is legally binding when signed by all parties to the agreement

Where should a buyer's wish to have the seller's desk remain in the property be addressed in the CBS residential? a. In the Exclusions section b. In the Inclusions - Attached section c. In the Inclusions - Not Attached section d. In the Other Inclusions section

d. In the Other Inclusions section The desk should be written into the Other Inclusions section, which is where the buyer indicates if there are other items in the house which the seller would normally remove that he'd like the seller to leave behind.

Which commission-approved form related to inspection contingencies is an amendment to the sales contract? a. Inspection Amendment b. Inspection Contingency Outcome c. Inspection Objection d. Inspection Resolution

d. Inspection Resolution The Inspection Resolution is signed by both parties and is amends the sales contract.

Henry O'Toole is the broker-owner at the firm Mile High Homes, LLC. What name(s) must be used to identify all trust accounts Henry establishes? a. Henry O'Toole, Broker-Owner b. Henry O'Toole, LLC c. Mile High Henry O'Toole d. Mile High Homes, LLC

d. Mile High Homes, LLC In this case, the name of the LLC must appear on the trust accounts Henry establishes for the brokerage. If Henry were a sole proprietor, the account would need to include the name "Henry O'Toole" instead, since he's the employing broker (or independent broker) at the firm.

Which of the following dates may be specified as the foreclosure sales contract cancellation date? a. Midnight on the fifth day after the seller signs the contract b. Midnight on the third day after the buyer signs the contract c. Noon on the day after the foreclosure sale d. Noon on the day before the foreclosure sale

d. Noon on the day before the foreclosure sale If designated, the seller has until noon on the day before the foreclosure sale to cancel the contract.

To whom can a broker offer exclusive agency through the use of the Exclusive Brokerage Listing Addendum to the Exclusive-Right-to-Sell Listing Contract? a. Buyers b. Landlords c. Sellers d. Sellers and landlords

d. Sellers and landlords Exclusive agency through the exclusive brokerage addendum can be offered to both sellers and landlords.

Janet's been a real estate broker for 12 years, but circumstances currently prevent her from continuing to work. She expects to return to real estate eventually, but in the meantime, she asks the real estate commission to make her license inactive. Which of these actions will she need to take as a result? a. Advertise only those properties she currently has listed and not under contract, until the listing terminates. b. Allow her current real estate advertisements to continue for 30 days, at which time all advertising must cease. c. Include a notice of "broker inactivity" in all her real estate advertisements. d. Stop all her real estate advertising immediately.

d. Stop all her real estate advertising immediately. When a broker's license becomes inactive, all advertising must cease immediately, along with all other real estate activities requiring a license.

Mike's tenant clients have agreed to pay the brokerage firm's fee. Which of the following options will Mike select in Colorado's Exclusive Tenant Listing Contract to reflect this agreement? a. Listing Brokerage Firm, Landlord, or Sublandlord May Pay. Tenant is NOT Obligated to Pay. b. Listing Brokerage Firm, Landlord, or Sublandlord May Pay. Tenant IS Obligated to Pay. c. Not Applicable. d. Tenant Will Pay.

d. Tenant Will Pay.

A week before closing, seller learns that the property has a condemnation pending on it. Which of the following is true of this situation? a. The contract is valid and binding on both parties. b. The contract is void. c. The contract is voidable by the buyer. d. The contract is voidable by the seller.

d. The contract is voidable by the seller. A seller who learns there is a pending condemnation must notify the buyer right away. The buyers may either terminate the contract before closing, or go through with the sale, receiving all condemnation proceeds the seller is given.

Toby is the broker in an Exclusive Right-to-Buy Listing Contract, and Zoey is the buyer. Who has the right to cancel the agreement before the agreed-to contract end date? a. Neither party, because the contract doesn't allow for early termination b. The broker, but not the buyer c. The buyer, but not the broker d. The non-defaulting party

d. The non-defaulting party The contract allows for the early termination of the agreement by either party if the other party is in default.

Happy Home Realty, Inc. is a newly licensed organizational broker in Colorado. The corporation is headed by Neil, Carey, and Randa. Neil and Randa are both licensed brokers with years of real estate experience, but Carey is a business administrator. Which of these is one of the requirements Happy Home Realty had to meet in order to become licensed? a. All company officers (Neil, Carey, and Randa) must be licensed brokers. b. All of the organization's licensed activities must be supervised by Neil or Randa, since they're both licensed and both officers of the corporation. c. Carey is designated as the sole escrow fund holder for the company. d. The officers of the company designated Randa as their qualified active broker.

d. The officers of the company designated Randa as their qualified active broker. Organizational brokers must designate a qualified active broker to manage and supervise all licensed activities, as well as be personally responsible for the company's trust funds. Randa didn't need to be a company officer to be the designated broker.

Joan is acting as buyer Robin's transaction-broker. When she presents Robin's offer to a seller, which required duty is she performing? a. The additional duty of negotiation b. The additional duty of promoting her client's interests c. The uniform duty of advocacy for her client d. The uniform duty of reasonable skill and care

d. The uniform duty of reasonable skill and care

An expired license can be reinstated as long as the license is expired for no longer than ________. a. Five years b. One year c. Six months d. Three years

d. Three years An expired license can only be reinstated if no more than three years has elapsed.

Shanna's reputation is that of a well-organized broker who's always on top of the details. She's got a system for record keeping, too, that differentiates between records she keeps because it's good business practice (like correspondence and transactional notes) and the records she maintains according to CREC rules. What defines the records she keeps to comply with Colorado law? a. All documents that become a matter of public record. b. Any document signed, handled, or viewed by one of the parties to the transaction. c. Transaction documents directly related to the commission she earned. d. Transaction documents she prepared or which were prepared on her behalf.

d. Transaction documents she prepared or which were prepared on her behalf. Colorado law and CREC rules require Shanna to maintain duplicates of transaction documents (except those that are in the public record) that she prepared or which were prepared on her behalf.

Statutory duties required of Colorado agents and transaction brokers are called _______. a. Agent duties b. Commission duties c. Fiduciary duties d. Uniform duties

d. Uniform duties In 1993, Colorado began operating under statutory law. This meant that statutes defined the duties agents and transaction-brokers would owe their clients. In Colorado, these duties are called uniform duties.

Victoria, a broker, comes into contact with a potential buyer and is required by law to present the buyer with the Colorado Brokerage Disclosure to Buyer form. What's Victoria's working relationship with the seller? a. The seller and Victoria have a signed buyer agency agreement. b. The seller is Victoria's customer. c. The seller is Victoria's potential client. d. Victoria is acting as the seller's agent or transaction-broker.

d. Victoria is acting as the seller's agent or transaction-broker. In situations where a Colorado Brokerage Disclosure to Buyer form is required, the broker presenting the form is acting as either a seller's agent or a transaction-broker. The broker isn't the buyer's agent.

A real estate licensee who is not a licensed mortgage loan originator but who assists a buyer client with negotiating for a loan provided by the seller is ___________. a. Acting within the limits of real estate law b. Providing a service that will generally earn an increased commission c. Required to disclose that he or she is not licensed as a mortgage broker d. Violating the law and may be subject to severe penalties

d. Violating the law and may be subject to severe penalties A broker who offers advice or assistance for financing in a real estate transaction is required to be either an attorney or licensed as a loan originator. The real estate licensee would be violating the law and could be subject to severe penalties.

The Licensee Buy-Out Addendum gives a seller additional rights in a transaction because ________. a. The licensee has a fiduciary duty to make the transaction as profitable as possible b. The licensee is usually offering a below-market price on the property c. The seller is essentially paying the buyer a commission to purchase the property d. When the buyer is also the listing agent, there's a conflict of interest

d. When the buyer is also the listing agent, there's a conflict of interest The Licensee Buy-Out Addendum protects the seller's rights in a transaction where the licensee has created a conflict of interest by acting as both the listing agent and the buyer.

Len and Nancy's real estate broker told them to bring good funds to their closing meeting. Of the following, which is the best option for delivering funds? a. Cash b. Personal check c. Record of ACH transfer d. Wire transfer

d. Wire transfer In Colorado, cashier's checks, certified checks, and wire transfers are considered good funds. Many title companies now accept only wire transfers.

In a Colorado CBS residential contract, a "day" is said to end at __________. a. 11:59 p.m., Mountain Time b. 9:00 p.m., Mountain Time c. Midnight, Eastern Time d. Midnight, Mountain Time

a. 11:59 p.m., Mountain Time

Is the high cost of urban real estate considered a benefit or a drawback to foreign investors? a. A benefit because one deal can require a large amount of investment funds b. A benefit because they're guaranteed to earn a large profit c. A drawback because the cost of U.S.. urban property is much higher than in other countries d. Neither, because foreign investors prefer not to invest in urban property

a. A benefit because one deal can require a large amount of investment funds

Dwayne is checking the accuracy of the closing statement for his buyer client. The Contract to Buy and Sell shows the earnest money his buyer paid is $5,000. How will this be shown on his client's closing statement? a. A credit to the buyer and a debit to the broker b. A credit to the seller and a debit to the broker c. A credit to the seller and a debit to the buyer d. A debit to the seller and a credit to the buyer

a. A credit to the buyer and a debit to the broker Earnest money is recorded as a credit to the buyer, because it reduces the amount the buyer must bring to closing, and it's a debit in the broker column.

What's a transaction-broker? a. A licensee who doesn't represent a party to the transaction, but assists a party in certain aspects of the transaction b. A licensee who represents both parties in the same transaction c. A licensee who's selected by the employing broker to act as either a single agent or transaction-broker to a party d. A licensee who works under another agent with the principal's permission to perform some of the acts of agency

a. A licensee who doesn't represent a party to the transaction, but assists a party in certain aspects of the transaction

A Colorado licensee cooperated with a licensee who lives and has an office out of state. All money collected prior to closing was deposited in an account in the name of the Colorado broker. What else is required for the compensation to be paid to the out-of-state licensee? a. All activities were performed in the Colorado broker's name. b. All activities were performed in the out-of-state broker's name. c. Compensation can't be paid to out-of-state licensees. d. There are no other requirements.

a. All activities were performed in the Colorado broker's name. Compensation can be paid if the cooperating licensee lives and has an office in another state, activities are performed in the Colorado broker's name, and money collected before closing is deposited in an account in the Colorado broker's name.

If a broker can't make it to a closing and delegates another licensee to attend, who's responsible for the accuracy of the closing statement? a. Both the broker and the delegate b. The broker c. The broker's delegate d. The employing broker

a. Both the broker and the delegate

You represent a tenant as a single agent and are showing her several properties today. Which disclosure would you provide to prospective landlords so they know what relationship exists? a. Brokerage disclosure b. Change of Status c. Definitions of Working Relationships d. Lease

a. Brokerage disclosure Specifically, you'd provide the Brokerage Disclosure to Landlord, which would indicate to landlords that they are a customer and that you're the tenant's agent.

In Colorado, which of the following is a true statement regarding withdrawals from a brokerage firm trust account to pay compensation earned by the broker? a. Compensation the broker has earned should be withdrawn from the trust fund on a monthly basis. b. The broker may maintain the earned funds in the trust account as long as the beneficiary agrees in writing. c. The withdrawal must be matched by an equal deposit from the brokerage operating account. d. This type of withdrawal is a violation of the broker's role as fiduciary.

a. Compensation the broker has earned should be withdrawn from the trust fund on a monthly basis.

Your buyer client Toby is purchasing property served by a small-capacity well that is registered with the Colorado Division of Water Resources. As part of the transaction, what is Toby (or the closing agent) required to do? a. Complete a change of ownership form b. Have the well and the water inspected c. Replace the well with a mid-capacity well d. Submit a new registration and pay a small fee

a. Complete a change of ownership form Buyers who purchase property served by a small-capacity well must complete a change of ownership form and file it with the Colorado Division of Water Resources. Typically the closing agent handles this requirement.

Debra's a new Colorado licensee. She's pretty busy already, but she still lacks confidence that she's providing the proper disclosures to the right people at the appropriate time. She finally asks her employing broker, Tonya, for guidance, and Tonya tells her there are certain actions considered "brokerage activities" that should trigger the disclosure requirement for her. Which of these actions is one of those brokerage activities? a. Debra asks a potential buyer what price range he's looking in. b. Debra tells a caller that the basement is 1,000 unfinished square feet. c. Debra tells a potential buyer that the HOA is $175 quarterly. d. Debra tells a potential buyer that the neighborhood includes a pool and two playgrounds.

a. Debra asks a potential buyer what price range he's looking in. Commission Rule 6.5, Brokerage relationship disclosure in writing, defines brokerage activities to include the communication of confidential information related to real estate, such as needs, motivations, and financing.

As of 2021, what's the date by which Colorado real estate brokers must renew their licenses? a. December 31 b. January 1 c. June 30 d. License anniversary date

a. December 31 After 2020, all Colorado broker licenses will expire on December 31 of each three-year renewal cycle.

Samantha helped her neighbor sell his home by assisting with negotiations. She received no compensation for her assistance, however. Based on this one transaction, Samantha _______. a. Doesn't need a real estate license b. Must be a lawyer c. Must have a broker license d. Must have at least a sales agent license

a. Doesn't need a real estate license

Henry wants to sell his home. He contacts Elite Realty and begins working with a new licensee named Joanne, who's acting as his seller's agent. Because this is Joanne's first potential transaction, her employing broker, Seth, mentors her every step of the way. Henry has entered into an employment contract with which party? a. Elite Realty b. Joanne c. Seth d. Seth and Joanne

a. Elite Realty In Colorado, employment contracts that establish the agent-client relationship are between the principal and the brokerage firm, not an individual licensee or the employing broker. Elite Realty is the other party.

How many members make up the Colorado Real Estate Commission? a. Five b. Nine c. Seven d. Three

a. Five

A seller and broker have signed an Exclusive Brokerage Listing Addendum. When would the broker be owed commission? a. If any broker secures the buyer b. If anyone secures the buyer c. If the seller, another broker, or a listing broker secures the buyer d. If the seller secures the buyer

a. If any broker secures the buyer

Which of the following is a true statement about the listing contract between a seller and a licensee acting as a transaction-broker? a. It can be written or oral. b. It doesn't need a termination date. c. It must be written. d. It's not legally binding.

a. It can be written or oral.

Which of the following is true regarding the Estoppel Statement provision in the Colorado Contract to Buy and Sell Real Estate (Commercial)? a. It documents the tenants' agreement (or disagreement) with the seller regarding the terms of the existing lease. b. It prevents existing tenants from requesting changes to the lease agreement after the transaction is closed. c. It prohibits the buyer from making changes to the existing lease agreements after the transaction closes. d. It prohibits the seller from making any changes to existing tenants and lease agreements while under contract.

a. It documents the tenants' agreement (or disagreement) with the seller regarding the terms of the existing lease.

Tamra is assisting Blaine with leasing his property. Tamra has performed several real estate-related activities, but she and Blaine never signed a written agreement. What's true about their working relationship? a. It's assumed that Tamra is acting as a transaction-broker for Blaine. b. Since Tamra has performed real estate-related activities for Blaine, this is an illegal form of agency. c. Tamra is a landlord's agent for Blaine, who is her client. d. Without a written agreement, there is no recognized working relationship.

a. It's assumed that Tamra is acting as a transaction-broker for Blaine. If a written agreement doesn't exist, neither does agency. Colorado law says that a broker is presumed to be a transaction-broker unless a written agreement creates a single-agency relationship.

Broker Janelle is recording a transfer she made of $100 from the brokerage operations account into the brokerage trust account for the purpose of maintaining a minimum required balance in the account. How should this transfer be recorded? a. Janelle should record the transfer in the broker's ledger and the escrow account journal. b. Janelle should record the transfer in the broker's ledger but not in the escrow account journal, since the funds belong to the brokerage and are not being held on another's behalf. c. Janelle should record the transfer in the escrow account journal. No other record is required since the funds aren't related to a transaction. d. There's no correct way to record this because it's an illegal commingling of funds.

a. Janelle should record the transfer in the broker's ledger and the escrow account journal.

Unlicensed consumers in Colorado may only perform real estate activities in certain situations. In which of these scenarios would the consumer need a real estate license? a. Jessie is searching for a new home for a friend moving into town. Jessie will be compensated 2% of the sale price for her time and effort. b. Mickey is selling his own home and isn't using the services of a listing agent. c. Peter is helping his sister, Kristen, find a new apartment. He will not be compensated in any way. d. Ronald is acting as executor of his uncle's estate, which includes selling the property his uncle owned.

a. Jessie is searching for a new home for a friend moving into town. Jessie will be compensated 2% of the sale price for her time and effort. In general, unlicensed consumers may not receive compensation for performing real estate activities for others. Jessie is receiving compensation and would need to be licensed to accept this without breaking any laws.

A Colorado licensee uses the ________ to describe the terms of employment and working relationship between broker and seller. a. Listing contract b. Notice of brokerage relationship c. Purchase contract d. Working relationship disclosure

a. Listing contract

What information is NOT included on Colorado's Closing Instructions form? a. The amount of the earnest money deposit b. The closing services fee c. The form the seller's proceeds will take d. The name of the closing company

a. The amount of the earnest money deposit

Which of the following statements about a deed of trust used for a real estate loan in Colorado is true? a. The deed of trust creates a lien against the property. b. The deed of trust isn't commonly used for real estate loans in Colorado. c. The lender holds legal title to the property until the loan has been paid in full. d. There are two parties to a deed of trust agreement in Colorado: the buyer/borrower and the lender.

a. The deed of trust creates a lien against the property.

Franklin's brokerage firm is performing a closing for which the title company held the earnest money. Who's responsible for withholding and remitting required Foreign Investment in Real Property Tax Act (FIRPTA) funds? a. The party performing the closing b. The seller c. The seller's lender d. The title company that held the earnest money

a. The party performing the closing The party who performs the closing must determine if FIRPTA or Colorado non-resident funds are required, and withhold and remit them as necessary.

A seller wants to take the dwarf magnolia tree that's planted in the yard of the house she's selling. How should this appear in the Colorado sales contract? a. The tree should be listed under Exclusions. b. The tree should be listed under Inclusions - Attached. c. The tree should be listed under Inclusions - Not Attached. d. The tree should be listed under Other Inclusions.

a. The tree should be listed under Exclusions.

Why is the buyer/borrower asked to sign the Dual Status Disclosure form? a. To acknowledge receipt of the disclosure b. To give notice to the seller that the loan application has been submitted c. To provide consent for the real estate broker to continue to take part in the transaction d. To provide notice to the broker if the offer is contingent upon a loan

a. To acknowledge receipt of the disclosure

What should a Colorado licensee do for a client who is making an offer to purchase a property in which more is owed by the seller than the listed price? a. Add the Loan Assumption Addendum to the Contract to Buy and Sell Real Estate and explain to your clients how assumption works b. Add the Short Sale Addendum to the Contract to Buy and Sell Real Estate and explain how the short sale process works c. Advise them to work with an attorney to draft an addendum to the Contract to Buy and Sell Real Estate that's appropriate to a short sale situation d. Use the Contract to Buy and Sell Real Estate (Short Sales) form to write up their offer

b. Add the Short Sale Addendum to the Contract to Buy and Sell Real Estate and explain how the short sale process works In a short sale situation, you'll include the CREC-approved Short Sale Addendum and explain the process to your clients.

Brianna is completing the Colorado Brokerage Duties Disclosure to Seller form. Which of the following statements about her situation is true? a. Brianna and the seller have entered into an exclusive right-to-sell listing agreement. b. Brianna is assisting a seller in a REO or non-CREC-approved listing agreement. c. Brianna represents the buyer in a transaction and is meeting with a potential seller for the first time. d. Brianna represents the seller in a transaction and is meeting with a potential buyer for the first time.

b. Brianna is assisting a seller in a REO or non-CREC-approved listing agreement. The Colorado Brokerage Duties Disclosure to Seller form must be completed if the broker is assisting a seller in a REO or non-CREC-approved listing agreement.

Simone is assisting a seller in a transaction that's based on a non-CREC-approved listing agreement. What information must Simone provide when completing the Colorado Brokerage Duties Disclosure to Seller form? a. Brokerage Disclosure of Designated Agency Relationship b. Brokerage Duties Disclosure to Seller c. CREC Listing Agreement Supplement d. Definitions of Working Relationships

b. Brokerage Duties Disclosure to Seller When brokers use a non-CREC-approved listing agreement, they're required to add the Brokerage Duties Disclosure to Seller. This form describes the uniform and additional duties an agent is obligated to perform.

Simone is assisting seller Roman in a transaction. The listing agreement they used was drafted by Roman's attorney, rather than the CREC-approved listing agreement Simone's used to. Simone explains to Roman that she's required to ask Roman to sign an additional disclosure as a result. What form does Simone ask Roman to sign? a. Brokerage Disclosure of Designated Agency Relationship b. Brokerage Duties Disclosure to Seller c. CREC Listing Agreement Supplement d. Definitions of Working Relationships

b. Brokerage Duties Disclosure to Seller When brokers use a non-CREC-approved listing agreement, they're required to add the Brokerage Duties Disclosure to Seller. This form describes the uniform and additional duties an agent is obligated to perform.

How is the broker's commission typically documented on the Colorado closing worksheet? a. Credit to the broker, debit to the buyer b. Credit to the broker, debit to the seller c. Debit to the broker, credit to the buyer d. Debit to the broker, credit to the seller

b. Credit to the broker, debit to the seller Typically, a seller pays the broker's fee, so this is represented on the worksheet by a credit to the broker and a debit to the seller.

How is the Colorado documentary fee recorded on the closing worksheet for an assumed loan? a. Credit to buyer and debit to broker b. Debit to buyer and credit to broker c. Debit to buyer and credit to seller d. Debit to seller and credit to broker

b. Debit to buyer and credit to broker The closing agent collects the documentary fee is collected from the buyer in an assumed loan transaction, so it's debited to the buyer and credited to the broker on the worksheet.

Brokerage firms often employ large numbers of licensees. What CREC-required action helps a brokerage ensure that all associates represent the firm consistently, understand the firm's procedures, and follow federal and state laws when practicing real estate? a. A specified hiring process that ensures employees are honest and know how to follow license law b. Development of an office policy manual covering a mandated set of topics, reviewed periodically with all workers c. Regular oversight and mentorship for all associates from an experienced employing broker d. Weekly sales meetings to reiterate the behaviors required of all associates

b. Development of an office policy manual covering a mandated set of topics, reviewed periodically with all workers CREC rules specify employing broker responsibilities, which include development of an office policy manual that's periodically reviewed with all employees.

Each of these brokers has received an earnest money check to hold for the parties to a transaction. Which one is recording the deposit properly in the brokerage trust fund accounting records? a. David intends to deposit the check tomorrow but records the deposit today so he won't forget. He enters the record in the firm's escrow account journal and the beneficiary's ledger. b. Eric records the earnest money deposit in the firm's escrow account journal and the beneficiary's ledger, including all relevant data and the account balance. c. Jamie enters the date of deposit, the names of the beneficiaries, the purpose, and the amount, and updates the balance in the escrow account journal. She then reconciles the account using the bank reconciliation worksheet. d. Misty records the earnest money deposit in the firm's escrow account journal and the broker's ledger, including all relevant data and the account balance.

b. Eric records the earnest money deposit in the firm's escrow account journal and the beneficiary's ledger, including all relevant data and the account balance.

Which of the following terms is used to describe a review of the assumed boundaries of a property and the location of any improvements on the property in relation to its boundaries? a. Boundary survey b. ILC c. Improvement survey d. Land survey plat

b. ILC The ILC is not an actual survey because it doesn't use any physical measurements of the boundaries.

Your clients want you to host an open house next weekend but you'll be at your son's wedding. Is there a circumstance under which your unlicensed assistant Ava can host the open house? a. Ava can't legally host the open house. b. If the seller consents. c. If you're ill. d. If you're more than 250 miles away.

b. If the seller consents.

Shaun has been the designated broker responsible for all licensed activities at New Horizons Realty for the past 15 years. When his wife gets a new job in another state, Shaun leaves his position. What will happen to New Horizons Realty after his departure? a. It cannot continue as a real estate brokerage, and must cease operations within 90 days or when all current agreements are terminated, whichever comes first. b. It has 90 days during which it can operate with a temporary broker, but it must designate another qualified active broker in order to continue operations as a brokerage. c. It must designate a new qualified active broker to take responsibility for the company's licensed activities, and must do so before Shaun's departure, or it will lose its license. d. Shaun's departure will have no effect, since the designated broker requirement is only relevant to an organization's initial two years in operation.

b. It has 90 days during which it can operate with a temporary broker, but it must designate another qualified active broker in order to continue operations as a brokerage.

What do landlord-tenant laws dictate? a. A maximum number of rental properties a landlord or property manager may oversee b. Lease terms, such as security deposits, notices for termination, and habitability c. Maintenance schedules tenants must adhere to d. Per-room rental rates, based on the area where the property is located

b. Lease terms, such as security deposits, notices for termination, and habitability

William's tenant client has agreed to pay any part of the brokerage firm's fee that isn't paid by the listing brokerage firm, landlord, or sublandlord. Which of the following options will William select in Colorado's Exclusive Tenant Listing Contract to reflect this agreement? a. Listing Brokerage Firm, Landlord, or Sublandlord May Pay. Tenant is NOT Obligated to Pay. b. Listing Brokerage Firm, Landlord, or Sublandlord May Pay. Tenant IS Obligated to Pay. c. Not Applicable. d. Tenant Will Pay.

b. Listing Brokerage Firm, Landlord, or Sublandlord May Pay. Tenant IS Obligated to Pay. William will select the "Listing Brokerage Firm, Landlord, or Sublandlord May Pay. Tenant IS Obligated to Pay." The tenant must pay any portion of the brokerage firm's fee that is not paid by the listing brokerage firm, landlord, or sublandlord.

The standard deed of trust in Colorado allows a _________. a. Judicial foreclosure b. Non-judicial foreclosure c. Statutory right of redemption d. Transfer with assumption

b. Non-judicial foreclosure The standard deed of trust in Colorado grants title to the property to a public trustee, allowing for a non-judicial foreclosure.

A visual inspection and research of a property that assesses the known presence of toxic chemicals and how they've been stored and handled is known as a _______. a. Environmental Property Analysis b. Phase I Environmental Site Assessment c. Phase II Environmental Site Assessment d. Preliminary Assessment for Toxic or Chemical Hazards

b. Phase I Environmental Site Assessment

What activities did the real estate brokers of the investment firm of Conway-Bogue perform that were viewed as the unlawful practice of law? a. Accepting broker commissions b. Preparing and explaining legal documents used in real estate transactions c. Recommending parties in real estate transactions seek legal counsel d. Using one standard form for all real estate transactions

b. Preparing and explaining legal documents used in real estate transactions The Denver Bar Association brought charges against Conway-Bogue due to their preparation and explanation of legal documents used in real estate transactions.

When a contract for deed is used in Colorado, the _____________ must be named as the escrow agent. a. Buyer's broker b. Public trustee c. Seller d. State treasurer

b. Public trustee

Georgia, an employing broker, has been found guilty of misclassifying a worker at her brokerage. What's likely to happen to Georgia? a. She'll be fined for employing an unlicensed person to perform licensed activities. b. She'll be fined for treating an employee as an independent contractor. c. She may face prison time for employing an undocumented worker. d. The brokerage license will be suspended and Georgia will be fined.

b. She'll be fined for treating an employee as an independent contractor. Colorado employers can be fined $5,000 for a first offense of worker misclassification that demonstrates "willful disregard of the law." Subsequent violations are subject to a $25,000 fine.

A Colorado broker would record the receipt of a check for earnest money in which two required accounting records? a. The beneficiary ledger and the broker's ledger b. The beneficiary ledger and the escrow account journal c. The broker's ledger and the beneficiary ledger d. The broker's ledger and the escrow account journal

b. The beneficiary ledger and the escrow account journal

What do provisions in the Exclusive Right-to-Buy Listing Contract say about payment for a survey that the broker orders on behalf of the buyer? a. The brokerage firm is to advance the funds to the buyer. b. The buyer agrees to pay for the cost of the survey promptly when due. c. The buyer is to pay for the survey in advance with a certified check. d. The survey will be paid at closing.

b. The buyer agrees to pay for the cost of the survey promptly when due. Per the Colorado exclusive buyer contract, brokers should only obtain or order services or products that the buyer has authorized and agreed to pay for promptly when due.

Which of the following is addressed in the listing contract regarding earnest money? a. The maximum amount the seller will accept b. The minimum amount the seller will accept c. When the earnest money will be deposited d. Whether the earnest money can be deposited in an interest-bearing account

b. The minimum amount the seller will accept

Brokerage relationships are established by employment contracts. In Colorado, the employment contract is between ______________. a. The licensee and the principal b. The principal and the brokerage firm c. The principal and the employing broker d. The principal, the licensee, and the employing broker

b. The principal and the brokerage firm

What's the seller's obligation to provide due diligence documents requested by the buyer on a contract? a. The seller must provide all available documents before the Due Diligence Documents Delivery Deadline. b. The seller must provide all the documents before the Due Diligence Documents Delivery Deadline. c. The seller must provide all the documents prior to the scheduled closing date. d. The seller must provide all the documents within 30 days of the request.

b. The seller must provide all the documents before the Due Diligence Documents Delivery Deadline.

Which statement is true about the retention of publicly available records? a. Only state public records, not county or local records, should be retained. b. There's no need to retain public records in a broker's files. c. They need only be retained for one year after a transaction closes. d. They should also be retained for four years along with a broker's records.

b. There's no need to retain public records in a broker's files.

When must the Colorado Brokerage Duties Disclosure to Seller form be completed? a. When a broker and a seller have entered into an exclusive right-to-sell listing agreement b. When a broker is assisting a seller in a REO or non-CREC-approved listing agreement c. When a broker meets with a potential buyer for the first time when representing the seller d. When a broker representing the buyer meets with a potential seller for the first time

b. When a broker is assisting a seller in a REO or non-CREC-approved listing agreement The Colorado Brokerage Duties Disclosure to Seller form must be completed if the broker is assisting a seller in a REO or non-CREC-approved listing agreement.

A Colorado buyer is purchasing a home for $300,000 and financing $250,000. How much will the buyer owe in Colorado documentary fees? a. $25 b. $250 c. $30 d. $300

c. $30 Colorado statute requires payment of a documentary fee equal to $0.01 per $100 of consideration (i.e., sales price) if consideration is over $500 for all real property transfers.

Licensees should obtain annual aggregate errors and omissions coverage of no less than what amount? a. $150,000 b. $1 million c. $300,000 d. $500,000

c. $300,000

How soon after a Notice of Election and Demand is recorded can a foreclosure sale be held for agricultural property in Colorado? a. 110 days b. 125 days c. 215 days d. 230 days

c. 215 days

Hannah's license renewal date is just a few months away. How many hours of continuing education does Hannah need to document? a. 12 b. 15 c. 24 d. 30

c. 24

Closing agent Dmitri has recorded the prorated property tax on the closing statement. The closing date is October 12. When seller's broker Chad reviews his client's closing statement for accuracy, which of these should he confirm for this proration? a. A credit for his seller in the amount of taxes for the time period of 281 days. b. A credit for his seller in the amount of taxes for the time period of 79 days. c. A debit for his seller in the amount of taxes for the time period of January 1 through October 11. d. A debit for his seller in the amount of taxes for the time period of January 1 through October 12.

c. A debit for his seller in the amount of taxes for the time period of January 1 through October 11. Property tax is an accrued expense in Colorado, so it's a debit for the seller. The seller is responsible for the taxes from January 1 through October 11, since the buyer owns the day of closing.

You've won your first listing! You're ready to sign a listing contract with your new client. The contract you fill out with your client is ______. a. A listing agreement your personal attorney created for your use b. A standard form provided by the local association of REALTORS® that you've customized with your firm name and logo c. A standard form you downloaded from the Colorado Real Estate Commission's website d. One you developed yourself, following CREC guidelines for listing contracts

c. A standard form you downloaded from the Colorado Real Estate Commission's website

A broker would record the deposit of funds to cover bank charges and checking supplies in the escrow account journal and which other required Colorado accounting record? a. Bank reconciliation worksheet b. Beneficiary ledger c. Broker's ledger d. Monthly expense report

c. Broker's ledger This is the primary purpose of the broker's ledger. This entry would also be made in the escrow account journal, which records all funds coming into and going out of the escrow account.

Mitch is assisting his client in the sale of an REO property. Which form must accompany the listing agreement Mitch and his client have signed? a. Brokerage Disclosure to Seller (REO) b. Brokerage Disclosure to Seller (Sale by Owner) c. Brokerage Duties Disclosure to Seller d. Dual Status Disclosure

c. Brokerage Duties Disclosure to Seller

Reserves for tax and insurance payments are deposited with the lender for most mortgage loans. How are these reserves transferred from seller to buyer in a Colorado loan assumption? a. Buyer writes a check outside closing to seller b. Credit to buyer and debit to seller c. Credit to seller and debit to buyer d. Debit to buyer and credit to broker, which isn't shown

c. Credit to seller and debit to buyer In order to refund these reserves to the seller and set up the buyer's reserve accounts, the balance in the reserve accounts is credited to the seller and debited to the buyer.

Mr. Murphy lives in one unit of the duplex he owns and is seeking a tenant for the other unit. Which of these actions is Mr. Murphy allowed to take? a. He can advertise for a non-smoking, non-drinking, Christian tenant. b. He can refuse to rent the unit to Joe because Joe says he's a Mexican immigrant, and Mr. Murphy doesn't like Mexicans. c. He can refuse to rent the unit to River and her two-year-old daughter Breeze because he detests children. d. He can refuse to rent to Hilary, who is blind and uses a service dog, because he has a "no pets" policy.

c. He can refuse to rent the unit to River and her two-year-old daughter Breeze because he detests children. Colorado fair housing law prohibits Mr. Murphy from discriminating against any protected class when he's renting out a unit in his owner-occupied home, but the law does make an exemption for familial status. He can discriminate against River and Breeze.

Ernesto, a licensee, is working with Bunny, a buyer. Along the way, Ernesto has presented offers to and from Bunny, kept her fully informed about the transaction, kept Bunny's reason for buying confidential, and accounted for all money Bunny entrusted to him. What can you say for sure about Ernesto, based on his actions? a. He's acting as Bunny's agent. b. He's a one-person brokerage. c. He's performing uniform duties for Bunny. d. He's representing both Bunny and the seller in this transaction.

c. He's performing uniform duties for Bunny. The actions Ernesto performed are all uniform duties. He could be Bunny's agent, but since we don't know if he performed any additional duties for her, he may instead be her transaction-broker.

Camilla's working as a transaction-broker with Jade, who's selling her two-bedroom condo. Which of these should Camilla present with the Brokerage Disclosure to Buyer form? a. All buyers Camilla works with, regardless of the property they're interested in. b. Daisy, who's looking for an apartment to rent c. Henry and Lisa, potential buyers who expressed interest in Jade's condo d. Jade, the seller she's working with

c. Henry and Lisa, potential buyers who expressed interest in Jade's condo Camilla should present the Brokerage Disclosure to Buyer to Henry and Lisa so they're aware that she's representing Jade and not representing them.

The Listing Contract Amend-Extend allows the client and broker to change the termination date of a listing contract. Without using the "Additional Provisions" section of the contract, what other components of a listing contract can be changed on this agreement? a. Compensation b. Designated agent c. Listing price d. Marketing plan

c. Listing price

What's one reason a seller can't modify existing lease terms without the buyer's consent once a commercial property is under contract in Colorado? a. It's illegal to modify lease terms once a property is under contract. b. Lease terms may only be modified within the first 30 days after the lease is signed. c. Modification may change the buyer's expected income from the property. d. The property is considered to be the buyer's as soon as the contract is signed.

c. Modification may change the buyer's expected income from the property. Modifying an existing lease may affect the buyer's bottom line, so buyers need to provide written consent for any lease changes once a commercial property is under contract.

Under Colorado law, when does a landlord have the right to enter the leased premises? a. Any time b. In an emergency c. Never, unless otherwise stated in the lease d. Two days prior to the lease expiration

c. Never, unless otherwise stated in the lease

Brian's been working as an independent broker for a few years. He and some friends decide to become business partners and incorporate as a brokerage. They plan to start relatively small, with just a few associated brokers, but their long-range plans include dominating the local market. How many qualified brokers must they designate to begin, and how many will they need to designate in order to maintain the organization's broker license when they expand? a. Each company officer must be a designated qualified broker, so it depends on how many officers the corporation has at any given time. b. One to begin, and another one for every 10 employed brokers in the organization c. One to begin, and still one after they expand d. Two to begin, and two more if they expand beyond 30 employed brokers in the organization

c. One to begin, and still one after they expand

What form(s) should be used if a Colorado seller is offering a property for sale and also for lease? a. Both the Exclusive Right-to-Sell and the Exclusive Right-to-Lease b. Only the Exclusive Right-to-Lease c. Only the Exclusive Right-to-Sell d. The Exclusive Right-to-Sell with an addendum related to the option to lease.

c. Only the Exclusive Right-to-Sell Only the right-to-sell agreement is needed as the contract includes details should the seller also wish to offer the property for lease.

Which of the following tasks might be performed by a landlord's agent, but not by a transaction-broker, per the Colorado Brokerage Disclosure to Tenant form? a. Disclose any known adverse material facts to the landlord b. Prepare and convey written offers c. Promote the landlord's interest with the utmost good faith, loyalty, and fidelity d. Use reasonable skill and care

c. Promote the landlord's interest with the utmost good faith, loyalty, and fidelity A landlord's agent must promote the landlord's interest, while a transaction-broker assists the landlord with the transaction, but doesn't advocate for the landlord's interests.

Ongoing lease contracts, bids, invoices, and service provider billings are examples of _________ files that Colorado brokers must retain for at least four years. a. Commission b. Listing c. Property management d. Sales

c. Property management Colorado brokers must retain property management files for four years, and include items like lead-based paint disclosures, legal notices, and documentation of commissions earned.

When a seller-financed transaction in Colorado uses the contract for deed, the ______ must inform the county treasurer that the public trustee will be paying the property taxes, by filing a notice of transfer form. a. Borrower b. Public trustee c. Seller d. Settlement agent

c. Seller One of the requirements with a contract for deed in Colorado is that the seller is responsible for filing a notice of transfer form with the county treasurer regarding payment of the property taxes.

What type of relationship with a seller does the Colorado Exclusive Right-to-Sell Listing Contract allow a licensee to establish without using an addendum? a. Exclusive buyer agency b. Exclusive seller agency c. Seller agency or transaction-brokerage d. Transaction brokerage

c. Seller agency or transaction-brokerage

Dean ensures that more than one person in his Colorado brokerage is responsible for maintaining escrow accounting records and he uses an internal audit team to help him review all records on a monthly basis. He is practicing ________________________. a. Creating leverage b. Ensuring good funds c. Separation of duties d. Staying within his scope of expertise

c. Separation of duties

Niko has decided a career in real estate is just what she wants, so she's preparing herself to take the licensing exam and get her broker's license. She knows there's a bunch of education involved, but what other detail must she take care of when submitting an application for a broker's license? a. She must pass her 21st birthday. b. She must provide the Colorado Real Estate Commission with three professional references, not from family or relatives. c. She must submit her fingerprints to the Colorado Bureau of Investigation for a criminal background check. d. She must take an oath of honesty and integrity.

c. She must submit her fingerprints to the Colorado Bureau of Investigation for a criminal background check.

Edwina has just transferred her client's earnest money funds to the closing company from her brokerage's trust account to hold until the closing date. Where will she record this disbursement? a. She'll make a note of the date she transferred the funds and the name of the closing company on her copy of the original earnest money check. b. She'll record the date, check number, payee name, purpose, and amount in the beneficiary's ledger and the broker's ledger and update the balances. c. She'll record the date, check number, payee name, purpose, and amount in the trust account journal and beneficiary ledger, and update the balances. d. She'll use the earnest money receipt and a copy of the closing statement from the closing company as the record of disbursement in the transaction file.

c. She'll record the date, check number, payee name, purpose, and amount in the trust account journal and beneficiary ledger, and update the balances.

Megan has started working with Linda, a prospective buyer searching for a new condo. Megan and Linda haven't yet signed an exclusive employment contract. Megan is also assisting Bruno, a buyer, in another transaction. Bruno has Nancy's property, which Nancy listed with Megan, under contract. With which of these consumers is Megan acting as a transaction-broker? a.Megan is presumed to be the designated agent, not a transaction-broker, for all of these consumers. b. She's a transaction-broker for Bruno and Nancy; Linda is Megan's customer only. c. She's a transaction-broker for Linda, Bruno, and Nancy. d. She's a transaction-broker for Linda; she's a dual agent for Bruno and Nancy.

c. She's a transaction-broker for Linda, Bruno, and Nancy. Megan is assumed to be a transaction-broker for Linda, with whom she hasn't yet signed an employment contract. She was originally Nancy's listing agent, but she's now working with both parties in the transaction, so she's become transaction-broker to both

Molly's an individual broker at a one-person firm who's currently working with five sellers and several buyer clients. She receives an offer for one of her listings from a buyer who's working with another agent. She presents the offer to her seller, and they discuss the benefits and drawbacks of the offer. Based on Molly's actions, what's her role in this situation? a. Designated agent b. Dual agent c. Single agent d. Transaction-broker

c. Single agent Molly's a single agent for her seller. She's not a designated agent because she works at a one-person firm, and her actions show that she's acting as the seller's agent, not as a transaction-broker.

Along with copies of the signed Contract to Buy and Sell, the closing instructions, the lender's disclosures, and the title documents, what other item will a Colorado closing agent need for closing? a. Listing agreement and buyer's agency agreement b. Release of liability from buyer and seller c. Tax certificate c. The appraisal report

c. Tax certificate The closing agent needs to obtain the tax certificate from the county treasurer, as well as prepare the final closing statements for each party.

Seller Carmen's HOA dues are due on February 1 and cover the upcoming month. Since closing is scheduled for February 9, how will the HOA dues she paid for February be prorated? a. She'll owe the buyer, which appears on the closing statement as a credit to the seller and a debit to the buyer. b. She'll owe the buyer, which appears on the closing statement as a debit to the seller and a credit to the buyer. c. The buyer will owe her at closing, which appears as a credit to the seller and a debit to the buyer. d. The buyer will owe her at closing, which appears as a debit to the seller and a credit to the buyer.

c. The buyer will owe her at closing, which appears as a credit to the seller and a debit to the buyer. If the seller has paid for an expense that will cover a period of time when the buyer owns the property, it's a prepaid expense which appears on the closing statement as a credit to the seller and a debit to the buyer.

According to Colorado's warranty of habitability, who is responsible for keeping a rental property safe, clean, and well-maintained? a. Both parties b. The landlord c. The lessee d. The lessor

c. The lessee The lessee (also known as the tenant) is responsible for keeping a rental property safe, clean, and well-maintained.

If the listing broker asks the title company to complete the legal documents for a transaction, who pays the title company for these services? a. The buyer b. The buyer's broker c. The listing broker d. The seller

c. The listing broker Even if a broker delegates document preparation to another party, these fees can't be charged back to the buyer or seller.

Which of the following is true regarding selection of title insurance and/or closing company in Colorado? a. The buyer is required to select the title/closing company. b. The lender assigns the title/closing company. c. The party that selects the title insurance company pays for the owner's title policy. d. The seller's broker selects the title/closing company.

c. The party that selects the title insurance company pays for the owner's title policy.

A broker is completing the Colorado Real Estate Commission-approved Counterproposal form for a seller client. Which of the following parts of the form should the broker complete? a. Both the terms the client wants to accept and those the client wants changed b. Neither the terms the client wants to accept nor those the client wants changed c. The terms in the original offer that the client wants changed d. The terms in the original offer that the client wants to accept

c. The terms in the original offer that the client wants changed

What does it mean when we say that a closing worksheet is balanced? a. The buyer and seller columns together equal the broker columns. b. The subtotal of each of the six columns is the same. c. The total of each column in a pair (seller, buyer, and broker) is the same. d. The total of each of the six columns is the same.

c. The total of each column in a pair (seller, buyer, and broker) is the same.

You're calculating the prorated property taxes for your client's estimated closing statement. The day of closing is March 10. Which of these is the appropriate method for calculating this proration in Colorado? a. Using a 360-day year, you calculate the daily rate, then apply that rate to 69 days the property was owned by the seller. b. Using a 360-day year, you calculate the daily rate, then apply that rate to 70 days the property was owned by the seller. c. Using a 365-day year, you calculate the daily rate, then apply that rate to 68 days the property was owned by the seller. d. Using a 365-day year, you calculate the daily rate, then apply that rate to 69 days the property was owned by the seller.

c. Using a 365-day year, you calculate the daily rate, then apply that rate to 68 days the property was owned by the seller. Colorado uses a calendar year of 365 days and the actual number of days in the month when calculating prorations. The buyer traditionally owns the day of closing, so the seller owns the property for 68 days in this example.

Broker Dill accidentally let his license expire. Now he needs to figure out what he's supposed to do to reinstate his license. Will the commission rules help him do this? a. No, commission rules are regulations that describe the real estate commission duties, and don't apply to licensing requirements. b. No, commission rules govern the actions of consumers and businesses, not individual licensees. c. Yes, commission rules are written to help licensees interpret and comply with license law. d. Yes, the commission rules will give Dill a list of approved education providers and include links to the application he should complete.

c. Yes, commission rules are written to help licensees interpret and comply with license law.

If you're an associate broker in Colorado, and you move to another brokerage, who's responsible for informing the commission that your current association will terminate? a. This is your current employing broker's responsibility b. This is your new employing broker's responsibility c. You and your current employing broker are jointly responsible d. You are solely responsible for notifying the commission

c. You and your current employing broker are jointly responsible

You're an associate broker at XYZ Realty. When you receive an earnest money check for one of your listings and deposit it in the brokerage trust account, what's true about those funds? a. CREC is responsible for them. b. The state treasurer is responsible for them. c. Your employing broker is responsible for them. d. You're still responsible for them.

c. Your employing broker is responsible for them. Your employing broker bears the ultimate responsibility for the funds in brokerage trust accounts, and for maintaining the corresponding transaction records. If you were an independent broker, it would be your responsibility.

According to Colorado law, which of the following choices best reflects the type of property requiring a lead-based paint disclosure? a. A property in which any part was completed before 1978 b. A property in which the occupancy certificate was issued before 1978 c. A property that was completed in its entirety before 1978 d. A property that was constructed or in which the building permit was issued before 1978

d. A property that was constructed or in which the building permit was issued before 1978 Any of these choices are correct, however this language in the CBS - Residential makes one choice better than the rest, "Unless exempt, if the Property includes one or more residential dwellings constructed or a building permit was issued prior to January 1, 1978, for the benefit of Buyer, Seller and all required real estate licensees must sign and deliver to Buyer a completed Lead-Based Paint Disclosure (Sales) form on or before the Lead-Based Paint Disclosure Deadline."

Employing broker Saul has agreed to hire Lisa as an independent contractor. Lisa and Saul review the contract together before signing. What clause is required by Colorado law? a. A compensation clause identifying the exact hourly rate Lisa will earn. b. A description of the quality standard Lisa must meet in order to maintain employment. c. A place of business clause identifying the location where Lisa must conduct the bulk of her work. d. A statement that Lisa isn't entitled to unemployment compensation from Saul.

d. A statement that Lisa isn't entitled to unemployment compensation from Saul.

Which of these transactions should use Colorado's Contract to Buy and Sell Real Estate (Income - Residential)? a. A four-unit property that has office and retail tenants b. A single-family property that the buyer will occupy as a primary residence c. A single-family property that will be occupied by the buyer who plans to rent out the finished basement d. A tri-plex that has tenants occupying two units

d. A tri-plex that has tenants occupying two units The Contract to Buy and Sell Real Estate (Income - Residential) is used when the residential property subject to the offer is income-producing, that is, it has tenants.

Bertha, a Colorado broker, is notified by CREC that a former client has filed a complaint against her. Which of these actions is part of the required process in a CREC investigation? a. Bertha must ask her employing broker to provide documentation of all her real estate activities related to the complaint. b. Bertha must cease all real estate activities until the commission's investigation is complete. c. Bertha must participate in an arbitration program with the client to resolve the dispute. d. Bertha must submit a response to the complaint in writing and include specific answers to the allegations.

d. Bertha must submit a response to the complaint in writing and include specific answers to the allegations. CREC uses a defined process to investigate complaints. Rule 6.25.A requires licensees to respond in writing when notified of a complaint against them. The response must include specific answers and factual information related to the complaint.

Greg is opening a trust account for Mountain Valley Realty. Which of these is NOT an action Greg needs to take? a. He must include the word "escrow" or "trust" in the account name. b. He must label the account according to the purpose of the funds (such as "sales"). c. He must open it at an FDIC-insured institution. d. He must register the account as a trust or escrow account with CREC.

d. He must register the account as a trust or escrow account with CREC. Trust accounts must be opened at an FDIC-insured institution. The name of the account must include "escrow" or "trust" and a label describing the type of trust funds being held. Trust funds don't need to be registered with CREC.

Ernie is representing Carla, his buyer client, at closing. What's Ernie's responsibility regarding the closing statements? a. He must deliver a copy of the signed buyer's closing statement to the seller. b. He must deliver a copy of the signed seller's closing statement to his client. c. He must verify the accuracy of both closing statements. d. He must verify the accuracy of his client's closing statement.

d. He must verify the accuracy of his client's closing statement.

A Colorado homeowner is paying property taxes in two payments. If the second payment is NOT made by ______, then interest accrued starting ______ must also be paid. a. April 30; May 1 b. February 28; May 1 c. June 15; June 16 d. June 15; May 1

d. June 15; May 1

Colorado broker Shaun receives a call from Terry, who's interested in a property Shaun listed for his seller client. Shaun asks Terry to sign the Brokerage Disclosure to Buyer form he sends electronically. Before he sends the form, which of these actions should Shaun take? a. Enter the amount of compensation Terry will owe Shaun as a result of their relationship. b. Enter the seller's name and address in the appropriate fields of the form. c. Mark the appropriate box on the form indicating that Shaun doesn't have a personal interest in the property. d. Mark the appropriate box on the form to notify Terry that he's from a multiple-person firm.

d. Mark the appropriate box on the form to notify Terry that he's from a multiple-person firm. In the Colorado Brokerage Disclosure to Buyer form, brokers must identify themselves as being from a multiple-person firm or a one-person firm.

Who must fill out the optional Green Disclosure form in order to list a property as a green home on the MLS? a. Buyer b. Certified Home Inspector c. Licensee d. Seller

d. Seller

The seller would like to convey a large roll of chicken wire in the sale of his land to a buyer. The buyer has no use for chicken wire, so he doesn't want to take it. How should this be expressed in the initial offer? a. Draw up a separate Exclusions Addendum and list the chicken wire among the other things the buyer doesn't want. b. In the Exclusions section, specifically state that the seller should remove the chicken wire before the closing date. c. In the Inclusions section, specifically state that the chicken wire is not included. d. Simply omit the chicken wire from the list of inclusions.

d. Simply omit the chicken wire from the list of inclusions. The chicken wire is still on the roll making it personal property. The buyer doesn't want the personal property to remain, so it doesn't need to be addressed in the buyer's initial offer.

A Colorado property is located in a special taxing district. Which of these actions can a buyer take when learning this information? a. File paperwork with the district to have the lien removed from the property b. File paperwork with the district to have the property removed from the special tax district c. Require the seller to pay the remaining taxes due on or before the transaction closing date d. Terminate the contract by the record title deadline

d. Terminate the contract by the record title deadline Buyers may terminate a contract upon learning that the property is located in a special tax district. Appropriate written notice must be provided by the record title deadline.

In their Colorado sales contract, a buyer and seller agree that if possession is not given on the closing date, the seller will pay a daily fee of $90 until the seller delivers possession of the property. What other consequences could the seller face under the terms of this contract? a. The buyer could cancel the sales contract. b. The buyer could sue the seller for specific performance and receive a refund of his earnest money. c. The seller could be forced to refund the buyer's earnest money. d. The seller is subject to eviction.

d. The seller is subject to eviction. If the seller doesn't deliver possession of the property as dictated by the contract, the seller is subject to eviction and must pay the seller a specified daily rate until possession is delivered.

Who is responsible for finding out if a loan is assumable in the sale of industrial property? a. The buyer's agent when the buyer asks b. The buyer's agent, when the buyer client first expresses interest in the property c. The buyer, upon making an offer d. The seller's agent when the property is listed

d. The seller's agent when the property is listed When the seller's agent lists the property, part of his responsibility is to collect information from the seller's lender (with permission) regarding the loan, including whether or not it's assumable, and if so, the terms and process for assumption.

In a residential transaction, who's responsible for completing the CREC-approved Square Footage Disclosure form provided to the buyer and seller? a. The appraiser b. The buyer's broker c. The home inspector d. The seller's broker

d. The seller's broker Rule 6.11 requires the listing broker to make this disclosure using the CREC-approved Square Footage Disclosure form. The buyer and seller sign to acknowledge receipt.

What happens if a Colorado property's air conditioning fails ten days before closing? a. The buyer must bring suit if the seller refuses to repair/replace b. The buyers are responsible for repair/replacement c. The parties must negotiate how the failure will be handled d. The sellers are responsible for repair/replacement

d. The sellers are responsible for repair/replacement

Broker Katie has just met Rhonda, who's asking her about renting a unit in landlord Jan's building. Katie presents her with a completed Brokerage Disclosure to Tenant form and asks her to sign it. What information is NOT disclosed to Rhonda on this form? a. That the disclosure form isn't a contract b. The possible working relationships between Katie and Jan or Rhonda c. The tasks Katie intends to perform for Rhonda, who is Katie's customer d. The uniform and additional duties Katie performs as Jan's representative

d. The uniform and additional duties Katie performs as Jan's representative The Brokerage Disclosure to Tenant form ensures that Rhonda understands that Katie is representing Jan's interests, not Rhonda's, so it discloses all this information except for listing the uniform and additional duties Katie performs for Jan.

How many days does a Colorado broker have to deposit earnest money funds into a trust account? a. Five b. One c. Seven d. Three

d. Three

In Colorado, who usually acts as the closing agent? a. Broker b. Closing attorney c. Lender d. Title company representative

d. Title company representative A title company representative usually performs the closing services in Colorado.

Shelly has filed a discrimination complaint with the Colorado Civil Rights Division. Her next step is to file a court action, which she must complete within __________ year(s) of the date of the occurrence. a. Five b. One c. Three d. Two

d. Two Shelly has up to one year from the last discriminatory incident to file a formal complaint with CCRD, and two years from the last discriminatory incident to file a court action.

When is the Notice of Cancellation attached to a foreclosure sales contract? a. When the broker submits the contract to the lender. b. When the buyer is given the contract. c. When the contract is notarized. d. When the contract offer is submitted to the seller.

d. When the contract offer is submitted to the seller.

When representing a Colorado buyer client at closing, you notice a debit to your buyer on the closing statement for a tax certificate. Is this a valid fee? a. No. The tax certificate is a legal document the buyer's broker must pay for, according to CREC rules. b. No. The tax certificate is the seller's guarantee that property taxes have been paid, and should be shown as a debit to the seller. c. Yes. The tax certificate is a required federal disclosure the lender must provide, and for which the borrower pays. d. Yes. The tax certificate is obtained by the closing agent from the county treasurer, and the buyer pays for it.

d. Yes. The tax certificate is obtained by the closing agent from the county treasurer, and the buyer pays for it.

To whom is the earnest money deposit debited on the Colorado closing worksheet? a. Broker b. Buyer c. Lender d. Seller

a. Broker The earnest money is a broker debit, because it's a deposit into the broker's escrow account.

Myrtle is newly licensed and is eager to be the best broker ever. She knows she's supposed to renew her license every three years, and that she has to complete a certain amount of continuing education. She's a little confused about that part and asks her employing broker what she should do. What should her employing broker tell her? a. "You can choose from four options, but doing the Annual Commission Update course plus 12 hours of electives is the preferred one." b. "You can do four hours annually, which meets the requirement with only 12 hours of CE each cycle." c. "You can retake any of the pre-licensing courses over again, as long as you've got at least 24 hours of CE at the end of the three-year cycle." d. "You can take the 24-hour Broker Reactivation course every year, or you can retake and pass the state portion of the licensing exam."

a. "You can choose from four options, but doing the Annual Commission Update course plus 12 hours of electives is the preferred one."

Licensees should obtain no less than how much errors and omissions coverage per claim? a. $100,000 b. $25,000 c. $50,000 d. $75,000

a. $100,000

How far before errors and omissions insurance premiums are due will the Real Estate Division notify licensees about the required terms and conditions of their policy? a. 30 days b. 60 days c. Six months d. Three months

a. 30 days

Which of the following best describes the client's liability regarding the agent's actions? a. A client is liable for the agent's actions if the client directed or approved of the action. b. The client is always liable for the agent's actions. c. The client is never liable for their agent's actions. d. The client is only liable for disclosure-related actions of their agent.

a. A client is liable for the agent's actions if the client directed or approved of the action.

In Colorado, what's the effect of a special district tax on property owners within the district? a. A lien is placed against their property and remains in place until it's repaid. b. Property owners must increase their homeowners' insurance. c. The property owners can't take advantage of the additional services until they pay the tax. d. The special district tax reduces their property taxes.

a. A lien is placed against their property and remains in place until it's repaid. In Colorado, a special district tax creates a Special Improvement District (SID) lien against the property. The lien remains on the property until the property owner pays it in full.

Marvin is a transaction broker for a tenant. As part of the terms of the Colorado Exclusive Tenant Listing Contract, which of the following duties must he perform? a. Account in a timely manner for all money and property received as part of the transaction. b. Based on information known to the broker, counsel the tenant as to any material benefits or risks associated with the transaction. c. Promote the tenant's interest with the utmost good faith, loyalty, and fidelity. d. Seek a price and terms that are acceptable to the tenant.

a. Account in a timely manner for all money and property received as part of the transaction. As part of their uniform duties, both tenant's agents and transaction-brokers have a duty to account in a timely manner for all money and property they receive. A tenant's agent must perform the three additional duties presented here.

What's the purpose of the Green Disclosure form in Colorado? a. Allows the seller, and the seller's agent, to market the property as a green property b. Discloses that the property has been ENERGY STAR certified c. Discloses the presence of a green belt adjacent to the property d. Identifies the presence or absence of wetlands or endangered animals within a specified proximity of the property

a. Allows the seller, and the seller's agent, to market the property as a green property The Green Disclosure form in Colorado is used to market the property as a green property, and list it as such on the MLS. This disclosure is optional, but required in Colorado to market a home as green.

In Colorado, if your property taxes for the year are more than $25 and you elect to pay them in one payment, when is that one payment due? a. April 30 b. August 1 c. February 15 d. June 15

a. April 30 In Colorado, property tax amounts greater than $25 may be paid in one payment due April 30. It may also be paid in two payments, the first of which is due by the last day of February, and the second of which is due by June 15.

Which party is qualified to advise a buyer about seller-financed transactions in Colorado, without possessing a Colorado mortgage loan originator license? a. Attorney b. Closing agent c. Employing broker with more than 10 years' experience d. Seller's broker

a. Attorney

Which of the following must be included in the Colorado sales contract under "Property"? a. Both the property's legal description and its mailing address are required. b. Either the property's legal description or its mailing address is required. c. Only the property's legal description is required. d. Only the property's mailing address is required.

a. Both the property's legal description and its mailing address are required.

Lance, a seller, isn't looking for representation, just someone to help him market his home and comply with all legal requirements. What should you do relative to the listing contract? a. Check the box for transaction-broker at the top of the exclusive right-to-sell contract. b. Create a new listing contract outlining just those transactional duties you'll perform. c. Decline to work with him because his needs aren't legal. d. Forego the use of any contract since you'll only be performing ministerial tasks.

a. Check the box for transaction-broker at the top of the exclusive right-to-sell contract. You can use the Exclusive Right-to-Sell Listing Contract as a transaction-broker. You'll just need to check the appropriate box at the top of the first page of the form.

What must a title company have in order to legally perform closings? a. Closing Instructions b. Earnest money c. Loan documents d. The Closings Authorization form

a. Closing Instructions

What CREC-approved form can a broker use to collect information regarding homeowners associations in Colorado? a. Common Interest Community Checklist for Brokerage Firm b. Disclosure of Common Interest Communities c. HOA Information Sheet d. Homeowners Association Notice

a. Common Interest Community Checklist for Brokerage Firm CREC has approved the Common Interest Community Checklist for Brokerage Firm to assist a broker in collecting pertinent information regarding properties within a common interest community like an HOA.

In the case of periodic tenancy or tenancy at will, the terminating party must sign and deliver written notice to the other party before the termination date per specific guidelines. Which of the following is an acceptable way for a landlord to deliver a termination notice to a tenant if the tenant isn't home at the time of the delivery? a. Conspicuously post the notice on the front door of the property b. Deliver to the tenant's neighbor c. Give the notice to any child who resides at the property d. Send the notice via certified mail through the U.S. Postal Service

a. Conspicuously post the notice on the front door of the property It's acceptable to conspicuously post the notice on the property if the tenant isn't present at the time of the delivery.

It's Monday, and property manager Ariadne has accepted a check from a new tenant, who signed a lease last Saturday, for the security deposit. What does Ariadne need to do with the check? a. Deposit it into the security deposit trust fund account by Friday b. Deposit it into the single brokerage trust account by the end of the day Wednesday c. Hold it uncashed until the tenant's lease terminates d. Submit it, with all other security deposits, to the property owner within 10 business days

a. Deposit it into the security deposit trust fund account by Friday

When you're calculating the amount of property taxes that will be prorated at closing, which of these is the appropriate method? a. Determine a daily rate based on a calendar year of 365 days, then apply the rate to the number of days the seller owns the property (buyer owns day of closing). b. Determine a daily rate based on a calendar year of 365 days, then apply the rate to the number of days the seller owns the property (seller owns day of closing). c. Determine a daily rate based on a statutory year of 360 days, then apply the rate to the number of days the seller owns the property (buyer owns day of closing). d. Determine a daily rate based on a statutory year of 360 days, then apply the rate to the number of days the seller owns the property (seller owns day of closing).

a. Determine a daily rate based on a calendar year of 365 days, then apply the rate to the number of days the seller owns the property (buyer owns day of closing). In Colorado, a calendar year is traditionally used for prorations, and the buyer owns the property all day on the day of closing.

Samantha helped her neighbor sell his home by assisting with negotiations. She received no compensation for her assistance, however. Based on this one transaction, Samantha _______. a. Doesn't need a real estate license b. Must be a lawyer c. Must have a broker license d. Must have at least a sales agent license

a. Doesn't need a real estate license Remember that compensation is one main factor in the requirements for licensure.

What's true about equity skimming in Colorado? a. It's a felony b. It's a misdemeanor c. It's an ethical violation d. It's legal

a. It's a felony

Rachel's looking for a roommate to share her Fort Collins home. She'd like to rent to a single woman with a young child, just like she is, since she feels it would be an efficient arrangement. What's true about this situation? a. Rachel may select a roommate based on her preference for a single woman with a young child, but she may not advertise for a tenant that way. b. Rachel will be guilty of housing discrimination based on familial status. c. Rachel will be guilty of housing discrimination based on marital status, which is a protected class under federal and state law. d. This would be acceptable based on the Mrs. Murphy exemption under federal law, but it's illegal under the Colorado Fair Housing Act.

a. Rachel may select a roommate based on her preference for a single woman with a young child, but she may not advertise for a tenant that way.

A Colorado buyer reviews the seller's counteroffer and agrees provided the closing date is changed. What is the BEST course of action to respond? a. The buyer's agent should complete a new CBS that reflects the seller's counterproposal but changes the closing date to reflect buyer's proposed date. b. The buyer's agent should verbally ask the seller's agent to send over a new CBS. c. The buyer should return the Counterproposal form back to the seller and ask them to complete a new Counterproposal with the closing change. d. The buyer should sign the seller's Counterproposal form and include a separate signed amendment with the change to the closing date.

a. The buyer's agent should complete a new CBS that reflects the seller's counterproposal but changes the closing date to reflect buyer's proposed date. Although you could complete a new Counterproposal form to counter the seller's counter offer, this might get confusing. It's a better practice to complete a new CBS that reflects all the terms previously agreed to, plus the change the client wants.

A broker is representing a buyer with the purchase of a 640-acre dairy farm. Which party should prepare the purchase contract for this transaction? a. The buyer's attorney b. The buyer's broker c. The seller's accountant d. The seller's broker

a. The buyer's attorney The buyer's attorney should prepare the contract, and the seller's attorney should review it. For complicated transactions involving a business and real estate, the real estate licensee isn't the best qualified person to complete the contract.

When it comes to Colorado escrow/trust funds, which of the following is a true statement? a. The funds belong to the beneficiary. b. The funds belong to the fiduciary. c. They may be combined with other brokerage funds. d. They may not be placed in an interest-bearing account.

a. The funds belong to the beneficiary.

Which of these situations would require Thelma, a licensee, to attach the Licensee Buy-Out Addendum to the purchase contract? a. Thelma agrees to buy a seller's property to facilitate the seller's purchasing another property that will earn Thelma a commission. b. Thelma is acting as the buyer's agent, and the seller in the transaction is also a real estate licensee. c. Thelma is purchasing a property for her personal use, and is acting as her own agent in the transaction. d. Thelma is the listing agent for a property. The buyer she finds is also a real estate licensee who's purchasing the property for personal use.

a. Thelma agrees to buy a seller's property to facilitate the seller's purchasing another property that will earn Thelma a commission. When Thelma agrees to purchase a property in order to ensure that those sellers can successfully close on another property, and closing on that other property will earn her a commission, she'll need to use the Licensee Buy-Out Addendum.

Why is a Notice of Cancellation submitted along with an offer to purchase a Colorado property that is in foreclosure? a. To give notice of the seller's right to cancel the purchase contract. b. To give notice that the homeowner may stop the foreclosure. c. To give notice that the loan will be paid in full when the transaction closes. d. To protect the broker and brokerage from liability if the buyer changes his mind.

a. To give notice of the seller's right to cancel the purchase contract. The Notice of Cancellation is intended to give the seller the right to cancel the purchase contract within a certain timeframe, indicated by the dates entered on the form. It's also the form the seller will use to cancel if so desired.

If any additional costs arise from a 1031 exchange in Colorado, which party is responsible for the costs? a. The buyer b. The investor's CPA c. The one benefiting from the exchange d. The seller

c. The one benefiting from the exchange The party benefitting from the 1031 exchange will be responsible for exchange costs

Saul is a Colorado broker. Assuming each of these situations results in a transaction that meets the definition of federally-related, which of these payments to others would be illegal for him to make? a. A $100 gift card to former client Ana, who told him that her neighbor was looking for someone to help her sell her home. b. A $200 finder's fee to home inspector Pam, who gave Saul's name to the Delfords, who subsequently signed on as his clients. c. A $300 finder's fee to fellow broker Dan, who's got a vacation planned and who therefore recommends Saul to a prospective client. d. Five hundred dollars to Saul's mother-in-law, who sends her co-worker Missy to him as a potential client. Saul successfully acts as both listing agent and buyer's agent for Missy.

b. A $200 finder's fee to home inspector Pam, who gave Saul's name to the Delfords, who subsequently signed on as his clients. Saul is prohibited from paying referral fees to settlement service providers such as Pam.

Under a Colorado deed of trust, who holds legal title to the property until the loan is paid in full? a. An attorney b. A public trustee c. The Hawkins d. The lender

b. A public trustee In Colorado, the deed of trust is typically used for mortgage loans. The county's public trustee is named as the party holding title to the property until the loan is paid in full.

Buyers send the Colorado Agreement to Amend/Extend Contract to the seller. What must happen for modifications to the contract to be effective? a. Both the buyers and seller must sign the form. b. Both the buyers and seller must sign the form, and the buyers must receive notice of the seller's acceptance. c. The buyers, seller, and their respective agents must sign the form. d. The buyers, seller, and their respective agents must sign the form, and the change must be okayed by the buyers' lender (if applicable).

b. Both the buyers and seller must sign the form, and the buyers must receive notice of the seller's acceptance.

Derrick and his buyer couldn't decide what the term of their agreement should be, so they left that field blank in the Listing Period section of the Colorado Exclusive Right-to-Buy Listing Contract. Which of the following statements about this situation is true? a. Because no termination date has been provided, Derrick will have no choice but to act as a transaction-broker for the buyer. b. By law, a termination date for the agreement must be included in the contract. c. By not providing a term length, Derrick and his buyer are agreeing to a default term of six months. d. Only the buyer can terminate the agreement.

b. By law, a termination date for the agreement must be included in the contract.

If you're looking for guidance on a particular real estate related law, where would the best place be to look for more information? a. Broker blogs b. Commission rules c. State congressional records d. The annotated statutes

b. Commission rules

Karsten had a great experience with his apartment and landlord until about two months ago, when the plumbing in the unit above started leaking into his apartment. The landlord keeps saying he'll fix it but hasn't, and now Karsten has mold growing on the ceiling and walls. Karsten is moving out before his lease has expired, which is a form of ______. a. Actual eviction b. Constructive eviction c. Mutual agreement d. Tenant retaliation

b. Constructive eviction If a unit isn't habitable and the tenant is forced to leave, this is a form of constructive eviction.

Scott is moving out of his rented apartment at the end of the month. When he first signed the lease, he gave his landlord a security deposit equal to one month's rent. What should he expect regarding that deposit? a. His landlord will return the deposit on the day Scott's lease terminates, minus any deductions the landlord deems necessary. b. His landlord will return the deposit within 30 days, along with an itemized list accounting for any amounts the landlord retained from it. c. His landlord will use the deposit to cover Scott's final rental payment. This is standard practice, because it allows the renter to have funds for a deposit on a new rental. d. His landlord will use the security deposit to pay for the wear and tear on the unit during the time Scott lived there, and will return any amount remaining within 60 days.

b. His landlord will return the deposit within 30 days, along with an itemized list accounting for any amounts the landlord retained from it. Unless the lease states a time frame of up to 60 days, landlords must return the tenant's security deposit within 30 days of lease termination. Landlords must also give tenants an itemized accounting of any amounts retained.

Which clause prevents buyers or tenants from reaching an agreement with a seller or landlord on a property and then discarding their brokers so that neither party has to pay a broker commission? a. Habendum b. Holdover Period (Broker Protection) c. Seisin (Buyer Fraud Cease and Desist) d. "Weasel" Prevention

b. Holdover Period (Broker Protection)

A listing broker will receive a commission equal to 7% of the gross rent for the life of the lease. How is this documented in the Exclusive Right-to-Lease Listing Contract? a. All negotiated compensation details should go in the Additional Provisions section with any necessary calculations shown on an attachment. b. In the Compensation to Brokerage Firm section, the numeral 7 is entered documenting the percent of the gross rent that will serve as commission. c. The compensation percentage and type is entered in the Landlord's Obligations to Broker section of the contract. d. The Rental Rate and Terms section of the contract indicates what percentage of the rental rate will go to the broker as a leasing commission.

b. In the Compensation to Brokerage Firm section, the numeral 7 is entered documenting the percent of the gross rent that will serve as commission.

What statement must a brokerage use in its advertising if its trademark or trade name is owned by a third party? a. All rights reserved b. Independently owned and operated c. Registered trademark d. Used by explicit permission

b. Independently owned and operated Brokerages should include the statement "[Trade name] brokerage is independently owned and operated."

Shirley is a buyer. At closing, she notices that the water bill for the property is prorated and appears as a credit to her, and a debit to the seller. What's true about the water bill? a. It increases the amount Shirley must bring to closing. b. It's an accrued expense. c. It's a prepaid expense. d. The closing agent will pay the water bill.

b. It's an accrued expense. Accrued expenses appear as a credit to the buyer and a debit to the seller. It's an expense the seller owes (has accrued) at closing, but the bill won't be due until after the buyer owns the property.

Muriel, a broker, has verified the Closing Statement for her client, Boris. Based on Colorado statutes, which of the following statements is true? a. Muriel, as an employed broker, can't verify the Closing Statement unless her employing broker has already done so. b. Muriel's employing broker remains responsible for the Closing Statement even when Muriel has verified it. c. Muriel's verification relieves her employing broker of responsibility for the accuracy of the Closing Statement. d. The closing agent is ultimately responsible for the accuracy of the Closing Statement; Muriel's verification is a service performed according to her firm's office policy.

b. Muriel's employing broker remains responsible for the Closing Statement even when Muriel has verified it. Various Colorado revised statutes and real estate commission rules emphasize that the employing broker remains responsible for the accuracy of the Closing Statement, even when the designated broker has verified its accuracy.

Which of the following statements about the holdover period in the Colorado's Exclusive Tenant Listing Contract is true? a. The holding period extends the agency agreement by the number of days specified, and guarantees the broker a percentage of the brokerage fee. b. The holdover period protects a broker's right to compensation for property presented to, but not leased or purchased by, a tenant until after the term of the agency agreement. c. The number of days in the holdover period can't exceed 30. d. The tenant is required to pay the compensation amount stated in the original agency agreement, even if no property is leased or purchased.

b. The holdover period protects a broker's right to compensation for property presented to, but not leased or purchased by, a tenant until after the term of the agency agreement. If a tenant leases or purchases property during the holdover period that the broker either negotiated for the tenant or submitted in writing to the tenant for consideration, the tenant may owe the broker compensation.

A listing agent is planning to split the sale's commission with the agent who brings the buyer to the table. What's required for the listing agent to do this? a. A listing agent can't split the commission with a buyer's agent. b. The listing agent must get written approval from the seller. c. The property must sell for more than the list price. d. The property must sell for more than the owner still owes.

b. The listing agent must get written approval from the seller.

At closing, the seller has already paid for utilities for the next three months on a flat-rate payment program. How will this expense be handled on the closing statement? a. The seller will be credited for the time paid for but not used, and a corresponding debit will be made in the broker's column. b. The seller will be credited for the time paid for but not used, and the buyer will be debited. c. The seller will be debited for the time paid for but not used, and a corresponding credit will be made in the broker's column. d. The seller will be debited for the time paid for but not used, and the buyer will be credited.

b. The seller will be credited for the time paid for but not used, and the buyer will be debited.

When will you use the Estoppel Statement form? a. To disclose the origin of the water supply to a buyer in a residential transaction. b. To disclose the terms of an existing lease to the property's buyer. c. When applying for your broker's license to disclose any past history of financial wrongdoing. d. When entering into a brokerage agreement with a consumer to disclose the actions you'll take as an agent or transaction broker.

b. To disclose the terms of an existing lease to the property's buyer. The CREC-approved Estoppel Statement is a form used to disclose the terms of a lease being transferred to a buyer along with the property, typically in a commercial transaction.

A buyer client enters into a listing that has a success fee compensation arrangement. The buyer defaults on the purchase agreement. Per Colorado's Exclusive Right-to-Buy Listing Contract, will the buyer's brokerage firm receive its fee? a. No, the success fee is waived. b. Yes, the buyer must pay the fee. c. Yes, the seller and buyer split the cost of the fee. d. Yes, the seller pays the fee.

b. Yes, the buyer must pay the fee. With a success fee compensation arrangement, if the seller defaults during the transaction with no fault on the buyer's part, the fee is waived. If the buyer defaults, the buyer must pay the fee.

You're working with a seller who owes more on his mortgage than what the home is worth. He's having a discussion with his lender about a possible short sale. What do you need to do in this situation? a. Attach an Additional Provisions form to the listing contract. b. Attach an Open Listing Addendum to the listing contract. c. Attach a Short Sale Addendum to the listing contract. d. Notify the seller's lender with the Short Sale Notice form.

c. Attach a Short Sale Addendum to the listing contract.

Which of these statements describes Colorado fair housing law, but not federal fair housing law? a. Advertisements that exclude a protected class are illegal. b. A person renting a room in her home may not reject a potential renter based on race. c. Both residential and commercial property owners must comply with the law. d. Protected classes include race, color, religion, national origin, sex, familial status, and disability.

c. Both residential and commercial property owners must comply with the law. Colorado fair housing law applies to residential and commercial properties, while federal fair housing law applies only to residential property. Colorado adds marital status, ancestry, sexual orientation, and creed to the seven federally protected classes

Karla is furious at her real estate agent, Yolanda, who Karla feels is responsible for the sale of her home falling through at the last moment. She files a complaint against Yolanda with the Colorado Real Estate Commission. What happens next? a. CREC will notify both Yolanda and her employing broker (if she's employed) of the complaint, and give them 30 days to find a resolution with Karla. b. CREC will set up a mediation between Karla and Yolanda, and will notify them both of the time and date. c. Karla will have to wait 10 to 12 business days to hear back from the commission and find out if they'll investigate her complaint. d. Yolanda will receive a letter of admonishment from CREC, and must attend the next scheduled CREC meeting to state her case related to the complaint.

c. Karla will have to wait 10 to 12 business days to hear back from the commission and find out if they'll investigate her complaint. Complainants should find out about the status of their complaints within 10 to 12 business days. If CREC decides to investigate, it will send Yolanda a request for a written response to the complaint.

Kristy is licensed as a real estate broker and a mortgage loan originator in Colorado. She's the buyer's agent in a transaction in which the buyer/borrower must apply for a loan, and has asked Kristy for her help as a mortgage loan originator. Which of the following statements about this situation is true? a. It's illegal for Kristy to represent this buyer. She must remove herself from the transaction. b. Kristi must present the buyer/borrower with a Change of Status form. c. Kristy must present the buyer/borrower with the Colorado Dual Status Disclosure form. d. The buyer/borrower must use Kristy as the mortgage broker in the transaction.

c. Kristy must present the buyer/borrower with the Colorado Dual Status Disclosure form. Individuals who are licensed as real estate brokers and mortgage brokers must present the Colorado Dual Status Disclosure form to the buyer/borrower to obtain the buyer/borrower's consent to act in a dual capacity.

The Colorado Real Estate Commission is NOT required to investigate which of these situations? a. It comes to CREC's attention that Don is practicing real estate without a license. b. Licensee Darma submits a complaint against her employing broker to CREC, claiming he isn't available to help when she needs it, resulting in a "sale fail" for her client. c. Licensee Mark believes licensee Ben is marketing property unethically, and submits his complaint to the Colorado Association of REALTORS®. d. Mercy submits a complaint to CREC about licensee Fred, claiming he didn't disclose a personal interest in the property she purchased.

c. Licensee Mark believes licensee Ben is marketing property unethically, and submits his complaint to the Colorado Association of REALTORS®. CREC is obligated to investigate complaints it receives from the public. Investigations may also be initiated by the commission, but complaints about ethics submitted to NAR or a local chapter aren't CREC's responsibility.

Which of the following contract options indicates a Colorado buyer's willingness to pay any amount of commission that is not paid by the seller or seller's broker? a. Buyer Will Pay. b. Listing Brokerage Firm or Seller May Pay. Buyer is NOT Obligated to Pay. c. Listing Brokerage Firm or Seller May Pay. Buyer IS Obligated to Pay. d. Not Applicable.

c. Listing Brokerage Firm or Seller May Pay. Buyer IS Obligated to Pay. The "Listing Brokerage Firm or Seller May Pay. Buyer IS Obligated to Pay" option indicates that the buyer is obligated to pay any portion of the brokerage firm's fee that is not paid by the listing brokerage firm or seller.

If your client wants to extend the termination date of her listing contract with you, which form should you use? a. Agreement to Amend/Extend Contract b. Exclusive Agency Addendum c. Listing Contract Amend-Extend d. Open Listing Addendum

c. Listing Contract Amend-Extend You would use the Listing Contract Amend-Extend to lengthen the contract term. The similarly named form "Agreement to Amend-Extend Contract" is intended for use with the purchase contract, not the listing contract.

All resident Colorado real estate licensees must ______. a. Hold an active license b. Join the National Association of REALTORS® c. Maintain a place of business in the state, open to the public d. Perform a minimum number of transactions each year

c. Maintain a place of business in the state, open to the public

Legal documents required to transfer property at closing include the deed, bill of sale, promissory note, and deed of trust. What's the Colorado Real Estate Commission's position regarding payment for preparation of these documents? a. Brokers may charge clients a nominal fee for preparing these documents. b. Closing agents may charge clients a nominal fee for preparing these documents. c. Neither the broker nor the closing agent may charge a fee to clients for the preparing these documents. d. These documents must be prepared by an attorney, with the cost borne by the buyer or seller.

c. Neither the broker nor the closing agent may charge a fee to clients for the preparing these documents. Rule 6.14.B. prohibits licensees from charging clients for preparing these documents. CP-7 states that brokers are responsible for the cost of preparing these documents. Closing agents may charge brokers a nominal fee for legal document preparation.

What's true about cooperating broker compensation and an Open Listing Addendum? a. Cooperating brokers are very poorly compensated under the terms of an Open Listing Addendum. b. Cooperating brokers are very well compensated under the terms of an Open Listing Addendum. c. Only the broker who finds a buyer or tenant is compensated under an Open Listing Addendum, so there's no "cooperating" broker. d. The client can opt not to include cooperating brokers on an Open Listing Addendum.

c. Only the broker who finds a buyer or tenant is compensated under an Open Listing Addendum, so there's no "cooperating" broker.

Which of these activities does independent broker Lulu perform on a monthly basis to maintain her active brokerage trust accounts? a. Deposit all earnest money checks received during the calendar month. b. Print a hard copy of the trust account journal, beneficiary ledgers, and broker's ledger since she uses an electronic recordkeeping system. c. Reconcile her records for active trust accounts with the bank's statement. d. Update the balances in the trust account journal, the beneficiary ledgers, and the broker's ledger.

c. Reconcile her records for active trust accounts with the bank's statement. Independent brokers and employing brokers must ensure that brokerage trust accounts are reconciled monthly using the bank reconciliation worksheet to make sure that bank and broker records agree.

Buyer Summer has a new loan application deadline of November 17, per the CBS residential contract she signed. However, after reviewing the various loan options, she can't find any that meet her requirements for payments, terms, and conditions, so she decides to cancel the contract. If Summer wants to get her earnest money back, which of the following must she do? a. She has two options: Either cancel payment on the earnest money check if it hasn't been cashed yet, or have her attorney notify the seller on or before the settlement date that she's terminating the contract. b. She must notify the seller in writing on or before the loan approval deadline that she wasn't approved for a loan, and therefore is terminating the purchase contract. c. She must notify the seller in writing on or before the new loan termination deadline that she wasn't able to find a loan to meet her requirements, and because of that, she's terminating the purchase contract. d. She must notify the seller in writing on or before the settlement date that she's terminating the purchase contract because she's changed her mind about the property.

c. She must notify the seller in writing on or before the new loan termination deadline that she wasn't able to find a loan to meet her requirements, and because of that, she's terminating the purchase contract.

The Colorado Real Estate Commission received a complaint from a consumer, claiming that licensee Mina hadn't made sufficient disclosure about a property defect she knew of. After investigation, Mina is informed that there will be a disciplinary hearing. Which of these will occur? a. Mina must inform all her clients from the past year of the hearing date and reason. b. Mina must inform her employing broker of the upcoming hearing. c. The commission will inform Mina's employing broker of the upcoming hearing. d. The commission will notify all Mina's current clients that she's being investigated.

c. The commission will inform Mina's employing broker of the upcoming hearing. CREC is obligated to notify a licensee's employing broker of any pending disciplinary actions or upcoming hearings.

What's true of the holdover period when using the Exclusive Brokerage Listing Addendum? a. The holdover period is automatic. b. The holdover period is capped. c. The holdover period must be negotiated. d. The holdover period no longer applies.

c. The holdover period must be negotiated.

Which of the following statements about the holdover period in the Colorado's Exclusive Right-to-Buy Listing Contract is true? a. The buyer is required to pay the compensation amount stated in the original agency agreement even if no property is purchased. b. The holdover period extends the agency agreement by the number of days specified and guarantees the broker a percentage of the brokerage fee. c. The holdover period protects a broker's right to compensation for property presented to, but not purchased by, a buyer until after the term of the agency agreement. d. The number of days in the holdover period can't exceed 30.

c. The holdover period protects a broker's right to compensation for property presented to, but not purchased by, a buyer until after the term of the agency agreement.

Who must consent for a property to be advertised on the MLS in an Exclusive Right-to-Lease Listing Contract? a. The broker b. The employing broker c. The landlord d. The lender

c. The landlord

What would happen if a lease contained provisions that violated a state's landlord-tenant law? a. The landlord or property owner would face civil charges. b. The lease would be enforceable with written consent from the tenant. c. The lease would be legally unenforceable. d. The written lease would supersede the law.

c. The lease would be legally unenforceable.

Who pays property marketing expenses according to Colorado's Exclusive Right-to-Sell Listing Contract? a. Expenses are split jointly between seller and broker b. The buyer c. The listing broker d. The seller

c. The listing broker

If a title company isn't involved in a transaction and won't be performing the closing, who is typically responsible for holding earnest money deposits in Colorado? a. The buyer b. The buyer's broker c. The listing broker d. The seller

c. The listing broker The listing broker is traditionally responsible for holding earnest money unless the parties agree otherwise in writing.

Tim's been a difficult tenant since his divorce six months ago. When landlord Peggy discovers that he's punched a hole in the bedroom door, how does Colorado's Warranty of Habitability Act work to protect either Tim or Peggy? a. Because the damage isn't a health hazard, Peggy and Tim are required to work out a repair agreement that shares responsibility, and do so in a reasonable amount of time. b. Peggy must repair the damage within a reasonable amount of time. If she doesn't, Tim can reduce the amount of rent he pays. c. Tim is liable for the damage he caused to the property, since it was an intentional act. d. Tim may not be held liable for the damage, but since it doesn't create a health hazard, Peggy's not required to repair the door.

c. Tim is liable for the damage he caused to the property, since it was an intentional act.