Final Focus Questions Exam
When making a counter offer by using the approved Counterproposal form - how do you change dates? Add an addendum Mark through the old dates and enter new ones. Do nothing, a verbal notification is sufficient. Change only the dates that needed to be changed
Change only the dates that needed to be changed Explanation: The only dates which are changed in the original Contract to Buy/Sell Real Estate are those specified as changed in the Counterproposal form. All other dates are assumed to not have been affected. The client submitting the counterproposal signs only the Counterproposal. The Counterproposal amends and replaces the proposed contract.This is stated on the bottom of the counterproposal: "If accepted, the Contract, as amended by this Counterproposal, will become a contract between Seller and Buyer. All other termsand conditions of the Contract remain the same."
When creating the listing agreement, the sellers informs you that they will not be filling out a Seller's Property Disclosure form. What is your best response: Inform the sellers that most buyers want the form Inform the sellers that you will fill out the form for them Decline the listing Inform the sellers as the form is optional there are no repercussions to not filling it out
Inform the sellers that most buyers want the form Explanation: The listing agreement does not require the sellers to fill out the form, however the purchase contract requires one be filled out and the buyers expect to receive one. Once a purchase contract is received, the sellers will have to counter the offer. If the sellers are reluctant to fill out because they have no knowledge of the property (for example in an estate situation whereby they inherited the property) sometimes the best strategy is to fill out the form indicating they have no knowledge of the property.
A Buyers right to a specific performance remedy in the event of a Seller default in the Contract to Buy and Sell Real Estate: Is the default remedy and as such need not be selected Buyer default remedy is liquidated damages Not addressed in the contract Depends on which box is checked
Is the default remedy and as such need not be selected Explanation: Should the Seller default in the contract - the only remedy for the Buyer is Specific Performance. The Seller did not put up earnest money and thus cannot offer liquidated damages.
A Contract to Buy and Sell (Residential) does NOT require inclusion of which of the following? fireplace screens and grates leased security systems parking and storage facilities as described in a condominium community window coverings on the property on the date of the sales contract
Leased security Systems Explanation: The Inclusions and Exclusions section of the Contract does not specify inclusion of items likely to be leased, such as security systems, water softeners, smoke/fire detectors and satellite systems. These are included only if the appropriate box is checked
Which class is protected under under Colorado Fair Housing and not the Federal Fair Housing? Marital Status Race Familial Status National Origin
Marital Status Explanation: Marital Status is not a protected class under Federal Fair Housing
If a licensee is also a licensed appraiser, can the licensee offer to appraise a home if they intend to be the listing agent for that same property in the future? No, that would be a conflict of interest Yes, as long as it is disclosed to all parties Yes, as the listing is in the future no disclosure requirements apply No, according to Federal law licensed real estate brokers cannot hold an appraisers license
Yes, as long as it is disclosed to all parties Explanation: There are no laws that prohibit an appraiser or a mortgage broker from working as such on a transaction upon which they are involved as a real estate broker, or acting as a real estate broker in the future on a property on which they have operated as a mortgage broker or an appraiser. However, this can be construed as a conflict of interest and all present or potential conflicts of interest must be disclosed to the parties involved.
Who can not prepare an addendum to the Contract to Buy and Sell Real Estate? buyer or seller employing broker's attorney attorney for buyer buyer''s broker
buyer''s broker Explanation: Associate Brokers may only use forms prepared by the Real Estate Commission.
Recording Fee of Warranty Deed most typically would appear on the settlement statement as: debit buyer debit seller debit broker debit 1/2 seller and 1/2 buyer
debit buyer Explanation: Although everything is negotiable, the buyer is the primary beneficiary of recording the warranty deed since it will make the transfer into the buyer's name a matter of public record.
What is the debit/credit entry when a buyer assumes a loan from the seller? debit broker, credit buyer debit seller, credit buyer debit buyer, credit seller debit seller, credit broker
debit seller, credit buyer Explanation: The seller still owes the amount that is assumed (debit seller). On an assumption, that the buyer will be making payments against the loan does not relieve the seller of the obligation that it be paid in full. The buyer will not be required to bring this amount to the closing (credit buyer)
Licensee gets asked by out-of-state party to manage 15 rental units. Broker should: put money in sales escrow account set up escrow account in own name inform employing broker to create Property Management Contract and set up proper escrow account inform employing broker and set up own escrow account
inform employing broker to create Property Management Contract and set up proper escrow account Explanation: Section 12-61-103 (10) requires all business to be conducted only in the licensed name of the employing broker. Within a brokerage, only the employing broker or an attorney for the brokerage can create contracts from scratch.
If a landlord fails to refund the security deposit within one month (up to 60 days if specified in the lease) of the tenant surrendering the property, the landlord: is liable for the entire deposit is liable for treble the amount wrongfully withheld may be liable for double damages may extend the deposit return period for an additional 10 days if good cause exists
is liable for treble the amount wrongfully withheld Reference: CRS 38-12-103 (3) (a)
After a tenant gave notice and vacated an apartment, the landlord discovered substantial damage to the unit. No time was set in the lease specifying the length of time the landlord had to account or refund the security deposit after deductions. Which of the following is an appropriate action by the landlord? return the deposit immediately and bill the tenant for the repairs when completed if the damage is obviously more than the deposit, the landlord may keep the damage deposit without notice notify the tenant that his or her damage deposit is forfeited within 60 days itemize the damage in writing and return any excess deposit within one month
itemize the damage in writing and return any excess deposit within one month Explanation: The maximum amount of time a landlord can specify in a lease that they will hold a security deposit after lease termination is 60 days. If no time was specified in the lease, the default maximum is one month.
A seller providing financing may be exempt from attaining a lender's license if they have completed: a seller providing financing always needs a mortgage license less than 3 transactions in the past 12 months less than 5 transactions in the past 12 months less than 5 transactions is the past 15 months.
less than 3 transactions in the past 12 months Explanation: This section from the real estate manual outlines the exceptions to needing a mortgage license:§ 12-61-904, C.R.S. Exemptions - rules.(1) (b) With respect to a residential mortgage loan, a person, estate, or trust that provides mortgage financing for the sale of no more than three properties in any twelve-month period to purchasers of such properties, each of which is owned by such person, estate, or trust and serves as security for the loan;
Broker Betty at an open house meets a young couple looking to purchase their first home. The couple asked if the Broker thought they had enough income to qualify for a loan to purchase the property. Realizing this information is of a confidential nature Broker Betty makes the agency disclosure that her office policy and State statute require. The buyers are very skeptical about making a commitment and have been coached by family members not to sign anything. They refuse to sign the signature block on the Brokerage Disclosure to Buyer form. Betty should: refuse to answer unless they sign answer the question, then ask them to sign once again call their attorney and make the disclosure to him make a note of the date and time the disclosure was made and reference the fact that the buyers declined to sign the form - then have the discussion.
make a note of the date and time the disclosure was made and reference the fact that the buyers declined to sign the form - then have the discussion. Explanation: Brokers are required to make agency disclosure. Buyers are not required to sign the disclosure. It is acceptable to note the date and time the disclosure was made, and indicate that the buyers declined to sign the form.
Loan discount fees are paid by: broker buyer seller seller or buyer
seller or buyer Explanation: This is a negotiable item in the contract to Buy and Sell Real Estate
A designated broker's responsibilities are delegated by: written statement by Managing Broker office manager legislative statute negotiated by buyer and seller
written statement by Managing Broker Explanation: designated broker: a licensee designated in writing by an employing broker to serve as a single agent or transaction-broker for a seller, landlord, buyer or tenant in a real estate transaction; does not include a real estate brokerage firm that consists of only one licensed natural person.More info: CP-22...A designated broker is permitted to share confidential information with a supervising broker without changing or extending the brokerage relationship beyond the designated broker. Brokers may want to consult legal counsel regarding the necessity of securing the authorization of the party to whom the information is confidential before the designated broker shares that confidential information with the supervising broker. Such advice could include modifications to the listing agreement or buyer agreement that create such authorization.More info:This is a Colorado twist on brokerage laws. Generally, everything you learned in the National side is consistent with Colorado. That all contracts are with the company not the licensee, that the Employing Broker is responsible for the actions of the licensees under him/her and so on. The twist is in how we deal with confidential information and how we resolve what in past years was considered a conflict of interest. All of this comes under the heading of "Designated Broker."Here is the problem as the real estate commission saw it; once upon a time, it was a conflict of interest if two agents from the same company were working opposite sides of the same transaction - even if it was a large company and the agents did not know each other.Fact is - earlier brokerage laws were written in a time when there were no large offices or super-sized brokerages. Most were ma and pa operations where everybody knew and talked to each other.Recognizing that times had changed, the real estate commission wanted two agents working for the same company on the same transaction, to be able to fully represent their clients in a Buyer or Seller Agency relationship and not be forced into some form of neutral relationship such as Transaction Broker or the predecessor to Transaction Brokerage, the now illegal and much hated Dual Agency relationship.The issue was - if everybody in a company reports to the Employing Broker then that person is a walking talking potential conflict-of-interest on any transaction that occurs in the office.So they declared that brokerage relationships only, would be confined to the licensee level and not rise to the Employing broker level. This way the Employing Broker does not have a conflict of interest with anybody.That left one more problem and this was "imputation of confidential information". In simpleze - it would be a bad thing if two agents working on opposite sides of a transaction, went to the same Employing Broker for advice and that Employing Broker blabbed confidential information between them.To avoid that - the real estate commission issued rules that said in the event of two agents working on the same transaction for the same company, the Employing Broker would "Designate" another supervising broker for one of the agents. Tah Dah! No conflict of interest and no chance of one Employing Broker spilling secrets from one side to the other.Then to tie everything into a bow - they exempted one-man band brokerages from having to appoint another supervisor because... there is only one person in the company. One agent companies mostly become Transaction Brokers when double-ending a deal.
Out of state seller sold a property for $489,000. The property was highly leveraged resulting in cash proceeds to the seller of $5,500. How much should be withheld subject to the Colorado Department of Revenue Income Tax? $9780 $5500 $110 $978
$5500 Explanation: This question relates to the rules on Colorado withholding taxes. The rule is if the seller has an out-of-state address, the State directs at close a withholding of 2% of the purchase price or the entire net proceeds, whichever is less. This is to cover any potential State income tax liability for sellers. Since they live out-of-state, they likely do not file Colorado tax returns. Taking the money gives them a good incentive to file. Keep in mind this is not an actual tax, just a withholding. If the seller files and does not owe taxes, they get the withheld money back. Two percent of the selling price of $489,000 is $9780. Since $9780 is higher than the proceeds of $5,500, the lessor amount of $5,500 will be withheld as the potential tax liability. Also note that this withholding does NOT apply to Colorado residents.
Which of the following is not a Commission approved Deed of Trust: due on sale not due on sale/transfer Creditworthy 1% increase
1% increase Explanation: The ones the Commission has approved are:TD 72-8-10 Deed of Trust (Due on Transfer - Strict)TD73-8-10 Deed of Trust (Due on Transfer-Creditworthy)TD74-8-10 Deed of Trust (Assumable - Not due on transfer)The differences are principally what happens to the loan when the property is sold. "Due on Transfer - Strict" means the entire loan balance becomes due on sale. "Due on Transfer - Creditworthy" means the loan is assumable with lender approval. "Assumable - Not due on transfer" means the loan is assumable with no additional approvals required to another owner.
How many credit hours of Continuing Education classes does an Associate Broker need to renew his/her license? 8 16 24 32
24 Explanation: The licensee must complete 24 hours of approved continuing education during the three year license period. Twelve of those hours must consist of taking 4 hour Annual Commission Update Course each year. CE requirements are listed in Commission Rule B-2 below:B-2. Methods of completing continuing education. Licensed brokers must satisfy the continuing education requirement before they apply to renew an active license, activate an inactive license or to reinstate an expired license to active status. Licensed brokers may satisfy the entire continuing education requirement through one of the following options: a) Complete the twelve hours required bysection 12-61-110.5 (1) (c), C.R.S., and required by this rule in annual 4-hour increments developed by the Commission, otherwise referred to as the "Annual Commission Update Course." Licensees who choose this option must complete an additional 12 hours of elective credit hours to meet the 24-hour total continuing education requirement during the license period in subject areas listed in section 12-61-110.5(3), C.R.S. Please note that a licensee may not take the same version of the Annual Commission Update Course more than once. If a licensed broker takes more than 12 hours of the Annual Commission Update Course during a license period, the licensee will receive elective credit hours for any additional hours. b) Completing the Commission-approved 24-hour "Broker Reactivation Course." This option is available to licensees under one of the following conditions: (1) Licensee is currently active and did not use the Broker Reactivation Course to satisfy the Rule B-2(a) requirements in the previous license year (2) Licensee is inactive or expired for up to thirty-six months prior to active status and unable to comply with the education requirements listed in Rule B-2(a). c) Pass the Colorado state portion of the licensing exam. d) Completing 72 total hours of pre-licensure education concerning the understanding and preparation of Colorado real estate contracts (48 hours) and real estate closings (24 hours). The courses and course providers are required to comply with the requirements as described at section 12-61-103(4)(a), C.R.S. Any inactive or expired licensees who cannot meet the education requirements listed in Section 4(a), (b), or (c) must comply with the education requirements found in Section 4(d) before activation or reinstatement of the license. ReferenceStatute 12-61-110.5 Colorado Real Estate Manual
Closing March 15, next payment due April 1. How many months of escrow can lender take for taxes? 1 2 3 4
3 Explanation: The private lender will collect its loan in monthly installments, along with one month's taxes to be held in reserve so that sufficient funds are on hand to pay the yearly taxes when due. This reserve is based lender's own loan requirement and state law, C.R.S. 39-1-119. This law provides that any amount held on May 20 in excess of 3/12 of the taxes paid that year must be refunded to the borrower on or before May 30. Payments to a reserve escrow account must be adjusted annually upon reasonable belief of substantial improvements to the property or upon official notification of an increase in the actual amount of taxes levied. Failure to make a refund is subject to interest and penalty.
A brokerage firm holding 4 earnest money deposits, and 15 security deposits for managed single-family residences must have a minimum of how many trust accounts? 19 1 2 3
3 Explanation: Three - One for Earnest money, one for security deposts and one for rent receipts.More info:f a Broker is going to deposit rent or security deposits into the employing broker's trust account(s), the Broker is required to keep records relative to these monies. Rule E-1 requires that all money belonging to others that is accepted by Broker be deposited in one or more accounts separate from money belonging to the Broker, employing broker or brokerage entity. Separate trust accounts must be maintained in the name of the employing broker, or the employing broker and the licensed business entity, and the maintenance of the separate accounts is the responsibility of the employing broker (Rule E-1(a) and (c)). This includes rent checks. A Broker who manages fewer than seven residences may deposit rental receipts and security deposits, and disburse money for such purposes, in the "sales escrow" account (Rule E-1(i)), although this is not recommended. A better practice is to maintain separate accounts for property management. At a minimum, a Broker is recommended to have two trust accounts for property management; one for security deposits and one for operating trust monies. As an alternative to trust accounts, a Broker may deposit rent monies or security deposits directly into an account owned and controlled by the landlord. ReferenceColorado Real Estate Manual Chap 2 - Rule E-1 (h)
Once a contract to purchase has been accepted by the seller, when does the earnest money tendered with the contract need to be deposited into the appropriate escrow account? 1 business day after notice of acceptance 2 business days after notice of acceptance 3 business days after notice of acceptance 4 business days after notice of acceptance
3 business days after notice of acceptance Explanation: A check for the earnest money should either accompany the offer until accepted or be delivered prior to expiration of the Alternative Earnest Money Deadline. Most often, a buyer's agent holding the deposit forwards a copy of the earnest money check with the offer and then specifies a date in the Alternative Earnest Money Deadline when the actual check will be delivered after contract acceptance. If the deposit was tendered with the contract; it must be deposited no later than 3 business days after notice of acceptance of the contract.From the real estate manual:"Unless otherwise agreed, earnest money deposits held by the specified broker must be deposited not later than the third business day after notice of acceptance of the contract. The broker should keep a copy of the validated escrow deposit slip and earnest money check in the office transaction file for later inspection."
When reconciling a 6 column worksheet for a closing - after totaling up the debits and credits, the closing agent needed to add a $30,000 Debit to the Seller Debit column to make it equal to the Seller Credit column. What does this Seller Debit represent? A $30,000 check the Seller must bring to the closing A $30,000 check the Seller will receive from this closing
A $30,000 check the Seller will receive from this closing Explanation: This DEBIT represents the Seller's proceeds from the sale (what they are getting). More info: This is a common spot of confusion, so do not let it break your head. The situation occurs at the bottom of the 6 column worksheet when you are reconciling the columns. Let's assume for a moment you are looking at a Buyer's columns. You have applied all the debits and credits and all you have to do is reconcile the columns which have $100,000 in the Credit column (money the buyer has proven they have) and $125,000 in the Debit column (what the Buyer owes). Looks like this Buyer is a little short, but by how much? To determine this amount, you have to make both columns equal. This enables the Closing Agent to determine how much the Buyer is short; which is also how much of a check the Buyer needs to bring and be deposited into the escrow account. So you add $25,000 to the Buyer's Credit column to make both columns equal. Therefore this $25,000 CREDIT represents how much the Buyer is short, meaning this CREDIT does not represent how much they have, it represents how much they still OWE. This is how a CREDIT becomes something you OWE. We are not done reconciling yet. We have a $25,000 Credit, to balance it out we need a $25,000 Debit. That debit goes to the Broker account which represents the Escrow Account. Back to practical language - the Buyers needs to bring a $25,000 check to the closing so that they can make their Credit column (what they got) equal to the Debit column (what they owe) and the Broker (Closing Agent) needs to deposit it into the Escrow Account ($25,000 Debit). For extra points - the reverse is most common with the Seller. When a Sellers Debit column (what they owe) is lower than their Credit column (what they sold their property for), the amount added to the DEBIT column to make both columns equal represents money the Seller is receiving. The balancing CREDIT in the Broker column, reminds the Closing Agent to cut a check to the Seller out of the escrow account.
A property manager may refuse to lease to: A Muslim tenant renting near a Catholic church A gay individual A disabled veteran A person addicted to or using illegal drugs
A person addicted to or using illegal drugs Explanation: The Fair Housing Act considers alcoholism and drug addiction to be a disability. This means that a landlord can't reject a rental application or otherwise discriminate simply because someone is an alcoholic or a drug addict. HOWEVER, a landlord may reject if (s)he learns that someone is currently using illegal drugs. Use of illegal drugs is an illegal activity. Many landlords ask about this on their rental application, and it's perfectly legal to do so. The other answer options all represent protected classes and may not be discriminated against. ReferenceFair Housing Act
When comparing/analyzing CMA, these are the factors that would be NOT be taken into consideration: Similar size properties sold in the neighborhood Date of sale Age of the property Accrued Depreciation
Accrued Depreciation Explanation: Accrued Depreciation is used by businesses to reduce their taxes. It is not a factor in determining market value. For tax purposes only, a building is considered to lose value each year to reflect its reduced functional life even if real estate market values are increasing. More on accued depreciation: Accrued depreciation is the amount of total value that an asset has lost since it was newly purchased. Also known as accumulated depreciation, it is included on the balance sheet of a company or business as a liability to reflect the lesser value of the asset in question. There are many different ways that an asset's depreciation may be calculated, with the most common examples being straight-line depreciation and declining balance depreciation. No matter the method of depreciation, the accrued depreciation represents the amount of value that has been lost over the life span of the asset.When a business purchases an asset, whether it's a business vehicle or a computer or something else that can lose value with the passage of time, it is allowed to write off the amount of value the asset loses each year. This process, known as depreciation, allows the business to pay taxes based on what the asset is worth as time passes rather than always paying off on it as if it was new. After the amount of value lost begins to build up over a period of several years, the total amount of depreciation is known as accrued depreciation.
Which does the buyer have to disclose to the seller when using the Licensee Buyout Addendum? That the Buyer stands to make a profit That the Buyer is exposed to possible losses and expenses That the property may be immediately sold by the Buyer All of the above are required disclosures
All of the above are required disclosures Explanation: From the Licensee Buyout Addendum: RESALE, PROFIT/LOSS, EXPENSES. Seller acknowledges that in entering into the Contract, Buyer is exposed to possible losses and expenses. Seller acknowledges that following Closing, the Property may be held by Buyer for a period of time or may be resold immediately, and any profit or loss shall be solely that of Buyer. Seller further acknowledges that there is a chance for profit to Buyer and that certain expenses may accrue to Buyer. Such expenses include costs and expenses of Closing, holding, and reselling the Property. Buyer may incur additional expenses, or some anticipated expenses may vary, or may not be incurred. In any event, after Closing, Buyer will absorb the loss or receive the profit from any sale and ownership of the Property.
A contract was terminated when the buyer and seller were unable to resolve inspection issues. The buyer had included the buyer's inspection report as part of the inspection notice, which included information about a number of small material items. The seller of the property has what if any obligation for disclosing the issues noted in the report? No obligation to disclose because the contract was terminated An obligation to disclose only those items which are not latent defects No obligation to disclose if the total amount of items is less than $5,000 An obligation to fully disclose all material items the buyer found which the seller now has knowledge of
An obligation to fully disclose all material items the buyer found which the seller now has knowledge of
If an owner wants to make a single full payment for property taxes, what is the latest date by which this payment can be made? March 1 April 30 May 1 June 16
April 30 Explanation: Real property taxes may be paid as follows: if the owners wants to make payments, one-half is due on or before the last day of February and the remaining one-half on or before June 15. If the owner wants to make one full payment, the entire tax may be paid on or before the last day of April
Who pays the Colorado Use Tax on the transfer of furniture, personal property, equipment: Buyer Seller Split equally between buyer and seller Seller''s broker
Buyer Explanation: The Colorado Use Tax, (39-26-Part 2, C.R.S.) is a form of sales tax, payable on the transfer of furniture, equipment, etc. The buyer is obligated to pay this tax by statute. The broker has the duty to inform the buyer of this obligation. 21-
The furnace breaks down before closing, but after the buyer has taken possession. Who is responsible for the cost of replacement? Seller Buyer depends on how the appropriate box is checked in the Contract to Buy and Sell not addressed by the Contract to Buy and Sell
Buyer Explanation: The buyer is responsible for such costs after possession, even if possession is before closing. BTW it is really common for students with contract questions to hunt throughout the courses for an answer. Whereas the answer is as far away as looking at the contract itself. Also, it is always a bad idea to let a buyer move into a property prior to close. Savvy agents avoid this at all costs. Nothing good ever happens when this situation occurs. First up, there is a really good chance the buyer will notice something about the house they do not like, which can throw a monkey wrench into the closing process. Lastly, what happens if the buyer moves in and then does not qualify for a loan? You could have an eviction proceeding on your hands. From the Contract to Buy and Sell Real Estate:Damage, Inclusions and Services. Should any Inclusion or service (including utilities and communicationservices), system, component or fixture of the Property (collectively Service), e.g., heating or plumbing, fail or be damaged between the date of this Contract and Closing or possession, whichever is earlier, then Seller is liablefor the repair or replacement of such Inclusion or Service with a unit of similar size, age and quality, or an equivalent credit, but only to the extent that the maintenance or replacement of such Inclusion or Service is not the responsibility of the Association, if any, less any insurance proceeds received by Buyer covering such repair or replacement. If the failed or damaged Inclusion or Service is not repaired or replaced on or before Closing or possession, whichever is earlier, Buyer has the Right to Terminate under § on or before Closing Date (§) , or, at the option of Buyer, Buyer is entitled to a credit at Closing for the repair or replacement of such Inclusion or Service. Such credit must not exceed the Purchase Price. If Buyer receives such a credit, Seller's right for any claim against the Association, if any, will survive Closing. Seller and Buyer are aware of the existence of pre-owned home warranty programs that may be purchased and may cover the repair or replacement of such Inclusions.
How is the relationship handled when a buyer wishes to work with a broker to locate property to purchase? Brokerage will be an agent for the buyer unless there is written agreement for another relationship. Buyer and broker must sign an exclusive representation agreement. Buyer will be a customer with no working relationship to the brokerage company. Buyer and broker may agree to a relationship which could include agency, transaction-brokerage, or no working relationship between the parties
Buyer and broker may agree to a relationship which could include agency, transaction-brokerage, or no working relationship between the parties Explanation: The buyer has many options: he or she can be a unrepresented "customer" after appropriate disclosure, can sign an agency representation agreement, or can hire the broker as a transaction-broker either in an exclusive arrangement, oral agreement, or by default.
Just before the close, the buyer noticed a broken window and a mandoor hanging by one hinge in the detached garage, her inspector had missed these as he considered outbuildings as outside the scope of the inspection. What is the buyer's recourse? Seller must fix window Buyer's responsibility because she had missed the inspection deadline. The Inspector is at fault Buyer may terminate the agreement or negotiate a settlement with the Seller
Buyer's responsibility because she had missed the inspection deadline. Explanation: The buyer has no recourse. After the inspection deadline passes, the buyer has no recourse to object to a pre-existing defect. Should a defect occur after the inspection deadline, the seller would have responsibility for the repair as per the terms of the purchase agreement.
John Bargas of Buywell Realty wants to place a listing in the phone book. At a minimum he must list: John Bargas, Buywell Realty John Bargas Buywell Realty John Bargas, Buywell Realty, Each Branch Independently Owned and Operated
Buywell Realty Explanation: The minimum is the employing broker's name (the firm, not the person) Chapter 2 - CREC Manual Rule E-8. Advertising "A real estate licensee who performs any act requiring a license, including advertising services or advertising property belonging to another, shall do so in the name of the employing broker;...."
What must appear in the title of a trust account? Company name Employing broker's name Company name and employing broker's name Responsible broker's name
Company name and employing broker's name Explanation: How to Open Escrow Bank Accounts1. Select a Colorado depository that offers FDIC insurance coverage or as authorized for the specific engagement.2. Include the following "fiduciary elements" in the account title. These must identify the true owner of the account, specify the type or purpose of account being established (sales, management, homeowner association, etc.), include one of the fiduciary words "escrow" or "trust," state the employing broker's personal name, and show his or her fiduciary capacity as "broker." The employing broker must be able to independently control and operate all escrow bank accounts, but others may be designated as signatories as well. These elements may be abbreviated to facilitate printing the broker's monthly bank statement heading, checks, and deposit stock. The general account title format follows:Licensed brokerage name and/or d.b.a. (brokerage TIN/SSN)Type of escrow, broker's name, brokerStatement mailing address
Which does NOT fall under Rule F? Contract to Buy/Sell (Commercial) Contract to Buy/Sell (Land) Deed of Trust Contract to purchase newly constructed home with warranties.
Contract to purchase newly constructed home with warranties. Explanation: This is an actual question from the licensing exam. Rule F is the rule under which all approved contracts and the rules governing their use fall. To answer this question requires a knowledge of the contracts that are approved and those which are not. They are listed in the Printout section of our website. The non-approved contract in this list is the "contract to purchase newly constructed homes with warranties". New home builders are exempt from the rules established under the Conway-Bogues court decision. As such they are not required to use approved contracts and generally choose to use purchase contracts they create. Some students may wish to point out that some small new builders may choose to use the the approved purchase contract and add warranty info. This is true. However, please read the first sentence of this explanation again. We want you to be prepared to answer this question should you see it on the State exam.
A type of value estimate approach, in which value equals the estimated land value plus reproduction costs of any improvements, after the depreciation costs have been subtracted, is called the: market approach cost approach substitution approach income approach
Cost approach Explanation: The cost approach is what is described here - it estimates the amount needed to reproduce or replace the property.
An inaccurate county tax certificate failed to indicate the correct taxes due. Additional tax money due would be the responsibility of the: Title Company Buyer''s Agent Seller County Treasurer
County Treasurer Explanation: The fault lies with the County Treasurer
The water bill has been paid in advance by the seller for the month of August. The bill was $35.82. The closing is August 25. The correct entry on the settlement statement would be: Credit Seller $35.82, Debit Buyer $35.82 Credit Buyer $9.50, Debit Seller $9.50 Credit Seller $8.09, Debit Buyer $8.09 Credit Seller $8.09, Debit Buyer $27.73, Credit Broker $27.73
Credit Seller $8.09, Debit Buyer $8.09 Explanation: Seller overpaid, so buyer owes seller - Credit Seller/Debit Buyer To calculate the amount owed: $35.82 / 31 (days in August) x 7 (Buyer owned days in month, including day of closing)= $8.09 Credit Seller $8.09, Debit Buyer $8.09
A buyer employed a broker through a sales associate. Which of the following would not terminate the buyer agency? The house was significantly damaged by a fire Death of the broker Death of the sales associate
Death of the sales associate Explanation: Correct is the death of the Salesperson. First up, please note the "NOT" in the question, easy to miss and changes the whole complexion of the question. As to the answer, remember that all contracts are with the company. Legally, the Sales Associate is just someone who has been appointed to represent the company in the transaction. The unfortunate demise of the licensee has no legal impact on the transaction because s/he is not a party to the contract. The house burning up (nothing to sell or buy), the employing broker who is the personification of the company can both cause the termination of a listing or buyer agency agreement. As a side, please note that on a purchase contract the rules change. Although the significant damage to the house would likely result in the buyer having the ability to bail on the contract, the death of either party does not automatically terminate the agreement. The agreement is still binding on the estate of the deceased. The reason for this is a contract like a buyer agency or listing contract is considered to be a personal services agreement and as such the death of either party terminates it. However a purchase contract is not a personal services agreement and as such the death of the parties does not automatically terminate the agreement.
Once a student has passed the Colorado licensing exam, how soon can they solicit clients to list or buy a house? Immediately Upon application to the State of Colorado for a real estate license When you have passed the exam and joined a brokerage firm. When your license has been approved by the State of Colorado
Explanation: You cannot perform a licensed activity until you have a license. Soliciting a client to list or buy a house is a form of contract negotiating. You are negotiating the terms under which you will work with them. Negotiating a contract is a licensed activity. Passing the exam by itself does not give you a license, nor does joining a brokerage firm. You receive a license when your application has been approved by the Colorado Division of Real Estate.
In the absence of language to the contrary in the Property Managment Agreement a property manager must: Deliver security deposits to owner Deposit security deposit into escrow account Deposit security deposit into operating account Refuse to accept security deposit from tenant
Deposit security deposit into escrow account Explanation: Short version: put it into the escrow account first even if you are going to immediately transfer it to the owner. However, before the owner transfer you need to provide appropriate written notification to the tenant as to who is holding the deposit and the holder's contact info. CP-5 Commission Position on Advance Rentals and Security Deposits Pursuant to C.R.S. 12-61-113 (l)(g.5) and Commission Rule E-l and E-16, all money belonging to others which is received by a broker must be placed in an escrow or trust account. This applies to tenant security deposits and advance rental deposits, including credit card receipts, held by a broker. A broker may not deliver a security deposit to an owner unless notice is given to the tenant in the lease, rental agreement, or in a separate written notice that the security deposit will be held by the owner. Such notice must be given in a manner so that the tenant will know who is holding the security deposit, and shall include either the true' name and current mailing address of the owner or the true name and current mailing address of a person authorized to receive legal notices on behalf of such owner, along with specific requirements for how the tenant is to request return of the deposit. If, after receipt by the broker, the security deposit is to be transferred to the owner or used for the owner's benefit, the broker, in addition to properly notifying the tenant, must secure the consent of the owner to assume full financial responsibility for the return of any deposit which may be refundable to the tenant. The broker shall not withhold the identity of the owner from the tenant if demand for the return of the deposit is properly
Which of the following would MOST require a broker recommendation that his or her buyer further investigate water rights: Residential Buyer of a home wanting a permitted domesic water well Buyer wanting home in subdivision with a lake Buyer purchasing an urban storefront for a coffee shop Commercial buyer wanting a farm with irrigation canals
Explanation: Although it is never a bad idea to fully understand and verify the water rights associated with the purchase of any property. Commercial water rights, particularly involving agriculture, can be very complex and always warrant in depth investigation.
The Sellers Agent at his option rebated part of his commission back to the Seller. Was this legal? No, it is illegal to pay a commission to anyone who is unlicensed Yes, as it was part of the negotiated commission in the listing contract
Explanation: The Real Estate Commission has no problem with a licensee giving money to his/her client. The client does not need to be licensed as the rebate is considered a product of the commission negotiated by the licensee and his/her client in the Listing Agreement.
A Single Party listing: does not require a contract has no holdover clause does not fall under the Statute of Frauds requires two agents
Has no holdover clause Explanation: As per commission position 13: Brokers often secure single-party listings because they have what they believe to be a good prospect for purchase. These listings are usually only for a few days, but occasionally the broker wishes to be protected for a longer period while the broker is negotiating with a particular prospective purchaser. Usually, when an owner signs an exclusive right to sell with an exclusive brokerage adendum concerning a single party, the owner wishes to limit the rights of the broker under the listing contract. Therefore, in the space provided for additional provisions, one, two, or all of the following limitations should be inserted in this space: 1. The provisions of this listing contract shall apply only in the event a sale is made to ___________________________________. 2. The termination date shall not be extended by the "Holdover Period" of this listing contract. 3. In the event a sale is made by the owner or their broker to any other party than the above names, this isting contract is void.
What is the effect of a New Loan Termination Deadline when specified in an approved Residential Contract to Buy and Sell? If the buyer cannot get a satisfactory written loan commitment by that date, the buyer may terminate the contract upon written notice to the seller. The contract is contingent on actual funding of the new loan at closing. If the buyer cannot get a satisfactory written loan commitment, the contract terminates on that date. The buyer must provide the written commitment to the seller by that date or he will be in default.
If the buyer cannot get a satisfactory written loan commitment by that date, the buyer may terminate the contract upon written notice to the seller. Explanation: A buyer has until the Deadline to provide written notice s/he cannot get a commitment for a satisfactory loan and wants to terminate the contract. If s/he does provide such notice, the earnest money is refunded to the buyer. If the buyer does not provide such notice, the contract continues, but the buyer's earnest money becomes nonrefundable should s/he not receive a loan.
On what time basis must trust accounts be reconciled: Daily weekly monthly annually
Monthly Explanation: At least Monthly.From the real estate manual:The purpose of reconciliation is to verify that the records for the account are in balance per the escrow accounting equation. Rule E-1(p)(3) requires the ending bank statement cash balance to be reconciled with the office journal and ledger account cards during any month when there has been escrow account activity
A real estate agent does a open house for a fellow colleague. The listing is not hers. The potential buyers ask her questions about the property and the questions she does not know she says she will get back to them. Implied agency was created Express agency was created No agency was created She is now their agent
No agency was created Explanation: Only a written contract such as a listing or buyer agency agreement can create an agency relationship in real estate.
A deed of trust held by someone other than the public trustee is NOT: Notice that a legal action is pending that may effect ownership Exempt from loan recission rules Foreclosed through the courts A conditional transfer of ownership from the Trustor to the Beneficiary
Notice that a legal action is pending that may effect ownership Explanation: Regardless of who holds the Deed of Trust, the transfer of ownership is real and not a notice of pending legal action.
Select the correct statement about a lease in Colorado: Every lease contains an implied warrant of habitability and quiet enjoyment Only residential leases have an implied warrant of habitability Every lease contains an implied warrant of habitability
Only residential leases have an implied warrant of habitability Explanation: Property Mangement and Leases - Duties and Liabilities of the Parties, All residential leases have an implied Warranty of Habitability. This means they must meet a minimal set of standards for housing established by the State. "Implied" means the Warranty of Habitability standards do not have to be physically listed in a lease to be effective as they are State law. Commercial leases do not have a Warranty of Habitability. As to responsibility of making repairs - neither a landlord or tenant is required to make a repair unless stated in the lease. However the Landlord on residential properties is required to provide a habitable home that satisfies the conditions of the Warranty of Habitability. If the home is deemed not habitable, the Landlord cannot be compelled to make a repair, but the Tenant cannot be compelled to stay. When a tenant files a legal action to break a lease due to an unhabitable situation - this is called "constructive eviction."
A broker allowed her license to expire and renewed it 32 days after the expiration date. What does she need to do to reinstate her license?" Pay the renewal fee Pay the renewal fee, and pay half the renewal fee for it being over 30 days Pay the renewal fee and retake the state examination Pay the renewal fee and take 8 credit hours of continuing education
Pay the renewal fee, and pay half the renewal fee for it being over 30 days Explanation: On Renewal Fees as per Real Estate Commission:I) If proper application is made within thirty-one days after the date of expiration, by payment of the regular three-year renewal fee;(II) If proper application is made more than thirty-one days but within one year after the date of expiration, by payment of the regular three-year renewal fee and payment of a reinstatement fee equal to one-half the regular three-year renewal fee;(III) If proper application is made more than one year but within three years after the date of expiration, by payment of the regular three-year renewal fee and payment of a reinstatement fee equal to the regular three-year renewal fee.
Publishing a foreclosure notice of sale in a newspaper is the duty of the: County Treasurer Public Trustee Lender County Assessor
Public Trustee Explanation: Sale date published for 5 consecutive weeks prior to saleMore info:A residential foreclosure sale must be within 110 to 125 days of the recording of the Notice of Election and Demand. For agricultural properties the window is 215-230 days.
What fee will ALWAYS show as a credit on the sellers closing statement? Recording the Warranty Deed Documentary Fee New Loan Amount Sales Price
Sales Price Explanation: The seller, not the buyer, recieves the sales price of the property, hence it is always Seller Credit.
Brokers should provide safeguards on seller-assisted down payments on: Commercial transactions Land transactions Time share transactions Residential transactions
Residential transactions Explanation: As per Commission Position Statement 30 (CP-30) "The Colorado Real Estate Commission and the Colorado Board of Real Estate Appraisers have issued this Joint Position Statement to address mutual concerns pertaining to practices of real estate brokers and real estate appraisers with regard to residential sales transactions involving seller assisted down payments, seller concessions, personal property transferred with real property and other items of value included in the sale of residential real property. A residential real estate transaction has a life well beyond closing and possession of the property. Accurate sales data is crucial for appraisals and comparative market analysis (CMA) work products. Both appraisers and real estate brokers can effectively work together to maintain the safeguards that accurate sold data affords."
The Licensee Buyout Addendum informs the Seller of all EXCEPT: Seller is responsible for marketing and closing expenses Seller acknowledges that in entering into the Contract, Buyer is exposed to possible losses and expenses. The Contract may be terminated at any time by Seller upon written notice to Buyer. Any termination of the Contract shall not affect the listing contract for the Property (Listing Contract).
Seller is responsible for marketing and closing expenses Explanation: A is the only verbiage listed NOT in the Licensee Buyout Addendum. A licensee buyout addendum is a form used in certain real estate and property transactions in the state of Colorado. The LBA is used only in the purchase and sale of properties between licensed real estate professionals and their own clients. History and Purpose Formally known as Form LB36-10-06, or the Licensee Buy-Out Addendum to Contract to Buy and Sell Real Estate, the form was adopted by the Colorado Real Estate Commission in January 2007. It is intended to prevent improprieties and conflicts of interest in licensee/client transactions, as well as to make sellers contractually aware of the potential differences in selling to a licensed real estate professional as opposed to conventional buyers. Situations Dictating Use Licensed real estate agents are required to use an LBA when they enter into contracts to purchase properties concurrently with the initial listing of that property, when it immediately hits the market. Licensees also are required to use the LBA form when they are purchasing a property to facilitate its owner's purchase of another property, as well as when they continue to market that property to other potential buyers. Deleted Provisions Under the provisions of the licensee buyout addendum, several conventional provisions of standard real estate listing contracts reached under Colorado state law are deleted. Deleted provisions include a property's appraisal condition, liquidated damages or pre-assessed damages to the property, provisions related to the seller's financial default status and the broker's acknowledgments and compensation disclosure forms. Profit and Loss Stipulations Colorado's LBA also stands as contractual acknowledgment by a property seller that the buyer is a licensed real estate professional and any future profit or loss on a resale of the property is solely that of the buyer. Similarly, the LBA protects the property seller by acknowledging that any fees related to closing, holding and reselling the property are all absorbed by the buyer and not the property seller as the original or prior landowner.
If any of the title documents are not delivered to the buyer on or before the date specified in the contract. The contract can be: terminated voided no effect canceled
Terminated Explanation: If the sellers or sellers representatives miss this date then the buyer may terminate the contract and recieve his/hers earnest money back.
The buyer notifies the seller in writing of a termination of the contract under the New Loan Termination Deadline. What happens to the earnest money? The broker splits the money with the seller The broker must immediately return the money to the buyer The broker holds the money until there is mutual agreement to return the money to the buyer The buyer and the seller will mediate any disagreement about the earnest money
The broker must immediately return the money to the buyer Explanation: A buyer has until the Deadline to provide written notice s/he cannot receive a satisfactory loan and wants to terminate the contract. If s/he does provide such notice, the earnest money must be refunded to the buyer. If the buyer does not provide such notice, the contract continues, but the buyer's earnest money becomes nonrefundable should s/he not receive a loan.
A buyer is assuming a loan and the loan balance has turned out to be less than the assumption balance provided by the seller. How would this be handled according to the Residential Contract to Buy and Sell ? The seller must reduce the price of the property to compensate for the difference The buyer may terminate the contract by written notice if the difference causes the buyer's cash at closing to increase by a stated amount. The contract is automatically terminated by the seller's misrepresentation Depending on how the form is completed, either the buyer may terminate the contract or the seller could reduce the price to make up for the difference.
The buyer may terminate the contract by written notice if the difference causes the buyer's cash at closing to increase by a stated amount. Explanation: The buyer has the option of terminating the contract if the terms are unacceptable.
You have a listing with a couple who hold title in joint tenancy. A broker brings you an offer and the couple indicates that they will probably accept the offer, but they want to think it over for a few hours. During those few hours they are involved in a traffic accident and one of them is killed. What would be the status of the listing? The listing agreement is enforceable against the surviving spouse The listing agreement is cancelled. The offer to purchase is void. The offer to purchase is still valid.
The listing agreement is enforceable against the surviving spouse Explanation: If the listing agreement has been signed by both spouses and one spouse dies, the listing agreement is still enforceable against the surviving spouse. In joint tenancy the surviving member(s) immediately inherits the property upon the death of a member. Therefore the surviving member has full rights to sell the property and the listing contract is valid. If you chose either of the purchase contract answers please be careful to read the questions more closely. This question asked about the status of the listing contract. As the verbiage of this questions contained much info about the purchase contact it is easy to skim through and miss the real question.
If an offer is given that fulfills all the terms of a contact and the seller rejects that offer - what happens? The listing broker is entitled to a commission The listing broker receives no commission The listing broker can sue for specific performance The listing broker is entitled to a partial commission for services rendered
The listing broker is entitled to a commission Explanation: When we, as agents, enter an agreement to market someone's property, we are tasked to bring them a "ready, willing and able buyer". We do that - we get paid. If we do that and the seller gets cold feet, rejecting an offer which met all of the seller's stated requirements, nobody can force the seller to sell, but we did our job and the seller may be liable for a commission to the listing agent.
What recourse do the buyers have if they determine that property they have contracted to purchase is within a special taxing district? They may demand that the seller pay the indebtedness of such a district. They may petition to be excluded from the district. They may terminate the contract automatically on the Off-Record Matters date. They may terminate the contract by written notice to the seller.
They may terminate the contract by written notice to the seller. Explanation: Termination requires written notice of intent to terminate and the buyers must provide written notice to the seller no later than the Off-Record Matters date
True/False - According to Commission Position 40 on Teams, Real estate brokers that function as teams should not advertise teams using the terms "realty", "real estate", "company", "corporation", "corp.", "inc.", "LLC" or other similar language that would indicate a company other than the employing brokerage firm. True False
True Explanation: CP-40 Commission Position on Teams (4-5-2011) The Commission recognizes that there are benefits to both real estate brokers and consumers in the usage of real estate broker teams. Teams may be formed within a licensed brokerage firm with the approval of the employing broker. Real estate brokers operating as teams need to ensure that they are compliant with Commission rules regarding advertising, name usage and supervision. Advertising and name usage: While there is no prohibition of teams, real estate brokers need to ensure that they do not advertise in a manner that misleads the public as to the identity of the brokers' licensed brokerage. Real estate brokers that function as teams should not advertise teams using the terms "realty", "real estate", "company", "corporation", "corp.", "inc.", "LLC" or other similar language that would indicate a company other than the employing brokerage firm. Advertising includes, but is not limited to, websites, signage, property flyers, mailings, business cards, letterhead and contracts. The advertising of team names should never give the impression that the team is an entity separate from the licensed real estate brokerage. If the identity of the employing broker or the brokerage firm is difficult for the public or the Commission to ascertain, the team may be in violation of Rule E-8 Advertising. Supervision: In addition to the supervision requirements set forth in Rules E-31 and E-32, Rule E-30 Employing broker responsibilities requires that the broker designated to act as the broker for any partnership, limited liability company or corporation, i.e. the employing broker, fulfill the following duties: 1) Maintain all trust accounts and trust account records; 2) Maintain all transaction records; 3) Develop an office policy manual and periodically review office policies with all employees; 4) Provide for a high level of supervision for newly licensed persons pursuant to Rule-32; 5) Provide for a reasonable level of supervision for experienced licensees pursuant to Rule E-31; 6) Take reasonable steps to ensure that violations of statutes, rules and office policies do not occur or reoccur; 7) Provide for adequate supervision of all offices operated by the broker, whether managed by licensed or unlicensed persons. Pursuant to §12-61-118, C.R.S. and Rule E-29, employing brokers are also responsible for providing supervision over such activities with reference to the licensing statutes and Commission rules for all brokerage employees, including but not limited to administrative assistants, bookkeepers and personal assistants of licensed employees. Thus, employing brokers are responsible for the actions of unlicensed persons who perform functions within the real estate broker team. Employing brokers need to ensure that any unlicensed person acting within the team is not engaged in practices that require a real estate broker's license. Employing brokers also need to establish that the compensation paid to an unlicensed person for services provided is not in the form of a commission. Compensation paid to an unlicensed person is not required to to be paid solely by the employing broker. However, §12-61-117, C.R.S. requires that all licensee compensation or valuable consideration for the performance of any acts requiring a broker's license is paid solely by the employing broker.
The objective of the buyer's walkthrough just prior to closing is: Give the buyer an opportunity to renegotiate the price. Verify that physical condition is in compliance with previous agreements Renegotiate the inspection points Last chance to terminate the contract without penalty
Verify that physical condition is in compliance with previous agreements Explanation: Gives the buyer an opportunity to verify that the property meets the requirements that were previously agreed.
Under what conditions is it permissible for a broker to pay a referral fee to a person who does not possess a Colorado real estate license? Under no conditions When the duties performed by that person would not normally require a real estate license Only if the unlicensed person is in the employ of and under the direct The unlicensed person may perform any duty deemed acceptable by the broker and receive a referral fee, if permission is granted by all interested parties, and so stipulated in writing
When the duties performed by that person would not normally require a real estate license Explanation: The Colorado Real Estate Commission states that a referral fee payment is permissible provided that an unlicensed person not perform duties requiring a license. Do not confuse "referral fee" with "commission". You can only pay a commission to a licensed agent. Referrals are ok to pay to anybody. The difference is what you do for the money. If the person receiving the money is doing something that requires a license such as negotiating than it is a commission. If the person is just passing a name along, which does not requires a license - then it is a referral fee. Referral Fee's also have to be reasonable and cannot be a commission in disguise.
If an offer was made on a house in which the buyer intended to have a hair salon in the basement, but found out a few days prior to closing that the zoning wouldn't allow it, can they cancel the agreement without penalty? Yes No, the buyer must perform this due diligence prior to submitting an offer Yes, but only if they terminate in writing prior to the Record Title Objection Deadline Yes, as long as they file an objection in writing prior to Closing
Yes, but only if they terminate in writing prior to the Record Title Objection Deadline Explanation: Zoning is a matter of Title. Buyers have the right to terminate the contact without penalty if any aspect of Title is unsatisfactory to them. However, they must due so in writing prior to either the Off-Record Title Objection Deadline or the Record Title Objection Deadline. From the Contract to Buy/Sell: Title Advisory. The Title Documents affect the title, ownership and use of the Property and should be reviewed carefully. Additionally, other matters not reflected in the Title Documents may affect the title, ownership and use of the Property, including, without limitation, boundary lines and encroachments, area, zoning, unrecorded easements and claims of easements, leases and other unrecorded agreements, and various laws and governmental regulations concerning land use, development and environmental matters. The surface estate may be owned separately from the underlying mineral estate, and transfer of the surface estate does not necessarily include transfer of the mineral rights or water rights. Third parties may hold interests in oil, gas, other minerals, geothermal energy or water on or under the Property, which interests may give them rights to enter and use the Property. Such matters may be excluded from or not covered by the title insurance policy. Buyer is advised to timely consult legal counsel with respect to all such matters as there are strict time limits provided in this Contract [e.g., Record Title Objection Deadline (§ 3) and Off-Record Title Objection Deadline
A buyer is concerned that new construction a mile away could have a negative environmental impact on the home they are considering purchasing. Can they make the Contract to Buy/Sell contingent on the result of an environmental impact report? No, it is impossible to determine the negative impact of construction a mile away Yes, you can make a contract contigent on anything
Yes, you can make a contract contigent on anything Explanation: This is a matter of negotiation between the buyer and seller. The law has no jurisdiction on matters of negotiation between a buyer and seller.
Mineral rights: If property is attached with mineral rights, you may be obligated to: charge a rate for entry refuse entry allow them to enter an use your property to gain access to the minerals call police
allow them to enter an use your property to gain access to the minerals Explanation: Just as if your neighbor had no access to their property, the law may require you to grant the neighbor an easement to drive across your property, the mineral owner has a right to access their minerals. This does not mean that the mineral rights owner has unlimited right to impact or damage your property. The law may require the mineral owner to access their minerals, for example oil, by drilling underneath the property leaving the surface undisturbed. This is a complex and litigious area of the law.
A counterproposal: is a rejection of a proposed contract to buy/sell amends the terms and conditions of a proposed contract to buy/sell use is mandatory to modify the terms and conditions of a contract to buy/sell is used to counter the purchase price only of a proposed contract to buy/sell
amends the terms and conditions of a proposed contract to buy/sell Explanation: The key here is "supersede and replace." This is not merely a rejection of an offer, it is amending the original offer, not rejecting it entirely.
The Colorado Real Estate Commission may take all of the following actions against a licensee EXCEPT: revoke or suspend a license fine a licensee assess actual damages assign mandated education for a licensee
assess actual damages Explanation: The commission may fine, censure or mandate education for licensee and suspend or revoke a license. Only a court can assess damages.
Broker attends client closing. What must he/she do with signed closing documents? deliver to client within 2 business days deliver to title/closing company deliver immediately to Employing Broker deliver to Managing Broker within 3 business days
deliver immediately to Employing Broker Explanation: Clients AND employing brokers are to recieve closing doucments immediately.More info:Rule E-5. Closing responsibility; closing statement distribution. Pursuant to 12-61-113 (1)(h), at time of closing, the individual licensee who has established a brokerage relationship with the buyer or seller or who works with the buyer or seller as a customer, either personally or on behalf of an employing broker, shall be responsible for the proper closing of the transaction and shall provide, sign and be responsible for an accurate, complete and detailed closing statement as it applies to the party with whom the brokerage relationship has been established. If signed by an employed licensee, closing statements shall be delivered to the employing broker immediately following closing... Rule E-4. Document Preparation and Duplicates. ... A real estate broker shall immediately deliver a duplicate of the original of any instrument (except deeds, notes and trust deeds or mortgages, prepared by and for the benefit of third party lenders) to all parties executing the same when such instrument has been prepared by the broker or the broker's employed licensee or closing entity and relates to the employment or engagement of the broker or pertains to the consummation of the leasing, purchase, sale or exchange of real property in which the broker may participate as a broker...
When a buyer's agent approaches a for-sale-by-owner on behalf of the buyer client, what disclosure is required? disclosure of the broker's working relationship with the buyer no disclosure since the seller has elected to be unrepresented no disclosure as long as the broker seeks to list the property prior to submitting the buyer's offer disclosure of the buyer's financial capability to complete a purchase
disclosure of the broker's working relationship with the buyer Explanation: A broker's working relationship with one party must be disclosed to any other party to a transaction or potential transaction
According to the Licensee Buyout Addendum to the Contract to Buy and Sell, when does responsibility extend beyond the licensee to the brokerage firm? when the buyout date arrives when the buyout is for the personal use of the principal broker only if the listing associate is unable to perform the buyout if the employing broker signs at the bottom of the addendum
if the employing broker signs at the bottom of the addendum Explanation If the managing or employing broker signs the Licensee Buyout Addendum, then the brokerage company is responsible. According to the form, this is the only specification for responsibility.A is correct. A is the only verbiage listed NOT in the Licensee Buyout Addendum.More info:What Is a Licensee Buyout Addendum?by Maxwell Wallace, Demand MediaA licensee buyout addendum is a form used in certain real estate and property transactions in the state of Colorado. The LBA is used only in the purchase and sale of properties between licensed real estate professionals and their own clients.History and PurposeThe Licensee Buy-Out Addendum to Contract to Buy and Sell Real Estate is intended to prevent improprieties and conflicts of interest in licensee/client transactions, as well as to make sellers contractually aware of the potential differences in selling to a licensed real estate professional as opposed to conventional buyers.Situations Dictating UseLicensed real estate agents are required to use an LBA when they enter into contracts to purchase properties concurrently with the initial listing of that property, when it immediately hits the market. Licensees also are required to use the LBA form when they are purchasing a property to facilitate its owner's purchase of another property, as well as when they continue to market that property to other potential buyers.Deleted ProvisionsUnder the provisions of the licensee buyout addendum, several conventional provisions of standard real estate listing contracts reached under Colorado state law are deleted. Deleted provisions include a property's appraisal condition, liquidated damages or pre-assessed damages to the property, provisions related to the seller's financial default status and the broker's acknowledgments and compensation disclosure forms.Profit and Loss StipulationsColorado's LBA also stands as contractual acknowledgment by a property seller that the buyer is a licensed real estate professional and any future profit or loss on a resale of the property is solely that of the buyer. Similarly, the LBA protects the property seller by acknowledging that any fees related to closing, holding and reselling the property are all absorbed by the buyer and not the property seller as the original or prior landowner.
An employing broker (AKA sponsoring broker) may properly designate a broker: in writing by giving proper disclosure as a transaction-broker orally to the client with the independent contractor agreement
in writing Explanation: It must be done in writing
What is typically not negotiable in the Contract to Buy and Sell Real Estate closing service fee mediation fee appraisal fee title fee
mediation fee Explanation: The purchase contract indicates that should there be a legal dispute between buyer and seller, the first legal recourse is mediation and both both parties will split the fee equally regardless of who prevails. From the Contract to Buy and Sell: MEDIATION. If a dispute arises relating to this Contract, prior to or after Closing, and is not resolved, the parties shall first proceed in good faith to submit the matter to mediation. Mediation is a process in which the parties meet with an impartial person who helps to resolve the dispute informally and confidentially. Mediators cannot impose binding decisions. The parties to the dispute must agree, in writing, before any settlement is binding. The parties will jointly appoint an acceptable mediator and will share equally in the cost of such mediation. The mediation, unless otherwise agreed, shall terminate in the event the entire dispute is not resolved within thirty days of the date written notice requesting mediation is delivered by one party to the other at the party's last known address. This section shall not alter any date in this Contract, unless otherwise agreed
An offer to purchase is given to Broker Mary who has an Exclusive Right To Sell listing agreement with a seller. She.. must verify buyer's financial condition by her independent investigation is responsible for validating sellers statements on Sellers Property Disclosure must personally investigate condition of property and disclose material facts to buyer must disclose all material facts about the property that is know to her
must disclose all material facts about the property that is know to her Explanation: C.R.S. 12-61-804. (3)(a) requires that the broker must disclose all material facts about the property of which she/he has knowledge.
Unless the lease states otherwise, how long does a property manager have to return a security deposit after a lease has expired? one month 60 days 45 days 6 months
one month Explanation: Colorado law mandates that a security deposit must be returned within one month with an accounting for all deductions unless the lease indicates a different time period. Under no circumstances can the period of time in the lease be greater than 60 days.
The purchase agreement says to release earnest money after the inspection date. The seller demands the money be released prior to the inspection date. What should the listing broker do? tell the buyer of the situation refuse to release the earnest money release the earnest money
refuse to release the earnest money Explanation: Earnest money can only be released with the consent of both parties or by direction of a court. The listing broker cannot release the earnest money in violation of the purchase contract based solely upon the direction of his/her client.
When a Seller decides to submit a Counterproposal in response to a Contract to Buy and Sell, the Seller: signs both the original Contract and the Counterproposal initials the original Contract and signs the Counterproposal signs the Counterproposal sign the original offer
signs the Counterproposal Explanation: The client submitting the counterproposal signs only the Counterproposal. The Counterproposal amends and replaces the proposed contract.This is stated on the bottom of the counterproposal: "If accepted, the Contract, as amended by this Counterproposal, will become a contract between Seller and Buyer. All other termsand conditions of the Contract remain the same."
Which of the following is required before an owner of a 35-parcel of undeveloped land may drill a well for water only? nothing is required; a 35-acre site is entitled to an exempt well the owner must purchase water rights the owner must obtain a well permit from the state engineer if there is a stream on the property it must be diverted
the owner must obtain a well permit from the state engineer Explanation: Small wells on domestic property must have a permit from the state engineer even though they are exempt from a requirement to purchase water rights.
According to the Exclusive-Right-to-Sell Listing Contract which of the following is true with regard to fixtures listed within the contract? they are included unless they are crossed out on the form they are included if attached on the date of the listing unless specifically excluded by the seller they are included in every case they are included if they are on the property at the time of the listing
they are included if attached on the date of the listing unless specifically excluded by the seller Explanation: Unless excluded by the seller, all fixtures will be included
When must the "Change of Status" form be signed? before eliciting or receiving confidential information when changing brokerage relationship from transaction broker to agent when taking a listing when changing brokerage relationship from agent to transaction broker
when changing brokerage relationship from agent to transaction broker Explanation: A broker may not represent one party as an agent and work as a transaction-broker with the other party in the same transaction unless the principal to the agency agreement has agreed to revert to transaction brokerage. To accommodate this change, the commissionlisting forms contains a selection by the client at the time of the listing and a "Change of Status" form to notify the client at the time the "double ended" situation develops.
