Real Estate Pre-Test

What type of agent do you think a broker is in the managing broker - agent relationship? A. Universal B. General C. Special D. Limited

B. General - Agents are considered to be general agents to their managing brokers. An agent would be a special agent to their client.

A suspended license may be reinstated only A. following the prescribed term B. after the reinstatement proceeding c. after paying the prescribed penalty D. if the commission is satisfied the licensee can practice competently

D. if the commission is satisfied the licensee can practice competently.

Licensee W had his license revoked. At his point W may: A. reapply in 7 years B. expect the license to be reinstated following the revocation C. seek reinstatement after probationary period D. never practice again

A. reapply in 7 years

A revoked license: A. won't be reinstated until the next license cycle B. will be reinstated following the 7 year revocation C. may be reinstated if the commission is satisfied the licensee can practice competently. D. may not be reinstated; the person may reapply in 7 years

D. may not be reinstated; the person may reapply in 7 years Revoked licenses may not be reinstated, but the person may reapply in 7 years. What the Commission does at that point is not referenced in the law, and it is the Commission's decision as to whether to issue a new license to a person and what if any additional steps, such as retaking the pre-license course, must be taken.

Choose the situation that does not have to remain confidential A. your sellers told you they put new carpet in the house you have listed B. Your seller clients parents live next door C. Your Seller client has a new job in a nearby city D. Your buyer client is in the middle of a divorce.

A. Your sellers told you they put new carpet in the house you have listed

In Indiana the mere discussion of what could establish an agency relationship with a client even if there is no contract formed yet? A. asking questions more specific to a prospective clients needs in housing B. Responding to social media inquiries about a property C. General discussion with open house attendees D. answering general questions pertaining to a lisiting.

A. asking questions more specific to a prospective clients needs in housing

What should you do if a seller refuses to sign an agency disclosure form? A. Let the seller know you will refer them to another agent B. Document the fact and date your documentation C. Let them know because they wouldn't sign the form they can expect less for their home D. Refuse to take the listing

B. Document the fact and date your documentation You can't force anyone to sign anything. If anyone refuses to sign an agency disclosure form merely document that they refused to sign it and date your documentation

A pre-license real estate school makes statements in an advertisement that are improper. The Commission would likely take which action? A. Revoke the school's certification and the director's license until a hearing is held. B. Issue a cease and desist order to prevent further violations C. Place the director on probation until a hearing makes a final determination D. Summarily suspend the school and its director.

B. Issue a cease and desist order to prevent further violations A cease and desist order, which is basically an order to stop doing something, would likely be used to prevent further violations. Summary suspension is reserved for extreme cases in which person or property are in immediate danger and is the only sanction that may be imposed before a hearing is held.

If a licensee represents a clear and immediate danger to person or property, the commission: A. may summarily revoke the license only after a hearing. B. may summarily suspend the licensee without a hearing C. may summarily suspend the license only after a hearing D. may summarily revoke the license without a hearing.

B. May summarily suspend the licensee without a hearing This is the only case where the Commission may impose a sanction without a holding a hearing first. A hearing would need to be scheduled with 90 days, but in the meantime this suspension is intended to stop the suspect behavior. There is no such thing as summary revocation.

Which fiduciary duty is owned to a client but not owed to a customer? A. Fairness B. Obedience C. Honesty D. Knowledge

B. Obedience

A practitioner is found guilty of a license law violation that resulted in a consumer suffering actual damages of $1,000. Other than the Recovery Fund, what options are available to the Commission to address the consumer's loss? A. Order a seizure of the practitioner's personal assets equal to the amount of the judgement. B. Order the practitioner to pay consumer restitution to those who suffered damages. C. Place the practitioner on indefinite probation D. Summarily revoke the practitioner's license until damages are repaid..

B. Order the practitioner to pay consumer restitution to those who suffered damages Ordering consumer restitution is an available sanction; there is no summary revocation or indefinite probation, nor can the Commission seize assets.

What type of agent would have the greatest authority with dealing in Real Estate? A. General B. Universal C. Special D. All have the same

B. Universal A universal agent has the authority to do everything themselves that a principal could do. An agent is rarely deemed a universal agent.

Which of the Commission receives a court order stating that a practitioner is delinquent on child support payments as defined under IN law, the commission shall do which of the following until the delinquency is repaid or payment arrangements have been reached? A. summarily suspend the licensee B. suspend or place the licensee on probation C. revoke the license D. nothing as this is not an issue for the commission

B. suspend or place the licensee on probation This situation applies to all licensed professions. The State obviously wants these delinquencies "paid in full", but also understands that income is necessary to repay debts, so payment arrangements are common but must include income withholdings.

Choose the best example of a general agent A. A power of attorney given to a Nephew to handle his Aunts medical situation B. A power of attorney given to transfer title to a boat C. A property manager D. A licensee

C. A property manager

Martha wants to list her house and has interviewed several real estate firms to do so. What action creates a "Seller" agency relationship between Martha and a Broker? A. Martha signs a Consumer guide to agency relationship B. Martha expresses she would like to work with a brokerage C. Martha signs a Buyer Broker Agreement D. Martha signs a listing agreement with a brokerage

D. Martha signs a listing agreement with a brokerage

A License has violated an important article of the NAR Code of Ethics. As a direct result of the NAR violation, which of the following sanctions would the commission likely impose? A. License suspension B. License probation C. None, until the arbitration proceeding is completed D. None

D. None Violations of the NAR code of ethics are violations of a trade organization's rules, and not necessarily license law. The Board of Realtors can take away one's membership in that organization, but only the Commission can sanction a license and only for violations of license law. Many violations of the NAR Code of Ethics may be violations of the license law but that would have to be proven first.

Which does the Indiana Real Estate Commission not have authority over? A. approve CE courses of study B. administer and enforce Indiana license law C. inspect the records of licensees D. Resolve licensee disputes over fees

D. Resolve licensee disputes over fees The IREC does not have authority over licensees fees

What is another term to describe Dual or Limited agency? A. Limited loyalty B. Undisclosed dual agency c. Dual agency D. Undivided loyalty

D. Undivided loyalty The fiduciary duty that is given up by both buyer and seller in a dual agency transaction is Undivided Loyalty

A licensee found guilty of a violation that causes financial harm to a consumer may face all of the following sanctions except: A. Suspension and civil restitution B. Probation and a $1000 civil penalty. C. Letter of reprimand D. a civil penalty not to exceed $10,000 per licensee.

D. a civil penalty not to exceed $10,000 per licensee

A licensee convicted of dealing or manufacturing illegal drugs or controlled substances shall have their license: A. revoked until criminal proceeding are completed B. placed on probation C. suspended pending the investigation D. suspended or revoked

D. suspended or revoked The operative word here is "shall" as opposed to "may" in terms of sanctioning. This is not a matter for an investigation by the Commission. At this point the criminal proceeding has been completed as the licensee has been convicted. The law does not reference any prescribed steps for reinstatement of these licenses.

Licensees convicted of a crime shall send a copy of the complaint and judgement: A. to their managing broker within 30 days of the conviction B. no one as prosecutors are required to forward these convictions to regulatory bodies C. to the commission within 30 days of the conviction D. to the commission, their managing broker and the Board of Realtors: within 30 days of the conviction

C. to the commission within 30 days of the conviction It is the duty of the convicted licensee to report any conviction to the Commission within 30 days of conviction, by sending a copy of the conviction and complaint. The license law does not refer to notifying other bodies.

Which individual requires a license? A. Linda who owns and rents less than 12 units on her property B. Bill who was the executor of his mothers estate C. tax official conducting a tax sale D. An agent selling a commercial property

D. An agent selling a commercial property

Which of the following is available to a licensee found guilty of violating the license law? A. Seek arbitration B. Appeal the conviction in Circuit court C. File an order of mediation D. Appeal the conviction to the full commission

D. Appeal the conviction to the full commission The Commission has the "final word" on these regulatory matters. Courts deal with civil and criminal matters. Once found guilty of a violation, a hearing before the full Commission is the only available recourse.

In Indiana the mere discussion of what could establish an agency relationship with a client even if there is no contract formed yet? A. General discussion with open house attendees B. Responding to social media inquiries about a property C. Answering general questions pertaining to a listing D. Asking questions more specific to a prospective clients needs in housing.

D. Asking questions more specific to a prospective clients needs in housing. When a licensee engages in conversation more specific about someone's needs when it comes to housing this would establish a more involved relationship that would seem to make the licensee act like an agent and convey fiduciary obligations

In Indiana when Limited agency is created, the licensee is termed to represent whom? Seller Buyer Buyer and Seller Neither buyer or seller

Buyer and Seller

Which information would not be confidential to a client? A. An area of interest to a buyer that they night like to search for a home. B. Reasoning for wanting to sell C. A buyer's price range D. What date a seller must be out of the home

A. An area of interest to a buyer that they might like to search for a home

In Indiana an agency disclosure form is required for real estate transactions. At what point should this be presented by a licensee? A. At first substantive contact B. Before lending information and advice at a listing appointment C. Meeting people at an open house D. When confidential information is conveyed

A. At first substantive contact

The Indiana Professional Licensing Agency completes what function for the IREC except A. Determines the status of all Licensee application B. Maintains official records and files on all licenses and all Licensees C. Processes license applications, renewals, and collects all fees D. Schedules and provides notice of all IREC meetings, hearings and ivestigations

A. Determines the status of all Licensee applications The IREC determines the status of licensees, the Professional Licensing Agency provides administrative services on behalf of the IREC

Which action would be appropriate for an agent to do> A. Fill out a listing agreement form to list a property B. Drafting a Deed C. Draft a Land Contract for a buyer and seller D. Give a client legal advice pertaining to the sale of real estate

A. Fill out a listing agreement form to list a property

Jane is an unlicensed assistant to Mary and helps Mary daily. What act is Jane NOT restricted from doing for Mary? A. Give general information about listing limited to price, address, and directions to a property B. Discuss commission fees C. Explain contracts and any relevant forms to a client D. Be involved in Telemarketing

A. Give general information about listings limited to price, address, and directions to a property

When an agency relationship is formed in Indiana with a seller, what form is used? A. Listing agreement B. Seller disclosure form C. Indiana agency form D. Buyer broker form

A. Listing agreement

In Indiana an agency disclosure form is required for real estate transactions. At what point should this be presented by a licensee? A. when confidential information is conveyed B. Before lending information and advice at a listing appointment C. meeting people at an open house D. at first substantive contact

At. first substantive contact

Licensee A has had her license summarily suspended for 90 days. At the first hearing that matter had not been resolved as the investigation was not complete. At that point the Commission: A. must return the license B. may place licensee A under temporary revocation until resolved C. may renew the suspension for another 90 day interval D. must make a ruling or return the license

C. May renew the suspension for another 90 day interval. A summary suspension may be renewed but only at a hearing that must be held within 90 days of issuance. These suspensions may be renewed, but for only 90 days at a time. There is no temporary revocation.

Broker T had her license suspended for one year for improperly handling a limited agency transaction. After six months, T has completed five classes on the issue and a majority of the commissioners feel T could practice competently. In this situation, T could do which of the following? A. may not seek reinstatement; suspended licenses may not be reinstated early B. Pay the required fine which would lift the suspension C. Request the commission lift the suspension early and reinstate the license D. May seek reinstatement only with the written consent of the harmed party

C. Request the Commission lift the suspension early and reinstate the license. Suspended licenses may be reinstated if the Commission feels the practitioner may competently practice. Revoked licenses may not be reinstated.

Steve learned while listing Betty's property her and her husband are in the middle of a divorce. What is Steve's fiduciary duty regarding this fact about his clients? A. Steve must tell his prospective buyers this fact B. Steve has no duty to keep this fact confidential C. Steve must keep this confidential even if he does not sell the house and their agency relationship has ended D. Steve must keep this fact confidential for 2 years after learning about it.

C. Steve must keep this confidential even if he does not sell the house and their agency relationship has ended

What is another term to describe Dual or Limited agency? A. Undisclosed dual agency B. Limited loyalty C. Undivided loyalty C. Dual agency

C. Undivided loyalty The fiduciary duty that is given up by both buyer and seller in a dual agency transaction is Undivided Loyalty

Members of the Indiana Real Estate Commission are: A. appointed by the Executive Director B. selected by the State Legislature C. appointed by the Govenor D. Elected by the public

C. appointed by the Governor

The limited Agency Transaction who does an agent represent? A. only the buyer B. only the seller C. Both buyer and seller D. only the person you are designated to represent

C. both buyer and seller The agent represents both buyer and seller in a "limited agency" trarnsaction

The Indiana Real Estate Commission may issue a cease and desist order: A. to notify the licensee of the violation B. only following a hearing C. to prevent further violations D. only when the licensee presents a clear and immediate danger to the public

C. to prevent further violations The purpose of the order, which is enforced by State circuit courts, is to stop further violations. These orders are often used to stop an activity or behavior prior to the Commission's holding a hearing on the matter.

Jane is an unlicensed assistant to Mary and helps Mary daily. What act is Jane NOT restricted from doing for Mary? A. Give general information about listings limited to price, address, and directions to a property B Discuss commission fees C. Be involved in telemarketing D. explain contracts and any relevant forms to a client

Give general information about listings limited to price, address, and directions to a property

The commission may summarily suspend a licensee without a hearing if the licensee: A. is declared by a court to be delinquent in child support payments B. commits a criminal offense C. represents a clear and immediate danger to the public D. commits a class a felony

c. represents a clear and immediate danger to the public