State Practice Exam

Lee is wondering if he really needs to complete his CE requirements during this licensing cycle. Which of these questions should you ask him to help him determine if he has to or not? "Are you a broker or a salesperson?" "Are you at least 60 years old?" "Have you held a reciprocal license for less than a year?" "Have you managed other licensees within the last six months?"

"Have you held a reciprocal license for less than a year?"

FDIC insurance covers every owner of funds deposited into a trust account, up to __________each. $150,000 $25,000 $250,000 $400,000

$250,000

It's 2010, and Miranda has had her Alabama real estate license for 40 years. At 83 years old, she still works part-time. How many hours of continuing education does she need to renew her Alabama license? 0 15 30 40

0

Renee is interested in becoming a licensed real estate professional in Alabama. To qualify, how old must she be? a. 18 b. 19 c. 20 d. 21

19

Appeal notices are typically filed in the circuit court of Montgomery County, along with a ______ appeal bond. $100 $200 $300 $500

200

The qualifying broker at Choice Realty has become incapacitated. How long does the company have to choose a salesperson or broker to apply for a temporary qualifying broker's license? a. 10 days b. 30 days c. 45 days d. 60 days

30 days

After passing the real estate exam, applicants must send their application for licensure to the commission within _____ days. a. 120 days b. 30 days c. 60 days d. 90 days

90 days

Which entity administers and enforces Alabama's residential and commercial laws for activities that require a license? Alabama Bureau of Licensing Alabama Planning Bureau Alabama Real Estate Commission National Association of REALTORS®

Alabama Real Estate Commission

Amy works under the supervision of Corinne at Rolling Hills Realty. Which of the following must be true? a. Amy could be either a salesperson or a broker. b. Amy must be a salesperson. c. Corinne must be a broker, and Amy must be a salesperson. d. Either Corinne or Amy is a salesperson.

Amy could be either a salesperson or a broker.

It's Friday afternoon, and Lori can't make it to the bank in time to deposit an earnest money check in the brokerage's escrow account, so she uses her mobile app to deposit it into her personal checking account for safekeeping. What violation did Lori just commit? Capping Commingling Conforming Conversion

Commingling

One of the following licensee's actions would constitute commingling. Which is it? a. Cynthia deposited her client's earnest money check into the firm's operating account. b. Jenson deposited his client's earnest money check into the firm's trust account. c. Jessica deposited her commission check into her brokerage firm's operating account. d. Sean withdrew funds from the firm's operating funds to pay the firm's office rent.

Cynthia deposited her client's earnest money check into the firm's operating account.

Bob wants to reinstate his license. Which license status must he have to ask the commission to reinstate? a. Expired b. Inactive c. Revoked d. Suspended

Expired

According to Alabama law, what should Alabama real estate licensees do when they receive an earnest money check? Deposit into the brokerage operating account. Deposit it into their own personal account. Handle the check in a timely fashion. Make sure it's safely locked in a drawer.

Handle the check in a timely fashion.

Janice is interested in becoming an Alabama real estate broker. Which of these is a requirement she has to meet? a. Be at least 17 years old b. Complete an approved 80-hour prelicensing course c. Have a bachelor's degree from an accredited university d. Have held an active salesperson license for at least 24 of the last 36 months

Have held an active salesperson license for at least 24 of the last 36 months

Karen is an Alabama salesperson who has just accepted a check from a client for earnest money. Which of the following is true? Karen has seven days in which to deposit the funds. Karen must immediately deposit the funds into the brokerage trust account. Karen owns the funds. Karen's qualifying broker is responsible for the funds she has just received.

Karen's qualifying broker is responsible for the funds she has just received.

Sandy is a new licensee. One of her recent clients, Phil, complained that she gave information to her customer that was confidential. Which laws can Sandy check to make sure that she didn't fail in her duties to Phil? Consumer protection laws General property law Landlord-tenant laws Law of agency

Law of agency

What must an Alabama assistant be in order to answer client questions about offers and negotiations? a. At least 25 years old b. Experienced (at least four years of licensure) c. Licensed d. Very helpful

Licensed

Lucinda is 25 and licensed in Alabama. She has been actively engaged in real estate for the past three years and has taken 60 hours of broker pre-licensing coursework. She used to be licensed in Florida, but her license there was revoked four years ago. She also has five unpaid parking tickets. Assuming she passes her licensing exam, is she qualified to be a broker? Maybe, if the commission approves her application. No, because her license was revoked in another state. No, because she has unpaid parking tickets. Yes, Lucinda is qualified.

Maybe, if the commission approves her application.

Adele's received notice of a complaint and a request for a hearing from the Alabama commission. Where will her hearing most likely be conducted? Jefferson County Mobile Montgomery County Opelika

Montgomery County

Karen would like to sell her own home. What's the minimum real estate license she must possess? a. Broker b. Designated broker c. Managing broker d. None

None

Non-trust funds, as long as they're not commingled with trust funds, are not bound by _______. Banking regulations International trade rules Real estate laws State laws

Real estate laws

Greta is working with agent Brandon to sell some property. Nelson represents the buyer, Rigby. Of these four parties, who will pay the earnest money? Brandon Greta Nelson Rigby

Rigby

Simone is chatting with Phil, who's about to close on a house. Simone's become good friends with Phil during the transaction. She's gotten to know him while printing his transaction-related documents and making sure he's signed where he needs to. The two of them don't have a written agency agreement. In what capacity is Simone acting in this transaction? a. She's acting as the buyer's agent. b. She's a limited consensual dual agent. c. She's a sub-agent. d. She's a transactional broker.

She's a transactional broker. tip : Since Simone doesn't have an agency relationship with Phil, she's not an agent, whether limited consensual dual, buyer's, or sub. Instead, in this transaction, she's fulfilling the role of transactional broker.

At what level does real estate licensing take place? County Federal Municipal State

State

After an investigation and hearing, Jeremy was found guilty of violating license law. Against which entity would he submit an appeal? The Alabama Association of REALTORS® The Alabama Real Estate Commission The Department of Licensing The deputy attorney general

The Alabama Real Estate Commission

Which of the following entities created the consumer information booklet? The Alabama Association of REALTORS® The Alabama Real Estate Commission The Alabama Real Estate Institute The National Association of REALTORS®

The Alabama Real Estate Commission

Moneys given for purchase deposits are ______. a. Commission b. Non-trust funds c. Revenue d. Trust funds

Trust Funds

Clint has always had an interest in real estate. He's helped a few friends determine the asking price for their properties, and now he's considering going into business doing this kind of work. Will Clint need a real estate license? a. It depends on how many hours a year he does real estate work. b. It depends on how much he charges for his services. c. No, he doesn't. d. Yes, he will.

Yes, he will

Which of these is an example of a real estate violation? a. A licensee didn't inform all parties that she was the listing agent. b. A licensee discussed using a three-month period for her new listing with a seller. c. A licensee negotiated a listing agreement ending date so that his agreement would end after a home would typically sell in the current market. d. A licensee told his new seller clients that he typically uses a six-month term for all of his listings.

a. A licensee didn't inform all parties that she was the listing agent.

Which of the following is required In order to conduct real estate activities as a business entity in Alabama? a. A qualifying broker and a company license for each branch office or location b. A qualifying broker and a single license for all branch offices/locations c. At least one salesperson and one broker at each licensed location d. At least three salespersons and one broker

a. A qualifying broker and a company license for each branch office or location

Jeung gave her agent an earnest money check, and the seller accepted Jeung's offer. What will happen to the check now? a. An escrow agent will hold the funds in a trust account until the agreement's terms are satisfied. b. Her agent will hold the check in the firm's operating account until Jeung's offer is accepted. c. Jeung's agent will transfer the funds to the seller. d. The seller's agent will deposit the funds in his operating account until closing.

a. An escrow agent will hold the funds in a trust account until the agreement's terms are satisfied.

The Alabama commission may enforce compliance with the law via the ______ if it believes the license law has been or is about to be violated. a. Attorney general b. Chairperson c. Governor d. Local police

a. Attorney general

In which of the following cases can AREC use its authority to suspend a real estate license? a. Broker Dean has repeatedly broken confidentiality with his clients for financial gain. b. Broker Terrance has decided to switch his specialty from residential to commercial real estate. c. Client Becka backed out of the sale of a large commercial property, citing that she "didn't trust" her agent, Marty. d. Licensee Stacy has forgotten to complete all required transactional paperwork, and therefore, her client doesn't owe her commission.

a. Broker Dean has repeatedly broken confidentiality with his clients for financial gain.

Jill needs to pay the web developer who created a new website for her brokerage, but her checking account is low, so she floats herself a loan from earnest money kept in the brokerage's escrow account to pay the developer. Which answer correctly identifies the violation(s) Jill has committed? a. Commingling and conversion b. Commingling only c. Conversion and fraud d. Deceptive business practice

a. Commingling and conversion

Mandatory topics for continuing education during each licensing period in Alabama include risk management and ______. a. Commission-approved courses b. Homebuyer programs c. Mortgage laws d. Real estate financing

a. Commission-approved courses

Which of the following is a step that Pauline must take to change her license status from inactive to active? a. Complete the 15 hours of CE that are required for the current licensing period. b. Have her managing broker write to the AREC certifying that she's been engaged in real estate for the last six months. c. Send a written request to the AREC asking to activate her license. d. Submit to AREC a list of the real estate transactions in which she's currently involved.

a. Complete the 15 hours of CE that are required for the current licensing period.

Woodrow helps his neighbor sell his home by assisting with negotiations. He receives no compensation for his assistance. Based on this one transaction, Woodrow ______. a. Doesn't need a real estate license b. Must have at least a broker's license c. Must have at least an appraiser's license d. Must have at least a negotiator's license

a. Doesn't need a real estate license

Alabama licensee Frank has just met with consumer Emily, who's in the market for a house. Which of the following is true of this situation? a. Frank isn't required to present the consumer information booklet to Emily at any time, but he may do so if he'd like. b. Frank must present the consumer information booklet to Emily after they've signed a brokerage agreement. c. Frank must present the consumer information booklet to Emily at closing. d. Frank must present the consumer information booklet to Emily before obtaining any confidential information from her.

a. Frank isn't required to present the consumer information booklet to Emily at any time, but he may do so if he'd like.

Jimbo doesn't yet have a real estate license. Which activity is he legally allowed to perform without one? a. Give advice to a friend who is negotiating the purchase of a house. b. List a friend or family member's home for sale for a fee. c. Negotiate the sale of a house for two friends and receive a tip as thanks. d. Receive payment for managing real estate.

a. Give advice to a friend who is negotiating the purchase of a house.

Which one of the following actions would be considered a real estate violation? a. Hailey ran out of copies of the brokerage engagement form, so she drafted a copy on a blank sheet of paper. b. Igor suggests his clients talk with an attorney about whether purchasing a property as tenants in common is a good idea. c. Jesse is working with an executor who asks what certain language in a will may mean. Jesse refers the executor to a lawyer for clarification. d. Kevin's clients ask whether a paper they have is a legal deed. He suggests they contact a lawyer.

a. Hailey ran out of copies of the brokerage engagement form, so she drafted a copy on a blank sheet of paper.

It's September 5 of an even-numbered year. Tobias hasn't renewed his broker's license yet. Which of the following is true? a. He needs to pay a late fee if he renews by September 30. b. He needs to take 10 hours of CE to renew his license. c. If he doesn't renew his license by September 15, it becomes inactive. d. When he does renew his license, it will be a salesperson's.

a. He needs to pay a late fee if he renews by September 30.

It's October 1 of an even-numbered year, and Candace hasn't completed her CE requirement. Which of the following is true? a. Her license is now inactive, and she has to reactivate it before she can practice real estate in Alabama. b. She can apply to AREC for a six-week extension and complete her CE within that timeframe. c. She has to complete her CE requirements as well as five more hours in a class of her choosing by December 31, or her license will become inactive. d. She must finish her CE and pay a late fee by October 31 to keep her license active.

a. Her license is now inactive, and she has to reactivate it before she can practice real estate in Alabama.

Jennifer is the qualifying broker for Bayou Brokerage in Mobile. What happens to the company license if she dies or becomes incapacitated? a. It becomes invalid. b. It expires after 30 days. c. It must be re-issued. d. It remains active until September 30 of the following year.

a. It becomes invalid.

What is a licensee's responsibility related to the paperwork in a real estate transaction? a. Make sure all parties have copies of the paperwork and that it's retained for the statutory period. b. Make three copies of all documents. c. Secure paperwork in the broker's vehicle. d. Shred documents once the transaction is complete.

a. Make sure all parties have copies of the paperwork and that it's retained for the statutory period.

Which of the following is an example of commingling? a. Mixing earnest money with personal funds b. Mixing two earnest money deposits c. Paying licensee bonuses from forfeited escrow deposits d. Using escrow funds to pay business expenses

a. Mixing earnest money with personal funds

What is the difference between the process of renewing a salesperson's license and renewing a broker's license? a. Nothing. The process is the same for both kinds of license. b. Salespersons' licenses expire at the end of August, and brokers' licenses expire at the end of September in even-numbered years. c. The fee to renew a broker's license is around 20% higher than the fee to renew a salesperson's license. d. To renew, brokers must show proof of errors and omissions insurance. Salespersons don't need this.

a. Nothing. The process is the same for both kinds of license.

Which of the following is a true statement regarding qualifying brokers in Alabama? a. Qualifying brokers are responsible for the actions of licensees who work under them. b. Qualifying brokers can only serve for a period of six months. c. Qualifying brokers can't serve more than one company at the same time, even if they're in the same location. d. Qualifying brokers can work at more than one location.

a. Qualifying brokers are responsible for the actions of licensees who work under them.

Which of the following is a true statement regarding the termination of qualifying broker status in Alabama? a. Qualifying brokers have to notify their brokerage and the commission in writing if they wish to terminate their status. b. Qualifying brokers who want to terminate their status have to get permission from the company president. c. To terminate their status, qualifying brokers must get the signatures of all the licensees whom they supervise. d. To terminate their status, qualifying brokers must re-apply for a regular broker's license.

a. Qualifying brokers have to notify their brokerage and the commission in writing if they wish to terminate their status.

Alabama broker Mandy has presented the Real Estate Brokerage Services Disclosure form to consumer Kyla and asked Kyla to sign it. What's the purpose of Kyla's signature on this form? a. To acknowledge that Mandy's presented her with this form b. To agree not to sue Mandy if the transaction doesn't end well c. To agree to hire Mandy as her agent d. To consent to the creation of an agency relationship between her and Mandy

a. To acknowledge that Mandy's presented her with this form

Buyer Susie's a little nervous about the $20,000 earnest money check she just deposited with the title company. When should she expect to see this money applied toward her purchase of the property? a. When conditions are met at closing b. When her mortgage is approved c. Within 10 days of the home inspection d. Within six months of closing

a. When conditions are met at closing

In Alabama, what's the post-licensing education requirement for active temporary licensees? a. 20 hours within the first three months of active licensure b. 30 hours within the first six months of active licensure c. 60 hours within the first year of active licensure d. 90 hours within the first two years of active licensure

b. 30 hours within the first six months of active licensure

Percy and Jackson have formed a team within their Montgomery real estate brokerage firm. They're drafting some advertisements to help launch their team. What do they need to keep in mind when designing their marketing materials? a. Ads must display the team name in a larger font than the firm name. b. Ads must include the brokerage firm name. c. Ads must include the team name but not the brokerage firm name. d. Ads specific to teams are prohibited.

b. Ads must include the brokerage firm name.

Amber is a new licensee in Alabama. She's having trouble getting her sales off the ground, so she's considering offering commission rebates or holding a lottery. Which of the following is a true statement? a. Any type of inducement used to encourage buyers and sellers to enter into a purchase contract is illegal. b. Any type of rebate or lottery related to a real estate transaction is always illegal. c. Inducements to convince buyers to enter into buyer representation agreements must disclosed in the contract. d. Inducements used to convince sellers to enter into listing agreements must be disclosed in the contract.

b. Any type of rebate or lottery related to a real estate transaction is always illegal.

Which of the following statements about real estate licenses in Alabama is true? a. All real estate professionals have the same type of license. b. Before you can legally perform any of the same activities that licensed real estate professionals perform, you must have your real estate license. c. Having a real estate license means you can legally draft a contract. d. Real estate licenses do not expire; consequently, there is no requirement to renew them.

b. Before you can legally perform any of the same activities that licensed real estate professionals perform, you must have your real estate license.

Suzanne received notice that her license may be revoked for ______. a. Being a week late to renew his license b. Being convicted of drug possession c. Disclosing a conflict of interest d. Routinely cancelling appointments with clients

b. Being convicted of drug possession

License candidates must request a ____________ prior to applying for an Alabama real estate license. a. Consent for licensure b. Criminal record check with fingerprinting c. Licensing application d. Tax exemption

b. Criminal record check with fingerprinting

When it comes to earnest money, which one of the following statements is true? a. Earnest money is rarely the subject of lawsuits against real estate licensees. b. Earnest money must be placed in a trust account. c. The amount of earnest money is non-negotiable between the buyer and seller. d. The seller dictates the amount of earnest money in the MLS listing.

b. Earnest money must be placed in a trust account.

For which of the following actions can the Alabama Real Estate Commission impose a penalty on licensee Joseph? a. Disclosing possible conflicts of interest b. Falsely promising his customer that she wouldn't have to pay closing costs c. Reassigning his listings and taking a leave of absence d. Renewing his license 10 days late

b. Falsely promising his customer that she wouldn't have to pay closing costs

Licensees may be disciplined for violating Alabama compensation laws. Which of the following are possible penalties for doing so? a. Fines, license suspension, jail time b. Fines, license suspension, license revocation c. Fines, probation, jail time d. Probation, jail time, license revocation

b. Fines, license suspension, license revocation

Eliza, your client, wants to buy a property with her sister. She asks you, "But what's the difference between joint tenancy and tenancy in common? I know they're both forms of property ownership, but I'm unclear on how they're different." Of course, as a licensee, you know the answer—but if you didn't, which of these laws could you consult? a. Consumer protection laws b. General property law c. Landlord-tenant laws d. Law of agency

b. General property law

Chester is moving on up! He and his wife are ready to sell their condo and purchase a new place. Chester is a real estate licensee and will list the property himself. What must Chester disclose to prospective buyers? a. Chester doesn't need to disclose anything to buyers. b. He owns the property. c. The sellers are eager to sell. d. The sellers will not accept any offers below $300,000.

b. He owns the property.

In which of the following situations does Alabama's consumer information statement replace the Real Estate Brokerage Services Disclosure form? a. It can always be used to replace the disclosure form. b. It can never be used to replace the disclosure form. c. It can only be used to replace the disclosure form if the licensee doesn't have a copy of the disclosure form on hand. d. It can only be used to replace the disclosure form if the licensee's broker instructs the licensee accordingly.

b. It can never be used to replace the disclosure form.

Broker Morgan enters into a brokerage agreement with buyer Suzanne. Which of the following does brokerage law require of this agreement? a. It must be signed and notarized. b. It must include a statement of the terms and conditions of the brokerage services. c. It must include the state's official seal. d. It must include the text of the Consumer Information Booklet.

b. It must include a statement of the terms and conditions of the brokerage services.

Which of the following is an Alabama broker's responsibility regarding trust funds? a. Immediately deposit all checks into a trust account. b. Maintain records of all funds belonging to others for three years. c. Reconcile each trust account once every three months. d. Teach their licensees how to disburse trust account funds .

b. Maintain records of all funds belonging to others for three years.

To which of the following situations does the law of contracts apply? a. Licensee Savannah needs to take some continuing education classes, but is unsure about which providers are licensed in Alabama. b. Max's client doesn't like a particular clause in the agency agreement document that they're about to sign, so Max crossed it out. c. Quincy's advertisement for the condo she's selling claims it's "the best condo development in the city!" Her client disagrees. d. Steven's business card says that he's a licensed broker, but actually, Steven's license has lapsed.

b. Max's client doesn't like a particular clause in the agency agreement document that they're about to sign, so Max crossed it out.

Which of the following is NOT a disciplinary action that the commission may take? a. Impose a fine of $300 b. Require the licensee to leave the state c. Require the licensee to take continuing education d. Revoke the license

b. Require the licensee to leave the state

Your assistant, Ella, often answers client questions about offers and negotiations. What do we know about Ella? a. She must be at least 20 years old. b. She must be licensed for this to be legal. c. She must have had a least two years of experience in real estate. d. She's a very helpful assistant who goes the extra mile.

b. She must be licensed for this to be legal.

Alabama law requires licensees to disclose personal interest before acting on behalf of themselves or certain individuals with whom the licensee has a personal relationship. Which of the following must Alabama licensee Ross disclose to a seller client? a. That he knows the other party to the transaction because it's his neighbor b. That he's acting on his own behalf to buy the house c. That he's helping an acquaintance write an offer on the house d. That he's told his former college roommate about the house, and he may make an offer

b. That he's acting on his own behalf to buy the house

Carl is an Alabama salesperson applying for his broker license. Can he continue to perform real estate activities while he waits for his broker license to be issued? a. Yes, if the broker license will be issued to a new company. b. Yes, if the broker license will be issued to the same company as the salesperson license. c. Yes, if the new company gives permission in writing. d. Yes, if the qualifying broker agrees to wait until the new license is received to return the old one.

b. Yes, if the broker license will be issued to the same company as the salesperson license.

Robert is 18, has a high school diploma, and wants to be a real estate salesperson in Alabama. If he completes the 60 hours of required education, is there anything that might prevent him from taking the licensing exam? a. No. If he completed his required education, he'll be allowed to take the exam. b. Yes. He can't take the exam yet because he must be at least 19 years old. c. Yes. He must have at least a one-year internship with a licensed broker to gain exposure to all different types of real estate transactions. d. Yes. He must prove that he has been actively working in the real estate industry for six months.

b. Yes. He can't take the exam yet because he must be at least 19 years old.

LuAnn is selling some property, and she wants broker Richard to represent her. He explains that she needs to sign a brokerage agreement, and she asks, "What does it mean when I sign this?" What's the best answer Richard can give? a. "It means that I can enter into a subagent relationship with another firm to get you the best representation." b. "It means that you're giving me permission to represent you as well as any potential buyer of your property." c. "It means that you understand and accept the conditions of our agency relationship." d. "It means you're contractually obligated to stick with me until I sell your property."

c. "It means that you understand and accept the conditions of our agency relationship."

Which of the following is NOT a source of revenue for the Alabama Recovery Fund? a. A $30 assessment on all new broker licenses b. A $30 assessment on all new salesperson licenses c. A 5% assessment on all licensee commissions for a month d. An assessment on every licensee in the state when the amount falls below $500,000

c. A 5% assessment on all licensee commissions for a month

Which of the following statements about material facts is true? a. All material facts are related to physical conditions. b. All parties considering a property would regard each material fact in the same way. c. A material fact may have more or less effect on a buyer based on the buyer's needs and values. d. Material facts are only those that can be easily seen or discovered.

c. A material fact may have more or less effect on a buyer based on the buyer's needs and values.

How does the Alabama requirement for licensing protect the public? a. By establishing a nation-wide standard that all licensees must adhere to b. By requiring all licensees to obtain a broker's license c. By requiring licensees to have certain education, training, and standards d. By requiring that real estate professionals have a degree in business

c. By requiring licensees to have certain education, training, and standards

Which of these terms describes a situation in which a broker uses client trust funds without the client's permission? a. A reverse trust b. Commingling c. Conversion d. Transferrable interest

c. Conversion

Which of the following documents are Alabama brokerages required to retain for three years, according to Alabama law? a. Business cards and contact information for all previous clients b. Copies of all documents that the HR manager created c. Copies of contracts and receipts for escrow moneys received d. Copies of receipts from restaurants in which brokerage meetings were held

c. Copies of contracts and receipts for escrow moneys received

Which one of the following tasks must licensees perform for seller clients? a. Dictate the listing price of the property. b. Drive the sellers around to show them other properties that are for sale in their neighborhood. c. Ensure that the buyer's earnest money is deposited. d. Show the sellers how they can market their property.

c. Ensure that the buyer's earnest money is deposited.

Giles and Maddy both work at Hoover Realty. Giles has worked there for seven years, and Maddy's worked there for 10 years. Giles supervises the transactions of all the associated licensees. Which of the following is true? a. Both Giles and Maddy are associate brokers. b. Both Giles and Maddy are qualifying brokers. c. Giles is the qualifying broker, and Maddy is an associate broker. d. Maddy is the qualifying broker, and Giles is an associate broker.

c. Giles is the qualifying broker, and Maddy is an associate broker.

Georgina is an escrow agent who's holding funds for several transactions. Which of these statements about how she'll disburse these funds is true? a. If the transaction closes, Georgina will disburse the earnest money to the listing broker as part of his commission. b. If the transaction closes, she'll refund the earnest money to the buyer, since the buyer brings the full amount necessary for the down payment and loan costs to closing. c. If the transaction doesn't close, Georgina will disburse the earnest money as instructed by the parties or according to state law. d. If the transaction doesn't close, Georgina will refund the earnest money to the buyer.

c. If the transaction doesn't close, Georgina will disburse the earnest money as instructed by the parties or according to state law.

Which of the following agents does NOT need to present the Real Estate Brokerage Services Disclosure form to the consumer? a. Bruce is looking to buy a piece of commercial property and asks Donna to represent him. b. Fran and James Bloom are looking for a house in a certain neighborhood and want to know if agent Chad can help them. c. In his capacity as a property manager, Chad meets with the DeLucas, who want to rent a unit in that property. d. Lucia tells agent Polly that she wants someone to act as her transactional agent when she puts her house on the market.

c. In his capacity as a property manager, Chad meets with the DeLucas, who want to rent a unit in that property.

The Wilsons are selling their home and have asked that an appraiser they know perform the appraisal on the property. Sidney, the buyer's agent, is surprised when the appraised value comes in considerably higher than the competitive market analysis she prepared. Sidney is concerned that this might be an example of which type of mortgage fraud scheme? a. Equity skimming b. False identity c. Inflated appraisal d. Straw buyers

c. Inflated appraisal

You're walking through a property with a new seller client. The seller tells you that the property is serviced by the public sewer system, but when walking up the drive you noticed the access hatch for a septic system. What should you do? a. Believe the homeowner when he says the property is on public sewer, because he'd know best. b. Hire a private investigator to look into it. c. Inquire about the homeowner's claim to ensure the property really is on public sewer. d. Terminate the listing, as the homeowner is obviously not being truthful.

c. Inquire about the homeowner's claim to ensure the property really is on public sewer.

Jerrold reviews the floor plan of the Knoxville house he's going to sell. It's 3,800 square feet. In his advertising, he bumps that number up to 4,000 square feet to better justify its asking price. What has Jerrold done? a. Active misstatement b. Exaggeration c. Intentional misrepresentation d. Puffery

c. Intentional misrepresentation

Which of the following statements about the Alabama Real Estate Brokerage Services Disclosure form is true? a. It creates an agency relationship between the licensee and consumer. b. It's a legal agreement between the licensee and consumer. c. It's informational and doesn't create a relationship between the licensee and consumer. d. It's optional for licensees to provide this form to consumers, but if it's provided and signed, it becomes a legal contract between the parties.

c. It's informational and doesn't create a relationship between the licensee and consumer.

Should a client incur financial hardship because of the misuse of trust funds, the broker could be held ______. a. Blameless b. In contempt c. Liable d. Uninsurable

c. Liable

If an Alabama licensee violates a compensation law, what's one possible sanction the commission may impose? a. Civil charges b. Criminal charges c. License suspension d. Repayment of the original compensation

c. License suspension

Which of the following must be reported to AREC via certified mail within 10 business days? a. Connor received two parking tickets in one week. b. Dmitri changed his territory to a new part of town. c. Maxine had a pending criminal action against her, but it was dismissed. d. Polly's client accused her of taking too long to respond and wants to break their agency contract.

c. Maxine had a pending criminal action against her, but it was dismissed.

If you, as an Alabama licensee, make a statement in an ad that you should have known was false, what are you guilty of? a. Active misstatement b. Fact bending c. Misrepresentation d. Puffing

c. Misrepresentation

Seller Trevor calls licensee Nate. "My current agent isn't doing anything to sell my house," Trevor says, "and I need to get it sold! I saw your billboard, and I'm wondering if you can represent me." What should Nate do? a. Nate should call Trevor's agent and see if he can buy out the remainder of the contract between that agent and Trevor. b. Nate should invite Trevor to sign a contract with him. Since Trevor approached him, this is legal. c. Nate should tell Trevor that he's happy to be his agent, but he'll have to wait until his current agency contract has ended. d. Nate should tell Trevor that if he can get his agent to sign a waiver, Nate can represent him.

c. Nate should tell Trevor that he's happy to be his agent, but he'll have to wait until his current agency contract has ended.

Salesperson Phyllis has had a temporary salesperson license for 13 months. She hasn't completed her post-licensing education. Which of the following is true about her situation? a. Phyllis has two months to complete her PLE so she can get an original license. b. Phyllis's broker is responsible for issuing her an original license. c. Phyllis's license has lapsed. d. Phyllis's temporary license automatically converted to an original license after 12 months.

c. Phyllis's license has lapsed.

Which of the following is true about subagency in Alabama? a. In subagency, the licensee assists in a real estate transaction, but no formal agency agreement exists. b. Subagency means that the agent represents all parties in a real estate transaction. c. Subagents owe their client the same duties that the agent owes that client. d. This kind of agency is only allowed when the subagent and the agent work for the same firm.

c. Subagents owe their client the same duties that the agent owes that client.

Which of these is a document-related task that's required of licensees? a. Provide a copy of all transaction-related documents to all relevant parties up to five years after the transaction. b. Send copies of all transaction-related documents to the commission once every two years. c. Surrender a document to its rightful owner after the licensee has possessed it. d. Turn over all transaction-related documents to any other brokerage that requests them.

c. Surrender a document to its rightful owner after the licensee has possessed it.

Which of the following statements about Alabama company real estate licenses is true? a. A single company license is issued for all locations licensed under a qualifying broker. b. If the qualifying broker dies or becomes incapacitated, the license is valid until September 30 of the following year. c. The qualifying broker for each location must apply for the license. d. The qualifying broker isn't allowed to maintain more than one place of business.

c. The qualifying broker for each location must apply for the license.

Which of the following is a true statement regarding temporary qualifying brokers in Alabama? a. They are appointed by the company president when a qualifying broker dies or becomes incapacitated. b. They are appointed by the real estate commission when a qualifying broker dies or becomes incapacitated. c. They are chosen by the company when a qualifying broker dies or becomes incapacitated but must apply for a temporary qualifying broker's license. d. They must have been a broker for at least five years.

c. They are chosen by the company when a qualifying broker dies or becomes incapacitated but must apply for a temporary qualifying broker's license.

What's one form of documentation the commission will accept as proof of an applicant's age? a. Employment ID b. School ID c. Valid driver's license d. Visa

c. Valid driver's license

Under what circumstances would undisclosed dual agency be most likely to occur? a. When meeting a buyer at an open house b. When meeting a seller at an open house c. When representing a seller and assisting an unrepresented buyer d. When representing the buyer and assisting a seller who is represented by another broker

c. When representing a seller and assisting an unrepresented buyer

Jenna owes the commission some money. She doesn't have enough money in her account right now to cover the fee, but she'll get paid in a week. However, if she waits until then to pay, she'll have to pay a late fee, as well. Jenna has some options. Which one violates license law? a. Ask her broker if she can borrow the needed money for a week. b. Wait until she gets paid and then pay both the fee and the late fee. c. Write a check now. When it bounces and gets returned to her in a week, she'll have the money. d. Write a letter to the commission to hold her check and ask it to waive the late fee.

c. Write a check now. When it bounces and gets returned to her in a week, she'll have the money.

Tanya represents Marco, who's selling his condo. Dan is interested in buying it; his agent is Terryl. Tanya and Terryl work for the same brokerage. According to RECAD, is this arrangement allowed? a. No, because it's a conflict of interest. The two agents must work for different brokerages. b. No, because this is called sub-agency, and it's illegal in Alabama. c. Yes, as long as all parties give consent to this limited consensual dual agent situation. d. Yes, but only if Tanya and Terryl act as transaction brokers and not agents.

c. Yes, as long as all parties give consent to this limited consensual dual agent situation.

Travis, who's licensed in another state, has a client who's decided on a home in Alabama. Can he still work with that client? a. No, but he can still claim to do business there as long as he keeps it a secret. b. No, he can't practice real estate outside of the state in which he's licensed. c. Yes, as long as his state offers co-brokerage and he enters into a written co-brokerage agreement with an Alabama broker. d. Yes, of course! Once licensed he can practice real estate in any state.

c. Yes, as long as his state offers co-brokerage and he enters into a written co-brokerage agreement with an Alabama broker.

Manda is representing Jim, who's selling his condo. She hears him telling a potential buyer "I think this building was built in 2015." She knows it was built in 2005. Does she have an obligation to provide the correct information? a. No, because her client Jim is speaking, not her. She's not responsible for what he says. b. No, because she represents Jim. She doesn't represent the potential buyer. c. Yes, because by not speaking up, she would be guilty of misrepresentation. d. Yes, but only if she can tell that the potential buyer is moving toward a sale.

c. Yes, because by not speaking up, she would be guilty of misrepresentation.

Adele's not at all happy with the commission's final decision on her hearing because she believes the commission is forcing her to sell off many of the assets of her brokerage. "Can it really do that?" Adele wonders. Does she have a reason to file an application for a rehearing? a. No, because she can't question the commission's authority in this matter. b. Yes, because she, Adele, can be the subject of a hearing but her brokerage cannot. c. Yes, because she has reason to believe that the commission acted outside its legal authority. d. Yes, because she has reason to believe that the decision is opposed to reliable evidence.

c. Yes, because she has reason to believe that the commission acted outside its legal authority.

In addition to serving as the listing agent for several clients, your own house is also on the market. You receive a call from another licensee who wants to show her buyer client your house. What must you immediately disclose to the buyer's agent and buyer? a. The house may have been an orphanage 80 years ago. b. You'd sell for far lower than the current asking price. c. You own the property. d. Your housemate had swine flu last month.

c. You own the property.

After discussing Kathy's requirements for the house she wants to buy, licensee DeVonn presents her with the Real Estate Brokerage Services Disclosure form. Kathy asks, "Why should I sign this?" What's the best answer DeVonn can give? a. "If I end up helping you find a house to buy, I have to have you sign this form so I can get my commission." b. "If you don't sign it, you and I can't enter into an agent-client relationship, which means I can't advocate as effectively for you." c. "If you sign this, you and I can start looking for your perfect home immediately." d. "This form describes the kind of brokerage services I can offer you. Signing it shows you understand what they are."

d. "This form describes the kind of brokerage services I can offer you. Signing it shows you understand what they are."

In Alabama, what's the broker pre-licensing education requirement? a. 20 hours of broker pre-licensing b. 20 hours of broker pre-licensing education plus an additional 10 hours of Alabama coursework c. 50 hours of broker pre-licensing d. 60 hours of broker pre-licensing education plus an additional six hours of Alabama coursework

d. 60 hours of broker pre-licensing education plus an additional six hours of Alabama coursework

What must you have to apply as a real estate salesperson in Alabama? a. A 90% or better on pre-licensing education exams b. A bachelor's degree c. A six-month reserve of operating funds d. A sponsoring broker

d. A sponsoring broker

In most states, which of the following situations would most likely be grounds for suspension or revocation of a real estate license? a. Failure to determine the correct list price in a comparative market analysis b. Failure to find a buyer for a listed property c. Failure to include a broker protection clause in a listing agreement d. Failure to specify a definite termination date in a listing contract

d. Failure to specify a definite termination date in a listing contract

Applicants must pay the required exam and licensing fees, as well as _____. a. Fees for a credit check b. Fees for post-licensing education courses c. Fees for processing the application d. Fees for the background check/fingerprinting process

d. Fees for the background check/fingerprinting process

Alabama broker Jim is acting as a limited consensual dual agent for seller Christine and buyer Blake. Which of the following is required for Jim to act in this capacity? a. He must get AREC's written permission. b. He must get the verbal consent from the buyer and seller. c. He must get the verbal or written consent of the parties at closing. d. He must get the written, informed, advance consent before entering into the relationship.

d. He must get the written, informed, advance consent before entering into the relationship.

Josef is a salesperson in Alabama. His buyer clients have just given him a check for earnest money. What should he do with it? a. Immediately deposit it into the brokerage account. b. Immediately deposit it into the brokerage trust account. c. Immediately pay all transactional expenses. d. Immediately turn it over to his qualifying broker.

d. Immediately turn it over to his qualifying broker.

Estelle is representing seller Margaret. Which of the following tasks is one that Estelle is required to perform as Margaret's agent? a. Determine the property's listing price based on comparables. b. Give the buyer's earnest money to Margaret to deposit into her personal checking account. c. Hire someone to market the property. d. Inform Margaret about required property condition disclosures.

d. Inform Margaret about required property condition disclosures.

A property is listed as having four bedrooms and two-and-a-half bathrooms. However, when showing your buyer clients the property, you only count three bedrooms. As their agent, what should you do as part of your due diligence? a. Call the police. b. Demand the homeowner build another bedroom. c. Ignore the discrepancy. d. Investigate this discrepancy.

d. Investigate this discrepancy.

Landon wants to transfer his license from his current managing broker, Daria, to a new managing broker, Roy. Landon has had his real estate license for 10 months. Which of the following is true about his situation? a. After Landon submits his request to the AREC, Roy can print a temporary license for Landon to use until he gets his official one. b. After Landon transfers, his new license will be good for the next two years. c. Landon can't transfer his license until he's been a licensee for 12 months. d. Landon must inform Daria of his decision to transfer to a new managing broker.

d. Landon must inform Daria of his decision to transfer to a new managing broker.

Which of the following statements is true regarding the Alabama Real Estate Brokerage Services Disclosure form? a. It's optional for licensees to provide it to any consumer. b. It's used to form brokerage agreements between licensees and consumers. c. Licensees only need to provide it to consumers if there's a dual agency situation. d. Licensees should ask, but not require, that consumers sign to acknowledge its receipt.

d. Licensees should ask, but not require, that consumers sign to acknowledge its receipt.

The Alabama commission is holding a hearing to investigate a complaint against Lucy. What actions is Lucy allowed to take at the hearing? a. Administer oaths to witnesses. b. Counter-investigate the complaint. c. Excuse subpoenaed witnesses d. Produce evidence and cross-examine witnesses.

d. Produce evidence and cross-examine witnesses.

Trust funds have better protection when deposited into trust accounts because they are ______. a. In an interest-bearing account b. Insured by the banking industry c. Insured by the depositor's private insurance d. Protected from seizure

d. Protected from seizure

Broker Samuela has just explained her agency disclosure office policy to new agent Kyle. He told her that he understands the policy. She asks him to sign an acknowledgment saying that he has received the policy and understands it, and Kyle does so. What happens next? a. Kyle is allowed to enter into agency relationships with customers. b. Kyle may now begin to act in the capacity of a transaction broker. c. Samuela can now request Kyle's license, and he can begin practicing real estate for her. d. Samuela must retain a copy of this acknowledgment for three years.

d. Samuela must retain a copy of this acknowledgment for three years.

Andie is just about to enter into an agency relationship with a real estate licensee, Clark, so he can help her find a house. But first, she wants to make sure that Clark is a licensed agent in good standing. How can she find out? a. She can call her local association of REALTORS®. b. She can find and read federal real estate legislation. c. She can talk to a few of Clark's other clients. d. She can verify Clark's license status on the AREC website.

d. She can verify Clark's license status on the AREC website.

Julie is working with buyer clients and has prepared an estimated closing statement. Which of the following statements is true? a. She must provide it at least three days before closing. b. She must provide it the day of closing. c. She must provide it when an offer is accepted. d. She must provide it when an offer is signed.

d. She must provide it when an offer is signed.

Maya violated Alabama real estate license law. Which disciplinary action is NOT a possible penalty? a. Her license may be subject to suspension. b. Her license will be revoked and she'll be unable to practice real estate in the future. c. Her license will be suspended during which time she cannot practice real estate. d. She will not be able to take continuing education classes.

d. She will not be able to take continuing education classes.

Jeremy is serving in the place of a qualifying broker who became incapacitated. What is his title? a. Associate broker b. Interim broker c. Qualifying broker d. Temporary qualifying broker

d. Temporary qualifying broker

Real estate law covers general property law, related federal- and state-specific laws, law of contracts, and ______. a. Constitutional law b. Criminal law c. Income tax law d. The law of agency

d. The law of agency

Jessica has just taken her Alabama real estate license exam. If she passes the exam, what will the exam proctor provide to her? a. A copy of her real estate license b. A license number c. Authorization to begin real estate activities d. The licensure application

d. The licensure application

Which of the following is true about Alabama Real Estate Commission hearings? a. No witnesses are allowed to be present. b. They are held once per month. c. They are private. d. They are usually held in Montgomery County.

d. They are usually held in Montgomery County.

What are the main ways that license laws ensure consumer protection? a. They define standards, build education, and create recurring revenue. b. They establish requirements, assess fees, and build education. c. They establish requirements, assess fees, and create recurring revenue. d. They establish requirements, define activities, and describe standards of conduct.

d. They establish requirements, define activities, and describe standards of conduct.

What action may licensees take if they're unhappy with the commission's final decision on their hearing? a. They can present the issue in civil court. b. They have no recourse. c. They may ignore the findings. d. They may request a rehearing.

d. They may request a rehearing.

What's an agent's responsibility related to home inspections? a. To encourage buyers to waive an inspection b. To hire an inspector for the buyers c. To perform them d. To recommend a buyer have a professional inspection performed

d. To recommend a buyer have a professional inspection performed

Even the most honest broker can make a mistake from time to time. Keeping trust funds in ___________ diminishes the possibility of accidental misuse of trust funds. a. Personal accounts b. Private brokerage accounts c. Swiss bank accounts d. Trust accounts

d. Trust accounts

Which of the following is a true statement regarding handling trust funds in Alabama? a. Brokers may deposit them into the brokerage operating account. b. Licensees own the funds. c. Qualifying brokers must make sure they're safely locked in a drawer. d. Trust fund monies should be deposited in a timely fashion.

d. Trust fund monies should be deposited in a timely fashion.

In Alabama, RECAD requires that all purchase agreements designate which of the following? a. That closing will occur within 30 days of signing the contract b. What the brokers' commission is c. What type of counter-offers the seller will consider d. Who represents whom in the transaction

d. Who represents whom in the transaction

Licensee Bert's seller client asks him not to tell prospective buyers that he's selling his house because he's lost his job and can't continue to afford the mortgage payments. Should Bert obey him? a. No, because although it's not illegal to keep this information confidential, it's unethical. b. No, because this is a material fact, and Bert must disclose material facts to all prospective buyers. c. Yes, because as the seller's agent, Bert must obey all of his client's instructions. d. Yes, because this is a lawful instruction, and this information should be kept confidential.

d. Yes, because this is a lawful instruction, and this information should be kept confidential.

Which of the following actions might be considered a red flag signaling mortgage fraud? a. The buyer has disclosed that she's purchasing the property with her sister. b. The buyer's credit score is outstanding. c. While reviewing the sales agreement, you notice the buyer has impeccable handwriting. d. Your buyer requests a specific appraiser.

d. Your buyer requests a specific appraiser.

How often must trust accounts be reconciled in Alabama? Annually Bi-weekly Monthly Weekly

monthly

Each qualifying broker must explain the agency disclosure office policy, which specifies the types of agency relationships allowed, to licensees at least once every ______. Quarter Six months Two years Year

year