Practical Applications

In Colorado, each county requires the "Real Property Transfer Declaration" to be completed at closing and mailed to the county. Which of the following statements are true regarding this document? It is usually executed by the seller It discloses the inclusion of personal property in the transfer It discloses any relationship the buyer may have to the broker It discloses certain terms of the financing that was secured by the seller

It discloses the inclusion of personal property in the transfer

Cindy is an associate broker who received a thank you letter and nice bonus check from the seller of a house several weeks after the closing. Cindy cashed the check because she felt she earned it. Which of the following is true in this situation? Cindy may accept the bonus check because she is licensed as an associate broker Cindy is allowed to accept the money if 30 days have elapsed since the closing It is a violation of commission regulations to accept the money Cindy may accept the money if her broker permits her to do so

It is a violation of commission regulations to accept the money

The Title Company charges a fee to effect the closing on behalf of the buyer and seller. Who bears the cost of this? It is agreed in the purchase contract who shall pay this cost The listing broker must pay since he usually chooses the Title Company It is illegal for the Title Company to charge this fee The seller always pays this fee

It is agreed in the purchase contract who shall pay this cost

What happens to the original warranty deed after it has been recorded? It is sent to the buyer It is sent to the seller It is sent to the lender until the loan has been paid off The Public Trustee retains it until the loan has been paid off

It is sent to the buyer

An older couple owned a property together. The man died and his wife is the sole owner of the property. How did the couple acquire title to the property? In Severalty Joint tenants with right of survivorship Tenants in Common

Joint tenants with right of survivorship

When advertising, which is the correct way? Joseph Magnum, Associate Broker Joseph Magnum, Associate Broker, Hot Properties Real Estate Team Joseph Magnum, ABC Realty Inc. Joseph Magnum, Associate Broker, (303) 999-5555

Joseph Magnum, ABC Realty Inc.

The inclusions and exclusions section of the Residential form of the Contract to Buy and Sell calls for mandatory inclusion of a number of items. Which of the following are included only if checked? Parking & storage facilities as described in a condominium community Leased security systems Window coverings on the property the date of the sales contract Fireplace screens and grates

Leased security systems

Lily listed her house for sale with a broker on February 1st. The listing agreement was to last for five months but in April she decided that the house was no longer for sale. Which of the following statements is true? Lily is required by law to leave her house on the market until June Lily has withdrawn the broker's authority to sell the property and may be subject to reimbursing some broker expenses Lily has cancelled the agreement and there are no penalties The real estate commission will decide if Lily's action was justified

Lily has withdrawn the broker's authority to sell the property and may be subject to reimbursing some broker expenses Lily may cancel the agreement but she may be responsible for some expenses. The real estate commission will not be involved

Mr. and Mrs. Snively have a contract to purchase a home for $257,000. A hailstorm damaged the roof to the tune of $27,500 before closing. What remedy does the buyer have? Snivelys can be entitled to credit for half the insurance proceeds resulting from the damage Snivelys broker can wait until the roof is repaired then make a decision whether they want to continue with the contract Snivelys can demand that the roof be replaced prior to closing Snivelys have an option of whether they will or will not proceed with this contract

Snivelys have an option of whether they will or will not proceed with this contract

According to the Contract to Buy and Sell Real Estate (AKA Purchase Contract) at or before the Association Documents Deadline a purchaser of a property in a Common Interest Community must receive: Lead Based Paint Disclosure An agreement to amendment and extend Governing and Financial Documents A buyer/agency agreement

Governing and Financial Documents Governing Documents consisting of: 1 - All Owners' Association declarations, articles of incorporation, bylaws, articles of organization, operating agreements, rules and regulations, party wall agreements; 2 - Minutes of most recent annual owners' meeting; 3 - Minutes of any directors' or managers' meetings during prior six-month period. If none of the preceding minutes exist, then the most recent minutes, if any Most recent Financial Documents consisting of: 1- annual and most recent balance sheet, 2 - annual and most recent income and expenditures statement, 3 - annual budget, 4 - reserve study, and 5 - notice of unpaid assessments

In order for a broker to write an offer for a buyer on a HUD-acquired property, the broker must use a: HUD sales contract Commission-approved Contract to Buy and Sell Real Estate HUD sales contract and FHA financing Must have a HUD real estate license

HUD sales contract Offers must be submitted on HUD Standard Retail Sales Contract.

A woman listed her house that had prize roses bushes in the backyard. She told her agent that she would be removing the roses from the garden and preparing the soil for the new owner to plant their own flowers. Upon the walk-through, the buyers saw that the roses were removed and were angry. That is one of the reasons they were buying the house. What would be the best scenario in this situation?" If the roses bushes were not listed as an exclusion the Buyers have the right to cancel the agreement The Buyers would still be bound to purchase the home if the Sellers plant new rose bushes The Sellers intent rules, the Buyers must complete the transaction The Sellers have no recourse, they must replant the rose bushes they removed.

If the roses bushes were not listed as an exclusion the Buyers have the right to cancel the agreement

The Real Estate Commission will NOT issue a temporary hardship employing broker license to a/n: Corporation Partnership Individual Proprietor LLC

Individual Proprietor

Closing is February 10 and taxes for the prior year were not paid for $1,854, this is shown on the settlement sheet as: $1,854 debit to the seller, credit to the broker $1,854 debit to the seller, credit to the buyer $152.38 debit to the seller, credit to the buyer $152.38 debit to the seller, credit to the broker

$1,854 debit to the seller, credit to the broker Taxes for the prior year would be a debit to the seller and a credit to the broker. The previous years taxes are the seller's problem. Debit the seller for $1854. The broker receives the funds as a Credit. (remember - the "broker" is a proxy for the title company closing agent who controls the escrow account). The broker (closing agent) will then write a check from the escrow account and send it to the governement to pay the past due tax bill.

A new loan for $165,000 is taken out at 6 1/2 % by the buyer, the closing is May 16. How will the interest be shown on the settlement sheet? $440.75 debit to the buyer, credit to the broker $470.14 debit to the buyer, credit to the broker $3966.78 debit to the buyer, credit to the broker $3996.16 debit to the buyer, credit to the broker

$470.14 debit to the buyer, credit to the broker $165,000 (loan amount) x .065 (Interest Rate) = $10,725 (annual interest) / 365 (days in year) =$29.38356 (interest per day) x 16 (days owned by buyer in May -May 16-31) = $470.14 Debit to the buyer (because they owe the interest) credit to the broker (because the money is being paid into the escrow account controlled by the broker/closing agent so that they can cut a check for the interest to the lender.)

Susan Seller gave her agent a 60 days listing to sell her home for $200,000. The seller specified in the Exclusions section of the listing agreement that her prized iris plants would be removed prior to close and the iris bed repaired to eliminate the damage of plant removal. Public records indicates the home is 2,400 square feet, has 3 bedrooms, 2 bathrooms, a 90% finished basement and a two-car garage. Last year's taxes were $1,832 and have been paid. An offer was made and accepted with a sales price of $190,000. The buyers submitted earnest money of $3,000 under liquidated damages. The inspection objections must be made by March 27. The survey must be completed by April 10. Review of title must be completed by April 10. The Sellers indicated in the seller's property disclosure that the water heater had leaked. The water heater was replaced and all water damage repaired. The sellers further disclosed that the concrete basement floor had lifted due to expansive soils creating a crack in the concrete floor. Although closing was set for May 1st, a delay in the lender processing of the buyer's loan forced a change in close to May 10th. This change was accepted by both parties. The cost of the survey was $450. The closing fee charged by the closing company is $150 to be split by both parties. What is debit entry on the settlement sheet for the seller's prorated share of property taxes. The buyer is responsible for the day of closing. Use a 365-day year: $342.90 $647.47 $782.18 $1,782.34

$647.47 $1,832 last years taxes/365 days in year * 129 days seller owned the property prior to close = $647.47 taxes owed by seller.

A broker received a commission for $20,940 for the sale of a $349,000 house. What was the commission rate? 0.06 0.07 0.08 0.09

0.06 20,940 / $349,000 = 6%

The lender computed the interest for the previous month on a $120,000 mortgage loan balance at $825. What is the rate of interest? 0.07500000000000001 0.07750000000000001 0.0825 0.085

0.0825 $825 X 12 = $9900 (Annual Interest) / $120,000 = .0825 or 8 1/4 %

How many times can the exclusion on capital gains taxes be claimed? 3 transactions over the past 12 months 5 transaction over the past 15 months 1 transaction every 24 months 2 transactions every 18 months

1 transaction every 24 months If your client(s) sold their main home and made a profit, they may be able to exclude that profit from taxable income. Here's how: Individuals can exclude up to $250,000 in profit from the sale of a principal residence (or $500,000 for a married couple) as long as s/he has owned and lived in the home for a minimum of two years. Those two years do not need to be consecutive. In the 5 years prior to the sale of the house, s/he needs to have lived in the house for at least 24 months in that 5-year period. This 2-out-of-5 year rule can be used to exclude profits each time a principal residence is sold or exchanged. Generally, the exclusion can be claimed only once every two years. Some exceptions do apply.

What portion of the 24-hour continuing education requirement is to consist of the mandatory credits developed by the Real Estate Commission? 4 hours 8 hours 12 hours All 24 hours are mandatory subjects

12 hours

The selling landlord has collected the September rents from all five tenants: two at $845 and three at $925. Determine the proration to be allowed the buyer when the sale is closed on September 19. 1965 1637 1786 1690

1786 2 x $845 = $1690 3 x $925 = $2775 $4465 total rent divided by 30 days = $148.8333 PER DAY x 12 (days the buyer owns the property) = $1786

A house is closed on April 15. The property taxes are $960 for the year; they have not been paid. How much does the buyer receive from the seller at closing? 360 274 280 680

274 $960 / 365 days = $2.6301 per day the seller owned the property and owes the Buyer for 104 days. $2.6301 x 104 = $273.53

A house is sold on June 15.The annual taxes in the amount of $850 for the year have not been paid. What does the seller owe the buyer at closing? 384.25 465.75 468.08 381.92

384.25 Jan. 1 - June 14 = 165 days. (Remember, on the state side the buyer owns the day of closing and it is a 365-day year.) $850 / 365 = $2.3288 per day tax liability.165 days x $2.3288 = $384.25

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

A $75,000 loan requires $1,875 in discount points to be paid by seller and $375 in discount points to be paid by the buyer. This is how many total discount points? 2 2.5 3 3.5

3 $1875 + $375 = $2,250. I / V = R. $2,250 / $75,000 = .03 Definition of 'Discount Points' Discount Points are a form of prepaid interest. A borrower buys a point and in return gets a lower interest rate on the loan. Each discount point generally costs 1% of the total loan amount and depending on the borrower, each point lowers your interest rate by one-eighth to one one-quarter of your interest rate. As the IRS considers discount points to be prepaid interest they are tax deductible in the year in which they were paid. For example, on a $300,000 loan, each point would cost $3,000. Assuming the interest rate on the mortgage is 5% and each point lowers the interest rate by 0.25%. Buying 2 points will cost $6,000 and will result in an interest rate of 4.50%. Both lenders and borrowers gain benefits from discount points. Borrowers gain the benefit of lowered interest payments down the road, but the benefit applies only if the borrower plans on holding onto the mortgage long enough to save money from the decreased interest payments. Lenders benefit by receiving cash upfront instead of waiting for money in the form of interest payments over time, which enhances the lenders liquidity situation. On a practical basis; discount points are most often purchased by sellers as an incentive to prospective buyers. For most sellers, discount points are a cost of selling and thus tax-deductible. Buyers usually do not see enough benefit to purchase discount points. In the earlier example; spending $6,000 to reduce the interest rate to 4.5%, would have reduced the monthly payment by about $90. It would have taken a buyer 67 months to cover the cost of the points.

As per the Contract to Buy/Sell Real Estate, mediation shall terminate in the event the entire dispute is not resolved within how many days of written notice requesting mediation delivered by one party to the other at the party's last known address? 10 30 45 60

30 MEDIATION. If a dispute arises relating to this Contract, prior to or after Closing, and is not resolved, the parties must 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, will 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 will not alter any date in this Contract, unless otherwise agreed.

Use the included Amoritization Chart (also called a mortgage factor chart) to find the shortest term for a $275,000 loan at 6.5% interest that keeps the monthly payment under the $1,800 the borrowers can afford. 15 years 30 years

30 years

After taking the examination you must apply with the Real Estate Commission for your license within: 365 days 2 years 6 months there is no time period

365 days

A house is sold on June 15. The annual taxes in the amount of $850 for the year have not been paid. What does the seller owe the buyer at closing? 384.25 465.75 468.08 381.92

384.25 Jan. 1 - June 14 = 165 days. $850 / 365 = $2.3288 per day tax liability.165 days x $2.3288 = $384.25

In Colorado a broker must retain records of real estate transactions for a minimum of how many years? 2 3 4 8

4

Trust account records must be kept for: 1 years 3 years 4 years 6 years

4 years

A house is closed on October 15. The annual insurance payment is $578 for the fiscal year of July 1 to June 30. The buyers will assume the seller's policy. Since the policy has been paid, how much does the buyer owe the seller at closing? 167.86 410.14 408.56 169.44

410.14 $578 / 365 = $1.5836 per day. Seller paid for 259 days; he didn't own the policy (Oct. 15 through June 30) 259 x $1.5836 = $410.14

The maximum amount of time a landlord can specify in a lease that they will hold a security deposit after lease termination is: 30 days 60 days 7 days 15 days

60 days

Who has the responsibility for prosecuting in court the practice of real estate without a license? A District Attorney The Colorado Real Estate Commission A Police Detective IRS

A District Attorney

An owner falls behind on payments. The lender declares the full loan amount due; this is the result of what clause in the promissory note? Due On Sale clause Acceleration clause Habendum clause Consideration clause

Acceleration clause

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

When the license of the sole proprietor is suspended for two years, what is the effect on the affiliated associate brokers? Affiliates' licenses will also be suspended for a two-year period Affiliates' licenses will be revoked, subject to reinstatement after one year Suspension of the proprietor has no effect on the affiliates' licenses Affiliates licenses are inactive until they are hired by a new employing broker

Affiliates licenses are inactive until they are hired by a new employing broker

When the license of the sole proprietor is suspended for two years, what is the effect on the affiliated associate brokers? Affiliates' licenses will also be suspended for a two-year period Affiliates' licenses will be revoked, subject to reinstatement after one year Suspension of the proprietor has no effect on the affiliates' licenses Affiliates licenses are inactive until they are hired by a new employing broker

Affiliates licenses are inactive until they are hired by a new employing broker If the broker's license is suspended, the licenses of all associate brokers will be placed on inactive status until these persons are "hired" by a new broker.

In the Contract to Buy and Sell, what does the statement, "time is of the essence hereof" mean? All dates and deadlines will be strictly interpreted. All dates and deadlines must be performed within a reasonable margin of the stated time or date. Everything in the contract must be complete within a year or it will be void. Everything not done by closing will be waived.

All dates and deadlines will be strictly interpreted. This is a legal phrase and it means that timing is important to the contract, thus every date and deadline must be met.

Title insurance protects the buyer against: All liens All liens of record All liens of record that are not listed in the schedule of exceptions Default by the seller on their existing loan

All liens of record that are not listed in the schedule of exceptions Title insurance protects the buyer only against liens or defects of record that are not listed in the schedule of exceptions.

What was decided in the Conway-Bogue decision? Must recommend to client that it is always advisable to have a contract reviewed by an attorney Real estate agents are practicing law without a license Must use pre-approved commission forms All of the above

All of the above

The purpose of RESPA is to: Disclose the true cost of borrowing funds Eliminate kickbacks Disclose all costs in closing of a property All of the above

All of the above The purpose of RESPA, a federal law, is to disclose to the borrower the true cost of borrowing money and to help eliminate kickbacks.

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

The Amend/Extend Contract With Broker is used to change : Any Commission approved contract The Contract to Buy and Sell Any contract to which the broker is a party None of the above

Any contract to which the broker is a party

With regard to a property in a Home Owners Association, the Contract To Buy & Sell Real Estate provides the Buyer the right to terminate the contract if Buyer does not receive the Association Documents by: Title Deadline Association Documents Deadline Association Documents Objection Deadline Buyer cannot terminate the contract for failure to receive the Association Documents

Association Documents Deadline

A real estate broker filling out a listing agreement finds that there is not enough room for the legal description. The broker may: Abbreviate the description, as it must fit within the body of the contract Use only the street address as it is shorter Insert the legal description on MLS in lieu of the listing agreement Attach the legal description; information may be added outside the body of the contract

Attach the legal description; information may be added outside the body of the contract The legal description can be added as an attachment to the contract on an addendum, or amend & extend form.

The support staff in an office is available to do all of the following, except? Be your own personal assistant To set showings for properties listed by that office Direct calls to the brokers Input properties into the MLS

Be your own personal assistant You need to hire your own personal assistant.

What do you use to transfer personal property when you buy a furnished residential property? Deed of Trust Bill of Sale Inventory items on bottom of closing statement

Bill of Sale Deeds transfer real estate. Whether you are buying a fridge at Best Buy, lumber from Home Depot or the furniture from a furnished home the rules involving the transfer of ownership of personal property are in charge and you use a Bill of Sale to transfer ownership.

Prospective buyers made an offer on a property. The seller did NOT accept, but made a counteroffer. The prospective buyers signed the counteroffer and the real estate agent delivered their acceptance to the seller. In the interim, the same buyers found another house that they liked better and made an offer on it, which was accepted. Which of the following is TRUE? Neither contract is enforceable Only the first contract is valid Both contracts are valid The contract on the first house is not enforceable

Both contracts are valid This is a case of double jeopardy. The buyer signed two purchase contracts. There is nothing in a purchase contract that prohibits the buyer from putting an offer on another property.

The holdover period in an Exclusive Right-to-Sell Listing Contract is freely negotiable, so the seller and broker agreed upon a 60-day holdover period. Who is protected by this provision? Broker Seller Buyer Lender

Broker The Holdover Period says that a listing broker may be entitled to a commission after the expiration of a listing contract for the period of time specified in the clause if: 1) the broker negotiated with the buyer during the listing period and 2) the broker submitted the name of this buyer in writing to the seller. Although the protection is for a negotiated time after the listing expires; it can terminate early if the property is re-listed by another agent and the "Will Not" box is checked, meaning the old listing agent "Will Not" be owed a commission if another brokerage firm has earned one. If neither the "Will" or "Will Not" be owned a commission" box is checked - the default is "Will Not". See "Holdover Period" in the "When Earned" clause of an Exclusive Right-to-Sell listing agreement.

Broker A is a sole proprietor. He quits business and goes to work under Broker B. Whose responsibility is it to keep Broker A's previous records? Broker A Broker B Real Estate Commission None of the above

Broker A

Broker A is a sole proprietor. He quits business and goes to work under Broker B. Whose responsibility is it to keep Broker A's previous records? Broker A Broker B Real Estate Commission None of the above

Broker A A real estate broker is required to keep records (for the Commission) for 4 years.

A transaction broker relationship may be created by: Lead-Based Paint Disclosure an oral disclosure is sufficient approval of the employing broker Brokerage Disclosure to Buyer

Brokerage Disclosure to Buyer Seller and Buyer Agency relationships must be in writing. In the absence of a written agreement the default non-agency relationship is a transaction broker. However, prior to performing a licensed activity such as eliciting or receiving confidential information, the Broker must at a minimum disclose this status using an approved disclosure form.

Which of the following is the ONLY section which must be a office policy manual? Human Resource Benefits Commission Plan Backup Contracts Brokerage Relationships Offered to Public

Brokerage Relationships Offered to Public

Title insurance endorsements are provided by the: Seller for the protection of the lender Buyer for the protection of the lender Seller for the protection of the buyer Buyer for the protection of the seller

Buyer for the protection of the lender Standard Title insurance is paid for by the seller. Title insurance endorsements are paid for by the buyer as protection for the lender. This is usually called mortgagee insurance, or the mortgagees policy.

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

Just before the close, the buyer noticed a brokern 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.

Who should attend the inspection? Buyer, seller and listing agent Buyer, selling agent, and inspector Inspector Selling agent and inspector

Buyer, selling agent, and inspector

When making a counter offer 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 need to be changed

Change only the dates that need to be changed 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.

As per the Assignability and Inurement clause in the Contract to Buy/Sell Real Estate: Checking the "Is Not" box means the contract is not assignable Checking the "Is Not" box means the contract is not assignable without the seller's prior written consent

Checking the "Is Not" box means the contract is not assignable without the seller's prior written consent Assignability and Inurement. This Contract ___ Is ___ Is Not assignable by Buyer without Seller's prior written consent.

As per the Assignability and Inurement clause in the Contract to Buy/Sell Real Estate: Checking the "Is" box means the contract is assignable with the seller's prior written consent Checking the "Is" box means the contract is assignable without the seller's prior written consent

Checking the "Is" box means the contract is assignable without the seller's prior written consent

When the employing broker of a corporate brokerage is suddenly unable to continue in that position, to whom may the commission issue a temporary "hardship" license? person with sufficient ownership interest in the corporation Colorado licensee approved by the corporate board of directors member of the board of directors officer or director with a broker's license from another state

Colorado licensee approved by the corporate board of directors

When the employing broker of a corporate brokerage is suddenly unable to continue in that position, to whom may the commission issue a temporary "hardship" license? person with sufficient ownership interest in the corporation Colorado licensee approved by the corporate board of directors member of the board of directors officer or director with a broker's license from another state

Colorado licensee approved by the corporate board of directors A temporary hardship license for a corporate brokerage can only be issued to a broker licensed in Colorado. The requirements for ownership and director status are waived.

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

A broker is working with a buyer. The buyer believes there to be a water leak in the home. What should the broker do? Get an inspection done Immediately order a repair of the plumbing Contact the listing broker and inform her of the problem Terminate the contract

Contact the listing broker and inform her of the problem

What type of map is MOST useful for describing the terrain of a very hilly lot? Assessor's map Contour map Recorded map or plat Seismic projection map

Contour map

The holder of the earnest money must be clearly identified in the: Contract to Buy and Sell Real Estate Amend and Extend Exclusive Right to Sell Listing Contract Brokerage Relationship Disclosure

Contract to Buy and Sell Real Estate

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. 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.

On a service property, (i.e., church, school), which approach to value is most reliable? Income approach Sales Comparison approach Cost approach Gross multiplier

Cost approach Since they do not produce income and are not frequently sold, the only method of appraisal is the replacement or reproduction cost approach. A library or public swimming pool would fall into this category, as well. The cost approach is based on the premise that the value of a property is limited by the cost of replacing it. (This is the principal of substitution: if the asking price for a home is more than it would cost to build a new one just like it, no one will buy it.) The estimate of value arrived at through the cost approach usually represents the upper limits of the property's value. The cost approach involves estimating how much it would cost to replace the subject property's existing buildings, then adding to that the estimated value of the site on which they rest. Because the cost approach involves estimating the value of land and buildings separately, then adding the estimates together, it is sometimes called the summation method.

How is the purchase price handled on the settlement statement? Debit seller, credit buyer Debit seller, debit buyer and credit broker Credit seller, debit buyer Credit seller, credit buyer and debit broker

Credit seller, debit buyer

Standard title insurance charges appear on a closing statement as a: Credit to the buyer Credit to the seller Credit to the broker Debit to the broker

Credit to the broker Title Companies collect the title insurance premium at closing - a check is later sent to the title insurance premium company. It is usually a debit to the seller and a credit to the broker at time of closing.

The amount due from the buyer appears on a closing statement as a: Credit to the broker Credit to the seller Credit to the buyer Debit to the buyer

Credit to the buyer The amount due from the buyer appears on a closing statement as a credit to the buyer. This is a receipt for the money that the buyer has already paid. Remember that the closing is over!

For a VA loan - how will the Buyer's Loan Processing Fee be shown on a settlement sheet: Debit Buyer Debit Seller Debit Broker Not indicated on settlement sheet

Debit Seller

The Seller holds security deposits in the amount of $1,000 from each of six tenants. On the settlement sheet: Credit Seller & Debit Broker $6,000 Debit Seller & Credit Buyer $6,000 Credit Seller & Debit Buyer $6,000. Prorate the deposits between the Buyer and Seller based on the closing date

Debit Seller & Credit Buyer $6,000

Lender required add-ons (called endorsements) to the Title insurance endorsements appear on a closing statement as a: Debit to the buyer Credit to the buyer Debit to the seller Credit to the seller

Debit to the buyer

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

Which of the following would an unlicensed personal assistant be permitted to do? Complete and present a comparative market analysis Drive potential buyers to a listing and discuss purchase options Answer questions about the seller's motivations as long as they are correct Distribute factual literature prepared by a licensed associate

Distribute factual literature prepared by a licensed associate An unlicensed assistant is allowed to distribute literature, they can chauffeur buyers to a property with the seller's permision as long as no licensed activity is performed, and they may complete but not present market analysis.

Which items are not considered physically attached to the property and are not included in the sale? Light fixtures Curtain rods Storage rods Draperies

Draperies Personal property is not included in the sale of real estate. Draperies do not satisfy the tests of fixtures since they are not permanently attached. All other items in the answers are permanently attached.

From whom does the licensee receive a commission? Employing Broker Seller Buyer Either 2 or 3 may pay a commission to the licensee

Employing Broker

A licensee shows a home and mentions that it has a lovely fireplace in the living room. After buying the home, the buyers and agent discover that the brick fireplace is just a decorative fireplace and is not "wood burning." Which of the following would BEST protect the licensee from financial loss? Homeowner warranty insurance The state recovery fund Errors and Omissions coverage The agent's homeowner's insurance policy

Errors and Omissions coverage

Colorado licenses must be renewed: Every year at the anniversary of licensing Every three years at anniversary of licensing Every year on December 31 Every three years on December 31

Every three years at anniversary of licensing Colorado licenses renew every three years on the anniversary of original licensing.

In Colorado the broker must disclose: stigmatized properties material facts buyer's motivating factors how long they have been a licensed agent

Material Facts A broker is not required to disclose stigmatized properties but they must disclose material facts.

If a refrigerator fails prior to closing and after a contract has been accepted, according to the Colorado Contract to Buy & Sell the Seller must? Do nothing for the Buyer is at risk during this period May do nothing and the Buyer can replace it after closing and charge the Seller Must replace it with a new a refrigerator May replace it or repair it with a similar used refrigerator

May replace it or repair it with a similar used refrigerator

Which of the following best describes "commingling?" Joint ownership of property owned by a broker and a salesperson Co-ownership between husband and wife Mixing escrow funds of others with a broker's operating account Husband and wife ownership without survivorship

Mixing escrow funds of others with a broker's operating account

A note for earnest money: Must be indicated in the Contract to Buy and Sell Makes a Purchase Contract void A promissory note for Earnest Money is not allowable A promissory note for Earnest Money must be redeemed withing 24 hours of contract acceptance

Must be indicated in the Contract to Buy and Sell

In the Colorado Contract to Buy & Sell encumbrances to be paid by the seller: Must be paid prior to closing Must be paid at or before closing Must not be paid from proceeds from the sale of the property May be paid by the seller after closing

Must be paid at or before closing

What, if anything, must an associate broker include in his/her web site advertising? Name of the brokerage firm that holds the associate broker's license Names of all licensees in the broker's office which the associate broker works The brokerage firms home office that holds the associate's license There is no need for additional disclosures

Name of the brokerage firm that holds the associate broker's license All advertising by an associate broker must include the identity of the brokerage firm that holds the associate's license.

In the Contract to Buy/Sell Real Estate (AKA the purchase contract), who is responsible for the cost of the appraisal? Buyer Seller Split between all parties to the contract Negotiable

Negotiable

If the homeowner association charges a transfer fee to the new owner of the property, who normally pays this? Negotiable Always paid by the seller Always paid by the buyer There is no such thing as a transfer fee

Negotiable This is usually paid by the seller, but is always negotiable.

In an Exclusive Right-to-Buy contract, who is responsible for paying the commission to the broker? Buyer does not have to pay Buyer Negotiable between buyer and seller Split 50/50 between buyer and seller

Negotiable between buyer and seller In the standard buyer agency contract, the buyer may pay but can say they are not going to pay, or allow for the broker to collect their commission from the seller or some other source.

You're holding an open house for another agent. A prospective buyer comes in and asks a bunch of questions. You can't answer some of the questions but tell her you will get back to her. What is your relationship with this individual? Express Agent General Agent Buyer's Agent No agency was created

No agency was created An agency relationship can only be created through the express consent of the potential client. Providing information does not constitute consent to establish an agency relationship.

As a licensee, are you required to become a member of the MLS? No, however the MLS is the most used marketing tool for listed properties No, but you must become a member of the Internet Yes, and you must also join one of the boards Yes, and you must advertise all your properties in the MLS

No, however the MLS is the most used marketing tool for listed properties You are not required to become a member of the MLS or join any of the boards, however the MLS is the most used marketing tools for listed properties and probably the least expensive.

A seller asks an agent/friend to accept compensation to advise on tax and title matters for a property the seller is considering buying. Can the agent do this? Yes, brokers provide this advice commonly Yes, as long as the agent is engaged as a buyer's agent No, the agent is not a buyer's agent and therefore cannot provide this advice No, this is outside the scope of permitted activities for a holder of a real estate license

No, this is outside the scope of permitted activities for a holder of a real estate license

The land description T3N, R4W 5th Principal Meridian refers to what method of property description? Rectangular Survey System Lot and Block Metes and Bounds Subdivision

Rectangular Survey System

A client is buying an old gas station with the intention of building a flower shop. The lender will likely ask for: A Phase 1 environmental assessment with a visual inspection and neighbor interviews An Environmental Impact Study (EIS) A Phase 2 environmental statement with soil testing Request if a CERCLA assessment report has been issued in the prior 2 years making the property owner innocent of past environmental liabilities as per the Brownfield Revitalization Act

Request if a CERCLA assessment report has been issued in the prior 2 years making the property owner innocent of past environmental liabilities as per the Brownfield Revitalization Act Some would say the "choose the longest answer" strategy would lead you to the correct answer on this question and they would be right. A better technical explanation is CERCLA is more commonly known as the Superfund law. CERCLA generally says that all current and past owners of a property may be held responsible for environmental cleanup regardless of whether any particular owner was responsible for the contamination. Recognizing that this could put a chill on anyone wanting to purchase industrial parcels, the government passed the Brownfields Revitalization Act. Brownfields is a term for contaminated properties. This act is an amendment to the federal Superfund law, which provide for BFPP (bona fide prospective purchaser) status for new buyers. This status provides assurance to lenders that the borrower will not be liable and will not affect their ability to repay the lender. Attaining BFPP status requires the client to jump through a number of hoops such as conducting a Phase 1 environmental assessment, but a lender would likely first ask if BFPP status has already been granted.

A broker has an Exclusive Right-to-Buy contract with a principal. Who is to be their customer? Buyer Broker Seller Client

Seller

Who should hire a closing company? Seller Selling agent Buyer Lender

Seller

The Licensee Buyout Addendum contains the following verbiage 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

Which party should create an amend/extend because buyer needs more time for an inspection? Selling agent Listing agent Lender Title company

Selling agent

Who is responsible for getting a copy of the contract to the lender? Selling agent Listing agent Seller Title Company

Selling agent A selling agent may not disclose whom the buyer will make loan application with.

Which party should create an amend/extend because buyer needs more time for an inspection? Selling agent Listing agent Lender Title company

Selling agent If buyer needs more time, buyer's agent (also known as the selling agent) has to request it.

Which of the following is true when a broker signs the Broker Acknowledgments at the end of the Residential Contract to Buy and Sell? The broker acknowledges receipt of the earnest money deposit. The broker becomes a party to the contract and agrees to its terms. The broker assures the right to a commission. The broker confirms the commission split with cooperating brokers.

The broker acknowledges receipt of the earnest money deposit. The brokers' signatures acknowledge receipt of the earnest money deposit and confirms their brokerage relationship to the party with whom they are working

What is the status of an employing broker who moves his office down the street but does not notify the Real Estate Commission? The broker must notify the Real Estate Commission within 30 days The broker's license is revoked The broker and all of his agents' licenses are inactive The broker's license is suspended but all of the employed agents may continue to conduct business

The broker and all of his agents' licenses are inactive

When a broker terminates his affiliation with an employing broker what must be done? All business cards must be returned to the employing broker The broker's license along with a letter of termination must be sent to the real estate commission The broker must give the employing broker an official letter of termination that he or she can send to the real estate commission The broker and the employing broker have joint responsibility to assure that the real estate commission is notified

The broker and the employing broker have joint responsibility to assure that the real estate commission is notified The licensee and the employing broker have joint responsibility in notifying the real estate commission.

In the Colorado Listing agreement the holdover period provision entitles the broker to a commission if the property sells to anyone: The broker negotiated with during the listing period unless the seller lists with another exclusive broker and the "Will" box has not been checked Within a stated period after listing expires The broker negotiated with during the listing period Within the listing period

The broker negotiated with during the listing period unless the seller lists with another exclusive broker and the "Will" box has not been checked

Under the Commission-approved Contract to Buy and Sell, if the buyer diligently tried to get a loan, was unable to do so and notified the Seller of such before the Loan Objection Deadline had passed, what would happen to the earnest money deposit? The broker and owner would split the money The broker would release the money back to the buyer The buyer and broker would split the money 50/50 The seller is entitled to liquidated damages and other things of value

The broker would release the money back to the buyer

An offer has been presented to the sellers of a property. They ask their agent to change the terms through a counter proposal. The seller's agent prepares the counter proposal and delivers it to the buyer's agent. The buyers don't want to accept the new terms the seller is offering and would like to submit a revision. Sometimes what is LEGAL is not best PRACTICE. What is the best PRACTICE for the buyer's agent in this situation? The buyer's agent should prepare a counter proposal and attach it to the previous offer and counter proposal The buyer's agent should rewrite the original contract and submit a clean one The buyer's agent should tell the sellers to withdraw their counter proposal None of the above are possible in this scenario

The buyer's agent should rewrite the original contract and submit a clean one Countering a counter proposal using a counter proposal, although legal is not considered a good practice. It is instead considered good practice to revise and submit a new contract. The problem with countering a counter proposal with another counter proposal is each purports to change the terms and conditions of the original offer. This makes it easy to misunderstand the final agreed terms. It better to start fresh with one revised purchase contract. In reality, when multiple counter proposals are placed upon an offer, only the last counter is valid. The earlier counter proposals are void as they have been rejected.

A licensee may accept compensation from: The licensee's employing broker only The seller or buyer Any licensed real estate broker Any service provider to the transaction

The licensee's employing broker only A licensee can only accept compensation from his employing broker.

An agent can advertise a property under his or her name if: He/she is a member of a local real estate board He/she personally listed the property The name of his/her broker is also in the ad He/she personally paid for the ad

The name of his/her broker is also in the ad

Water Rights: Who owns the water rights to a property? The property owner owns the water rights The recorded owner of the water rights, not necessarily the owner of the property The State of Colorado The local water district

The recorded owner of the water rights, not necessarily the owner of the property Water rights transfer with their very own deed separate from the deed which transferred ownership of the property. Therefore the person owning the surface rights may not have water rights. This is very common in subdivisions served by a community water system.

The seller agreed to clean and certify the furnace prior to closing. The Title Company should verify it was done The lender should verify the work was done The seller or listing broker should provide a receipt and certification at closing The inspector should verify the work was done

The seller or listing broker should provide a receipt and certification at closing A receipt from a licensed professional, i.e., a furnace and heating technician, is a good way to verify that work was done that may not be easily detected by the naked eye.

The selling agent observes that the names are misspelled on the warranty deed. What needs to happen? The selling agent should require that the names be corrected The selling agent should not worry, as it is recorded in the county No one else noticed the error, so the closing should just carry on The selling agent should insist that the people change their names

The selling agent should require that the names be corrected The brokers are to verify that the information on the closing documents is correct. This includes names.

Which of the following is true of brokers working for buyers under the Exclusive-Right-to-Buy Contract? They may require listing brokers to adjust their offered split to match the buyer's broker's negotiated fee. They may negotiate an hourly fee to be paid in addition to any other compensation agreed upon. They may also seek a nonrefundable retainer fee, which must be credited toward any Success Fee earned. They may also receive compensation from lenders and other service providers without disclosure to the buyer.

They may negotiate an hourly fee to be paid in addition to any other compensation agreed upon. All compensation received by the buyer's broker must be disclosed. Hourly fees may be charged in addition to other compensation if that is what the parties have agreed upon.

In Colorado the default representation status is: Subagent Seller's agent Transaction broker Buyer's agent

Transaction broker "Agency" requires a written agreement, absent that agreement, the default is transaction broker

Right of rescission is part of: Real Estate Settlement Procedures Act (RESPA) Truth in Lending Act Consumer Protection Act Fair Housing Act

Truth in Lending Act

What is a mandatory recommendation in the Contract to Buy/Sell Real Estate? Use of a home inspector Use of Legal Counsel Use of a surveyor to verify property boundaries Use of Legal and Tax Counsel

Use of Legal and Tax Counsel

According to the Conway-Bogue decision, it is a required practice for Colorado brokers to: Use standard and approved forms Use a title company in closing all transactions Retain an attorney for all transactions Charge a fee for the preparation of legal documents

Use standard and approved forms

Which is not required to be in the file for examination during audit? Copy of the earnest money Contract to Buy and Sell Real Estate Disclosure of Brokerage Relations Warranty Deed

Warranty Deed

Under which circumstance is it NOT necessary to use a Colorado Real Estate Commission-approved form? When purchasing a home in the resale market through a licensed broker When purchasing a newly constructed home When purchasing a duplex When purchasing a commercial property

When purchasing a newly constructed home

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

Which constitutes "good funds": title company's check a broker's check a personal check a cashier's check

a cashier's check

When a licensee purchases a property utilizing a Licensee Buyout Addendum: a commission may be collected a commission may not be collected a commission may be collected with proper disclosure nothing prohibits a licensee from collecting a commission

a commission may not be collected

Colorado Real Estate Commission Rule E-11 states that all agreements to provide services for which a license is required must have: a notary witness signature a definite date for termination an automatic six-month termination a commission approval signature

a definite date for termination

The following is true of discount points: the seller must always pay the discount points a discount is a percentage of the loan amount required by the lender to obtain the same yield that could be obtained on loans offering a higher interest rate the buyer must always pay the discount points discount points are the same as the origination fee

a discount is a percentage of the loan amount required by the lender to obtain the same yield that could be obtained on loans offering a higher interest rate

A home inspection is required by contract on: all homes over $150,000 all homes homes, condominiums, and townhomes a home inspection is not required

a home inspection is not required

A lawsuit for inverse condemnation may be brought by: a homeowner the city the police the zoning board

a homeowner

"Puffing" is: something you do on a cigar illegal as it is fraud a legal exaggeration of a property's benefits hiding a material fact such as a known deficiency in a furnace

a legal exaggeration of a property's benefits

A real estate licensee who is an independent contractor receives: a regular salary health insurance a negotiated commission on transactions completed paid vacations

a negotiated commission on transactions completed

All parties are presumed to have the legal capacity to enter into contracts. But certain persons, for reasons of public policy or some disability, do not have full contractual capacity. All of these do not have contractual capacity except: minors mental impairment intoxicated persons a person over eighty years old

a person over eighty years old

What would most likely cause housing prices to fall? the sale of 3 luxury homes in a neighborhood a company hiring 250 engineers a sharp increase in interest rates a reduction in building activity

a sharp increase in interest rates

A 1031 Exchange is: changing a transaction broker relationship to a buyer broker relationship a tax deferred exchange of investment properties a tax deferred exchange of owner occupied primary residences a transaction where a promissory note will be exchanged for cash prior to closing

a tax deferred exchange of investment properties

Which of the following is required for a person to be a broker of record for a corporation? a corporate position as a director with voting rights an executive position with the corporation such as president or chief executive officer a valid active Colorado broker's license more than nominal ownership in the corporation

a valid active Colorado broker's license

Which of the following is required for a person to be a broker of record for a corporation? a corporate position as a director with voting rights an executive position with the corporation such as president or chief executive officer a valid active Colorado broker's license more than nominal ownership in the corporation

a valid active Colorado broker's license The only requirement in order to be the broker of record for a corporation is that one have a valid, active Colorado broker's license, and have fulfilled the necessary requirements to be an Independent Broker.

The purchaser is buying a vacant property and needs to move his or her family in as soon as possible. If the seller agrees to allow this early occupancy, the listing agent should: help the buyer move in insist that the seller not allow the buyer to occupy the property advise the purchaser they do not need to obtain insurance on personal belongs because the seller still owns the property advise the seller as to any risks

advise the seller as to any risks A rental prior to closing by the purchaser should be fully disclosed, including risks to the seller, in writing and the buyer should be aware of their responsibilities.

A buyer working with a broker has been unable to reach the broker for two days. Even though the broker gave word to his office that an emergency called him out of town, the buyer could construe this to be: abandonment irresponsible unforgivable unlawful

abandonment

The three major evidences of title are: abstract and opinion, title insurance, Torrens certificate abstract and opinion, personal representatives, title insurance Torrens certificate, general warranty, title insurance general warranty, special warranty, abstract and opinion

abstract and opinion, title insurance, Torrens certificate The three major evidences of title are an abstract and opinion, title insurance, and a Torrens certificate.

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 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.

If a licensee desires to sell his or her own property as a FSBO, the licensee must: address the issue of who is to hold the earnest money not use a Commission-approved purchase and sale contract put their license in an inactive status you are not allowed to sell your home property

address the issue of who is to hold the earnest money Unless an agreement with an employing broker requires that an agent owned property be sold through the brokerage, a licensee may sell their property as a F.S.B.O., but they must indicate on the sales contract if the earnest money is to be held by the seller, the buyer, or a Title Company.

Which monetary encumbrances should be listed by the seller when completing the Exclusive-Right-to-Sell Listing Contract? all encumbrances known to the seller all encumbrances the seller will not pay off only encumbrances of public record all encumbrances to be assumed by a buyer

all encumbrances known to the seller

An exclusive right-to-buy (Buyer Agency) contract may : not continue for an indefinite period of time without a specific termination date have a termination date up to one year after the start of the contract may involve three or more parties to the contract all of the above

all of the above

A counter offer: terminates the original offer will result in a valid contract if accepted by the other party must be signed by both parties all of the above

all of the above A counter offer is a rejection of the initial offer. It becomes binding when signed by both parties.

A buyer submits an offer to purchase to the listing agent. He finds out that more than several offers are coming in for the same property. He can expect that: his offer is presented first because it was received first if it is unacceptable to the seller, they counter his first before accepting any other offers the listing agent rejects all other offers until a decision is made regarding the first one all offers will probably be presented at the same time, and the seller will select among them

all offers will probably be presented at the same time, and the seller will select among them Agents are required to submit all offers received, if more than one offer is received before an offer is presented then the agent must submit all offers at the same time.

A counterproposal: is a rejection of a proposed contract to buy/sell amends the terms and conditions of a proposed contract to buy/sell 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

The License Buyout Addendum to the Contract to Buy and Sell is required for which of the following situations? a listing associate offers to purchase a property immediately after the listing expires an associate in the listing brokerage company wishes to purchase a property listed by another associate an associate is offering a guaranteed buyout arrangement as an inducement to list with his or her company a broker wishes to acquire one of his own listings as his personal residence

an associate is offering a guaranteed buyout arrangement as an inducement to list with his or her company "It is the Commission's position that Rule F-7 requires use of the Buyout Addendum under the following circumstances: 1. When a licensee enters into a contract to purchase a property concurrent with the listing of such property. 2. When a licensee enters into a contract to purchase a property as an inducement or to facilitate the property owner's purchase of another property, the purchase or sale of which will generate a commission or fee to the licensee. 3. When a licensee enters into a contract to purchase a property from an owner but continues to market that property on behalf of the owner under an existing listing contract."

Before being employed by a broker, you should receive and review: the office telephone policies the history of the company a list of all current listings an employment agreement

an employment agreement

Before being employed by a broker, you should receive and review: the office telephone policies the history of the company a list of all current listings an employment agreement

an employment agreement Before being employed by a broker, you should receive and review the office policies and the employment agreement.

The broker must keep funds received on behalf of others in: a safe the general business account an identified trust account separate from the broker's other funds an account that provides the best interest

an identified trust account separate from the broker's other funds Funds received on behalf of others must be held in an identified trust account separate from the brokers other funds.

If an Asian family is looking for a home, you must assume they would want a home in: a predominantly Asian community a good neighborhood any neighborhood a predominantly black neighborhood

any neighborhood Stereotyping a buyer is not illegal however steering is illegal. A broker must assume that a buyer would want to live in any neighborhood.

A real estate appraiser means: a realtor providing a market opinion an inspector who evaluates the soundness of the property any person who provides for a fee or a salary an estimate of the nature, quality, value, or utility of an interest in, or aspect of, identified real estate and includes one who estimates value and who possesses the necessary qualifications the loan originator who determines the value of the property

any person who provides for a fee or a salary an estimate of the nature, quality, value, or utility of an interest in, or aspect of, identified real estate and includes one who estimates value and who possesses the necessary qualifications

In Colorado, which of the following must be investigated by the real estate commission? any verified written complaint at least five percent of all brokers annually disputes between brokers regarding commission any licensee accused of a crime

any verified written complaint

Gratuitous gifts to a purchaser subsequent to closing and not promised or offered as an inducement to buy: are allowed and do not require disclosure are not allowed could be construed as fraud none of the above

are allowed and do not require disclosure Gratuitous gifts to purchaser subsequent to closing and not promised or offered as an inducement to buy are allowed.

Traditional splits offered in a real estate office might include: start at 50/50% are always 70/30% never exceed 80/20% are negotiable

are negotiable Depending on the broker and brokerage firm, there are many different commission splits available. Commissions are always negotiable.

On contracts to purchase land, crops that are growing in the field: automatically go with the land as part of the sales price are harvested by the seller, even if the property has closed are negotiated as part of the contract always go the buyer

are negotiated as part of the contract Crops that are fruits of industry, i.e., they require cultivation, can always be a negotiable item; fruits of nature (think apple tree) usually go with the land.

If the purchaser takes possession prior to closing, the utilities are paid by: the purchaser the seller the purchaser's agent as mutually agreed

as mutually agreed Utilities are paid by mutual agreement on a rental prior to closing situation, and this should be stipulated in the written agreement.

When must a seller respond to an offer to buy? automatically within 24 hours an offer never expires until the seller responds as specified in the offer no later than 48 hours after it is written

as specified in the offer Everything is negotiable and the time to accept the offer should be written into the Contract to Buy and Sell Real Estate. It is best to use both date and time for acceptance.

When must a seller respond to an offer to buy ? automatically within 24 hours an offer never expires until the seller responds as specified in the offer no later than 48 hours after it is written

as specified in the offer Everything is negotiable and the time to accept the offer should be written into the contract to buy and sell real estate.

Title insurance companies guarantee against a loss because of defects existing: at the time of acceptance of contract at or before the date of the policy at the time of closing subsequent to the date of issuance of the title policy

at or before the date of the policy Defects, which come into existence subsequent to the date of insurance of the title policy, are not covered.

When using a non-approved form to buy and sell real estate, who must prepare it attorney for parties attorney for broker broker for parties broker for seller

attorney for parties Agents can only use commission-approved forms. Buyers, sellers and their attorneys can do whatever they want.

Since much of your real estate business is done when other people are not working, a real estate office should: be available to the public be open 24 hours a day be open at least three days a week be open only on weekends and evenings

be available to the public

Earnest money abandoned from an unexecuted contract should: be transferred to the Colorado State Treasury Department after five years accrue interest for broker's benefit to offset advertising costs not accrue interest under any circumstances will never be missed

be transferred to the Colorado State Treasury Department after five years

If at all possible the broker should set up showings for he/she and the buyer: when in front of the house before heading out for the day, so the time can be well spent two days prior to the desired date of showing no notice is needed

before heading out for the day, so the time can be well spent Setting up showings prior to heading out can save you and your buyer time and you can organize the route in which to take that day.

Broker Needa leaves for vacation. In his absence, associate Wanna will be handling the escrow accounts. If Wanna errors with the accounting procedures: broker Needa's license will be revoked broker Needa's vacation may be permanent as he is ultimately responsible the Commission will excuse Needa and Wanna; everyone needs a vacation broker Wanna's solely responsible for her actions

broker Needa's vacation may be permanent as he is ultimately responsible

Deposit money received by a licensee is turned over to the: seller of the property Real Estate Commission broker to deposit in his trust fund seller's attorney

broker to deposit in his trust fund

Lock boxes are used for: brochures and flyers placed at the home for sale buyer's security storing the seller's valuables during an open house broker's access into homes that are listed for sale

broker's access into homes that are listed for sale Lock boxes are used for the seller's security and broker's access into homes that are listed for sale.

A good Realtor should be able to pick up on buying signs from the buyer. These signs might include: buyer's not saying anything as you walk through the house buyer's saying bedrooms are very small buyer's commenting on poor housekeeping of sellers buyer's asking how soon can the sellers move out

buyer's asking how soon can the sellers move out Being able to close means you need to be able to identify a buyer's buying signs.

To pre-qualify a buyer, a broker should obtain the following information from the buyer: buyer's criminal background buyer's marital status buyer's drivers license number buyer's present occupation information (i.e. gross income, how long at present job)

buyer's present occupation information (i.e. gross income, how long at present job) To pre-qualify a buyer the broker should obtain from the buyer their social security number and current address for the lender to pull a credit report, the buyer's present occupation and an approximate amount of cash they have to invest in the new home.

When a purchaser is deciding whether or not to do an inspection it is advisable that: the agent tell them they do not need one the licensee determine the condition of the property buyers be advised to consult a professional inspector or engineer sellers can just provide the property disclosure

buyers be advised to consult a professional inspector or engineer

If the listing broker is out of town, and you cannot reach them to present an offer: contact the seller directly to present your offer call the listing broker's office and ask if there is another broker handling the out of town broker's business or ask to speak to the employing broker of that office do nothing until the listing broker is available send the offer to the listing broker's office and wait until he gets back into town

call the listing broker's office and ask if there is another broker handling the out of town broker's business or ask to speak to the employing broker of that office Speak to the listing office and find out who is covering for the agent and if no one is ask to speak to the employing broker.

A broker pulls up in front of the next home to be shown to the buyers and, at first glance, they tell the broker that they don't like the looks of the house. The broker should: make them complete the cancelled home showing form continue on to the next property make them view the property because the showing was already set call the listing office and cancel the showing as soon as possible

call the listing office and cancel the showing as soon as possible Since the showing was already set try to see the home even if it is just to compare that home with the others they have seen or will be seeing. If they still do not want to see the property call the listing office as soon as possible to cancel the showing.

According to the contract, should any fixture or service fail between the date of contract and the date for closing or possession, whichever is earlier, the seller is obligated to: do nothing as the purchaser has taken possession comply as per the terms of the agreement evict the purchaser cancel the contract

comply as per the terms of the agreement

Seller is giving the buyer a contingency but doesn't want to be stopped from selling forever. The seller should consider: increasing the earnest money get proof of buyer financing refuse the contingency countering with an escape clause

countering with an escape clause

Procuring cause means: showing the property to the buyers creating an uninterrupted chain of events that resulted in a closed transaction or sale a broker that provided affirmative service the broker returned all of the buyer's calls in a timely manner

creating an uninterrupted chain of events that resulted in a closed transaction or sale

Under the approved listing agreement, the broker is responsible for: all damage occurring to the premises maintenance of the premises damage caused by the broker's negligence only punitive damages caused by broker's negligence

damage caused by the broker's negligence If the broker causes any damage to the property he/she are responsible.

The seller agrees to pay $1500 of the buyer's closing costs; this is shown on the settlement sheet as: debit to the seller, credit to the broker debit to the seller, credit to the buyer debit to the seller single entry debit to the broker, credit to the buyer

debit to the seller, credit to the buyer

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

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 Clients AND employing brokers are to recieve closing documents immediately.

What is one of the things that MLS can be used for? writing real estate contracts creating a real estate marketing plan developing a broker's annual budgets designing brochures and mapping out property locations

designing brochures and mapping out property locations

Dates in the contract can do all of the following except: be extended by mutual agreement terminate the contract if not adhered to cause a buyer or seller to be considered in default of the contract determine the worthiness of the buyer's financing

determine the worthiness of the buyer's financing

The Commission requires a licensee who advertises the square footage of a property to do which of the following: disclose in the MLS the source of the measurement disclose in writing to the Buyer using the Square Footage Disclosure form the manner in which the square footage was taken measure the square footage of the property hire an appraiser to measure the property

disclose in writing to the Buyer using the Square Footage Disclosure form the manner in which the square footage was taken This is accomplished on the Square Footage Disclosure Form. The licensee is not required to measure the square footage, but is responsible for obvious significant errors regardless of the source from which the measurement was taken.

Before showing buyers properties, a broker needs to: disclose the types of brokerage relationships have them sign an Exclusive Right-to-Buy Contract find out the buyer's race pull an O&E from the title company

disclose the types of brokerage relationships Before showing buyers properties the broker needs to disclose the types of brokerage relationships.

The office policy manual establishes the types of brokerage relationships your broker offers. If your seller requests you to offer one that is not offered, you should: offer that relationship to your seller anyway discuss the issue with your broker have the seller sign an agency form and tell them everything will be fine do nothing

discuss the issue with your broker Your broker establishes an office policy manual for guidelines involving the real estate transactions in that office. Any deviation from office policy should be discussed with your employing broker.

Which of the following would be permissible for an unlicensed personal assistant? distribute factual literature prepared by a licensed associate complete and present a comparative market analysis answer questions about the seller's motivations as long as the answers are factual drive potential buyers to a listing and discuss purchase options

distribute factual literature prepared by a licensed associate

When inserting the name of the buyers into the purchase and sale contract, it is important to: do it exactly as they would like it to appear on the deed, as this is the source of information that the title company uses check their driver's licenses to verify identification check public records first to ensure there are no other homeowners with the same name they are required to use their birth names when taking title

do it exactly as they would like it to appear on the deed, as this is the source of information that the title company uses

When inserting the name of the buyers into the purchase and sale contract, it is important to: do it exactly as they would like it to appear on the deed, as this is the source of information that the title company uses check their driver's licenses to verify identification check public records first to ensure there are no other homeowners with the same name they are required to use their birth names when taking title

do it exactly as they would like it to appear on the deed, as this is the source of information that the title company uses The Title Company derives all of the information for closing from the purchase and sale contract.

A broker received an earnest money deposit. Other than depositing it in an escrow account, he may: do whatever the buyer wants him to do do whatever the seller wants him to do do whatever he wants to do because he is responsible for the money until closing do whatever is agreed to by the seller and buyer

do whatever is agreed to by the seller and buyer

A licensee who wishes to pursue a career in a specialty area of real estate: must have a special license for property management must have a special license to practice commercial real estate must have a special license for farm and ranch land does not need any special license for farm-ranch and vacant land sales, property management, as well as commercial and residential real estate

does not need any special license for farm-ranch and vacant land sales, property management, as well as commercial and residential real estate There is only one license in Colorado and it allows the practice of all types of real estate activity.

An estate from period to period: does have a specific starting date and a specific ending date occurs when lessee's agreement expires doesn't have a specific expiration date is characterized by inconsistent payments

doesn't have a specific expiration date

The following statement is NOT true: the buyer may write a promissory note for earnest money earnest money should be deposited the next time you go to the bank, at your convenience earnest money shall be credited to buyer on the settlement statement at time of closing earnest money checks should be photocopied prior to deposit

earnest money should be deposited the next time you go to the bank, at your convenience

A property owner has an easement to allow them access to their driveway. What kind of easement is this? easement in gross easement appurtenant easement prescriptive

easement appurtenant

An agent who is an independent contractor, must make: estimated tax payments when there is extra money estimated tax withdrawals against their upcoming refund estimated tax payments every quarter at least $50,000 per year

estimated tax payments every quarter

In Colorado, all of the following topics are regulated by Real Estate License Law or Real Estate Commission Rules, except: qualifications of licensure record keeping ethical standards Commission-approved contracts

ethical standards

Who of the following is required to obtain errors and omissions professional liability insurance: the employing broker only every active Colorado licensee active and inactive Colorado licensees resident Colorado brokers only

every active Colorado licensee

Every potential purchaser in Colorado must be given a copy of: the HUD booklet "Settlement Statements and You" the Real Estate Commission's audit report every document that they have signed the exclusive right-to-sell listing agreement

every document that they have signed

A seller listed her home with a broker. After a few months, the seller found a buyer, and the sale closed. The seller was not obligated to pay a commission to the broker. This listing was MOST likely: net listing buyer agency agreement exclusive agency listing exclusive right to sell listing

exclusive agency listing Do not confuse an exclusive agency agreement with an exclusive right to sell. An exclusive agency means that if the seller finds a buyer independent of their listing broker - the seller owes no commission. An exclusive right means that the listing agent is owed a commission regardless of who found a buyer.

Where both parties have fulfilled their agreements, the contract is known to be: voidable canceled executed invalid

executed

A homeowner refused to accept a full price contract offered by a buyer with children. He told his broker that he only wishes to sell his home to single adults with absolutely no children. The broker should: file a fair housing complaint with HUD and try to collect a commission refer the homeowner to firms that offer listings for "single adults" only do your obedience duty, listen to seller and look for buyer w/o children advertise listing as "for singles only"

file a fair housing complaint with HUD and try to collect a commission

All records are required to be kept for: the previous year five years and must be available within the office four years seven years and two days

four years

To a real estate broker, prospecting refers to: closing one transaction a month attending real estate classes on how to get business getting out there and meeting people, whether it is in person, over the phone, through direct mail, or flyers selling old abandoned gold mine properties

getting out there and meeting people, whether it is in person, over the phone, through direct mail, or flyers Prospecting is doing something that will gain you a possible client now or in the future.

A trust account maintained by a licensed broker in Colorado must have all of the following except: be located in the state of Colorado have a regular specified minimum balance designate the broker as trustee be the subject of a record showing deposits and withdrawals

have a regular specified minimum balance

According to Commission Position 39 on Lease Options, Lease Purchase Agreements and Installment Land Contracts a licensee may create the before mentioned agreements by: using the appropriate commission approved form having a lawyer draw them up creating an addendum to the lease or purchase contract and having it signed by the parties involved Adding the neccessary language to the Additional Provisions section of an Exclusive Right to Buy/Sale

having a lawyer draw them up

You answered this question correctly Starting out you might prefer a lower split versus keeping 100% of your commission for: more training and support given to licensees on higher splits lower splits that typically include higher monthly office fees higher splits that typically include higher monthly office fees less training and support that is given to licensees on lower splits

higher splits that typically include higher monthly office fees Higher splits typically include higher monthly office fees and when first starting out you need support and supervision to get your career moving.

The least expensive way of getting clients is: bulk mailing to 5,000 residents holding open houses advertising in print and television farming a 200-block subdivision

holding open houses Open houses are one of many affordable ways to find a prospect, as there is little direct expense required.

In order for each beneficiary to be covered in case of bank failure, the broker must: open a new account for each earnest money check deposit each check into a working account identify the broker's "escrow or trust" account including licensed name, broker's name, type of account the trust account must be with a title company

identify the broker's "escrow or trust" account including licensed name, broker's name, type of account

Security deposits may be retained by the lessor: never only if a tenancy at will exists if notice is given to the tenant in the lease, rental agreement, or separate written notice whenever a period-to-period lease exists

if notice is given to the tenant in the lease, rental agreement, or separate written notice

When are faxed signatures acceptable on a Contract to Buy and Sell? never only during negotiation and not at closing as determined by the real estate commission if the parties agree and indicate this choice on the contract form

if the parties agree and indicate this choice on the contract form According to the contract, parties are permitted to approve faxed signatures and either party may request original signatures at closing or earlier.

Commission Position 6 on the release of earnest money deposits indicates: the broker cannot release earnest money funds from the trust account without written releases from all parties in the event of a dispute, the broker must decide to the "best of their ability" who is deserving of the earnest money and release it to that party if the transaction fails and there is no dispute over who is to receive the earnest money the broker should release the funds immediately since the Seller is the Listing Broker's client - the Seller gets to decide

if the transaction fails and there is no dispute over who is to receive the earnest money the broker should release the funds immediately

Agreement to accept facsimile signatures would be found: on a side agreement in the Contract to Buy and Sell Real Estate in the closing instructions in the additional provisions

in the Contract to Buy and Sell Real Estate Agreement to accept facsimile signatures has been added as part of the commission-approved Contract to Buy and Sell Real Estate.

Before choosing a broker, you may: inquire with the Real Estate Commission about the broker's status -- are there any complaints or past disciplinary actions against him or her pull a credit report do a fingerprint check ask competing brokers about the reputation of the broker

inquire with the Real Estate Commission about the broker's status -- are there any complaints or past disciplinary actions against him or her You may call the commission and inquire about the broker's status, i.e., are there any complaints or past disciplinary actions against him or her.

A broker answered a call. A prospective buyer wants to see the home he drove by over the weekend. Feeling uncomfortable; for safety reasons the broker should: insist they meet at the office before going out and showing the property do not show them the house show the property and not worry about it - crimes of violence are uncommon in real estate call the police and have the police meet the broker at the property

insist they meet at the office before going out and showing the property

A contract may be renegotiated after acceptance if the: buyer decides he or she did not get a good deal appraisal comes in above the purchase price seller cannot find a new home inspection reveals several items that need repair

inspection reveals several items that need repair There are clauses in the contract that allow for the buyers to terminate the contract, the parties may renegotiate, if both parties are willing, and amend the contract.

If an offer is given that fulfills all the terms of a contact and the seller rejects that offer, the listing broker: is entitled to a commission receives no commission can sue for specific performance is entitled to a partial commission for services rendered

is entitled to a commission 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.

Any special assessment on the property assessed prior to closing is paid by: always by the seller always by the buyer The Title Company must pay this off is negotiable in the sales contract

is negotiable in the sales contract

Any special assessment on the property assessed prior to closing is paid by: always by the seller always by the buyer the Title Company must pay this off is negotiable in the sales contract

is negotiable in the sales contract Assessments are usually paid by the seller, but can be negotiated in the contract.

If the buyer has asked the seller to pay points, the seller needs to understand that a point: is 1% of the purchase price is paid at closing by the seller is shown as a credit to the seller and a debit to the buyer on the settlement statement is paid over the term of the buyer's loan is up front money paid to the buyer's lender at closing

is up front money paid to the buyer's lender at closing A point is 1% of the loan amount. A point paid by the seller is a debit to the seller and a credit to the broker. A point is paid at closing not over the term of the loan.

An appraisal is always required by: law contract the buyer it is not required

it is not required

If the appraiser contacts the listing broker and indicates a problem reaching the contract value, the: listing agent should provide comparables to substantiate the value selling agent should use another lender seller should sue the appraiser selling agent should find a new property for his/her buyer

listing agent should provide comparables to substantiate the value

When a contract is contingent upon the purchaser's ability to obtain special financing, (i.e., down payment or closing cost assistance), the: selling broker should not disclose anything to the listing agent listing broker should verify the ability of the purchaser to obtain such financing, the availability of the program, and disclose this information to his or her seller seller needs to investigate buyer should leave everything to his agent

listing broker should verify the ability of the purchaser to obtain such financing, the availability of the program, and disclose this information to his or her seller

The closing instruction form must be used in conjunction with an approved: listing contract at the time a listing is signed property disclosure promissory note buyer-agency agreement

listing contract at the time a listing is signed The commission's position is that this form is initiated with the buyer or seller at the time the listing is taken.

A broker who does not have any employed licensees must: maintain an office policy on brokerage relationships work out of an office, not his or her home keep records for 7 years offer all brokerage relationships

maintain an office policy on brokerage relationships

Licensees are required to: take 32 hours of continuing education every three years carry a license pocket card display their license in a conspicuous place purchase E & O insurance every year

purchase E & O insurance every year

If the purchaser makes an offer to buy conditional on the ability to secure a loan and is unable to after the buyer has in good faith pursued the loan application, the buyer: will lose his earnest money will pay damages will pay the commission may cancel the contract to purchase

may cancel the contract to purchase If the buyer has pursued a loan in good faith and cannot obtain the loan, the buyer may cancel the contract of purchase.

When establishing a relationship with a buyer or seller, the Commission-approved form entitled "Definition of Real Estate Working Relationships": must be given to the seller and buyer as a disclosure form may help explain brokerage relationships must be given when you first meet the prospective client must be given to them after they have signed a contract

may help explain brokerage relationships The definition of Real Estate Brokerage relationships may help explain, but it is not a proper disclosure.

A legal easement can be created by any of the following EXCEPT: merger of the titles the parties' behaving as though there was an agreement a written agreement between the parties definition within a deed

merger of the titles When two titles are emerged it means that two properties have been merged into one. Any easements between the two are extinguished as no longer necessary.

New home builders: must advertise their homes through the MLS must be members of the BRC might use non-commission approved sales contracts must use commissioned approved forms

might use non-commission approved sales contracts Each builder has his or her own type of purchase and sale contracts.

All of the following are true regarding the Exclusive Right-to-Sell listing contract except: there is one contract for all types of listings a listing contract may establish seller agency a listing contract may be executed without establishing agency more than one listing contract may be executed for the same time period, for the same property

more than one listing contract may be executed for the same time period, for the same property

A broker working as a buyer's agent in a real estate transaction: should have his assistant show them houses if the broker is busy should encourage buyers to view properties or open houses on their own should not have to be inconvenienced by the buyer must be available to accompany buyers and show properties at the convenience of the buyer

must be available to accompany buyers and show properties at the convenience of the buyer Customer service is #1; try to always be there for your client at their convenience, within reason.

In order to avoid blind advertising, you need to: name the employing broker in the advertisement hang your license under an employing broker be supervised by another broker write all of your ads yourself

name the employing broker in the advertisement

In a real estate transaction, a broker should advise the buyer of the: need for a title search legal effect of the evidence of title legal effect of the deed best method of taking title

need for a title search

A broker is required to disclose any psychologically stigmatizing factors, such as there was a death in/on the property, that is actually known by the broker when he is acting as: a seller's agent a buyer's agent a transaction broker never

never

Under the Real Estate Commission rules, when a listing broker receives an earnest money deposit on a residential sales contract, he must deposit the earnest money in his trust account: no later than the third business day after he is notified of the acceptance of the contract no later than the first working day after receipt of the deposit no later than 48 hours after the receipt of the deposit when he is instructed to do so by the seller

no later than the third business day after he is notified of the acceptance of the contract

Under the Real Estate Commission rules, when a listing broker receives an earnest money deposit on a residential sales contract, he must deposit the earnest money in his trust account: no later than the third business day after he is notified of the acceptance of the contract no later than the first working day after receipt of the deposit no later than 48 hours after the receipt of the deposit when he is instructed to do so by the seller

no later than the third business day after he is notified of the acceptance of the contract A real estate broker must account to the buyer and seller for all earnest money. It must be deposited in a trust account no later than three business days after acceptance of the contract, unless the buyer and seller instruct the broker in writing to do something different.

The seller agreed to include the stove, refrigerator and microwave, asked for in the purchase and sale contract. After taking possession, the buyer noticed that the refrigerator was smaller and a different color than the one he saw prior to closing. The seller had moved the refrigerator in the basement to the kitchen and took the refrigerator that was originally in the kitchen. The buyer has: no recourse because he didn't specify which one he wanted included in the purchase agreement back out in the purchase of the home make the seller buy him a new refrigerator get the house for free

no recourse because he didn't specify which one he wanted included in the purchase agreement

You competed for and won a listing contract by offering a considerably reduced commission. In order to recoup some of your normal fee, you charge for each contract document that you prepare. Your seller agrees to this arrangement. It is: perfectly all right, so long as you use approved forms not allowable all right, so long as the seller's attorney prepares the forms anything that you and the seller agree upon in writing is allowable

not allowable It is illegal for a broker to charge a fee for the preparation of legal documents; a broker must even pay the Title Company for preparing the warranty deed, and the bill of sale, as the seller cannot be charged for the preparation of legal documents.

By signing an exclusive buyer-agency contract, the broker is : not automatically entitled to a commission entitled to a commission when the contract is performed entitled to a commission when the offer is presented entitled to a commission whenever a buyer buys a property

not automatically entitled to a commission When the Exclusive Right-to-Buy Listing Contract is performed the broker may be entitled to a commission depending upon which box is checked because the broker had an employment agreement and completed the sale.

If the buyer and seller have not reached a resolution on inspection issues the contract will terminate: one day following the resolution deadline. on the expiration of the resolution deadline. one day following the objection deadline. on the objection deadline.

on the expiration of the resolution deadline. The Buyer solely determines if the condition of a property is satisfactory or not. Although the Buyers normally will list items they wish the Seller to address; they are not required to do so. The Buyer can simply terminate the contract should they so desire. Should the Buyer submit items to correct to the Seller, the Seller has until a resolution deadline to come to a negotiated agreement regarding the items with the Buyer. If a satisfactory agreement is not reached, the contract will terminate automatically on the deadline unless the Buyer withdraws the objections.

Implied agency (also known as Implication) arises when: an agent accepts an oral listing a principal accepts an oral listing one person behaves toward another in a way that suggests or implies that he is acting as that other person's agent

one person behaves toward another in a way that suggests or implies that he is acting as that other person's agent An agency may be created by implication (implied agency) when one person behaves toward another in a way that suggests or implies that he is acting as that other person's agent. If the other person reasonably believes that there is an agency relationship, and the supposed agent fails to correct that impression, he may owe the other person agency duties. More info: Under general agency law, an agency relationship may be formed in four ways: by express agreement, by ratification, by estoppel, or by implication. Most agencies are created by express agreement: the principal appoints someone to act as her agent, and the agent accepts the appointment. An agency is created by ratification when the principal gives approval after the fact to acts performed by another. Under the legal doctrine of estoppel, a person is not allowed to take a position that contradicts her previous conduct, if someone else has relied on the previous conduct. An agency can be created by estoppel when it would be unfair to a third party to deny the agent's authority, because the principal has allowed the third party to believe there was an agency relationship. An agency may be created by implication when one person behaves toward another in a way that suggests or implies that he is acting as that other person's agent. If the other person reasonably believes that there is an agency relationship, and the supposed agent fails to correct that impression, he may owe the other person agency duties.

A broker must offer: only the relationships he or she chooses to offer all relationships approved by the Real Estate Commission transaction broker buyer's and seller's agency

only the relationships he or she chooses to offer

A Colorado broker with residence out of state accepts an earnest money deposit on a property located in Colorado. He needs to: open an escrow account in a Colorado bank have a Colorado office open to the public open an escrow account in his state of residence have an active license in his home state

open an escrow account in a Colorado bank

FHA loans are available for: low-income families only owner-occupied homes investors only owner-occupied homes and low-income families only

owner-occupied homes FHA are for owner occupied properties only.

A licensee selling his or her own home must do all of the following except: pay himself a commission disclose in the contract, or in a concurrent writing, that the licensee is a licensed real estate broker include the company name if the licensee is advertising a FSBO use state approved forms if you are listing through your broker

pay himself a commission You need to disclose the company's name, address or phone number if you are advertising your own property as a FSBO.

In order to reinstate a real estate license, that has been expired less than 3 years, a licensee will be required to: retest pay reinstatement and activation assessments in addition to the basic renewal fee take 24 hours of Brokerage Administration submit a new application

pay reinstatement and activation assessments in addition to the basic renewal fee The licensee has the right to reinstate an expired license without retesting and submitting a new application, for three years following its expiration. They must also take the current CE requirements.

A couple owns an investment property and wants to sell it to buy a new investment property. The best way for them to defer capital gains tax is: take the $500,000 capital gains exemption for this two-year period take a $250,000 capital gains exemption for this two-year period there is no way to defer capital gains on an investment property. perform a 1031 like-kind exchange for a more expensive property.

perform a 1031 like-kind exchange for a more expensive property. According to the IRS: "No gain or loss shall be recognized on the exchange of property held for productive use in a trade or business or for investment, if such property is exchanged solely for property of like-kind which is to be held either for productive use in a trade or business or for investment." This means that as long as an investor follows the rules for a "1031 exchange" the investor will be able to sell one investment property and transfer the gain on that property to another purchased property. Since the investor never removed the gain, the investor can defer payment of capital gains taxes on that gain until such time as the asset is sold and not exchanged for another. The answers relating to the $500,000 capital gains exemption for a couple and the $25000 exemption for an individual pertain to personal residences and not investment property.

At the time of harvest, crops that require annual planting are generally considered to be: personal property real property appurtenances improvements

personal property

If the buyer does not provide written notice of any unsatisfactory conditions by the date specified under the inspection clause, the: contract can terminate seller can sell to another buyer physical condition of the property and inclusions shall be deemed to be satisfactory to the buyer listing agent should re-list the home

physical condition of the property and inclusions shall be deemed to be satisfactory to the buyer

A $4,000 tax lien is shown on the title work. The contract: terminates proceeds so long as the lien is paid at or prior to closing requires the buyer to buy the property without title insurance requires the Title Company pays this as part of the insurance

proceeds so long as the lien is paid at or prior to closing All liens and defects against the title; the seller has the option to cure all defects to title and the contract does not terminate.

An Environmental Impact Statement (EIS): summarizes the environmental impact of an existing project is used primarily for state- and federally-funded projects must be approved by all affected water districts projects the impact on the environment of a proposed project

projects the impact on the environment of a proposed project

A growing crop, also known as emblements, is regarded as: real property until harvested leasehold property property of the land property of the tenant farmer

property of the tenant farmer Emblements are regarded as personal property even before harvest; thus a tenant has the right to take the annual crop resulting from his or her labor.

The reason for requiring an earnest money deposit in a purchase contract is to: ensure that the seller will not have offers from buyers who are unable to qualify for a loan provide proof of the buyer's intent to carry out the contract ensure that the broker will receive some commission if either the buyer or seller defaults set aside funds to cover the buyer's closing costs and mortgage insurance premiums

provide proof of the buyer's intent to carry out the contract A check is better proof of sincerity than "cross my heart and hope to die."

At the time of taking the listing, the broker has the responsibility of: providing buyers providing comparable properties and their prices driving a nice car listing the property high

providing comparable properties and their prices At the time of the listing, a broker should call to the attention of the owner comparable properties and prices.

While showing properties, your buyer points out a house that she wants to see: since you have showed that property before you pull over an immediately and take her in because it is not on the list for today's showings, you tell her it is under contract pull over and call the listing office to set up the showing ASAP keep on driving and pretend you didn't hear her

pull over and call the listing office to set up the showing ASAP

While showing properties, your buyer points out a house that she wants to see: since you have showed that property before you pull over immediately and take her in because it is not on the list for today's showings, you tell her it is under contract pull over and call the listing office to set up the showing ASAP keep on driving and pretend you didn't hear her

pull over and call the listing office to set up the showing ASAP Even though you have been to the property before, you must call the listing office and set up the showing for that day.

Measurements in public records often are not updated for residences. If square footage is a material consideration in making the purchase, such information should be verified by: seller listing broker purchaser selling broker

purchaser Often disclaimers state measurements approximate. The purchaser should verify square footage and the listor should do their best to get accurate square footage.

Of the following, who is responsible for for an accurate and complete closing statement? closing company closing agent for closing company employing broker not attending closing real estate broker attending closing

real estate broker attending closing

If an offer to buy is withdrawn, the listing broker: splits the earnest money with the seller charges a commission receives his/her expenses receives nothing

receives nothing

Antitrust laws prohibit competing brokers from all of the following EXCEPT receiving compensation from both the buyer and the seller boycotting other brokers in the marketplace dividing the market to restrict competition agreeing to set sales commissions and management rates

receiving compensation from both the buyer and the seller Antitrust laws prohibit agents from joining together to perform monopolistic practices. They have nothing to do with collecting a commission.

Being an independent contractor; your earned commissions: reflect tax deductions reflect no deductions are paid once a month are held for 30 days

reflect no deductions

Being an independent contractor, your earned commissions: reflect tax deductions reflect no deductions are paid once a month are held for 30 days

reflect no deductions The commission reflects no deductions and is reported on a 1099 MISC.

Form 1099-S shall be given to any seller of a transaction to: report cash received over $10,000 evaluate the proceedings at closing report income from the sale or exchange of property report fees charged to seller

report income from the sale or exchange of property This is to report any capital gains income to the federal government.

The broker is acting as a transaction broker. As such, he/she is: not responsible for any part of the closing responsible for all aspects of the closing to let the buyer beware to let the seller beware

responsible for all aspects of the closing Regardless of whether you are a Transaction broker, Seller's Agent or a Buyer's Agent, the broker is responsible for making sure all the paperwork is completed correctly.

The lessor retains a right to possession after the lease term expires. This right is: restrictive constructive personal reversionary

reversionary

After a failed contract, the earnest money should be retained or returned as: selling broker and buyer broker agree the listing and selling broker agree the buyer and seller agree listing broker sees fit

the buyer and seller agree

If scheduling a closing on the last day of the month, it is wise to: wait until the day before closing to schedule a time and place schedule the closing time the day of closing schedule the closing as soon as possible, as the times fill up fast schedule the closing 60 days ahead of time

schedule the closing as soon as possible, as the times fill up fast

Megan's Law requires: real estate brokers to disclose to buyers if a sex offender lives in the area real estate brokers to disclose to sellers if a sex offender lives in the area sex offenders to register with the local police department sellers to disclose to buyers if a sex offender lives in the area

sex offenders to register with the local police department

To comply with the dates in the contract to purchase, the title commitment: should be ordered by the listing agent as soon as all the parties accept the contract should not be ordered until the date in the contract can be ordered any time, so long as the purchaser receives it before closing should be made after the buyer's loan commitment date.

should be ordered by the listing agent as soon as all the parties accept the contract

If buyer finds out the property on which they have a contract is in a Special Taxing District: buyer may not be released and is obligated to continue on with the contract seller should thank their lucky stars they found a buyer and volunteer any information should give written notice of unsatisfactory conditions to be released from the contract can wait until the day of closing before deciding to be released from the contract

should give written notice of unsatisfactory conditions to be released from the contract

Written agency agreements require brokers to disclose their duties and obligations to a party prior to: writing a counteroffer agreement to amend/extend contract with broker closing of the property showing a home to a buyer

showing a home to a buyer

Written agency agreements require brokers to disclose their duties and obligations to a party prior to: writing a counteroffer agreement to amend/extend contract with broker closing of the property showing a home to a buyer

showing a home to a buyer Agency contracts must be in writing and must be disclosed prior to negotiating any part of the real estate transaction.

All HUD homes are: sold as is subject to buyer's inspection in need of renovation financed through FHA

sold as is All HUD homes are sold as is.

To become an employing broker (AKA sponsoring broker) one must: have three years active experience pass the uniform portion of the broker exam take 48 hours Brokerage Administration take 24 hours Brokerage Administration

take 24 hours Brokerage Administration Take 24 hours of Brokerage Administration, have two years active experience, and pass the state portion of the broker exam.

A tenancy whereby neither the lessor or the lessee specify a definite starting date or ending date is known as a: tenancy of sufferance periodic tenancy tenancy at will tenancy for years

tenancy at will

Tenant may remove trade fixtures before the lease expires provided: tenant owns the fixture and can remove without substantial damage the tenant cannot remove trade fixtures trade fixtures are removed 30 days after expiration of lease fixtures are removed three days after expiration of license

tenant owns the fixture and can remove without substantial damage

Which of the following is true when an employing broker changes the primary business address? the broker must notify the commission in a manner acceptable to the commission or the license will become inactive each employed licensee must notify the commission of the change the change may be noted at the next license renewal cycle all licenses of employees must be sent to the commission for reissue

the broker must notify the commission in a manner acceptable to the commission or the license will become inactive

If the seller finds out he is not being transferred and defaults on the sales contract: it depends if specific performance or liquidated damages was checked the listing agent can force the sale neither agent is entitled to commission since the deal never closed the buyer can sue him for specific performance and damages

the buyer can sue him for specific performance and damages

If the title deadline date is not met: it is not important the seller could be in default the buyer could be in default the buyer can terminate the contract

the buyer can terminate the contract

The Contract to Buy and Sell Real Estate specifies that earnest money should be returned to the buyer if: seller doesn't find a suitable replacement home buyer and seller can resolve the inspection objection list the buyer fails to find reasonable financing the community covenants aren't delivered three days after contract acceptance

the buyer fails to find reasonable financing

In a contract written in which the buyer is obtaining a new FHA loan: the buyer has the right to terminate the contract if the property doesn't appraise for the sales price the buyer must proceed with the contract if the seller agrees to reduce the price to the appraised value the buyer is not allowed to purchase the property if it does not appraise the contract automatically terminates if the appraised value is lower

the buyer has the right to terminate the contract if the property doesn't appraise for the sales price The buyer can still buy the property, but retains the right to terminate the contract if it does not appraise at the purchase price.

According to the rules and regulations of the Colorado Real Estate Commission, a broker is REQUIRED to recommend that: the buyer have title reviewed by legal counsel the buyer have an appraisal by a licensed appraiser the buyer have an inspection by a certified house inspector all of the above

the buyer have title reviewed by legal counsel

Your offer to buy a property for $150,000 is accepted, but unfortunately there is a fire in the kitchen prior to closing. The insurance company estimates about $9,000 to repair and repaint. The repairs will be made in time to meet the closing date. the buyer has the option of terminating the buyer must proceed the contract automatically terminates the buyer and seller renegotiate the price of the property

the buyer must proceed If the damage is repaired and the cost of the repairs are less than 10% of the cost of the property, then the buyer cannot terminate the contract. If the repairs exceed 10% then the buyer may terminate the contract.

Pre-qualifying a buyer helps determine: the buyer's purchasing power if they are worthy of the broker's service the quality of the buyer if the buyer has a criminal background

the buyer's purchasing power Pre-qualifying can help determine the buyer's maximum loan amount. Pre-qualifying is preliminary to the actual loan process.

During the processing of the loan, it is: a good idea for the seller to follow up on the progress the listing agent that follows up on the progress of the loan the title company's responsibility to follow up the buyer's responsibility to follow up with the lender

the buyer's responsibility to follow up with the lender

When scheduling a closing, the following parties need notification: the lender, the buyer, and the title company the title Company, the seller, and the buyer the buyer, the seller, and the lender the buyer, the seller, the lender and the title company

the buyer, the seller, the lender and the title company

Should a dispute go to court, according to the Contract to Buy and Sell Real Estate: the court must award the broker the court costs the court should award court costs to the prevailing party the court may award all court costs and attorneys' fees to the losing party. the court may award all reasonable costs and expenses to both parties

the court should award court costs to the prevailing party The Buy / Sell contract requires that the court award damages and costs to the prevailing party. The courts usually honor this, however, the court can award damages as they see fit in any given situation, they are not bound by our contract.

MEC" in the Contract to Buy/Sell Real Estate means: the date upon which both parties have signed the contract. the date mediation commences the date the deed was entered into the public record Mutual Execution Condition deadline

the date upon which both parties have signed the contract.

A final walk-through provides all of the following except: buyer the opportunity to verify that the property is in the same condition as when originally viewed buyer the opportunity to verify any repairs that needed to be done, have been completed the opportunity to re-inspect the property the final time to terminate the contract if not satisfied with the condition of the property

the final time to terminate the contract if not satisfied with the condition of the property The final walk-through is the buyer's opportunity to verify work that was to have been completed and make sure that the property is in the same condition as when viewed.

Prior to closing, it is usually the responsibility of the following person to order the appraisal: the lender the listing agent the buyer's agent the seller

the lender By agreement, anyone may order the appraisal, but it is usually the lender that orders it.

When a licensee transfers from the employ of one broker to another, which of the following are responsible for surrendering the license to the Real Estate Commission: the licensee the former employing broker new employing broker the licensee and the former employing broker

the licensee and the former employing broker A licensee and his former employing broker are jointly responsible for returning real estate licenses to the commission.

The earnest money check is usually made out to: the selling broker the seller the listing broker the lender

the listing broker

The Licensee Buy-Out Addendum to a Contract To Buy and Sell Real Estate becomes binding with the listing company when: the listing company supervisory broker signs the seller/licensee signs the seller signs the buyer and the broker sign

the listing company supervisory broker signs

Tina Dooley, a salesperson, ordered this listing in the real estate section of the local phone directory: Tina Dooley, Real Estate Salesperson, Residential Property My Specialty." What additional information must be included? her street address her license number the expiration date of her license the name of her employing broker

the name of her employing broker

The property is leased through September, and the new buyer closes on June 30. he can take possession June 30, since he did not enter into the lease, the former owner did the new buyer must honor all leases he can evict the buyer if he has not moved by July 30 he received a sheriff's deed, so the lease does not apply

the new buyer must honor all leases All existing leases remain in effect even though the property has been sold.

An owner refuses an offer, even though it is exactly in accordance with a valid Exclusive Right-to-Sell Listing Contract. What are the owner's rights? the owner does not have to sell the owner is liable to the buyer for money damages the owner likely would be sued by the broker for specific performance the owner may be liable to the buyer for specific performance

the owner does not have to sell Note: the owner may owe a commission to the broker

A buyer made an offer to purchase a property. The owner responded with a counteroffer. While the buyer was reviewing the counteroffer, the owner received a better offer. The owner can accept the second offer if: the owner withdraws the counteroffer before it is accepted the owner gives the first buyer notice that another offer was received and an opportunity to revise the bid the first buyer is informed, in writing, of the owner's intent to accept another offer it satisfies or exceeds all terms included in the counteroffer

the owner withdraws the counteroffer before it is accepted A purchase offer or counteroffer (counterproposal) can be withdrawn at any time prior to acceptance.

Time is of the essence means: performance will not be waived the period of performance or acceptance will be enforced strictly performance must be completed before a commission will be paid the parties cannot agree to any extension of the agreement

the period of performance or acceptance will be enforced strictly If dates are not met in the contracts the parties are considered out of contract.

Once a plat is approved, what step must be taken prior to the lots being sold? building permits must be issued the site must be cleared and leveled the appropriate governmental authority must approve zoning the plat map must be recorded

the plat map must be recorded The plat map must be entered into the public record prior to being sold by the process of recording. Waving around a government approval is not enough.

As per the Contract to Buy/Sell Real Estate: LEGAL FEES, COST AND EXPENSES. Anything to the contrary herein notwithstanding, in the event of any arbitration or litigation relating to this Contract, prior to or after Closing Date (§ x), the arbitrator or court must award to ______________________________, including attorney fees, legal fees and expenses. each party an equal share of reasonable costs and expenses the prevailing party damages the losing party all reasonable costs and expense the prevailing party all reasonable costs and expense

the prevailing party all reasonable costs and expense Do not confuse litigation and arbitration with mediation. Mediation is a non-binding process and all parties share in the costs equally. Litigation and arbitration is binding and the prevailing party will be awarded costs and expense from the losing party. Many people get confused by the wording "prevailing party is awarded" and think that means the winner has to pay. No, the prevailing party is the winner and by being awarded the judgement, it means that any fees - court costs, attorney fees, etc., are paid by the losing party.

If the contract calls for a closing on or before December 30 and the purchaser wishes to close on December 22, the following must happen: the purchaser and seller must agree to the new date there does not need to be agreement the Title Company can decide if it can close it is decided by the person responsible for setting the time and place of closing

the purchaser and seller must agree to the new date The contract to purchase allows for on or before a date for closing, therefore, if the parties agree, a closing may be moved up.

The co-op offered in the MLS is determined by: MLS the office policy the seller and buyer the seller and listing broker

the seller and listing broker

If the Specific Performance box is not checked, and the buyer defaults: the buyer cannot default without mediation the seller keeps the earnest money, but cannot sue the buyer is entitled to receive the earnest money buyer and seller split the earnest money

the seller keeps the earnest money, but cannot sue When the Specific Performance box is checked on the purchase and sales contract, this is the Seller's sole and only remedy for a Buyer default. If no box is checked - the default remedy is Liquidated Damages. Specific Performance means that the Seller can sue the Buyer for damages and take their Earnest Money. Liquidated Damages means the Seller CANNOT sue for damages and may only take the Earnest Money.

If the specific performance box is checked, and the buyer defaults on the contract: the seller may keep his earnest money and sue him the buyer and seller split the earnest money and release each other from the contract the buyer is entitled to receive the earnest money the two agents split the earnest money in lieu of commission

the seller may keep his earnest money and sue him When the Specific Performance box is checked on the purchase and sales contract, this is the Seller's sole and only remedy for a Buyer default. If no box is checked - the default remedy is Liquidated Damages. Specific Performance means that the Seller can sue the Buyer for damages and take their Earnest Money. Liquidated Damages means the Seller CANNOT sue for damages and may only take the Earnest Money.

John Brown submits an offer to purchase contingent upon the sale of his present home on or before June 15. The seller accepts the offer, and on June 16 the home is still not sold. This means: the buyer need not do anything since his property has not sold the buyer may extend the date for the contingent property to sell the seller may sue for damages the seller may terminate the contract and return the earnest money

the seller may terminate the contract and return the earnest money

The seller agreed to clean and certify the furnace prior to closing. the Title Company should verify it was done the lender should verify the work was done the seller or listing broker should provide a receipt and certification at closing the inspector should verify the work was done

the seller or listing broker should provide a receipt and certification at closing

A listing broker should tell a prospective buyer everything about a property except that: it has structural defects zoning makes the present use nonconforming if you'd like to make an offer, I'll present it to the seller the seller will accept less than full price if you close in two weeks

the seller will accept less than full price if you close in two weeks

A listing broker should tell a prospective buyer everything about a property except that: it has structural defects zoning makes the present use nonconforming if you'd like to make an offer, I'll present it to the seller the seller will accept less than full price if you close in two weeks

the seller will accept less than full price if you close in two weeks You never disclose that the seller is willing to accept less.

In the case of a listing contract that has been unilaterally canceled by a seller who wishes to list with another broker during the active term of the original listing: the new broker may list without any worry the new broker may not list, as the listing is not expired the subsequent broker must explain, prior to taking the listing, the potential liability for the payment of two commissions the new broker may list the property for two years

the subsequent broker must explain, prior to taking the listing, the potential liability for the payment of two commissions The Broker must explain the liability for the potential payment of two commissions. (REM 13-5)

The details of a sales transaction are always governed by: the seller's desires expressed orally the terms of the executed sales contract the buyer and the buyer's broker the title company and the seller's broker

the terms of the executed sales contract The purchase and sale contract - Exclusive Right-to-Buy Contract - and any counterproposal or amendments dictate the details of a sales transaction, not oral instructions.

A property is listed with Rockwell Realty at $70,000. Rockwell Realty negotiates with Woods who is familiar with the property and who agrees to buy the property at that figure. Rockwell Realty prepares an agreement of sale, which is signed by Woods. Copies are then mailed to Downes, the owner, for signature on May 31, 2014. Downes receives the copies on June 3, 2014. He signs them and mails the signed copies to Woods on June 5, 2014. On June 4, 2014 Woods wired Downes, "Offer withdrawn." Under these circumstances: there is an enforceable contract Rockwell Realty is entitled to a commission this is not an enforceable contract but Rockwell is entitled to a commission this is not an enforceable contract and Rockwell is not entitled to a commission

this is not an enforceable contract and Rockwell is not entitled to a commission An offer can be withdrawn anytime prior to acceptance. Acceptance means the offer has been signed AND acceptance communicated to the other party. Since the postmark is the date of acceptance the offer had been withdrawn prior to acceptance.

As a licensee you desire to sell your home yourself: this will be addressed in the office policy manual you may do so as long as you do not disclose you are a licensee you reserve the right to pay yourself a commission because you are licensed you may not advertise this property in the MLS

this will be addressed in the office policy manual It is recommended that the office policy manual address the purchase and sale of a licensee's property.

The listing agent calls you regarding your low offer. They ask what your buyer's real number is, and if the sellers counter, how much more your buyer will come up with? In your buyer's best interest, you tell the listing agent: what your buyer is willing to pay to accept your offer since your buyer can pay no more than what was offered to counter at whatever price you know that the buyer is willing to pay, and you will present it to your buyer to counter, and you will present it to your buyer

to counter, and you will present it to your buyer You have a fiduciary responsibility to your client and cannot reveal confidential information to the other agent.

The Commission's intent in promulgating Rule E-13 (Sign Crossing Rule) was: to allow two agents to collect a commission on the same property to assist brokers in obtaining more listings to protect the owner from possible claims that two commissions are owed to allow brokers to compete for existing listing contracts,

to protect the owner from possible claims that two commissions are owed

If he cannot get a written loan commitment by the Loan conditions deadline, the Colorado Contract to Buy & Sell allows the Buyer: to terminate the contract by written notice to notify the Seller if they want to continue the purchase to do nothing, the date is automatically extended to closing to wait until closing without risking the earnest money

to terminate the contract by written notice

The Colorado Contract to Buy & Sell allows the Buyer who cannot get a written loan commitment by the Loan Objection Deadline: to terminate the contract by written notice and receive earnest money back to automatically extend the closing date to automatically extend the Loan Objection Deadline to no later than that of the closing date to terminate the contract and limit the default penalty to liquidated damages

to terminate the contract by written notice and receive earnest money back

At closing, the earnest money is credited: to the seller to the buyer to the lender to the listing agent as commission

to the buyer Earnest money is credited to the buyer at closing and debited to the broker.

When setting up a showing, lock box information may be given: to the buyer directly to the buyer's agent to anybody asking for it to the buyer's broker, after licensee's information is taken and verified

to the buyer's broker, after licensee's information is taken and verified Lock box information should only be given out to the broker after verification of that broker's license status.

In reviewing the documents, it is wise to: check the buyer's and seller's names only check only the legal address verify the buyer's birth date verify all relevant information

verify all relevant information It is the broker's responsibility to verify that the information on the closing documents is correct.

Previewing a property means: showing the property to the buyer for the first time viewing the property before the broker takes the buyer to see it a showing on a property that the broker does not need to set up before hand showing flyers or the MLS listing information to the buyer before taking them out to see the property

viewing the property before the broker takes the buyer to see it A broker may preview properties before taking the buyer there.

A Seller signs an offer prior to the acceptance time and date. Before the offer is returned to the Buyer, the Buyer calls and withdraws the offer. This offer is: binding on all parties as it has already been signed prior to the acceptance time and date void and not binding as it was withdrawn before acceptance was communicated to the Buyer void, but the Buyer is in default and will forfeit the earnest money binding, the withdrawal must be in writing

void and not binding as it was withdrawn before acceptance was communicated to the Buyer

Before making an offer, a licensee should research the market in the area of the desired property. This will help determine: how quickly the deal will close what terms the seller will accept how long it will take to sell the property what other properties have sold for and are listed for in that neighborhood

what other properties have sold for and are listed for in that neighborhood

Title passes from the grantor to the grantee: at the time of recording of the deed at time of the buyer's initial possession of the property at time the closing begins when the seller signs the warranty deed and gives it to the buyer

when the seller signs the warranty deed and gives it to the buyer

A licensee should disclose the total proceeds the seller will net from a sale. This estimate should be given: at the time the listing is taken when an offer is presented at time of closing whenever a listing is taken and an offer is presented

whenever a listing is taken and an offer is presented

The Colorado Legislature passed a bill on April 22, 1996, establishing single licensing. The primary effect of this law is that Colorado: you now can be single or married to receive a state real estate license you can only hold one state license at a time will no longer issue a real estate salesperson license you can only have a real estate license from one state

will no longer issue a real estate salesperson license As of January 1, 1997, only real estate broker's license will be issued. Salesperson licensed under the old law will eventually need to upgrade to a broker. You are allowed to hold real estate licenses from several states, you are allowed to hold different state licenses i.e., appraiser, insurance, real estate broker.

A high level of supervision: is what an employing broker must provide for all licensed persons would include: review of documents in preparation for a closing, assistance in preparing contracts, monitoring of transactions from contracting to closing, attending closings, or making sure an experienced licensee attends the closing, being reasonably available for consultation is an employing broker giving leads to new agents to help them get business is required to fully understand the Zen of real estate and the psychic Karma of computers as another level in transcendence

would include: review of documents in preparation for a closing, assistance in preparing contracts, monitoring of transactions from contracting to closing, attending closings, or making sure an experienced licensee attends the closing, being reasonably available for consultation

You are helping a couple who is not married purchase a home. They look to you when you ask them how they want to take title. you cannot advise them in this matter -- they must seek legal advice you tell them that couples take title as joint tenants you tell them that most unmarried couples take title as tenants in common, and in the event one of them dies, their interest reverts to their heir they have no choice but to be tenants in common since they are not legally married

you cannot advise them in this matter -- they must seek legal advice It is a violation of the Convay-Bogues case to offer legal advice.

You are a buyer's agent. The buyer is anticipating a large legal settlement that will allow them to purchase home cash. It hasn't come through yet, but is anticipated within the next three months. Your buyer finds a home right away and wants to write an offer. The owners of the property are being transferred, only way their offer will be and your buyer knows that the accepted is if the closing is within 30 days. They have you write and present an offer for cash, with a 30-day close, knowing that it is highly possible that their funds will not be available at that time. As a buyer's agent: you cannot disclose this information to the seller's agent you must disclose this information to the seller's agent you may disclose this information, if your conscience is bothering you you tell the buyer that you cannot write the offer

you must disclose this information to the seller's agent

You are a buyer's agent. The buyer is anticipating a large legal settlement that will allow them to purchase a home with cash. It hasn't come through yet, but is anticipated within the next three months. Your buyer finds a home right away and wants to write an offer. The owners of the property are being transferred and the only way an offer will be accepted is if the closing is within 30 days. The buyer's ask you to write and present an offer for cash, with a 30-day close, knowing that it is highly possible that their funds will not be available at that time. As a buyer's agent: you cannot disclose this information to the seller's agent you must disclose this information to the seller's agent you may disclose this information, if your conscience is bothering you you tell the buyer that you cannot write the offer

you must disclose this information to the seller's agent This is considered to be a material fact and it must be disclosed to the listing agent. You should also tell your buyer that you have to disclose it to the seller.

When showing buyers new homes: the broker is not entitled to a commission because you do not complete a commission-approved purchase and sale contract you should register your buyers with the builder do not show them new homes because builders are difficult to deal with insist that the contract be drawn up by your attorney

you should register your buyers with the builder When showing buyers new homes the broker should register the buyers with the builder. Failure to do so may result in the agent not receiving a commission.

For tax purposes you are considered an independent contractor, and therefore: you need to complete a W-2 form your income will be reported on a 1099 your taxes will automatically be deducted from your commissions you need not file with the IRS

your income will be reported on a 1099

For tax purposes you are considered an independent contractor, and therefore: you need to complete a W-2 form your income will be reported on a 1099 your taxes will automatically be deducted from your commissions you need not file with the IRS

your income will be reported on a 1099 No deductions will be taken out because you are an independent contractor.