Practice of Real Estate

Kiley Ann is thrilled to have her real estate license and to be hired on at New Beginnings Brokerage. She's not positive about Luis, her employing broker, though. He seems a little sketchy. For example, when she looks at her independent contractor agreement, it says that she's not entitled to unemployment insurance and has to pay her own income taxes. What should she do?

Review the requirements for independent contractors and be prepared to pay her own income tax and unemployment insurance.

Xavier deposited a $3,000 earnest money check into his personal account for safekeeping while he was on vacation. The balance in his account when he left on vacation was $4,200, and when he returned, it was $2,800. He withdrew enough funds from his savings account to cover the earnest money check and delivered the funds to the escrow agent. Which statement best represents Xavier's issue?

Xavier is guilty of commingling and conversion.

A former client has filed a formal complaint against Ajit, claiming he failed to properly disclose a material fact that the seller didn't disclose. Which of these statements about Ajit's liability is true?

Ajit may be liable if he operates in a state that requires licensees to make a reasonable effort to discover adverse material facts

The Federal Trade Commission is concerned with all ad claims but is most likely to be most concerned with ______.

Any ad that makes a health or safety claim or any claim that's difficult for the consumer to evaluate

In certain cases, antitrust violators may be subject to court-ordered supervision. How long can this supervision last?

10 years

Which of the following is the best example of a tie-in arrangement?

A business requires its clients to also purchase services from another business.

Which of the following is an example of illegal market allocation?

Acme Realty and Hawthorne Realty Group agree to divide the city in half, each working its own half.

Which one of the following is an example of group boycotting?

Acme Realty offers discounted services. Berringer Realty and Hawthorne Real Estate Group decide not to show any of Acme's listings and prohibit showings to Acme buyers to drive Acme out of business.

What does the Federal Trade Commission regulate?

Advertising

Millie is a buyer who has given her agent an earnest money check for $10,000 with an offer to purchase. When will the check be deposited?

After the seller accepts the purchase offer

What does the Federal Trade Commission consider to be an unfair ad?

Any ad or business practice that causes or is likely to cause injury

Which agency enforces Title II under the Americans with Disabilities Act of 1990, when it relates to state and local public housing, housing assistance, and housing referrals?

Department of Housing and Urban Development

Your client submits an application to rent a condo unit. He has excellent credit and has had the same job for a long time. He uses a cane to help with his mobility. When his application is rejected, he feels it's due to his disability. He is protected under the _______.

Fair Housing Amendments Act of 1988

Frances collected an earnest money check from her client, but didn't have an opportunity to deliver it to the escrow agent before close of business on Friday. For safekeeping, she deposited it into her personal checking account over the weekend and wrote the escrow agent a new check on Monday morning. Which of these statements is true?

Frances is guilty of commingling.

Johnstone's Realty is a new discount, menu-based brokerage firm. Its approach usually results in a lower listing commission rate than other firms offer. Johnstone's also offers a lower cooperating brokerage split than most other firms. Business is booming for Johnstone's, and the remaining firms in town are concerned. These brokers agree to not show Johnstone's listings to their buyer clients. What is this an example of?

Group boycotting

Prior to the _______, there was no legal protection for women who endured sexual harassment from landlords and sellers when they attempted to obtain housing.

Housing and Community Development Act of 1974

Which of these situations represents the illegal practice of redlining?

Hunter, a mortgage broker, refuses to underwrite mortgage applications from applicants who are buying in specific neighborhoods.

Which of the following is considered unauthorized practice of law?

Interpreting the legal consequences of a client's actions

Krening Realty has been found guilty of running deceptive ads. Which of these statements about the potential penalty is NOT true?

Krening's broker may face jail time.

Which of the following strategies would help to make a "Choose Your Neighbor" marketing letter non-discriminatory in its effect?

Listing the property on the MLS

Which of these is an example of conversion of funds?

Monica used funds from the firm's trust account to pay her firm's rent.

Corinne is 68 years old and employed full time. She's of Spanish descent, is raising her 12-year-old grandson, and lives with her partner, Katherine. She requires an accessible apartment because she uses a wheelchair. Under which of the following federally protected classes might Corinne be protected if she faces housing discrimination?

National origin, sex, disability, and familial status

Which agency is charged with enforcing fair housing laws and holding all parties accountable for compliance with these laws and regulations?

Office of Fair Housing and Equal Opportunity

According to the U.S. Department of Justice, which type of antitrust violation is an agreement between competitors to set contract terms for a certain length of time?

Price fixing

Which of these is an example of practicing within your area of competence?

Researching the property tax amount that a client will pay on the home he's purchasing.

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

Rigby

The Housing and Community Development Act of 1974 added which protected class to federal fair housing law?

Sex

Ken, a licensee, has published an ad claiming that he can sell homes for 25% more than any of his competitors. The Federal Trade Commission determined this to be a deceptive ad. What might the FTC require Ken to do as a penalty for his deception?

Take out new ads correcting the misinformation in his original ad

The ______ is the federal act that deals with telephone solicitation.

Telephone Consumer Protection Act

Which of these statements most accurately represents existing federal antitrust legislation?

The Clayton Act supports the Sherman Antitrust Act's purpose of prohibiting monopolies by prohibiting mergers or acquisitions that would create a monopoly.

Which of these statements accurately describes finance- and housing-related legislation?

The Fair Housing Act of 1968 prohibited discrimination in the sale, rental, and financing of housing based on race, color, religion, or national origin.

This act added familial status and disability (both physical and mental) to the existing federally protected classes.

The Fair Housing Amendment Act

The two real estate firms in one small town, Vineyard Realty and Homestead Homes, agree to charge the same commission rate to avoid the possibility of clients selecting a firm based simply on price. What specific federal legislation prohibits this?

The Sherman Antitrust Act of 1890

Annie and George have been saving and are finally ready to purchase their first home for their family (including their two toddlers). They want to make an offer on a sweet little bungalow in a quiet neighborhood. If the sellers are represented by a real estate licensee, which situation would be a violation of fair housing laws?

Their offer is rejected because the seller knows the neighbors don't like children.

In order for her house to accommodate her inability to hear, Angela has made a request for the house to be equipped with a doorbell that also alerts occupants with a flashing light. Which statement is correct?

This is likely to be considered a reasonable accommodation, and Angela should be permitted to install it at her own expense.

The federal Fair Housing Act includes protections for people with disabilities. It requires multi-family buildings constructed for occupation after March 13, 1991 to have seven special features. Which of the following is one of those features?

Unit and internal doors that are usable by persons in wheelchairs

Buyer Susie's a little nervous about the $20,000 earnest money check she just deposited with the title company. When should she expect to see this money applied toward her purchase of the property?

When conditions are met at closing

Unauthorized practice of law and acting outside the scope of one's expertise are similar issues. Which of the following circumstances specifically relates to the unauthorized practice of law?

Writing contract addenda or additional provisions that cover unfamiliar circumstances

Four brokerage firms operate in the same small city as Jackson's firm. All the firms charge approximately the same listing commission and pay approximately the same cooperating commission to the selling broker. The commission splits within each firm are also similar. Is this an antitrust violation? Why or why not?

No. The fact that the firms' commission rates and splits are similar doesn't necessarily mean they agreed to fix those values.

Annabelle's previous transactions have all been median-priced, detached single-family residential homes in the main part of the city or its suburbs. In which of these situations would Annabelle be practicing within her area of competence?

Listing a property in the main part of the city that she'll market as a fixer-upper

An agent is trying to drum up business for a friend's mortgage company. She offers to charge a lower commission rate to clients who use her friend's mortgage company for their financing. What's this an example of?

Tie-in arrangement

Which type of antitrust violation occurs when the providing of one service is made dependent on the customer or client obtaining another recommended service?

Tie-in arrangement