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EVERY RE CONTRACT MUST HAVE

AN OFFER AND ACCEPTANCE

MANY STATES DETERMINE THE ORDER OF WATER RIGHTS ACCORDING TO WHICH USERS OF THE WATER HOLD A RECORDED BENEFICIAL USE PERMIT. THIS ALLOCATION OF WATER RIGHTS IS DETERMINED BY

LITTORAL THEORY

Acting as a real estate broker without a license or with a suspended license is:

a misdemeanor punishable by six months in jail and a fine up to $500

If the purchaser of a new home wants to be certain that he/she is obtaining a good title, he/she should obtain

a mortgagor's title insurance policy

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

In Colorado, a deed of trust may be used to provide security for a real estate loan. If the deed trust is set up with a private trustee:

any foreclosure will be handles by the appropriate court.

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.

What does not need to be placed into an escrow account?

withholding taxes

What does not need to be placed into an escrow account? withholding taxes security deposits short-term rental deposits earnest money

withholding taxes Withholding taxes are not under the jurisdiction of the Real Estate Commission. Applicable Commission Rules for escrowed deposits are are E-1 and Position Statement CP-5

In a new loan closing, the settlement worksheet will show an entry for a tax reserve that indicates the new lender is

withholding this amount from the loan proceeds to start the impound account for the next payment taxes.

If the closing is March 15, and last years taxes of $1127 were not paid; how is this shown on the settlement sheet? $1127 debit to the seller, credit to the broker $1127 debit to the seller, credit to the buyer $225 debit to the seller, credit to the broker $225 debit to the seller, credit to the buyer

$1127 debit to the seller, credit to the broker It will be shown on the settlement sheet as a debit to the seller and a credit to the broker. Remember, the broker represents the escrow account. The credit goes to the escrow account as the person in charge of it, represented by the broker, needs to write a check to the County to pay the seller's delinquent tax bill.

An investor buyer is acquiring a four-plex property. Each unit has a $300 security deposit held by the seller. How are these deposits handled on the statement worksheet?

$1200, debit seller, credit buyer

A parcel of land was sold for $17,500 which was a 22% profit. What price did the seller originally pay for the property?

$14,344.26 $17,500 / 1.22 (122 %) = $14,344.26

Broker Jones negotiates a lease for 3,000 square feet of warehouse storage space at a monthly rental of $0.50 per square foot. Jones' commission is 8% of the first year's gross rent. Jones' commission will be:

$1440.00

A buyer assumes the sellers existing loan and gets a new seller-carry second loan for $45,000 at 9% interest with monthly payments. If the first payment is due October 1 and the closing is August 17, what is the settlement sheet entry for line 29, "Interest on the New Loan"?

$166.44 debit buyer, credit seller

ABC property management manages an office building with $60,000 annual leases. Their agreement with the owners is that they will be paid 7 % the first year , 5 % the 2nd and 3rd years, and 3 % for the next four of their seven year agreement. What will be the total management fee? 15000 13500 15400 17400

$17,400 Multiply $60,000 X .07 = $4,200. Multiply $60,000 X .05 = $3,000 X 2yrs = $6,000. Multiply $60,000 X .03 = $1,800 X 4yrs = $7,200 add all three together $7,200 + $6,000 + $4,200 = $17,400

The subject property has two bedrooms. The comparable house has one bedroom and sold for $150,000. It is estimated that the added bedroom increases the value of the subject property $20,000. What should be done to adjust for the difference between the subject property and the comparable property in calculating the value for the subject property?

$20,000 should be added to the comparable property

If the real estate taxes for last year were $3685 what would the prorated tax entry be for tis years taxes for the September 11 closing?

$2554.26 debit to seller, $2554.26 credit to buyer. Buyer owns the closing day

An investor is buying a duplex with rents due on the 1st of the month. At the the of a closing on June 7th, the $475 rent on unit A has ben paid, and the $525 rent on unit B has not been paid. The investor agrees to pursue the collection of unit B's rent. How will the rents be treated on the settlement worksheet?

$275 debit to seller, credit to buyer

If the buyer is assuming an 8.5% loan with a balance of $127,538 at a closing on July 11, what is the interest proration?

$291.42 debit to seller, credit to buyer

If the buyer is assuming an 8.5% loan with a balance of $127,538.00 at a closing on July 11, what is the interest proration?

$291.42 debit to the seller, credit to the buyer Explanation $127,538 X .085 = $10,840.73 / 12 = $903.394 / 31 = $29.14 X 10 = $291.42 debit seller, credit buyer. Please note that on assumed loans interest is calculated in a unique way - Loan balance x annual interest rate = total annual interest / 12 x the number of days the seller owned the property in the month of closing.

#70****The potential gross income of a warehouse is $36,000 per year, and the vacancy rate is 2%. The taxes are $2,000 per year; monthly maintenance costs are $300. Quarterly reserves are $450, debt service is $13,500 annually and depreciation is $3,500 annually. If the capitalization rate is 12% what is the estimated value of the warehouse?

$36,000 X .98 = $35,280 - ($2,000 = ($300 X 12 = $3,600) + ($450 + 4 = $1,800) = $7,400 = $27,880 / 12% = $232,333

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

A property sold for $200,000 but was heavily encumbered. This left the seller with only $4,500 cash at the closing. The seller is an out of state investor and is subject to the Colorado Department of Revenue income tax withholding. How much should the closing company withhold?

$4,000 which is 2% of the sales price.

A water bill is due in arrears for the period of March 14 to May 15 in the about of $47. For a closing on May 8, how will the settlement worksheet reflect the bill?

$41.69 debit to seller, credit to buyer

How much interest should be charged on a $10,000 loan which is paid off in one lump sum in 10 months if the interest rate is 10%?

$833.33

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?

$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 lender charged a 2% loan origination fee and 3 discount points to provide a conventional insured loan of $95,000. What was the cost of these charges to the borrower?

($95,000 loan amount X 2% origination fee = $1900) + ($95,000 loan amount X 3% discount points = $2850) = $1900 + $2850 = $4750 The loan origination fee is a lender charge for the purpose of securing their new loan.

A deed restriction can be placed to help control: type, height, and size of buildings, including square footage land use and setbacks architectural style all of the above

... all of the above

When zoning authorities restrict particular land to accommodate an average maximum number of houses per acre, this is known as: cluster zoning density zoning maximum zoning gross zoning

... density zoning

The term "subdivision" does not include: A group of 20 or more time shares intended for residential use the conversion of an existing structure into a common interest community of at least 20 or more residences the selling of campground memberships a group of 20 proprietary leases in a cooperative housing corporation

... the selling of campground memberships

In a condominium, what must the declaration allocate to each unit? Air space equivalent to the ownership interest in the community A percentage of the undivided interests in the common elements A percentage of the undivided interests in the income of the association A position on the board of directors

...Air space equivalent to the ownership interest in the community

Under an agreement for purchase and sale of a condominium: a copy of the covenants must be delivered to the buyer before title deadline a copy of the covenants must be delivered to the buyer prior to the Association Documents Deadline a copy of the covenants must be delivered to the lender within 30 days of closing

...a copy of the covenants must be delivered to the buyer prior to the Association Documents Deadline

A buyer of a time-share has one unique right not shared by buyers in the resale market. It is: a limited interest in the common area the ability to choose which unit will be theirs a five-day right of rescission a longer time to sell their old property

...a five-day right of rescission

The Interstate Land Sales Full Disclosure Act regulates the interstate sale of unimproved lots. It is designed to: prevent fraudulent marketing schemes when land is sold prior to being seen prevent the buyers from seeing the true value of the land increase the sales relationships between states protect HUD from irate buyers who should have known better

...revent fraudulent marketing schemes when land is sold prior to being seen

Which of the following is required before an owner of a 35-parcel of undeveloped land may drill a well for water only? nothing is required; a 35-acre site is entitled to an exempt well the owner must purchase water rights the owner must obtain a well permit from the state engineer if there is a stream on the property it must be diverted

...the owner must obtain a well permit from the state engineer

Most condominium owners can alter: the area surrounding their back porch, also known as a limited common element the interior of their own unit, even if it means altering a weight-bearing wall their unit, so long as it does not impair the structural integrity, electrical systems, or lessen the support of any portion of the common interest community enclose their patio without notice or approval

...their unit, so long as it does not impair the structural integrity, electrical systems, or lessen the support of any portion of the common interest community

Find the capitalization rate on a business that is worth $430,000 and rents for $1,500 a month. 0.0419 0.0519 0.0375 0.0525

0.0419 First multiply the monthly rent $1,500 by 12 = Annual rental income $18,000. Then divide this by the property value $430,000 = the cap rate 4.19% More on Cap Rate: Since Cap Rate uses income, it is only used for income producing properties, not for example, the home you are buying for yourself. First let's define cap rate AKA Capitalization Rate: Cap rate indicates how fast an investment will pay for itself. For example, a 10% Cap Rate means you will get 10% of your purchase price back each year. If a commercial apartment building is purchased for $5,000,000 and it generates $500,000 a year in net operating income (the dollars left over after operating costs are subtracted from your gross income), then: $500,000 / $5,000,000 = 10% cap rate This means 10% of the building's purchase price is paid each year by the proceeds. Another way of saying this - the property will pay for itself in 10 years. How do you use this tool? Way one; it allows investors a fairly easy and quick method of comparing investment properties. For example: take two properties as identical as the cute twins you flirted with in high school, with the same net operating income. One has a cap rate of 8% (same income, priced higher) and the other a cap rate of 15% (same income, priced lower). The 15% cap rate property MIGHT just be a heck of a deal or the 8% one overpriced. BUT you have to dig deeper, because it might be that the higher cap rate property is in a bad neighborhood and the owner has to discount the price to get it sold. Higher risk means you as a buyer get more bang for the buck with the 15% cap rate property, but you are going to have to work harder for it and your spouse is mad because you haven't been able to take a vacation in years because of that "dang" property you bought. The 8% cap rate property may be more expensive and have a longer payback period, but that is because there is less risk and more investors want to buy it. The rents just come in without grief and it could save your marriage. Way two: Cap Rate is also used in the Income Method of appraisals to value a property. Generally, investors could care less if a property is pretty; they want to know how much they are going to make off it. The Income Method allows an investor to value a property based on its income. If most like investment properties in an area have an average cap rate of 7%. You can divide the net operating income of the property your client is interested in (provided by the listing agent) by the average cap rate in the area (digging in sold comps of various MLS's) and it will give you the approximate market value of the property. For example: $225,000 net operating income / 7% = $3,214,285 market value. If the property is listed for $5,000,000 you might want to pass it by because it is overpriced for the neighborhood. If it is listed for $2,500,000 you call your client quick because you think you found a good deal.

A property's gross income is $27,600 and has monthly expenses of $550. It has been valued at $483,000. What is the capitalization rate?

0.0435

Find the annual rate of return percentage on an $88,000 investment if the weekly gross income is $225 and monthly expense is $370

0.0825 Explanation Calculate the annual income which is $225 X 52 = $11,700. Then calculate the annual expenses $370 X 12 = $4,440. Next subtract $4,440 from $11,700 = $7,260 then divide this by $88,000 = 8.25 %

A broker needs $5950 to pay her IRS tax lien. She has the opportunity to list a property at fair market value of $85000. What would her listing commission rate need to be in order to pay her debt assuming she will pay 2.8% to the selling broker? 0.07 0.0725 0.098 0.06

0.098 $5950 / $85000 = 7% + 2.8% = 9.8%

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 to 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.

How many days after notice of discrimination does someone have to file a complaint under Colorado Fair Housing Laws with the Colorado Civil Rights Commission?

1 year

How many days after notice of discrimination does someone have to file a complaint under Colorado Fair Housing Laws with the Colorado Civil Rights Commission? 30 days 60 days 6 months 1 year

1 year Filing a Timely Charge of Discrimination There is a legal requirement that a charge must be filed within a specific period of time (statute of limitations) from the date of notice of the last discriminatory act. After the statute of limitations has passed the Colorado Civil Rights Commission does not have jurisdiction. In Employment cases the statute of limitations is six months; in Housing cases the statute of limitations is one year. Employment filing deadline: six (6) months Housing filing deadline: one (1) year

Which of the following is not a Commission approved Deed of Trust:

1% increase

Which of the following is not a Commission approved Deed of Trust: due on sale not due on sale/transfer creditworthy 1% increase

1% increase The ones the Commission has approved are: TD 72-8-10 Deed of Trust (Due on Transfer - Strict) TD73-8-10 Deed of Trust (Due on Transfer-Creditworthy) TD74-8-10 Deed of Trust (Assumable - Not due on transfer) The differences are principally what happens to the loan when the property is sold. "Due on Transfer - Strict" means the entire loan balance becomes due on sale. "Due on Transfer - Creditworthy" means the loan is assumable with lender approval. "Assumable - Not due on transfer" means the loan is assumable with no additional approvals required to another owner.

If two lots each 75 feet wide by 100 feet long, cost $300,000 in total, what is the their approximate cost per square foot?

100 X 75 = 7,500 sq ft X 2 = 15,000 sq ft; $300,000 / 15,000 = $20 per square foot.

Within what time period must the Public Trustee hold a foreclosure sale under a Colorado Deed of Trust arrangement?

110 and 125 following the lenders notice of default and request for sale

A rental agreement for less than how many months does not need to be in writing to be enforceable? 1 month 6 months 9 months 12 months

12 months The Statute of Frauds is the law that governs whether or not a real estate contract of any kind must be in writing. Although it is never advisable to enter into a real estate lease agreement with an oral contract, the law does specify that it is is enforceable if the agreement is for less than 12 months. Having said this, be aware that real estate brokers are also bound by real estate commission rules and as such are required to use commission approved forms, therefore we do not have the authority to comsumate an oral lease. The buyer and seller can, their attorneys can, the licensee cannot. More info about the Statute of Frauds: Statute of Frauds. To prevent fraud through perjury, the law requires that the parties' agreement evidencing their mutual assent be in writing in certain cases. As to real estate in Colorado, § 38-10-108, C.R.S., provides: Every contract for the leasing for a longer period than one year or for the sale of any lands or any interest in lands is void unless the contract or some note or memorandum thereof expressing the consideration is in writing and subscribed by the party by whom the lease or sale is to be made.

IF THE QUARTERLY INTEREST AT 10 1/2 % IS $3150. THE PRINCIPAL AMOUNT OF THE LOAN

120,000. 120,000.X.105 = 12600 ./. 4 = 3150.

The maximum time allowed for the sale of a residential property, through the Public Trustee's office after filing of the notice of election and demand (NED) to foreclose is: 45 days 90 days 125 days 230 days

125 days For residential properties, the public trustee schedules the sale 110-125 days ( 215-230 days for agricultural) after the initial foreclosure action was recorded. The notice of sale is published in a local newspaper for 5 weeks. The public trustee also mails a copy of the notice to the borrower. The public trustee typically conducts the sale at the courthouse. At the sale, the public trustee reads the written bid submitted by the lender, and any party may bid. If anyone other than the lender is the winning bidder, that person must deliver the bid amount in cash or cashier's check to the public trustee. The winning bidder is given a certificate of purchase.

A developer wants to divide a 15 acre tract into lots that are 50 feet by 90 feet each. The developer must allow 80,000 square feet for streets and green space, how many lots can be developed by the subdivision 123 125 127 128

127 Here are the steps: 1) Figure out the total square footage of the tract : 15 (acres) X 43560 ( sq ft in an acre) = 653,400 sq ft 2) Subtract he non-buildable square footage set aside for street and green space: 653,400 - 80,000 sq ft ( amount set aside for streets and green space) = 573,400 Sq ft 3) Determine the square footage of one lot: 50 x 90 = 4500 4) Divide the total buildable square footage by the square footage of one lot: 573,400/ 4500 (sq ft in each lot) = 127.425) The answer is 127. A common error on this type of question occurs when the fraction is greater than .50, such as 127.75. Students often round up and assume the answer is 128. The problem with this is rounding up does not make more dirt. That is reserved for a higher power than a developer. If a buildable lot is 50 x 90 then a smaller lot than that is not buildable.

127 Here are the steps: 1) Figure out the total square footage of the tract : 15 (acres) X 43560 ( sq ft in an acre) = 653,400 sq ft 2) Subtract he non-buildable square footage set aside for street and green space: 653,400 - 80,000 sq ft ( amount set aside for streets and green space) = 573,400 Sq ft 3) Determine the square footage of one lot: 50 x 90 = 4500 4) Divide the total buildable square footage by the square footage of one lot: 573,400/ 4500 (sq ft in each lot) = 127.42 5) The answer is 127. A common error on this type of question occurs when the fraction is greater than .50, such as 127.75. Students often round up and assume the answer is 128. The problem with this is rounding up does not make more dirt. That is reserved for a higher power than a developer. If a buildable lot is 50 x 90 then a smaller lot than that is not buildable.

Mr. Thomas wanted to remodel his business, so he got a loan of $43,000 at a rate of 6% He paid the loan off in 8 months. How much did Mr. Thomas pay in interest. 211.5 1720 2580 3580

1720 The loan amount $43,000 times the interest rate 6% = The annual interest $2,580 divide by twelve to give you the monthly cost of interest $215 times 8 = $1,720.

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

Your client wants a 12% return on their investment, the property they are looking to buy nets $3,000 per month and has annual expenses of $12,000. What should be the most they would pay for the property

200000

A lot with a depth of 80 feet and an area of 4,800 square feet was sold for $350 per front foot. What was the total sales price?

21000

A lot with a depth of 80 feet and an area of 4,800 square feet was sold for $350 per front foot. What was the total sales price? 31800 28000 35000 21000

21000 4800sf / 80 = 60 front feet. 60 x 350 = 21,000 A front foot is the front length of a parcel - in this case 60 feet. Front feet are a big deal for commercial properties who rely on walk-in traffic. They want to have as must exposure to the traffic. Also, vacation properties along a lake. Everybody wants as much property as they can facing the lake.

The maximum time allowed for the sale of an agricultural property, through the Public Trustee's office after filing of the notice of election and demand (NED) to foreclose is:

230 days

Prorate an annual insurance premium for an assumed loan, which was paid in advance on Jan 1 by the sellers. Closing is Oct 5 and the policy amount was $985. Since the buyer is benefiting from the Seller paying the year in advance, the buyer owes money to the seller. How much?

237.48

In order to renew an active Colorado real estate license, the licensee

24 Hours of approved continuing education or successful completion of the Colorado portion of the state licensing examination

To renew an active Colorado real estate license, what continuing education is required of the licensee?

24 hours of approved continuing education, of which 12 hrs must consist of the 4 hour Annual Commission Update Course taken each year

To renew an active Colorado real estate license, what continuing education is required of the licensee? 24 hours of continuing education and successful completion of the Colorado portion of the state licensing exam 8 hours of mandatory continuing education taken within the last three years 24 hours of approved continuing education, of which 12 hrs must consist of the 4 hour Annual Commission Update Course taken each year 24 hours of additional education from any source

24 hours of approved continuing education, of which 12 hrs must consist of the 4 hour Annual Commission Update Course taken each year The licensee must complete 24 hours of approved continuing education during the three year license period. Twelve of those hours must consist of taking 4 hour Annual Commission Update Course each year. CE requirements are listed in Commission Rule B-2 below: B-2. Methods of completing continuing education. Licensed brokers must satisfy the continuing education requirement before they apply to renew an active license, activate an inactive license or to reinstate an expired license to active status. Licensed brokers may satisfy the entire continuing education requirement through one of the following options: a) Complete the twelve hours required bysection 12-61-110.5 (1) (c), C.R.S., and required by this rule in annual 4-hour increments developed by the Commission, otherwise referred to as the "Annual Commission Update Course." Licensees who choose this option must complete an additional 12 hours of elective credit hours to meet the 24-hour total continuing education requirement during the license period in subject areas listed in section 12-61-110.5(3), C.R.S. Please note that a licensee may not take the same version of the Annual Commission Update Course more than once. If a licensed broker takes more than 12 hours of the Annual Commission Update Course during a license period, the licensee will receive elective credit hours for any additional hours. b) Completing the Commission-approved 24-hour "Broker Reactivation Course." This option is available to licensees under one of the following conditions: (1) Licensee is currently active and did not use the Broker Reactivation Course to satisfy the Rule B-2(a) requirements in the previous license year (2) Licensee is inactive or expired for up to thirty-six months prior to active status and unable to comply with the education requirements listed in Rule B-2(a). c) Pass the Colorado state portion of the licensing exam. d) Completing 72 total hours of pre-licensure education concerning the understanding and preparation of Colorado real estate contracts (48 hours) and real estate closings (24 hours). The courses and course providers are required to comply with the requirements as described at section 12-61-103(4)(a), C.R.S. Any inactive or expired licensees who cannot meet the education requirements listed in Section 4(a), (b), or (c) must comply with the education requirements found in Section 4(d) before activation or reinstatement of the license.

A house is closed on July 16. The taxes of $546 for the current year have been paid, what is the prorated portion that the buyer owes the seller

252.81 Divide the total taxes $546 by 365 (number of days in the year = $1.4959 per day time the number of days from July 16 through Dec 31 remember that the day of closing goes to the buyer, therefore times 169 = $252.81

A property was purchased for $230,000 and later sold for $292,000. What was the percent profit on the sale of this property?

27%

The new owner of a house needs hazard coverage for $98,000. The annual premium is $0.44 per $100.00 of the amount insured. The insurance company agreed to make the cost of the policy 2 ½ times the annual rate for a 3 year policy. How much would the monthly insurance payments be to pay for this policy?

29.94

Closing March 15, next payment due April 1. How many months of escrow can lender take for taxes?

How many days notice does a landlord have to give to evict a tenancy-at-will?

A $75,000 loan requires a $1,875 in discount points to be paid by seller and $375 in discount ponits 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.

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 Rule E-1 (h) A broker who manages less than 7 single-family residences may deposit rental receipts and security deposits and disburse money collected for such purposes in the "sales escrow" account" Elsewise, you need one escrow account for earnest money, one for rental receipts and one for rental deposits.

A lender may hold how many months of tax reserve in an escrow account? None 1 2 3

3 The law is very clear on this point. RESPA (Real Estate Setlement Procedure Act) prevents lenders from holding too much money in an escrow bank account. This means they can only charge the minimum amount, and then the regular monthly charges for the escrowed items. However, they are permitted to charge the full amount if the taxes are due immediately or within 60 days of the closing. The basic rule of thumb is the mortgage holder can hold no more than three months of payments at any one time. Just how do you determine how much you need to fund the escrow account with at closing? Take all the yearly reserves required by the lender to be escrowed. This can include taxes, property insurance and sometimes other recurring costs. Divide the resulting number by 12 months. Then, multiply the monthly payment amount by the number of months required by the mortgage holder to go into escrow. The amount of fund required upfront into escrow at closing depends upon how near tax time is to the closing date. If it's within 60 days of tax time, the entire year of payments may be required at closing. If taxes are paid at closing, no more than 3 months will be required to be escrowed for next year's tax payments.

Closing March 15, next payment due April 1. How many months of escrow can lender take for taxes? 1 2 3 4

3 The private lender will collect its loan in monthly installments, along with one month's taxes to be held in reserve so that sufficient funds are on hand to pay the yearly taxes when due. This reserve is based lender's own loan requirement and state law, C.R.S. 39-1-119. This law provides that any amount held on May 20 in excess of 3/12 of the taxes paid that year must be refunded to the borrower on or before May 30. Payments to a reserve escrow account must be adjusted annually upon reasonable belief of substantial improvements to the property or upon official notification of an increase in the actual amount of taxes levied. Failure to make a refund is subject to interest and penalty.

How many days notice does a landlord have to give to evict a tenancy-at-will? 3 10 30 90

3 First up lets give you some definitions of teanncies: Tenancy for years A tenancy for years is for a fixed period of time (e.g., one day or 99 years). The termination date is set at the time the lease is executed. A tenancy for years ends on the last day of the lease term, with no need to give notice. Periodic tenancy A periodic tenancy exists when the rental period is indefinitely renewable for a series of same durations (e.g., week-to-week or month-to-month). The most common example is a residential lease requiring a tenant to pay monthly rent, but with no definite termination date. Periodic tenancies are generally created by implication and not by an express provision. According to Colorado law, and that of most states, such tenancies require the giving of proper notice for their termination. Notice to terminate is discussed below under "Termination of leases." Tenancy at will A tenancy at will provides that either party may terminate the lease whenever he or she chooses to do so. A tenancy at will also exists when the agreement allows a tenant to occupy the premises until sold, or until the landlord is ready to construct a new building, or some other indefinite happening. Similar to a periodic tenancy, a tenancy at will requires the giving of proper notice for its termination. Tenancy at sufferance A tenancy at sufferance arises when a tenant remains in wrongful possession after a lease has ended. In this situation, the tenant is called a "holdover tenant." The landlord may treat the tenant as a trespasser and initiate eviction, or may elect to accept the tenant for a similar term and conditions as in the previous lease. The choice is the landlord's; the tenant has none. If a tenant holds over due to reasons beyond his or her control, such as illness, the tenant may be held liable only for the reasonable rental of the holdover period. As to how much notice you need to give a tenant to evict them, Here is the straight stuff from the real estate manual: A tenancy for years ends on the last day of the term, with no notice-to-quit required. ... • Year-to-year tenancy or longer: three months prior or earlier. • Six months or more but less than a year: one month prior or earlier. • Month-to-month or up to but less than six months: at least 10 days' prior notice. • Tenancy at will: minimum three-day notice.

Sellers are required to keep a copy of the lead-based paint disclosure form in their files for a minimum of: 6 months 1 year 3 years 7 years

3 years Sellers are required to keep lead paint disclosure forms for 3 years. Real estate brokers are required to keep them for 4 years.

How long must seller retain a copy of the completed Lead-Based Paint Disclosure?

3 years from the completion date of the sale.

As per the Mediation clause in the Contact to Buy/Sale Real Estate: "The mediation, unless otherwise agreed, will terminate in the event the entire dispute is not resolved within _________ days of the date written notice requesting mediation is delivered by one party to the other at the party's last known address. 30 45 60 90

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 650 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.

According to the Real Estate License Law, a transaction and trust account record must be kept for a minimum of how many years? 1 2 3 4

According to RE license law, a transaction and trust account record must be kept for a minimum of how many 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

How many cubic yards of concrete will it take to pour a driveway 25 feet wide and 100 feet long if it is 6 inches thick?

46.30

Security Deposits held in property management escrow accounts must be deposited within:

5 days following receipt. (3 days for earnest money)

A lender who offers a loan at 7.5% with three loan discount points is probably anticipating a yield on the loan of approximately

7.875%

Assuming no waste, how many square feet of siding will it take to cover both ends of an "A-frame" house if the house is 30 feet wide and 25 feet tall?

750

How many parcels of land, each measuring 50' by 100', could be created from an acre of land? a) 1 b) 4 c) 7 d) 8

8 > 50' x 100' = 5,000 sq. ft. > 43,560 SF (acre) divided by 5,000 SF = 8.71

LAST MONTH'S LOAN PAYMENT INCLUDED 412.50 INTEREST ON THE $60,000 LOAN BALANCE WHAT IS THE ANNUAL RATE OF INTEREST

8 1/4 PERCENT

When reconciling a 6 column worksheet for a closing - after totaling up the debits and credits, the closing agent needed to add a $30,000 Debit to the Seller Debit column to make it equal to the Seller Credit column. What does this Seller Debit represent? A $30,000 check the Seller must bring to the closing A $30,000 check the Seller will receive from this closing

A $30,000 check the Seller will receive from this closing This DEBIT represents the Seller's proceeds from the sale (what they are getting). More info: This is a common spot of confusion, so do not let it break your head. The situation occurs at the bottom of the 6 column worksheet when you are reconciling the columns. Let's assume for a moment you are looking at a Buyer's columns. You have applied all the debits and credits and all you have to do is reconcile the columns which have $100,000 in the Credit column (money the buyer has proven they have) and $125,000 in the Debit column (what the Buyer owes). Looks like this Buyer is a little short, but by how much? To determine this amount, you have to make both columns equal. This enables the Closing Agent to determine how much the Buyer is short; which is also how much of a check the Buyer needs to bring and be deposited into the escrow account. So you add $25,000 to the Buyer's Credit column to make both columns equal. Therefore this $25,000 CREDIT represents how much the Buyer is short, meaning this CREDIT does not represent how much they have, it represents how much they still OWE. This is how a CREDIT becomes something you OWE. We are not done reconciling yet. We have a $25,000 Credit, to balance it out we need a $25,000 Debit. That debit goes to the Broker account which represents the Escrow Account. Back to practical language - the Buyers needs to bring a $25,000 check to the closing so that they can make their Credit column (what they got) equal to the Debit column (what they owe) and the Broker (Closing Agent) needs to deposit it into the Escrow Account ($25,000 Debit). For extra points - the reverse is most common with the Seller. When a Sellers Debit column (what they owe) is lower than their Credit column (what they sold their property for), the amount added to the DEBIT column to make both columns equal represents money the Seller is receiving. The balancing CREDIT in the Broker column, reminds the Closing Agent to cut a check to the Seller out of the escrow account.

Which would need to be registered with the CREC (Colorado Real Estate Commission) for a subdivision? A membership-based campground with 75 campsites Bulk sale of 500 lots between two developers A development with15 residential units A 60 unit co-op building

A 60 unit co-op building A 60 unit co-op building Explanation The Subdivision Developer's Act affects the types of subdivisions that must be registered with the Commission. The following types of subdivisions within the State of Colorado, and subdivisions located outside the state if being offered for sale in Colorado, must be registered before offering, negotiating, or agreeing to sell, lease, or transfer any portion of the subdivision: * 1. Any division of real property into 20 or more interests for residential use; * 2. Subdivisions consisting of 20 or more time-share interests (a time share interest includes a fee simple interest, a leasehold, a contract to use, a membership agreement, or an interest in common); * 3. Subdivisions consisting of 20 or more residential units created by converting an existing structure (e.g., condominium conversions); and * 4. Subdivisions created by cooperative housing corporations with 20 or more shareholders with proprietary leases, whether the project is completed or not. * B. Exempt from Registration under the Subdivision Developer's Act: * 1. The selling of memberships in campgrounds; * 2. Bulk sales and transfers between developers; * 3. Property upon which there has been or upon which there will be erected residential buildings that have not been previously occupied and where the consideration paid by the purchaser for such property includes the cost of such buildings (this does not apply to conversions, time share, or cooperative housing projects); * 4. Lots that, at the time of closing of a sale or occupancy under a lease, are situated on a street or road and the street or road system is improved to standards at least equal to streets and roads maintained by the county, city, or town in which the lots are located; have a feasible plan to provide potable water and sewage disposal; and have telephone and electricity facilities and systems adequate to serve the lots, which facilities and systems are installed and in place on the lots or in a street, road, or easement adjacent to the lots and which facilities and systems comply with applicable state, county, municipal, or other local laws, rules, and regulations; or any subdivision that has been or is required to be approved after September 1, 1972 by a regional, county, or municipal planning authority pursuant to Article 28 of Title 30 or Article 23 of Title 31, C.R.S.; and * 5. Sales by public officials in the official conduct of their duties.

A 60 unit co-op building The Subdivision Developer's Act affects the types of subdivisions that must be registered with the Commission. The following types of subdivisions within the State of Colorado, and subdivisions located outside the state if being offered for sale in Colorado, must be registered before offering, negotiating, or agreeing to sell, lease, or transfer any portion of the subdivision: * 1. Any division of real property into 20 or more interests for residential use; * 2. Subdivisions consisting of 20 or more time-share interests (a time share interest includes a fee simple interest, a leasehold, a contract to use, a membership agreement, or an interest in common); * 3. Subdivisions consisting of 20 or more residential units created by converting an existing structure (e.g., condominium conversions); and * 4. Subdivisions created by cooperative housing corporations with 20 or more shareholders with proprietary leases, whether the project is completed or not. * B. Exempt from Registration under the Subdivision Developer's Act: * 1. The selling of memberships in campgrounds; * 2. Bulk sales and transfers between developers; * 3. Property upon which there has been or upon which there will be erected residential buildings that have not been previously occupied and where the consideration paid by the purchaser for such property includes the cost of such buildings (this does not apply to conversions, time share, or cooperative housing projects); * 4. Lots that, at the time of closing of a sale or occupancy under a lease, are situated on a street or road and the street or road system is improved to standards at least equal to streets and roads maintained by the county, city, or town in which the lots are located; have a feasible plan to provide potable water and sewage disposal; and have telephone and electricity facilities and systems adequate to serve the lots, which facilities and systems are installed and in place on the lots or in a street, road, or easement adjacent to the lots and which facilities and systems comply with applicable state, county, municipal, or other local laws, rules, and regulations; or any subdivision that has been or is required to be approved after September 1, 1972 by a regional, county, or municipal planning authority pursuant to Article 28 of Title 30 or Article 23 of Title 31, C.R.S.; and * 5. Sales by public officials in the official conduct of their duties.

Periodic tenancy

A periodic tenancy exists when the rental period is indefinitely renewable for a series of same durations (e.g., week-to-week or month-to-month). The most common example is a residential lease requiring a tenant to pay monthly rent, but with no definite termination date. Periodic tenancies are generally created by implication and not by an express provision. According to Colorado law, and that of most states, such tenancies require the giving of proper notice for their termination. Notice to terminate is discussed below under "Termination of leases."

In Colorado "good funds" include a

A teller's check from a savings and loan

Tenancy at will

A tenancy at will provides that either party may terminate the lease whenever he or she chooses to do so. A tenancy at will also exists when the agreement allows a tenant to occupy the premises until sold, or until the landlord is ready to construct a new building, or some other indefinite happening. Similar to a periodic tenancy, a tenancy at will requires the giving of proper notice for its termination.

An exclusive listing must contain:

A termination date

novation

A three-way agreement in which the obligor transfers all rights and duties to a third party.

Ernie Pyle offers to pay $100.00 to anyone who will clear his driveway of snow. This is an example of which of the following?

A unilateral contract Explanation: It is made by one party and anyone who fulfills the contract will receive the compensation.

In order to be the broker of record for a corporation, a person must hold

A valid Colorado broker's license

The most essential element to create an enforceable broker-principle relationship concerning a transfer of interest in real property is:

A written employment contract

A BROKER'S SALESPERSON LISTS A UNIT FOR SALE IN A CONDOMINIUM BLD. THE SALESPERSON IN THIS TRANSACTION

ACTS ON BEHALF OF THE BROKER

A BROKER WHO IS THE AGENT OF THE BUYER SHOULD DO WHICH OF THE FOLLOWING

ADVISE THE BUYER WHETHER THE LISTING PRICE OF THE SELLER'S HOUSE IS UNREALISTIC

AN AGENT HAS A DUTY TO DISCLOSE TO THE PRINCIPAL EVERY STEP TAKEN IN THE TRANSACTION OF THE PRINCIPAL'S BUSINESS. THIS IS BECAUSE IS

AGENT HAD FIDUCIARY OBLIGATIONS TO THE PRINCIPAL

In a transaction that is subject to a licensee buyout agreement, if the buyer defaults, the seller may:

ALWAYS sue the buyer for specific performance Explanation "Liquidated damages" is deleted, in a licensee buyout addendum to a contract to buy and sell real estate.

A DECEDENT LEFT A WILL GIVING HIS NEIGHBOR THE RIGHT TO USE A WELL ON THE DECEDENT'S LAND AS LONG AS THE NEIGHBOR WAS ALIVE. THE NEIGHBORS INTEREST IN THE PROPERTY IS CALLED

AN EASEMENT IN GROSS

A COUPLE APT LEASE EXPIRED;LL HAD INDICATED THAT THEY MAY STAY UNTIL THE SALE OF BLD IS CLOSED. THE TT PAYS WILL STILL THE SAME RENTAL; THIS IS CALLED

AN ESTATE AT WILL

A GRANDMA CONVEYS A LIFE ESTATE TO HER GRANDSON AND STIPULATES THAT UPON HER DEATH, THE ESTATE WILL PASS TO HER SON-IN-LAW. HE HAS

AN ESTATE IN REMAINDER

THE OWNER DIVIDED A PARCEL INTO TWO LOTS, ONE OF WHICH IS SURROUNDED BY OTHER LOTS AND HAS NOT STREET ACCESS. WHAT CAN BE DONE

AND EASEMENT BY NECESSITY SHOULD BE CREATED FOR THE LAND LOCKED PARCEL

A DEVELOPER GRANTS TO THE GAS COMPANY THE RIGHT TO INSTALL TRANSMISSION LINES. THIS RIGHT IS CALLED

AND EASEMENT IN GROSS

THE OWNERS OF A HOUSE WANTS TO FENCE THE YARD FOR HER DOG. WHEN THE FENCE IS ERECTED, THE FENCING MATERIALS ARE CONVERTED TO REAL ESTATE BY

ANNEXATION

In the Colorado Brokerage Relationship law, the seller's agent may not disclose which of the following to the buyer? All adverse material facts about the title to the property All adverse material facts about the property All of the environmental hazards effecting the property All adverse psychological impacts or stigmas about the property

All adverse psychological impacts or stigmas about the property

Which of the following is true if a broker establishes an account to hold money belonging to others?

All checks, deposit slips, and bank statements must include the word "escrow" or "trust" as part of the account name.

Which encumbrances does the Seller list on the Colorado Exclusive Right to Sell Listing Contract? All encumbrances to be assumed by a buyer Only encumbrances of public record All encumbrances known to Seller All encumbrances the Seller will not pay off

All encumbrances known to Seller

Jane is the broker/owner of Downtown Realty which is a trade name registered with the Colorado Department of Revenue and licensed with the Real Estate Commission as Downtown Realty. Which of the following is correct?

All licensees employed by Jane must do business only with the name Downtown Realty

Which of the following is true of a continuing education renewal?

All licensees must complete an annual 4 hour Commission update course

According to Commision Position 31 on Acting as a Transaction Broker, you cannot be a Transaction Broker for: Your brother Your close friend Your best client All of the above

All of the above CP-31 Commission Position on Acting as a Transaction Broker or Agent in Particular Types of Transactions The public may enter into either a Transaction-Broker relationship or an Agency relationship with a Broker. Fundamental among the differences between Agency and Transaction-Brokerage is that an Agent is an advocate with fiduciary duties, while a Transaction-Broker should remain neutral, not advocate. However, in some situations the relationship of the Broker with a particular party or property may make a particular relationship inappropriate or problematic. Before acting as a Transaction-Broker in transactions where neutrality is difficult, the Broker should consider whether the Transaction-Brokerage arrangement is suitable, consult with the Broker's supervising Broker and then make the necessary disclosures. Some examples of these situations include: 1. Selling or purchasing for one's own account (whether the property is solely or partially owned or to be acquired by the Broker), (See Rule E-25 regarding proper disclosures); 2. Selling or purchasing for the account of a spouse or family member of the Broker; 3. Selling or purchasing for the account of a close personal friend, business associate, or other person where it would be difficult for the Broker to remain neutral; or 4. Selling or purchasing for the account of a repeat or regular client/party where it would be difficult for the Broker to remain neutral (i.e., undertaking as a Transaction-Broker the listing of multiple units, lots or properties such as listing a real estate development or condominium complex for a single developer, listing multiple residential or commercial properties for the same seller that will be sold to different buyers, or listing for lease a multiple unit residential or commercial property that will be leased to different tenants). An agency relationship between a Broker and a seller or landlord, buyer or tenant, requires a written agency agreement. The duties of an agent go beyond facilitation of the transaction as a neutral party and require representing the interests of the Broker's principal over the interests of the other party. In certain circumstances, fulfilling the duties of an Agent including acting as an advocate may be difficult. A Broker who enters into an agency relationship must fulfill the duties of advocacy, fidelity, loyalty and other fiduciary duties associated with a single agency relationship. In circumstances where the Broker may not be able to fulfill the duties imposed on an agent the Broker should consider whether the agency arrangement is appropriate, consult with the Broker's supervising Broker and act accordingly.

Which of the following can terminate an agency relationship? Mutual rescission Incapacity of either party Expiration of subject matter All of the above

All of the above An agency relationship may be terminated by mutual agreement; revocation by principal; renunciation by agent; expiration of its term; extinction of its subject matter; death or incapacity of either principal or agent.

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 From the Licensee Buyout Addendum: RESALE, PROFIT/LOSS, EXPENSES. Seller acknowledges that in entering into the Contract, Buyer is exposed to possible losses and expenses. Seller acknowledges that following Closing, the Property may be held by Buyer for a period of time or may be resold immediately, and any profit or loss shall be solely that of Buyer. Seller further acknowledges that there is a chance for profit to Buyer and that certain expenses may accrue to Buyer. Such expenses include costs and expenses of Closing, holding, and reselling the Property. Buyer may incur additional expenses, or some anticipated expenses may vary, or may not be incurred. In any event, after Closing, Buyer will absorb the loss or receive the profit from any sale and ownership of the Property. A is correct. A is the only verbiage listed NOT in the Licensee Buyout Addendum.???? More info: What Is a Licensee Buyout Addendum? A licensee buyout addendum is a form used in certain real estate and property transactions in the state of Colorado. The LBA is used only in the purchase and sale of properties between licensed real estate professionals and their own clients. History and Purpose The Licensee Buy-Out Addendum to Contract to Buy and Sell Real Estate is intended to prevent improprieties and conflicts of interest in licensee/client transactions, as well as to make sellers contractually aware of the potential differences in selling to a licensed real estate professional as opposed to conventional buyers. Situations Dictating Use Licensed real estate agents are required to use an LBA when they enter into contracts to purchase properties concurrently with the initial listing of that property, when it immediately hits the market. Licensees also are required to use the LBA form when they are purchasing a property to facilitate its owner's purchase of another property, as well as when they continue to market that property to other potential buyers. Deleted Provisions Under the provisions of the licensee buyout addendum, several conventional provisions of standard real estate listing contracts reached under Colorado state law are deleted. Deleted provisions include a property's appraisal condition, liquidated damages or pre-assessed damages to the property, provisions related to the seller's financial default status and the broker's acknowledgments and compensation disclosure forms. Profit and Loss Stipulations Colorado's LBA also stands as contractual acknowledgment by a property seller that the buyer is a licensed real estate professional and any future profit or loss on a resale of the property is solely that of the buyer. Similarly, the LBA protects the property seller by acknowledging that any fees related to closing, holding and reselling the property are all absorbed by the buyer and not the property seller as the original or prior landowner.

All of the above are required disclosures RESALE, PROFIT/LOSS, EXPENSES. Seller acknowledges that in entering into the Contract, Buyer is exposed to possible losses and expenses. Seller acknowledges that following Closing, the Property may be held by Buyer for a period of time or may be resold immediately, and any profit or loss shall be solely that of Buyer. Seller further acknowledges that there is a chance for profit to Buyer and that certain expenses may accrue to Buyer. Such expenses include costs and expenses of Closing, holding, and reselling the Property. Buyer may incur additional expenses, or some anticipated expenses may vary, or may not be incurred. In any event, after Closing, Buyer will absorb the loss or receive the profit from any sale and ownership of the Property.

How long must an Independent Broker retain transaction records?

All transaction records should be held for 4 years

An Exclusive Agency Addendum to the Exclusive Right-To-Sell Listing Contract: Engages the licensee as the Exclusive Agent for the property Engages the licensee as the Exclusive Agent who will receive a commission upon any sale of the property Allows a second broker to represent the seller under dual agency Allows the seller to not pay a commission to the listing broker if the seller should procure a buyer

Allows the seller to not pay a commission to the listing broker if the seller should procure a buyer Exclusive Agency is an addendum you add to a listing contract. In it, the seller reserves the right to not to pay a commission to an agent if the seller finds the buyer. Exclusive agency weakens the desire of any agent to list a home. Its acceptance by any agent varies greatly. Many agents will find it acceptable if you have a particular buyer in mind and the property is desirable. They will sign the listing, with the seller's understanding that they will but not market the property until the situation with the specific buyer resolves itself. The idea is to lock up the listing and hope the buyer falls through. Not too many agents who are savvy will accept an Exclusive Agency if the seller does not have a buyer in mind and simply wants to market the property in competition with their own agent in the hopes of avoiding a commission.

easement by condemnation

An easement acquired for a public purpose through the power of eminent domain.

easement by necessity

An easement allowed by law as necessary for the full enjoyment of a parcel of real estate; for example, a right of ingress and egress over a grantor's land

easement in gross

An easement in gross is not created for the benefit of the land owned by the owner of the easement, but that attaches personally to the easement owner. An easement in gross benefits an individual or a legal entity, rather than a dominant estate. The easement can be for a personal use (for example, an easement to use a boat ramp) or a commercial use (for example, an easement to a railroad company to build and maintain a rail line across property). Historically, an easement in gross was neither assignable nor inheritable, but today commercial easements are freely transferable

Broker Bob has just taken an exclusive right to sell listing to sell a home. This brand new listing may be described as:

An express, bilateral, executory, employment contract

As a debit to the broker, single entry

In a new loan closing, sometimes a lender may make some of the payouts, such as recording fees, survey and reserve taxes, in order to protect its interest as the holder of the 1st lien. The net loan proceeds are entered on the settlement worksheet:

As a debit to the broker, single entry

In a new loan closing, sometimes a lender may make some of the payouts, such as recording fees, survey and reserve taxes before the closing. When these amounts are taken out of the loan, the remaining balance is the amount sent to the closing table and is called the Net Loan Proceeds. The Net Loan Proceeds are entered on the settlement worksheet: As a debit to the broker, single entry As a credit to the broker, single entry As a debit to the buyer, credit to the broker As a credit to the buyer, debit to the broker

As a debit to the broker, single entry Net Loan Proceeds: Debit broker single entry. Here is the play: most often seen with new loans (and always on the State Exam). Net Loan Proceeds is a situation when a lender is making a loan for x and part of that loan is covering expenses that the lender is owed. In short - the lender is lending money to the buyer to cover expenses that are going to be paid to the lender. The lender does not want to send the entire loan amount to the closing and wait for a check back to cover the money they are owed, they instead take their money out of the loan up front and send the remaining balance called Net Loan Proceeds to the closer. To show this on a settlement sheet, the closer enters a series of single entries i.e. there not a debit/credit on every line. Instead there is one big credit all by itself on a line showing the total loan amount the buyer is getting and then two or more debits all by themselves on other lines adding up to the total loan amount. Example - a lender is making a loan for $100,000 and they are taking their 1% origination fee ($1,000) out of the loan. They send the net loan proceeds $99,000 (remember they are keeping their $1000) to the closing agent. First up let's handle the credit, enter the entire loan amount on the sheet (put a Credit Buyer $100,000 all by itself on the loan line). Then you need to show the deposit of $99,000 into the escrow account (Single entry all by itself on line Net Loan Proceeds, Debit Broker $99,000). Lastly we need to account as a debit the $1,000 the lender held back (single entry all by itself on the Origination Fee line, Debit Buyer $1000). Tah Dah! You have $100,000 of Debits and $100,000 of credits and everything is in balance. For more info and examples of this check out the new loan examples in the chapter of the real estate manual on Closings

An offer has been presented to the sellers of a property. The sellers do not want to accept it as it is. 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. What can be done? As buyer's agent you would advise them to write a counter proposal and attach it to the previous offer and counter proposal As buyer's agent you would tell them to rewrite the original contract As buyer's agent you would tell them to withdraw the counter proposal None of the above are possible in this scenario

As buyer's agent you would tell them to rewrite the original contract. A purchase contract can only have one counter attached, the buyer can't withdraw a counter, and only sellers can withdraw the counter. They must sign another contract knowing what terms are acceptable

When a sole proprietor has his or her license suspended for two years, what effect does this have on the associate brokers affiliated with the sole proprietor?

Associate's licenses will be inactive until after the associates are hired by a new employing broker.

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:

Association Documents Deadline

When can a broker rebate a portion of the commission to a seller?

At the brokers option as part of the negotiated price of services. (kind of pointless, just offer a lower %)

THE CLAUSE IN A MORTGAGE INSTRUMENT THAT WOULD PREVENT THE ASSUMPTION OF THE MORTGAGE BY A NEW PURCHASER IS A

DUE TO SALE CLAUSE

The Contract to Buy and Sell states that "time is of the essence". This would mean:

Dates and deadlines will be strictly enforced.

The Colorado Contract to Buy & Sell states that "time is of essence hereof". This statement means that:

Dates and deadlines will be strictly interpreted

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

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 VA assigns this expense to the Seller. The Buyer can not pay it.

The Seller holds security deposits in the amount of $1,000 from each of six tenants. On the settlement sheet:

Debit Seller & Credit Buyer $6,000

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

The seller agrees to pay $1500 of the buyer's closing costs, this is shown on the settlement sheet as:

Debit Seller/Credit Buyer. The term Closing Costs covers a variety of charges such as Recording Fees, Survey, Documentary Fee, Appraisal and others. The Seller contribution may not cover all of them. To keep it simple and make it work. The concession itself is a Seller Debit and Buyer Credit. This gets the dollars into the Buyer's side. The Buyers is then debited for his/her share of the Closing Costs. The Buyer's individual closing cost charges will each be a debit to the Buyer and a credit to the Broker (this deposits the money into the Trust Account for the Broker/Closing Agent to actually pay the vendor who is owed the Closing Costs).

Debit Seller/Credit Buyer

In a net loan proceeds settlement sheet, the net loan amount is shown as a: Debit seller, credit buyer Credit buyer single entry Debit broker single entry Debit broker, credit buyer

Debit broker single entry Net Loan Proceeds: Debit broker single entry. Net Loan Proceeds Decription: When preparing a settlement sheet we normally think "for every debit there is a credit". This assumes that the closing agent receives and disburses all funds. However, most lenders pay off items they feel will affect the loan (ex credit reports, survey) and title and then send the balance of the loan (Net Proceeds) to the closing agent. The settlement worksheet must show all the debits paid in advance by the lender. These debits will not have a credit on the worksheet (single entry) as the closing agent did not receive the funds. The Net Proceeds amount itself will show as a DEBIT BROKER.

In a net loan proceeds settlement sheet, the net loan amount is shown as a: Debit seller, credit buyer Credit buyer single entry Debit broker single entry Debit broker, credit buyer

Debit broker single entry. most often seen with new loans (and always on the State Exam). Net Loan Proceeds is a situation when a lender is making a loan for x and part of that loan is covering expenses that the lender is owed. In short - the lender is lending money to the buyer to cover expenses that are going to be paid to the lender. The lender does not want to send the entire loan amount to the closing and wait for a check back to cover the money they are owed, they instead take their money out of the loan up front and send the remaining balance called Net Loan Proceeds to the closer.

The purchaser has promised to pay for a one-year home warranty plan. How is it entered? Debit buyer, credit broker Debit buyer, credit seller Credit buyer, debit lender Credit buyer, debit broker

Debit buyer, credit broker Charge the buyer, Broker will pay out after receiving it in.

In a new loan closing, the net loan proceeds after the lender subtracts loan fees and closing costs are entered on the settlement worksheet.

Debit the broker, single entry

The six-column settlement statement worksheet would show the charges for recording a Deed of the Trust as

Debit the buyer, credit the broker

A MORTGAGE BROKER GENERALLY OFFERS WHICH SERVICE

BRINGING THE BORROWER AND THE LENDER TOGETHER

A SELLER HAS LISTED HER HOME WITH A BROKER FOR 190,000, BROKER TOLD BUYER TO OFFER LOW; SELLER ACCEPTED. WHAT DID THE BROKER DO

BROKER HAS VIOLATED HIS AGENCY RELATIONSHIP WITH THE SELLER

If the owner of a vacant lot bills a structured not in compliance with the deed restrictions, that person may

Be required to remove the structure provided those complaining did so in a timely manner

The support staff in an office is available to do all of the following, except?

Be your own personal assistant - Need to hire your own personal assistant

Broker Beatrice meets with buyer Bob, and together they negotiate the terms of an exclusive right-to-buy contract. Buyer Bob is unrealistic in his expectations of properties available in his price range, and after looking at several houses decides to wait until next year and save some more money before making a purchase. In regards to the exclusive right-to-buy contract, which of the following is true? Beatrice may retain the contract in her original files until next year Beatrice may destroy the contract, as it never came to fruition Beatrice must submit the contract to the office to be retained with all other permanent records Beatrice can hold on to the contract and use it again next year

Beatrice must submit the contract to the office to be retained with all other permanent records All contracts must remain with the permanent records of the office. Exclusive right to buy contracts expire in one year, so a new contract will be needed.

Beatrice must submit the contract to the office to be retained with all other permanent records - All contracts must remain with the permanent records of the office. Exclusive right to buy contracts expire in one year, so a new contract will be needed.

First make sure you understand the difference between the Agreement to Amend and Extend and the Agreement to Amend and Extend With Broker.

Both agreements are used to alter the terms and conditions of a contract. The Agreement to Amend and Extend is used to alter the terms of the sales agreement between the buyer and seller. The Agreement to Amend and Extend With Broker is used to amend the terms of an agreement with the client and their broker such as a listing agreement or buyer agency agreement. As to why would you extend a contract before it is executed, understand the difference between the terms "executory" and "executed". When a contract is signed by all parties it is in "executory" status. This means it is in process but not complete. When it is "executed" this means it is complete i.e. fully performed. Real Estate Commission rules say that you cannot amend the terms of an agreement after it has been expired, executed or otherwise terminated. When a closing occurs, the deal is done, the associated listing and sales contracts are fully executed, can't-be-changed, done, dead, history, ex-contracts, ended, finished, achieved, accomplished, done-with, taken-to-the-bank and all-over-including-the-shouting.

A landlord can evict a delinquent tenant by: Giving him three days notice Giving him thirty days notice Calling the sheriff Bringing court action

Bringing court action A landlord must institute court action in order to evict a tenant which is called an unlawful detainer action.

A mortgage broker generally offers which of the following services?

Bringing the borrower and the lender together

The holdover period in an exclusive right-to-sell listing is freely negotiable, so the seller and broker agreed upon a 60-day holdover period. Who is protected by this provision?

Broker

Who is responsible for proofreading the settlement statement before closing? Lender Seller Broker Closer

Broker The agents should check the statement with regards to the contract and all amendments.

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 Baker lists seller Simms home. The listing expires January 15th. During the listing period Broker Baker showed the house to Archie and Edith Bunker. Broker Baker submits their names to Seller Simms, but the Bunkers do not make an offer. On the 25th of January, Seller Simms lists the property with Broker Barker. On, January 30th, the Bunkers make an offer through Broker Baker. Who is entitled to the listing commission?

Broker Barker

If a defaulting buyer forfeits an earnest money deposit, based on the language of the Colorado exclusive Right to Sell Listing Contract: Broker would receive the funds Seller is entitled to keep the funds Broker and Seller would split the funds Broker and Seller would submit the funds for mediation

Broker and Seller would split the funds It specifically is stated in the contract that the Broker and Seller will split the funds.

A transaction broker relationship may be created by:

Brokerage Disclosure to Buyer

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?

Brokerage Relationships Offered to Public

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 here are only three sections which are mandatory, whereas there are a number that are suggested. The mandatory ones are: written brokerage relationship policy, a policy to protect confidential information and designation brokerage relationships. The suggested ones are the long list below. From the real estate manual: Office Policy Manuals Commission Rules E-29 through E-32 require brokers to demonstrate reasonable supervision over all licensees and non-licensed employees, including but not limited to secretaries, bookkeepers, and personal assistants of licensed employees. To comply with these supervision Rules, brokers who employ others are required to establish an office policy manual. This is in addition to the requirements for a written brokerage relationship policy (Rule E-39), a policy to protect confidential information (Rule E-39), and designation brokerage relationships (Rule E-38), whether performing sales or management activities. The following topical guidelines (as applicable) are suggested for office policy manuals. Sales Transactions • Parties responsible for delegated duties/agreements; • Preparation and review of contracts prior to closing; • Handling earnest money deposits, disputes, and releases; • Backup contracts; • Closing documents and closing instructions for the broker's agent; • Maintenance/custody of contract files; • Escrow records and written procedures for handling business operations; • Fair housing/affirmative action marketing; • Staff training - dissemination of information, staff meetings; • Use of personal assistants; • Guaranteed buyouts; • Investor purchases; • Non-qualifying assumptions and owner financing; • Licensee's purchase and sale of property; • Listing procedures and release of listings; • Rental occupancy before closing; • Computer system - data control, backup, and physical security; and • Internal audit and supervisory reviews of business operations. Management Activity • Operating policies and required disclosures; • Use of unlicensed on-site managers; • Administration of rentals and leasing activity; • Items under "Sales" above, where applicable; • Supervision of accounting services, records, and reporting to others; • Cash handling, collection of delinquent rents and deposits; • Ownership/management of rental properties by agents; • Administration and policies for in-house services; • Maintenance of records and business reports by any outside service; • Advances of funds on behalf of clients/customers; • Cancellation of agreements and termination of sevices; • Related services performed by affiliated entities; • Backup and disaster recovery plan for loss of business records; • Eviction and legal action; and • Return of security and advance deposits.

According to the Rule E-48, brokers are allowed to file a lien, a lis pendens or record a listing contract to secure payment of a commission under what circumstances? Only with the written permission of the seller. Only if the amount is under $2,000, and then must file in Small Claims court. Only if there is a mechanic's lien already recorded, since that lien has already clouded title. Brokers may never cause the title to become clouded if they are not principals in the transaction

Brokers may never cause the title to become clouded if they are not principals in the transaction.

Which of the following is correct according to the Colorado Real Estate Commission Position Statement regarding Rule F? Exculpatory language limiting a broker's liability may not appear in listings or buyer relationship agreements. Brokers may not add exculpatory language limiting their liability to any contract to which they are not a party such as the Contract to Buy and Sell. Exculpatory language limiting the broker's liability may be added to the Contract to Buy and Sell only in addenda, not in additional provisions. Brokers may not add exculpatory language to any commission-approved contract.

Brokers may not add exculpatory language limiting their liability to any contract to which they are not a party such as the Contract to Buy and Sell. Exculpatory provisions do not belong in the Contract since a broker is not a party to the Contract to Buy and Sell. If some form of confirmation is needed from the buyer or seller, the broker should prepare a separate disclosure for that purpose.

Who pays the Colorado Use Tax on the transfer of furniture, personal property, equipment: Buyer Seller Split equally between buyer and seller Seller''s broker

Buyer The Colorado Use Tax, (39-26-Part 2, C.R.S.) is a form of sales tax, payable on the transfer of furniture, equipment, etc. The buyer is obligated to pay this tax by statute. The broker has the duty to inform the buyer of this obligation.

The furnace breaks down before closing, but after the buyer has taken possession. Who is responsible for the cost of replacement? Seller Buyer depends on how the appropriate box is checked in the Contract to Buy and Sell not addressed by the Contract to Buy and Sell

Buyer The buyer is responsible for such costs after possession, even if possession is before closing. BTW it is really common for students with contract questions to hunt throughout the courses for an answer. Whereas the answer is as far away as looking at the contract itself. Also, it is always a bad idea to let a buyer move into a property prior to close. Savvy agents avoid this at all costs. Nothing good ever happens when this situation occurs. First up, there is a really good chance the buyer will notice something about the house they do not like, which can throw a monkey wrench into the closing process. Lastly, what happens if the buyer moves in and then does not qualify for a loan? You could have an eviction proceeding on your hands. From the Contract to Buy and Sell Real Estate: Damage, Inclusions and Services. Should any Inclusion or service (including utilities and communication services), system, component or fixture of the Property (collectively Service), e.g., heating or plumbing, fail or be damaged between the date of this Contract and Closing or possession, whichever is earlier, then Seller is liable for the repair or replacement of such Inclusion or Service with a unit of similar size, age and quality, or an equivalent credit, but only to the extent that the maintenance or replacement of such Inclusion or Service is not the responsibility of the Association, if any, less any insurance proceeds received by Buyer covering such repair or replacement. If the failed or damaged Inclusion or Service is not repaired or replaced on or before Closing or possession, whichever is earlier, Buyer has the Right to Terminate under § on or before Closing Date (§) , or, at the option of Buyer, Buyer is entitled to a credit at Closing for the repair or replacement of such Inclusion or Service. Such credit must not exceed the Purchase Price. If Buyer receives such a credit, Seller's right for any claim against the Association, if any, will survive Closing. Seller and Buyer are aware of the existence of pre-owned home warranty programs that may be purchased and may cover the repair or replacement of such Inclusions.

According to the Contract to Buy and Sell Real Estate earnest money is held on behalf of: Seller Buyer Buyer and Seller Seller and Broker

Buyer and Seller As per the contract to buy and sell real estate: Earnest Money. The Earnest Money set forth in this section, in the form of _________________________________, is part payment of the Purchase Price and shall be payable to and held by _________________________________________________ (Earnest Money Holder), in its trust account, on behalf of both Seller and Buyer.

How is the relationship handled when a buyer wishes to work with a broker to locate property to purchase?

Buyer and broker may agree to a relationship which could include agency, transaction-brokerage, or no working relationship between the parties

How is the relationship handled when a buyer wishes to work with a broker to locate property to purchase? Brokerage will be an agent for the buyer unless there is written agreement for another relationship. Buyer and broker must sign an exclusive representation agreement. Buyer will be a customer with no working relationship to the brokerage company. Buyer and broker may agree to a relationship which could include agency, transaction-brokerage, or no working relationship between the parties

Buyer and broker may agree to a relationship which could include agency, transaction-brokerage, or no working relationship between the parties The buyer has many options: he or she can be a unrepresented "customer" after appropriate disclosure, can sign an agency representation agreement, or can hire the broker as a transaction-broker either in an exclusive arrangement, oral agreement, or by default.

When a buyer executes a real estate sales contract that is accepted and signed by a seller:

Buyer has equitable title - Upon acceptance of the sales contract, the buyer has an interest in the property called equitable title. Legal title is not conveyed until closing.

An agent and buyer enter into an Exclusive Right to Buy Contract, the

Buyer is bound to work with only one broker during the term of the contract The buyer agrees to only work with one broker with the Exclusive Right to Buy Contract regardless of whether it is an Agency or TB contract

An agent and buyer enter into an Exclusive Right to Buy Contract, the Broker must be a buyer's agent Buyer may have agreements with several brokers The broker is bound to work with one buyer at a time Buyer is bound to work with only one broker during the term of the contract

Buyer is bound to work with only one broker during the term of the contract The buyer agrees to only work with one broker with the Exclusive Right to Buy Contract

Who will not have a copy of the listing agreement? Seller Listing broker Buyer's agent Listing agent

Buyer's agent

Who will not have a copy of the listing agreement? Seller Listing broker Buyer's agent Listing agent

Buyer's agent

In the Exclusive Right to Buy Contract, who is responsible with regard to registered sex offenders? Sex offenders privacy rights are protected by state and federal law Sellers will be required to disclose any sex offenders in the neighborhood Buyers must obtain this information from local law enforcement agencies Brokers must disclose the presence of any known sex offenders

Buyers must obtain this information from local law enforcement agencies

John Bargas of Buywell Realty wants to place a listing in the phone book. At a minimum he must list: John Bargas, Buywell Realty John Bargas Buywell Realty John Bargas, Buywell Realty, Each Branch Independently Owned and Operated

Buywell Realty e minimum is the employing broker's name (the firm, not the person) Chapter 2 - CREC Manual Rule E-8. Advertising "A real estate licensee who performs any act requiring a license, including advertising services or advertising property belonging to another, shall do so in the name of the employing broker;...."

When employing the income approach to value, the improvements and the land are valued: By comparing the sales of similar properties By determining the cost per square foot of reproducing improvements By capitalizing income Concurrently by more than one approach

By capitalizing income The income approach is based on the capitalization rate.

Which of the following is considered personal property? A. Improvements B. Apple Trees C. Emblements D. Trees growing in a natural forest

C. Emblements The fruit (apples) from orchards in a commercial grove & crops, which are grown & cultivated annualy for sale, are called emblements. Emblements, or fructus industriales, are crops produced by human labor such as lettuce, grapes, fruits, nuts, wheat, corn, cotton, etc. Emblements, the crops are the personal property, not the trees or plants on which they grow.

A PERSON PURCHASES A FEE SIMPLE ESTATE AND HAS AN UNDIVIDED INTEREST IN COMMON ELEMENTS

CONDO

A PERSON WHO OWNS ONE UNIT IN A MULTI-UNIT STRUCTURE TOGETHER WITH A SPECIFIED UNDIVIDED INTEREST IN THE COMMON ELEMENTS OWNS A

CONDOMINIUM

THE TT LEASE A HEATED APT BUT THE LL FAILS TO PROVIDE HEAT BC OF A DEFECTIVE CENTRAL HEATING PLANT. THE TT VACATED THE PREMISES AND REFUSES TO PAY ANY RENT. THIS IS CALLED

CONSTRUCTIVE EVICTION

A BUYER WHO IS SHOWN PROPERTIES LISTED FOR RENT BY BROKER IS THE BROKER'S

CUSTOMER

lease that will terminate within one year of its conception

Can be verbal

Earnest money checks received by a broker in connection with a real estate transaction must be:

Deposited with three days of receipt by listing broker - Earnest money checks are made payable to the listing broker or their designated title company and deposited within three days into an escrow account upon receipt by listing broker.

Earnest money checks received by a broker in connection with a real estate transaction must be: placed in the broker's trust account before the seller approves the offer payable to the selling broker given directly to the seller Deposited within three days of receipt by listing broker

Deposited within three days of receipt by listing broker Earnest money checks are made payable to the listing broker or their designated title company and deposited within three days into an escrow account upon receipt by listing broker.

According to CP-22 Handling of Confidential Information, the sharing of confidential information is prohibited according to the rules set forth by ? Confidential Brokerage Secret Brokerage Designated Brokerage Seller Agency

Designated Brokerage CP-22 Commission Position Statement on Handling of Confidential Information in Real Estate Brokerage Prior to designated brokerage, it was common for brokers to share the motivations of a buyer or seller during office sales meetings, for example. Under designated brokerage, the law specifically prohibits sharing of such information. Confidential information, and the broker responsibility thereto, are defined in C.R.S. 12-61-804 (2), 12-61-805 (2), 12-61-807 (3), and Rules E-32 and E-39. Confidential information can include, but is not limited to, motivation of the parties.

All of these are examples of a common area of a condominium EXCEPT: Laundromat Designated parking place Swimming pool The land

Designated parking place

The purpose of the HUD-1, Uniform Settlement Statement, is to

Determine the seller's net proceeds and the buyer's cost to close

Which of the following is one of the primary reasons that the real estate commission has approved a broad variety of forms and made their use mandatory by licensees? allows the commission to discipline brokers for improper contracting protects the public by requiring the same forms for all real estate transactions in Colorado assists attorneys and the public in following commission rules when contracting assures the broker's compliance with the Conway-Bogue decision of the Colorado Supreme Court

Change only the dates that needed 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.

If taxes for the proceeding year have not been paid as of a closing February 23 and the closing involves a new loan, what must the broker do?

Check with the new lender for its method of handling these taxes.

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 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? Aperson with sufficient ownership interest in the corporation BColorado licensee approved by the corporate board of directors Cmember of the board of directors D 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.

According to Commission Position 25 on Recording Contracts, should a listing broker decide her Seller client is attempting to cheat her out of a commission, the broker can:

Commence mediation, arbitration or a civil action

According to CP-25 on Recording Contracts, should a listing broker decide her Seller client is attempting to cheat her out of a commission, the broker can: File a mechanics lien to ensure the brokers'' claim for the commission is honored Record the listing contract so that it would appear in any Title Commitment for the property File a lis pendens to warn any potential buyer that a legal action is pending Commence mediation, arbitration or a civil action

Commence mediation, arbitration or a civil action CP-25 Commission Position on Recording Contracts Over the years the Commission has received many inquiries and complaints concerning the recording of listing contracts to protect claims for commissions. In addition, some licensees have attempted more "creative" ways of holding up a closing, such as filing mechanics liens or notices of lis pendens, as well as recording demand letters or purchase contracts. The end result is usually a cloud on the title and sometimes a slander of title action. Some states have passed statutes authorizing the filing of such liens. Colorado has not. Filings and recordings such as these are inappropriate and will result in Commission action. Here is a typical scenario: Broker lists a property at $125,000 for 120 days and actively markets it. No offers come in during the first 30 days. Broker advises her seller to lower the price by $5,000 to encourage some activity. The seller is adamant that the property is worth the list price and refuses. After another 15 days with no offers, the seller reluctantly lowers the price. He also tells the broker that he doesn't feel she is trying hard enough to sell the property and he's going to take it off the market if nothing happens. A week later an offer for $100,000 comes in from another company, which is presented and rejected. The seller is quite upset at the low offer and demands to be released from the listing. There is no further communication between the parties, but the listing is never formally terminated. Three weeks later the broker learns that the seller has entered into a contract with the same buyer for $110,000 and closing is set. The broker is very upset and wants to protect her commission. What can she do? 1. File a mechanics lien? ANS: No. Real estate licensees are not a protected class of lien claimant under the statute except as provided in C.R.S. 38-22.5 (Commercial Real Estate Brokers Commission Security Act). 2. File a lis pendens (notice of pending lawsuit)? ANS: No. A lis pendens relates to a title or ownership dispute involving the land itself. The broker has no legal interest in the real estate. 3. Record the listing contract? ANS: No. This will usually have the effect of clouding title to the property, which in turn affects the closing between buyer and seller. The broker should not interfere in the process of transferring title to property. 4. Escrow the disputed commission? ANS: Maybe. This is a touchy area. If the broker makes demand on the seller for the commission prior to closing and states her possible rights (mediation; arbitration; civil action) the parties may agree to an escrow pending settlement of the dispute. However, there is no legal requirement that the closing entity escrow funds absent an agreement. 5. Commence mediation, arbitration or civil action (as appropriate). ANS: Yes. Nothing prevents a licensee from asserting any legal claim against a principal. A commission dispute is an emotional issue. Sometimes a licensee has put in considerable time on a listing only to be faced with a seller who refuses to pay, attempts to renegotiate or is outright deceitful. On the other side, the Commission has witnessed instances in which the licensee had no legitimate right to a commission and was using superior knowledge and scare tactics to force payment. Clearly this is a time to consult a good real estate attorney and avoid the risk of a complaint based on a hasty decision.

According to Commission Position 25 on Recording Contracts, should a listing broker decide her Seller client is attempting to cheat her out of a commission, the broker can: File a mechanics lien to ensure the brokers'' claim for the commission is honored Record the listing contract so that it would appear in any Title Commitment for the property File a lis pendens to warn any potential buyer that a legal action is pending Commence mediation, arbitration or a civil action

Commence mediation, arbitration or a civil action P-25 Commission Position on Recording Contracts Over the years the Commission has received many inquiries and complaints concerning the recording of listing contracts to protect claims for commissions. In addition, some licensees have attempted more "creative" ways of holding up a closing, such as filing mechanics liens or notices of lis pendens, as well as recording demand letters or purchase contracts. The end result is usually a cloud on the title and sometimes a slander of title action. Some states have passed statutes authorizing the filing of such liens. Colorado has not. Filings and recordings such as these are inappropriate and will result in Commission action. Here is a typical scenario: Broker lists a property at $125,000 for 120 days and actively markets it. No offers come in during the first 30 days. Broker advises her seller to lower the price by $5,000 to encourage some activity. The seller is adamant that the property is worth the list price and refuses. After another 15 days with no offers, the seller reluctantly lowers the price. He also tells the broker that he doesn't feel she is trying hard enough to sell the property and he's going to take it off the market if nothing happens. A week later an offer for $100,000 comes in from another company, which is presented and rejected. The seller is quite upset at the low offer and demands to be released from the listing. There is no further communication between the parties, but the listing is never formally terminated. Three weeks later the broker learns that the seller has entered into a contract with the same buyer for $110,000 and closing is set. The broker is very upset and wants to protect her commission. What can she do? 1. File a mechanics lien? ANS: No. Real estate licensees are not a protected class of lien claimant under the statute except as provided in C.R.S. 38-22.5 (Commercial Real Estate Brokers Commission Security Act). 2. File a lis pendens (notice of pending lawsuit)? ANS: No. A lis pendens relates to a title or ownership dispute involving the land itself. The broker has no legal interest in the real estate. 3. Record the listing contract? ANS: No. This will usually have the effect of clouding title to the property, which in turn affects the closing between buyer and seller. The broker should not interfere in the process of transferring title to property. 4. Escrow the disputed commission? ANS: Maybe. This is a touchy area. If the broker makes demand on the seller for the commission prior to closing and states her possible rights (mediation; arbitration; civil action) the parties may agree to an escrow pending settlement of the dispute. However, there is no legal requirement that the closing entity escrow funds absent an agreement. 5. Commence mediation, arbitration or civil action (as appropriate). ANS: Yes. Nothing prevents a licensee from asserting any legal claim against a principal. A commission dispute is an emotional issue. Sometimes a licensee has put in considerable time on a listing only to be faced with a seller who refuses to pay, attempts to renegotiate or is outright deceitful. On the other side, the Commission has witnessed instances in which the licensee had no legitimate right to a commission and was using superior knowledge and scare tactics to force payment. Clearly this is a time to consult a good real estate attorney and avoid the risk of a complaint based on a hasty decision.

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. This is an actual question from the licensing exam. Rule F is the rule under which all approved contracts and the rules governing their use fall. To answer this question requires a knowledge of the contracts that are approved and those which are not. They are listed in the Printout section of our website. The non-approved contract in this list is the "contract to purchase newly constructed homes with warranties". New home builders are exempt from the rules established under the Conway-Bogues court decision. As such they are not required to use approved contracts and generally choose to use purchase contracts they create. Some students may wish to point out that some small new builders may choose to use the the approved purchase contract and add warranty info. This is true. However, please read the first sentence of this explanation again. We want you to be prepared to answer this question should you see it on the State exam.

How many days after notice of discrimination does someone have to file a complaint under Colorado Fair Housing Laws with the Colorado Civil Rights Commission? 1) 30 days 2) 60 days 3) 6 months 4) 1 year

Correct is 1 year. From the Colorado Civil Rights Commission: Filing a Timely Charge of Discrimination There is a legal requirement that a charge must be filed within a specific period of time (statute of limitations) from the date of notice of the last discriminatory act. After the statute of limitations has passed the Colorado Civil Rights Commission does not have jurisdiction. In Employment cases the statute of limitations is six months; in Housing cases the statute of limitations is one year. Employment filing deadline: six (6) months Housing filing deadline: one (1) year

Broker Bill Butter is working with Buyer Brian Bread and has found a property on which the Buyer wants to place an offer. The property that he likes is owned by Seller Sammy Samuel and listed by Broker Cherry Cleary. The property is located at 2443 E Westgate Ave in Durango, CO. The asking price is $315,000. Buyer Bread offers $299,000 on April 10th and wants all appliances including the washer and dryer included in the sale price, the appliances were excluded in the listing as was the Hot Tub on the patio. The offer is countered by Seller Samuel on the recommendation of his agent Broker Cherry Cleary on April 11th at $309,000 and will include all appliances except the washer and dryer. Buyer Bread accepts this counter offer on April 12th and the closing is scheduled for May 25. An inspection is held on April 16th and Buyer Bread wants some roof shingles repaired and the carpet in the master bedroom to be replaced. Seller Samuel agrees to the shingles being repaired, but will only give a $750 credit at closing to the Buyer Bread to replace the carpet; Buyer Bread accepts. Prior to closing, Buyer Bread requests that the seller allow them to start a kitchen remodel prior to closing. Seller Samuel will not allow this and Buyer Bread gets angry and wants out of the contract. When Seller Samuel responded to the initial offer from Buyer Bread which of the following forms should have been used?

Counterproposal

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

Credit to the broker This answer pertains to the bottom of the settlement sheet when the columns are reconciled. Once you have applied all credit and debits, you total up all columns to the bottom. Obviously they are not going to be the same. Looking at the Seller's debit and credit columns. After you add them up. If the Seller's debit column is less than the Seller's Credit column, it means the Seller is getting money back - s/he owes less than s/he is getting. To determine how much, you add whatever you need to the Debit column to make it equal to the Credit column. If for example, the debit column totals $60,000 and the Credit column totals $100,000; you would add $40,000 to the Debit column making both columns equal to $100.000. Unfortunately, you are not done yet. You have added $40,000 to the Seller's Debit column. For every Debit there must be a Credit. Where does this corresponding Credit go? To the Broker Credit column. Remember, the Broker columns represent the Escrow account. The Debit column represents money being deposited into the account (expl - money from lender). The Credit column represent checks (or wire transfers) that need to be written from the account. In this case; the $40,000 Broker credit is a check that needs to be written to the Seller. This is how the Closing Agents knows that s/he needs to write a check. Therefore the amount due to the Seller appears as a Credit Broker.

Title insurance endorsements appear on a closing statement as a: Credit to the seller Debit to the seller Debit to the broker Credit to the broker

Credit to the broker The Title Company or broker, whoever is doing the closing, collects money for title insurance endorsements most typically from the buyer (Debit Buyer) and then places the coresponding amount into the Credit Broker column to ensure a check gets written to the title company for providing the endorsement. Endorsements are generally requirements by the lender for additional converage to be added to the title insurance policy. More info: This answer to this question refers to the 6 column worksheet which pre-personal computer days was used to calculate the numbers for a closing. The broker engages the title company to act as scrivener and conduct the closing which includes deposits and withdraws into and out of the closing escrow account. Although the escrow account used for closings is managed by the title company closer, legally the listing broker is still responsible for it. Therefore, on the 6 column settlement worksheet the columns pertaining to the closing escrow account are labeled "Broker Credit" and "Broker Debit." Deposits into the closing escrow account are placed into the Broker Debit Column and withdrawals are listed in the Broker Credit column. Wait a minute! How can a deposit be a debit? Unfortunately that is how it works. The 6 column settlement worksheet twists slightly the traditional rules of accounting so that the person responsible for the closing escrow account knows what checks to write and deposits to make. S/he does this by dedicating the "Broker Debit" column to deposits and the "Broker Credit" column to withdrawals. This way, for example, if the seller owes the County Treasurer for back taxes, the closer can take the money from the Seller by indicating Debit Seller and have a reminder to write a check to the County Treasurer by placing the corresponding credit into the Broker Credit column. When all is said and done accounting gods are happy as all debits and credits are in balance.

The documentary fee appears on a closing statement as a: Credit to the broker Credit to the seller Credit to the buyer Debit to the broker

Credit to the broker The documentary fee is collected from the buyer by the Title Company (broker) and is sent to the county assessor to assist in determining the true value of the property. Debit Buyer Credit Broker "On all documents granting or conveying title to real property (CRS. 39-13-102) $0.01 per $100 consideration if consideration is greater than $500" This answer to this question refers to the 6 column worksheet which pre-personal computer days was used to calculate the numbers for a closing. The broker engages the title company to act as scrivener and conduct the closing which includes deposits and withdraws into and out of the closing escrow account. Although the escrow account used for closings is managed by the title company closer, legally the listing broker is still responsible for it. Therefore, on the 6 column settlement worksheet the columns pertaining to the closing escrow account are labeled "Broker Credit" and "Broker Debit." Deposits into the closing escrow account are placed into the Broker Debit Column and withdrawals are listed in the Broker Credit column. Wait a minute! How can a deposit be a debit? Unfortunately that is how it works. The 6 column settlement worksheet twists slightly the traditional rules of accounting so that the person responsible for the closing escrow account knows what checks to write and deposits to make. S/he does this by dedicating the "Broker Debit" column to deposits and the "Broker Credit" column to withdrawals. This way, for example, if the seller owes the County Treasurer for back taxes, the closer can take the money from the Seller by indicating Debit Seller and have a reminder to write a check to the County Treasurer by placing the corresponding credit into the Broker Credit column. When all is said and done accounting gods are happy as all debits and credits are in balance.

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!

The sales price of a property appears 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 seller The seller gets a credit for the purchase price of the property.

Which institution is not acceptable for use as an escrow account? Savings and loan Credit union FDIC insured bank FSLIC savings and loan

Credit union Brokers must deposit money belonging to others into a properly identified Colorado escrow account.

In a real estate agency relationship, the third party who is entitled to honesty and fair dealing is the:

Customer The customer is the third party in the transaction.

The Exclusive-Right-to-Buy Listing Contract calls for "reasonable efforts to locate property." Which of the following would most likely demonstrate such efforts? showing the buyer properties that meet the general description of the property as defined in the contract running a "Property Wanted" ad in local newspapers providing the buyer with descriptions of several properties recently listed with the brokerage providing the buyer with addresses of internet sites that list local properties

showing the buyer properties that meet the general description of the property as defined in the contract Reasonable efforts are demonstrated when the broker seeks to match properties to the buyer's needs and shows them, or attempts to show them, to the buyer

he Exclusive-Right-to-Buy Listing Contract calls for "reasonable efforts to locate property." Which of the following would most likely demonstrate such efforts? showing the buyer properties that meet the general description of the property as defined in the contract running a "Property Wanted" ad in local newspapers providing the buyer with descriptions of several properties recently listed with the brokerage providing the buyer with addresses of internet sites that list local properties

A minority couple come to an agent looking for a house. The agent knows of properties for which the couple qualify but avoids showing or mentioning these listings. Instead, the agent takes them to only properties in low-priced and integrated neighborhoods. This practice is known as: conciliation redlining steering blockbusting

steering Steering is a practice in which agents guide prospective home buyers towards or away from certain neighborhoods based on their race. Steering is often divided into two broad classes of conduct; Advising customers to purchase homes in particular neighborhoods on the basis of race Failing, on the basis of race, to show, or to inform buyers of homes that meet their specifications

If a group of people form a cooperative housing corporation, they will each buy: stock certificates furniture for the common areas items to maintain the common areas one portion of the area

stock certificates Such corporation shall provide each stockholder in said corporation with the right to occupy for dwelling purposes, a house or an apartment in a building owned or leased by said corporation.

When the license of an employing broker is suspended or revoked, his/hers licensees must:

stop listing and selling

A tenant's lease does not terminate for five more years. The premises, however, have become too small to accommodate the tenant's growing business. Another business owner is interested in leasing the premises from the tenant for three years. Which of the following would the parties use for the tenant to lease the space to the business owner?

sublease

Tom Tenant has signed a one-year lease with Larry Landlord. Two months into the lease, Tom gets a great job offer in another city and has to vacate his property. If Tom, with Larry's permission, leases the property to Terry, so that Terry pays rent to Tom, this would be known as a(n):

sublease

Tim has 13 months left on his lease when he receives notice of a job transfer. He transfers possession of his apartment to Brenda for the remaining term of the lease. Brenda pays the rent directly to Tim. Tim is known as a(n): lessor sublessee sublessor assignee

sublessor If a lease is transferred from one party to another and the second party pays the first party the rent money the first and original party is considered the sub lessor.

submit the offer without disclosing the purchaser's position

A broker, acting as a transaction broker, lists a property for $248,500. He finds a prospect who is willing to sign an offer at $247,000, but will pay $248,500 if the owner declines the offer. The broker should: buy the property himself at $248,500 submit the $247,000, but disclose that the buyer may pay more submit the offer without disclosing the purchaser's position refuse to submit the $247,000

submit the offer without disclosing the purchaser's position

An existing mortgage loan can have its lien priority lowered through the use of a(n)

subordination clause.

Assume that Mr.and Mrs. Davis did not sign the lease agreement, but upon taking possession of the apartment on August 1 were handed a signed copy by landlord Smith. On August 20, Mr. and Mrs. Davis move out claiming that since they had not signed the agreement, it was a mere tenancy at will. Smith could: sue Davis immediately for the unpaid portion of the lease sue Davis immediately for the unpaid portion of the lease lease the apartment and upon expiration of the lease, sue Davis for the difference between what he received and what Davis should have paid keep only the security deposit

sue Davis immediately for the unpaid portion of the lease By taking possession, Mr. and Mrs. Davis impliedly accepted the agreement and would be liable for the unpaid portion. Only the lessor needs to sign the lease. More info on Leasehold Tenancies: Leasehold Tenancy also known as Nonfreehold Estates A nonfreehold estate is an interest in real property that is less than a freehold estate. Nonfreehold estates are not inheritable and are said to exist without seisin. Seisin denotes ownership: an individual who is "seised" of an estate is the owner of the estate. Also known as a leasehold estate, a nonfreehold estate is created through a lease or rental agreement that can be either written or oral. The holder of a nonfreehold estate (the tenant or lessee) holds no ownership interest in the real property, and only has the right to use the property as established in the terms of the lease or rental agreement. Ownership remains with the landlord (lessor). (To learn more, see Becoming A Landlord: More Trouble Than It's Worth?) Types of Nonfreehold Estates Because nonfreehold estates involve tenants, they are often referred to as "tenancies." There are four types of tenancies: Tenancy for Years This is, also called an estate for years or tenancy for a definite term, is an estate that is created by a lease. A lease is a contractual agreement where a tenant takes a leasehold interest in a real property for a specified duration. The defining characteristic of a tenancy for years is that the term must have a definite beginning and end; that is, a beginning date and either a specific time period (such as one year or one month) and an end date must be declared. As long as a lease is for a definite term, it is identified as a tenancy for years. These leases terminate automatically at the specified end date without the need for notice by either party. Tenancy from Period to Period A tenancy from period to period is an estate that exists when the tenancy is for a definite initial time, but is automatically renewable unless terminated by the lessor or lessee with prior notice that the tenancy is to be ended. These estates, which are also called periodic tenancies, are of indefinite duration since they can be renewed indefinitely. A tenancy from period to period may be from year to year, month to month, week to week or even day to day, and renews for a like period of time. For example, a month to month periodic tenancy is renewable in one-month periods until it is terminated at the end of a month through proper notice by either party. (See also, 11 Mistakes Inexperienced Landlords Make.) Tenancy at Will A tenancy at will, or an estate at will, exists at the pleasure of both the lessor and the lessee. This type of tenancy can be terminated at any time "at the will" of either the owner or the tenant. A tenancy at will lease agreement might contain language that expresses that the lease may be terminated instantly when notice is given. In practice, a tenant is generally entitled to a reasonable amount of time in which to vacate the property. Landlords may prefer a tenancy at will when a property is for sale and any tenants would have to vacate quickly. Tenants may favor a tenancy at will if they plan on renting only for a short period of time; for example, prior to moving or while waiting to move into a new home. Tenancy at Sufferance A tenancy at sufferance is the lowest form of estate known to law. Also called an estate at sufferance, it exists indirectly as the result of circumstance, and is never deliberately created. This type of tenancy arises when a person goes into possession of land in a lawful manner, but remains on the property without any right to do so, and without the owner's consent. The only difference between a tenant at sufferance and a trespasser is that the tenant at sufferance had at one time a right to be on the property, but has stayed beyond the terms of the previous agreement. For example, a tenant who remains after a one-year lease has terminated, without consent or recognition from the owner, becomes a tenant at sufferance. The tenant can be evicted at any time without notice.

Every employing broker must provide:

supervision

Every employing broker must provide: medical insurance a 401K plan supervision personal assistants

supervision Every employing broker must provide supervision. It is the law!

Regarding a dispute over Earnest Money - if no lawsuit is filed, the broker may: surrender the money to the state Real Estate Commission surrender the money to the court in an interpleader action surrender the money to the party with the best lawyer surrender the money to the court by way of "Notice of Appearance".

surrender the money to the court in an interpleader action An option for the broker is to interplead all parties and deposit the earnest money into a court of competent jurisdiction.

To become an employing 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

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

tell the agent 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.

According to statue, "good funds" include a

tellers check from a savings and loan

According to statue, "good funds," include a

tellers check from savings and loan

Tenancy at sufferance

tenancy at sufferance arises when a tenant remains in wrongful possession after a lease has ended. In this situation, the tenant is called a "holdover tenant." The landlord may treat the tenant as a trespasser and initiate eviction, or may elect to accept the tenant for a similar term and conditions as in the previous lease. The choice is the landlord's; the tenant has none. If a tenant holds over due to reasons beyond his or her control, such as illness, the tenant may be held liable only for the reasonable rental of the holdover period.

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 A tenancy whereby neither the lessor or the lessee specify a definite starting date or ending date is know as a tenancy at will. More info on Leasehold Tenancies: Leasehold Tenancy also known as Nonfreehold Estates A nonfreehold estate is an interest in real property that is less than a freehold estate. Nonfreehold estates are not inheritable and are said to exist without seisin. Seisin denotes ownership: an individual who is "seised" of an estate is the owner of the estate. Also known as a leasehold estate, a nonfreehold estate is created through a lease or rental agreement that can be either written or oral. The holder of a nonfreehold estate (the tenant or lessee) holds no ownership interest in the real property, and only has the right to use the property as established in the terms of the lease or rental agreement. Ownership remains with the landlord (lessor). (To learn more, see Becoming A Landlord: More Trouble Than It's Worth?) Types of Nonfreehold Estates Because nonfreehold estates involve tenants, they are often referred to as "tenancies." There are four types of tenancies: Tenancy for Years This is, also called an estate for years or tenancy for a definite term, is an estate that is created by a lease. A lease is a contractual agreement where a tenant takes a leasehold interest in a real property for a specified duration. The defining characteristic of a tenancy for years is that the term must have a definite beginning and end; that is, a beginning date and either a specific time period (such as one year or one month) and an end date must be declared. As long as a lease is for a definite term, it is identified as a tenancy for years. These leases terminate automatically at the specified end date without the need for notice by either party. Tenancy from Period to Period A tenancy from period to period is an estate that exists when the tenancy is for a definite initial time, but is automatically renewable unless terminated by the lessor or lessee with prior notice that the tenancy is to be ended. These estates, which are also called periodic tenancies, are of indefinite duration since they can be renewed indefinitely. A tenancy from period to period may be from year to year, month to month, week to week or even day to day, and renews for a like period of time. For example, a month to month periodic tenancy is renewable in one-month periods until it is terminated at the end of a month through proper notice by either party. (See also, 11 Mistakes Inexperienced Landlords Make.) Tenancy at Will A tenancy at will, or an estate at will, exists at the pleasure of both the lessor and the lessee. This type of tenancy can be terminated at any time "at the will" of either the owner or the tenant. A tenancy at will lease agreement might contain language that expresses that the lease may be terminated instantly when notice is given. In practice, a tenant is generally entitled to a reasonable amount of time in which to vacate the property. Landlords may prefer a tenancy at will when a property is for sale and any tenants would have to vacate quickly. Tenants may favor a tenancy at will if they plan on renting only for a short period of time; for example, prior to moving or while waiting to move into a new home. Tenancy at Sufferance A tenancy at sufferance is the lowest form of estate known to law. Also called an estate at sufferance, it exists indirectly as the result of circumstance, and is never deliberately created. This type of tenancy arises when a person goes into possession of land in a lawful manner, but remains on the property without any right to do so, and without the owner's consent. The only difference between a tenant at sufferance and a trespasser is that the tenant at sufferance had at one time a right to be on the property, but has stayed beyond the terms of the previous agreement. For example, a tenant who remains after a one-year lease has terminated, without consent or recognition from the owner, becomes a tenant at sufferance. The tenant can be evicted at any time without notice.

When tenants hold possession of a landlord's property without a definite lease term or arrangement, but with the landlord's approval, this is called: tenancy in common joint tenancy tenancy at will trespass

tenancy at will Tenancy at will can be terminated at any time by notice from either party.

The joint ownership that is recognized in some states but not Colorado, of property acquired by husband and wife during marriage, is known as:

tenancy by the entirety

If any of the title documents are not delivered to the buyer on or before the date specified in the contract. The contract can be: terminated voided no effect canceled

terminated If the sellers or sellers representatives miss this date then the buyer may terminate the contract and recieve his/hers earnest money back.

A broker may operate from:

the address on the broker's license

A broker may operate from: his or her office any office the address on the broker's license his or her car

the address on the broker's license

By signing an exclusive buyer-agency contract:

the broker is not automatically entitled to a commission

If the transaction does not close: the broker has the right to unilaterally declare a forfeiture of the earnest money the broker may only declare a forfeiture of earnest money upon (written) instruction of the seller the title company may declare a forfeiture of earnest money the lender may declare a forfeiture of earnest money

the broker may only declare a forfeiture of earnest money upon (written) instruction of the seller

the broker may only declare a forfeiture of earnest money upon (written) instruction of the seller The forfeiture of earnest money must be returned if there is no disagreement

When an employing broker changes the primary business address, all of the licenses of employed licensees must be sent to the commission for reissue at the correct address. this change will be noted at the next license renewal cycle. each employed licensee must notify the commission of the change. the broker must notify the commission in a manner acceptable to the commission, or the brokerage license will become inactive.

the broker must notify the commission in a manner acceptable to the commission, or the brokerage license will become inactive. The broker must notify the commission in a manner acceptable to the commission, or the brokerage license will become inactive. Any licensee who does not notify the Commission of an address change will have their license inactivated. When the licensee is also the mama or poppa bear of the office (the employing broker) the penalty goes up. Since an employing broker with an inactive license cannot have licensees reporting to him/her AND a licensee who is not independent cannot have an active licensee without reporting to an employing broker - the effect is catastrophic. Everybody's license in the office is inactive. Here are the applicable statues: From chapter in real estate manual on License Law § 12-61-109, C.R.S. Change of license status - inactive - cancellation. (1) Immediate notice shall be given in a manner acceptable to the commission by each licensee of any change of business location or employment. A change of business address or employment without notification to the commission shall automatically inactivate the licensee's license. § 12-61-110, C.R.S (5) The suspension, expiration, or revocation of a real estate broker's license shall automatically inactivate every real estate broker's license where the holder of such license is shown in the commission records to be in the employ of the broker whose license has expired or has been suspended or revoked pending notification to the commission by the employed licensee of a change of employment.

An ad in the newspaper must appear under the name of:

the broker of record - All advertising must contain the name of the employing broker

If the buyer assigns her right to purchase a property pursuant to an exclusive right-to-buy contract to her brother-in-law:

the broker shall still have the right to collect a commission

The commission rule, that requires an employing broker to supervise associate brokers, stipulates:

the broker should exercise reasonable supervision over activities of licensed employees

The commission rule, that requires an employing broker to supervise associate brokers, stipulates: the broker meets with his associate brokers once a week the broker does not need to maintain a written office policy the broker must review at least 10% of all contracts and ensure that required documents exist the broker should exercise reasonable supervision over activities of licensed employees

the broker should exercise reasonable supervision over activities of licensed employees The broker should exercise reasonable supervision over activities of the licensee, maintain a written office policy and review all contracts and to ensure required documents exist.

If a licensee places a blind ad in the paper, he has not disclosed: the broker's address the broker's name the sale price of the property the address of the property

the broker's name A blind ad may lead the reader to believe the property is offered by owner rather than by broker. Therefore it must always include the name of the broker.

If an employing broker leaves a real estate brokerage, what happens to the transaction records?

the brokerage retains the records as the company is responsibile for maintenance

If an employing broker leaves a real estate brokerage, what happens to the transaction records? the brokerage retains the records as the company is responsibile for maintenance of records the departing broker is personally responsible for delivering all such records to to his/her new brokerage all funds in escrow must be returned to the rightful parties before being re-deposited with the new brokerage. the real estate brokerage can dispose of all records acquired while the former employing broker worked for the company

the brokerage retains the records as the company is responsibile for maintenance of records Employing brokers are often salaried employees, they are not always the owner of a brokerage. Just like any company, if an employee leaves a brokerage s/he does not get to take records. The brokerage has legal repsonsibility for all transaction records and must keep them for at least 4 years. The only time an employing broker would be responsible for record retention would be if the company is shutting down.

The Statement of Settlement prepared for the closing must be signed by

the brokers associated with the transaction, the buyer, and the seller.

The purchase contract called for a homeowner's warranty. There are no charges reflecting the homeowner's warranty on the settlement statement, and buyer and selling agent have not said anything about it. the brokers involved in the transaction are responsible to verify that it is being provided at the time of closing the listing broker should not mention it, as it will save the seller money it is the title company's responsibility it is the lender's responsibility

the brokers involved in the transaction are responsible to verify that it is being provided at the time of closing The broker's are to verify the terms of the contract with the closing documents.

If a seller prepares a counterproposal, to an offer to buy and it is turned down by the buyer: the seller can still accept and hold the buyer to the original offer, if it has not terminated the buyer must resubmit their original offer one more time the original offer made is valid the buyer can prepare a counter to the counteroffer

the buyer can prepare a counter to the counteroffer The buyer may prepare a new offer or you may counter a counteroffer. When the buyer has turned down the counteroffer he is allowed to write a new counteroffer, and submit it to the seller attached on top of the original offer and first counter. Countering a counteroffer is legal but generally considered to be bad form. Good form is to prepare a new offer.

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 A seller does not have the option of liquidated damages. The buyer is allowed to sue for specific performance or for damages, or both.

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 The contract specifies that earnest money must be returned to the buyer under any one of multiple conditions. Most common are: if a buyer doesn't receive loan approval on agreeable terms by the date specified in contract, or the buyer and seller cannot resolve the inspection objection list, or if the appraisal is less than the selling price, or the title is not satisfactory, or the satisfactory property insurance cannot be attained, or the HOA covenents (if any) are not satisfactory. Any one of these would allow a buyer to back out of a contract if done within the established time frames. More on the process of returning Earnest Money: The Colorado Contract to Buy and Sell Real Estate (AKA Purchase Contract) says the agent holding earnest money has 5 days to return earnest money to whomever is supposed to get it after receipt of written instructions to do do. This is covered in the Broker Acknowledgements sections of the purchase contact. The actual language reads like this - "Broker agrees that if Brokerage Firm is the Earnest Money Holder and, except as provided in § .., if the Earnest Money has not already been returned following receipt of a Notice to Terminate or other written notice of termination, Earnest Money Holder will release the Earnest Money as directed by the written mutual instructions. Such release of Earnest Money will be made within five days of Earnest Money Holder's receipt of the executed written mutual instructions, provided the Earnest Money check has cleared." BUT!!!!!! to make it even more fun for you, the Real Estate has issued Commission Position 6, whereby they say that if there is no controversy over who gets the earnest money, they want the money returned as quickly as possible and the agent does NOT have to get writen permission from all parties to do so. Most companies as a prudent measure have both parties sign that they agree who gets the earnest money, before they release it. This just makes sense, woe to the agent who releases the earnest money and one of the parties throws a fit over it. Safer to get the parties to agree in writing first. However, sometimes the party that is giving up the earnest money and their agent makes this a pretty low priority on their things-to-do-list. Keep in mind, they are grumpy the deal is dead and even if they know they need to release the earnest money, they are not happy about it. In the meantime, the other party wants their money. Buyers in particular are anxious as they are back on the market looking for a property and can't make an offer until they get their earnest money returned. Therefore, the Commission has made is very clear, that they do not want slow paperwork to hold things up when there is no controversy. Does this occasionally put us in an awkward position? Yup. Smart agents who do not like to even get within sniffing distance of having to write out a personal check to cover a perceived, if not actual screw up (that be me, except my wife would probably dispute the "smart" assertion) will move heaven and earth to get quickly signed releases by both parties before releasing earnest money. If you find that one of your parties due to the stress of the failed deal ran instantly to consult with the yogi on the mountaintop and are not returning messages. You need to have a talk with your managing broker before doing something you may regret. It is always cooler to share the love and say "my managing broker said to do it and will make it good" then "how do I spell your name on my check".

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 review by legal counsel

According to the rules and regulations of the Colorado Real Estate Commission, a broker is REQUIRED to recommend that: the buyer have title review 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 review by legal counsel All are great ideas and good ideas, but of those listed, only the recommendation of title examination by legal counsel is required by Real Estate Commission rules. This occurs at the end of the Title Advisory section of the Contract to Buy and Sell Real Estate wherein the contract advises the use of Legal Counsel to review title. The others appear in the purchase contract, but do not get an actual recommendation. See Below: "Title Advisory. The Title Documents affect the title, ownership and use of the Property and should be reviewed carefully. Additionally, other matters not reflected in the Title Documents may affect the title, ownership and use of the Property, including, without limitation, boundary lines and encroachments, area, zoning, unrecorded easements and claims of easements, leases and other unrecorded agreements, and various laws and governmental regulations concerning land use, development and environmental matters. The surface estate may be owned separately from the underlying mineral estate, and transfer of the surface estate does not necessarily include transfer of the mineral rights or water rights. Third parties may hold interests in oil, gas, other minerals, geothermal energy or water on or under the Property, which interests may give them rights to enter and use the Property. Such matters may be excluded from or not covered by the title insurance policy. Buyer is advised to timely consult legal counsel with respect to all such matters as there are strict time limits provided in this Contract"

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

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 All are great ideas and good ideas, but of those listed, only the recommendation of title examination by legal counsel is required by Real Estate Commission rules. This occurs at the end of the Title Advisory section of the Contract to Buy and Sell Real Estate wherein the contract advises the use of Legal Counsel to review title. The others appear in the purchase contract, but do not get an actual recommendation. See Below: "Title Advisory. The Title Documents affect the title, ownership and use of the Property and should be reviewed carefully. Additionally, other matters not reflected in the Title Documents may affect the title, ownership and use of the Property, including, without limitation, boundary lines and encroachments, area, zoning, unrecorded easements and claims of easements, leases and other unrecorded agreements, and various laws and governmental regulations concerning land use, development and environmental matters. The surface estate may be owned separately from the underlying mineral estate, and transfer of the surface estate does not necessarily include transfer of the mineral rights or water rights. Third parties may hold interests in oil, gas, other minerals, geothermal energy or water on or under the Property, which interests may give them rights to enter and use the Property. Such matters may be excluded from or not covered by the title insurance policy. Buyer is advised to timely consult legal counsel with respect to all such matters as there are strict time limits provided in this Contract"

A buyer enters into an exclusive right-to-buy contract and subsequently submits an offer on a property that is accepted; if the transaction fails, through no fault of the purchaser:

the buyer is under no obligation to pay his broker a commission

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.

If the purchase price exceeds the property's appraisal: the buyer shall have the sole option and election to terminate the contract the buyer can receive damages the buyer can sue for specific performance the seller can terminate the contract

the buyer shall have the sole option and election to terminate the contract If the appraised valuation exceeds the purchase price, there is no provision allowing the seller to increase the price.

During the processing of the loan, it is: a good idea for the seller to follow up on the progress The listing agent must follow 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

"MEC" in the Contract to Buy/Sell Real Estate means:

the date upon which both parties have signed the contract.

MEC" in the Contract to Buy/Sell Real Estate means:

the date upon which both parties have signed the 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. Applicability of Terms. Any box checked in this Contract means the corresponding provision applies. Any box, blank or line in this Contract left blank or completed with the abbreviation "N/A", or the word "Deleted" means such provision, including any deadline, is not applicable and the corresponding provision of this Contract to which reference is made is deleted. The abbreviation "MEC" (mutual execution of this Contract) means the date upon which both parties have signed this Contract.

The difference between condominium and townhome is: in the floor plan in the bylaws whether garages are attached the legal description

the legal description First of all you need to know the difference between a physical description of a townhome vs a condo and their legal description. They are not the same. A townhome is a multifamily home with no one above or below, whereas a condo can share walls, floors and ceiling with other units. That is a physical description. Whereas a legal description does not pay attention to what they look like but instead describes where they are. The legal description for a condo is simple as it specifies the unit and building. Townhomes have an address just like a single family home so their legal description contains a lot (usually the street number) and block. Now.....here is the part that will blow your mind. When multifamily developments are made, the developer has to have the complex approved by FHA to qualify the homes to be bought using FHA loans. If the developer had both townhomes and condos in the development they have to pay two large application fees to FHA, one for the townhomes and one for the condos. Since developers do not like to pay two fees, they sometimes bypass one of them by classifying all the homes as condos regardless of what they look like. In complexes where this has occurred, you end up with a unit that looks like a townhome but legally because of the legal description is a condo.

As to the preparation of legal documents at closing:

the licensee bears the cost for the preparation of legal documents except those prepared by the Seller''s or Buyer''s attorney

The license laws of Colorado require a licensee to inform the seller that he has a real estate license for all of the following except:

the licensee is buying a time share

A licensee may negotiate the terms upon which to take a future listing when: by first contacting the current listing broker and receiving permission to seek the seller's future business the licensee is contacted by a seller the licensee contacts a seller and the seller agrees to sign a future listing this is not permitted under any circumstance

the licensee is contacted by a seller When a licensee attempts to interfere in the written relationship between another agent and his/her client - this is called "signcrossing" and is prohibited by the Real Estate Commission. This means do not steal another agents business. However, negotiating a listing or buyers agency agreement is permissable if: 1) it is for a future date after the expiration or termination of an existing agreement and 2) the initial contact was initiated by the Seller.

On the Commission-approved purchase and sale agreement involving remedies in the event of a buyer default; if no box is checked what is the default: neither liquidated damages nor specific performance is in effect - a judge will have to decide the liquidated damages clause is automatically in effect the buyer cannot sue for specific performance the seller can sue for specific performance

the liquidated damages clause is automatically in effect On the commission approved purchase and sale agreement form; if the specific performance box is not checked the liquidated damages clause is automatically in effect.

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

the listing agent should 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 submits an offer contingent upon the successful closing of their present home. the selling agent should request a copy of the contract on the contingent property the selling agent should verify the financial ability of the buyer on the contingent property the selling agent should fully disclose all information to the seller the listing agent should fully disclose all information to the seller

the listing agent should fully disclose all information to the seller The listing agent has the responsibility to verify as much information as possible on behalf of their principal.

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

the listing agent should order the title commitment as soon as all the parties accept the contract Dates are very important. Title commitments must be ordered in a timely fashion, in order to meet the required contract dates.

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

When a tenant sublets all or any part of rented property under a written lease: the tenant assigns all legal rights, title, and interest in the rented property to the new lessee the sublessee becomes primarily responsible to the landlord for payment of rent and upkeep of the property the original lease is automatically canceled, and the sublessee takes possession of the rented property on a month-to month basis the original lease is unaffected, unless it contains a provision prohibiting subletting

the original lease is unaffected, unless it contains a provision prohibiting subletting The original tenant in a sublease situation still has the primary responsibility for the lease, unless subletting is prohibited in the lease.

An owner refuses an offer, even though it is exactly in accordance with a valid exclusive-right-to-sell listing. 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. The owner does not have to sell. (note: the owner may owe a commission to the broker)

the owner must obtain a well permit from the state engineer Small wells on domestic property must have a permit from the state engineer even though they are exempt from a requirement to purchase water rights.

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.

No common interest community, except cooperatives, can be created until: the people vote on an association the land is cleared of debris the plat map for the common interest community is recorded

the plat map for the common interest community is recorded

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.

A bilateral contract is one in which: only one of the parties is bound to act the promise of one party is given in exchange for the promise of the other party a restriction is placed, by one party, to limit the actuarial performance by the other party something is to be done by one party only

the promise of one party is given in exchange for the promise of the other party A bilateral agreement requires each of the parties to do something for the other.

The Certificate of Taxes Due is used to calculate:

the proration of taxes for the final tax agreement

The Term "property" refers to: a. the rights or interests in the thing owned. b. a freehold estate c. personal property only d. land and buildings only

the rights or interests in the thing owned Property refers to the bundle of rights or interests a person has in the thing owned

Fred Thompson rents an apartment under a two-year written lease. He has occupied the apartment for one full year, and now the landlord is selling the apartment building to a new owner. So far as Thompson's lease is concerned: the sale has no effect on Thompson's tenancy it is automatically terminated, and he must renegotiate with the new owner the new landlord will decide whether or not to renew Thompson's lease for a full lease period it is terminated after 60 days' notice by the new owner

the sale has no effect on Thompson's tenancy A sale of real property is subject to any leases or tenancies that exist on that property.

The fee to notarize a Warranty Deed is charged on the settlement statement to:

the seller

Under an installment land contract, title to the land is held by: the broker the seller the buyer in escrow

the seller The seller (vendor) retains legal title until the debt is paid in full; the buyer (vendee) has equitable title. More info on Installment Land Contracts: Installment Land Contracts AKA "Land Contracts" is a purchase agreement in which the owner retains legal title to a property while the buyer, usually a tenant, makes payments. ONCE THE BUYERS COMPLETES THESE PAYMENTS, THE SELLER DEEDS THE PROPERTY TO THE BUYER. Two big points here: 1) Since the buyer does not take legal ownership until they complete payments, this means the buyer, who usually has possession of the property, has no legal rights to the property beyond that of a renter. THEY DO NOT OWN IT - THE SELLER DOES. 2) Because of the number of creeps who have used installment land contracts to defraud unknowing buyers, the real estate commission does not have an approved form for us as agents to use. These contracts are not illegal, if you have clients who want to enter into such an agreement, they (notice the "they" here - I for one would not touch a land contract transaction for all the tea in China) need to bring in an attorney to draw up the necessary paperwork. The real estate commission feels so strongly about this, they issued a position statement on it. Here it is: CP-39 Commission Position on Lease Options, Lease Purchase Agreements and Installment Land Contracts (4-5-2011) The Commission recognizes that in order to maintain the resilience of the real estate market during times when conventional lending requirements are rigorous, alternative funding practices are utilized to sustain the market conditions of supply and demand. The Commission has received and investigated numerous complaints pertaining to lease options, lease purchase agreements and installment land contracts. Although the Commission does not have the authority to prohibit the types of real estate transactions that real estate brokers participate in, the Commission strongly cautions real estate brokers to utilize the services of an attorney licensed to practice law within the State of Colorado. It has been the Commission's observation, based on complaints received, that lease option and lease purchase transactions are complex and generally contain provisions with significant financial risk posed to the prospective buyer and seller. Installment land contracts and the other transactions mentioned in this position statement afford buyers the opportunity to take possession of the real property and make installment payments to the seller. There is a significant potential for harm to the seller, buyer or assignee if the installment land contract is not properly drafted. In all of the above transactions, the seller retains legal title to the property while the buyer may acquire equitable title. The Commission does not have an approved contract form necessary to memorialize the terms and nuances related to these complex transactions, or any jurisdictional regulations that may be germane. Pursuant to Rule F, the appropriate provisions of the license law and the brokerage relationship act (§§12-61-113, 12-61-804, 805 and 807, C.R.S.), real estate brokers are prohibited from drafting a contract document that would reflect the terms of such a transaction as it would exceed their level of competency and is a matter requiring the expertise and advice of an attorney. Additionally, such behavior may be construed as the unauthorized practice of law by the real estate broker and subject to civil penalties. The contracts for these transactions should not be prepared by a real estate broker; rather, the documents should be drafted by a licensed Colorado attorney-at-law engaged for each particular transaction.

The co-op offered in the MLS is determined by:

the seller and listing broker

It is illegal for a broker to work with both seller and buyer when:

the seller is not aware of such action, all parties to the transaction are not aware of such action, the agent collects a commission from both buyer and seller without the knowledge and consent of both

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 person is good way to verify that work was done that may not be easily detected by the naked eye.

the selling of campground memberships The key term is "20 or more" to be considered a subdivision; excluding the selling of campground memberships.

The authority to carry out eviction of a delinquent tenant from rented property is held by: a landlord the sheriff any of the above

the sheriff landlord may request an eviction - but only a sheriff has the authority to physically perform one . A fuller explanation of the procedure is; a landlord requests the courts to issue a judgment for an eviction by filing a "unlawful detainer action" in a court. An "unlawful detainer" is a legal way of saying the tenant refuses to give up possession - they are detaining the property from the landlord. If the judge agrees, s/he issues a "writ of execution" which is a court order to a sheriff to physically perform the eviction.

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)

Regarding the Colorado Homestead Exemption, as indicated in the approved deed of trust forms, the buyer agrees that:

the trustor waives the right to the homestead exemption

Regarding the Colorado Homestead Exemption, as indicated in the approved deed of trust forms, the buyer agrees that: the homestead exemption is not addressed in the deed of trust forms that the homestead exemption is not waived the trustor waives the right to the homestead exemption the trustee waives the right to the homestead exemption

the trustor waives the right to the homestead exemption Trustor = Borrower Trustee = Receives and records Deed Beneficiary = Lender The trustor (buyer) waives all rights to the homestead exemption in all Colorado approved deed of trust forms. The buyer is the "Trustor" because the buyer originates the Deed of Trust to provide security for a loan, the Public Trustee is the "Trustee" as he/she receives and holds the Deed of Trust, the lender is the "Beneficiary" because it is their loan that is being protected i.e the benefit. The Colorado Homestead Protection Exception provides a $60,000 (This number changes with time) exemption from any debt, contract or civil obigation entered into after July 1, 1975. This exemption is for the head of family householder. Elderly or disabled individuals recieve a $90,000 exemption. Generally, the exemption is waived as a requirement for getting a loan.

The seller under a land contract is also known as: the vendee leasee the vendor leaser

the vendor A vendor is a seller under a land contract, while a vendee is a buyer. Neither a leaser nor a leasee has anything to do with land contracts

A Colorado real estate Associate Broker may lawfully collect compensation from

their employing broker only

An associate broker may accept compensation from:

their employing broker only.

their unit, so long as it does not impair the structural integrity, electrical systems, or lessen the support of any portion of the common interest community The owner may alter so long as it doesn't impair the structural integrity, electrical systems, or lessen the support of any portion of the common interest community.

Property will revert back to the state when:

there is unclaimed property when someone dies without a will

Which of the following is true concerning commissions earned by a broker in a real estate sales transaction? they are based on a schedule of commission rates set by the real estate commission they may be deducted from the earnest money deposit and claimed by the broker when the sales agreement is executed they are determined by agreement of the broker and the principal they may be shared with an unlicensed person if that person assisted the broker in bringing the buyer and seller together

they are determined by agreement of the broker and the principal Commissions are always negotiable between the principal and the agent

Which of the following is true concerning listings based on a "net price?" they are illegal in Colorado they are more profitable because no minimum is set on the amount of commission they are legal in Colorado as long as the seller agrees, and the broker has the necessary form prepared by an attorney representing one of the parties to the transaction. they are permissible with approval of the real estate commission

they are legal in Colorado as long as the seller agrees, and the broker has the necessary form prepared by an attorney representing one of the parties to the transaction. A traditional Net Listing is one in which the broker receives as commission all proceeds above a set net price. Net listings are legal in Colorado. Because of the potential for conflict of interest between the seller and broker, they can be problematic.

Which of the following is true with regard to water rights?

they are real property rights that may be severed and sold separately from the land Explanation Water rights are real property that may be sold separately and transferred by deed.. They could be transferred on a water rights deed or a general warranty deed. They can be included in the sale of the property if expressly stated in the contract and both parties agree.

Before a purchaser is shown homes built prior to 1978:

they are to be given a copy of the EPA booklet "Protect Your Family From Lead In Your Home"

A broker MUST supervise independent contractors even if: they have at least three years experience they have an independent brokers license, even though a designated broker employs them the broker is out of town

they have at least three years experience, they have an independent brokers license, even though a designated broker employs them, the broker is out of town

When a broker presents the Definitions of Working Relationships form to a purchaser:

this is not considered complete disclosure of agency

When a broker presents the Definitions of Working Relationships form to a purchaser: this is considered adequate disclosure of agency no other agency documents need be executed this is not considered complete disclosure of agency this form is never necessary or required

this is not considered complete disclosure of agency The definitions form is an explanation of types of agency - not a disclosure.

There are two types of time-share estates: These are known as: unit owner and time-share owner interval estates and time span owner time span estate and interval estate time-share owner and common interest community estate

time span estate and interval estate Time span estate means an undivided interest in a present estate in fee simple, in a unit. Interval estate is an estate for years, terminating on a date certain. Title to a time-share unit circulates among the interval owners.

Marketable title

title that is free from reasonable doubt or defect; which can be readily sold or mortgaged to a reasonably prudent person; a title free from material defects.

The title company may be hired by the listing broker:

to act as scrivener for the transaction

The title company may be hired by the listing broker: to prepare legal documents from scratch and may charge the buyer and/or seller for the preparation of legal documents and has ultimate responsibility for the accuracy of legal documents to act as scrivener for the transaction

to act as scrivener for the transaction Although buyers and sellers may be charged a fee for closing, no fee may be charged for preparation of legal documents, except by an attorney representing the buyer or seller. The Conway-Bogue decision granted real estate brokers the right to prepare certain legal documents, but prohibits licensees from charging a separate fee for such service. The companion Title Guaranty case specifically prohibits title companies from preparing legal documents. Today, title companies only fill in blanks on legal documents under explicit instructions from the broker responsible for the closing. The listing broker who is responsible for completing the deed, bill of sale, and any notes and deeds of trust called for in the contract uses the second section of the Closing Instructions form to hire the title company as scrivener to complete the legal forms. The listing broker will be responsible for paying for all legal documents and for their accuracy. However, the listing broker is not responsible for the cost of legal documents prepared by the buyer or seller, or by attorneys hired by the buyer or seller.

The title company may be hired by the listing broker: to prepare legal documents and may charge the buyer and/or seller for the preparation of legal documents to act as scrivener for the transaction and has ultimate responsibility for the accuracy of legal documents

to act as scrivener for the transaction Preparation of Legal Documents Although buyers and sellers may be charged a fee for closing, no fee may be charged for preparation of legal documents, except by an attorney representing the buyer or seller. The Conway-Bogue decision granted real estate brokers the right to prepare certain legal documents, but prohibits licensees from charging a separate fee for such service. The companion Title Guaranty case specifically prohibits title companies from preparing legal documents. Today, title companies only fill in blanks on legal documents under explicit instructions from the broker responsible for the closing. The listing broker who is responsible for completing the deed, bill of sale, and any notes and deeds of trust called for in the contract uses the second section of the Closing Instructions form to hire the title company as scrivener to complete the legal forms. The listing broker will be responsible for paying for legal documents and for their accuracy. However, the listing broker is not responsible for the cost of legal documents prepared by the buyer or seller, or by attorneys hired by the buyer or seller.

The purpose of Commission Rule F is:

to help brokers conform to the Conway-Bogue Realty vs. the Colorado Bar Association decision

Broker Price Opinions (BPO) are created by real estate licensees not appraisers. These "estimates of value" cannot be used:

to obtain financing

Broker Price Opinions (BPO) are created by real estate licensees not appraisers. These "estimates of value" cannot be used: for tax purposes for court testimony to set a listing price to obtain financing

to obtain financing CP-24 Commission Position on Preparation of Market Analyses and Real Estate Evaluations Used for Loan Purposes The Colorado Real Estate Appraiser Licensing Act contains special provisions which allow licensed real estate brokers to perform certain real estate valuation related activities without being registered, licensed or certified as real estate appraisers. These provisions are found in Sections 12-61-702 and 12-61-718, C.R.S. The first of these allows a broker to prepare an "estimate of value" which is not represented as an appraisal and is not used to obtain financing. The position of the Commission is that this provision allows a broker to prepare a market analysis for use in the real estate brokerage process and to offer their estimate as to the value or market price of real estate for court testimony or tax purposes.

What is the purpose of the real estate commission in Colorado? to provide mediation in disputes between brokers and Colorado residents to protect Colorado residents in real estate matters to assure that licensees collect commissions in accordance with the law to provide legal assistance to the public regarding real estate transactions

to protect Colorado residents in real estate matters The function of the real estate commission is to protect the public. This is done chiefly by licensing brokers, enforcing the licensing law through rules, forms, and disciplinary proceedings

The Commission's intent in promulgating Rule E-13 (Sign Crossing Rule) was:

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

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 Only when an owner contacts and initiates the discussion, may the licensee negotiate the terms upon which to take a future listing if the property is currently listed.

What is the purpose of the real estate commission in Colorado? to provide mediation in disputes between brokers and Colorado residents to protect the public to assure that licensees collect commissions in accordance with the law to provide legal assistance to the public regarding real estate transactions

to protect the public The function of the real estate commission is to protect the public. This is done chiefly by licensing brokers, enforcing the licensing law through rules, forms, and disciplinary proceedings. Licencee's are not considered "public" therefore the commission does not get involved in disputes between licensee's in matters such as commission disagreements.

A broker acting as a transaction broker for a buyer, with no written agreement needs: nothing. This is the default representation in Colorado to provide the buyer with a copy of the "Brokerage Disclosure to Buyer" with the broker's signature showing the date it was given to the Buyer. a signed Exclusive agreement in order to show the buyer property. a signed disclosure form from the Buyer.

to provide the buyer with a copy of the "Brokerage Disclosure to Buyer" with the broker's signature showing the date it was given to the Buyer. Even though the broker has no written agreement - the broker is still required to make a written disclosure as to their relationship. Absent a written agreement - the default relationship is transaction broker.

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

At closing, the earnest money is credited as follows: 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.

An licensee who represents both parties in a transaction but is not an advocate of either one, is a: general agent limited agent transaction broker dual agent

transaction broker

An licensee who assists both parties in a transaction but is not an advocate of either one, is a: general agent limited agent transaction broker dual agent

transaction broker A Transaction Broker is a broker who asists one or more parites throughout a contemplated real estate transaction with communication, interposition, advisement, negotiation, contract terms, and the closing without being an agent or advocate for the interests of any party. In sporting terms, a transaction broker is a referee and not a coach.

In Colorado in the absence of a written agency agreement, a broker is considered to be a: free agent transaction broker sub agent general agent

transaction broker Agency agreements are established only by a written contractual agreement. If no contractual agreement has been signed then the default relationship is transaction broker. Transaction broker can also be established by a written contractual agreement.

In Colorado in the event that an exclusive right-to-buy contract is not signed by a buyer, the default relationship is that of a: buyer-broker relationship dual agency relationship seller-agency relationship transaction broker relationship

transaction broker relationship In the absence of a contractual agreement, transaction brokerage is created.

To assign a contract for the sale of real estate means to:

transfer the rights under the contract An assignment of a contract transfers the rights to purchase the property from the assignor to the assignee.

To assign a contract for the sale of real estate means to: file a contract with a county recorder transfer the rights under the contract have the buyer assign the contract to a relative all of the above

transfer the rights under the contract An assignment of a contract transfers the rights to purchase the property from the assignor to the assignee.

transfer the rights under the contract?/

If mineral rights are not listed in the deed, and not previously transferred, the rights are:

transferred to the grantee

If mineral rights are not listed in the deed, and not previously transferred, the rights are: retained by grantor not owned not transferred transferred to the grantee

transferred to the grantee In Colorado, all mineral rights except water are transferred with the property unless otherwise indicated in the deed or if the rights were transferred (ie sold or given away) by a previous deed. The Seller is the "Grantor" (the creator of the deed), the Buyer is the "Grantee" (receives the deed)

If mineral rights are not listed in the deed, and not previously transferred, the rights are: retained by grantor not owned not transferred transferred to the grantee

How is a broker licensed when employed by a broker doing business under a trade name?

under the trade name and the broker's name

How is a broker licensed when employed by a broker doing business under a trade name?

under the trade name and the broker's name Explanation The trade name and broker's name must appear in all marketing materials produced by the associate broker.

An oral contract for the sale of real estate is:

unenforceable

An oral lease for five years is generally: illegal unenforceable a long-term lease renewable only in writing

unenforceable A lease for longer than one year should be in writing to be enforceable.

A condominium would be legally described as: lot and block unit and building lot and building none of the above

unit and building Condo refers to a particular unit in a building. The legal difference between a condo and a townhome is determined by the legal description. First you need to know the difference between a physical description of a townhome vs a condo and their legal description. They are not the same. A townhome is a multifamily home with no one above or below, whereas a condo can share walls, floors and ceiling with other units. That is a physical description. Whereas a legal description does not pay attention to what they look like but instead describes where they are. The legal description for a condo is simple as it specifies the unit and building. Townhomes have an address just like a single family home so their legal description contains a lot (usually the street number) and block. Now.....here is the part that will blow your mind. When multifamily developments are made, the developer has to have the complex approved by FHA to qualify the homes to be bought using FHA loans. If the developer had both townhomes and condos in the development they have to pay two large application fees to FHA, one for the townhomes and one for the condos. Since developers do not like to pay two fees, they sometimes bypass one of them by classifying all the homes as condos regardless of what they look like. In complexes where this has occurred, you end up with a unit that looks like a townhome but legally because of the legal description is a condo.

Suburban residential property is sold for delinquent taxes may be redeemed:

up to 3 years after the sale by paying the full amount plus interest

How many single-family residences can a broker manage without having to open a trust account only for rents and deposits (separate from his sales trust accounts)?

up to seven

Broker written provisions inserted into a Commission approved form must:

use a different style font from the pre-printed areas

A voidable contract could be described as

valid unless voided Explanation A voidable contract, unlike a void contract, is a valid contract. At most, one party to the contract is bound. The unbound party may repudiate the contract, at which time the contract is void. An option to purchase is a voidable contract as the holder (buyer) of the option can choose to execute or not execute the agreement whereas the seller of the option is bound to its terms.

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

Broker Wilson took a listing on property and shortly thereafter discovered that her client had been previously declared incompetent by the court. The listing is

void

A owner agrees to lease a property to be used as a casino. State laws prohibit gambling. This contract would be legally defined as void voidable valid unenforceable

void A contract for an illegal purpose is void. An essential element of a contract is that it be for a legal purpose.

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 Standard contract law states that a contract must be signed and accepted to be binding. The Buyer has every right to withdraw an offer at no penalty before the signed contract was accepted. A signature alone is not sufficient to constitute valid acceptance: the accepting party must also communicate acceptance to the party who made the last offer or counteroffer. Since acceptance was not communicated, the purchase contract was not binding and either party could withdraw at no penalty. To have a valid contract, it must be signed and accepted and that acceptance must be communicated to the person making the offer before the contract deadline There is no question that written notification is preferable to a verbal one. In real life a savvy agent would have followed up the verbal withdrawal with a written one. However, in this case they are both legal. The disadvantage of a verbal notification is the difficulty in enforcing it in a court of law, not that it is illegal. The terms of the purchase contract are not in force until it has been signed AND accepted by both parties. Even though it has been signed, absent acceptance the purchase contract is not fully in force, general contract law is in charge and says that verbal works. Please note that once the purchase contract is in force it specifies all sorts of places where written notification is mandatory and verbal will not do. The preferred form of acceptance is returning the signed contract. The popularity of electronic contact has made this easy 24/7 - click and you delivered it to everybody. BTW..interestingly enough, if the Seller agent also had called the buyer agent before the withdrawal and indicated that they had signed and accepted the contract. That would have also constituted legal acceptance and the buyer could not then withdraw the offer as it would be binding. Of course by then we possibly could have dueling verbal notifications and that is why lawyers drive nice cars.

Having a difficult time figuring out what is the difference between voidable and unenforceable. They seem to be the same thing. If a 17 year old signs a contract is the contract: a. void b. voidable c. unenforceable d. invalid

voidable. Here is why; it is valid but can be voided if damaged party chooses to remove themselves. Let's look at it more closely. A voidable contract, unlike a void contract, is a valid contract. At most, one party to the contract is bound. The unbound party may repudiate the contract, at which time the contract is void. An option to purchase is a voidable contract as the holder (buyer) of the option can choose to execute or not execute the agreement whereas the seller of the option is bound to its terms. Another way to look at it is: an agreement which is enforceable by law at the option of one or more parties but not at the option of the other or others is a Voidable Contract. A contract can become voidable when the consent of one or more of the parties to a contract is obtained by coercion, undue influence, misrepresentation or fraud. An agreement which is enforceable by law at the option of one or more parties but not at the option of the other or others is a voidable contract. This is the reason a contract with a minor is a voidable contract by the minor or a minor's legal representatives (the minor by him/herself does not have legal capacity to enter a contract) and not a void contract. Unenforceable: An unenforceable is a contract missing an element or a contract signed by someone with no contractual capacity. A minor can have contractual capacity; that is why a contract with a younger Justin Bieber would be voidable not unenforceable.

Written disclosures regarding agency should be made: at an open house during small talk responding to general factual information when a licensee elicits or accepts confidential information from a buyer or tenant

when a licensee elicits or accepts confidential information from a buyer or tenant

when a licensee elicits or accepts confidential information from a buyer or tenant You need to disclose your brokerage relationship in writing before engaging in any activity which requires a brokerage license. Commission rule E-35 states that "brokerage activities" occur when a broker elicits or accepts confidential information from a party concerning specific real estate needs, motivations, or financial qualifications. Activities such as open house, preliminary conversations, or small talk concerning price range, location, property styles, or responding to general factual questions about properties that have been advertised for sale or lease do not qualify as triggering brokerage activities.

When must the "Change of Status" form be signed? before eliciting or receiving confidential information when changing brokerage relationship from transaction broker to agent when changing brokerage relationship from agent to transaction broker when taking a listing

when changing brokerage relationship from agent to transaction broker A broker may not represent one party as an agent and work as a transaction-broker with the other party in the same transaction unless the principal to the agency agreement has agreed to revert to transaction brokerage. To accommodate this change, the commission listing forms contains a selection by the client at the time of the listing and a "Change of Status" form to notify the client at the time the "double ended" situation develops.

When is a real estate broker entitled to receive payment of his or her commission?

when he or she has 1. established employment, 2. fulfilled the terms of employment, or 3. gotten the transaction closed-unless defeated by the refusal of his or her client to consummate the sale as agreed upon.

A financing statement and security agreement are used:

when offering personal property as security for a loan

When do licensees not need errors and omission insurance?

when the hold an inactive license

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 Title passes when the signed deed is delivered to and accepted by the buyer during closing.

A designated broker is permitted to reveal confidential information to the supervisor:

when they have written informed consent of the party.

The Real Estate Commission approved addendum "brokerage Duties Disclosure to Seller" is used:

when using listing contracts that have not been Commission Approved.

A licensee should disclose the total proceeds the seller will net from a sale. This estimate should be given:

whenever a listing is taken and an offer is presented

The amount of the assumption fee is disclosed to the buyer: within the purchase and sale contract at time of closing by the seller by the selling broker

within the purchase and sale contract The buyer agrees to the amount of the assumption fee at the time his offer is written and then accepted by the seller.

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 Review of all new licensees activities is a requirement of a high level of supervision.

A designated broker's responsibilities are delegated by: written statement by Managing Broker office manager legislative statute negotiated by buyer and seller

written statement by Managing Broker designated broker: a licensee designated in writing by an employing broker to serve as a single agent or transaction-broker for a seller, landlord, buyer or tenant in a real estate transaction; does not include a real estate brokerage firm that consists of only one licensed natural person. More info: CP-22...A designated broker is permitted to share confidential information with a supervising broker without changing or extending the brokerage relationship beyond the designated broker. Brokers may want to consult legal counsel regarding the necessity of securing the authorization of the party to whom the information is confidential before the designated broker shares that confidential information with the supervising broker. Such advice could include modifications to the listing agreement or buyer agreement that create such authorization. More info: This is a Colorado twist on brokerage laws. Generally, everything you learned in the National side is consistent with Colorado. That all contracts are with the company not the licensee, that the Employing Broker is responsible for the actions of the licensees under him/her and so on. The twist is in how we deal with confidential information and how we resolve what in past years was considered a conflict of interest. All of this comes under the heading of "Designated Broker." Here is the problem as the real estate commission saw it; once upon a time, it was a conflict of interest if two agents from the same company were working opposite sides of the same transaction - even if it was a large company and the agents did not know each other. Fact is - earlier brokerage laws were written in a time when there were no large offices or super-sized brokerages. Most were ma and pa operations where everybody knew and talked to each other. Recognizing that times had changed, the real estate commission wanted two agents working for the same company on the same transaction, to be able to fully represent their clients in a Buyer or Seller Agency relationship and not be forced into some form of neutral relationship such as Transaction Broker or the predecessor to Transaction Brokerage, the now illegal and much hated Dual Agency relationship. The issue was - if everybody in a company reports to the Employing Broker then that person is a walking talking potential conflict-of-interest on any transaction that occurs in the office. So they declared that brokerage relationships only, would be confined to the licensee level and not rise to the Employing broker level. This way the Employing Broker does not have a conflict of interest with anybody. That left one more problem and this was "imputation of confidential information". In simpleze - it would be a bad thing if two agents working on opposite sides of a transaction, went to the same Employing Broker for advice and that Employing Broker blabbed confidential information between them. To avoid that - the real estate commission issued rules that said in the event of two agents working on the same transaction for the same company, the Employing Broker would "Designate" another supervising broker for one of the agents. Tah Dah! No conflict of interest and no chance of one Employing Broker spilling secrets from one side to the other. Then to tie everything into a bow - they exempted one-man band brokerages from having to appoint another supervisor because... there is only one person in the company. One agent companies mostly become Transaction Brokers when double-ending a deal.

May a broker add exculpatory (hold harmless) language to Section 27, additional provisions?

yes

You hold open one of your listings that you took as a seller's agent. A buyer comes through the front door and wants to buy on the spot. The following is true: you cannot write the offer for him -- he must use another agent you can write the offer, so long as you disclose that you are a seller's agent and indicate that in the offer to buy that he signs you automatically become a transaction broker for both parties you are a transaction broker for the buyer, but an agent for the seller

you can write the offer, so long as you disclose that you are a seller's agent and indicate that in the offer to buy that he signs The buyer will be the customer and the seller is the principal. You cannot be a transaction broker to one part of the transaction and have an agency relationship with the other. You must receive permission from both parties to become a transaction broker.

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.

Concerning agency, the following statement is true:

you cannot represent one party in the transaction as an agent, and be a transaction broker for the other party in the same transaction

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 accepted, and your buyer knows that, 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 This is considered to be material facts 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 you, as a licensee, are selling your own property: you are required to list it with another broker you must inform all prospective purchasers that you are the owner as well as a licensee you are required to list it at or under the market price you are not allowed to list your own property

you must inform all prospective purchasers that you are the owner as well as a licensee A licensed salesperson must inform all prospective purchasers that he is a licensee.

A deed of trust held by someone other than the public trustee is NOT: • Notice that a legal action is pending that may affect ownership • Exempt from loan rescission rules • Foreclosed through the courts • A conditional transfer of ownership from the Trustor to the Beneficiary

• Notice that a legal action is pending that may affect ownership Regardless of who holds the Deed of Trust, the transfer of ownership is real and not a notice of pending legal action. There are no loan recession rules associated with a Deed of Trust as the deed is not a Promissory Note. A Promissory Note outlines the terms and conditions of a loan between borrower and the lender. A Deed of Trust, places a lien on the property securing the loan. Only a Deed of Trust held by the Public Trustee avoids a judicial foreclosure. A deed of trust held by a private party must use the judicial process to foreclose.

All of the following must be disclosed to a tenant by a property manager EXCEPT: Disclose in writing that the property manager works for the landlord Disclose that the tenant is not "vicariously liable" for acts of the agent Disclose name and address of the landlord Disclose adverse material facts about the property known by the agent

Disclose name and address of the landlord From the Brokerage Disclosure to Tenant: Landlord's Agent: A landlord's agent works solely on behalf of the landlord to promote the interests of the landlord with the utmost good faith, loyalty and fidelity. The agent negotiates on behalf of and acts as an advocate for the landlord. The landlord's agent must disclose to potential tenants all adverse material facts actually known by the landlord's agent about the property. A separate written listing agreement is required which sets forth the duties and obligations of the broker and the landlord. Tenant understands that Tenant shall not be liable for Broker's acts or omissions that have not been approved, directed, or ratified by Tenant. (Jon...this is vicarious liability)

A licensee has a transaction-broker agreement with a seller. What disclosure is required to a buyer?

Disclosure in writing that the licensee is a transaction-broker to the seller and will have the same duties to a buyer.

Unlicensed personal assistants may

Distribute factual literature prepared by a licensed associate

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 as long as no licensed activity is performed and they may complete but not present a market analysis

The Appraisal deadline and the Appraisal Objection Deadline of the Contract to buy and Sell:

Do not apply to FHA or VA financing. Buyers with FHA or VA has the right to terminate regardless of when appraisal comes in

According to Commission Position 42 on Apartment Building or Complex Management, a duty an unlicensed on-site manager may NOT perform without a license is: Draw up a lease Sign and execute a lease with a Power of Attorney from the owner Collect and deposit rents and security deposits Obtain information necessary to qualify perspective tenants for a lease.

Draw up a lease CP-42 on on Apartment Building or Complex Management Pursuant to §12-61-101(2)(b)(XII), C.R.S., a regularly salaried employee of the owner of an apartment building or complex is permitted to perform customary duties for his or her employer without a real estate broker's license. The unlicensed, on-site manager must either report directly to the owner or to the real estate broker, if a real estate broker is engaged to manage the property. The Commission views the following to be customary duties of an unlicensed, on-site manager: 1. Performance of clerical duties, including gathering information about competing projects. 2. Obtain information necessary to qualify perspective tenants for a lease. This includes obtaining and verifying information regarding employment history, credit information, references and personal information as necessary. 3. Provide access to a property available for lease and distribute preprinted, objective information prepared by a broker as long as no negotiating, offering or contracting is involved. 4. Distribute preprinted, objective information at an on-site leasing office that is prepared by an owner or broker, as long as no negotiating, offering or contracting is involved. 5. Quote the rental price established by the owner or the owner's licensed broker. 6. Act as a scrivener to the owner or the broker for purposes of completing predetermined lease terms on preprinted forms as negotiated by the owner or broker. 7. Deliver paperwork to other brokers. 8. Deliver paperwork to landlords and tenants, if such paperwork has already been reviewed by the owner, or a broker or has been prepared in accordance with the supervising broker's instructions. 9. Collect and deposit rents and security deposits in accordance with the owner's lease agreement or the brokerage firm's written office policy. 10. Schedule property maintenance in accordance with the brokerage firm's management agreement or the owner's lease agreement. If the owner has executed a Power of Attorney form or a written delegation of authority that authorizes the unlicensed, on-site manager to sign and execute leases on behalf of the owner, the unlicensed, on-site manager may execute those without possessing a real estate broker's license. Brokers supervising unlicensed, on-site managers with this authority are expected to review the executed documents to ensure compliance with lease terms, management agreements, local, state and federal laws, including the real estate brokerage practice act and Commission rules.

EQUITABLE TITLE

During the period starting with the buyer and seller signing the contract and the seller delivering the deed, the buyer is said to hold equitable title to the property and the seller is said to hold bare or naked title, i.e. title in name only without full ownership rights. The term equitable title derives from the fact that a buyer can enforce specific performance of the contract in a court of equity to get title.

Which of the following is true of time share ownership

Each time share unit constitutes an interest in real estate. Each time share owner is liable to the owners association for assessments and property taxes

Which of the following is true if a Contract to Buy and Sell form indicates the "Liquidated Damages" choice in case the buyer is in default?

Earnest money and any other payments or things of value received from the buyer will be kept by the seller as seller's sole remedy for buyer's default.

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

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

Which level of licensure is required to hire other licensees to work in your company?

Employing Broker

A buyer's agent is unable to attend the closing and a stand-in broker agrees to go on his behalf. Who is responsible for the closing?

Employing broker, Buyer's agent, and Stand-in Broker

NAR regulates

Ethics

Colorado licenses must be renewed

Every three years at anniversary of licensing

If seller does not relinquish possession as indicated and negotiated in the contract, what remedy does buyer have? Eviction and a predetermined daily payment until possession is delivered Eviction and court ordered payments Seller is under no time constraints to leave the premises Eviction and $100.00 per day until possession is relinquished

Eviction and a predetermined daily payment until possession is delivered Always make this amoun t high so the sellers will leave the premises. Paragraph 16, contract to buy.

The potential gross income of a warehouse is $4,200 a month and the vacancy rate is 2 1/2%. The taxes are $3750, the monthly maintenance costs are $350, monthly reserves for replacement are $250, depreciation is $575 a month, management fees are $500 per month, debt service is $1200 per month and the quarterly landscaping fees are $600. If the cap rate is 12.5% what is the estimated value of the warehouse?

Explanation Part 1 $4,200 X 12 = $50,400 X .025 = $1,260 Part 2 $50,400 - $1,260 = $49,140 - ($350 X 12 = $4,200) - $3,750 - ($250 X 12 = $3,000) - ($500 X 12 = $6,000) - ($600 X 4 = $2,400) = $29,790 / .125 = $238,320

Why Taxes are debit seller credit broker

Explanation 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.

THE PRINCIPAL DIFFERENCE BETWEEN AN ESTATE FOR YEARS AND AN ESTATE FROM YEAR TO YEAR IS THAT AN ESTATE

FROM YR TO YR HAS NO EXPIRATION DATE

A broker's license may be suspended or revoked for which of the following causes? Over-charging sales commission Conviction of a motor vehicle violation Failure to pay a money judgement entered by a clerk of courts Failure to account for or remit funds belonging to others

Failure to account for or remit funds belonging to others Failing to account for funds of others, conversions and commingling are grounds for disciplinary action.

Deed restrictions are a means by which

Grantors control the future use of property

Ricardo privately owns a single 20-acre parcel of land and wishes to sell ten acres. Which of the following statements is correct regarding Ricardo's options? He is not required to register with the real estate commission but must meet local and state requirements for dividing his land as such. Because he is the private owner, there are no restrictions or registration requirements. Only a registered subdivider may divide land, thus Richard as a private owner may not sell part of a single parcel. Richard must comply with federal land sales rules.

He is not required to register with the real estate commission but must meet local and state requirements for dividing his land as such. Division of a single parcel into multiple parcels is a subdivision and must be done in compliance with local and state subdivision restrictions. They only have to be registered with the CREC if there are 20 or more residential lots being sold., leased, or transfered.

Stan is a real estate broker in Colorado. He has identified a property for a fast food outlet and has asked four friends to contribute money to the purchase and gain partial ownership. Stan will manage the property and negotiate the lease for the fast food franchise. Which of the following is correct with regard to Stan's role as a broker in this arrangement? He must comply with state and federal securities laws in arranging this investment group. He will have no liability in the deal since he will not contribute money. He is not entitled to any commission on the purchase because he will be an owner. He can keep both the sales commission and the lease commission without specifically telling the others about the amounts involved.

He must comply with state and federal securities laws in arranging this investment group. The arrangement must comply with securities regulations regardless of how it is organized. Stan is a partner and must disclose his interest and any gains to the other owners.

Net Loan Proceeds: Debit broker single entry.

Here is the play: most often seen with new loans (and always on the State Exam). Net Loan Proceeds is a situation when a lender is making a loan for x and part of that loan is covering expenses that the lender is owed. In short - the lender is lending money to the buyer to cover expenses that are going to be paid to the lender. The lender does not want to send the entire loan amount to the closing and wait for a check back to cover the money they are owed, they instead take their money out of the loan up front and send the remaining balance called Net Loan Proceeds to the closer. To show this on a settlement sheet, the closer enters a series of single entries i.e. there not a debit/credit on every line. Instead there is one big credit all by itself on a line showing the total loan amount the buyer is getting and then two or more debits all by themselves on other lines adding up to the total loan amount. Example - a lender is making a loan for $100,000 and they are taking their 1% origination fee ($1,000) out of the loan. They send the net loan proceeds $99,000 (remember they are keeping their $1000) to the closing agent. First up let's handle the credit, enter the entire loan amount on the sheet (put a Credit Buyer $100,000 all by itself on the loan line). Then you need to show the deposit of $99,000 into the escrow account (Single entry all by itself on line Net Loan Proceeds, Debit Broker $99,000). Lastly we need to account as a debit the $1,000 the lender held back (single entry all by itself on the Origination Fee line, Debit Buyer $1000). Tah Dah! You have $100,000 of Debits and $100,000 of credits and everything is in balance. For more info and examples of this check out the new loan examples in the chapter of the real estate manual on Closings

If a broker moves his place of business without advising the Real Estate Commission: His license is inactivated but not licensees working for him His license and all associate brokers working for him are inactivated The licenses of all associate brokers under him are inactivated

His license and all associate brokers working for him are inactivated We have various questions floating around related to what happens when a broker fails to notify the real estate commission of a business address change. Any licensee who does not notify the Commission of an address change will have their license inactivated. When the licensee is also the mama or poppa bear of the office (the employing broker) the penalty goes up. Since an employing broker with an inactive license cannot have licensees reporting to him/her AND a licensee who is not independent cannot have an active licensee without reporting to an employing broker - the effect is catastrophic. Everybody's license in the office is inactive. Here are the applicable statues: From chapter in real estate manual on License Law § 12-61-109, C.R.S. Change of license status - inactive - cancellation. (1) Immediate notice shall be given in a manner acceptable to the commission by each licensee of any change of business location or employment. A change of business address or employment without notification to the commission shall automatically inactivate the licensee's license. § 12-61-110, C.R.S (5) The suspension, expiration, or revocation of a real estate broker's license shall automatically inactivate every real estate broker's license where the holder of such license is shown in the commission records to be in the employ of the broker whose license has expired or has been suspended or revoked pending notification to the commission by the employed licensee of a change of employment.

When viewing the property, the buyer asks if the shelving in the basement is included. The broker is safe to say: yes, the shelving is included I don't know, but I will find out for you the MLS printout does not mention the shelving, so it must not be included I assume it is included because it looks as if is permanently attached

I don't know, but I will find out for you Never assume anything, call the listor and find out the correct information for your buyer.

If a client asks whether it would be beneficial to add a second bathroom to increase profit on the sale of the home, what would be the appropriate response? yes, an additional bathroom will always add more value than it costs to add it in no, the additional bathroom will never add more value than it costs to put in I cannot answer this. I am a real estate broker not a construction expert and as I do not have the expertise to answer this question I cannot answer it. I would be happy to do some research or analysis and speak to a construction expert on costs to determine if it''s worth it

I would be happy to do some research or analysis and speak to a construction expert on costs to determine if it''s worth it Agents are experts on real estate values and transactions but not on construction costs. The best approach is to get a construction experts opinion on the cost of adding a bathroom and then perform additional resaerch to determine if the value increase would justify the expenditure. This takes the agent out of being the expert on construction costs and places the agent in the correct role of recommending soliciting expert advise when the topic is outside the agent's expertise.

A MAN AND SISTER BOUGHT A STORY BLD, TAKING TITLE AS JOINT TT. THE MAN DIED TESTATE. HIS SISTER NOW OWNS THE STORE.

IN SEVERALTY

WHICH OF THE FOLLOWING IS CONSIDERED COMMUNITY PROPERTY

INCOME EARNED BY ONE SPOUSE DURING THE MARRIAGE

ALL OF THE FOLLOWING ARE PHYSICAL CHARACTERISTIC OF LAND ARE

INDESTRUCTIBILITY; UNIQUENESS; IMMOBILITY

UPON DISCOVERING A LATENT DEFECT IN THE PROP, THE LICENSEE SHOULD DISCUSS THE PROBLEM WITH THE SELLER AND THEN

INFORM ANY PROSPECTIVE BUYERS OF THE DEFECT

Fixtures listed on the approved Colorado exclusive right to Sell Listing contract will be included If on the property at the time of the listing Unless they are crossed out on the form In every case If attached on the date of the listing unless specifically excluded by Seller

If attached on the date of the listing unless specifically excluded by Seller If they are attached and not specifically excluded they will be included.

As per the Exclusive Right to Sell Listing Contract fixtures listed on the improved form will be included: In every case Unless they are crossed out on the form If on the property at the time of the listing If attached on the date of the listing unless specifically excluded by the seller

If attached on the date of the listing unless specifically excluded by the seller All fixtures will be included unless specifically excluded by the seller at the time the listing was taken.

On Jan 2nd a buyer called the agent to find out if his offer had been accepted. The agents told buyer seller would not be back until Jan 14 and would make a decision then. Under these circumstances which is true:

If buyer decides not to wait he can recind the offer and secure the return of the full deposit.

Regarding delivery of Earnest Money:

If other than at the time of tender of this contract it must be delivered no later than the Alternative Earnest Money Deadline

The Colorado Contract to Buy & Sell establishes a Loan Objection Deadline if the buyer is getting a new loan. What is the effect of the deadline?

If the buyer cannot get a satisfactory loan by that date, the buyer may terminate the contract with written notice to the seller.

According to CP-6 on the Release of Earnest Money Deposits, should a broker refuse to release earnest money to the appropriate party when there is no dispute until such time as both parties have signed a written release? Earnest money deposits should never be issued without a signed release by all parties If there is no dispute, the broker should release earnest money to the appropriate party immediately Regardless if there is a dispute or not; the broker decides who should receive the earnest money in accordance with commission rules If there is no dispute, agency rules require the listing broker to release earnest money in accordance with the express direction of the seller

If there is no dispute, the broker should release earnest money to the appropriate party immediately Releases are not required when there is no dispute - the money should be released immediately. When there is a dispute, there are no commission rules as to who should receive the earnest money, nor is the broker allowed to make a decision. Disputed earnest money must be resolved by the parties to the contract, by an agreed upon arbitrator or in a court of law. CP-6 Commission Position on Release of Earnest Money Deposits Rule E-15 states in part that: "When for any reason the owner fails, refuses, neglects or is unable to consummate the transaction as provided for in the contract, and through no fault or neglect of the purchaser the real estate transaction cannot be completed, . . . the deposit should be returned to the purchaser at once . . ." The Commission will not pursue disciplinary action against a broker for refusal to disburse disputed funds when the broker is acting in accordance with the language of the appropriate Commission-approved contract to buy and sell. It is clear in the contract to buy and sell real estate that the broker holds the earnest money on behalf of both buyer and seller. If there is no dispute, the broker should disburse to the appropriate party immediately. Some brokers unnecessarily require a signed release by both parties even when there is no disagreement. Audits have disclosed many instances where brokers have held deposits for extended periods just because one or both parties will not sign a release. While good judgment is always urged, releases are not a requirement of the Real Estate Commission. In addition, where one party has given written authorization for the release of a deposit to another, a written release by the other party is not required.

impossibility of performance

Impossibility-of-Performance Doctrine is a principle whereby a party may be released from a contract on the ground that uncontrollable circumstances have rendered performance impossible.

The seller of the property is including the refrigerator and window coverings with the sale. Where in the offer to purchase is this addressed? Since these items are in the multiple listing, there is no need to mention them In the inclusions section of the contract In the other provisions section of the contract Since these items are personal property, they cannot be mentioned in the contract to purchase the real property

In the inclusions section of the contract All items that are inclusions to the sale and not to be sold as personal property must be included in the inclusions part of the contract.

When must a listing broker disclose to the buyer the broker's working relationship with the seller?

In writing before providing specific real estate services.

The licensee has an Exclusive-Right-To-Sell listing with a seller as a Transaction-Broker. When a potential buyer calls on this listing, the licensee must disclose

In writing that the licensee works with the seller as a Transaction -Broker and still owe the same duties to the buyer in a purchase transaction

When creating the listing agreement, the sellers informs you that they will not be filling out a Seller's Property Disclosure form. What is your best response:

Inform the sellers that most buyers want the form

In Colorado, who of the following is exempt from real estate license law? Property Manager renting single family homes for a variety of owners Investor who owns 12 investment properties and sells one to an owner-occupant. Inactive licensee assisting friends in filling out purchase offers and negotiating deals. Attorney at law collecting a five percent commission for helping

Investor who owns 12 investment properties and sells one to an owner-occupant. Private owners may always act for themselves and are not subject to real estate license laws. Attorneys are normally exempt from real estate license law while practicing law but must have a license to act as a broker. An inactive licensee is still bound by all rules of the commission, and the right-of-way specialist is exempt only for certain specific activities.

In the section on Purchase Price and Terms in a Residential Contract to Buy and Sell, which of the following is true concerning the entry for cash at closing? It represents the total amount the buyer should plan to bring to closing. It should match the good-faith estimate provided with the HUD-1 form. It represents the approximate amount the seller will receive at closing. It does not include the buyer's closing costs, such as loan fees.

It does not include the buyer's closing costs, such as loan fees. The line item of cash at closing is entered in order to complete the math showing the sources of funds that equal the total purchase price. The amount does not include closing costs or new loan fees and is not intended to represent final figures.

Several weeks after closing, an Associate Broker received a thank you letter and a nice bonus check from the seller of the house. The Associate Broker cashed the check because he felt it was earned. In this situation, which of the following is true?

It is a violation of the commission regulations to accept the money.

When a counteroffer is made, what happens to the original offer? It is considered a novation It is deemed rejected It is held in secondary position It can be used as a fall back position, in the event that the counteroffer is rejected

It is deemed rejected A counteroffer rejects the original offer and is considered the new contract.

When an exclusive right-to-buy contract has been executed, who is obligated to pay the broker working with the buyer?

It is determined by which box is checked in the contract

When an exclusive right-to-buy contract has been executed, who is obligated to pay the broker working with the buyer? The seller The listing broker The buyer It is determined by which box is checked in the contract

It is determined by which box is checked in the contract Whichever box is checked is who has to pay the commisssion.

Which statement is TRUE regarding an owners policy of the title insurance?

It is issued after closing and deliver later

A special tax or special assessment is shown on the Certificate of Taxes sue to the amount of $834 for a curb and gutter project. The tax is payable over 10 years with annual interest of 5%. If the buyer has agreed to assume the property obligation, how will it show on the settlement worksheet?

It will not show up, since it has no financial effect at closing.

2 FRIENDS ARE CO-OWNERS OF A FEE SIMPLE INTEREST INA SMALL OFFICE BLD. THE OLDER MAN DIES INTESTATE AND LEAVES NO ESTATE TO BE DISTRIBUTED TO HIS HEIR. YOUNGER MAN IS NOT A RELATIVE/CREDITOR. WHY THE YOUNGER ACQUIRE OLDER MAN INTEREST

JOINT TENANCY

ALL OF THE FOLLOWING ARE ELEMENTS OF A JOINT TENANCY WHT RIGHT OF SURVIVORSHIP

JOINT TENANCY MAY PASS THEN INDIVIDUAL INTEREST TO THEIR HEIR

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

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

Which of the following is a proper method for two or more owners of a single property in Colorado to hold title?

Joint tenancy with right of survivorship

Broker Jones negotiates the sale of a house for $195,000. The agreement recites a deposit of $2,500. Jones receives $1,500 cash and a $1,000 note. The buyer seeks FHA financing. Jones certifies to the lending institution that he has received a $2,500 cash deposit from the buyer. Under these circumstances:

Jones is guilty of a criminal act and his license can be revoked Fraud

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 minimum requirement for advertising is that the name of the brokerage firm is included in the ad. The law wants to make certain that the public knows which company for whom the broker represents. A Team is not a brokerage firm, but instead a group of agents working for a brokerage firm. For social media, a special rule applies, the name of the brokerage firm must be included in the first post of an agent discussing a licensed type of activity in a chat type of communication. If the name is long and does not fit into one entry, the FIRST CLICK rule applies. This rule says that if the firm's name does not fit, a link must be in the post which when clicked goes immediately to a webpage containing the firm's name is acceptable.

Which of the following provisions is not essential to the validity of a lease? Competent lessor and lessee Rent provision Judgment clause All of the above

Judgment clause A judgement clause is usually found only in a commercial lease and is infrequently used.

One-half of the general property tax has been paid by February 28; by what date must the balance be paid to avoid a penalty?

June 15

One half of the general property tax has been paid by February 28th; by what date must the balance be paid to avoid any penalty?

June 15th. 1/2 by end of Feb, 1/2 by end of June or 100% by end of April.

To enforce the deed restriction, a property owner may request an injunction from a

Justice of the peace Court

Susan Seller give 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. The buyers did not show up to the closing, nor did they complete the loan application. The seller may: Keep the earnest money and sue for damages Must return the earnest money to the buyers as they did not qualify for a loan Keep the earnest money, there is no recourse in the agreed purchase contract for a suit for damages

Keep the earnest money, there is no recourse in the agreed purchase contract for a suit for damages

Susan Seller give her agent a 60 days listing to sell her home for $200,000. An offer was made and accepted with a sales price of $190,000. . 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. The buyers did not show up to the closing, nor did they complete the loan application. The seller may: Keep the earnest money and sue for damages Must return the earnest money to the buyers as they did not qualify for a loan Keep the earnest money, there is no recourse in the agreed purchase contract for a suit for damages

Keep the earnest money, there is no recourse in the agreed purchase contract for a suit for damages Liquidated damages means the buyer is only offering the loss of their earnest money should the buyer default on the contract. If the buyer had selected "specific performance" as a remedy in the event they defaulted, the seller would have the right to keep their earnest money AND sue for damages. Not showing up for the closing and the failure to even atttempt to secure a loan are clear breaches of the purchase contract. The seller may keep the earnest money, but may not sue for damages.

A TT IS LEASING A HOUSE UNTIL HE HAS SAVED MONEY FOR THE DOWN PYMT TO PERFORM ON THE SALES CONTRACT, WHAT TYPE OF AN AGREEMENT IS THIS

LEASE PURCHASE AGREEMENT

THE BROKER INFORMS THE AFFILIATE LICENSEES THAT FROM NOW ON, THE MINIMUM COMMISSION THEY MAY CHARGE A SELLER IS 7 % IN THIS SITUATION THE BROKER IS

LEGALLY PERMITTED TO DO THIS

THE OWNER OF RE WHO LEASES IT TO ANOTHER IS CALLED THE

LESSOR

THE OWNERS OF A FEE SIMPLE ESTATE CONVEYS THE FARM TO THE STATE TO BE USED AS A PAR BUT RESERVES THE RIGHT TO LIVE IN THE OLD FARMHOUSE. THE OWNER HAS A

LIFE INTEREST

5 INDIVIDUALS JOINTLY OWN A BUS. ONLY ONE IS ACTIVE IN THE BUS. THE OTHER 4 CONTRIBUTED FUNDS BUT IN DAY TO DAY OPERATIONS. THIS FORM OF OWNERSHIP IS A

LIMITED PARTNERSHIP

MEC as used in the Contract to Buy and Sell means the

Latest date upon which both parties have signed.

Which of the following is a less-than-freehold estate? Fee simple defeasible Fee simple absolute Leasehold estate Life estate

Leasehold estate Under a less-than-freehold estate the holder does not have a title to the property. A less-than-freehold estate is a leasehold estate. A leasehold merely gives possession and use of the property, not title.

As the Buyers Agent is filling out a "Contract to But and Sell", the agent asks the young married buyers how they want to take title. The buyers are not sure. The buyers agent should

Leave the choice blank and advise the couple to seek legal counsel and inform the agent of their choice later.

As the buyers agent is filling out a Contract to Buy and Sell, the agent asks the young married buyers how they want to take title. The buyers are not sure. The buyer's agent should

Leave the choice blank and advise the couple to seek legal counsel and inform the agent of their choice later.

As the buyers agent is filling out a Contract to Buy and Sell, the agent asks the young married buyers how they want to take title. The buyers are not sure. The buyer's agent should Advise them to take titles as joint tenants since that is appropriate for a married couple. Leave the choice blank since the title insurance company will know what to do. Leave the choice blank and advise the couple to seek legal counsel and inform the agent of their choice later. Explain the differences in the various modes and suggest the one that the licensee knows to be correct.

Leave the choice blank and advise the couple to seek legal counsel and inform the agent of their choice later. When your buyers ask how they should take title, if you tell them that would be giving legal advice and is strictly forbidden.

A valid lease includes the basic elements needed for all contracts: consideration, capacity to contract, offer and acceptance, legal description, and

Legal objectives

A non disturbance clause is for the protection of the: Lessee Developer Lessor Mortgagee

Lessee

Which one of the following is not a person who acquires title to real estate? Vendee Devisee Grantee Lessee

Lessee A lessee is the holder of a lease estate; therefore he does not actually have title to real estate.

WHEN A LISTING BROKER WAS TOLD BY HIS PRINCIPAL NOT TO ADVERTISE THE LISTING IN A PARTICULAR NEWSPAPER, WHICH WAS OUT OF THE AREA, THE BROKER COMPLIED BECAUSE THE BROKER

MUST OBEY THE LAWFUL INSTRUCTIONS OF HIS PRINCIPAL

IN A TYPICAL AGENCY RELATIONSHIP BETWEEN THE BROKER AND THE CLIENT, THE BROKER'S COMMISSION IS DETERMINED BY

MUTUAL AGREEMENT

THE AMT OF COMMISSION DUE TO A SALESPERSON IS DETERMINED BY

MUTUAL AGREEMENT

A licensee is working with a buyer in a transaction on another brokers listing. What must the licensee do with the personal check the buyers give as an earnest money deposit?

Make a copy for the licensee's broker and turn it over to the listing broker

A licensee is working with a buyer in a transaction on another broker's listing. What must the licensee do with the personal check the buyers use as an earnest money deposit?

Make a copy for the licensee's broker and turn it over to the listing broker.

Which class is protected under under Colorado Fair Housing and NOT the Federal Fair Housing?

Marital Status IS Race Familial Status National Origin

A licensee listed a home for some sellers as a Sellers Agent, and it is now under contract. The sellers ask their agent to work with them to find a new home to purchase. In the purchase transaction, the licensee

May be either an agent or Transaction-Broker depending on the mutual agreement

Based on the contract to buy and sell loan discount points:

May be paid by either party or a combination of both

Based on the contract to buy and sell loan discount points: Are tax deductible only by the seller. Are always paid by the seller because of Truth in Lending Laws May be paid by either party or a combination of both Are always paid by the buyer since he/she is obtaining the loan

May be paid by either party or a combination of both

If a broker is accused of a violation of the license law in a complaint to the commission and the commission investigative staff determines that the violation probably happened, the commission:

May decide to refer the matter to a hearing before an appointed administrative law judge.

Which of the following is authorized for an Independent Broker under Colorado Law?

May independently work without the supervision of another broker

After investigation has taken place determining licensee misconduct, the Commission

May issue a letter of admonishment

After the Sellers columns on a Settlement sheet have been subtotaled, to balance the two debit and credit columns, a credit to the Seller and a debit to the broker would represent: Money due to the Buyer Money due to the Seller Money owed by the Seller Money owed by the Buyer

Money owed by the Seller When the Sellers credit column is less than the debit column you need to add a credit to make them both equal. This means the credit column (containing the sale price) is less than the debits (containing amoung items - money owed on the property). This Seller is "upside-down." This credit ends up representing money the Seller must bring to the Closing and give to the Broker to pay off debts. (A Broker Debit is a deposit into the escrow account and a check that has to be written). More info: That is a common spot of confusion, so do not let it break your head. The situation occurs at the bottom of the 6 column worksheet when you are reconciling the columns. Let's assume for a moment you are looking at a Buyer's columns. You have applied all the debits and credits and all you have to do is reconcile the columns which have $100,000 in the Credit column (money the buyer has proven they have) and $125,000 in the Debit column (what the Buyer owes). Looks like this Buyer is a little short, but by how much? To determine this amount, you have to make both columns equal. This enables the Closing Agent to determine how much the Buyer is short; which is also how much of a check the Buyer needs to bring and be deposited into the escrow account. So you add $25,000 to the Buyer's Credit column to make both columns equal. Therefore this $25,000 CREDIT represents how much the Buyer is short, meaning this CREDIT does not represent how much they have, it represents how much they still OWE. This is how a CREDIT becomes something you OWE. We are not done reconciling yet. We have a $25,000 Credit, to balance it out we need a $25,000 Debit. That debit goes to the Broker account which represents the Escrow Account. Back to practical language - the Buyers needs to bring a $25,000 check to the closing so that they can make their Credit column (what they got) equal to the Debit column (what they owe) and the Broker (Closing Agent) needs to deposit it into the Escrow Account ($25,000 Debit). For extra points - the reverse is most common with the Seller. When a Sellers Debit column (what they owe) is lower than their Credit column (what they sold their property for), the amount added to the DEBIT column to make both columns equal represents money the Seller is receiving. The balancing CREDIT in the Broker column, reminds the Closing Agent to cut a check to the Seller out of the escrow account.

ACCORDING TO THE WRITTEN ONE YEAR LEASE THE TT WILL EXPIRE ON MAY 1. TO OBTAIN POSSESSION AS OF THAT DATE THE LL MUST GIVE THE TT

NO NOTICE

A SALESPERSON FROM A FIRM SELLS A BUYERS A PROP LISTED BY ANOTHER BROKERAGE THAT PRACTICE DESIGNATED AREAS. SALESPERSON DOESNT HAVE A CONTRACT WITH THE BUYER. IN PA, SALESPERSON MAY BE PRESUMED TO REPRESENT

NO ONE

What if anything is required by the broker to be included on his/her Web site. License number of the brokerage and a list of all current active licensees Names of active licensees, addresses, and telephone numbers Address of the brokerage's home office and states in which the brokerage holds licenses Name of licensee's brokerage firm

Name of licensee's brokerage firm Commission rules regarding advertising of brokerage identity all apply to any Web site or Internet advertising. Brokerage name must appear on web site.

Trust Account journal and ledger documentation of disbursements from trust accounts need NOT include: Records verifying purpose of payment Amount paid and the resulting balance Date of payment and check number Name of the person who wrote the check out of the account

Name of the person who wrote the check out of the account Rule E-1 (p) Recordkeeping requirements A broker shall supervise and maintain, at the broker's licensed place of business, a record keeping system, subject to subsection (7) of this rule, consisting of at least the following elements for each required escrow or trust account: (1) A record called an "escrow or trust account journal" or an equivalent accounting system which records in chronological sequence all money belonging to others which is received or disbursed by the broker. For funds received, the records maintained in the system must include the date of receipt and deposit, the name of the person who is giving the money, the name of the person and property for which the money was received, the purpose of the receipt, the amount, and. a resulting cash balance for the account. For funds disbursed, the records maintained in the system must include the date of payment, the check number, the name of the payee, a reference to vendor documentation or other physical records verifying purpose for payment, the amount paid, and a resulting cash balance for the account.

In the Contract to Buy/Sell Real Estate (AKA the purchase contract), who is responsible for the cost of the appraisal?

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 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 Who pays what in the purchase contract is always a matter of negotiation. Although there are traditions that we follow, such as the Seller paying for Title Insurance, this is custom and not law. Neither the Real Estate Commission or State Statutes will tell a Buyer or Seller what they must pay. That is between the buyer and the seller. From the real estate contract: Cost of Appraisal. Cost of any appraisal to be obtained after the date of this Contract must be timely paid by ___ Buyer ___ Seller. The cost of the appraisal may include any and all fees paid to the appraiser, appraisal management company, lender's agent or all three.

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.

In Colorado, real estate commissions are

Negotiable between the broker and the seller or buyer

The maximum amount of days that can be specified in the Holdover Period in the Listing Contract is: 30 days 60 days 90 days negotiable by Seller and Broker

Negotiable. the Listing Period expires (Holdover Period) (1) to anyone with whom Broker negotiated and (2) whose name was submitted, in writing, to Seller by Broker during the Listing Period (Submitted Prospect). Provided, however, Seller ___ Will __Will Not owe the commission to Brokerage Firm under this if a commission is earned by another licensed real estate brokerage firm acting pursuant to an exclusive agreement entered into during the Holdover Period and a Sale or Lease to a Submitted Prospect is consummated. If no box is checked in this then Seller does not owe the commission to Brokerage Firm.

If a broker is approached by an owner of real property which is listed with another broker under an Exclusive Right-to-Sell or Exclusive Agency contract, the second broker may:

Negotiate the terms of a possible future listing

What is NOT proper for an unlicensed on-site manager of an apartment complex?

Negotiating a rent reduction for a long term tenant

A lease that requires the commercial/industrial tenant to pay the taxes, insurance, and operating expenses would most likely be a

Net lease

According to Commission Position 2 on Earned Fees can a commission be paid to a broker whose license is in an inactive status? Yes No

No A broker with an inactive license is not licensed CP-2 Commission Position on Earned Fees Section 12-61-113(1)(j), C.R.S. of the license law forbids a broker from paying a commission or valuable consideration, for performing brokerage functions, to any person who is not licensed as a real estate broker. Brokerage functions include negotiating the purchase, sale or exchange of real estate.

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.

No, the new listing broker earns the listing side commission

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 This violates the Conway-Bogue court decision which in Colorado binds the conduct of agents. Agents are recognized authorities at conducting real estate transactions. We are not experts at tax and title matters. Those are within the recognized legal expertise of accountants, title examiners and lawyers. A real estate broker is expected to recommend to clients they seek expert advice when the matter is outside their area of expertise.

May a broker accept a referral fee from a mortgage lender or a mortgage broker?

No. it is never permissible to accept such a fee. Against RESPA

To terminate an estate for years leasehold estate, how much notice must be given? 60 days 30 days 90 days None of the above

None of the above An estate for year's leasehold automatically ends on the last day of the term.Therefore, no notice is necessary.

A BPO (Broker Price Opinion) is an estimate of value most often requested by a lending institution of a real estate broker to determine the value of a foreclosed property. Can a BPO be used for financing? When there is a shortage of available appraisers. When you'd like to save your client money on appraisal fees. When your employing broker signs off on it. None of the above.

None of the above. Never, BPO's are an estimate of value for the purposes of marketing and not an appraisal. Only licensed appraisers can prepare an appraisal. Only appaisals can be used for financing purposes. E-42. Notice Required on CMA's or BPOs for Other Than Marketing. When a real estate broker prepares a competitive market analysis (CMA) or a broker's price opinion (BPO) for any reason other than the anticipated sale or purchase of the property, the licensee must include a notice stating: "This evaluation was prepared by a licensed real estate broker and is not an appraisal. This evaluation cannot be used for the purposes of obtaining financing." Pursuant to 12-61-702(5)(b)(II), C.R.S, brokers are prohibited from completing CMA's or BPOs that are used for the purpose of obtaining financing.

A deed of trust held by someone other than the public trustee is NOT: Notice that a legal action is pending that may effect ownership Exempt from loan recission rules Foreclosed through the courts A conditional transfer of ownership from the Trustor to the Beneficiary

Notice that a legal action is pending that may effect ownership Regardless of who holds the Deed of Trust, the transfer of ownership is real and not a notice of pending legal action.

A deed of trust held by someone other than the public trustee is NOT:

Notice that a legal action is pending that may effect ownership - Regardless of who holds the Deed of Trust, the transfer of ownership is real and not a notice of pending legal action.

Broker is allowed to facilitate safeguards for seller assisted financing by adherence to the following EXCEPT: 1) Advise buyers and sellers to consult legal and tax counsel for advice 2) Cooperate with appraisers as they perform their due diligence in asking questions about sales 3) Advise seller as to the impact of any seller paid costs 4) Notify Real Estate Commission of true selling price of home

Notify Real Estate Commission of true selling price of home The real estate commission does not track sale prices of homes. CP-30 State of Colorado Real Estate Commission and Board of Real Estate Appraisers Joint Position Statement The Colorado Real Estate Commission and the Colorado Board of Real Estate Appraisers have issued this Joint Position Statement to address mutual concerns pertaining to practices of real estate brokers and real estate appraisers with regard to residential sales transactions involving seller assisted down payments, seller concessions, personal property transferred with real property and other items of value included in the sale of residential real property. A residential real estate transaction has a life well beyond closing and possession of the property. Accurate sales data is crucial for appraisals and comparative market analysis (CMA) work products. Both appraisers and real estate brokers can effectively work together to maintain the safeguards that accurate sold data affords. A real estate broker can facilitate these safeguards by adherence to the following: • Note the amount of any seller paid costs (including a seller assisted down payment or fee paid to a charitable organization on behalf of the buyer) or other seller concession in the proper transaction documents, including the Buy/Sell Contract, Closing Statements, and Real Property Transfer Declaration. • Utilize all available fields in the multiple listing service to report sold information including all transaction terms and seller concessions. Sold information should be entered promptly following closing and be specific and detailed particularly when the sold price includes a seller assisted down payment or concessions. • Advise buyers and sellers to consult legal and tax counsel for advice on tax consequences of seller contributions and inducements to purchase. • Cooperate with appraisers as they perform their due diligence in asking questions about sales.

Broker is allowed to facilitate safeguards for seller assisted financing by adherence to the following EXCEPT: Advise buyers and sellers to consult legal and tax counsel for advice Cooperate with appraisers as they perform their due diligence in asking questions about sales Advise seller as to the impact of any seller paid costs Notify Real Estate Commission of true selling price of home

THE COVENANT IMPLIED IN A LEASE THAT ENSURES THAT THE TT WILL NOT BE EVICTED BY SOMEONE CLAIMING OWNERSHIP OF THE PROPERTY PRIOR TO THAT OF THE LESSOR IS THE COVENANT

OF QUIET ENJOYMENT

THE ESSENTIAL ELEMENTS OF A CONTRACT INCLUDE ALL OF THE FOLLOWING

OFFER AND ACCEPTANCE; COMPETENT PARTIES; AND CONSIDERATION

ALL OF THE FOLLOWING ARE ESSENTIAL TO THE FORMATION OF A CONTRACT

OFFER; ACCEPTANCE; CONSIDERATION

A SALESPERSON FINALLY CONCLUDED DIFFICULT NEGOTIATION THAT RESULTED IN THE SALE OF A LISTED PARCEL OF PROPERTY. FOR ALL OF HER EXTRA EFFORTS, THE SALESPERSON CAN LEGALLY DEMAND A PERFORMANCE BONUS FROM

ON ONE

A LICENSE SALESPERSON MAY RECEIVE COMPENSATION OR COMMISSION FROM

ONLY THE EMPLOYING BROKER

AFTER THE CONSTRUCTION OF A BUILDING OVER A RR RIGHT OF WAY, THE TRAINS CAN

OPERATE AS USUAL

WHEN A TT SUBLETS ALL OR ANY PART OF THE PREMISES RENTED UNDER A WRITTEN LEASE THE

ORIGINAL LEASE IS UNAFFECTED UNLESS IT CONTAINS A PROVISION THAT PROHIBITS SUCH SUBLETTING

THE PRINCIPAL DISTINCTION BETWEEN THE PRIMARY MORTGAGE MARKET AND THE SECONDARY MORTGAGE MARKET IS IN THE

ORIGINATION VERSUS THE PURCHASE OF MORTGAGE LOAN

Select the correct statement about a lease in Colorado:

Only residential leases have an implied warrant of habitability

The manager of a commercial building has many responsibilities in connection with the operation and maintenance of the structure. The manager would normally be considered the agent of whom?

Owner of the building

severalty

Ownership of real estate by one person only; although a corporation (single entity) can own in severalty

The difference between private mortgage insurance (PMI) and the mortgage insurance premium (MIP) is

PMI is used with conventional loans while MIP is used with FHA loans

TO CREATE A JOINT TENANCY RELATIONSHIP IN THE OWNERSHIP OF REAL ESTATE, THERE MUST BE UNITIES OF

POSSESSION, TIME, INTEREST AND TITLE

A RE BROKER WAS RESPONSIBLE FOR A CHAIN OF EVENTS THAT RESULTED IN THE SALE OF A CLIENT'S PROPERTIES. THIS IS REFEREED TO AS A

PROCURING CAUSE

ANTI TRUST LAWS PROHIBIT ALL OF THE FOLLOWING

PROPERTY MANAGEMENT COMPANIES STANDARDIZING MANAGEMENT FEES; BROKERS ALLOCATING MARKET BASED ON THE VALUE OF HOMES; RE COMPANIES AGREEING NOT TO COOPERATE WITH A BROKER BC OF THE FEES THAT BROKER CHARGES ??????

THE PURPOSE OF A MORTGAGE IS TO

PROVIDE SECURITY FOR THE LOAN

STATEMENTS BY A RE LICENSEE EXAGGERATING THE BENEFITS OF A PROP ARE CALLED

PUFFING

A SALESPERSON EMPLOYED BY A BROKER TOLD A PROSPECTIVE BUYER THAT THE HOUSE SHE WAS LOOKING AT IS 'THE BEST HOUSE IN THE AREA' BECAUSE OF THIS STATEMENT THE SALESPERSON WOULD BE VIEWED AS

PUFFY

WHAT IS THE PURPOSE OF A SECURITY DEPOSIT

REPAIR DAMAGE TO THE PROP CAUSED BY THE TT

A MAN CONVEYS OWNERSHIP OF HIS HOUSE TO HIS MOTHER AND STIPULATES UPON HER DEATH, HE WILL RECAPTURE THE OWNERSHIP. THE INTEREST THE MAN HAS IN THE FOLLOWING IS A

REVERSION ESTATE

ALL OF THE FOLLOWING WILL TERMINATE AN OFFER

REVOCATION OF THE OFFER BEFORE ACCEPTANCE; DEATH OF THE OFFEROR BEFORE ACCEPTANCE; A CONTEROFFER BY THE OFFEREE

THE RIGHTS OF THE OWNER OF PROPERTY LOCATED ALONG THE BANKS OF A RIVER ARE CALLED

RIPARIAN RIGHTS

Select the correct statement about a lease in Colorado: Residential leases have an implied warranty of habitability Commercial and Residential leases have an implied warranty of habitability The Landlord is responsible for repairs The Tenant is responsible for repairs

Residential leases have an implied warranty of habitability Property Mangement and Leases - Duties and Liabilities of the Parties, All residential leases have an implied Warranty of Habitability. This means they must meet a minimal set of standards for housing established by the State. "Implied" means the Warranty of Habitability standards do not have to be physically listed in a lease to be effective as they are State law. Commercial leases do not have a Warranty of Habitability. As to responsibility of making repairs - neither a landlord or tenant is required to make a repair unless stated in the lease. However the Landlord on residential properties is required to provide a habitable home that satisfies the conditions of the Warranty of Habitability. If the home is deemed not habitable, the Landlord cannot be compelled to make a repair, but the Tenant cannot be compelled to stay. When a tenant files a legal action to break a lease due to an unhabitable situation - this is called "constructive eviction."

Brokers should provide safeguards on seller-assisted down payments on: Commercial transactions Land transactions Time share transactions Residential transactions

Residential transactions You answered this question incorrectly Brokers should provide safeguards on seller-assisted down payments on: Commercial transactions Land transactions Your Choice -> Time share transactions Correct -> Residential transactions Explanation As per Commission Position Statement 30 (CP-30) "The Colorado Real Estate Commission and the Colorado Board of Real Estate Appraisers have issued this Joint Position Statement to address mutual concerns pertaining to practices of real estate brokers and real estate appraisers with regard to residential sales transactions involving seller assisted down payments, seller concessions, personal property transferred with real property and other items of value included in the sale of residential real property. A residential real estate transaction has a life well beyond closing and possession of the property. Accurate sales data is crucial for appraisals and comparative market analysis (CMA) work products. Both appraisers and real estate brokers can effectively work together to maintain the safeguards that accurate sold data affords."

Brokers should provide safeguards on seller-assisted down payments on: Commercial transactions Land transactions Time share transactions Residential transactions

Residential transactions As per Commission Position Statement 30 (CP-30) "The Colorado Real Estate Commission and the Colorado Board of Real Estate Appraisers have issued this Joint Position Statement to address mutual concerns pertaining to practices of real estate brokers and real estate appraisers with regard to residential sales transactions involving seller assisted down payments, seller concessions, personal property transferred with real property and other items of value included in the sale of residential real property. A residential real estate transaction has a life well beyond closing and possession of the property. Accurate sales data is crucial for appraisals and comparative market analysis (CMA) work products. Both appraisers and real estate brokers can effectively work together to maintain the safeguards that accurate sold data affords."

THE MORTGAGEE FORECLOSED ON A PROP AFTER THE BORROWER DEFAULTED ON THE LOAN. AT THE FORECLOSER SALE, THE HOUSE SOLD FOR ONLY 29 THOU. THE UNPAID BALANCE OF THE LOAN AT THE TIME SALE OF 40 THOU. HOW THE LENDER WILL RECOVER THIS

SEEK A DEFICIENCY JUDGEMENT

AN IMPORTANT CHARACTERISTIC OF LAND IS THAT IF MAY BE MODIFIED OR IMPROVED AT ANY GIVEN TIME. IT MAY INCREASE THE VALUE OF REAL ESTATE; WHAT IS CONSIDER IMPROVEMENT

SEWER; BUILDINGS; ROADS

THE INTEREST PAID OVER THE LIFE OF A FIXED RATE LOAN IS

SIMPLE INTEREST

CONDOMINIUM OWNERSHIP COMMON ELEMENTS CANNOT BE

SOLD SEPARATELY

IN A COMMUNITY PROPERTY STATE, SEPARATE PROPERTY IS OWNED

SOLELY BY EITHER SPOUSE BEFORE THE MARRIAGE OR ACQUIRED BY GIFT OR INHERIT BY EITHER SPOUSE DURING THE MARRIAGE.

AS AN AGENT FOR THE SELLER, A R E BROKER CAN

SOLICIT AN OFFER TO PURCHASE THE PROPERTY FROM A PROSPECTIVE BUYER

AFTER THE BUYER AND THE SELLER HAVE SIGNED A SALES CONTRACT, THE SELLER CHANGES HIS MIND AND DEFAULTS. THE BUYER SUES THE SELLER TO FORCE HIM TO GO THRU W/ THE CONTRACT. THIS IS KNOWN AS

SPECIFIC PERFORMANCE

THE LEGAL PROCEEDING OR LEGAL ACTION BROUGHT BY EITHER THE BUYER OR THE SELLER UNDER A PURCHASE CONTRACT TO ENFORCE THE TERMS OF THE CONTRACT IS KNOWN AS

SPECIFIC PERFORMANCE

A VALID LEASE MUST CONTAIN A

STATEMENT OF THE SPECIFIC LENGTH OF TIME

THE LAW THAT REQUIRES RE CONTRACTS TO BE IN WRITING TO BE ENFORCEABLE IS THE

STATUE OF FRAUDS

THE WORD IMPROVEMENT REFERS TO ALL THE FOLLOWING

STREETS; SANITARY SEWER; THE FOUNDATION

TT PLACE TOO SMALL OF A 5 YR LEASE CONTRACT. ANOTHER BUSINESS OWNER IS INTERESTED IN LEASING THE PREMISES. WHAT IS THIS CALLED

SUBLEASE

AN EXISTING MORTGAGE LOAN CAN HAVE ITS LIEN PRIORITY LOWERED BY A

SUBORDINATION AGREEMENT

A BREACH OF CONTRACT IS A REFUSAL OR A FAILURE TO COMPLY WITH THE TERMS OF THE CONTRACT. IF THE SELLER BREACHES THE PURCHASE CONTRACT, THE BUYER MAY DO ALL OF THE FOLLOWING

SUE THE SELLER FOR SPECIFIC PERFORMANCE; RESCIND THE CONTRACT AND RECOVER THE EARNEST MONEY; SUE THE SELLER FOR DAMAGES

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

Seller

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

Seller The Exclusive Right to Buyer is also know as the Buyer Agency agreement. It is the contract a buyer signs to engage a broker as a buyer's agent. Since the buyer is the principal, the only possible customer is a seller.

Interest in arrears is charged to the: Buyer Seller Broker Lender

Seller The seller pays interest from the first day of the month until the day of closing (sellers loan balance times the interest rate divided by 365 to get the daily rate) on the loan the seller's paying off.

Who should hire a closing company?

Seller - (Usually listing agent refers)

Broker Bill Butter is working with Buyer Brian Bread and has found a property on which the Buyer wants to place an offer. The property that he likes is owned by Seller Sammy Samuel and listed by Broker Cherry Cleary. The property is located at 2443 E Westgate Ave in Durango, CO. The asking price is $315,000. Buyer Bread offers $299,000 on April 10th and wants all appliances including the washer and dryer included in the sale price, the appliances were excluded in the listing as was the Hot Tub on the patio. The offer is countered by Seller Samuel through and on the recommendation of his agent Broker Cherry Cleary on April 11th at $309,000 and will include all appliances except the washer and dryer. Buyer Bread accepts this counter offer on April 12th and the closing is scheduled for May 25. An inspection is held on April 16th and Buyer Bread wants some roof shingles repaired and the carpet in the master bedroom to be replaced. Seller Samuel agrees to the shingles being repaired, but will only give a $750 credit at closing to the Buyer Bread to replace the carpet; Buyer Bread accepts. Prior to closing, Buyer Bread requests that the seller allow them to start a kitchen remodel prior to closing. Seller Samuel will not allow this and Buyer Bread gets angry and wants out of the contract. What is the brokerage relationship between Seller Samuel and Broker Cleary?

Seller Agency

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 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).

When a RE broker is acitng as a subagent for the seller, her fiduciary duty is owed and primary responsibility is to:

Seller only

When a seller decides to counter an offer presented to him, which is true?

Seller should sign only the counter offer

In the Exclusive Right-to-Sell Listing Contracts, what does the seller agree regarding existing monetary encumbrances?

Seller will pay off any encumbrance not assumed by the buyer.

At the time of taking a listing, the broker should have the seller complete which of the following documents? HUD-1 Seller's net proceeds Promissory note for broker'scommission Seller's Property Disclosure

Seller's Property Disclosure The seller's property disclosure and lead based paint disclosure are required. The seller's net proceeds helps show costs the seller might pay and will vary with different offers.

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

Selling agent

An out-of-state seller sells a property in Colorado. The closing company must withhold up to 2 percent of the:

Selling price

An out of state investor sells a property in Colorado. The closing entity withholds 2% of the

Selling price as possible income tax liability

An out of state investor sells a property in Colorado. The closing entity withholds 2% of the:

Selling price as possible income tax liability - The law is that the closing entity must withhold 2% or the entire net amount whichever is less at closing for possible income tax liability when the person selling has an out of state address.

Property management security deposits Must be held by the property owner May be held in the management trust account Should be held in a separate, security deposit trust account by the property manager Are normally used for property expenses until needed for return to the tenant.

Should be held in a separate, security deposit trust account by the property manager Commission rules call for security deposits to be held in a separate trust account to prevent commingling with operating expenses.

An owner has refinanced his primary residence and decided to take cash out of the loan to buy a fixer-upper. If the closing is scheduled for today (Monday) on the primary residence, How early can the owner close on the fixer upper? Right after the closing Since he will get a check and since that check needs to be cashed, the earliest he can go buy is Thursday Since the right of rescission is 3 days, he will not get the check until 3 business days after the closing which would be Friday Since the right of rescission is 5 days, he will not get the check 5 days from the closing, the earliest he can buy is the following Monday

Since the right of rescission is 3 days, he will not get the check until 3 business days after the closing which would be Friday

The Real Estate Commission may NOT issue a temporary license to prevent hardship to a:

Sole proprietor

Duplex owned by wife and husband. Joint tenancy. Husband dies. Husband had a will and left all assets or to son from previous marriage. What does the son receive? Son now owns the property Son does not get the property Son owns half of property with wife Son owns one of the duplex units

Son does not get the property All parties under joint tenancy have a right of survivorship. This means that the wife became the sole owner of the proeprty automatically upon the death of her husband. This right supercedes the will. More about Joint Tenancy and Other Forms of co-ownership from the FreeDictionary.com : In estate law, joint tenancy is a special form of ownership by two or more persons of the same property. The individuals, who are called joint tenants, share equal ownership of the property and have the equal, undivided right to keep or dispose of the property. Joint tenancy creates a Right of Survivorship. This right provides that if any one of the joint tenants dies, the remainder of the property is transferred to the survivors. Descended from common-law tradition, joint tenancy is closely related to two other forms of concurrent property ownership: Tenancy in Common, a less restrictive form of ownership that sometimes results when joint tenancies cease to exist, and Tenancy by the Entirety, a special form of joint tenancy for married couples. Joint tenants usually share ownership of land, but the property may instead be money or other items. Four main features mark this type of ownership: (1) The joint tenants own an undivided interest in the property as a whole; each share is equal, and no one joint tenant can ever have a larger share. (2) The estates of the joint tenants are vested (meaning fixed and unalterable by any condition) for exactly the same period of time—in this case, the tenants' lifetime. (3) The joint tenants hold their property under the same title. (4) The joint tenants all enjoy the same rights until one of them dies. Under the right of survivorship, the death of one joint tenant automatically transfers the remainder of the property in equal parts to the survivors. When only one joint tenant is left alive, he or she receives the entire estate. If the joint tenants mutually agree to sell the property, they must equally divide the proceeds of the sale. Because disagreement over the disposition of property is common, courts sometimes intervene to divide the property equally among the owners. If one joint tenant decides to convey her or his interest in the property to a new owner, the joint tenancy is broken and the new owner has a tenancy in common. Tenancy in common is a form of concurrent ownership that can be created by deed, will, or operation of law. Several features distinguish it from joint tenancy: A tenant in common may have a larger share of property than the other tenants. The tenant is also free to dispose of his or her share without the restrictive conditions placed on a joint tenancy. Unlike joint tenancy, tenancy in common has no right of survivorship. Thus, no other tenant in common is entitled to receive a share of the property upon a tenant in common's death; instead, the property goes to the deceased's heirs. Tenancy by the entirety is a form of joint tenancy that is available only to a Husband and Wife. It can be created only by will or by deed. As a form of joint tenancy that also creates a right of survivorship, it allows the property to pass automatically to the surviving spouse when a spouse dies. In addition, tenancy by the entirety protects a spouse's interest in the property from the other spouse's creditors. It differs from joint tenancy in one major respect: neither party can voluntarily dispose of her or his interest in the property. In the event of Divorce, the tenancy by the entirety becomes a tenancy in common, and the right of survivorship is lost.

Duplex owned by wife and husband. Joint tenancy. Husband dies. Husband had a will and left all assets or to son from previous marriage. What does the son receive?

Son does not get the property All parties under joint tenancy have a right of survivorship. This means that the wife became the sole owner of the property automatically upon the death of her husband. This right supercedes the will.

Who is responsible for the cost of Mediation?

Split equally between buyer and seller

Buyer Stanley hired broker Riley, to represent her through the process of purchasing a newer home. After the offer is written, the broker for Stanley makes a copy of the earnest money check, but does not deliver the copy or the check with the contract Stanley has not made a legal offer because no consideration was given Stanley has made a legal offer and Riley can hold the check without depositing it until the contract is accepted Riley need not deliver the check for 2 days regardless of the provisions in paragraph 4 negotiating who will hold the earnest money deposit Riley is subject to disciplinary action

Stanley has made a legal offer and Riley can hold the check without depositing it until the contract is accepted Colorado law allows the selling broker to hold the check until the offer is accepted

The most likely source of information for what water rights exist for a property with a well would be:

State Engineer - Colorado Department of Natural Resources

The most likely source of information for what water rights exist for a property with a well would be: An attorney County Clerk and Recorder County Planning Department State Engineer - Colorado Department of Natural Resources

State Engineer - Colorado Department of Natural Resources

Well permits are issued and tracked by: State Engineer's Office Colorado Supreme Court Colorado Legislature Well Permits are not regulated

State Engineer's Office The State Engineers Office maintains records of all permits issued in the State. The office also issues most permits except in designated ground water basins where well permits are issued by the Ground Water Commission.

When a license law complaint is made to the Commission against a licensee, the licensee must: Pay a fine and give up license Appear before the Commission within 30 days Submit a written response to the Commission if requested Temporarily give up license

Submit a written response to the Commission if requested Rule E-21. Licensee must respond to complaint or audit notice in writing When a licensee has received written notification from the Commission that a complaint has been filed against the licensee, the licensee has been selected for an audit, or that an audit has identified record keeping or trust account deficiencies, such licensee shall submit a written answer to the Commission. Failure to submit a written answer within the time set by the Commission in its notification shall be grounds for disciplinary action unless the Commission has granted an extension of time for the answer in writing and regardless of the question of whether the underlying complaint warrants further investigation or subsequent action by the Commission. The licensee's written answer shall contain the following: (a) A complete and specific answer to the factual recitations, allegations or averments made in the complaint filed against the licensee, whether made by a member of the public, on the Commission's own motion or by an authorized representative of the Commission. (b) A complete and specific response to any additional questions, allegations or averments presented in the notification letter. (c) Any documents or records requested in the notification letter. (d) Any further information relative to the complaint that the licensee believes to be relevant or material to the matters addressed in the notification letter.

A listing broker arrives at a closing and discovers that an easement release that the title company requires from the neighbors lender is missing. The title representative indicates that she confirmed that it had been sent, but it has not yet arrived. What should the listing broker do?

Suggest that if everything else is in order, the settlement could proceed "in escrow" with the title company instructed to actually close when the release is received.

A buyers broker attends a closing and discovers that his or her buyer was charged $225 for an appraisal the seller had agreed to pay for. How should the broker handle this?

Suggest that if the buys agrees, the seller could give the buyer a personal check for this amount to settle this unfortunate oversight. A memo should be signed by both parties agreeing to this transaction.

WHEN A TT HOLDS POSSESSION OF A LL PROPERTY WITHOUT A DEFINITE LEASE

TENANCY AT WILL

ALL OF THE FOLLOWING TT INVOLVE A LESSOR-LESSEE RELATIONSHIP SUCH AS

TENANCY IN COMMON

EQUAL RIGHTS OF POSSESSION ARE CHARACTERISTIC IN ALL OF THE FOLLOWING

TENANCY IN COMMON; TENANCY BY ENTIRETY; JOINT TENANCY

IN A GIFT OF PARCEL OF REAL ESTATE, ONE OF THE 2 OWNERS WAS GIVEN AN UNDIVIDED 60% INTEREST AND THE OTHER RECEIVED AN UNDIVIDED 40% INTEREST. THE 2 OWNERS HOLD THEIR INTERESTS AS

TENANTS IN COMMON

THE SEVERLTY OWNER OF A PARCEL OF LAND SELLS IT TO A BUYER. THE BUYER INSISTS THAT THE OWENRS WIFE JOIN IN SIGNING THE DEED. THE PURPOSE OF OBTAINING THE WIFES SIGNATURE IS TO

TERMINATE ANY RIGHTS THE WIFE MA HAVE IN THE PROPERTY

WHICH OF THE FOLLOWING IS AN EXAMPLE FO DUAL AGENCY

THE BROKER ACTING FOR BOTH THE BUYER AND THE SELLER IN THE SAME TRANSACTION

RENT IS BEST DEFINED AS

THE CONSIDERATION FOR THE USE OF REAL PROPERTY

WHICH OF THE FOLLOWING BEST DESCRIBES A CONTRACT THAT IS VOIDABLE

THE CONTRACT MAY BE VALID

A PROP HELD AS TENANCY BY THE ENTIRETY REQUIRES WHICH OF THE FOLLOWING

THE COTENANTS MUST BE HUSBAND AND WIFE

A PERSON MUST ACCEPT AN OFFER TO ENTER INTO A CONTRACT BEFORE

THE DEATH OF THE OFFERER

THE PHRASE 'BUNDLE OF LEGAL RIGHTS' IS PROPERLY INCLUDED IN

THE DEFINITION OF REAL PROPERTY

THE OWNER OF A CONDO IS RESPONSIBLE FOR PAYING A MONTHLY MAINTENANCE FEE. IF THE OWNER FAILS TO MAKE THIS PAYMENT, WHAT HAPPENS

THE DEPT BECOMES A LIEN AGAINST THE UNIT

WHICH OF THE FOLLOWING IS THE BEST DEFINITION OF ACTUAL EVICTION

THE ENFORCEMENT OF A COURT ORDER TO REMOVE A LESSEE

A LOT IS EMCOMBERED BY A SEWER EASEMENT THAT RUNS WHERE THE FOUNDATION OF A BLD WOULD BE. HOW WILL THIS AFFECT THE OWNER WHO WANTS TO BUILD A HOUSE

THE HOUSE MUST AVOID THE EASEMENT AND CONSTRUCT AROUND IT

UNDER THE PROVISIONS OF A TYPICAL COMMERCIAL LEASE, ANY TRADE FIXTURES THAT REMAIN IN THE PROPERTY AFTER THE LEASE HAS EXPIRED WILL BE THE PROPERTY OF

THE OWNER/THE LESSOR

CO-OPERATIVE OWNERSHIP IS

THE OWNERS HAVE A PROPIETARY LEASE WITH THE ASSOCIATION FOR THEIR INDIVIDUAL UNIT

A BILATERAL CONTRACT IS ONE IN WHICH

THE PROMISE OF ONE PARTY IS GIVEN IN EXCHANGE FOR THE PROMISE OF THE OTHER PARTY

A RANCHER OWNS A PARCEL OF LAND ON WHICH OIL WAS DISCOVERED. IF RANCHER HAS NOT CONVEYED THE OIL RIGHTS, WHO OWNS THE OIL

THE RANCHER

YOUNG COUPLE W/ INFANT SAW AN APT THAT IS OCCUPIED BY MOSTLY ADULTS. AGENT SHOWED ONLY THE FIRST FLOOR? WHAT DID THE AGENT DO WRONG

THE RENTAL AGENT SHOULD HAVE INQUIRED ABOUT THE COUPLE'S PREFERENCE FOR APARTMENTS

THE RIGHT TO CONTROL ONE'S PROPERTY INCLUDES ALL OF THE FOLLOWING ARE

THE RIGHT TO INVITE PPL ONTO THE PROPERTY FOR A POLITICAL FUNDRAISER; THE RIGHT TO ERECT NO TRESPASSING SIGNS; THE RIGHT TO ENJOY PRIDE OF OWNERSHIP

WHICH OF THE FOLLOWING BEST DEFINES LAY OF AGENCY

THE RULES OF LAW THAT APPLY TO THE RESPONSIBILITIES OF A PERSON WHO ACTS FOR ANOTHER

AN INDIVIDUAL RENTS AN APT FOR ONE YEAR. THE LL SELLS THE BLD DURING THE YEAR. WHAT EFFECT DOES THE SALE HAVE ON THE LEASE

THE SALES DOES NOT AFFECT THE LEASE

FOR LAND TO BE TAKEN BY THE GOVT UNDER ITS RIGHT OF EMINENT DOMAIN, WHICH OF THE FOLLOWING MUST APPLY

THE TAKING MUST BE FOR A PUBLIC PURPOSE

TENANCY WITH SURVIVORSHIP MEANS

THE TENANCY INTEREST MAY BE HELD BY THE REMAINING TT UPON DEATH

A LESSEE IS IN POSSESSION OF PROPERTY UNDER A TENANCY AT WILL. IF LESSEE DIES

THE TENANCY WILL TERMINATE

UNLESS SOME OTHER WRITTEN AGREEMENT HAS BEEN MADE THE BROKER WILL USUALLY RECEIVE THE SALES COMMISSION FROM THE SELLER WHEN

THE TRANSACTION IS CLOSED

THE LL LEASE PROHIBITS TT FROM ALTERING THE PROP IN ANY WAY. YOUNG WOMAN WHO USES A WHEELCHAIR CANNOT MOVE OVER THE DOORSTEP/BTHRM BY HERSELF. WHAT A TT TO DO

THE TT IS ENTITLED TO MAKE THE NECESSARY ALTERATIONS

3 CO-WORKERS CANNOT AGREE ON THE USE AND DISPOSITION OF THE PROP THAT THEY OWN TOGETHER. 2 WANT TO SELL AND THE 3RD WANT TO KEEP THE PROP. WHAT CAN THEY DO

THEY CAN FILE A PARTITION SUIT

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.

When a broker terminates his affiliation with an employing broker what must be done?

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

A real estate broker may pay compensation to which of the following parties?

The broker associates employed by the broker

Regarding the broker/seller relationship under the terms of an Exclusive Right-to-Sell listing contract, which of the following statements are true?

The broker can take the listing without being an agent of the seller

Regarding the broker/seller relationship under the terms of an Exclusive Right-to-Sell listing contract, which of the following statements are true? The broker may be the seller's agent and a transaction broker for the buyer The broker can take the listing without being an agent of the seller The listing must have at least a 60 day holdover period The listing has to be for at least thirty days

The broker can take the listing without being an agent of the seller A broker may list a property as either a Seller's Agent or Transaction Broker. Only a Seller's Agent is considered to be an "agency relationship." Transaction Broker is considered to be a "working relationship." In an agency relationship you are an advocate for the client and owe the client your loyalty. In a working relationship you are a neutral party, advocating for neither the buyer or the seller but are instead just a facilitator for the transaction. Under NO CIRCUMSTANCES can you be an agent for one party and a transaction broker for the other in the same transaction. That would have the effect of you telling one party you are working for them (Buyer or Sellers Agency) and the other that you are a neutral party (Transaction Broker). That would be dishonest.

Where a buyer, after signing a valid purchase agreement, asks the broker for permission to move into the property before the closing, the broker should:

The broker does not have the authority, to give the buyer permission to move on to the property before closing, and should refer all such requests to the owner.

If there is a dispute regarding earnest money: The broker has a choice to interplead the money or await written instructions from the parties The broker must turn the money over to the court while awaiting resolution of the dispute Seller and Buyer must sue the broker to resolve the impasse The broker may move the money to an operating account

The broker has a choice to interplead the money or await written instructions from the parties the broker has options, to interplead the money or await written instructions

An Exclusive Right to Buy and Sell contract may disclose which of the following in the Acknowledgments section? The broker is an agent of the buyer The broker is a transaction broker The broker is an agent of both the buyer and the seller The broker is either a Buyers' Agent or a Transaction Broker or a Seller's Agent

The broker is either a Buyers' Agent or a Transaction Broker or a Seller's Agent The Acknowledgements section of the Exclusive Right to Buy/Sell (AKA Purchase Contract) is the place where the brokers disclose their relationship to their clients. Here is a wiggle for you: the person writing an Exclusive Right to Buy and Sell agreement (Purchase Contract) for the buyer may be working either as a Transaction Broker for the buyer or seller, or as a buyers agent, or as a Sellers agent. How can the agent working with the buyer be a seller's agent? Ans. When the seller's agent is selling a property to a customer ie. an unrepresented buyer. As an example: the sellers agent sells the property to someone who does not have an agent, but who saw the property in an open house the agent was holding. In this case the agent discloses that he/she represents the seller and that the buyer is a customer. From the Acknowledgements section of the Contract to Buy and Sell Real Estate BROKER'S ACKNOWLEDGMENTS AND COMPENSATION DISCLOSURE. (To be completed by Broker working with Buyer)..... ...Broker is working with Buyer as a Buyer's Agent Seller's Agent Transaction-Broker in this transaction.

Which of the following is true when a broker negotiates a Fee under the Exclusive-Right-to-Buy Contract?

The broker may be directed to seek payment from any or all of several sources - The buyer may direct the broker to seek payment from various sources. If the broker is unable to collect the fee from any of the other sources, the buyer may be obligated to pay the fee, depending upon which box is checked in para.7 of the contract. (7.1 says buyer is obligated to pay, 7.3 says buyer is not obligated to pay. all other choices in this question are not totally correct so they couldn't be the right answer.

Which of the following is true if a broker negotiates a Success Fee under the Exclusive-Right-to-Buy Contract? A) The listing broker must pay the negotiated fee at closing. B The buyer will pay the fee at closing. C) The broker may be directed to seek payment from any or all of several sources. D) If the broker cannot get the fee from the listing broker or seller, the buyer is under no obligation to pay.

The broker may be directed to seek payment from any or all of several sources. the Exclusive Right to Buy agreement is often referred to as the Buyer Agency Agreement. This is the contract used when a buyer wants to engage the services of a buyer's agent. In this agreement, Success Fee is a term used for commission. Since the buyer is engaging the agent, the buyer needs to indicate who is going to pay the agent (buyer or listing broker or seller or anybody but me). The form of this payment needs to be indicated i.e. a percentage of the sale or lease, or an hourly rate, or some other form of compensation. If there is a minimum or maximum amount. If they are paying a retainer. In short, a number of different negotiated items all relating to the commission paid.

Which of the following is true about listing contracts?

The broker may negotiate for a future listing if contacted by the owner.

According to the CREC Rule-F

The broker may prepare an addendum to include exculpatory language to be attached to a buyer or seller listing.

The buyer notifies the seller in writing of a termination of the contract under the Loan Objection Deadline. What happens to the earnest money? The broker splits the money with the seller The broker must immediately return the money to the buyer The broker holds the money until there is mutual agreement to return the money to the buyer The buyer and the seller will mediate any disagreement about the earnest money

The broker must immediately return the money to the buyer A buyer has until the Loan Objection Deadline to provide written notice s/he cannot receive a satisfactory loan and wants to terminate the contract. If s/he does provide such notice, the earnest money must be refunded to the buyer. If the buyer does not provide such notice, the contract continues, but the buyer's earnest money becomes nonrefundable should s/he not receive a loan. From the Contract to Buy/Sell Real Estate: Loan Objection. If Buyer is to pay all or part of the Purchase Price with a New Loan, this Contract is conditional upon Buyer determining, in Buyer's sole subjective discretion, whether the New Loan is satisfactory to Buyer, including its availability, payments, interest rate, terms, conditions, and cost of such New Loan. This condition is for the sole benefit of Buyer. Buyer has the Right to Terminate on or before Loan Objection Deadline, if the New Loan is not satisfactory to Buyer, in Buyer's sole subjective discretion. IF SELLER IS NOT IN DEFAULT AND DOES NOT TIMELY RECEIVE BUYER'S WRITTEN NOTICE TO TERMINATE, BUYER'S EARNEST MONEY WILL BE NONREFUNDABLE, except as otherwise provided in this Contract (e.g., Appraisal, Title, Survey).

When an Employing Broker changes the primary business address

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

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 "Shall" 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 "Shall" box has not been checked 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 "Shall Not" box is checked, meaning the old listing agent "shall not" be owed a commission if another brokerage firm has earned one. If neither the "Shall" or "Shall Not" be owned a commission" box is checked - the default is "Shall Not". See "Holdover Period" in the "When Earned" clause of an Exclusive Right to Sell listing agreement.

If a water bill is based on a water meter reading, how is the bill handled at closing?

The broker should withhold an amount sufficient enough to pay the sellers final bill.

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 A buyer has until the Loan Objection Deadline to provide written notice s/he cannot get a commitment for a satisfactory loan and wants to terminate the contract. If s/he does provide such notice, the earnest money is refunded to the buyer. If the buyer does not provide such notice, the contract continues, but the buyer's earnest money becomes nonrefundable should s/he not receive a loan. From the Contract to Buy/Sell Real Estate: Loan Objection. If Buyer is to pay all or part of the Purchase Price with a New Loan, this Contract is conditional upon Buyer determining, in Buyer's sole subjective discretion, whether the New Loan is satisfactory to Buyer, including its availability, payments, interest rate, terms, conditions, and cost of such New Loan. This condition is for the sole benefit of Buyer. Buyer has the Right to Terminate on or before Loan Objection Deadline, if the New Loan is not satisfactory to Buyer, in Buyer's sole subjective discretion. IF SELLER IS NOT IN DEFAULT AND DOES NOT TIMELY RECEIVE BUYER'S WRITTEN NOTICE TO TERMINATE, BUYER'S EARNEST MONEY WILL BE NONREFUNDABLE, except as otherwise provided in this Contract (e.g., Appraisal, Title, Survey).

The following statements concerning the Colorado Use Tax is true

The burden to pay the tax is placed on the buyer

If the Loan Objection Deadline passes and there is no loan commitment by the lender, what happens to the contract if the buyer and seller have not signed an amendment extending the date? It terminates There is a three-day grace period Nothing The buyer is in default if he/she does not close

The buyer is in default if he/she does not close buyer has until the Loan Objection Deadline to provide written notice s/he cannot receive a satisfactory loan and wants to terminate the contract. If s/he does provide such notice, the earnest money must be refunded to the buyer. If the buyer does not provide such notice, the contract continues, but the buyer's earnest money becomes nonrefundable should s/he not receive a loan. From the Contract to Buy/Sell Real Estate: Loan Objection. If Buyer is to pay all or part of the Purchase Price with a New Loan, this Contract is conditional upon Buyer determining, in Buyer's sole subjective discretion, whether the New Loan is satisfactory to Buyer, including its availability, payments, interest rate, terms, conditions, and cost of such New Loan. This condition is for the sole benefit of Buyer. Buyer has the Right to Terminate on or before Loan Objection Deadline, if the New Loan is not satisfactory to Buyer, in Buyer's sole subjective discretion. IF SELLER IS NOT IN DEFAULT AND DOES NOT TIMELY RECEIVE BUYER'S WRITTEN NOTICE TO TERMINATE, BUYER'S EARNEST MONEY WILL BE NONREFUNDABLE, except as otherwise provided in this Contract (e.g., Appraisal, Title, Survey).

A buyer makes an offer through the listing broker on a seller's property. The buyer offers $98,000 and asks the seller to pay 3 discount points. The property is listed for $103,900.00. The seller agrees to the $98,000, but submits a counterproposal that she will only pay 2 points. All of the following are true EXCEPT: The buyer's offer has been rejected and she is under no further obligation The buyer is the offeree The seller is the offeror The buyer is the offeror

The buyer is the offeror When the buyer made her original offer, she was the offeror and the seller was the offeree. Once the seller countered the buyer's original offer their roles reversed. The seller became the offeror because the counterproposal constituted a new offer and the buyer receiving it was the offeree. As to her original offer; since the seller rejected it, the buyer was under no further obligation as to her original offer. 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.

If a Seller is in default of the terms of the Contract to Buy & Sell:

The buyer may cancel or sue for specific damages

If a Seller is in default of the terms of the Contract to Buy & Sell: The buyer may cancel or sue for specific damages

The buyer may cancel or sue for specific damages

The buyer may terminate the contract by written notice if the difference causes the buyer's cash at closing to increase by a stated amount.

A buyer is assuming a loan and the loan balance has turned out to be less than the assumption balance provided by the seller. How would this be handled according to the Residential Contract to Buy and Sell ? The seller must reduce the price of the property to compensate for the difference. The buyer may terminate the contract by written notice if the difference causes the buyer's cash at closing to increase by a stated amount. The contract is automatically terminated by the seller's misrepresentation. Depending on how the form is completed, either the buyer may terminate the contract or the seller could reduce the price to make up for the difference.

The buyer may terminate the contract by written notice if the difference causes the buyer's cash at closing to increase by a stated amount. The buyer has the option of terminating the contract if the terms are unacceptable.

Susan Seller give her agent a 60 days listing to sell her home for $200,000. 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. The buyers inspector noticed the damage to the basement floor and communicated this information to the buyer on March 20th. The purchase contract is still binding as the listing broker guarantees the floor will be repaired by closing The purchase contract is still binding as the crack was disclosed in the seller property disclosure The buyer may terminate the purchase contract in writing. The buyer also has the option to negotiate a repair cost with the seller

The buyer may terminate the purchase contract in writing. The buyer also has the option to negotiate a repair cost with the seller The buyer has the ability to terminate the contract with no penalty as long as they communicated the termination to the sellers prior to the March 27th inspection deadline. The buyer alternatively may negotiate a repair with the seller. Disclosing the crack does not prohibit the buyer from objecting.

When a buyer buys a home "subject to" the seller's existing loan on the property:

The buyer will not be personally liable for the loan and the seller remains the borrower of record.

A buyer selected an expert to inspect a septic tank of the home he was about to purchase. The inspector damaged the homes sprinkler system during the inspection. Who is liable for the repair costs:

The buyer would be liable for the damages

A seller of real property is bound by the acts and representations of the following EXCEPT:

The buyers broker

If Bess Crockett was a widow of upon her death and her first child died before she did and left a wife and two children but her second child is still living, who inherits Bess' property if she left no will?

The children of the first child and the second child

Title to property may be acquired by adverse possession if:

The claimant has occupied the property for 18 years under certain conditions.

According to RESPA regulations, what is a lender's limitation on an escrow account cushion for taxes and insurance?

The commission cannot exceed two months taxes and two months insurance

According to the lead-based paint disclosure provision, contained in the Residential Contract to Buy and Sell, which of the following is correct if the building permit for a residential improvement was issued prior to January 1, 1978? The contract is void unless disclosure is signed by the seller and brokers prior to the parties signing the sales contract. The seller and brokers must make disclosure prior to closing. The broker is responsible to disclose the age of the property. Disclosure is required only if the sellers are aware of lead-based paint on the property.

The contract is void unless disclosure is signed by the seller and brokers prior to the parties signing the sales contract. The provision about lead-based paint disclosure included in the Residential Contract to Buy and Sell is a federal disclosure requirement. Colorado rules provide that the contract is void unless proper disclosure and all signatures are obtained prior to the parties signing the sale contract.

Th Residential Contract to Buy and Sell includes a provision about lead-based paint disclosure. According to this provision, if the building permit for a residential improvement in the property was issued prior to January 1,1978:

The contract is void unless the disclosure is signed by all parties on or before the date the purchase contract is executed.

It is necessary to calculate a dollar value for depreciation when using which of the following

The cost approach to value

When a seller wishes to counter an offer made by a purchaser, which of the following documents should be signed by the seller? The purchase and sale contract The counter offer The purchase and sale contract and the counter offer The purchase and sale contract after the appropriate changes have been stricken or changed and initialed

The counter offer By signing the purchase and sale contract the seller is agreeing to those terms. Changing and initialing is a poor practice. Just have the seller sign the counter and attach it to the offer and submit it to the buyer.

Who is responsible for determining the mill levy used to determine taxes?

The county commissioners by setting the mill levy

According to Real Estate Commission rules - who has responsibility for an accurate closing? The buyer and seller The title company and closer The lender The designated broker, the employing broker and any substitute broker

The designated broker, the employing broker and any substitute broker The Employing Broker has responsibility for all company closings. The Designated Broker is the broker appointed by the Employing Broker on behalf of the company to service the transaction. If the Designated Broker is unable to attend a closing, a stand-in broker would need to be appointed and would thus acquire responsibility. This scenario repeats for any company representing the Buyer and the Seller. The buyer and seller and title company have a vested interested in accuracy but are not subject to Commission rules and regulations as they are not licensed. Lenders are licensed but only contribute to the loan portion of the closing. Regardless, the real estate companies and agents have the highest level of responsibility according to law for a closing.

According to the Colorado Licensing Law, in order for a non-resident to become a broker: he must meet Colorado licensing law only he must be involved in real estate in his home state he must be 21 and have been involved in real estate for two years he must be a broker from his home state and pass Colorado licensing laws, but need not open an office in Colorado

Under the provisions of the typical commercial lease, any trade fixtures that remained in the property after the lease has expired will be the property of

The lessor

A broker moves his office to the building next door and neglects to inform the Real Estate Commission. What is the status of the brokerage license?

The license is cancelled along with the licenses of the employed licensees

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

You have a listing with a couple who hold title in joint tenancy, Another broker brings you an offer and the couple indicates that they will probably accept the offer, but they want to think it over for a few hours. During those few hours they are involved in a traffic accident and one of them is killed. What would be the status of the listing?

The listing agreement is enforcable against the surviving spouse

You have a listing with a couple who hold title in joint tenancy. A broker brings you an offer and the couple indicates that they will probably accept the offer, but they want to think it over for a few hours. During those few hours they are involved in a traffic accident and one of them is killed. What would be the status of the listing? The listing agreement is enforceable against the surviving spouse The listing agreement is cancelled. The offer to purchase is void. The offer to purchase is still valid.

The listing agreement is enforceable against the surviving spouse If the listing agreement has been signed by both spouses and one spouse dies, the listing agreement is still enforceable against the surviving spouse. In joint tenancy the surviving member(s) immediately inherits the property upon the death of a member. Therefore the surviving member has full rights to sell the property and the listing contract is valid. If you chose either of the purchase contract answers please be careful to read the questions more closely. This question asked about the status of the listing contract. As the verbiage of this questions contained much info about the purchase contact it is easy to skim through and miss the real question.

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

The listing broker is entitled to a commission 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

Mr. Thomas wanted to remodel his business, so he got a loan of $43,000 at a rate of 6% He paid the loan off in 8 months. How much did Mr. Thomas pay in interest.

The loan amount $43,000 times the interest rate 6% = The annual interest $2,580 divide by twelve to give you the monthly cost of interest $215 times 8 = $1,720.

Any excess funds above those required to pay off encumbrances realized at a foreclosure sale belong to: The State General Fund The mortgagee The mortgagor The Lender

The mortgagor The Mortgagor is the owner of the property. The owner placed the voluntary lein on the property which the mortgage represents to secure a loan for the property. Excess funds means the encumbrabces have been satisfied and represents equity belonging to the owner.

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

Salesperson J-H paid the local telephone company to list her name in the directory under the real estate heading as "J-H, Real Estate Salesperson, Residential Property My Speciality." Based on the information, J-H must also include

The name of the employing broker

Which is not true regarding the Counterproposal form: The purchase contract should not be signed by the person creating the counterproposal The date and deadlines table can be omitted if not used If a date or deadline is left blank it means "no change" The only changes allowed are purchase price and earnest money

The only changes allowed are purchase price and earnest money Whoever creates the counterproposal can make any change they want.

To be the broker of record for a corporation:

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.

All of the following statements regarding options are true except:

The option binds the optionee to perform

A private owner of a single 20 acre parcel of land wishes to sell off ten acres for her own use. Which statement is true for this owner?

The owner is not required to register with the Real Estate Commission but must meet local and state requirements for this subdivision.

private owner of a single 20-acre parcel of land wishes to sell off ten acres and retain ten acres for her own use. Which statement is true for this owner? As the private owner, there are no restrictions or registration requirements. The owner is not required to register with the real estate commission but must meet local and state requirements for this subdivision. A private owner may not sell only part of a single parcel; only a registered subdivider may divide land. The private owner must comply with federal land sales rules.

The owner is not required to register with the real estate commission but must meet local and state requirements for this subdivision. The owner is not required to register with the real estate commission but must meet local and state requirements for this subdivision.

The placement of a corporate seal on a deed implies:

The person who signed the deed is authorized to sign for the corporation

The approved Contract to Buy and Sell, "Property" includes:

The real property plus fixtures, improvements, and appurtenances

he approved Contract to Buy and Sell, "Property" includes: The real property plus fixtures, improvements, and appurtenances The real property and all rights such as water rights The real property plus fixtures, improvements, appurtenances, plus inclusions, minus exclusions The real property and everything now attached

The real property plus fixtures, improvements, and appurtenances Property as described in the Contract to Buy and Sell includes appurtenances, improvements, and fixtures From the Contract to Buy and Sell: Property. The Property is the following legally described real estate in the County of Arapahoe, Colorado: Legal Description Here known as No. ,999 Maple Street Aurora Co 80999 together with the interests, easements, rights, benefits, improvements and attached fixtures appurtenant thereto, and all interest of Seller in vacated streets and alleys adjacent thereto, except as herein excluded (Property).

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.

Which of the following is true with regard to the Seller's Property Disclosure form that is mentioned in an Exclusive-Right-to-Sell listing form? The seller is required by law to provide this form to every buyer. The seller may check the "as is" box, making the buyer responsible to find any defects. The seller may decline to provide the disclosure but still must disclose latent material defects. The seller may refuse to provide the disclosure and avoid disclosure of material defects.

The seller may decline to provide the disclosure but still must disclose latent material defects. The seller has the choice whether to provide the disclosure form, but is nevertheless responsible for disclosure of hidden material defects

The seller-landlord has collected the September rent from all five tenants: two paying $345 per month each and three paying $425 per month each. Determine the prorated amount to be allowed the buyer when the sale closes on September 19.

The closing entity must withhold from the sellers proceeds up to 2% of: The net proceeds as a luxury tax if the seller is from out-of-state The net proceeds as a sales tax if the seller is from out-of-state The selling price as a possible property tax liability if the seller is from out-of-state The selling price as a possible income tax liability if the seller is from out-of-state

The selling price as a possible income tax liability if the seller is from out-of-state

When protected classes between State, Regional and Federal Fair Housing Laws differ which should take precedence?

The strictest of the protected classes should apply in all cases

What recourse do the buyers have if they determine that property they have contracted to purchase is within a special taxing district? They may demand that the seller pay the indebtedness of such a district. They may petition to be excluded from the district. They may terminate the contract automatically on the Off-Record Matters date. They may terminate the contract by written notice to the seller.

They may terminate the contract by written notice to the seller. Termination requires written notice of intent to terminate and the buyers must provide written notice to the seller no later than the Off-Record Matters date

This evaluation was prepared by a licensed real estate broker and is not an appraisal. This evaluation cannot be used for the purposes of obtaining financing.

A Broker Price Opinion (BOP) and Competitive Market Analysis (CMA) are estimates of value created by real estate licensees for marketing purposes. Since they were not prepared by a licensed appraiser, the follow words must appear at their bottom: This evaluation was prepared by a licensed real estate broker and is not an appraisal. This evaluation cannot be used for the purposes of obtaining financing. This appraisal was prepared by a licensed real estate broker. This evaluation was prepared by a licensed appraiser. This evaluation was prepared by a licensed real estate broker. It may be used to obtain financing only with full disclosure and the signatures of all parties to the associated Contract to Buy/Sell Real Estate.

This evaluation was prepared by a licensed real estate broker and is not an appraisal. This evaluation cannot be used for the purposes of obtaining financing. What in the heck are BPO's? BPO's are "Broker Price Opinions". They and CMA's are "estimates of value" prepared by real estate licensees for marketing purposes. BOP's are most commonly requested by lending institutions to ascertain the market value of a REO ("Real Estate Owned" i.e. foreclosed) property. In simpleze: when banks need to get a market value of a property they are getting ready to sell, they would much rather pay a pittance to a real estate licensee hungry for the listing, than real money to a licensed appraiser. They also can be used as testimony in a court case, or for tax purposes, or to set a listing price on a home. There are four facts you need to know about BPO's for the State test: 1) BPO stands for "Broker Price Opinion" 2) They are "estimates of value" NOT an appraisal. Only licensed appraisers can prepare appraisals. 3) They can be used only for marketing purposes (valuing a property for sale), NOT for financing (valuing a property for a loan) 4) Whenever you create a BPO (for a bank) or a CMA ("Competitive Market Analysis" for a client), you need to include these words in the report "This evaluation was prepared by a licensed real estate broker and is not an appraisal. This evaluation cannot be used for the purposes of obtaining financing."

A contract to buy and sell has only been signed by the buyer, but has been given to the seller's agent along with an earnest money check: The earnest money belongs to the seller This is considered an offer This constitutes a valid contract The buyer can sue the seller for specific performance

This is considered an offer Until the seller signs the contract it is considered an offer and nothing more.

This is not an enforceable contract and Rockwell is not entitled to a commission

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.

Which of the following is true about licensees filling in blanks on a standard commission-approved form?

This is the practice of law but it is specifically permitted by Colorado law.

Thompson is the owner of a store building that is leased to Floyd, for a ten-year term. If Thompson dies at the end of the seventh year of the lease: Thompson's heirs and devisees continue as lessors A new lease must be signed Floyd must vacate the building Floyd continues as the lessor

Thompson's heirs and devisees continue as lessors lease is treated as personal property of the tenant and becomes part of his estate at the time of death.

A real estate license, or license for a broker who is working for another broker, may be issued:

To a woman using her birth name

A transaction broker has which of the following duties to a buyer?

To advise the buyer regarding the transaction

The "Additional Provisions" section of the Contract to Buy and Sell Real Estate may include: Personal provisions of the listing broker on the client''s behalf Confirmation of the commission split to the cooperating brokerage firm Exculpatory language protecting the brokerage firm Transaction specific items resulting from negotiations or instructions of the parties to the contract

Transaction specific items resulting from negotiations or instructions of the parties to the contract The additional provisions sections is a blank area in which Brokers have broad discretion to enter any necessary language. However, the clauses inserted must be a product of the buyers and sellers negotiation and not language, for example, benefiting the Broker.

A title insurance policy will NOT guarantee that the purchaser will be able to later sell the property for a profit nor will it even guarantee continued ownership in the event of a successful claim against the title by another person. T/F

True

Perhaps one of the most important things a buyer can learn from examining the HUD-1 closing statement is how much money, if any, he/she must bring to closing.

True

True of False: Excepting real estate instructors, the examination will be given only to duly qualified applicant's for a brokers license. A license will normally be issued after a review by the Colorado Bureau of investigation and the Federal Bureau of investigation.

True

True or False: Employed brokers shall not include their names in an advertisement without including the name of the broker employer.

True

True/False - According to Commission Position 38 Disclosure of Affiliated Business Arrangements, a licensee is required to disclose any affiliated business arrangement in which the licensee has a 1% or more interest when an offer to purchase real property is fully executed.

True

True/False - According to Commission Position 40 on Teams, Real estate brokers that function as teams should not advertise teams using the terms "realty", "real estate", "company", "corporation", "corp.", "inc.", "LLC" or other similar language that would indicate a company other than the employing brokerage firm.

True

True/False - According to CP-40 on Teams, Real estate brokers that function as teams should not advertise teams using the terms "realty", "real estate", "company", "corporation", "corp.", "inc.", "LLC" or other similar language that would indicate a company other than the employing brokerage firm. True False

True 0 Commission Position on Teams (4-5-2011) The Commission recognizes that there are benefits to both real estate brokers and consumers in the usage of real estate broker teams. Teams may be formed within a licensed brokerage firm with the approval of the employing broker. Real estate brokers operating as teams need to ensure that they are compliant with Commission rules regarding advertising, name usage and supervision. Advertising and name usage: While there is no prohibition of teams, real estate brokers need to ensure that they do not advertise in a manner that misleads the public as to the identity of the brokers' licensed brokerage. Real estate brokers that function as teams should not advertise teams using the terms "realty", "real estate", "company", "corporation", "corp.", "inc.", "LLC" or other similar language that would indicate a company other than the employing brokerage firm. Advertising includes, but is not limited to, websites, signage, property flyers, mailings, business cards, letterhead and contracts. The advertising of team names should never give the impression that the team is an entity separate from the licensed real estate brokerage. If the identity of the employing broker or the brokerage firm is difficult for the public or the Commission to ascertain, the team may be in violation of Rule E-8 Advertising. Supervision: In addition to the supervision requirements set forth in Rules E-31 and E-32, Rule E-30 Employing broker responsibilities requires that the broker designated to act as the broker for any partnership, limited liability company or corporation, i.e. the employing broker, fulfill the following duties: 1) Maintain all trust accounts and trust account records; 2) Maintain all transaction records; 3) Develop an office policy manual and periodically review office policies with all employees; 4) Provide for a high level of supervision for newly licensed persons pursuant to Rule-32; 5) Provide for a reasonable level of supervision for experienced licensees pursuant to Rule E-31; 6) Take reasonable steps to ensure that violations of statutes, rules and office policies do not occur or reoccur; 7) Provide for adequate supervision of all offices operated by the broker, whether managed by licensed or unlicensed persons. Pursuant to §12-61-118, C.R.S. and Rule E-29, employing brokers are also responsible for providing supervision over such activities with reference to the licensing statutes and Commission rules for all brokerage employees, including but not limited to administrative assistants, bookkeepers and personal assistants of licensed employees. Thus, employing brokers are responsible for the actions of unlicensed persons who perform functions within the real estate broker team. Employing brokers need to ensure that any unlicensed person acting within the team is not engaged in practices that require a real estate broker's license. Employing brokers also need to establish that the compensation paid to an unlicensed person for services provided is not in the form of a commission. Compensation paid to an unlicensed person is not required to to be paid solely by the employing broker. However, §12-61-117, C.R.S. requires that all licensee compensation or valuable consideration for the performance of any acts requiring a broker's license is paid solely by the employing broker.

True/False - According to Commission Position 1 on Homebuilders - Corporations that build structures on land they own may sell the land and building together without licensing True False

True CP-1 Commission Policy on Homebuilder's Exemption from Licensing Corporations that build structures on land they own may sell the land and building together without licensing, provided that the sales are made by corporate officers or regularly salaried employees. The land and building must be sold as a unit and the building must not have been previously occupied. This exemption is usually referred to as the homebuilder's exemption.

True/False - According to CP-11 Assignment of Brokers Rights to a Commission, the Employing Broker has full authority to assign legal rights to a commission True False

True CP-11 - If a broker is entitled to a commission pursuant to 12-61, Part 2, C.R.S., or, a broker is entitled to a commission in a transaction and title has passed from a seller to a buyer, the broker may assign any or all legal rights to such commission to any person including employed licensees and no disciplinary action will be invoked against such broker for having made such an assignment.

True/False - According to CP-14 Sale of Modular Homes,a licensee who sells land and a modular home to be affixed to the land, to the purchaser in concurrent or an arranged or pre-arranged or packaged transaction, is subject to the laws and rules of the Commission.

True CP-11 The Commission is aware that many services rendered by licensees may or may not, in themselves, require licensing. Such services as collection of rents on real property, subdivision development services other than sales, or the general management of real property not involving renting or leasing may all be performed independently by an unlicensed person. When performed by a licensee, these services are all so integrated with real estate brokerage that all money received in connection therewith must be held or disbursed according to the law and rules of the Real Estate Commission. Therefore, it is the position of the Commission that a licensee who sells land and a modular home to be affixed to the land, to the purchaser in concurrent or an arranged or pre-arranged or packaged transaction, is subject to the laws and rules of the Commission. Consequently, all money received concerning the integrated transaction, including the modular home, should be processed through the broker or the employing broker pursuant to 12-61-117, C.R.S. and 12-61-113(l)(f), C.R.S. and Commission Rules E-l and E-5. It is also the position of the Commission that if a licensee sells to an owner of land, a modular home to be affixed to the land, and there has been no brokerage relationship between the owners of the land and the licensee, such licensee in such a sale will not be required to comply with the requirements of 12-61-117, C.R.S. or 12-61-113(l)(f), C.R.S. or Commission Rules E-l and E-5.

True/False - According to CP-20 on Personal Assistants, an unlicensed personal assistant may show homes, True False

True CP-20... An unlicensed assistant may complete the following tasks: 1. Complete forms prepared for, and as directed by a broker. Unlicensed assistants cannot independently draft legal documents such as listing or sales contracts, and they cannot offer opinions, advice or interpretations of these documents. 2. Distribute preprinted, objective information prepared by the broker about a property listed for sale. 3. Perform clerical duties, including gathering information for a listing. 4. If authorized by the seller, provide access to property, conduct showings or open houses. 5. Deliver paperwork to other brokers, buyers or sellers. 6. Deliver paperwork that requires signatures in regard to financing documents that are prepared by lending institutions. 7. Prepare market analyses on behalf of the broker, if the analyses are approved and submitted by the broker to the client with a disclosure that the market analyses were prepared by the unlicensed assistant. The broker must ensure that market analyses comply with Commission Rule E-42. 8. Collect and receipt for earnest money deposits, security deposits or rents. 9. Schedule property repairs on behalf of the broker, if there is an existing agreement that authorizes the broker to make repairs to the property.

True/False - According to Commission Position 22 on Handling of Confidential Information, a designated broker is permitted to share confidential information with a supervising broker without changing or extending the brokerage relationship beyond the designated broker. True False

True CP-22...A designated broker is permitted to share confidential information with a supervising broker without changing or extending the brokerage relationship beyond the designated broker. Brokers may want to consult legal counsel regarding the necessity of securing the authorization of the party to whom the information is confidential before the designated broker shares that confidential information with the supervising broker. Such advice could include modifications to the listing agreement or buyer agreement that create such authorization. More info: This is a Colorado twist on brokerage laws. Generally, everything you learned in the National side is consistent with Colorado. That all contracts are with the company not the licensee, that the Employing Broker is responsible for the actions of the licensees under him/her and so on. The twist is in how we deal with confidential information and how we resolve what in past years was considered a conflict of interest. All of this comes under the heading of "Designated Broker." Here is the problem as the real estate commission saw it; once upon a time, it was a conflict of interest if two agents from the same company were working opposite sides of the same transaction - even if it was a large company and the agents did not know each other. Fact is - earlier brokerage laws were written in a time when there were no large offices or super-sized brokerages. Most were ma and pa operations where everybody knew and talked to each other. Recognizing that times had changed, the real estate commission wanted two agents working for the same company on the same transaction, to be able to fully represent their clients in a Buyer or Seller Agency relationship and not be forced into some form of neutral relationship such as Transaction Broker or the predecessor to Transaction Brokerage, the now illegal and much hated Dual Agency relationship. The issue was - if everybody in a company reports to the Employing Broker then that person is a walking talking potential conflict-of-interest on any transaction that occurs in the office. So they declared that brokerage relationships only, would be confined to the licensee level and not rise to the Employing broker level. This way the Employing Broker does not have a conflict of interest with anybody. That left one more problem and this was "imputation of confidential information". In simpleze - it would be a bad thing if two agents working on opposite sides of a transaction, went to the same Employing Broker for advice and that Employing Broker blabbed confidential information between them. To avoid that - the real estate commission issued rules that said in the event of two agents working on the same transaction for the same company, the Employing Broker would "Designate" another supervising broker for one of the agents. Tah Dah! No conflict of interest and no chance of one Employing Broker spilling secrets from one side to the other. Then to tie everything into a bow - they exempted one-man band brokerages from having to appoint another supervisor because... there is only one person in the company. One agent companies mostly become Transaction Brokers when double-ending a deal.

True/False - According to Commission Position 24 on the Preparation of Market Analysis and Evaluation for Loans the following text must appear on every licensee's estimates of value. "NOTICE: The preparer of this appraisal is not registered, licensed or certified as a real estate appraiser by the State of Colorado". True False

True CP-24...The broker preparing an estimate or evaluation must at all times comply with the statutory requirement in Sections 12-61-702 and 12-61-718, Colorado Revised Statutes, for a written notice that they are not an appraiser. The wording and use of the written notice are specified in Chapter 15 of the Rules of the Board of Real Estate Appraisers. The required wording is: "NOTICE: The preparer of this appraisal is not registered, licensed or certified as a real estate appraiser by the State of Colorado".

True/False - According to CP-38 Disclosure of Affiliated Business Arrangements, a licensee is required to disclose any affiliated business arrangement in which the licensee has a 1% or more interest when an offer to purchase real property is fully executed. True False

True CP-38 Commission Position on Disclosure of Affiliated Business Arrangements and Conflicts of Interest (4-5-2011) This statement supplements Rule E-46 Affiliated Business Arrangements. §12-61-113.2, C.R.S. Affiliated Business Arrangements was enacted in Colorado to provide transparency, accountability, and consumer protection through disclosure and consistency concerning affiliated business arrangements. Affiliated business arrangements have also been regulated for many years by the Real Estate Settlement Procedures Act (RESPA). RESPA was precipitated by significant reforms identified by Congress as necessary to ensure that consumers did not pay disproportionately high settlement costs as the result of certain deleterious business practices by settlement service providers. RESPA is applicable to any residential mortgage transaction involving a federally related mortgage loan. However, Colorado law requires disclosure of affiliated business arrangements to consumers even if the transaction does not involve a federally related residential mortgage loan. Colorado law C.R.S. 12-61-113.2(1)(a) defines an "affiliated business arrangement" as an arrangement in which: "A provider of settlement services or an associate of a provider of settlement services has either an affiliate relationship with or a direct beneficial ownership interest of more than one percent in another provider of settlement services;" and the provider directly or indirectly refers business to the other provider or affirmatively influences the selection of another provider of settlement services. It is the Commission's position that real estate brokers must disclose affiliated business arrangements to consumers in all transactions intended to result in the transfer of title from one party to another. RESPA requires that affiliated business arrangements be disclosed before or at the time a referral is made to a provider of settlement services. Colorado law requires a licensee to disclose any affiliated business arrangement when an offer to purchase real property is fully executed. In Colorado, the disclosure is required to be in writing, must be given to both agents and transaction brokers, must comply with RESPA and Colorado law, and must be made using the Federal RESPA disclosure form. Colorado law requires real estate brokers to disclose their affiliated business arrangements to all parties to the real estate transaction and all parties are expected to sign the disclosure form. The Commission recommends that real estate brokers disclose their affiliated business arrangements to the party with whom they are working early in their relationship, i.e. at the time brokerage relationships are disclosed or when the listing contract or buyer broker agreement is negotiated. In those transactions where the broker does not deal with another party until the time of contracting written disclosure should be made to all parties at the time the purchase contract is fully executed. Additionally, real estate brokers are required to make certain disclosures to the Division of Real Estate regarding their affiliated business arrangements. Colorado law requires every licensee to disclose to the Commission when they enter into or change an affiliated business arrangement. All affiliated business arrangements to which the licensee is a party must be disclosed. Disclosure is required at the time of a new application for licensure or at the time of activation of an inactive license. The disclosure must include the physical location of the affiliated business. Employing brokers are required to disclose the names of all affiliated business arrangements to which the employing broker is a party on an annual basis, at the least. The disclosure must include the physical location of the affiliated businesses. The Commission has determined that these disclosures shall be made electronically through the Division of Real Estate's website at www.dora.state.co.us/pls/real/AFB_Web.Logon?p_div=REC. It is the Commission's position that Rule E-25 Continuing duty to disclose conflict of interest and license status, applies to all licensees including real estate brokers who perform licensed property management services and are affiliated with businesses or vendors that provide services applicable to lease transactions. For example, a real estate broker acting on behalf of a landlord is required to disclose to the landlord that the real estate broker has partial ownership of the maintenance company that the real estate broker utilizes for the landlord's property repairs. The Commission strongly recommends that this type of information be disclosed to the principal early in the business relationship, i.e. at the time brokerage relationships are disclosed or when the listing contract is negotiated. Additionally, this disclosure should be made in writing.

True/False - According to CP-24 on the Preparation of Market Analysis and Evaluations for Loans, real estate brokers may perform valuations only for the purpose of determining the market value of a property for marketing purposes. True False

True This is one of those gray areas where the reading assignment says one thing, but the way the State exam is written reflects another. Real estate brokers may never do appraisals. Only a licensed appraiser may do an appraisal. Real estate brokers may do "estimates of value" for their clients, but not for the purpose of securing financing. Despite the fact that CP-24 says a bank may use it for lending, that is not what the question on the state exam (or this one) wants to know. The real estate commission draws a very hard line for agents, and that is that agents are never allowed to do an appraisal, so all agents can do is a BPO for the purpose of marketing their client's home. So when you see the question on the state exam the answer is always reflective of the marketing only response. CP-24 Commission Position on Preparation of Market Analyses and Real Estate Evaluations Used for Loan Purposes: The Colorado Real Estate Appraiser Licensing Act contains special provisions which allow licensed real estate brokers to perform certain real estate valuation related activities without being registered, licensed or certified as real estate appraisers. These provisions are found in Sections 12-61-702 and 12-61-718, C.R.S. The first of these allows a broker to prepare an "estimate of value" which is not represented as an appraisal and is not used to obtain financing. The position of the Commission is that this provision allows a broker to prepare a market analysis for use in the real estate brokerage process and to offer their estimate as to the value or market price of real estate for court testimony or tax purposes.

True/False - According to Commission Position 40 on Teams, Real estate brokers that function as teams should NOT advertise teams using the terms "realty", "real estate", "company", "corporation", "corp.", "inc.", "LLC" or other similar language that would indicate a company other than the employing brokerage firm.

True CP-40 Commission Position on Teams (4-5-2011) The Commission recognizes that there are benefits to both real estate brokers and consumers in the usage of real estate broker teams. Teams may be formed within a licensed brokerage firm with the approval of the employing broker. Real estate brokers operating as teams need to ensure that they are compliant with Commission rules regarding advertising, name usage and supervision.

A Corporation, LLC, Partnership must have E&O insurance for entity and employing broker. t/f

True Rule D-14 Errors and omissions (E&O) insurance Every active real estate licensee, including licensed real estate companies, shall have in effect a policy of errors and omissions insurance to cover all acts requiring a license.

A Corporation, LLC, Partnership must have E&O insurance for entity and employing broker. True False, only the employing broker requires E&O insurance False, only the legal entity requires E & O insurance False, only the individual licensee''s require E&O insurance

Truehe Commission recognizes that there are benefits to both real estate brokers and consumers in the usage of real estate broker teams. Teams may be formed within a licensed brokerage firm with the approval of the employing broker. Real estate brokers operating as teams need to ensure that they are compliant with Commission rules regarding advertising, name usage and supervision. Advertising and name usage: While there is no prohibition of teams, real estate brokers need to ensure that they do not advertise in a manner that misleads the public as to the identity of the brokers' licensed brokerage. Real estate brokers that function as teams should not advertise teams using the terms "realty", "real estate", "company", "corporation", "corp.", "inc.", "LLC" or other similar language that would indicate a company other than the employing brokerage firm. Advertising includes, but is not limited to, websites, signage, property flyers, mailings, business cards, letterhead and contracts. The advertising of team names should never give the impression that the team is an entity separate from the licensed real estate brokerage. If the identity of the employing broker or the brokerage firm is difficult for the public or the Commission to ascertain, the team may be in violation of Rule E-8 Advertising. Supervision: In addition to the supervision requirements set forth in Rules E-31 and E-32, Rule E-30 Employing broker responsibilities requires that the broker designated to act as the broker for any partnership, limited liability company or corporation, i.e. the employing broker, fulfill the following duties: 1) Maintain all trust accounts and trust account records; 2) Maintain all transaction records; 3) Develop an office policy manual and periodically review office policies with all employees; 4) Provide for a high level of supervision for newly licensed persons pursuant to Rule-32; 5) Provide for a reasonable level of supervision for experienced licensees pursuant to Rule E-31; 6) Take reasonable steps to ensure that violations of statutes, rules and office policies do not occur or reoccur; 7) Provide for adequate supervision of all offices operated by the broker, whether managed by licensed or unlicensed persons. Pursuant to §12-61-118, C.R.S. and Rule E-29, employing brokers are also responsible for providing supervision over such activities with reference to the licensing statutes and Commission rules for all brokerage employees, including but not limited to administrative assistants, bookkeepers and personal assistants of licensed employees. Thus, employing brokers are responsible for the actions of unlicensed persons who perform functions within the real estate broker team. Employing brokers need to ensure that any unlicensed person acting within the team is not engaged in practices that require a real estate broker's license. Employing brokers also need to establish that the compensation paid to an unlicensed person for services provided is not in the form of a commission. Compensation paid to an unlicensed person is not required to to be paid solely by the employing broker. However, §12-61-117, C.R.S. requires that all licensee compensation or valuable consideration for the performance of any acts requiring a broker's license is paid solely by the employing broker.

Based on the Colorado Statue of Frauds, which lease must be in writing?

Two- year lease for commercial space. Any lease over one year needs to be in writing.

*CHARGING MORE INTEREST THAN IS LEGALLY ALLOWED IS KNOWN AT

USURY

Should the lessor die after the lease has been signed by all parties; what happens to the lease? Rescinded Renegotiated Unchanged Cancelled

Unchanged The lease remains in force if the landlord or lessor dies.

A LEASE AGREEMENT IS SIGNED BY A LESSEE WHO IS 17 YRS OLD. THE LEASE AGREEMENT IS

VOIDABLE

AT THE TIME A BUYER WAS NEGOTIATING THE PURCHASE OF A LOT ON WHICH TO BUILD A NEW HOME, THE SELLER CLAIMS THAT THE SOIL WAS FIRM ENOUGH TO SUPPORT THE CONSTRUCTION OF A BLD WHEN THE SELLER KNEW IS NOT. THIS CONTRACT IS

VOIDABLE BY THE BUYER BECAUSE OF FRAUD

If a contract is signed under duress, it is:

Voidable

If a contract is signed under duress, it is: Bleached Discharged Voidable Void

Voidable

IN ABSENCE OF AN AGREEMENT TO THE CONTRARY, THE MORTGAGE HAVING PRIORITY WILL BE ONE

WHICH WAS RECORDED FIRST

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 Any document, which requires signatures, must be retained.

When is a broker to open or have access to an escrow account? When he applies for his broker's license When he starts to work as a broker When he receives earnest money None of the above

When he receives earnest money A broker is not required to open a trust account, in a recognized Colorado depository, until he takes money that belongs to others.

Under what conditions is it permissible for a broker to pay a referral fee to a person who does not possess a Colorado real estate license?

When the duties performed by that person would not normally require a real estate license

When a property located in Colorado is sold, it may be subject to state income tax withholding. Which of the following situations would require state tax to be withheld? When the last known address at the time of closing was outside of the state of Colorado When the property is the principal residence of the seller When the sales price is less than $100,000 When the seller is a bank foreclosing on a loan which is in default

When the last known address at the time of closing was outside of the state of Colorado Only out of the state sellers selling property in excess of $100,000 are subject to Colorado tax withholding at the time of closing. Title Companies are generally required to withhold the lesser of (1) two percent of the sales price, or (2) the entire net proceeds, to cover any POTENTIAL tax liability on the sale of Colorado property when the seller has moved or will move out of state. In Simple-eze - the State is worried that they will not get their cut if someone lives out-of-state or is moving out-of-state as they may not file a Colorado Tax Return. Soooo, the State withholds some money from the closing to motivate the seller to file a Colorado Tax Return and settle a tax if any is owed.

Associate Broker may hold a concurrent license with more than one Employing Broker under which of the following circumstances?

With written permission of the real estate commission

Which statement is NOT true? Depositing earnest money must be within three business days after acceptance of contract Withdrawing earnest money must be within the last business day before closing The beneficiary's transaction ledger should be zeroed out after closing and dispersing of funds A copy of the earnest money check with a copy of the validated deposit slip should be placed in the transaction file

Withdrawing earnest money must be within the last business day before closing

Withdrawing earnest money must be within the last business day before closing It can be anytime before closing-most commonly 1 day before.

On a new loan closing, the settlement worksheet entry for a tax reserve indicates that the new lender is

Withholding this amount from loan proceeds to start the escrow account for the next tax payment

On a new loan closing, the settlement worksheet entry for a tax reserve indicates that the new lender is Withholding this amount from loan proceeds to start the escrow account for the next tax payment Collecting this tax amount from the seller Contributing this amount toward the buyer's taxes for this year There is no such thing as a Tax Reserve

Withholding this amount from loan proceeds to start the escrow account for the next tax payment Lenders have the right to take sums of money from the buyer and place it into a Tax Reserve escrow account to ensure there is enough money availabe to make the next tax payment. Lenders are sensitive to this as unpaid taxes automatically become the most senior obligation should the buyer default on the loan.

When must the earnest money holder release the earnest money?

Within 5 days of written mutual instructions

According to CO Fair Housing laws, a complaint must be filed with the Civil Rights Commission:

Within one year of the violation

RESPA requires the lender to provide a good faith estimate of the borrower's closing costs: One day prior to closing Before a loan origination fee may be charged Within three days of loan application If those numbers are different than the broker anticipated

Within three days of loan application The Real Estate Settlement Procedures Act requires a lender to provide a good faith estimate of the buyer's closing costs within three days of loan applications by the buyer.

What can an independent broker do under Colorado Law?

Work independently without supervision of another broker.

An encumbrance issued by a court on a property of a defendant in a pending lawsuit for money damages is called an: Writ of Seizure Writ of Security Lis Pendens Writ of Attachment

Writ of Attachment Here is a good definition of writ of attachment found on Wikipedia. BTW Wikipedia is a great resource for the national side of the test, not so much for the State side. Here ya go: "A writ of attachment is a court order to "attach" or seize an asset. It is issued by a court to a law enforcement officer or sheriff. The writ of attachment is issued in order to satisfy a judgment issued by the court. A prejudgment writ of attachment may be used to freeze assets of a defendant while a legal action is pending. Common grounds for obtaining a prejudgment writ of attachment are that a defendant has committed fraud or that a defendant is prepared to hide assets from a court." When a writ of attachement is issued to secure a proprerty prior to a judgement, the plaintiff obtaining the writ, must file a bond to protect the defendant against any loss caused by the attachment in the event the plaintiff loses the c

Does the buyer have the right to inspect the Property to investigate if any third party has any right in the property not shown by public records?

YES

A buyer has a signed Contract to Buy/Sell Real Estate to purchase a property for $200,000. Prior to close, $25,000 worth of damage occured. May he/she terminate the agreement?

Yes, When the damage exceeds 10% of the agreed upon purchase price

A buyer has a signed Contract to Buy/Sell Real Estate to purchase a property for $200,000. Prior to close, $25,000 worth of damage occured. May he/she terminate the agreement? Yes, When the damage exceeds 10% of the agreed upon purchase price Yes, When the damage exceeds 5 % of the agreed upon purchase price. No, this is not a cause for termination Yes, damage in any form or amount prior to close or possession allows the buyer to terminate

Yes, When the damage exceeds 10% of the agreed upon purchase price From the Purchase Contract: Causes of Loss, Insurance. In the event the Property or Inclusions are damaged by fire, other perils or causes of loss prior to Closing in an amount of not more than ten percent of the total Purchase Price (Property Damage), Seller shall be obligated to repair the same before Closing Date. Buyer has the Right to Terminate on or before Closing Date, if the Property Damage is not repaired before Closing Date or if the damage exceeds such sum.

The Sellers Agent at his option rebated part of his commission back to the Seller. Was this legal?

Yes, as it was part of the negotiated commission in the listing contract

The Sellers Agent at his option rebated part of his commission back to the Seller. Was this legal? No, it is illegal to pay a commission to anyone who is unlicensed Yes, as it was part of the negotiated commission in the listing contract

Yes, as it was part of the negotiated commission in the listing contract The Real Estate Commission has no problem with a licensee giving money to his/her client. The client does not need to be licensed as the rebate is considered a product of the commission negotiated by the licensee and his/her client in the Listing Agreement.

If a licensee is also a licensed appraiser, can the licensee offer to appraise a home if they intend to be the listing agent for that same property in the future?

Yes, as long as it is disclosed to all parties

If a licensee is also a licensed appraiser, can the licensee offer to appraise a home if they intend to be the listing agent for that same property in the future? No, that would be a conflict of interest Yes, as long as it is disclosed to all parties Yes, as the listing is in the future no disclosure requirements apply No, according to Federal law licensed real estate brokers cannot hold an appraisers license

Yes, as long as it is disclosed to all parties There are no laws that prohibit an appraiser or a mortgage broker from working as such on a transaction upon which they are involved as a real estate broker, or acting as a real estate broker in the future on a property on which they have operated as a mortgage broker or an appraiser. However, this can be construed as a conflict of interest and all present or potential conflicts of interest must be disclosed to the parties involved.

If an offer was made on a house in which the buyer intended to be have a 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 Zoning is a matter of Title. Buyers have the right to terminate the contact without penalty if any aspect of Title is unsatisfactory to them. However, they must due so in writing prior to either the Off-Record Title Objection Deadline or the Record Title Objection Deadline. From the Contract to Buy/Sell: Title Advisory. The Title Documents affect the title, ownership and use of the Property and should be reviewed carefully. Additionally, other matters not reflected in the Title Documents may affect the title, ownership and use of the Property, including, without limitation, boundary lines and encroachments, area, zoning, unrecorded easements and claims of easements, leases and other unrecorded agreements, and various laws and governmental regulations concerning land use, development and environmental matters. The surface estate may be owned separately from the underlying mineral estate, and transfer of the surface estate does not necessarily include transfer of the mineral rights or water rights. Third parties may hold interests in oil, gas, other minerals, geothermal energy or water on or under the Property, which interests may give them rights to enter and use the Property. Such matters may be excluded from or not covered by the title insurance policy. Buyer is advised to timely consult legal counsel with respect to all such matters as there are strict time limits provided in this Contract [e.g., Record Title Objection Deadline (§ 3) and Off-Record Title Objection Deadline

Can a broker in Colorado give a referral fee to an out-of-state broker?

Yes, if the out-of-state broker resides and maintains an office in the other state

When making a counter offer by using the approved Counterproposal form - how do you change dates? Add an addendum Mark through the old dates and enter new ones. Do nothing, a verbal notification is sufficient. Change only the dates that needed to be changed

Yes, if the out-of-state broker resides and maintains an office in the other state Commission Rule E-23 states that a Colorado broker who cooperates with a broker who is licensed in another state or country may pay such out-of-state broker a finder's fee or share of the commission if: (1) such broker resides and maintains an office in the other state or county, (2) all advertising, negotiations, contracting, and conveyancing done in Colorado is performed in the name of the Colorado broker, and (3) all money collected prior to the closing is deposited in the name of the Colorado broker.

Can a broker in Colorado give a referral fee to an out-of-state broker? Yes, if they have a Colorado trust account No Yes, if the out-of-state broker resides and maintains an office in the other state Yes, if they have a Colorado license in addition to their out-of-state license

A primarily white neighborhood was starting to change over to more racially mixed demographic. An advertisement said "sell now before it's too late". Can the realtor be in trouble for this and if so, under what premise?

Yes, this is blockbusting

According to CP-7 on Closing Costs - In reference to a Closing; is the listing broker responsible for paying the costs of legal document preparation? Yes, even if the documents were prepared by the Seller''s Attorney Yes, when the broker is responsible for preparing such documents No, this expense is split between the Buyer and Seller

Yes, when the broker is responsible for preparing such documents 1. Licensees are still responsible for paying the costs of legal document preparation when they are preparing such documents for their clients. If the broker delegates this function to an agent (title company or closing service) the broker is still responsible for bearing the cost. 2. Other costs associated with closings can be paid for by the licensee or any other party. The Commission will no longer require that licensees bear these costs. Licensees are urged to use the Closing Instructions and Earnest Money Receipt form developed by the Commission. 3. It is now permissible for brokers to close their own transactions and make additional charges for providing closing services so long as the charges are not tied to legal document preparation. If a licensee does this it must be with the consent of the parties and all charges must be specified. This consent may be obtained through the Listing Contract, the Contract to Buy and Sell, the Closing Instructions and Earnest Money Receipt form, or otherwise. 4. Licensees are not responsible for bearing the cost of legal document preparation where the documents are prepared by an attorney representing the parties to the transaction. However, the broker should not designate the broker's own attorney to prepare legal documents for the parties and then charge as if the attorney had prepared the documents on behalf of a client. 5. The broker must still provide accurate closing statements.

The organization that determines whether a special exception to zoning may be allowed based upon "personal hardship" to the landowner is the:

Zoning Board of Adjustment

The Colorado Real Estate Commission can decide on their own to investigate all of the following EXCEPT:

a broker depositing salaries into her trust account Correct -> failure to disclose stigmatizing property Your Choice -> violating the Colorado Consumer Protection Act broker failing to disclose licensed status to seller while buying a property for personal use

Antitrust laws govern all of the following practices except: price fixing allocation of markets boycotting a broker requiring all of his brokers to charge 6% commission

a broker requiring all of his brokers to charge 6% commission Price fixing, boycotting, and allocations of markets are all illegal practices.

When a licensee purchases a property utilizing a licensee's buy-out agreement:

a commission may not be collected

When a licensee purchases a property utilizing a licensee's buy-out agreement: 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 Under the licensee buyout agreement a licensee will not collect a commission.

A major reason for buying and owning a condominium rather than a detached single-family home is that: a condominium tends to be more affordable a condominium requires no maintenance a condominium is easier to resell condominium ownership has more tax advantages

a condominium tends to be more affordable Instructor's confession. I do not like this question as I think it is entirely subjective, BUT it appears on the National licensing exam so here it is. It is as true that condo's tends to be less expensive as it is that they require less maintenance, but the test wants the "more affordable" answer.

a copy of the covenants must be delivered to the buyer prior to the Association Documents Deadline Homeowners' Association Documents. The term Association Documents consists of all owners' associations (Association) declarations, bylaws, operating agreements, rules and regulations, party wall agreements, minutes of most recent annual owners' meeting and minutes of any directors' or managers' meetings during the six-month period immediately preceding the date of this Contract, if any (Governing Documents), most recent financial documents consisting of (1) annual balance sheet, (2) annual income and expenditures statement, and (3) annual budget (Financial Documents), if any (collectively, Association Documents).

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 Discount pooints are a percentage of the loan amount and either party can pay discount fees. (REM 15-6) 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.

The length of the holdover period in the exclusive right-to-buy contract is best described as:

a freely negotiable period that may be invalidated when the buyer signs a new exclusive right-to-buy contract

In interpreting a contract, a court would consider that:

a later document takes precedence over an earlier document

When showing properties permitted prior to January 1, 1978: the seller should display a lead-based paint disclosure a lead-based paint disclosure should be displayed along with a pamphlet titled "Protect Your Family from Lead in Your Home" the lead-based paint disclosures only apply to multiple dwelling units lead-based paint is only a concern along the East Coast

a lead-based paint disclosure should be displayed along with a pamphlet titled "Protect Your Family from Lead in Your Home"

A broker is entitled to pay commission to: a licensee in another state without knowledge of his/her employing broker a licensed real estate appraiser a licensed broker in another state, provided payment is made as a part of a cooperating sale a mortgage banker who helped obtain a loan

a licensed broker in another state, provided payment is made as a part of a cooperating sale A real estate broker may pay his own agents or other employing brokers in any state, in connection with a real estate transaction.

A Realtor is:

a licensee that pledges to observe the Code of Ethics and Standards of Practice adopted by NAR

A Realtor is: any active broker a member of NAREB a member of IREM a licensee that pledges to observe the Code of Ethics and Standards of Practice adopted by NAR

a licensee that pledges to observe the Code of Ethics and Standards of Practice adopted by NAR A Realtor is a licensee that joins the National Association of Realtors and pledges to observe the Code of Ethics and Standards of Practice.

To suspend, revoke, or deny a license, requires a vote of:

a majority of the members of the Real Estate Commission

A real estate broker may not accept a commission from which of the following?

a money lender, a title company, or a sale of a pre-owned warranty contract.

A Condominium owner files a declaration with the country clerk which divides his individual ownership and ownership in common elements into time-share units. Each time-share owner will have individual ownership of the common elements for three weeks each year. The condominium owner may have created: a planned unit development a subdivision a townhouse complex a cooperative project

a subdivision This would be creating a subdivision.

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 A §l031 Exchange is a transaction in which a taxpayer is allowed to exchange one investment property for another by deferring the tax consequence of a sale. The transaction is authorized by §1031 of the IRS Code. The IRS Code actually reads: "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." Requirements for a 1031 Exchange Timelines for a 1031 Exchange The investor (or exchanger) must follow the strict 45- / 180-day guidelines for an exchange. Once the exchanger sells his/her property (relinquished property) he/she has 45 days to identify property(s) of equal or greater value. Once identified, the exchanger has 180 days from the day he/she sold their property to acquire the property(s) identified (or 135 days from the end of the 45-day period). Like-Kind Property in a 1031 Exchange The investor must acquire "like-kind" property. This means that it must be other qualifying forms of real estate. For example, the exchanger could sell a duplex and purchase a commercial property, or he/she could sell a piece of land and buy an apartment building. The property just needs to be "like-kind."

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.

Brokers should be extremely careful when acting as a power of attorney for one of the parties. Which of the following is correct:

a written power of attorney must be recorded in the county in which the real property is located

The Licensee Buy-Out Addendum to a Contract To Buy and Sell Real Estate becomes a binding contract with the listing company when: a. the listing company supervising broker signs b. the seller & the licensee sign c. the seller signs d. the buyer, and the broker sign

a. the listing company supervising broker signs It is PERSONALLY binding on the seller and the agent (buyer) when they sign the contract. Although there is a place at the bottom for the supervising broker's signature, that signature is not mandatory. If the supervising broker does not sign, this agreement is NOT BINDING on the listing company. In the addendum it says "NOTICE TO SELLER: THIS CONTRACT IS BINDING ONLY UPON THE BUYER (LICENSEE) WHO PERSONALLY SIGNS ABOVE, UNLESS THE SUPERVISING BROKER OF THE BROKERAGE FIRM WORKING WITH SELLER SIGNS HERE:" More info: Why is this contract different from all the others which are binding on the company? Understand this addendum addresses a specific legal situation that has been rife with abuse, but is one that the Real Estate Commission has limited jurisdiction over, due to a little document called the United States Constitution. Typically the scenario is some variation of an agent promising to buy a property they have listed, from a not-too-sophisticated seller. The seller accepts a low ball price from the agent and when the closing is done, the agent immediately lists the property for a much higher price thereby pocketing a pretty penny. This is often referred to as "equity skimming". Problem is "equity skimming" is not illegal between a willing seller and buyer. If a seller wants to sell her Aspen mansion for a glass of Mom's lemonade to some guy who greeted her at a Walmart - she can do it. That is the Constitutional aspect of this scenario. Fact is, neither the Real Estate Commission or a Listing Brokerage can tell a willing buyer or seller what an acceptable deal is or is not. Having said that - since one of the parties (the buyer) is a licensee the Commission can make it harder and force the licensee to make certain the seller is fully informed. That is the Licensee Buyout Addendum. First up, they established under what circumstances must a licensee use the addendum: when a licensee enters into a contract to purchase a property, if one of the following fits, the agent must use the addendum: (1) concurrent with the listing of such property; (2) as an inducement or to facilitate the property owner's purchase of another property; or (3) continues to market that property on behalf of the owner under an existing listing contract . . . Notice that the addendum does not have to be used every time an agent buys a client's property. Only if one of the above exists. Agents who are buying fix and flips, rentals, or for a personal residence are off the hook. If it does apply, the addendum deletes certain provisions in the real estate listing contract including: property's appraisal condition (i.e. buyer cannot get out of deal if it does not appraise), liquidated damages (i.e. buyer gets cold feet and wants to back out the seller can sue), provisions related to the seller's financial default status and the broker's acknowledgments and compensation disclosure forms (ouch! - no sales commission for the agent. Now do you want the property?). Pretty strong stuff. There are also disclosures to the seller that the buyer is a licensed real estate professional and any future profit or loss on a resale of the property is solely that of the buyer. Similarly, the addendum protects the seller by acknowledging that fees related to closing, holding and reselling the property are all the responsibility of the licensee/buyer and not the seller. Toss in the earlier mention that the contract is not binding on the listing brokerage company unless the supervising broker signs, and the seller really has been fully informed of the potential consequences of this type of transaction.

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.

ABC Realty, a brokerage, is part of a franchise or marketing cooperative with a strong public image. How must the broker's advertising indicate this relationship? include the franchise name in advertising with the broker's phone number so that people are led to the correct office advertise only ABC Realty since that is how the license is held with the commission advertising should show both the franchise name and ABC Realty with the same level of prominence display the franchise name prominently with ABC Realty identified in fine print

advertising should show both the franchise name and ABC Realty with the same level of prominence The brokerage entity, as licensed with the commission, must be advertised at least as prominently as the franchise or trade group identity.

A 1994 Colorado law allows "undesirable and dangerous persons" to be evicted:

after a three-day notice to quit

A final walk-through is: required by law agreed to by contract required by the Real Estate Commission required by the listing agent

agreed to by contract A walk-through is not required.

A listing agent receives two similar offers to purchase and sets an appointment with the sellers to present the offers. Another offer comes in from an associate in the same company. In this situation, the licensee should present

all 3 offers for simultaneous review

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 The seller should list all encumbrances known at the time of the listing. The status of these encumbrances after the property is sold would not be relevant (or known) at the time of the listing.

The term "imputed knowledge" in a real estate transaction, refers to information known by:

all members of a team on a listing taken in the team name.

Broker Green sold a home and the buyer gave him a $5,000 check as deposit. Green did the improper thing when he: endorsed it over to the seller upon financial acceptance of the offer held the check until all financing was completed in escrow cashed the check and gave the money to the seller when his acceptance was communicated to the buyer all of the above

all of the above

The owner of a treasurer's deed: is not responsible for previous owner's property taxes if owed was the highest bidder at a tax lien sale owns the property free and clear after a redemption period all of the above

all of the above

When representing a principal under a written listing agreement, what type of authority may an agent have? a) actual authority b) specific authority c) ostensible authority d) 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.

Those exempted from the obtaining a real estate license are: any person who purchases property or a business opportunity for his own account or in any way disposes of the same any authorized attorney in fact or attorney at law while acting in that capacity any escrow agent, receiver, trustee in bankruptcy, executor, administrator, guardian, or any person acting under a court order all of the above

all of the above A license is required when an individual receives compensation for the sale of property for others.

The options of a property manager in dealing with a risk are: to avoid to retain it to transfer it all of the above

all of the above A property manager may deal with a risk by removing it, retaining it by insuring against it with a large deductible, or transfer it by taking out an insurance policy.

A broker's record-keeping system for his trust account(s) must include the following: a trust account ledger a trust account journal a monthly bank reconciliation worksheet all of the above

all of the above A trust account ledger and journal must be kept current at all times and the account must be reconciled monthly with the bank statement.

When a real estate entity is dissolved: the last employing broker becomes personally responsible for making all final disbursements and accounting for all trust funds the last employing broker must maintain all records for a period of four years the agent's licenses are inactive until they join another real estate entity all of the above

all of the above All agents have to join another company, and the responsibility of the employing broker is to maintain the records for four years and is responsible for all final disbursements.

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 All real estate agency contracts must have a definite beginning and ending date. The start of an Exclusive Right To Buy contracts may be post dated. There is no limit to the number of parties to a contract.

In the case where there is a homeowner's association to oversee a common interest community, and there are several common interest communities within one large community, a master association shall hold all powers, rights, obligations, assets, and liabilities of all communities monitor all communities within their domain regarding the planned architectural criteria set forth in the declarations assume responsibility for the common elements between each community all of the above

all of the above The master association shall be responsible for all of these.

The license laws of Colorado require a licensee to inform the seller that he has a real estate license if: the licensee is buying a home in which he will live the licensee is buying property for investment the licensee is selling a property which he owns all of the above

all of the above An active licensee must disclose in both advertising and the contract that he is licensed. An inactive licensee must disclose in the contract that he is licensed.

A licensee, who is guilty of an act that is grounds for disciplinary action, may: be subject to criminal prosecution have his/her license suspended or revoked be subject to civil prosecution all of the above

all of the above The real estate commission may suspend or revoke a license. Brokers may also be subjected to criminal prosecutions as a result of certain criminal acts.

Mineral rights: If property is attached with mineral rights, you may be obligated to: charge a rate for entry refuse entry allow them to enter an use your property to gain access to the minerals call police

allow them to enter an use your property to gain access to the minerals Just as if your neighbor had no access to their property, the law may require you to grant the neighbor an easement to drive across your property, the mineral owner has a right to access their minerals. This does not mean that the mineral rights owner has unlimited right to impact or damage your property. The law may require the mineral owner to access their minerals, for example oil, by drilling underneath the property leaving the surface undisturbed. This is a complex and litigious area of the law.

The seller agrees to all terms of the offer presented, except that they want 72 hours before possession, not 48 hours as in the offer. Since it is such a small change, they made the change by crossing out the 48 hours and writing in 72 hours and initialing the change. They then signed the contract as accepted. The buyer may, at their discretion: also initial the change, and the contract is deemed accepted by all parties not initial but they are still bound because of the seller's acceptance they must initial since the price and all other terms were acceptable proceed with the contract since the seller's signed it, but do not initial the change and consider the original 48 hours as the accepted terms

also initial the change, and the contract is deemed accepted by all parties Initialing is legal but is not a preferred method of changing a contract, the best way would be to write up a counteroffer with the change.

In a transaction that is subject to a licensee buyout agreement, if the buyer defaults, the seller may: sue the buyer if the specific performance box has been checked always sue the buyer for specific performance only keep the buyer's earnest money as liquidated damages keep the buyer's earnest money as liquidated damages if the liquidated damages box has been checked

always sue the buyer for specific performance "Liquidated damages" is deleted, in a licensee buyout addendum to a contract to buy and sell real estate. More info: What Is a Licensee Buyout Addendum? by Maxwell Wallace, Demand Media A licensee buyout addendum is a form used in certain real estate and property transactions in the state of Colorado. The LBA is used only in the purchase and sale of properties between licensed real estate professionals and their own clients. History and Purpose The Licensee Buy-Out Addendum to Contract to Buy and Sell Real Estate is intended to prevent improprieties and conflicts of interest in licensee/client transactions, as well as to make sellers contractually aware of the potential differences in selling to a licensed real estate professional as opposed to conventional buyers. Situations Dictating Use Licensed real estate agents are required to use an LBA when they enter into contracts to purchase properties concurrently with the initial listing of that property, when it immediately hits the market. Licensees also are required to use the LBA form when they are purchasing a property to facilitate its owner's purchase of another property, as well as when they continue to market that property to other potential buyers. Deleted Provisions under the provisions of the licensee buyout addendum, several conventional provisions of standard real estate listing contracts reached under Colorado state law are deleted. Deleted provisions include a property's appraisal condition, liquidated damages or pre-assessed damages to the property, provisions related to the seller's financial default status and the broker's acknowledgments and compensation disclosure forms. Profit and Loss Stipulations Colorado's LBA also stands as contractual acknowledgment by a property seller that the buyer is a licensed real estate professional and any future profit or loss on a resale of the property is solely that of the buyer. Similarly, the LBA protects the property seller by acknowledging that any fees related to closing, holding and reselling the property are all absorbed by the buyer and not the property seller as the original or prior landowner.

A counterproposal:

amends the terms and conditions of a proposed contract to buy/sell

A counterproposal: is a rejection of a proposed contract to buy/sell amends the terms and conditions of a proposed contract to buy/sell use is mandatory to modify the terms and conditions of a contract to buy/sell is used to counter the purchase price only of a proposed contract to buy/sell

amends the terms and conditions of a proposed contract to buy/sell The key here is "supersede and replace." This is not merely a rejection of an offer, it is amending the original offer, not rejecting it entirely.

On the settlement worksheet, charges for "Abstracting: Before Sale" would include

an abstract certified to date by a qualified abstractor

The amend\extend form is used to change the terms of:

an accepted purchase and sale contract

A contractual disagreement led to a seller's reducing the contract price by $1000. This agreement would be: unenforceable because of a lack of consideration an accord and satisfaction a novation a waiver

an accord and satisfaction This agreement would be an accord and satisfaction.

Under the Federal and State Fair Housing Acts, which of the following may a landlord refuse to rent? commercial space for use as a studio for African American art because the studio would "attract the wrong element" an apartment to three students for fear they will have loud parties an apartment to a single mother because the landlord is worried about who will supervise her child after school a gay couple

an apartment to three students for fear they will have loud parties Students are not a protected class under the Colorado Fair Housing Act so a landlord may refuse to rent an apartment to them. Colorado is one of a majority of states that has its own fair housing law. If you're renting or looking for an apartment in Colorado, you're covered by the Fair Housing Act (FHA), a federal law, which protects tenants and prospective tenants alike from illegal housing discrimination based on the following protected classes: race color religion national origin sex disability familial status. In addition to these protected classes, Colorado offers legal protection based on: creed sexual orientation marital status ancestry. Caution: There are two under Colorado law: • Housing operated by religious organizations and private clubs which may give preference to or limit occupancy to members • For familial status only: certain housing operated for seniors 55 and older, or 62 and older, with specific other requirements to meet the qualifications of the exemption

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 an investment

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." Having said this, the commission position goes on to say: "If the listing licensee or broker desires to acquire a listed property solely for personal use or future resale and not as an inducement to the owner, the licensee or broker is advised to (1) clearly sever their agency or listing relationship in writing; (2) renounce the right to any commission, fee or compensation in conjunction with acquisition of the listed property; and, (3) advise the owner to seek other assistance, representation or legal advice." In English, this second part says that although properties bought for true investment purposes do not require the use of the buyout addendum, the commission would prefer if you adopted some of the provisions of it and put some distance between you and the seller, such as not making a commission and severing the listing contract.

Before being employed by a broker, you should receive and review:

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

The correlation (reconciliation) process involves

analyzing and weighing the results obtained by using the three approaches to value.

If the settlement worksheet contains a figure for "Mortgage Insurance Reserve," it probably means that

annual mortgage insurance premiums are being collected in an impound account for future payment

A broker who has an exclusive agency listing receives a commission when

any broker sells the property

The Colorado Contract to Buy & Sell contains a section regarding Association Documents. This section refers to documents for:

any community subject to mandatory assessments for maintenance of common elements

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

The Real Estate Commission must investigate

any verified written complaint

Which of the following would fall under the definition of a real estate broker?

anyone who solicits a fee from a prospective tenant for furnishing information concerning the availability of rental properties

The law that requires that any Colorado real estate license applicant: apply for an associate broker license apply for an independent license with educational classes en lieu of experience will have a 30-day probationary period will have the same level of authority as an independent or employing broker

apply for an associate broker license

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

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

Commissions earned by a broker in a real estate sales transaction

are determined by agreement of the broker and his or her principal.

"Dual Contracts:" are legal in Colorado means one contract for two parcels are oral or written are written only

are oral or written Are oral or written and means two separate contracts for the same parcel. (REM 15-19)

Torrens certificates of title:

are primarily found on the eastern slope of Colorado

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.

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

as the buyer and seller agree More on the process of returning Earnest Money: The Colorado Contract to Buy and Sell Real Estate (AKA Purchase Contract) says the agent holding earnest money has 5 days to return earnest money to whomever is supposed to get it after receipt of written instructions to do do. This is covered in the Broker Acknowledgements sections of the purchase contact. The actual language reads like this - "Broker agrees that if Brokerage Firm is the Earnest Money Holder and, except as provided in § .., if the Earnest Money has not already been returned following receipt of a Notice to Terminate or other written notice of termination, Earnest Money Holder will release the Earnest Money as directed by the written mutual instructions. Such release of Earnest Money will be made within five days of Earnest Money Holder's receipt of the executed written mutual instructions, provided the Earnest Money check has cleared." BUT!!!!!! to make it even more fun for you, the Real Estate has issued Commission Position 6, whereby they say that if there is no controversy over who gets the earnest money, they want the money returned as quickly as possible and the agent does NOT have to get writen permission from all parties to do so. Most companies as a prudent measure have both parties sign that they agree who gets the earnest money, before they release it. This just makes sense, woe to the agent who releases the earnest money and one of the parties throws a fit over it. Safer to get the parties to agree in writing first. However, sometimes the party that is giving up the earnest money and their agent makes this a pretty low priority on their things-to-do-list. Keep in mind, they are grumpy the deal is dead and even if they know they need to release the earnest money, they are not happy about it. In the meantime, the other party wants their money. Buyers in particular are anxious as they are back on the market looking for a property and can't make an offer until they get their earnest money returned. Therefore, the Commission has made is very clear, that they do not want slow paperwork to hold things up when there is no controversy. Does this occasionally put us in an awkward position? Yup. Smart agents who do not like to even get within sniffing distance of having to write out a personal check to cover a perceived, if not actual screw up (that be me, except my wife would probably dispute the "smart" assertion) will move heaven and earth to get quickly signed releases by both parties before releasing earnest money. If you find that one of your parties due to the stress of the failed deal ran instantly to consult with the yogi on the mountaintop and are not returning messages. You need to have a talk with your managing broker before doing something you may regret. It is always cooler to share the love and say "my managing broker said to do it and will make it good" then "how do I spell your name on my check".

If you are unable to attend a closing for a transaction in which you established the brokerage relationship on behalf of your broker, you should

ask another licensee in your office to attend for you and share the responsibility to confirm the buyers closing figures.

assures the broker's compliance with the Conway-Bogue decision of the Colorado Supreme Court The Conway-Bogue decision gives real estate licensees the limited right to practice law by completing standard and approved forms, thus these numerous mandatory forms assist brokers in their compliance with this statute.

Employing Broker "reasonable supervision" includes all of the following EXCEPT:

attending first meeting with client

Employing Broker "reasonable supervision" includes all of the following EXCEPT: reviewing all contracts review transaction files maintaining an office policy manual attending first meeting with client

attending first meeting with client E-31. Reasonable supervision. Pursuant to section 12-61-113(1)(o), C.R.S., and in addition to the requirements of Commission Rule E-30 "reasonable supervision" of licensees with two or more years of experience shall include, but not be limited to, compliance with the following (a) Maintaining a written office policy describing the duties and responsibilities of licensees employed by the broker. A copy of the written policy shall: (1) be given to, read and signed by each licensee; (2) be available for inspection, upon request, by any authorized representative of the Commission. (b) Reviewing all executed contracts in order to maintain assurance of competent preparation. (c) Reviewing transaction files to ensure that required documents exist. (d) Nothing in this rule shall prohibit an employing broker from delegating supervisory authority to other experienced licensees. (1) Employed licensees who accept supervisory authority from an employing broker shall bear responsibility with the employing broker for ensuring compliance with the Commission statutes and rules by allsupervised licensees. (2) Any such delegation of authority shall be in writing and signed by the employed licensee to whom such authority is delegated. A copy of such delegation shall be maintained by the employing broker for inspection, upon request, by any authorized Commission representative. (3) An employing broker shall not contract with any employed licensee so as to circumvent the requirement that the broker supervise employed licensees. More info on "High Level of Supervision: E-32. High-level of supervision. In addition to the requirements of Rule E-31 and pursuant to section 12-61-103 (6)(c)(I) C.R.S., an employing broker shall provide a "high level of supervision" for licensed persons with less than two years experience as follows: (a) Provide specific training in office policies and procedures; (b) Be reasonably available for consultation; (c) Provide assistance in preparing contracts; (d) Monitor transactions from contracting to closing; (e) Review documents in preparation for closing; (f) Ensure that the employing broker or an experienced licensee attends closings or is available for assistance. (g) Nothing in this rule shall prohibit an employing broker from delegating supervisory authority to other experienced licensees. (1) Employed licensees who accept supervisory authority from an employing broker shall bear responsibility with the employing broker for ensuring compliance with the Commission statutes and rules by all supervised licensees. (2) Any such delegation of authority shall be in writing and signed by the employed licensee to whom such authority is delegated. A copy of such delegation shall be maintained by the employing broker for inspection, upon request, by any authorized Commission representative.

When using a non approved form to buy and sell real estate who must prepare it

attorney for parties

The Real Estate Commission has the authority to:

audit or investigate a licensee and files at any time without advance notice

If a dispute over the Residential Contract to Buy and Sell goes to court, the contract indicates that court costs and legal fees shall be:

awarded to the prevailing party.

The normal relationship between an escrow officer and the principals in a real estate transaction is that of: a) an independent contractor b) a neutral agent c) an employee d) an advocate for both the buyer and seller

b) a neutral agent

An offer which is made contingent upon the buyer;s first obtaining a satisfactory lease on another property is: a) an illusory offer b) a valid offer c) a unilateral offer d) unenforceable

b) a valid offer

If a contingency in a contract fails, which of the following is true? a) a buyer is obligated to perfom as per the terms of the contract b) buyer is not obligated to perform c) buyer must perform or is in breach of contract d) all of the above

b) buyer is not obligated to perform

a contract based on an unlawful consideration is: a. valid, until voided b. void c. legal d. enforceable, if in writing

b. void

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 A real estate office should be available to the public but does not need to be open 24 hours a day. C-2. Resident broker required to have office; exceptions. Every resident Colorado real estate broker shall maintain and supervise a brokerage practice available to the public, except those brokers registered in the Commission office as in the employ of another broker or those brokers registered as inactive. Editor Note: Please note that the above statute refers to "resident" brokers. Colorado brokers not resident in the State are not required to have a physical location in the State.

Each owner of a time-share estate therein shall: share responsibility in the title encumbrances be individually liable to the unit's association for all assessments and taxes be individually liable to the unit's association for all assessments and taxes but be responsible for only a fraction of such assessments and taxes purchase items of interest only for their private use in the unit

be individually liable to the unit's association for all assessments and taxes but be responsible for only a fraction of such assessments and taxes Each owner is only responsible for a fraction of such assessment and taxes.

The time and place of closing is generally scheduled by the listing agent, however it should: always be set according to the buyer's needs always be set according to the seller's needs be set according to the lender's schedule be mutually agreed to by the parties

be mutually agreed to by the parties The person scheduling the closing time and place should try to accommodate all of the parties.

A licensee, who is guilty of an act that is grounds for disciplinary action, may:

be subject to criminal prosecution have his/her license suspended or revoked be subject to civil prosecution Correct -> all of the above Explanation The real estate commission may suspend or revoke a license. Brokers may also be subjected to criminal prosecutions as a result of certain criminal acts.

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 Earnest money abandoned from an unexecuted contract should be transferred to the Colorado State Treasury Department after five years.

The Colorado-approved Amend/Extend Contract form should be signed:

before the sales contract has been fully executed Explanation The Agreement to Amend/Extend Contract is used only to amend the terms and conditions of a sales contract while it is in process. You cannot amend a contract once it is complete (AKA "executed"), or terminated, or expired.

The illegal practice of inducing homeowners to sell their properties by making representations about the prospective entry of persons of a certain race/national origin into the neighborhood is also called: redlining blockbusting commingling steering

blockbusting Think of "blockbusting" as "busting up a block" by trying in induce or force people to move out of their neighborhood to allow others who are "different" to move in. Blockbusting is also known as Panic Peddling

Mr. and Mrs. Seller give an exclusive 90-day listing to broker First. The broker shows the property to Mr. and Mrs. Buyer and he reveals their names to the Sellers. The buyers do not make an offer. The listing with broker First expires and the sellers sign a new exclusive right to sell 60 day listing with broker Second. Two weeks later the Buyers decide to purchase the property through broker First. If the Buyers purchase the property, who is entitled to a commission?

both brokers

Licensees are responsible for paying the costs of legal document preparation when they are preparing such documents for their clients. If the broker delegates this function to an agent (title company or closing service), they are responsible for bearing the cost. mortgage company broker title company buyer

broker Licensees are responsible for paying the costs of legal document preparation

When an employing broker A sells his company to broker B: broker A is responsible for retention of all records prior to sale broker B is responsible for retention of all records before and after sale broker A is only responsible for records of transactions not completed broker A is only responsible for their personal transactions

broker A is responsible for retention of all records prior to sale Broker selling company is responsible for retention of all transaction records that occurred prior to the sale of the company.

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

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

When purchasing a "new home" through a builder, the earnest money should be held in the: broker's escrow account builders escrow account Title Company's escrow account lenders escrow account

builders escrow account

If the buyer provides written notice of unsatisfactory conditions: - the seller must fix all the items -buyer and seller must agree in writing to a settlement, or the buyer withdraw the objections on or before the resolution deadline or the contract shall terminate - the buyer must buy the property "as is"

buyer and seller must agree in writing to a settlement, or the buyer withdraw the objections on or before the resolution deadline or the contract shall terminate According to the Contract to But/Sell Real Estate (AKA Purchase Contract) the buyer must provide a written description of insatisfactory items by the Inspection Objection Deadline. The Buyer and Seller then have until the Inspection Resolution Deadline in the contract is for the parties to reach agreement on the inspection items or for the Buyer to withdraw their objections, else the contract teminates on that date.

Advocacy of the principal is a benefit of which of the following relationships? Buyer-agency Seller-agency Transaction brokerage buyer or seller agency

buyer or seller agency Advocacy is one of the fiduciary duties an agent is required to perform in an agency relationship. There is no advocacy in a transaction broker relationship, you have to treat the buyer and seller equally.

A Purchase and Sale Contract may be prepared by: the broker's attorney the seller's attorney the buyer's attorney buyer or seller's attorney

buyer or seller's attorney The attorney of the buyer or the seller may prepare a purchase and sale contract; the broker's attorney may not.

Who can not prepare an addendum to the Contract to Buy and Sell Real Estate?

buyer''s broker Explanation Associate Brokers may only use forms prepared by the Real Estate Commission.

Who can not prepare an addendum to the Contract to Buy and Sell Real Estate? buyer or seller employing broker's attorney attorney for buyer buyer''s broker

buyer''s broker Associate Brokers may only use forms prepared by the Real Estate Commission.

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.

The exclusive right-to-buy contract is available as: various sizes and shapes multiple flavors different colors buyer-agency or transaction broker relationships

buyer-agency or transaction broker relationships Exclusive right to buy contracts can establish either buyer agency or transaction brokerage depending upon which box is checked at the top of the contract.

a "safety clause" is usally found in which of the following contracts: a) deposit receipt b) lease c) listing d) option

c) listing

It is the broker's responsibility when showing properties to: set up the showing for sometime within the next week wait outside while the buyer looks at the house lock all the doors and leave the lights on so the next broker does not have to turn them on. call ahead to set up the showing

call ahead to set up the showing It is the broker's responsibility when showing priorities to call ahead to set up the showing, enter the home first and leave the home last, make sure all the doors and windows are locked and the lights turned off.

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.

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.

Home inspectors: must be licensed are not licensed unless they became inspectors after Jan 1, 2002 are required to have 60 hours of training can enter the business without qualifications or training

can enter the business without qualifications or training Home inspectors are not required to be licensed; therefore they can enter the business without training or qualification.

Someone living in a condominium exclusively owns: The walls separating the units The carpet inside the unit The building elevator The balcony outside the unit

carpet Condominums are a form of cooperative ownership. Within this ownership, elements inside the condominium exclusively belong to the unit owner such as the carpet listed in the question. The unit owner has fractional ownership of the elements outside of the condominium which are shared by other owners and controlled by the HOA. Fractional ownership elements belong to one of two categories - "common elements" or "limited elements". Both common and limited elements belong to the HOA. A common element is something outside of the unit, examples are the elevator, the walls surrounding the unit, the grounds, the pool and the roof. A limited element is dedicated to the exclusive use of a unit, but as it is outside the unit, is still owned by the HOA. An example of this is a balcony or an unshared staircase providing exterior access to the front door.

When a contract is rejected by the Seller, the seller should: not return the contract write "rejected" across the front of the contract check the appropiate box and initial on the indicated line indicate a rejection on the appropriate box and complete a counteroffer

check the appropiate box and initial on the indicated line They should not sign the contract. Instead there is a check box to indicate if the offer is being rejected or countered. The seller intials in the appropriate area.

The Exclusive Right-to-Sell listing contract gives the listing broker the right to: sign the purchase agreement for the seller collect deposits from the purchasers assign the listing agreement to another broker all of the above

collect deposits from the purchasers The listing broker on behalf of the brokerage firm is authorized by the seller to collect and hold earnest money as a neutral escrow agent.

What falls within the scope of Rule F?

commercial contracts, installment land contract, deed of trust

A broker must offer: 100% commission 50/50% commission split 75/25% commission split commission splits and office fees referenced in the broker's office policy manual

commission splits and office fees referenced in the broker's office policy manual

Which of the following would an unlicensed personal assistant be permitted to do?

complete a comparative market analysis for presentation by the licensed associate.

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

An unlicensed personal assistant may: create and get signatures on contracts share commission with licensee conduct an open house distribute copies of sales literature they wrote

conduct an open house Licensed assistant may not perform licensed activities such as independently drafting legal documents, or distributing information on listed properties other than those prepared by a broker. They may not share commissions. On the other hand, they may: 1. Perform clerical duties for a broker which may include the gathering of information for a listing; 2. Provide access to a property and hand out preprinted, objective information, so long as no negotiating, offering, selling or contracting is involved 3. Distribute preprinted, objective information at an open house, so long as no negotiating, offering, selling or contracting is involved; 4. Distribute information on listed properties when such information is prepared by a broker; 5. Deliver paperwork to other brokers; 6. Deliver paperwork to sellers or purchasers, if such paperwork has already been reviewed by a broker; 7. Deliver paperwork requiring signatures in regard to financing documents that are prepared by lending institutions; and 8. Prepare market analyses for sellers or buyers on behalf of a broker, but disclosure of the name of the preparer must be given, and it must be submitted by the broker.

The information a broker must keep about a deposit into an escrow account does not include:

confirmation of electronic transfer

The information a broker must keep about a deposit into an escrow account does not include: address of affected parties address of affected property confirmation of electronic transfer amount of deposit

confirmation of electronic transfer The broker's deposit slip or wire transfer must individually identify the respective parties, properties, and amounts deposited, and the appropriate escrow records must be established.

Which homes in an area represent the highest and best use of the land and are similar in architectural design, this would best exemplify which of the following principles of appraisal? a) change b) conformity c) contribution d) progression and regression

conformity

When a tenant abandons the leased premises because the landlord has not furnished hot water for two months, it is called what type of eviction. forced constructive cooperative absolute

constructive When a tenant early terminates a lease because they claim the property is not habitable, it is called a constructive eviction. There are strict rules and regulations regarding Constructive Evictions in Colorado. They are detailed under the State's Warranty of Habitability which outlines under what circumstances may a property be declared uninhabitable and what steps must be taken by the tenant to perform a constructive eviction to be legally released from a lease.

If a building collapsed, and the tenant was forced to move out, this could be called: actual eviction effective eviction illegal construction constructive eviction

constructive eviction constructive eviction occurs when property is not habitable.

The process of changing a property's status from rental to condominium is known as: conversion anticipation competition contribution

conversion Remember, conversion is "CONVERTING" a property's status from rental to condominium.

A developer would be required to register with the real estate commission for which of the following projects? conversion of an apartment complex into 25 residential condominiums condominium office park with 40 office warehouse units for sale mini-warehouse project with over 100 storage units subdivision of 100 acres into 10 sites for residential use

conversion of an apartment complex into 25 residential condominiums In Colorado, the subdivision developer's registration law requires registration for any property "divided into twenty or more interests solely for residential use and offered for sale, lease, or transfer."

A type of value estimate approach, in which value equals the estimated land value plus reproduction costs of any improvements, after the depreciation costs have been subtracted, is called the: market approach cost approach substitution approach income approach

cost approach The cost approach is what is described here - it estimates the amount needed to reproduce or replace the property.

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 Before we define "escape clause" lets define "contingency". When a seller agrees to accept a contingency from a buyer, they are agreeing to sell the property to the buyer contingent on the buyer selling their property. Sellers are more likely to accept a contingency offer in a tough real estate market when they are uncertain when and if their property will sell. In a strong market, seller are not as motivated to pull their property off the market. It is very common when a seller does accept a contingency, for the seller to want to include an escape clause into the terms of the purchase agreement. There is no set format for an escape clause, it is simply a term used to describe any clause in a contract that would let the seller not perform the contract i.e. blow off the contingent buyer and accept another offer. It is not unusual for an escape clause to place a deadline on the contingent buyer, usually a day or two, to waive the contingency or lose the property.

The Real Estate Commission approved Colorado Power of Attorney form

creates a limited agency agreement

The Real Estate Commission approved Colorado Power of Attorney form creates a limited agency agreement is required in foreclosure sales creates a universal agency agreement may be used in place of a buyer agency agreement

creates a limited agency agreement The Colorado Real Estate Commission approved Power of Attorney form is designed to establish a limited agency agreement sufficient to designate someone to sign on behalf of another for a real estate transaction. It is not designed to establish broader legal authority to act outside this limited legal scope.

Procuring cause means: showed 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 Procuring cause means creating an uninterrupted change of events that resulted in a closed transaction or sale.

How would charges for an attorney to examine the title documents normally appear on the settlement worksheet?

credit to broker, debit to buyer

The six -column settlement worksheet entry for the property purchase price would be

credit to the seller, debit to the buyer

If a real estate licensee advised buyers about how to take title when preparing a deposit receipt, she may be: a) giving tax advice b) giving legal advice c) providing a basis for a possible claim of discrimination d) all of the above

d) all of the above

Under the approved listing agreement, the broker is responsible for:

damage caused by the broker's negligence

At closing, the broker's commission generally appears as a:

debit (or charge) to the seller

Recording Fee of Warranty Deed most typically would appear on the settlement statement as:

debit buyer

What is the debit/credit entry when a buyer assumes a loan from the seller?

debit seller, credit buyer The seller still owes the amount that is assumed (debit seller). On an assumption, that the buyer will be making payments against the loan does not relieve the seller of the obligation that it be paid in full. The buyer will not be required to bring this amount to the closing (credit buyer)

What is the debit/credit entry when a buyer assumes a loan from the seller? debit broker, credit buyer debit seller, credit buyer debit buyer, credit seller debit seller, credit broker

A broker is informed of an $18 charge for recording a release of deed of trust in connection with a loan to be paid of at closing. The charge would be entered as

debit the seller, credit the broker

Based on the approved Contract to Buy and Sell, the title insurance premium would be entered on a settlement worksheet as

debit to seller, credit to broker

Seller's proceeds are shown at the bottom of a six-column settlement worksheet as a: debit to the seller credit to the seller credit to seller, debit to the broker debit to the broker

debit to the seller Seller's proceeds are a shown as a debit on the worksheet. To fully understand this answer you need to have a good understanding of the six-column worksheet used in closings. Once all expense and credits have been applied you total up the Debit and Credit columns at the bottom. If the Seller is going to have proceeds, the debit column total should be less that the total of the credit column. For the sake of discussion lets assume the seller's debits are 125k and credits 200k. This means ultimately the seller is going to be getting a check from the escrow account for 75K, but how do you express this on the 6 column worksheet? After totaling the columns you need to make then equal, meaning you add 75K to the DEBIT column to make it equal to the credit column. This means the sellers proceeds are shown as a DEBIT on the worksheet. You still need to assign a corresponding CREDIT and that is to the BROKER CREDIT column. Remember the Broker CREDIT column tells the closing agent what checks they have to write out of the escrow account. The check they need to write in this case is for 75K to the Seller.

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 Debit Seller/Credit Buyer. The term Closing Costs covers a variety of charges such as Recording Fees, Survey, Documentary Fee, Appraisal and others. The Seller contribution may not cover all of them. To keep it simple and make it work. The concession itself is a Seller Debit and Buyer Credit. This gets the dollars into the Buyer's side. The Buyers is then debited for his/her share of the Closing Costs. The Buyer's individual closing cost charges will each be a debit to the Buyer and a credit to the Broker (this deposits the money into the Trust Account for the Broker/Closing Agent to actually pay the vendor who is owed the Closing Costs).

Mr. Jones has a property valued at $150,000. The 2003 taxes were 27.65 mills. In 2004 the mill levy was reduced to 25 mills but the assessed value increased 10%. Did the taxes: stay the same increase decrease none of the above

decrease The taxes decreased since the mill levy reduction was a greater percent than the assessment increase. If i convert the reduction in the mills to a percentage I get 9.6% and if am doing it correctly then 9.6% is not greater than 10% increase. Could you please explain further. Answer: Hello A, Best just do the calculations and see which one results in the lowest tax bill - 2003: $150,000 x .02765 = $4147.50 tax bill 2004: $165,000 x .025 = $4125 tax bill

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 doucments immediately. More info: Rule E-5. Closing responsibility; closing statement distribution. Pursuant to 12-61-113 (1)(h), at time of closing, the individual licensee who has established a brokerage relationship with the buyer or seller or who works with the buyer or seller as a customer, either personally or on behalf of an employing broker, shall be responsible for the proper closing of the transaction and shall provide, sign and be responsible for an accurate, complete and detailed closing statement as it applies to the party with whom the brokerage relationship has been established. If signed by an employed licensee, closing statements shall be delivered to the employing broker immediately following closing... Rule E-4. Document Preparation and Duplicates. ... A real estate broker shall immediately deliver a duplicate of the original of any instrument (except deeds, notes and trust deeds or mortgages, prepared by and for the benefit of third party lenders) to all parties executing the same when such instrument has been prepared by the broker or the broker's employed licensee or closing entity and relates to the employment or engagement of the broker or pertains to the consummation of the leasing, purchase, sale or exchange of real property in which the broker may participate as a broker...

To be effective a lease must be: delivered recorded sealed defeated

delivered

You answered this question correctly When zoning authorities restrict particular land to accommodate an average maximum number of houses per acre, this is known as: cluster zoning density zoning maximum zoning gross zoning

density zoning Density zoning ordinances restrict the average number of houses per acre that may be built within a particular subdivision.

If an FHA loan is being assumed, the FHA Mortgage Insurance Premium (MIP)

depends on the age and type of FHA loan and must be carefully calculated

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 The MLS can be used for marketing properties, preparing a seller's CMA and designing brochures and mapping out property locations.

If a property owner tells you the land only flooded during the "great flood" over 100 years ago, a licensees obligation to a potential buyer is.... provide them with necessary documentation and assure them that there''s nothing to worry about direct them towards the public records which would specify whether the land is in a flood zone assure them there is nothing to worry about because the flooding only occurs every 100 years recommend the install necessary infrastructure to avoid future flooding.

direct them towards the public records which would specify whether the land is in a flood zone Recognizing when you are out of your area of expertise and knowing how to deal with it, is an important skill and required by the Real Estate Commission. Recommending a review of public records to determine if the property is in a flood zone demonstrates that skill. The other three have the agent stepping out of their area of expertise.

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.

If the property does contain lead-based paint, the seller must: have it removed at the seller's expense disclose that there is lead-based paint disclose that they have painted the house, therefore there is no problem disclose the families medical records, to demonstrate that it has not caused any health problems

disclose that there is lead-based paint

If an earnest money check does not clear the bank: quickly get the buyer to write another before seller finds out disclose to seller, who may elect to void the contract immediately void the contract the buyer has three days to make the check good

disclose to seller, who may elect to void the contract No valid consideration was given therefore it is a voidable contract.

An Associate Broker wants to purchase a property for investment. The property is not listed with any broker. The Associate Broker must

disclose to the seller that he or she has a license and inform his or her broker of the transaction

An associate broker desires to purchase a property. The property is not listed with a broker, the associate must:

disclose to the seller that the associate is licensed and keep his employing broker informed.

The Definitions of Working Relationships form has the effect of: establishing an agency relationship disclosing the different types of relationships that are available complete disclosure of agency as required by Colorado statute disclosing only the types of relationships that the broker prefers to offer

disclosing the different types of relationships that are available The definitions form does not establish a specific relationship with a buyer or seller- only discloses the type of relationships that are available.

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 An unlicensed assistant is allowed to distribute literature, they can chauffeur buyers to a property as long as no licensed activity is performed and they may complete but not present market analysis

If items listed in the Inclusions and Exclusions Section of of the Contract to Buy and Sell Real Estate are not a part of the property, the broker should:

do nothing, if the listing item is not on the property as of the date of the contract, it is not included nor necessary to cross it out

If items listed in the Inclusions and Exclusions Section of of the Contract to Buy and Sell Real Estate are not a part of the property, the broker should: do nothing, if the listing item is not on the property as of the date of the contract, it is not included nor necessary to cross it out cross out the items to show they are not included if not crossed out the seller could be obligated to install the item check the appropriate box

do nothing, if the listing item is not on the property as of the date of the contract, it is not included nor necessary to cross it out 3.1. Inclusions. The Purchase Price includes the following items (Inclusions): 3.1.1. Fixtures. If attached to the Property on the date of this Contract, lighting, heating, plumbing, ventilating, and air conditioning fixtures, TV antennas, inside telephone, network and coaxial (cable) wiring and connecting blocks/jacks, plants, mirrors, floor coverings, intercom systems, built-in kitchen appliances, sprinkler systems and controls, built-in vacuum systems (including accessories), garage door openers including remote controls; and 3.1.2. Personal Property. The following are included if on the Property whether attached or not on the date of this Contract: storm windows, storm doors, window and porch shades, awnings, blinds, screens, window coverings, curtain rods, drapery rods, fireplace inserts, fireplace screens, fireplace grates, heating stoves, storage sheds, and all keys. If checked, the following are included: Water Softeners Smoke/Fire Detectors Security Systems Satellite Systems (including satellite dishes).

do nothing, if the listing item is not on the property as of the date of the contract, it is not included nor necessary to cross it out The Inclusions section lists a number of items which may or may not be a part of the property. Just being in this list does not mean the item is a part of the property. These items are included "if on the Property whether attached or not on the date of this Contract". This means a listed item is only included if it was a part of the property on the date of the purchase agreement. From the Contract to Buy and Sell Real Estate: Please note that the paragraph numbers in the below clause may be different in the current contract. Although the numbers change periodically, the language essentially remains the same. Inclusions. The Purchase Price includes the following items (Inclusions): 32 2.5.1. Fixtures. If attached to the Property on the date of this Contract: lighting, heating, plumbing, ventilating and air conditioning fixtures, TV antennas, inside telephone, network and coaxial (cable) wiring and connecting blocks/jacks, plants, mirrors, floor coverings, intercom systems, built-in kitchen appliances, sprinkler systems and controls, built-in vacuum systems (including accessories), garage door openers including Other Fixtures: remote controls. If any fixtures are attached to the Property after the date of this Contract, such additional fixtures are also included in the Purchase Price. 41 2.5.2. Personal Property. If on the Property whether attached or not on the date of this Contract: storm windows, storm doors, window and porch shades, awnings, blinds, screens, window coverings, curtain rods, drapery rods, fireplace inserts, fireplace screens, fireplace grates, heating stoves, storage sheds, and all keys. If checked, the following are included: Water Softeners Smoke/Fire Detectors Security Systems Satellite Systems (including satellite dishes). Other Personal Property:

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 broker is required to follow the written instructions of the buyer and seller when handing earnest money.

The owner is justified in canceling the listing agreement if the listing broker: makes full disclosure provides proper comparable properties does not exert reasonable effort to sell the property presents offers delivered to the broker.

does not exert reasonable effort to sell the property

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.

A broker's trust account at a solvent credit union:

does not offer proper insurance protection to the account beneficiaries.

An estate from period to period:

doesn't have a specific expiration date

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 An estate from period to period doesn't have a specific expiration date.

A broker who enters into an agency relationship with a seller owes a fiduciary obligation to the seller. To the purchaser he owes:

duty of fairness and good faith

A broker who enters into an agency relationship with a seller owes a fiduciary obligation to the seller. To the purchaser he owes: duty of fairness and good faith nothing, as the seller is the principal and the one paying the commission an obligation to provide only answers to questions asked by the purchaser an obligation to provide only answers to questions directly relevant to the sales price and the physical condition of the property

duty of fairness and good faith To the purchaser, a broker owes a duty of fairness and good faith, and an obligation to answer questions honestly and to disclose all material defects known to the broker. A fiduciary relationship is created when a principal signs a listing or buyer's agency agreement with a Listing Agent or Buyers Agent. Note: a Transaction Broker as a neutral party is not a fiduciary relationship (the T broker owes no loyalty, only Care, Obedience, Accounting and Disclosure of non-confidential items and material facts). In real estate transactions, only the Sellers or Buyer's agency relationships are fiduciary relationships. This relationship implies a position of trust or confidence, wherein one person is usually entrusted to hold or manage property or money for another. In a fiduciary relationship, one person, in a position of vulnerability, justifiably vests confidence, good faith, reliance and trust in another whose aid, advice or protection is sought in some matter. In such a relation good conscience requires the fiduciary to act at all times for the sole benefit and interest of the one who trusts.

Of the following; who is responsible for for an accurate and complete closing statement?

eal estate broker attending closing Explanation Real estate brokers are required by Rules E-4 and E-5 to provide copies of complete and accurate closing statements to buyers and sellers for any transaction in which the broker assists or acts in an agency capacity. Although the brokers usually engage a closing company to create the closing statements, they cannot delegate responsibility for the statements being accurate and complete.

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 check for the earnest money should either accompany the offer until accepted or be delivered prior to expiration of the Alternative Earnest Money Deadline. Most often, a buyer's agent holding the deposit forwards a copy of the earnest money check with the offer to prove s/he has it, and then specifies a date in the Alternative Earnest Money Deadline when the actual check will be delivered after contract acceptance. If the deposit was tendered with the contract; it must be deposited no later than 3 business days after notice of acceptance of the contract. From the real estate manual: Except as provided in Rule E-l (o), all money belonging to others which is received by a broker as a property manager shall be deposited in such broker's escrow or trust account not later than five business days following receipt. All other money belonging to others which is received by a broker shall be deposited in such broker's escrow or trust account not later than the third business day following receipt

The easement that is not created for the benefit of the land owned by the owner of the easement, but that attaches personally to the easement owner is known as an:

easement in gross

A property owner died, having willed his real property to his two daughters. There is still a chance that they could lose the land for a variety of reasons, but it CANNOT be taken through escheat a challenge to the will condemnation sale to satisfy a tax lien

escheat The transfer of title of property or an estate to the state when an individual dies without a will and legal heirs. Escheat ensures that property always has a recognized owner, which would be the state or government if no other claimants to ownership exist. Most jurisdictions have their own laws and regulations defining escheat and the circumstances under which it can be invoked. Escheat is usually done on a revocable basis, which means that ownership of the estate or property would revert to a rightful heir should one turn up.

A licensed real estate broker engaging in short-term rentals should: not put deposits into their escrow accounts not combine short-term occupancy and lease agreements as a business practice escrow and account for funds coming into their possession commingle funds so as not to confuse the general public

escrow and account for funds coming into their possession

Provisions of the Colorado Common Interest Ownership Act:

establishes the right of an HOA to place a lien on a property for unpaid HOA dues and assessments Explanation When someone buys a house, condo, or townhome that is part of a community with an HOA, s/he will most likely pay monthly fees and assessments to the homeowners' association. Becoming delinquent in paying those fees and assessments, the homeowners' association will be able to get a lien on the home that could lead to a foreclosure. This right to lien is established in the Colorado Common Interest Ownership Act.

A situation in which the tenant's lease has expired and the tenant is no longer paying rent, but is living on the property is known as:

estate at sufferance

A situation in which the tenant's lease has expired and the tenant is no longer paying rent, but is living on the property is known as: an estate for years estate at will estate from period to period estate at sufferance

estate at sufferance In an estate at sufferance, the tenancy is by a lessee who lawfully occupies the landlord's property, but then continues to occupy the property improperly after his rights have expired and the lessor "suffers" from not having the unit available to rent.

A tenant's lease has expired, and the tenant has not vacated or negotiated a renewal lease. The landlord has declared that he does not want the tenant to remain in the building. The occupancy is normally called estate for years estate from year to year estate at will estate at sufferance

estate at sufferance When a landlord does not want the tenant to remain on the property there is an estate at sufferance (the landlord is suffering).

Frank and Betty Taylor's apartment lease has expired, but their landlord has indicated to them, that they may remain on the premises until a sale of the building is closed. The Taylor's will be charged their normal monthly rent during this period. Their tenancy may be called a(n): year-to-year holdover estate for term estate at sufferance estate at will

estate at will A tenancy at will often occurs upon the expiration of an estate for years. More info on Leasehold Tenancies: Leasehold Tenancy also known as Nonfreehold Estates A nonfreehold estate is an interest in real property that is less than a freehold estate. Nonfreehold estates are not inheritable and are said to exist without seisin. Seisin denotes ownership: an individual who is "seised" of an estate is the owner of the estate. Also known as a leasehold estate, a nonfreehold estate is created through a lease or rental agreement that can be either written or oral. The holder of a nonfreehold estate (the tenant or lessee) holds no ownership interest in the real property, and only has the right to use the property as established in the terms of the lease or rental agreement. Ownership remains with the landlord (lessor). (To learn more, see Becoming A Landlord: More Trouble Than It's Worth?) Types of Nonfreehold Estates Because nonfreehold estates involve tenants, they are often referred to as "tenancies." There are four types of tenancies: Tenancy for Years This is, also called an estate for years or tenancy for a definite term, is an estate that is created by a lease. A lease is a contractual agreement where a tenant takes a leasehold interest in a real property for a specified duration. The defining characteristic of a tenancy for years is that the term must have a definite beginning and end; that is, a beginning date and either a specific time period (such as one year or one month) and an end date must be declared. As long as a lease is for a definite term, it is identified as a tenancy for years. These leases terminate automatically at the specified end date without the need for notice by either party. Tenancy from Period to Period A tenancy from period to period is an estate that exists when the tenancy is for a definite initial time, but is automatically renewable unless terminated by the lessor or lessee with prior notice that the tenancy is to be ended. These estates, which are also called periodic tenancies, are of indefinite duration since they can be renewed indefinitely. A tenancy from period to period may be from year to year, month to month, week to week or even day to day, and renews for a like period of time. For example, a month to month periodic tenancy is renewable in one-month periods until it is terminated at the end of a month through proper notice by either party. (See also, 11 Mistakes Inexperienced Landlords Make.) Tenancy at Will A tenancy at will, or an estate at will, exists at the pleasure of both the lessor and the lessee. This type of tenancy can be terminated at any time "at the will" of either the owner or the tenant. A tenancy at will lease agreement might contain language that expresses that the lease may be terminated instantly when notice is given. In practice, a tenant is generally entitled to a reasonable amount of time in which to vacate the property. Landlords may prefer a tenancy at will when a property is for sale and any tenants would have to vacate quickly. Tenants may favor a tenancy at will if they plan on renting only for a short period of time; for example, prior to moving or while waiting to move into a new home. Tenancy at Sufferance A tenancy at sufferance is the lowest form of estate known to law. Also called an estate at sufferance, it exists indirectly as the result of circumstance, and is never deliberately created. This type of tenancy arises when a person goes into possession of land in a lawful manner, but remains on the property without any right to do so, and without the owner's consent. The only difference between a tenant at sufferance and a trespasser is that the tenant at sufferance had at one time a right to be on the property, but has stayed beyond the terms of the previous agreement. For example, a tenant who remains after a one-year lease has terminated, without consent or recognition from the owner, becomes a tenant at sufferance. The tenant can be evicted at any time without notice.

An agent who is an independent contractor, must make:

estimated tax payments every quarter

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 Broker is not responsible for FICA, state or federal tax with holdings of independent contractors.

In Colorado, all of the following topics are regulated by Real Estate License Law or Real Estate Commission Rules except:

ethical standards

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 Code of Ethics and standard of practice is addressed when you become a member of a board, i.e. AAR, CAR, and NAR.

Errors and Omissions professional liability insurance is required for

every active Colorado licensee

Who of the following is required to obtain errors and omissions professional liability insurance?

every active Colorado licensee

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 Errors and omissions insurance coverage is required for every active Colorado licensee. Inactive licensees are not required to carry this insurance, however, they cannot conduct any real estate activities either

Which is presumed to be true of a lease in Colorado?

every lease contains an implied warranty of habitability and quiet enjoyment

In Colorado, when must real estate licenses be renewed?

every three years on the anniversary date of first being licensed, or any date mandated by the CREC.

In Colorado, when must real estate licenses be renewed? every three years with expiration on December 31 of the third year every three years on the anniversary date of first being licensed, or any date mandated by the CREC. each year at the anniversary of licensing every three years if the licensee passes the state examination

every three years on the anniversary date of first being licensed, or any date mandated by the CREC.

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 Executed means that both parties have fulfilled their agreements.

A broker acting as an agent must: act as an advocate for the buyer or seller exercising reasonable skill and care, as well as act as an advocate for buyer or seller not act as an advocate for either the buyer or the seller not inform the buyer or seller that they could be legally responsible for the agent

exercising reasonable skill and care, as well as act as an advocate for buyer or seller Agency requires a fiduciary responsibility from the agent to the Principal, therefore, an agent must exercise reasonable skill and care as well as being an advocate for buyer or seller.

The Colorado Real Estate Commission can decide on their own to investigate all of the following EXCEPT: a broker depositing salaries into her trust account failure to disclose stigmatizing property violating the Colorado Consumer Protection Act broker failing to disclose licensed status to seller while buying a property for personal use

failure to disclose stigmatizing property Colorado statute states that certain items that could psychologically impact (stigmatize) a property is not material to a real estate transaction. Therefore, these facts not being disclosed is not a violation.

A father and son own land as joint tenants. The father conveys one half of his interest to his daughter. Ownership would now be held by:

father, son and daughter as tenants in common

According to the Contract to Buy and Sell Real Estate - all prorations are:

final as of the closing date

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

for owner-occupied homes

F.S.B.O. in real estate means: first seller buys out free soda and barbecue at our house farmer stranded behind outhouse for sale by owner

for sale by owner

All records are required to be kept for: the previous year's file shall all be on the premises of the main office five years and must be available within the office four years seven years and two days

four years

A buyer and seller agree to write two contracts: lower actual price because the seller is under pressure to sell quickly, and a higher contract to submit for financing to allow the buyer to get a larger loan. The arrangement is

fraudulent dual contracting

A buyer and seller have written two contracts for one property: a higher contract to submit for a larger loan request and another with a lower actual purchase price because they know the seller is anxious to sell quickly. Which correctly describes this arrangement? risky but acceptable because the lender will have the right to appraise and inspect the property good business since the parties agree and the loan can only be made if the property appraises at the higher value fraudulent dual contracting acceptable for conventional loans, but not for VA or FHA loans

fraudulent dual contracting The buyer and seller are committing fraud and if a broker knew of the arrangement, he or she is also committing fraud and risks disciplinary action as well.

If the homestead exemption is not waived, the owner is protected:

from any debt

Following a closing, the listing broker should pay commissions due to the company associates

from the company operating account accruing to employment agreements.

full commission to both broker N and broker . In an open listing who ever sells the property receives the commission. In an exclusive right to sell listing, no matter who sells the property, the broker who listed the property will receive a commission. Therefore the seller would be responsible to pay both brokers a commission.

A seller hired broker N under the terms of an open listing. While that listing was still in effect, the seller without informing broker N, hired broker K under an exclusive right-to-sell listing for the same property. If broker N produces a buyer for the property whose offer the seller accepts, then the seller must pay a: full commission only to broker N full commission only to broker K full commission to both broker N and broker K half commission to both broker N and broker K

full commission to both broker N and broker K In an open listing who ever sells the property receives the commission. In an exclusive right to sell listing, no matter who sells the property, the broker who listed the property will receive a commission. Therefore the seller would be responsible to pay both brokers a commission

Third parties may hold interests in oil, gas, other minerals, geothermal energy or water on or under the Property, which interests may:

give them rights to enter and use the property.

A mortgage loan requires monthly payments of $175.75 for the first year, with increasing monthly payments in future years, is a/an

graduated payment mortgage.

In addition to taking the required 168 hours of course instruction to become an associate broker, one must also:

hang their license under an employing broker

A Single Party listing: does not require a contract has no holdover clause does not fall under the Statute of Frauds requires two agents

has no holdover clause Single party listings are confined to one buyer. These are most commonly used when an agent for a buyer approaches a For Sale By Owner. The seller is willing to pay a commission to the agent should the specific buyer purchase the property. Contractually this is accomplished by identifying the buyer in a listing agreement and limiting the duration of the agreement for a few days. As per commission Position 13 on Single Party Listings, the termination date shall not be extended by the "Holdover Period" of this listing contract. More info: CP-13 Commission Policy on Single-Party Listings Brokers often secure single-party listings because they have what they believe to be a good prospect for purchase. These listings are usually only for a few days, but occasionally the broker wishes to be protected for a longer period while the broker is negotiating with a particular prospective purchaser. A single-party listing, when placed on a Commission approved form for an Exclusive Right to Sell or Exclusive Agency, results in greater protection to the broker than the broker needs to have and the owner is placed in a position which is unfair. The owner may not realize that if the owner signs a listing contract with another broker, the owner may become liable for the payment of two commissions even though the owner has excepted a sale to the person mentioned in a single-party listing contract. In any and all contracting, the intent of the parties is paramount in its importance, in a listing contract, a broker is dealing with those less informed than the broker, and the broker has a duty to disclose the true meaning of the listing contract. The Commission does not wish to limit any owner of the freedom to contract. However, the broker should fully disclose to the owner the effect of the exclusive right to sell listing contract or the exclusive agency contract. Usually, when an owner signs an exclusive right to sell or exclusive agency agreement concerning a single party, the owner wishes to limit the rights of the broker under the listing contract. Therefore, in the space provided for additional provisions, one, two, or all of the following limitations should be inserted in this space: provided for additional provisions, one, two, or all of the following limitations should be inserted in this space: 1. The provisions of this listing contract shall apply only in the event a sale is made to ___________________________________. 2. The termination date shall not be extended by the "Holdover Period" of this listing contract. 3. In the event a sale is made by the owner or their broker to any other party than the above names, this listing contract is void. If an owner is misled to their disadvantage, the broker may be found guilty of endangering the public.

A Single Party listing: does not require a contract has no holdover clause does not fall under the Statute of Frauds requires two agents

has no holdover clause As per commission position 13: Brokers often secure single-party listings because they have what they believe to be a good prospect for purchase. These listings are usually only for a few days, but occasionally the broker wishes to be protected for a longer period while the broker is negotiating with a particular prospective purchaser. Usually, when an owner signs an exclusive right to sell with an exclusive brokerage adendum concerning a single party, the owner wishes to limit the rights of the broker under the listing contract. Therefore, in the space provided for additional provisions, one, two, or all of the following limitations should be inserted in this space: 1. The provisions of this listing contract shall apply only in the event a sale is made to ___________________________________. 2. The termination date shall not be extended by the "Holdover Period" of this listing contract. 3. In the event a sale is made by the owner or their broker to any other party than the above names, this isting contract is void.

A broker has overbooked his Saturday for showing buyers some homes. The broker may suggest all of the following except: getting together on Sunday instead of Saturday have his unlicensed assistant show and sell the buyers a home give a referral to another agent in his office for taking the buyers to see the properties reschedule for the following weekend or next available time for the buyers

have his unlicensed assistant show and sell the buyers a home An unlicensed assistant may chauffeur the buyer to the property, but may not be involved in any type of sales.

According to Commission Position 39 on Lease Options, Lease Purchase Agreements and Installment Land Contracts a licensee may create the before mentioned agreements by:

having a lawyer draw them up

According to CP-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 Installment Land Contracts AKA "Land Contracts" is a purchase agreement in which the owner retains legal title to a property while the buyer, usually a tenant, makes payments. ONCE THE BUYERS COMPLETES THESE PAYMENTS, THE SELLER DEEDS THE PROPERTY TO THE BUYER. Two big points here: 1) Since the buyer does not take legal ownership until they complete payments, this means the buyer, who usually has possession of the property, has no legal rights to the property beyond that of a renter. THEY DO NOT OWN IT - THE SELLER DOES. 2) Because of the number of creeps who have used installment land contracts to defraud unknowing buyers, the real estate commission does not have an approved form for us as agents to use. These contracts are not illegal, if you have clients who want to enter into such an agreement, they (notice the "they" here - I for one would not touch a land contract transaction for all the tea in China) need to bring in an attorney to draw up the necessary paperwork. The real estate commission feels so strongly about this, they issued a position statement on it. Here it is: CP-39 Commission Position on Lease Options, Lease Purchase Agreements and Installment Land Contracts (4-5-2011) The Commission recognizes that in order to maintain the resilience of the real estate market during times when conventional lending requirements are rigorous, alternative funding practices are utilized to sustain the market conditions of supply and demand. The Commission has received and investigated numerous complaints pertaining to lease options, lease purchase agreements and installment land contracts. Although the Commission does not have the authority to prohibit the types of real estate transactions that real estate brokers participate in, the Commission strongly cautions real estate brokers to utilize the services of an attorney licensed to practice law within the State of Colorado. It has been the Commission's observation, based on complaints received, that lease option and lease purchase transactions are complex and generally contain provisions with significant financial risk posed to the prospective buyer and seller. Installment land contracts and the other transactions mentioned in this position statement afford buyers the opportunity to take possession of the real property and make installment payments to the seller. There is a significant potential for harm to the seller, buyer or assignee if the installment land contract is not properly drafted. In all of the above transactions, the seller retains legal title to the property while the buyer may acquire equitable title. The Commission does not have an approved contract form necessary to memorialize the terms and nuances related to these complex transactions, or any jurisdictional regulations that may be germane. Pursuant to Rule F, the appropriate provisions of the license law and the brokerage relationship act (§§12-61-113, 12-61-804, 805 and 807, C.R.S.), real estate brokers are prohibited from drafting a contract document that would reflect the terms of such a transaction as it would exceed their level of competency and is a matter requiring the expertise and advice of an attorney. Additionally, such behavior may be construed as the unauthorized practice of law by the real estate broker and subject to civil penalties. The contracts for these transactions should not be prepared by a real estate broker; rather, the documents should be drafted by a licensed Colorado attorney-at-law engaged for each particular transaction.

A broker purchases software for contract printing. If there is an error in the contract wording:

he broker is liable for the contract's accuracy

If a broker lends money to a client and places it in his trust account: he may withdraw it only with the consent of his client since it is his money, he may withdraw it as he wishes the client may withdraw it at any time the broker may only withdraw it with the consent of the real estate commission

he may withdraw it only with the consent of his client Once a broker makes a loan to a client, it becomes the property of the client and must be handled the same as any other trust money.

he must be a broker from his home state and pass Colorado licensing laws, but need not open an office in Colorado The minimum age requirement for a license in Colorado is 18. In order to obtain a non-residential license an applicant must be a broker in his own state and comply with Colorado licensing laws. It is not necessary to have an office in Colorado but a Colorado trust account is necessary.

Hannah has a VA loan. This means

her loan is guaranteed by the VA

Starting out you might prefer a lower split versus keeping 100% of your commission for:

higher splits 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.

Licensee buyout addendums are to be used when a real estate broker is purchasing:

his or her own listing

If cash is received with an offer: hold cash until closing of contract photocopy the bills and wait to deposit until the contract is accepted deposit immediately even if it's before contract acceptance hold cash until contract has been accepted or withdrawn

hold cash until contract has been accepted or withdrawn Earnest Money follows offer until acceptance.

If a buyer and seller have a dispute over earnest money, the listing broker may

hold earnest money in escrow account until the parties provide mutual instructions

What is the listing broker's responsibility for an Earnest Money Promissory Note?

hold the note, and notify the seller if it is not redeemed in time.

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 a single-party listing, which of the following provisions or contingencies does NOT apply? a. mediation b. commission c. holdover d. financing

holdover does NOT apply

The rescission provisions of truth-in-lending apply to what type of loan? purchase money construction business home equity

home equity A home equity loan has a three day right of recission or a re-finance. More info: From Investopedia.com - A right of rescession under federal law set forth by the Truth in Lending Act that gives a borrower the right to cancel a home equity loan or line of credit with a new lender, or to cancel a refinance transaction done with another lender other than the current mortgagee within three days of closing. The right is provided on a no-questions-asked basis, and the lender must give up its claim to the property and refund all fees within 20 days of exercising of the right of rescission. The right of rescission was created to protect consumers from unscrupulous lenders, and to give borrowers a cooling off period and the time to change their minds. Not all mortgage transactions have the right of rescission. The right of rescission exists only on home-equity loans, home-equity lines of credit and refinances of existing mortgages in which the refinancing is done with a lender other than the current mortgagee. The right of rescission does not exist on a mortgage for the purchase of a home, a refinance transaction with the existing lender, a state agency mortgage, and a mortgage on a second home or investment property.

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 Identify the brokers "escrow" or "trust" account including licensed name, brokers name and type of account.

Exclusions in the Contract to Buy and Sell:

if it's not attached, it will NOT be included unless otherwise stated. If it is attached, it will be included unless excluded.

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 Security deposits may be retained by the lessor, if notice is given to the tenant in the lease, rental agreement, or separate written notice.

Your buyer is purchasing a town home. He has heard that the community has very restrictive covenants and wants to make sure that his offer is contingent upon his approval of their rules. he must check this out ahead of time, since the contract makes no provision for this as a reason for termination you must advise him that this is discrimination, and you cannot help him further you must write any such contingency in the other provisions section of the contract if properly prepared, the buy and sell contract gives him the right to review the covenants and terminate, if they are unacceptable.

if properly prepared, the buy and sell contract gives him the right to review the covenants and terminate, if they are unacceptable. When completing the contract to buy and sell real estate, it is important to insure that the buyer has the opportunity to review the community or condo covenants, which allows him the right to terminate if not acceptable

According to the Licensee Buyout Addendum to the Contract to Buy and Sell, when does responsibility extend beyond the licensee to the brokerage firm?

if the employing broker signs at the bottom of the addendum

According to the Licensee Buyout Addendum to the Contract to Buy and Sell, when does responsibility extend beyond the licensee to the brokerage firm? when the buyout date arrives when the buyout is for the personal use of the principal broker only if the listing associate is unable to perform the buyout if the employing broker signs at the bottom of the addendum

if the employing broker signs at the bottom of the addendum If the managing or employing broker signs the Licensee Buyout Addendum, then the brokerage company is responsible. According to the form, this is the only specification for responsibility. A is correct. A is the only verbiage listed NOT in the Licensee Buyout Addendum. What Is a Licensee Buyout Addendum? A licensee buyout addendum is a form used in certain real estate and property transactions in the state of Colorado. The LBA is used only in the purchase and sale of properties between licensed real estate professionals and their own clients. History and Purpose The Licensee Buy-Out Addendum to Contract to Buy and Sell Real Estate is intended to prevent improprieties and conflicts of interest in licensee/client transactions, as well as to make sellers contractually aware of the potential differences in selling to a licensed real estate professional as opposed to conventional buyers. Situations Dictating Use Licensed real estate agents are required to use an LBA when they enter into contracts to purchase properties concurrently with the initial listing of that property, when it immediately hits the market. Licensees also are required to use the LBA form when they are purchasing a property to facilitate its owner's purchase of another property, as well as when they continue to market that property to other potential buyers. Deleted Provisions Under the provisions of the licensee buyout addendum, several conventional provisions of standard real estate listing contracts reached under Colorado state law are deleted. Deleted provisions include a property's appraisal condition, liquidated damages or pre-assessed damages to the property, provisions related to the seller's financial default status and the broker's acknowledgments and compensation disclosure forms. Profit and Loss Stipulations Colorado's LBA also stands as contractual acknowledgment by a property seller that the buyer is a licensed real estate professional and any future profit or loss on a resale of the property is solely that of the buyer. Similarly, the LBA protects the property seller by acknowledging that any fees related to closing, holding and reselling the property are all absorbed by the buyer and not the property seller as the original or prior landowner.

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.

The inspection provision of the Residential Contract to Buy and Sell allows the buyer to terminate the contract in which of the following situations?

if the property is unsatisfactory in the buyer's subjective opinion

The Commission Position on earnest money deposits indicates:

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

Commission Position 6 on the release of earnest money deposits indicates:

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

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 Commission Position 6: " If there is no dispute, the broker should disburse to the appropriate party immediately."

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

The Commission Position on 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

A nonresident of this state may become a real estate broker

if they comply with all of the requirements for a Colorado Broker, except that brokers do not have to maintain a place of business in Colorado if they have one in another state

The real estate contract for a specific property for use as an unlicensed petroleum sales operation was forced to terminate. The termination was the result of:

impossibility of performance

The term "express contract" describes a contract which is expressed:

in words, either oral or written

An employing broker may properly designate a broker: in writing by giving proper disclosure as a transaction-broker orally to the client with the independent contractor agreement

in writing

Proper disclosure of working relationships must be made: verbally personally by the employing broker in writing with witnesses

in writing You need to disclose your brokerage relationship in writing before engaging in any activity which requires a brokerage license. Commission rule E-35 states that "brokerage activities" occur when a broker elicits or accepts confidential information from a party concerning specific real estate needs, motivations, or financial qualifications. Activities such as open house, preliminary conversations, or small talk concerning price range, location, property styles, or responding to general factual questions about properties that have been advertised for sale or lease do not qualify as triggering brokerage activities.

Licensee gets asked by out-of-state party to manage 15 rental units. Broker should: put money in sales escrow account set up escrow account in own name inform employing broker to create Property Management Contract and set up proper escrow account inform employing broker and set up own escrow account

inform employing broker to create Property Management Contract and set up proper escrow account Section 12-61-103 (10) requires all business to be conducted only in the licensed name of the employing broker. Within a brokerage, only the employing broker or an attorney for the brokerage can create contracts from scratch.

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?

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 The good news is that violence towards real estate agents is although not unknown, is uncommon. Still prudence is always in order. If someone makes you uncomfortable, invite them to the office to discuss their exact needs and for security purposes get a copy of their license. Bad guys will not show or go along with this requirement - good guys understand the reasons. Other ideas: bringing someone along - agents have accompanied fellow agents on a number of occasions, a well behaved but imposing dog works for some agents as does scheduling showings during daylight hours and always make certain someone knows where you are going. Many offices have a yellow file/green file/ red file system. Calling up the office and saying "bring me the yellow file" means "I am uncomfortable - stay on the line", "red file" means call the police now, "green file" means all is ok.

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

Which is true of an FHA loan

is insured by the Federal Housing Administration

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.

Tenant Teri signs a six-month lease and agrees to pay $375.00 a month in rent, utilities included, on an apartment unit. Teri moves out after two months because the electrical service has been cut off. Teri: Is in violation of her lease and is obligated to continue paying rent Is not obligated to continue making rent payments as she has been constructively evicted Has been actually evicted and need not continue paying rent Has abandoned the property and may be sued for specific performance

is not obligated to continue making rent payments as she has been constructively evicted This is constructive eviction

If a Lead-Based Paint Disclosure form is not executed at the time of the sale of a dwelling built prior to 1978, the purchaser:

is not obligated under the terms of the contract

If a Lead-Based Paint Disclosure form is not executed at the time of the sale of a dwelling built prior to 1978, the purchaser: may sue the seller for damages is not obligated under the terms of the contract is entitled to an inspection paid for by the seller may suffer damages as a result of caveat emptor

is not obligated under the terms of the contract Penalties for failure to comply with Federal Lead-Based Paint Disclosure Laws include treble damages, attorney fees, costs and a penalty up to $10,000 for each violation. A buyer is not obligated under the terms of a contract until the lead-based disclosure has been executed.

Your buyer's earnest money: is put in the broker's trust account, whether or not the offer is accepted is held, but not cashed, until the closing date and returned to them at that time is returned if the contract is not accepted by the seller is deposited in the selling broker's trust account until the contract is negotiated, and then turned over to the listing broker

is returned if the contract is not accepted by the seller

An executory contract is one which:

is yet to be performed

When is it acceptable for a broker to pay a referral fee to a unlicensed person?

it is acceptable as long as the unlicensed person does nothing that requires a real estate license

When a lessor dies the lease is affected in which of the following ways? It is terminated it is void it is not affected in any way It can be terminated by the lessee

it is not affected in any way The death of the lessor does not affect the lease in any way and it can not be terminated or renegotiated.

If it is the broker's office policy to offer differing splits to various types of cooperating brokers, such as one amount to buyer agents and another to transaction brokers: no disclosure is required it must be clearly disclosed to a seller that such a policy could result in restricting market exposure or cooperation from other brokers this will have no effect on buyers or sellers it will always provide a higher price for the seller

it must be clearly disclosed to a seller that such a policy could result in restricting market exposure or cooperation from other brokers It must be disclosed to the seller that such a policy could result in restricting market exposure or cooperation. (REM 13-7)

The Interstate Land Sales Full Disclosure Act stipulates that: a prospectus must be filed with OILSR it requires developments to be registered if they are selling less than 100 lots or condominiums it requires developments to be registered if they are selling more than 100 lots or condominiums prospective purchasers must inspect property prior to purchase to prevent fraud

it requires developments to be registered if they are selling more than 100 lots or condominiums The Interstate Land Sales Full Disclosure Act of 1968 (ILSFDA or ILSA or "Act") was an act of Congress passed in 1968 to facilitate regulation of interstate land sales, to protect consumers from fraud and abuse in the sale or lease of land. The Act was patterned after the Securities Act of 1933 and required land developers to register subdivisions of (currently 100 or more) non-exempt lots or condominium units. Originally, the filings were to be with the United States Department of Housing and Urban Development. Currently, the responsibility for administering the Act [1] and its regulations [2] is with the Bureau of Consumer Financial Protection (CFPB). A regulated developer is to provide each purchaser with a disclosure document called a Property Report. The Property Report contains relevant information about the subdivision and must be delivered to each purchaser before the signing of the contract or agreement and gives the purchaser at a minimum a 7 day period to cancel the purchase agreement.

A tenant provides proper notice and vacates an apartment. The landlord discovers substantial damage to the unit. Which of the following is a proper action by the landlord?

itemize the damage in writing and return any excess deposit within one month

After a tenant gave notice and vacated an apartment, the landlord discovered substantial damage to the unit. No time was set in the lease specifying the length of time the landlord had to account or refund the security deposit after deductions. Which of the following is an appropriate action by the landlord? return the deposit immediately and bill the tenant for the repairs when completed if the damage is obviously more than the deposit, the landlord may keep the damage deposit without notice notify the tenant that his or her damage deposit is forfeited within 60 days itemize the damage in writing and return any excess deposit within one month

itemize the damage in writing and return any excess deposit within one month The maximum amount of time a landlord can specify in a lease that they will hold a security deposit after lease termination is 60 days. If no time was specified in the lease, the default maximum is 30 days.

The sales contract should list: all of the buyer's relatives the lender who will be providing the loan items which are included in the contract price

items which are included in the contract price All Inclusions and exclusions to the property should be included in the sales contract.

Which form of concurrent ownership does Colorado recognize?

joint tenancy

A Contract to Buy and Sell (Residential) does NOT require inclusion of which of the following? fireplace screens and grates leased security systems parking and storage facilities as described in a condominium community window coverings on the property on the date of the sales contract

leased security systems The Inclusions and Exclusions section of the Contract does not specify inclusion of items likely to be leased, such as security systems, water softeners, smoke/fire detectors and satellite systems. These are included only if the appropriate box is checked

George is a buyer's agent filling out a Contract to Buy and Sell for young married buyers. When he asks how they wish to take title they are unsure. What should George do?

leave the choice blank and advise the couple to seek legal counsel and let George know their choice later

A seller providing financing may be exempt from attaining a lender's license if they have completed:

less than 3 transactions in the past 12 months (1) (b) With respect to a residential mortgage loan, a person, estate, or trust that provides mortgage financing for the sale of no more than three properties in any twelve-month period to purchasers of such properties, each of which is owned by such person, estate, or trust and serves as security for the loan;

A seller providing financing may be exempt from attaining a lender's license if they have completed: a seller providing financing always needs a mortgage license less than 3 transactions in the past 12 months less than 5 transactions in the past 12 months less than 5 transactions is the past 15 months.

In a sale-leaseback, the original owner subsequently assumes the role of:

lessee

Mr. Rob leases an apartment to Ms. Hall. Mr. Rob is called: lessee lessor vendor vendee

lessor

Under the provisions of the ordinary store lease, trade fixtures that remain in the store at the expiration of the lease term will be the property of the: lessee lessor tenant chattel mortgage

lessor If trade fixtures are not removed at the expiration of a lease by a tenant, they become part of the real property.

The owner of real estate who leases it to another is called a: vendor lessee lessor grantor

lessor the lessor is the landlord; the lessee is the tenant.

The schedule of exceptions in a title insurance commitment:

list of things against which the company will not insure

In order for the appraiser to obtain access to the property, he or she must first obtain permission from the: listing agent Title Company buyer selling agent

listing agent The seller has control over the property and it would therefore be the listing brokers responsibility.

When there is a contingency on the sale of the purchasers property prior to closing, the: listing agent should advise the seller to take the property off the market and wait for the purchaser's property to sell selling agent should show the buyer other homes listing agent should advise the seller of potential risks to the contract seller should find another agent

listing agent should advise the seller of potential risks to the contract

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 The listing broker has a responsibility to the seller to substantiate the value.

This document that defines the relationship between the real estate firm and the seller is the:

listing agreement

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 listing broker should verify as much information about the contract as possible.

The authority of the agent to act as the agent's principal is usually given by the terms of the: brokerage disclosure to buyer agreement to amend/extend contract purchase and sale contract listing contract

listing contract A listing agreement is an employment agreement between the seller and the broker. A right to buy contract is an employment agreement between the buyer and the broker.

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. (REM 13-6)

The secondary market is where

loans are purchased

A broker who does not have any employed licensees must:

maintain an office policy on brokerage relationships

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

make a note of the date and time the disclosure was made and reference the fact that the buyers declined to sign the form - then have the discussion.

Broker Betty at an open house meets a young couple looking to purchase their first home. The couple asked if the Broker thought they had enough income to qualify for a loan to purchase the property. Realizing this information is of a confidential nature Broker Betty makes the agency disclosure that her office policy and State statute require. The buyers are very skeptical about making a commitment and have been coached by family members not to sign anything. They refuse to sign the signature block on the Brokerage Disclosure to Buyer form. Betty should: refuse to answer unless they sign answer the question, then ask them to sign once again call their attorney and make the disclosure to him make a note of the date and time the disclosure was made and reference the fact that the buyers declined to sign the form - then have the discussion.

make a note of the date and time the disclosure was made and reference the fact that the buyers declined to sign the form - then have the discussion. Brokers are required to make agency disclosure. Buyers are not required to sign the disclosure. It is acceptable to note the date and time the disclosure was made, and indicate that the buyers declined to sign the form.

A broker is showing a property in which a heinous crime was committed. The broker is aware of the circumstances surrounding the crime as a result of media attention. As a transaction broker working with a buyer, he is obligated to: make no disclosure regarding psychologically impacted properties disclose every fact he knows about the property disclose the information only if the suspect has not been apprehended make a written request to the seller asking for permission to disclose

make no disclosure regarding psychologically impacted properties In Colorado psychologically impacting events may not be disclosed.

Rule E-35 of the Colorado Real Estate Commission requires brokers: make oral disclosure of brokerage relationship first, then followup with correct Commission form prior to closing make written disclosure of his/her brokerage relationship before eliciting or receiving confidential information make written disclosure of brokerage relationship using forms prepared by the managing broker make written disclosure of brokerage relationship prior to closing

make written disclosure of his/her brokerage relationship before eliciting or receiving confidential information Rule E-35 states that when a real estate broker elicits or accepts confidential information from a buyer or tenant concerning the buyer's or tenant's real estate needs, motivation, or financial qualifications, the real estate broker must provide a written brokerage relationship disclosure identifying his or her brokerage relationship with the buyer or seller.

Broker Bill has several agents in his employ. Agent Smith, an "S-Corporation" himself, has his commission checks written out to his "S-Corporation." Because of this, Broker Bill is: relieved of his duties to supervise Agent Smith required to file tax withholding for Agent Smith managing broker over Agent Smith licensed under a corporation and no longer the employing broker

managing broker over Agent Smith The employing broker must pay the licensee. The commission checks are not made to the licensee.

As per terms of Closing Instructions, a closing company must do all except: provide an accurate and detailed closing statement mandatory release of earnest money if buyer fails to close provide copies of all signed documents authorized to obtain any information necessary for the Closing

mandatory release of earnest money if buyer fails to close As per Closing instructions: EARNEST MONEY DISPUTE. Except as otherwise provided herein, Earnest Money Holder shall release the Earnest Money as 36 directed by written mutual instructions, signed by both Buyer and Seller. In the event of any controversy regarding the Earnest Money 37 (notwithstanding any termination of the Contract), Earnest Money Holder shall not be required to take any action. Earnest Money Holder, at 38 its option and sole discretion, may (1) await any proceeding, (2) interplead all parties and deposit Earnest Money into a court of competent 39 jurisdiction and shall recover court costs and reasonable attorney and legal fees, or (3) provide notice to Buyer and Seller that unless Earnest 40 Money Holder receives a copy of the Summons and Complaint or Claim (between Buyer and Seller) containing the case number of the 41 lawsuit (Lawsuit) within one hundred twenty days of Earnest Money Holder's notice to the parties, Earnest Money Holder shall be authorized 42 to return the Earnest Money to Buyer. In the event Earnest Money Holder does receive a copy of the Lawsuit, and has not interpled the 43 monies at the time of any Order, Earnest Money Holder shall disburse the Earnest Money pursuant to the Order of the Court.

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

material facts

According to RESPA, lenders must provide to applicants: a booklet explaining all of the costs involved in owning a home a good faith estimate of the fees that the title company will charge minimum amounts that could be collected at time of closing maximum amounts that could be collected at time of closing

maximum amounts that could be collected at time of closing

Pursuant to an exclusive right-to-buy contract, a broker:

may always show the same property to another buyer

Pursuant to an exclusive right-to-buy contract, a broker: may always show the same property to another buyer may not show the same property to more than one buyer may show the same property to another buyer only if a buyer-agency relationship has been established may show the same property to another buyer only if a transaction broker relationship has been established

may always show the same property to another buyer exclusive right to buy contract contains a clause authorizing the broker to show properties to more than one buyer.

Listing information: may be added outside the body of a contract as an attachment can never be added outside the body of a contract may be obtained after the listing agreement has been signed by the buyer and the broker none of the above

may be added outside the body of a contract as an attachment Listing information may be added outside of the body of the listing contract in the form of an addendum or an Amend/Extend With Broker.

f 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. (REM 13-7)

When a broker is accused of a violation of law and the commission investigative staff determines that the licensee is probably guilty, the commission:

may decide to refer the matter to a hearing before an administrative law judge.

The owner of subsurface mineral rights:

may have the right to enter and use property

The Commission may investigate a licensee's activities, and upon sufficient grounds:

may suspend, censure, and fine the licensee a sum not exceeding $2,500

The concept of "Single License" was enacted in order to:

meet public expectations of competence and professionalism of all licensees.

Requirements of a real estate applicant: must be at least 21 or older meet the state requirements for licensing must have a high school diploma or GED must be a US citizen

meet the state requirements for licensing An applicant for a real estate license must be 18 years or older, take 168 hours of pre-licensing education, pass the state's exam and work under an employing broker.

A contract to amend/extend with broker is used for the purpose of:

modifying the terms on an exclusive right-to-buy or exclusive right-to-sell contract Explanation To modify an employment agreement between a broker and the buyer/seller, an amend/extend with a broker should be used.

On what time basis must trust accounts be reconciled: daily weekly monthly annually

monthly From the real estate manual: The purpose of reconciliation is to verify that the records for the account are in balance per the escrow accounting equation. Rule E-1(p)(3) requires the ending bank statement cash balance to be reconciled with the office journal and ledger account cards during any month when there has been escrow account activity

All of the following are true regarding the Exclusive Right-to-Sell listing contract except: there is a 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 The Right to Sell Listing contract provides exclusivity to the listing broker to sell the property. The broker will be entitled to compensation regardless of who sells the property. If there is more than one listing contract active at the same time, the seller could be liable for multiple commissions to be paid. Commission Rule E-13 does not allow a real estate licensee to enter into an exclusive listing agreement with a seller if there is a listing contract currently in force with another licensee. It allows a listing contract executed that will become effective upon the expiration of the listing currently in force - but the two cannot be in effect concurrently. More info about agency and non-agency relationships: The reason the third answer is true (and therefore not the right answer to this question), a listing contract can be executed without establishing agency by simply checking the Transaction Broker box. At that point the licensee is not an agent (with agency duties) but a Transaction Broker. If the Seller Agency box was checked an agency relationship would have been established. The understand why a Transaction Broker is not an agency relationship you have to understand the agency relationship. An agency relationship is a consensual relationship created by contract or by law where the principal grants authority to the agent to act on behalf of and under the control of the principal to represent the principal with a third party. Only the Buyer and Seller Agency relationships are agency relationships. When you are a Transaction Broker you are in a "working relationship" not an "agency relationship". The Transaction Broker is a neutral party, much like a referee in a sport, the TB can assist with the transaction, but cannot advise the principal as to the risks or benefits of the transaction, nor can the TB become an advocate for the interests of the principal. Those are duties reserved to an agency relationship where the Buyer or Seller Agent is a coach for the principal. An agency relationship is referred to as "fiduciary" as the actions and words of the agent with a third party bind the principal. A TB is not "fiduciary" as the words and actions of the TB DO NOT bind the principal. The only items which bind the principal when a Transaction Broker is involved are the contracts signed by the principal.

more than one listing contract may be executed for the same time period, for the same property The Right to Sell Listing contract provides exclusivity to the listing broker to sell the property. The broker will be entitled to compensation regardless of who sells the property. If there is more than one listing contract active at the same time, the seller could be liable for multiple commissions to be paid. Commission Rule E-13 does not allow a real estate licensee to enter into an exclusive listing agreement with a seller if there is a listing contract currently in force with another licensee. It allows a listing contract executed that will become effective upon the expiration of the listing currently in force - but the two cannot be in effect concurrently. The reason the third answer is true (and therefore not the right answer to this question), a listing contract can be executed without establishing agency by simply checking the Transaction Broker box. At that point the licensee is not an agent (with agency duties) but a Transaction Broker. If the Seller Agency box was checked an agency relationship would have been established. The understand why a Transaction Broker is not an agency relationship you have to understand the agency relationship. An agency relationship is a consensual relationship created by contract or by law where the principal grants authority to the agent to act on behalf of and under the control of the principal to represent the principal with a third party. Only the Buyer and Seller Agency relationships are agency relationships. When you are a Transaction Broker you are in a "working relationship" not an "agency relationship". The Transaction Broker is a neutral party, much like a referee in a sport, the TB can assist with the transaction, but cannot advise the principal as to the risks or benefits of the transaction, nor can the TB become an advocate for the interests of the principal. Those are duties reserved to an agency relationship where the Buyer or Seller Agent is a coach for the principal. An agency relationship is referred to as "fiduciary" as the actions and words of the agent with a third party bind the principal. A TB is not "fiduciary" as the words and actions of the TB DO NOT bind the principal. The only items which bind the principal when a Transaction Broker is involved are the contracts signed by the principal.

The title insurance policy that is intended to protect the interest of the lender is known as the:

mortgagee's title insurance policy

In order to be effective, a Commission-approved Counter Proposal: must be attached to each copy of the original offer signed by the buyer must be signed by the seller at the same time he signs the original offer after the original is signed by both parties the counterproposal must be signed by both parties. the original offer must only be signed by the seller but the counterproposal must be signed by both parties

must be attached to each copy of the original offer signed by the buyer This is stated as a note on the bottom of the counterproposal. The counterproposal changes the terms and conditions of the original offer. As such, it does not stand alone and must be combined with the original offer to create an updated full offer.

Which of the following is true with regard to the approved Earnest Money Promissory Note?

must be due early enough to assure good funds for closing

Which of the following is true with regard to the approved Earnest Money Promissory Note? should be accompanied by any of the three deed of trust forms allows the seller to sue for the earnest money in case the closing fails must be due early enough to assure good funds for closing should not be used because earnest money should be in good funds

must be due early enough to assure good funds for closing An Earnest Money Promissory Note allows a prospective buyer to present earnest money in form of a promise to pay. The note must be presented and paid before closing to assure that it represents good funds at closing.

The Closing Instructions form

must be part of every contract

A real estate broker has identified a property that is ideal for a fast food outlet. He asks four friends to contribute funds to the purchase and gain partial ownership interest. The broker will manage the property and negotiate the lease for the fast food company. In this arrangement, the broker:

must comply with state and Federal securities laws in arranging this investment group.

A real estate broker has identified a property that is ideal for fast food outlet. He asks four friends to contribute money to the purchase and gain partial ownership. The broker will manage the property ad negotiate the lease for the fast food company. In this arrangement, the broker

must comply with state and federal securities laws in arranging this investment group

An offer to purchase is given to Broker Mary who has an Exclusive Right To Sell listing agreement with a seller. She.. must verify buyer's financial condition by her independent investigation is responsible for validating sellers statements on Sellers Property Disclosure must personally investigate condition of property and disclose material facts to buyer must disclose all material facts about the property that is know to her

must disclose all material facts about the property that is know to her

The buyer and seller are in dispute about the earnest money. According to the Contract to Buy and Sell, the earnest money holder:

must interplead earnest money into a court of competent jurisdiction.

In the event of a dispute between the parties under a Contract to Buy and Sell, the parties:

must mediate in good faith to seek a settlement for up to 30 days.

Which of the following is true for a person activating an inactive or expired Colorado real estate license?

must satisfy the continuing education requirement before they apply to activate an inactive license or to reinstate an expired license to active status

Which of the following is true for a person activating an inactive or expired Colorado real estate license? are not required to make up for the continuing education requirements they missed must satisfy the continuing education requirement before they apply to activate an inactive license or to reinstate an expired license to active status

must satisfy the continuing education requirement before they apply to activate an inactive license or to reinstate an expired license to active status his answer is a two-edged sword. To convert an inactive or expired license to active status the licensee must be current on or otherwise satisfy the CE requirements, pay a renewal fee and get Errors and Omissions insurance. If the licensee has no intention of ever activating their inactive or expired license they do not need to take continueing education, pay a renewal fee or purchase insurance. CE requirements are listed in Commission Rule B-2 below: B-2. Methods of completing continuing education. Licensed brokers must satisfy the continuing education requirement before they apply to renew an active license, activate an inactive license or to reinstate an expired license to active status. Licensed brokers may satisfy the entire continuing education requirement through one of the following options: a) Complete the twelve hours required bysection 12-61-110.5 (1) (c), C.R.S., and required by this rule in annual 4-hour increments developed by the Commission, otherwise referred to as the "Annual Commission Update Course." Licensees who choose this option must complete an additional 12 hours of elective credit hours to meet the 24-hour total continuing education requirement during the license period in subject areas listed in section 12-61-110.5(3), C.R.S. Please note that a licensee may not take the same version of the Annual Commission Update Course more than once. If a licensed broker takes more than 12 hours of the Annual Commission Update Course during a license period, the licensee will receive elective credit hours for any additional hours. b) Completing the Commission-approved 24-hour "Broker Reactivation Course." This option is available to licensees under one of the following conditions: (1) Licensee is currently active and did not use the Broker Reactivation Course to satisfy the Rule B-2(a) requirements in the previous license year (2) Licensee is inactive or expired for up to thirty-six months prior to active status and unable to comply with the education requirements listed in Rule B-2(a). c) Pass the Colorado state portion of the licensing exam. d) Completing 72 total hours of pre-licensure education concerning the understanding and preparation of Colorado real estate contracts (48 hours) and real estate closings (24 hours). The courses and course providers are required to comply with the requirements as described at section 12-61-103(4)(a), C.R.S. Any inactive or expired licensees who cannot meet the education requirements listed in Section 4(a), (b), or (c) must comply with the education requirements found in Section 4(d) before activation or reinstatement of the license.

An associate broker has developed a web site. What must he or she include on the site? name of the home office of the company that holds the salesperson's license and a list of states in which company is licensed name and location of the brokerage company that holds the associate's license names of all licensees in the broker's office and the states in which they are licensed license number of the brokerage and a list of current active licensees

name and location of the brokerage company that holds the associate's license All advertising by an employed licensee must include the identity of the brokerage that holds the associate's license. This also applies to internet advertising.

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

The maximum amount of days that can be specified in the Holdover Period in the Listing Contract is:

negotiable by Seller and Broker

The Colorado Real Estate Commission Rule E-13 regarding sign-crossing allows an agent to: advise a seller in the cancellation of an active listing negotiate terms for a future listing or take a listing effective upon the expiration of a current listing so long as the owner initiates contact with the licensee contact a seller, who is dissatisfied with the services of the broker with whom they have a listing and wish to cancel negotiate terms for a current listing

negotiate terms for a future listing or take a listing effective upon the expiration of a current listing so long as the owner initiates contact with the licensee Sign crossing, going behind the sign (contacting the owner of a property that you know is already listed) is a violation, unless the owner contacted you.

The terms of the listing contract are set by

negotiation of the owner and the broker

A transaction broker owes a fiduciary responsibility to :

neither the buyer nor the seller

A transaction broker owes a fiduciary responsibility to : the buyer the seller the buyer and the seller neither the buyer nor the seller

neither the buyer nor the sellerA transaction broker is a "neutral" party that owes no fiduciary responsibility to any party. A fiduciary relationship is created when a principal signs a listing or buyer's agency agreement with a Listing Agent or Buyers Agent. Note: a Transaction Broker as a neutral party is not a fiduciary relationship (the T broker owes no loyalty, only Care, Obedience, Accounting and Disclosure of non-confidential items and material facts). In real estate transactions, only the Sellers or Buyer's agency relationships are fiduciary relationships. This relationship implies a position of trust or confidence, wherein one person is usually entrusted to hold or manage property or money for another. In a fiduciary relationship, one person, in a position of vulnerability, justifiably vests confidence, good faith, reliance and trust in another whose aid, advice or protection is sought in some matter. In such a relation good conscience requires the fiduciary to act at all times for the sole benefit and interest of the one who trusts.

An Employing Broker designates one seller agent and one buyer's agent. The Employing Broker has:

no agency

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 minimum amount of time you must give a seller to respond to your offer is: 24 hours 8 hours no minimum 24 hours when in town, 48 hours if out of town

no minimum The amount of time a buyer will allow a seller to respond to the offer is up to the buyer, and should be stated in date and time. There is no minimum or maximum.

A tenant's, written, estate for years lease will expire on May 1. In order to obtain possession on May 1, the landlord must give the tenant: 30 days' notice 60 days' notice no notice notice on April 30

no notice An estate for years lease requires no notice for termination by either the landlord or the tenant.

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

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 Specify clearly in the inclusions and exclusions of the purchase and sale contract what your buyer wants to be included.

A requirement of RESPA is that: licensees be tipped for recommending a good title company no seller may require the buyer to purchase title insurance from a particular title company buyers are not required to purchase a mortgagee's title policy title insurance is always a requirement for all transactions

no seller may require the buyer to purchase title insurance from a particular title company RESPA eliminates kickbacks, and prevents sellers from requiring the use of a specific title company.

Under Colorado law concerning the licensing of a non-resident broker, which is (are) true?

non-resident applicants for all real estate brokers' licenses must conform to all education requirements for a resident application non-resident applicant must be engaged in real estate as a vocation in his resident state a non-resident applicant must be licensed in his resident state Correct -> all of the above

A broker does not have to supervise independent contractors when: they have at least three years experience they have an independent brokers license, even though a designated broker employs them the broker is out of town none of the above

none of the above A broker must always supervise all independent contractors.

A transaction broker must: not act as an advocate for either party, but must exercise reasonable skill and care act as an advocate for either buyer or seller inform the buyer or seller that they could be legally responsible the agent's actons may not act as an advocate for either party

not act as an advocate for either party, but must exercise reasonable skill and care May not act as an advocate for either party but must exercise reasonable care.

Brian purchased a second home three years ago for $ 169,000. He sold it this year for $154,000. He decided to go ahead and sell it for a loss because his work schedule prevented him from enjoying the second property. His tax return will: reflect a loss of $15,000 not show any loss, as you cannot write off a loss on your personal residence not show a loss this year, but Brian may carry this loss over into a year when he shows a gain on the sale of a principle residence and write it off then not show a loss this year, but Brian may carry this loss over into a year when he shows a gain on the sale of a principle residence and write it off then if that happens within the next three years

not show any loss, as you cannot write off a loss on your personal residence The IRS only plays with the owner of a personal residence if the house is sold at a profit; if there is a loss the IRS does not want to be your partner on your residence.

If a Colorado real estate licensee's license is revoked, his employing broker's license may also be: canceled until a hearing can be held automatically revoked automatically suspended not suspended or revoked until a hearing is held

not suspended or revoked until a hearing is held Licenses are never automatically revoked or suspended without a hearing.

Contract closing date is March 29. Buyer and seller want to close on the 27th. In order to do this, they must: amend the original contract sign a counterproposal this is not allowed unless a new contract is written up nothing, this is okay per the original contract

nothing, this is okay per the original contract As long as both parties to the contract agree and the date is being moved up, there is no need to do and amend and extend contract.

When an existing contract is replaced with a new contract, this is referred to as: subordination novation hypothecation assignment

novation

Acceptance of a written offer to purchase real estate requires the signature of the: offeree offeror and offeree offeree and agent offeree, offeror, and agent

offeror and offeree The offer is not valid until all parties have signed. Standard contract law states that a contract must be signed and accepted to be binding. A buyer or seller has every right to withdraw an offer at no penalty before the signed contract is accepted. Although a signature is required, it alone is not sufficient to constitute valid acceptance: the accepting party must also communicate acceptance to the party who made the last offer or counteroffer.

The income capitalization approach to value would be most important in the appraisal of a(n)

office building.

If the buyer and seller have not reached a resolution on inspection issues the contract will terminate:

on the expiration of the resolution deadline.

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.

Which of the following is untrue as to on-site manager that is unlicensed?

one of the duties of the on-site manager is to negotiate the terms of the lease

A written office policy regarding brokerage relationships is a requirement of offices that are staffed by:

one or more agents

A written office policy regarding brokerage relationships is a requirement of offices that are staffed by: six or more agents three or more agents two or more agents one or more agents

one or more agents Colorado statutes require all offices to have an office policy regarding agency.

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

According to the approved Colorado Contract to Buy and Sell Real Estate, when may purchaser assign the contract to another purchaser? without restrictions only with seller's approval if the "shall not be assignable" box in the clause is checked under no circumstances only with seller's approval if the "shall be assignable" box is checked in the clause

only with seller's approval if the "shall not be assignable" box in the clause is checked The Assignability and Inurement Clause in the contract reads: "This contract ( ) shall ( ) shall not be assignable by Buyer without Seller's prior written consent. " This means the Buyers ability to assign the contract to another Buyer without Seller approval is dependent upon which of the above check boxes are selected.

You may renew an active license by:

passing the state exam

A licensee selling his or her own home must do all of the following except:

pay himself a commission

In order to reinstate a real estate license, that has been expired less than 3 years, a licensee will be required to

pay reinstatement and activation assessments in addition to the basic renewal fee

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

personal property From the freedictionary.com - Commodities produced from the earth which are planted, raised, and gathered within the course of a single season.Crops might be produced either naturally or under cultivation. This distinction becomes important when determining whether a crop is to be sold as Personal Property or as real estate, and also in terms of how crops are to be devised. Fructus naturales are crops that are produced by the powers of nature alone, without any harvesting methods. They include fruit trees, berries growing on bushes, and hay growing spontaneously from perennial roots. They are considered real property when they are not severed from the land, but personal property when severed. Fructus industriales, or emblements, are annual crops that are raised by yearly labor and owe their existence to human intervention and cultivation. Such crops include wheat, corn, and vegetables. These are generally considered to be personal property. The ownership of crops is generally held to be in the owner of the land, whether the crops are natural or cultivated. The owner may voluntarily choose to sever and sell the crops, without being obligated to sell the land upon which they are grown. The situation often arises in which the land belongs to one person and the crops belong to another, such as in the case of one person leasing land from another person. In such a case, whoever is in possession of the land subject to the consent of the owner may take and carry away the products of land resulting from his or her own care and labor. Ordinarily, crops that are attached to land at the time of a sale pass automatically to the buyer, except where the owner has provided to the contrary. Someone disposing of land may, therefore, stipulate the retention of the title to the crops.

A charge(s) made by a lender for adjustment to the interest rate paid by the borrower is known as

points

If the buyer has no earnest money: prepare a promissory note to submit with the offer that is okay, if the seller doesn't mind they can write a postdated check, and the other broker can hold it they cannot write an offer

prepare a promissory note to submit with the offer In lieu of earnest money the agent should have the buyer sign a promissory note to the listing company or closing agent. The earnest money shows good faith to the seller. The not should not be for more than 10 or 20 days. Just long enough for the buyer to come up with some funds.

The Colorado Real Estate Commission requires that all addenda that a broker wants added to a Contract to Buy and Sell be:

prepared by an attorney

A real estate broker shall NOT engage in any of the following acts:

preparing legal documents as a courtesy for the seller of a for a sale by owner transaction

A real estate broker shall NOT engage in any of the following acts: dealing in options on real estate preparing legal documents as a courtesy for the seller of a for a sale by owner transaction selling or offering to sell or exchange a time-share auctioning real estate

preparing legal documents as a courtesy for the seller of a for a sale by owner transaction According to the Conway-Bogue court decision - a Broker is only allowed to perform a licensed activity, such as prepare contracts, on a transaction in which they have been engaged as a Broker by at least one of the parties.

prevent fraudulent marketing schemes when land is sold prior to being seen The act is administered by the Secretary of Housing and Urban Development, through the office of Interstate Land Sales registration. It is designed to prevent fraudulent marketing schemes, when land is being sold without being seen.

Following a foreclosure sale, the lender receives the

proceeds of the sale up to the outstanding debt plus court and collection costs

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 buyer has to buy the property without title insurance 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.

The Federal Equal Credit Opportunity Act:

prohibits discrimination in lending based on age

An Environmental Impact Statement (EIS)

projects the impact on the environment of a proposed project

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 An Environmental Impact Statement (EIS) is a document prepared to describe the effects for proposed activities on the environment. "Environment," in this case, is defined as the natural and physical environment and the relationship of people with that environment. This means that the "environment" considered in an EIS includes land, water, air, structures, living organisms, environmental values at the site, and the social, cultural, and economic aspects. An "impact" is a change in consequence that results from an activity. Impacts can be positive or negative or both. An EIS describes impacts, as well as ways to "mitigate" impacts. To "mitigate" means to lessen or remove negative impacts. Therefore, an Environmental Impact Statement, or EIS, is a document that describes the impacts on the environment as a result of a proposed action. It also describes impacts of alternatives as well as plans to mitigate the impacts.

"The act of conducting the business or affairs for a property owner, including leasing, collecting rents, and supervising repairs and employees for a fee" is a definition of: property management financing brokerage agency

property management Property management is the business of managing the affairs of a property owner. It does require a leal estate license.

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.

Reserve's are charged to the borrower at closing for:

property taxes, hazard insurance, and mortgage insurance

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. (REM 13-5)

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 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:

purchaser

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 Real estate brokers are required by Rules E-4 and E-5 to provide copies of complete and accurate closing statements to buyers and sellers for any transaction in which the broker assists or acts in an agency capacity. Although the brokers usually engage a closing company to create the closing statements, they cannot delegate responsibility for the statements being accurate and complete.

A property manager is normally compensated in all but one of the following ways: commission on new leases percentage of gross profits percentage of repair and major maintenance savings rebates and discounts on equipment and supplies

rebates and discounts on equipment and supplies Savings from rebates and discounts should benefit the property owner, not the agent.

If your Contract to Buy and Sell does not need the Seller or Private Financing Section, you as broker may do all of the following*******except:

remove the section in its entirety as it is not applicable

Under federal law, a landlord may properly refuse to: rent to pregnant women allow visually handicapped tenants to keep guide dogs because pets are not allowed rent to anyone younger than age 55 because the units are intended for the elderly and 80 percent of the units have a tenant older than 55 years of age rent to persons having AIDS

rent to anyone younger than age 55 because the units are intended for the elderly and 80 percent of the units have a tenant older than 55 years of age The requirement is that 80% of the units are occupied by people 55 years of age or older, and the housing is specifically designed for elderly occupancy.

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

According to Colorado law, in the absence of a written agreement to the contrary, a real estate broker:

represents neither the buyer nor the seller Explanation Agency is not implied. Brokers are considered to represent buyers and sellers as Transaction Brokers when there is no written agreement.

Under an Exclusive- Right-To-Sell-Contract with a Brokerage Addendum, the seller:

reserves the right to sell the property themselves and pay no commission

A licensee's sphere of influence includes all of the following except: family, friends, co-workers doctors, lawyers and other professionals they do business with the subdivision the licensee lives in residents of a nearby community

residents of a nearby community Everyone you are acquainted with is part of your sphere of influence.

A security is a financial instrument backed by assets. They give the holder an interest or right in something else. Regulation under state or federal securities laws may apply to which of the following? speculative purchase of raw land by a doctor as part of a retirement plan condominium project that includes both residential and retail uses within one structure resort condominium project in which owners enter their units in a common rental pool to enhance their income

resort condominium project in which owners enter their units in a common rental pool to enhance their income The common rental pool arrangement for increasing income may qualify this offering as a security.

resort condominium project in which owners enter their units in a common rental pool to enhance their income he common rental pool arrangement for increasing income may qualify this offering as a security.

Which of the following may be subject to regulation under the state or federal securities laws?

resort condominium project in which owners enter their units units in a common rental pool to enhance their income. a rental pool arrangement for income may qualify as offering a security.

The broker is acting as a transaction broker. As a transaction broker, 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

The broker is acting as a transaction broker. As a transaction broker, he/she is:

responsible for all aspects of the closing (regardless of T-brokerage)

company is in need of a new corporate headquarters. If it decides to purchase a tract of land, construct a new building on the site, sell it, and then lease the property back, this would be known as a(n):

sale and leaseback

A three-day right of rescission applies to: second mortgages FHA loans VA loans conventional loans

second mortgages Residential mortgages are exempt from rescission if the mortgage is created to finance the acquisition or initial construction of the consumer's principal dwelling. (REM 5-13)

The fee to notarize a Warranty Deed is charged on the settlement statement to: the buyer the listing broker the seller the buyer and seller

seller The seller(s) signs the warranty deed, not the buyer. The charge is debit seller. On the settlement sheet do not confuse "recording" the deed with "notarizing" the deed. Recording the deed is "debit buyer" as it is considered in the buyers best interest to have the deed recorded into the public record. For more info: THE WARRANTY DEED - Although title may be transferred by a number of types of deed such as a quit claim deed, the most common type of deed used in a closing to transfer title is the warranty deed. The seller signs the warranty deed, not the buyer. In addition, a notary public must notarize the deed and an unofficial witness who is not a party to the transaction must sign as well so the deed can be recorded. The notary and the witness are usually employees of the closing attorney, although sometimes the attorney may ask the licensee to be a witness. Once the seller, the notary, and the unofficial witness have signed the deed, and the seller or attorney hands (delivers) it to the buyer and the seller has officially transferred title. It is standard practice for the attorney to keep the original warranty deed at closing for recording at the courthouse. The original deed is then mailed to the buyer after the recording.

A seller must provide a Seller's Property Disclosure form based on which of the following? seller's opinion of condition at the time of the contract seller's current actual knowledge results of a professional property inspection advice of the listing agent regarding the condition of the property

seller's current actual knowledge The Property Disclosure of the Residential Contract to Buy and Sell specifies that the form should be completed by the seller (not the broker) and based on the seller's current actual knowledge.

An out-of-state investor sells a property in Colorado. The closing entity must uphold up to 2 percent of the

selling price as a possible income tax liability

An out-of -state investor sells a property in Colorado. The closing entity must withhold up to 2 percent of the

selling price as possible income tax liability

Typical functions of a property manager include all of the following except maintaining quality service with the lowest possible expenses. generating the highest return for the owner. selling the property at the highest price for the owner. keeping the property in good repair.

selling the property at the highest price for the owner. A property manager does not sell the property.

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.

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.

WHEN A MORTGAGE LOAN HAS BEEN PAID IN FULL, IT IS IMPORTANT FOR THE BORROWER TO BE SURE THAT

A SATISFACTION OF MORTGAGE IS RECORDED

All units in a community are being assessed for sidewalk improvements to a road along one side of the community. This is:

A Special Assessment

A RE LOAN PAYABLE IN PERIODIC INSTALLMENTS THAT ARE SUFFICIENT TO PAY THE PRINCIPAL IN FULL DURING THE TERM OF THE LOAN IS CALLED

AN AMORTIZED LOAN

In Colorado the minimum time following recording the Notice of Election and Demand before a residential foreclosure sale can be held is:

110 - 125 days

A real estate licensee who lists or sells investment real estate

Should proceed with due caution when discussing investment potential with the customer

In which situations may the Commission suspend an Associate Brokers license?

Taking a secret or undisclosed profit in a real estate transaction.

Following the later of lease termination or surrender and acceptance of the premises, a landlord shall return the full security deposit within what period of time unless the lease agreement specifies a longer period of time: A month 60 days 90 days 120 days

" A landlord shall. within one month after the termination of a lease or surrender and acceptance pf the premises, whichever occurs last, return to the tenant the full security deposit deposited with the landlord by the tenat, unless the lease specifies a longer period of time, but not to exceed 60 days." "Nothing in this section shall preclude the landlord from retaining the security deposit for nonpayment of rent, abandonment of the premises, or nonpayment of untility charges, repair work, or cleaning contracted for by the tenant."

A tax certificate shows a special assessment tax of $1,123 on property for which the buyer is getting a new loan. What will most likely show up on the settlement worksheet at closing?

$1,123 debit to seller, single entry on settlement worksheet A new lender will not permit the special assessments to have priority over the new first loan and will pay off the special assessment from the loan proceeds

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

A water bill is due in advance for the period of September 1 through November 30. The amount of the bill is $129. As of the date of closing, September 9, the bill is unpaid. How should the broker handle this on the settlement worksheet?

$11.34 debit to the seller, $117.66 debit to buyer. $129 Credit to broker

If the closing is March 15, and last years taxes of $1127 were not paid; how is this shown on the settlement sheet?

$1127 debit to the seller, credit to the broker The broker is responsible of making sure that the bill gets paid

A buyer offers $26,280 to own a 20 percent interest in a commercial property. What is the total value of the property?

$131,400

A broker is requested to order a Certificate of Taxes Due at a cost of $22. How does this appear on the settlement worksheet?

$22 debit to the buyer, credit to the broker

If a Colorado property sells for $245,900, what will the documentary fee be paid when the Warranty Deed is recorded?

$24.59 a penny per $100

If a licensee has violated the license law, what is the maximum monetary penalty the Real Estate Commission may impose?

$2500 administrative fine

$410.14

A lender is charging three discount points on an 80% loan for $275,000 sale. The broker is instructed to charge two points to the seller. The settlement sheet entry should appear as

$4400 debit to seller, single entry

If a lot containing 16,182 square feet sells for $5.25 per square foot and the broker charges a 6% commission, what is the commission amount?

$5,097.33

Jim's house has an assessed value of $450,000. His tax rate is $1.65 per $100 valuation. Assuming he has a homestead exemption equal to 20% of the assessed value, calculate his annual tax bill:

$5,940

Out of state seller sold a property for $489,000. The property was highly leveraged resulting in cash proceeds to the seller of $5,500. How much should be withheld subject to the Colorado Department of Revenue Income Tax?

$5500 because the seller did not receive to total 2% to take back. Otherwise, the seller would have to have $9,780 withheld at closing

The taxes on a house valued at $60,000 are $450.00. The tax ratio is 16%. What are the taxes on the house next door with a market value of $75,000?

$562.5

A house is closed on May 15. HOA dues are $108 per month and are due and payable on the first day of each month. The HOA dues will appear on the closing statement as a:

$59 credit to the seller

A house is closed on May 15. HOA dues are $108 per month and are due and payable on the first day of each month. The HOA dues will appear on the closing statement as a: $49 debit to the seller $59 debit to the seller $59 credit to the seller $49 credit to seller

$59 credit to the seller The seller paid the HOA dues on May first for the entire month. With a closing on May 15 ( remember the Buyer is responsible for the day of Closing), this means the Seller paid 17 days (May 15-31) too much. Since the Buyer is receiving the advantage of the overpaid HOA dues, the Buyer owes this money to the Seller. $108 / 31 days = $3.4839 per day. $3.4839 x 17 days = $59.23 to be credited to the seller and debited to the buyer.

A house was listed for $84,900, and the seller received $71,424 after the broker deducted her 7% commission. What was the selling price?

$76,800.00

In order to exist, an easement must: a) be visible b) be recorded c) have a dominant tenement d) have a servient tenement

) have a servient tenement

When a broker takes an exclusive authorization and right to locate property listing with a buyer, the broker is authorized to: a) act as the exclusive agent for that buyer only and agrees to work with no other buyers during the term of the listing b) incur expenses which the buyer is obligated to reimburse c) represent other buyers at the same time d) to receive a commission from the buyer regardless

) represent other buyers at the same tiime

If walls, floors, or ceilings are designed as the boundaries of a unit, which items would not be included as part of the unit? Insulation behind the wallboard Wallpaper and paint Tile and carpet Plasterboard and plaster

... Insulation behind the wallboard

Which of the following is a less-than-freehold estate? A. Life estate B. Estate of Inheritance C. Estate for years D. Estate in remainder

. Estate for years An estate for years is one of the four types of less-than-freehold estates. They are: (1) estate for years, (2) estate from period to period (3) estate at will, and (4) estate at sufferance. Choices (a),(b), and (d) are freehold estates.

Which of the following actions on the part of a real estate broker could result in revocation of his license?

1. Failing to submit to an owner all formal, written offers for property listed for sale 2. Quoting to prospective buyers, of a property, a price other than the one stipulated by the owner 3.Failure to report material facts

Which of the following is true concerning a licensure?

1. No license may be issued under more then one name. 2. A brokerage business must be operated only under the name in which the brokerage is licensed. 3. A trade name may be used concurrently with the name of the broker in the conduct of the business.

tenancy by the entirety

1. Only Exists Btw Husband + Wife

A real estate broker may

1. Pay consideration to the seller in order to obtain the listing. 2. Rebate a portion of the commission to the purchaser

What is proper for an unlicensed on-site manager of an apartment complex?

1. Show apartments which are available for rent. 2. Filing in a lease and collecting a tenant's deposit 3. Explaining the lease terms and rules and regulations of the complex

The fine for noncompliance with the lead paint disclosure laws is: 500 1000 2500 10000

10000 Sellers and brokers are subject to a $10,000 fine for noncompliance with lead paint disclosure laws.

When is a real estate broker not entitled to receive payment of his or her commission?

1. as soon as they find a ready, willing and able buyer. 2 when the buyer refuses to complete the transaction because of title defects. 3. when the seller refuses to correct the title defects because the buyer refuses to sign the contract

A lot is 275 feet deep and sits on 2/3 of an acre. What is the width of the lot? 158.4 105.6 106.5 112.4

105.6 Take an acre 43,560 and multiply by .6667 = 29,054.5 divide this by 275 = 105.6 ft the width of the property.

Which of the following is grounds for the Commission suspending or revoking a license?

1.Knowingly making use of any false or misleading advertising. 2. Acting for more then one party without the knowledge of all parties. 3. Commingling funds

If a lot was purchased for $20,000 and sold for $18,000 the percent of loss is

10%

An office rents for $4500 a month and measures 12 feet by 20 feet. The advertised monthly rent per square foot for this space would be: 1.875 18.75 4.5 22.5

12 x 20 = 240 $4500 / 240 = $18.75

What is the maximum amount of interest a Seller can charge for a seller financed loan? 9% 12% 20% 35%

12% In Colorado the general usury rate for a consumer loan by an unsupervised (ie not licensed) lender is 12%,

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

An out of state seller's property sold for $400.000. Unfortunately, the property was heavily mortgaged and the seller only realized $5,500 after all costs and expenses were paid. How much would be withheld from the seller at closing?

2% of sale price.

What is the maximum fine that the Real Estate Commission can impose for a violation of commission rules? $2,500 plus punitive damages 2500 No fine only license suspension or revocation $3,500 plus punitive damages

2500 The maximum administrative fine is $2,500

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?

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

30 days

Unless the lease states otherwise, how long does a property manager have to return a security deposit after a lease has expired? 30 days 60 days 45 days 6 months

30 days Colorado law mandates that a security deposit must be returned within 30 days with an accounting for all deductions unless the lease indicates a different time period. Under no circumstances can the period of time be greater than 60 days.

After successfully completing the educational classes and passing the state exam, within what time frame must an applicant make application to the Commission? 120 days after taking the test 120 days after passing educational classes 150 days after taking the test 365 days after passing the test

365 days after passing the test

A loan company will provide a loan to Bill and Hillary for 75% of the appraised value of their home. The interest rate is 10.5%. The first monthly interest payment is $820. The bank requires 4 discount points (hint: a discount point is 1% of the loan amount) to obtain this interest rate. How much will the discount points cost?

3749

A small office building sold for $949,000 and the broker received a commission the $54,990. What was the broker's commission rate?

5.8% Rate = commission paid / sales price Rate = 54,990 / 949,000 = .058 = 5.8%

IF THE AMT OF A HOME EQUITY LOAN IS 13,500 AND THE INTEREST RATE IS 71/2 % WHAT IS THE AMT OF THE SEMIANNUAL INTEREST PAYMENT

506.25 13500X.075 = 1012.5 ./. 2 = 506.25

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

A building is valued at $215,000 and contains 4 apartments that rent for $470 each per month. The owner estimates that the net operating income is 65 percent of the gross rental receipts. What is the capitalization rate?

6.8 percent

The building is valued at $215,000 and contains four apartments that rent for $470 each per month. The owner estimates that the net operating income is 65% of the gross rental receipts. What is the capitalization rate?

6.8%

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 The maximum amount of time a landlord can specify in a lease that they will hold a security deposit after lease termination is 60 days. If no time was specified in the lease, the default maximum is 30 days.

To net the owner $90,000 after a 6% commission is paid; the list price would have to be:

95745 ($90,000/.94%=$95,745)

A PARCEL OF VACANT LAND 80 FT WIDE AND 200 FT DEEP WAS SOLD FOR $200 PER FRONT FOOT. HOW MUCH MONEY WOULD A SALESPERSON RECEIVE FOR HER 60 % SHARE IN THE 10 % COMMISSION

960. 200 X 80 = 16000 X .10 = 1600 X .6 = 960

When reconciling a 6 column worksheet for a closing - after totaling up the debits and credits, the closing agent needed to add a $25,000 Credit to the Buyer Credit coluimn to make it equal to the Buyer Debit column. What does this Buyer Credit represent?

A $25,000 check the buyer must bring to the closing Explanation The amount of the check the Buyer must bring to the closing. This CREDIT represents money the Buyers OWES.

Which would need to be registered with the CREC (Colorado Real Estate Commission) for a subdivision?

A 60 unit co-op building

ALL OF THE FOLLOWING WOULD ACQUIRE TITLE TO REAL PROPERTY

A GRANTEE; A DEVISEE; A VENDOR

joint tenancy

A form of concurrent ownership, which occurs when two or more persons own a single estate in land, with right of survivorship. Must have equal shares, right to partition.

A Corporation, LLC, Partnership must have E&O insurance for entity and employing broker. True/False

A Corporation, LLC, Partnership must have E&O insurance for entity and employing broker. TRUE Every active real estate licensee, including licensed real estate companies, shall have in effect a policy of errors and omissions insurance to cover all acts requiring a license.

A 'FRIENDLY FORECLOSURE' ENABLES A MORTGAGOR TO PREVENT THE MORTGAGEE FROM TAKING THE PROPERTY BY STATUTORY MEANS. THIS CAN BE ACCOMPLISHED BY

A DEED IN LIEU OF FORE CLOSER

IF A PROPERTY SOLD AS A MORTGAGE FORECLOSURE DOES NOT SELL FOR THE AMT SUFFICIENT TO SATISFY THE OUTSTANDING MORTGAGE DEPT, THE MORTGAGOR MOAY BE RESPONSIBLE FOR

A DEFICIENCY JUDGEMENT

Who has the responsibility for prosecuting the practice of real estate without a license?

A District Attorney

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

A District Attorney

THE OWNER OF A CONDO UNIT LEARNS THAT THE NEIGHBOR HAS FAILED TO PAY HIS REAL ESTATE TAXES. WHAT HAPPENS

A LIEN CAN BE FILED AGAINST THE NEIGHBOR'S UNIT AND HIS PERCENTAGE OF THE COMMON ELEMENTS

THE FINANCE FEE CHARGED BY THE LENDER TO MAKE THE LOAN IS

A LOAN ORIENTATION FEE

ACCORDING TO LAW, A TRADE FIXTURE IS

A PERSONALITY

GREAT HOUSE FOR SALE FROM FIRM 'A' LISTED FOR SEVERAL WEEKS. OWNERS BEEN INTERVIEWING SALESPERSON FROM DIFFERENT FIRMS. THEY TELL FIRM 'A' THAT FIRM 'B' WILL CHARGE 2% LESS COMMISSION FOR SELLING THE HOUSE. WHAT DOES 'A' SAY TO OWNER TO GET THE LISTING

A PROVIDES EXCELLENT SERVICES TO MARKET THEIR SELLERS PROPERTIES

A RE broker was helping his brother find a home. The broker, representing his brother, negotiated a lease with an option to buy from an owner/seller of a home. The RE broker must disclose taht he is the brother of the tenant/optionee to: a) the owner/seller of the home b) the seller's broker or agent c) the multiple listing service d) nobody

AFTER A BORROWER MAKES THE FINAL PYMT ON A HOME MORTGAGE, THE LIEN REMAINS ON THE PROPERTY UNTIL THE LENDER RECORDS

A SATISFACTION OF MORTGAGE

THE DEFEASANCE CLAUSE IN A MORTGAGE REQUIRES THE MORTGAGEE TO EXECUTE

A SATISFACTION OF MORTGAGE

All units in a community are being assessed for sidewalk improvements to a road along one side of the community. This is: Rise in property taxes A Community Assessment Rise in HOA dues A Special Assessment

A Special Assessment . Although a rise in property taxes is close, because the government is definitely pulling more money out of your pocket, this situation has its own name and is referred to as a Special Assessment. A Special Assessment is whenever the government levies a tax on property owners in an area to pay for a project deemed to be beneficial to them. Common examples are sidewalks as in the question, sewer systems, street paving, better street lighting and such. Home Owner Associations also turn to Special Assessments when they are short on reserve funds to cover a capital improvement or deferred maintenance, such as the roof is shot, the pool or parking lot needs resealing, the building(s) need repainting or the central furnace is dying a painful death. How does this effect you as an agent? Whenever you are representing a buyer in a community with an HOA. Your due diligence includes reviewing a series of State mandated HOA disclosures from the HOA management. One of the things you are looking for is any current or planned Special Assessments. Often when a developer builds a community, they set the HOA dues artificially low to attract buyers. Once the HOA is turned over to the residents, it is incumbent on them to review and if need be, raise their HOA dues to build enough of a reserve account to cover future big-ticket maintenance. Boosting HOA dues is never popular, particularly when the community is new and shiny. But sooner or later everything new gets old and needs maintenance. If the community did not set aside funds, the cost of playing catch up can result in some absolute whoppers of Special Assessments. When that happens, property values take a beating and owners may try to sell before the assessment takes affect hoping to dump the problem on an unsuspecting buyer. In addition to checking the disclosures, when I show a client a home in a HOA community, a lower than average HOA dues is a warning flag. I also look around for signs of deferred maintenance. A beat up parking lot or pool, old siding, a roof with curling shingles (a sign of age) can mean that the low HOA dues is not such a good deal after all and this community may be a ticking bad maintenance/big assessment time bomb. Sniffing this out makes you a hero and gives you clients for life.

A TRUST IS A LEGAL ARRANGEMENT WHEREBY THE TITLE TO PROPERTY IS HELD FOR THE BENEFIT OF A THIRD PARTY IS

A TRUSTEE

A quiet title lawsuit is the first step in obtaining:

A Torrens certificate of title

FOR A SALESPERSON TO BE VIEWED AS AN INDEPENDENT CONTRACTOR, FEDERAL LAW REQURES

A WRITTEN EMPLOYMENT CONTRACT WITH THE BROKER THAT CLEARLY STATES THE TERMS OF THE EMPLOYMENT

Quitclaim deed

A deed to relinquish any interest in property which the grantor may have, without any warranty of title or interest.

An employing broker can usually avoid disciplinary action for the improper conduct of one of his employed licensees if: a licensee with 10-years experience produced an Installment Land Contract without the knowledge of the employing broker the broker can establish that he never authorized the improper conduct the licensee has less than two years in the business A broker can never avoid disciplinary action for improper conduct of a licensee. They are always ultimately responsible

A broker can never avoid disciplinary action for improper conduct of a licensee. They are always ultimately responsible A broker can never avoid disciplinary action for improper conduct of a licensee. They are always ultimately responsible.

Which is not true regarding licensees whose license is held inactive?

A broker license may not be issued on an inactive status

Which of the following requires the use of the Licensee Buyout Addendum to the contract to Buy & Sell?

A broker offers to purchase a property as an inducement for the Owner to purchase another

When starting out as a new broker, you may want to consider which of the following when choosing a broker to work under? Finding the broker with the lowest office fee A broker that will provide training and support A broker that doesn't require your attendance at sales meetings A broker that conducts most transactions in Colorado

A broker that will provide training and support

tenancy in common

A concurrent estate with no right of survivorship.

depreciation" refers to

A condition that adversely diminishes the value of an improvement to real estate over time

Which of the following could qualify for a temporary "hardship" broker license corporation?

A corporate employee with a Colorado broker associate license

A designated broker's responsibilities are delegated by:

The position of trust assumed by a real estate broker as an agent for the seller or buyer is described legally as:

A fiduciary relationship

Based on the Exclusive Right-to-Sell Listing Contracts, which would it be proper for the broker to disclose?

A leaky roof that the seller asked not to mention.

"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 Statements of facts made by agents must be accurate. Exaggeration of a property's benefits is called "puffing". While puffing is legal, agents must ensure that none of their statemetns can be interpreted as fraudulent. An agent describing a plain house as "charming" and "beautiful" may be an exaggeration, but because it is a subjective opinion it cannot be characterized as a falsehood and thus is not an act of fraud.

Which is not required under RESPA?

A lender who is a Creditor may not charge more than 21% interest

What Is a Licensee Buyout Addendum?

A licensee buyout addendum is a form used in certain real estate and property transactions in the state of Colorado. The LBA is used only in the purchase and sale of properties between licensed real estate professionals and their own clients.

A month

For the past 30 years, the Smiths have operated a neighborhood grocery store. Last week the city Council passed a zoning ordinance that prohibits packaged food sales in the area where the grocery store is located. The store is now an example of

A nonconforming use

lis pendens

A notice filed for he purpose of serving constructive notice that title, or some matter involving particular real property, is in litigation.

A percentage of the undivided interests in the common elements A condominium is an estate in real property consisting of an individual interior in an apartment or commercial unit and an undivided common interest in the common areas in the condo project.

For which of the following does someone not need a real estate brokers license?

A person selling or dealing in oil or gas leases

A subdivision includes which of the following

A real property divided into 20 or more units not intended for commercial or industrial use

The term subdivision included all f the following except

A selling memberships campgrounds

In Colorado "good funds" include a A personal check from the buyer that will clear the bank A title insurance company check A check drawn on the broker's escrow account A teller's check from a savings and loan

A teller's check from a savings and loan From the Contract to Buy and Sell (Purchase Contract) Good Funds. All amounts payable by the parties at Closing, including any loan proceeds, Cash at Closing and closing costs, shall be in funds that comply with all applicable Colorado laws, including electronic transfer funds, certified check, savings and loan teller's check and cashier's check (Good Funds). This is also covered in Real Estate Commission Rule E-36: E-36. Good funds at closing Pursuant to 38-35-125, a real estate licensee who provides closing services shall not disburse funds or instruct an agent to disburse funds until those funds have been received and are either: (1) available for immediate withdrawal as a matter of right from the financial institution in which the funds have been deposited or (2) available for immediate withdrawal as a consequence of an agreement of a financial institution in which the funds are to be deposited or a financial institution upon which the funds are to be drawn. Such agreement with a financial institution must be for the benefit of the licensee providing the closing service. If the agreement contains contingencies or reservations no disbursements can be made until these are satisfied.

Tenancy for years

A tenancy for years is for a fixed period of time (e.g., one day or 99 years). The termination date is set at the time the lease is executed. A tenancy for years ends on the last day of the lease term, with no need to give notice.

All of the following are true in the Colorado Right to Buy Contract except:

A> That the broker may be compensated by the seller Correct ->B> Allows for the broker to be an agent for the sellers as well as the buyers C> May provide that the broker be paid an hourly rate D. Must have definite termination date

Which would be the appropriate way to complete the name of the Brokerage Firm in the blank in the Exclusive Right-to-Sell Listing Contract?

ABC Realty, Inc.

A FARMER ACQUIRED OWNERSHIP OF LAND THAT WAS DEPOSITED BY A RIVER RUNNING THROUGH HIS PROPERTY BY

ACCRETION

A INTERESTED IN A HOUSE; THEIR ONLY CONCERN ABOUT THE PROPERTY LOCATION IS CALLED

AREA PREFERENCE

WHICH OF THE FOLLOWING HAS THE GREATEST IMPACE ON THE VALUE OF A PROPERTY

AREA PREFERENCE

A TT LEASE HAS EXPIRED, N HAS NOT VACATED OR NEGOTIATED A RENEWAL LEASE, AND THE LL WILL NOT RENEW; THIS TYPE OF OCCUPANCY IS CALLED ESTATE

AT SUFFERANCE

WHEN SHOULD A PA LICENSE PRESENT THE CONSUMER NOTICE TO A PROSPECTIVE BUYER

AT THE INITIAL INTERVIEW

Acceptance of an offer must be which of the following?

Absolute and unqualified, Expressed or communicated, Within time limits

The clause in a trust deed that permits the lender to declare the entire unpaid balance of immediately due and payable upon default is the

Acceleration clause

A declaration that before a notary (or other authorized public officer) that the signature on the deed belongs to the person before the notary is a(n)

Acknowledgment

What advice, must you give your clients prior to closing? Practice writing your name at home Bring an extra $2,000 to closing Advise legal counsel prior to closing Bring to closing your birth certificate

Advise legal counsel prior to closing

When a sole proprietor has their license suspended for two years, what effect does this have on the Associate Brokers and salespeople affiliated with the proprietor?

Affiliates licenses are inactive until the affiliates are hired by new Employing Brokers

When are rules made by the Real Estate Commission?

After written notice and a hearing in which all interested parties may participate.

Agency disclosure does not have to be made to a buyer under which of the following circumstances?

Agency disclosure does not have to be made to a buyer under which of the following circumstances? When showing a home at an open house When responding to general factual questions concerning advertised properties Prior to "small talk" regarding general price range, location, property styles, etc. Correct -> All of the above Explanation You need to disclose your brokerage relationship in writing before engaging in any activity which requires a brokerage license. Commission rule E-35 states that "brokerage activities" occur when a broker elicits or accepts confidential information from a party concerning specific real estate needs, motivations, or financial qualifications. Activities such as open house, preliminary conversations, or small talk concerning price range, location, property styles, or responding to general factual questions about properties that have been advertised for sale or lease do not qualify as triggering brokerage activities.

Which of the following is considered real property? A. Lumber B. Airspace above the land C. Unharvested crops under a prior sales contract. D. Landfill soil being hauled

Airspace above the land Land includes the surface and the space above and beneath for an indefinite distance is included with land. Lumber, crops, and landfill soil are movable personal property.

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

All HUD homes are sold as is.

When completing the Exclusive Right to Sell Listing Contract, which monetary encumbrances does the seller list?

All known to the seller

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.

If the sellers parents are cosigners on the original purchase loan and are on the deed even though the loan was paid off:

All owners of record should sign the listing

The Exclusive Brokerage Listing Addendum attached to an Exclusive Right to Sell Agreement

Allows the Seller to negotiate a sale and not pay the Broker

An Exclusive Agency Addendum to the Exclusive Right-To-Sell Listing Contract:

Allows the seller to not pay a commission to the listing broker if the seller should procure a buyer

Which of the following is not true of an Employing Brokers regarding, "reasonable supervision?"

An Employing Broker may assign an Associate Broker the duty to supervise employed licensees and divulge himself of all liability in doing so.

When a complaint against a licensee results in a possible suspension or revocation, a hearing is required. Which of the following presides over the hearing?

An administrative law judge

When a complaint against a licensee results in a possible suspension or revocation, a hearing is required. Which of the following presides over the hearing? Attorney general An administrative law judge The director of the Real Estate Commission An arbitration committee established by the Real Estate Commission

An administrative law judge An administrative law judge presides over all hearings by the real estate commission. Colorado Real Estate Manual statute 12-61-114.

You have a listing that is about to expire. How would you document the seller's agreement to extend the listing period by 90 days and drop the price $1,000?

An agreement to Amend/Extend Contract with BROKER

The permanent right to use another's land for the benefit of a neighboring parcel is known as:

An appurtenant easement

An abstract of title should be accompanied by

An attorney's opinion of title

Which of the following is exempt from the real estate licensing law in Colorado?

An investor who owns more than six houses and sells two of them to a private individual.

Who is exempt from real estate license law?

An investor who owns more than three investment properties and sells one to an owner occupant.

A contract was terminated when the buyer and seller were unable to resolve inspection issues. The buyer had included the buyer's inspection report as part of the inspection notice, which included information about a number of small material items. The seller of the property has what if any obligation for disclosing the issues noted in the report? No obligation to disclose because the contract was terminated An obligation to disclose only those items which are not latent defects No obligation to disclose if the total amount of items is less than $5,000 An obligation to fully disclose all material items the buyer found which the seller now has knowledge of

An obligation to fully disclose all material items the buyer found which the seller now has knowledge of

Which statement is false about unlicensed assistants?

An unlicensed assistant may be paid a commission by a licensee, based on the success of the transaction

The reconciliation process involves

Analyzing and weighing the results obtained by using the three approaches to value

cloud on title

Any claim affecting title to property.

What form may earnest money take?

Any form the seller will accept.

When can you talk to a seller about listing his house, if the house is listed with another broker? Five days before listing expires The day after listing is taken Anytime, if the seller approaches you first After the holdover period expires

Anytime, if the seller approaches you first Talking to the seller anytime prior to the listing expiration date is called "going behind the sign" and is illegal unless the seller approaches the agent first. Rule E-13 allows this practice.

Under the Colorado Fair Housing Act, a landlord may refuse to rent a(n)

Apartment to three students because he is afraid they will have loud parties

Restrictive covenants that run with the land

Apply to all owners of the property for a designated number of years

The commissioners are selected in the following way: Popular vote Appointed by the real estate director Appointed by the governor They volunteer

Appointed by the governor

The owner decides to make 1 payment for an entire years property taxes. That payment must be made by: within 30 days of receiving the tax bill March 1 April 30 June 30

April 30

If an owner wants to make a single full payment for property taxes, what is the latest date by which this payment can be made? March 1 April 30 May 1 June 16

April 30 Real property taxes may be paid as follows: if the owners wants to make payments, one-half is due on or before the last day of February and the remaining one-half on or before June 15. If the owner wants to make one full payment, the entire tax may be paid on or before the last day of April

The owner decides to make 1 payment for an entire years property taxes. That payment must be made by:

April 30th Property taxes become due on the first day of the year, January 1. If a person wants to make a years taxes in one payment - that payment must be made no later than the last day in April. They also can be paid in this manner: a half payment may be made no later than the last day of February with the second half payment made no later than June 15.

If an owner wants to make a single full payment for property taxes, what is the latest date by which this payment can be made?

April 30th Explanation Real property taxes may be paid as follows: if the owners wants to make payments, one-half is due on or before the last day of February and the remaining one-half on or before June 15. If the owner wants to make one full payment, the entire tax may be paid on or before the last day of April

Commissions earned by a broker in a real estate transaction

Are determined by agreement of the broker and his or her principal

An inspection is held on April 16th and Buyer Bread wants some roof shingles repaired and the carpet in the master bedroom to be replaced. Seller Samuel agrees to the shingles being repaired, but will only give a $750 credit at closing to the Buyer Bread to replace the carpet; Buyer Bread accepts. How would the credit for $750 for carpet replacement be shown on the settlement statement? As a $750 debit to the broker and a $750 credit to the buyer. As a $750 debit to the seller and a $750 credit to the buyer As a $750 debit to the seller and a $750 credit to the broker As a $750 debit to the buyer and a $750 credit to the seller

As a $750 debit to the seller and a $750 credit to the buyer B. Since the seller has money going out a closing it would be a debit and since the buyer has money coming in a closing it would be a credit to the buyer

In terms of the approved Colorado purchase contract who pays the closing costs?

As agreed by the buyer and seller

Lender required addons (called endorsements) to the Title insurance endorsements appear on a closing statement as a:

Debit to the buyer Explanation Buyers pay for the extended policy (sometimes-called mortgagee policy or title insurance endorsements) naming the lender as beneficiary.

Under what circumstances would the settlement statement reflect no proration for this years taxes?

For a January 1 Closing

Fred has failed to timely file his homestead exemption form with the local tax appraisal district

Fred has lost his homestead exemption

A DAUGHTER CONVEYS OWNERSHIP OF HER APT BLD TO A NURSING HOME ANTICIPATING THAT THE RENTAL INCOME WILL HELP PAY FOR HER FATHERS CARE THERE. WHEN HE DIES, SHE WILL RECAP OWNERSHIP OF THE APT BLD

LIFE ESTATE PUR ATRE VIE

Under Commission Rule F, all of the following are approved forms except: Contract to Exchange Real Estate Agreement to Amend/Extend Contract Business Opportunity Agreement Change of Status

Business Opportunity Agreement Because of the diverse and complex agreements associated with business opportunities, they must be prepared by an attorney.

At closing, who normally is charged for recording charges for the Warranty Deed?

Buyer

Which of the following is considered personal property? A. Mineral rights B. Leasehold estates C. Unharvested crops under a prior sales contract D. Landfill soil being hauled

B. Leasehold estates Leasehold Estates is concered personal property. Mineral rights, improvements to land, and trees growing in a forst are real property. A leasehold estate, also known as a less-than-freehold estate, is a personal property of the tenant.

The furnace breaks down before closing, but after the buyer has taken possession. Who is responsible for the cost of replacement?

Buyer

Who is responsible for verifying square footage in home? Seller Lender Buyer's agent Buyer

Buyer

Which test is not a general test of a fixture? A. Method of attachment B. Time of attachment C. Adaptability of the item D. Intention of the parties

B. Time of attachment The test to determine a fixture are adaptation and agreement of the parties, intention of the parties, and method of attachement.

COUPLE DODWNSIZES AND MOVES INTO A COOPERATIVE APT BLD. IN A CO-OP, THEY WILL

BECOME STOCKHOLDERS IN A CORPORATION

A BROKER IS PERMITTED TO REPRESENT BOTH THE SELLER AND THE BUYER IN THE SAME TRANSACTION WHEN

BOTH PARTIES HAVE BEEN INFORMED AND AGREE TO THE DUAL REPRESENTATION

A JOINT TENANCY WITH RIGHT OF SURVIVORSHIP MAY BE CREATED

BY DEED OR WILL

The Colorado approved Agreement to Amend/Extend Contract form should be signed:

Before the sales contract has been fully executed

What do you use to transfer personal property when you buy a furnished residential property Deed of Trust Bill of Sale inventory itens 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. Another one was what must be on your signs of advertisement for a home you are representing

A developer had a mortgage loan on his entire housing development. When he sold a lot to a buyer, he was able to deliver title to that lot free of the mortgage lien by obtaining a partial release. What type of loan that the developer have?

Blanket mortgage

Which of the following would be considered intangibles in the sale of business?

Blue Sky and Good Will

Premiums for title insurance are usually paid

By the sellers for the owner's title policy

At closing, who is responsible to confirm the figures on the Statement of Settlement presented to the buyer?

Both listing broker and selling licensee.

If the property to be conveyed by general warranty deed is Homestead property owned as separate property of one spouse, who must sign the deed

Both spouses

A brokerage, XYZ Realty, is a part of a franchise or marketing cooperative with a strong public image. The broker's advertising must indicate this relationship by advertising

Both the franchise name and XYZ Realty with the same level of prominence

A landlord can evict a delinquent tenant by:

Bringing court action

According to Commission Position 4 on Interest Bearing Trust Accounts who cannot receive interest earned by a trust account Buyers Sellers Tenants Brokers

Brokers CP-4 Commission Position on Interest Bearing Trust Accounts The Commission has taken the position that in the absence of a contract signed by the proper parties to the contrary, any interest accumulating on a trust account does not belong to the broker who is acting as escrow agent. (This position is based upon 12-61-113(l)(q) and upon the well-established tenet of agency that the agent may not profit personally from the agency relationship except for agreed upon compensation.)

According to the Rule E-48, brokers are allowed to file a lien, a lis pendens or record a listing contract to secure payment of a commission under what circumstances?

Brokers may never cause the title to become clouded if they are not principals in the transaction.

Which of the following is correct according to the Colorado Real Estate Commission Position Statement regarding Rule F?

Brokers may not add exculpatory language limiting their liability to any contract to which they are not a party such as the Contract to Buy and Sell.

What legal duties does a seller's agent owe to a buyer who does not have agent representation?

Fair and honest dealing and disclosure of material facts about the property

A real estate property will always sell at its appraised value. T/F

False

FHA loans are assumable without qualification T/F

False

True/False - According to Commission Position 42 on Apartment Building or Complex Management, an on-site manager performing customary duties is required to have a real estate license. True False

False * CP-42 Commission Position on Apartment Building or Complex Management The Commission recognizes that owners of apartment buildings or complexes will engage the services of real estate brokerages or unlicensed, on-site managers, or both. An "owner" includes either a person or an entity recognized under Colorado law. The owner must have a controlling interest in the entity formed by the owner to manage the apartment building or complex. In the instance of an entity, the "owner" may form a separate entity to manage the apartment building or complex. The ownership entity and the entity formed by the owner to manage the apartment building or complex must be under the control of the same person or persons. Pursuant to §12-61-101(2)(b)(XII), C.R.S., a regularly salaried employee of the owner of an apartment building or complex is permitted to perform customary duties for his or her employer without a real estate broker's license. The unlicensed, on-site manager must either report directly to the owner or to the real estate broker, if a real estate broker is engaged to manage the property. The Commission views the following to be customary duties of an unlicensed, on-site manager: 1. Performance of clerical duties, including gathering information about competing projects. 2. Obtain information necessary to qualify perspective tenants for a lease. This includes obtaining and verifying information regarding employment history, credit information, references and personal information as necessary. 3. Provide access to a property available for lease and distribute preprinted, objective information prepared by a broker as long as no negotiating, offering or contracting is involved. 4. Distribute preprinted, objective information at an on-site leasing office that is prepared by an owner or broker, as long as no negotiating, offering or contracting is involved. 5. Quote the rental price established by the owner or the owner's licensed broker. 6. Act as a scrivener to the owner or the broker for purposes of completing predetermined lease terms on preprinted forms as negotiated by the owner or broker. 7. Deliver paperwork to other brokers. 8. Deliver paperwork to landlords and tenants, if such paperwork has already been reviewed by the owner, or a broker or has been prepared in accordance with the supervising broker's instructions. 9. Collect and deposit rents and security deposits in accordance with the owner's lease agreement or the brokerage firm's written office policy. 10. Schedule property maintenance in accordance with the brokerage firm's management agreement or the owner's lease agreement. If the owner has executed a Power of Attorney form or a written delegation of authority that authorizes the unlicensed, on-site manager to sign and execute leases on behalf of the owner, the unlicensed, on-site manager may execute those without possessing a real estate broker's license. Brokers supervising unlicensed, on-site managers with this authority are expected to review the executed documents to ensure compliance with lease terms, management agreements, local, state and federal laws, including the real estate brokerage practice act and Commission rules. Employing brokers need to be especially aware of their supervisory duties under the license law. Supervisory duties apply whether the on-site manager is an employee or independent contractor of the broker or brokerage firm, or if the on-site manager is a regularly salaried employee of the apartment building or complex owner. The employing broker should have a written office policy explaining the duties, responsibilities and limitation on the use of on-site managers. This policy should be periodically reviewed with all employees.

In a new loan closing, where is the gross amount of the new loan entered on the settlement worksheet?

Credit the buyer, single entry on the "Trust deed payable to:" line

Title insurance endorsements appear on a closing statement as a:

Credit to the broker

A LEASE THAT WILL TERMINATE WITHIN ONE YEAR OF ITS INCEPTION

CAN BE VERBAL

AN INDIVIDUAL LIVES IN AN APT BLD. THE LAND/STRUCTURE ARE OWNED BY CORP. W/ 1 MORT LOAN COVERING THE PROP. LIKE THE OTHER RESIDENTS THE INDIVIDUAL OWNS A STOCK IN THE CORP AND A LEASE TO APT. THIS IS CALLED

CO-OPERATIVE

An investor decides to liquidate property previously acquired through a 1031 exchange. If he or she is not acquiring replacement property in this transaction,

Capital gains taxes are due on the total capital gain accumulated since the purchase of the initial property

Total amount of income left after all expenses have been paid, including taxes, operating costs, and mortgage payments

Cash flow

The document used to encumber a personal property mobile home is a:

Certificate of title

When making a counter offer by using the approved Counterproposal form - how do you change dates?

Change only the dates that needed to be changed

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 Assignability and Inurement. This Contract ___ Is ___ Is Not assignable by Buyer without Seller's prior written consent.

If an unlicensed person complied with the Commission, which activities below would they be able to perform?

Collection of rents on real property

In the event that the Employing Broker of corporate brokerage is suddenly unable to continue in that position, the commission may issue a temporary "hardship" license to any

Colorado licensee approved by the board of directors

If a broker is asked for additional information on working relationships, the broker must provide: the written office policy definitions of relationships Commission-approved form "Definitions of Real Estate Working Relationships" the telephone number for the Real Estate Commission

Commission-approved form "Definitions of Real Estate Working Relationships" Definitions of Real Estate Working Relationships is a form that gives the official Real Estate Commission-approved definitions of the various relationships such as Buyer Agency, Seller Agency or Transaction Broker. It is an optional form that may be used if someone wants more information about the relationships, but it is not a "disclosure" of which relationship a broker is operating under. There are other forms, such as the purchase contract and the listing contracts where actual disclosure of a relationship is specified; the Definitions of Real Estate Working Relationships is merely that - a form that defines the types of relationships one might have with an agent.

What must appear in the title of a trust account?

Company name and employing broker's

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

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

Adjudicated water rights may be taken from the owner involuntarily by:

Condemnation

The Real Estate Commission:

Consists of 5 members who are appointed by the governor and meet monthly

Mrs. Happy Homeowner just closed on her first home. All was well until she tried to clean a load of dirty dishes. At that time she discovered the dishwasher was broken. Referring back to the seller's property disclosure and her inspection report, the dishwasher was in good repair. What should Mrs. Happy Homeowner do first?Mrs. Happy Homeowner do first?

Contact buyer's agent who should contact listing agent to contact seller to resolve this issue

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 From Dictionary.com - A topographic map on which the shape of the land surface is shown by contour lines, the relative spacing of the lines indicating the relative slope of the surface.

Which does NOT fall under Rule F?

Contract to purchase newly constructed home with warranties.

The Colorado Statute of Frauds mandates that

Contracts for the sale of real estate must be in writing

In Colorado, a developer must register with the Real Estate Commission for which of the following projects

Conversion of an apartment complex into 25 residential condominiums. (must register for anything conveying 20 or more properties)

A valid deed

Conveys that estate owned by the grantor

Which of these acts could result in license suspension or revocation?

Conviction of a forgery crime, Accepting compensation from more than one party in a transaction without full disclosure, Advertising in the name of another broker

Fixing leaky faucets and broken air-conditioners and furnaces is an example of

Corrective maintenance

Counterproposal B. The Counterproposal is the correct answer. The "Agreement to Amend and Extend Contract with Broker" is used to amend a contract between a client and their broker such as a listing agreement. The "Agreement to Amend and Extend Contract" is used to amend a contract between the Buyer and Seller such as the purchase contract. There is no approved real estate form that is called a counter offer.

An inaccurate county tax certificate failed to indicate the correct taxes due. Additional tax money due would be the responsibility of the:

County Treasurer

An inaccurate county tax certificate failed to indicate the correct taxes due. Additional tax money due would be the responsibility of the: Title Company Buyer''s Agent Seller County Treasurer

County Treasurer The fault lies with the County Treasurer

easement by prescription

Created through continual use over a certain period of time. It must be continual, visible, & w/o approval. Example - a private road becomes public.

The water bill has been paid in advance by the seller for the month of August. The bill was $35.82. The closing is August 25. The correct entry on the settlement statement would be: Credit Seller $35.82, Debit Buyer $35.82 Credit Buyer $9.50, Debit Seller $9.50 Credit Seller $8.09, Debit Buyer $8.09 Credit Seller $8.09, Debit Buyer $27.73, Credit Broker $27.73

Credit Seller $8.09, Debit Buyer $8.09 Seller overpaid, so buyer owes seller - Credit Seller/Debit Buyer To calculate the amount owed: $35.82 / 31 (days in August) x 7 (Buyer owned days in month, including day of closing)= $8.09 Credit Seller $8.09, Debit Buyer $8.09

If the seller agrees to carry back part of the purchase price as a second Deed of Trust, what is the effect at closing?

Credit the buyer who can use this promise to pay in place of cash at closing

Earnest money appears on a settlement statement as a:

Credit to the buyer

Interest on the loan assumed is shown as: debit to the buyer credit to the buyer credit to the broker credit to the seller

Credit to the buyer a debit to the seller.

A loan origination fee appears on a settlement statement as a: Debit to the buyer Credit to the buyer Debit to the seller Credit to the seller

Debit to the buyer The loan origination fee is a lender charge for the purpose of securing their new loan and as such is the responsibility of the Buyer. Even if the Seller is making a concession to the Buyer and is providing the funds to cover an origination fee, the charge is still the Buyers (Debit Buyer). The Seller concession will appear on a different line in the settlement sheet as a Credit Buyer, Debit Seller.

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 It is unlawful for a real estate broker registered in the commission office as in the employ of another broker to accept a commission or valuable consideration for the performance of any of the acts specified in this part 1 from any person except the broker's employer, who shall be a licensed real estate broker.

If the taxes for the preceding year ate unpaid at the time of an August 14 closing, what must the broker do?

Debit the full amount plus penalties to the seller and pay the county. Taxes for the preceding year are entirely the sellers responsibility. Taxes are due by June 16 of the year

Real property is closing on May 15. The buyer is assuming the seller's mortgage. As of closing the balance is $65,325. The annual interest rate is 8%. How should the interest on the loan be prorated based on a banker's year (360 days in a year, 30 days in a month)

Debit the seller $203.23 Explanation Debit the seller $203.23 $65,325 x 8% / 360 days = $14.5167 x 14 days = $203.23

What are the different license levels in the state of Colorado?

Employing Broker, IndependentBroker, Associate Broker

A closing is scheduled for October 4 with an existing loan to be assumed. The lender informs the broker that the October 1 payment has not been made as of October 3rd. The seller says the payment was mailed on October 2nd. How should the broker proceed with the settlement worksheet?

Debit the seller and credit the broker the full payment that will be refunded by the lender.

If taxes for the preceding year have not been paid as of a closing on February 23 and the closing involves a cash sale, what must the broker do?

Debit the seller and credit the buyer for the full amount

How is the broker's fee normally shown of the settlement statement?

Debit the seller, credit the broker

A loan origination fee appears on a settlement statement as a:

Debit to the buyer

The highest quality & quanity of ownership in real property is: A. determinable fee B. allodial ownership C. life estate D. fee simple

D. fee simple Ownership in fee simple or fee simple absolute conveys the highest quanity and quality of ownership in the property.

Ownership in severalty would most likely involve: A. a fee simple defeasible estate B. tenancy in common C. ownership with other parties D. sole ownership

D. sole ownership Severalty means you are servered from other owners Property owned by one person or enity is known as sole and separate, or ownership in severality. Severalty means you are servered from other owners.

ALL OF THE FOLLOWING ARE CONSIDERED FRAUDULENT

DECEITFUL OR DISHONEST PRACTICES; OMITTED STATEMENTS OF MATERIAL FACT; MISSTATEMENTS ABOUT THE PROPERTY

A DEED CONVEYS OWNERSHIP TO THE GRANTEE SO AS LONG AS THE EXISTING BUILDING IS NOT TORN DOWN. WHAT TYPE OF ESTATE DID THIS DEED CREATE

DETERMINABLE

THE RIGHTS OF OWNERSHIP OF REAL PROPERTY INCLUDE ALL OF THE FOLLOWING

DISPOSITION, EXCLUSIVITY, CONTROL

For a VA loan - how will the Buyer's Loan Processing Fee be shown on a settlement sheet

Debit Seller

Loan discount points appear on a closing statement as a:

Debit to the buyer or seller

Recording fees may appear on a closing statement as a:

Debit to the buyer, Debit to the seller, Credit to the broker

The payoff of an existing loan appears on a closing statement as a:

Debit to the seller

A loan being assumed by a buyer has what effect at a closing?

Debit to the seller, credit to the buyer

Lender required addons (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 Credit to the broker Buyers pay for the extended policy (sometimes-called mortgagee policy or title insurance endorsements) naming the lender as beneficiary. On the 6 column worksheet this is shown as Debit Buyer and Credit Broker (so that the closer gets a check written to the title company for providing the insurance) More info: For more inquiring minds: This answer to this question refers to the 6 column worksheet which pre-personal computer days was used to calculate the numbers for a closing. The broker engages the title company to act as scrivener and conduct the closing which includes deposits and withdraws into and out of the closing escrow account. Although the escrow account used for closings is managed by the title company closer, legally the listing broker is still responsible for it. Therefore, on the 6 column settlement worksheet the columns pertaining to the closing escrow account are labeled "Broker Credit" and "Broker Debit." Deposits into the closing escrow account are placed into the Broker Debit Column and withdrawals are listed in the Broker Credit column. Wait a minute! How can a deposit be a debit? Unfortunately that is how it works. The 6 column settlement worksheet twists slightly the traditional rules of accounting so that the person responsible for the closing escrow account knows what checks to write and deposits to make. S/he does this by dedicating the "Broker Debit" column to deposits and the "Broker Credit" column to withdrawals. This way, for example, if the seller owes the County Treasurer for back taxes, the closer can take the money from the Seller by indicating Debit Seller and have a reminder to write a check to the County Treasurer by placing the corresponding credit into the Broker Credit column. When all is said and done accounting gods are happy as all debits and credits are in balance.

In Colorado, residential properties are usually conveyed by"

Deed of Trust

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 Short version: put it into the escrow account first even if you are going to immediately transfer it to the owner. However, before the owner transfer you need to provide appropriate written notification to the tenant as to who is holding the deposit and the holder's contact info. CP-5 Commission Position on Advance Rentals and Security Deposits Pursuant to C.R.S. 12-61-113 (l)(g.5) and Commission Rule E-l and E-16, all money belonging to others which is received by a broker must be placed in an escrow or trust account. This applies to tenant security deposits and advance rental deposits, including credit card receipts, held by a broker. A broker may not deliver a security deposit to an owner unless notice is given to the tenant in the lease, rental agreement, or in a separate written notice that the security deposit will be held by the owner. Such notice must be given in a manner so that the tenant will know who is holding the security deposit, and shall include either the true' name and current mailing address of the owner or the true name and current mailing address of a person authorized to receive legal notices on behalf of such owner, along with specific requirements for how the tenant is to request return of the deposit. If, after receipt by the broker, the security deposit is to be transferred to the owner or used for the owner's benefit, the broker, in addition to properly notifying the tenant, must secure the consent of the owner to assume full financial responsibility for the return of any deposit which may be refundable to the tenant. The broker shall not withhold the identity of the owner from the tenant if demand for the return of the deposit is properly

If a friend asks you to help manage a property for a fee, would you put the deposits into your escrow account or your employing brokers escrow account? Deposit them into your escrow account Deposit them into your employing brokers escrow account

Deposit them into your employing brokers escrow account You can have no escrow account. Only your employing broker can have one.

As a broker, you list a property in Sink Hole Estates, an area well known for mine shafts and underground and unstable surface condition. The sellers say they know nothing about these problems and have no problem on their property. Your duty is:

Disclose area history along with the sellers statement.

Another associate in your office has an agency listing. A buyer calls while you are on phone duty. You describe the other associates listing and agree to meet the buyer there to view it. When the buyer arrives, you should:

Disclose the brokerage relationship in writing. IF they decline to sign the disclosure, annotate the form and go ahead and show the property.

If a Broker measures a property, (s)he must:

Disclose the method used to determine the measurement

All of the following must be disclosed to a tenant by a property manager EXCEPT:

Disclose the name and address of the landlord

In the Purchase Price and Terms section of the Residential Contract to Buy and Sell, the entry for cash at closing:

Does not include a buyer's loan costs. Should represent the total amount the buyer is expected to bring at closing, match the HUD 1 Settlement form, and represent the approximate amount the seller will receive at closing.

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 answers are permanently attached.

IF THE OWNER OF THE DOMINANT TENEMENT BECOMES THE OWNER OF THE SERVIENT TENEMENT AND MERGES THE TWO PROPERTIES, THE

EASEMENT IS TERMINATED

A PORTION OF A MAN'S HOUSE WAS INADVERTENTLY BUILT ON HIS NEIGHBOR'S LAND.

ENCROACHMENT

THE PRIMARY INTENT OF ZONING REGULATIONS IS TO

ENSURE THE HEALTH, SAFETY, AND WELFARE OF THE COMMUNITY

THE INTEREST IN A PROPERTY HELD BY THE OWNER IN EXCESS OF ANY LIENS AGAINST IT IS CALLED

EQUITY

WHICH OF THE FOLLOWING BEST DESCRIBE A LEGAL LIFE ESTATE

ESTATE CONVEYED BY ONE PARTY TO A 2ND PARTY FOR THE LIFE OF THE SECOND PARTY

WHICH OF THE FOLLOWING WILL TERMINATE A LEASE

EXPIRATION OF THE TERM OF THE LEASE

In Colorado, commissions for real estate transactions are set by:

Each brokerage firm

An 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 homeowners insurance policy

Errors and Omissions coverage Errors and Omissions insurance often referred to as "E&O" insurance covers the licensee against inadvertent errors. It does not cover the licensee for fraud on the part of the licensee. A licensee must have an active policy to have an active real estate license.

Private property that is abandoned is taken by the local government. This is an example of:

Escheat This is a classic example of property that government can take over through escheat, another example would be a person dying without a will and no living relatives. The term is often now applied to the transfer of the title to a person's property to the state when the person dies intestate without any other person capable of taking the property as heir. For example, a common-law jurisdiction's intestacy statute might provide that when someone dies without a wil

In Colorado a mechanics lien:

Establishes its priority from when the work begun

In Colorado, which of the following is presumed to be true of a lease? Every residential lease contains an implied warranty of quiet enjoyment only. Every residential lease contains implied warranties of habitability AND quiet enjoyment. Every residential and commercial lease contains an implied warranty of habitability only.

Every residential lease contains implied warranties of habitability AND quiet enjoymen every residential lease contains implied warranties of quiet enjoyment and habitability. Quiet Enjoyment roughly means your Landlord has ceded control of the property to you and will leave you alone. Habitability means the property has to meet certain minimum State established standards that ensure it is a safe and healthful environment. Commerical leases do not have an implied warranty of habitability.

True/False - According to Commission Position 42 on Apartment Building or Complex Management, an on-site manager performing customary duties is required to have a real estate license.

FALSE

WOMAN OWNED A FEE SIMPLE TITLE TO A VACANT LOT ACROSS A HOSPITAL: HER ATTY PREPARED A DEED "SO LONG AS IT IS USED FOR MEDICAL PURPOSES"

FEE SIMPLE DETERMINABLE

A PERSON WHO HAS COMPLETE CONTROL OVER A PARCEL OF REAL ESTATE IS SAID TO OWN A

FEE SIMPLE ESTATE

THE MOST ALL INCLUSIVE TYPE OF REAL PROPERTY OWNERSHIP IS A

FEE SIMPLE ESTATE

UNDER THE CONDO FORM OF OWNERSHIP THE OWNERS INTEREST IN THE UNINT IS NORMALLY A

FEE SIMPLE ESTATE

THE RELATIONSHIP OF A BROKER TO A CLIENT IS THAT OF

FIDUCIARY

IN THE EVENT THAT IT IS NECESSARY HOW MIGHT A LL REMOVE A TT FROM THE PREMISES

FILE AN EVICTION SUIT

WHICH OF THE FOLLOWING HAS AN INDEFINITE DURATION

FREEHOLD ESTATE

According to Commission Position 25 on Recording Contracts should a listing broker get into a dispute with a seller over a commission, the broker may pursue a civil action and file a lis pendens. True False

False CP-24 ... File a lis pendens (notice of pending lawsuit)? ANS: No. A lis pendens relates to a title or ownership dispute involving the land itself. The broker has no legal interest in the real estate.

Under an Exclusive Buyer Agency Agreement, the broker has what agency relationship to the purchaser?

Fiduciary

True/False - The name of the Brokerage Firm with whom the team is associated does NOT have to appear on all team advertising as long as all licensed brokers on the team have their licenses registered under the Brokerage Firms name. True False

False CP-40 Commission Position on Teams (4-5-2011) The Commission recognizes that there are benefits to both real estate brokers and consumers in the usage of real estate broker teams. Teams may be formed within a licensed brokerage firm with the approval of the employing broker. Real estate brokers operating as teams need to ensure that they are compliant with Commission rules regarding advertising, name usage and supervision. Advertising and name usage: While there is no prohibition of teams, real estate brokers need to ensure that they do not advertise in a manner that misleads the public as to the identity of the brokers' licensed brokerage. Real estate brokers that function as teams should not advertise teams using the terms "realty", "real estate", "company", "corporation", "corp.", "inc.", "LLC" or other similar language that would indicate a company other than the employing brokerage firm. Advertising includes, but is not limited to, websites, signage, property flyers, mailings, business cards, letterhead and contracts. The advertising of team names should never give the impression that the team is an entity separate from the licensed real estate brokerage. If the identity of the employing broker or the brokerage firm is difficult for the public or the Commission to ascertain, the team may be in violation of Rule E-8 Advertising. Supervision: In addition to the supervision requirements set forth in Rules E-31 and E-32, Rule E-30 Employing broker responsibilities requires that the broker designated to act as the broker for any partnership, limited liability company or corporation, i.e. the employing broker, fulfill the following duties: 1) Maintain all trust accounts and trust account records; 2) Maintain all transaction records; 3) Develop an office policy manual and periodically review office policies with all employees; 4) Provide for a high level of supervision for newly licensed persons pursuant to Rule-32; 5) Provide for a reasonable level of supervision for experienced licensees pursuant to Rule E-31; 6) Take reasonable steps to ensure that violations of statutes, rules and office policies do not occur or reoccur; 7) Provide for adequate supervision of all offices operated by the broker, whether managed by licensed or unlicensed persons. Pursuant to §12-61-118, C.R.S. and Rule E-29, employing brokers are also responsible for providing supervision over such activities with reference to the licensing statutes and Commission rules for all brokerage employees, including but not limited to administrative assistants, bookkeepers and personal assistants of licensed employees. Thus, employing brokers are responsible for the actions of unlicensed persons who perform functions within the real estate broker team. Employing brokers need to ensure that any unlicensed person acting within the team is not engaged in practices that require a real estate broker's license. Employing brokers also need to establish that the compensation paid to an unlicensed person for services provided is not in the form of a commission. Compensation paid to an unlicensed person is not required to to be paid solely by the employing broker. However, §12-61-117, C.R.S. requires that all licensee compensation or valuable consideration for the performance of any acts requiring a broker's license is paid solely by the employing broker.

What is the primary difference between the commission approved deed of trust forms?

Forms contain different provisions for assumption of the loan in the event of a sale of the property.

Fred has a promissory note that requires equal monthly payments of principal and interest for 30 years until it is fully paid. It is a(n)

After closing, a managing broker should pay commissions due to company associates:

From the company operating funds

A MORTGAGOR IS THE ONE WHO

GIVES THE MORTGAGE

In Colorado, residential properties are usually conveyed by:

General Warranty Deed

Which is NOT evidence of mechantability title?

General Warranty Deed to the present owner.

Unless modified, the powers granted in a Colorado statutory power of attorney for property are:

General in scope

Unless modified, the powers granted in a Colorado statutory power of attorney for property are: Not applicable to property management A conflict of interest for a designated broker General in scope Limited to signing papers at closing

General in scope Power of Attorney, unless modified, are general in scope. Usually they are modified by stating exactly what is allowed for a licensee to sign in the name of the client.

The grantee receives the greatest protection in which type of of deed?

General warranty

The grantor receives the greatest amount of liability by transferring title to the grantee using which kind of deed?

General warranty Explanation The grantor receives the greatest amount of liability by transferring title to the grantee using a general warranty deed

Zoning ordinances have divided land use into four uses. Which is not a use? Residential Agricultural Governmental Commercial

Governmental

Zoning ordinances have divided land use into four uses. Which is not a use? Residential Agricultural Governmental Commercial

Governmental Zoning ordinances have traditionally divided land use into residential, commercial, industrial and agricultural classifications.

THE PLEDGING OF PROPERTY AS SECURITY FOR PAYMENT OF A LOAN IS

HYPOTHECATION

According to the Seller Transfer Disclosure law, the real estate Licensee:

Has a responsibility to visually inspect the property and reveal pertinent info which the seller has failed to disclose

The licensee is holding an Exclusive Right to Sell Listing contract, he:

Has permission to work with other sellers Explanation The other sellers provision of the listing contract specifically allows the broker to work with other sellers

An applicant for a brokers license must

Have 48 hours of classroom instruction or equivalent correspondence hours in Real Estate Law and Practice

A resident Colorado broker's office must: Be in a commercial office building to comply with zoning Be a virtual office doing business by phone and using a post office box mailing address Have a physical address in Colorado where the commission staff can inspect records

Have a physical address in Colorado where the commission staff can inspect records . Resident broker required to have office; exceptions. Every resident Colorado real estate broker shall maintain and supervise a brokerage practice available to the public, except those brokers registered in the Commission office as in the employ of another broker or those brokers registered as inactive. Editor Note: Please note that the above statute refers to "resident" brokers. Colorado brokers not resident in the State are not required to have a physical location in the State.

A broker's office must:

Have a physical address where the commission staff can inspect records

When a licensee misrepresents facts in property sales, they are subject to which action? Paying a fine to the county in which the misrepresentation occurred Immediately having their license suspended by the Real Estate Commission Having a hearing before the Real Estate Commission Immediately having their license revoked by the Real Estate Commission

Having a hearing before the Real Estate Commission A licensee is always under the jurisdiction of the real estate commission. Acts of fraud may also require a broker to appear in civil or criminal court.

Which of the following is an example of involuntary alienation?

Having a piece of land sold for delinquent taxes

He must comply with state and federal securities laws in arranging this investment group

If a broker moves his place of business without advising the Real Estate Commission:

His license and all associate brokers working for him are inactivated

Which of the following is not true about continuing education?

Hours in excess of those required by the statutory education requirement may be carried forward into the next renewal period.

If a client asks whether it would be beneficial to add a second bathroom to increase profit on the sale of the home, what would be the appropriate response?

I would be happy to do some research or analysis and speak to a construction expert on costs to determine if it''s worth it

LAND IS CONSIDERED

INDESTRUCTIBLE

A RE BROKER ACTING AS THE AGENT OF THE SELLER

IS OBLIGATED TO RENDER FAITHFUL SERVICE TO THE PRINCIPAL

A PROMISSORY NOTE

IS THE PRIMARY EVIDENCE OF A DEPT

When is the listing company responsible for a guaranteed buyout agreement under the License Buyout Addendum to the Contract to Buy and Sell?

If the employing broker signs at the bottom of the addendum.

In the Colorado Contract to Buy & Sell the inspection provision allows the buyer to terminate the contract: Only after listing unsatisfactory conditions that cause the buyer to terminate If the property is unsatisfactory in the buyer's subjective discretion Only if a licensed inspector determines that there are significant problems with the property

If the property is unsatisfactory in the buyer's subjective discretion 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.

Supervision:

In addition to the supervision requirements set forth in Rules E-31 and E-32, Rule E-30 Employing broker responsibilities requires that the broker designated to act as the broker for any partnership, limited liability company or corporation, i.e. the employing broker, fulfill the following duties: 1) Maintain all trust accounts and trust account records; 2) Maintain all transaction records; 3) Develop an office policy manual and periodically review office policies with all employees; 4) Provide for a high level of supervision for newly licensed persons pursuant to Rule-32; 5) Provide for a reasonable level of supervision for experienced licensees pursuant to Rule E-31; 6) Take reasonable steps to ensure that violations of statutes, rules and office policies do not occur or reoccur; 7) Provide for adequate supervision of all offices operated by the broker, whether managed by licensed or unlicensed persons.

In Colorado Sexual Preference is a protected class under Fair Housing?

In all counties statewide

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

Individual Proprietor There is no provision for an individual proprietor to receive a temporary employing broker license for a hardship. Statute 12-61-103, Application for license - rules. (7) (c) If the person so designated is refused a license by the real estate commission or ceases to be the designated broker of such partnership, limited liability company, or corporation, such entity may designate another person to make application for a license. If such person ceases to be the designated broker of such partnership, limited liability company, or corporation, the director may issue a temporary license to prevent hardship for a period not to exceed ninety days to the licensed person so designated. The director may extend a temporary license for one additional period not to exceed ninety days upon proper application and a showing of good cause; if the director refuses, no further extension of a temporary license shall be granted except by the commission. If any broker or employee of any such partnership, limited liability company, or corporation, other than the one designated as provided in this section, desires to act as a real estate broker, such broker or employee shall first obtain a license as a real estate broker as provided in this section and shall pay the regular fee therefor.

When creating the listing agreement, the sellers informs you that they will not be filling out a Seller's Property Disclosure form. What is your best response: Inform the sellers that most buyers want the form Inform the sellers that you will fill out the form for them Decline the listing Inform the sellers as the form is optional there are no repercussions to not filling it out

Inform the sellers that most buyers want the form The listing agreement does not require the sellers to fill out the form, however the purchase contract requires one be filled out and the buyers expect to receive one. Once a purchase contract is received, the sellers will have to counter the offer. If the sellers are reluctant to fill out because they have no knowledge of the property (for example in an estate situation whereby they inherited the property) sometimes the best strategy is to fill out the form indicating they have no knowledge of the property.

Dolores is owner of a home which she agreed to sell to David. A prelim report prepared during escrow shows:

Information about a deed of trust with Dolores as the trustor

A commonly-used method to defer recognition of the gain from the sale of real estate is known as:

Installment Sale

The designation of Certified Property Manager (CPM) is awarded by the

Institute of Real Estate Management

Insulation behind the wallboard Insulation is behind the wall, the other items are either the wall itself or on the inside of the wall to the unit.

Which one of the following funds should not be placed in the real estate trust account? Earnest money Rental collections Installment land contract collections Insurance premiums

Insurance premiums

Who of the following is exempt from real estate law?

Investor who owns 12 investment properties and sells one to an owner occupant.

A Buyers right to a specific performance remedy in the event of a Seller default in the Contract to Buy and Sell Real Estate:

Is the default remedy and as such need not be selected

A Buyers right to a specific performance remedy in the event of a Seller default in the Contract to Buy and Sell Real Estate: Is the default remedy and as such need not be selected Buyer default remedy is liquidated damages Not addressed in the contract Depends on which box is checked

Is the default remedy and as such need not be selected Should the Seller default in the contract - the only remedy for the Buyer is Specific Performance. The Seller did not put up earnest money and thus cannot offer liquidated damages.

Broker Mary Andrews took a listing and later discovered that her client had previously been declared incompetent by a court of law. The listing is now:

Is void - Incompetent persons cannot enter into a contract.

In the section on Purchase Price and Terms in a Residential Contract to Buy and Sell, which of the following is true concerning the entry for cash at closing?

It does not include the buyer's closing costs, such as loan fees.

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 Unlike the title to a car, the property owner gets possession of the warranty deed even if there is a loan against the property.

Last years Taxes on settlement sheet

It will be shown on the settlement sheet as a debit to the seller and a credit to the broker. Remember, the broker represents the escrow account. The credit goes to the escrow account as the person in charge of it, represented by the broker, needs to write a check to the County to pay the seller's delinquent tax bill.

Who pays for a survey ordered after the date of purchase contract?

Its negotiable-check the contract

Which of the following provisions is not essential to the validity of a lease? Competent lessor and lessee Rent provision Judgment clause All of the above

Judgment clause Explanation: A judgement clause is usually found only in a commercial lease and is infrequently used.

Which of the following is NOT a fixture: Shrub Tree Swimming Pool Land

Land Land is not a fixture. Land is something to which fixtures are attached. Fixtures are anything which is permanently attached to land or improvements such as patios, garage doors, grass, windows and basketball hoops. Personal property is something that is in or on land or improvement but can be removed without damage to the land or improvement, such as a non-built-in fridge, patio furniture, cars, washer/dryers and your prized velvet Elvis. How to Tell if Personal Property is a Fixture All states have their own rules for what constitutes a fixture, but here are the five tests most courts use to determine what is a fixture and what is not. It's called M-A-R-I-A. 1) Method of attachment. Is the item permanently affixed to the wall, ceiling or flooring by using nails, glue, cement, pipes, or screws? Even if you can easily remove it, the method used to attach it might make it a fixture. For example, ceiling lights, although attached by wires, can be removed, but the lights are a fixture. 2) Adaptability. If the item becomes an integral part of the home, it cannot be removed. For example, a floating laminate floor is a fixture, even though it is snapped together. One could argue that a built-in refrigerator is considered a fixture, although it can be unplugged, because it fits inside a specified space. 3) Relationship of the parties. If the dispute is between tenant and landlord, the tenant is likely to win. If the dispute is between buyer and seller, the buyer is likely to prevail. 4) Intention of party when the item was attached. When the installation took place, if the intent was to make the item a permanent attachment, for example, a built-in bookcase, the item is a fixture. 5) Agreement between the parties. Read your purchase contract. Most contain a clause that expressly defines items included in the sale and ordinarily state "All existing fixtures and fittings that are attached to the property."

Lily has withdrawn the broker's authority to sell the property and may be subject to reimbursing some broker expenses.

Which class is protected under under Colorado Fair Housing and not the Federal Fair Housing? Marital Status Race Familial Status National Origin

Marital Status Marital Status is not a protected class under Federal Fair Housing

In addition to Federal law the Colorado Fair Housing Act added as a protected class:

Marital status

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.

The listing contract is preserved in whose transaction files?

Listing Broker only

Who shall request the earnest money to be released, in good funds to the closing clerk, prior to closing?

Listing agent

Who shall request the earnest money to be released, in good funds to the closing clerk, prior to closing? Buyer Seller Listing agent Buyer agent

Listing agent Listing agent generally requests it from the broker at least 24 hours before closing. From the Contract to Buy and Sell (Purchase Contract) Good Funds. All amounts payable by the parties at Closing, including any loan proceeds, Cash at Closing and closing costs, shall be in funds that comply with all applicable Colorado laws, including electronic transfer funds, certified check, savings and loan teller's check and cashier's check (Good Funds).

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

Listing agent Listing agent helps seller determine which title company will issue commitment.

Loan discount points are a percentage of the:

Loan amount

GENERALLY PERSONAL PROPERTY CAN BE DISTINGUISHED FROM REAL PROPERTY BY ITS

MOBILITY

IF THE AMT REALIZED AT A SHERIFF'S SALE AS PART OF A MORTGAGE FORECLOSURE IS MORE THAT THE AMT OF THE INDEBTEDNESS AND EXPENSES, THEN THE EXCESS BELONG TO THE

MORTGAGOR

In addition to Federal law the Colorado Fair Housing Act added as a protected class: Marital status Sexual orientation Both sexual orientation and marital status Students

Marital status The Colorado statute covers the same protected classes as in the Federal Fair Housing Act, except that it uses the word "disability" rather than "handicap" in the Federal Fair Housing Act. The Colorado statute also adds three more protected classes: ancestry, marital status and creed, for a total of ten protected classes, as compared to the seven under the Federal Fair Housing Act. Under the Colorado Anti-Discrimination Act ("CADA"), sexual orientation and gender identity have been a protected class in employment since August 3, 2007. On May 29, 2008, the Colorado General Assembly amended CADA and made sexual orientation and gender identity a protected class in housing, public accommodation, and advertising. Therefore if you get a question asking if sexual orientation is protected under Colorado Fair Housing laws - the answer is yes. Under the Colorado Fair Housing Act - no.

As a transaction broker in an exclusive right to sell listing contract, the listing broker must disclose:

Material facts about the property known to the broker

As a transaction broker in an exclusive right to sell listing contract, the listing broker must disclose: The motivation of seller if requested by buyer Material facts about the property known to the broker Facts about the seller known by the broker All facts known by the broker about the transaction

Material facts about the property known to the broker All licensees have a statutory duty to disclose material facts about a property that are known by the broker.

In the Colorado Contract to Buy & Sell , if the buyer receives a property inspection report on the day after the Inspection Objection Deadline , and the report contains several serious matters. The buyer: Can compel the seller to correct these serious defects Is in default for missing the deadline and the seller may terminate the contract May still object since they did not receive the report until after the deadline Missed the opportunity to object based on inspections issues, and the contract is still in force.

Missed the opportunity to object based on inspections issues, and the contract is still in force. If the buyer does not file an objection prior to the deadline the inspection contingency is waived

After the Sellers columns on a Settlement sheet have been subtotaled, to balance the two debit and credit columns, a credit to the Seller and a debit to the broker would represent:

How often does the Real Estate Commission meet?

Monthly

A note for earnest money:

Must be indicated in the Contract to Buy and Sell

A person maintaining an inactive Colorado real estate license

Must complete continuing education for the current renewal cycle before activating the license.

Which of the following is true regarding an application for a brokers license?

Must have 48 hours of instruction in the Colorado Contracts and Regulations

licensed broker managing property as an owner's agent

Must not profit from private contracts at the expense of the owner

THE LESSOR AND LESSEE HAVE AGREED TO A LEASE TERM OF 5 YRS. HOW CAN THE LESSOR ENSURE THAT THE RENTAL INCOME DURING THE TERM REFLECTS THE MARKET CONDITIONS

NEGOTIATE AN INDEX LEASE

A RE SALESPERSON WHO IS AN INDEPENDENT CONTRACTOR RECEIVES

NEGOTIATED COMMISSION ON TRANSACTIONS

A LESSEE WHO PAYS SOME OR ALL OF THE PROPERTY EXPENSES HAS A

NET LEASE

THE GEOGRAPHIC LOCATION OF ANY PARCEL OF LAND CAN

NEVER BE CHANGED

After a public auction foreclosure sale for Deed of Trust default, the borrower may redeem the property any time up to

NEVER, there is no right of redemption on a foreclosure sale

VERBAL OFFERS TO A BROKER, ACCEPTED BY SELLER WHERE BUYERS BACKED OUT, WHAT DOES BROKER GETS IN COMMISSION

NO COMMISSION

OWNER OCCUPIED HAD WINDOWS, SCREENS, VENETIAN BLINDS. BEFORE THE CLOSING OF ESCROW, THE SELLER MAY REMOVE

NON OF THE IDENTIFIED ITEMS

A VOID CONTRACT IS ONE THAT IS

NOT LEGALLY ENFORCEABLE

An Associate Broker has developed an internet website. What, if anything, must he or she include?

Name and location of the brokerage company that holds the associates license.

What if anything is required by the broker to be included on his/her Web site.

Name of licensee's brokerage firm

If a broker shows a home for another broker who has it listed and a married couple comes in and he answers all questions the best he can and he promises to find out answers to the ones he doesn't know and get back to them. What type of relationship has been established? Implied agency No fiduciary relationship has been established Express agency Buyer agency

No fiduciary relationship has been established Just answering questions does not create an agency relationship. A fiduciary relationship is a buyer's agency or sellers's agency reltionahip. Transaction Broker is not a fiduciary relationship. Definition of Fiduciary relationship n: where one person places complete confidence in another in regard to a particular transaction or one's general affairs or business.

After what point will the owner of these new lofts need to turn control of the homeowner's association over to the homeowners? After 60% of the homes are sold After the first title is conveyed No later than 60 days after conveyance of 75% of the maximum number of units Developers are never required to relinquish control of the homeowner's association

No later than 60 days after conveyance of 75% of the maximum number of units The owner will need to turn over the homeowner's association no later than 60 days after conveyance of 75% of the maximum number of units

An agent lists a property using the Colorado Exclusive Right to Sell Listing Contract and checked the "Shall Not" box in the Holdover Clause. Just before the listing expired, a buyer views the property. Wanting to retain the rights to this buyer, the listing agent provides the buyer's name in writing to the seller. After the listing expires, the seller lists with another agent and the buyer's agent submits an offer on the property. If accepted, would the old listing agent receive a listing commission? No, the new listing broker earned the listing side commission Both the new and the old listing brokers are entitled to a listing commission Yes, because it is within the holdover period Yes, because he is the procuring cause of the sale.

No, the new listing broker earned the listing side commission Only the current listing broker earns the commission. Checking the "shall not" box in the Holdover clause indicated that the provisions of the clause would no longer be in effect should the property be relisted with another agent. When the property was relisted - the old listing agent lost the right to a listing commission for the buyer. If the old listing broker had checked the "shall" box, he/she would have been entitled to a listing commission under the terms of the Holdover clause.

A broker has put together a team consisting of a title representative, a lender and an inspector to assist the broker in building her business. Each settlement service provider reimburses the broker monthly for the cost of lead generation. The reimbursement covers all the broker's cost for generating the leads. In this instance this practice is: not acceptable as a broker may not receive any money from a title company but acceptable for the other team members. Acceptable since the team members may also get a lead and the broker is not using just one settlement provider but three. Not acceptable as broker may not receive any fees for lead generation from any settlement service provider Acceptable as long as it is documented and the broker will accept other settlement providers on her team.

Not acceptable as broker may not receive any fees for lead generation from any settlement service provider

A BROKER TOOK A LISTING AND LATER DISCOVERED THAT THE CLIENT WAS PREVIOUSLY DECLARED LEGALLY INCOMPETENT. THIS LISTING IS NOW

OF NO VALUE TO THE BROKER BC IT IS NOW VOID

When must encumbrances be paid?

On or before closing, from the proceeds of the sale or any other source.

Which of the following best describes an open ended loan:

One in which additional financing can be obtained without rewriting the contract

Select the correct statement about a lease in Colorado: Every lease contains an implied warrant of habitability and quiet enjoyment Only residential leases have an implied warrant of habitability Every lease contains an implied warrant of habitability

Only residential leases have an implied warrant of habitability Property Mangement and Leases - Duties and Liabilities of the Parties, All residential leases have an implied Warranty of Habitability. This means they must meet a minimal set of standards for housing established by the State. "Implied" means the Warranty of Habitability standards do not have to be physically listed in a lease to be effective as they are State law. Commercial leases do not have a Warranty of Habitability. As to responsibility of making repairs - neither a landlord or tenant is required to make a repair unless stated in the lease. However the Landlord on residential properties is required to provide a habitable home that satisfies the conditions of the Warranty of Habitability. If the home is deemed not habitable, the Landlord cannot be compelled to make a repair, but the Tenant cannot be compelled to stay. When a tenant files a legal action to break a lease due to an unhabitable situation - this is called "constructive eviction."

When is a real estate license required when selling a business opportunity?

Only when a lease is involved

If a Buyers Agent approaches a "For Sale by Owner" when must the agent disclose the agency relationship?

Orally at the first contact and in writing at the first physical meeting

A COMMERCIAL LEASE DOES NOT SPECIFICALLY INDICATE WHO IS RESPONSIBLE FOR MAKING REPAIRS TO THE PREMISES. THE EXPENSE OF MAKING SUCH REPAIRS IS GENERALLY

PAID BY THE LESSEE

A WRITTEN RE CONTRACT IS ASSUMED TO BE THE COMPLETE AGREEMENT OF THE

PAROLE EVIDENCE RULE

A BORROWER OBTAINED A $7000 SECOND MORTGAGE LOAN FOR 5 YRS AT 6% INTEREST PER ANNUM. MONTHLY PYMT WERE $50. THE FINAL PYMT INCLUDED THE REMAINING OUTSTANDING PRINCIPAL BALANCE. WHAT TYPE OF LOAN IS THIS

PARTIALLY AMORTIZED

WHICH IS CONSIDERED PERSONAL PROPERTY

PATIO FURNITURE

WHAT IS THE PRIMARY DISADVANTAGE OF A CORPORATION

PAYS TAXES TWICE

UNDER THE GROSS LEASE, THE LESSEE MAY BE REQUESTED TO PAY

PERSONAL PROPERTY INSURANCE

John Johnson owned a parcel of land around his copper mine. He sold the mine and property for $230,000 with the verbal understanding that copper already mined before the date of sale would not be included in the sale. The mined copper is considered by law as:

Personality Any mineral that has been removed from below the surface is personality.

A broker must keep which of these funds in his trust account?

Rental monies received

Which of the following is contained in the preprinted portion of a purchase and sale contract?

Preowned home warranty information

A seller approached you saying they are unhappy with the broker currently listing their property and wants you to take it over, you:

Prepare a listing agreement for after the current agreement expires

A person who engages another to act in his/her behalf is called a/an:

Principal

Which of the following is required to have a real estate license?

Property manager specializing in handling buildings in commercial districts

A broker must keep which of these funds in his trust account? Rental monies received Fire insurance premium monies not part of a real estate transaction Commissions received Relocation referral fee

Rental monies received ExplanationA broker must keep all money, belonging to clients or other individuals, in his trust account.

The written disclosure report that must be given in advance to prospective purchasers of real estate interests involving "securities" is called the:

Prospectus

The purpose of the Colorado Real Estate Commission is to:

Protect the public of the state of Colorado in real estate matters

Colorado law provides a homestead exemption to a head of household. This exemption:

Protects the first $60,000 of assets from the creditors unless the exemption is waived.

Under Colorado law, which must a real estate Employing Broker always do?

Provide adequate supervision over the activities of all licensees

Publishing a foreclosure notice of sale in a newspaper is the duty of the:

Public Trustee

Publishing a foreclosure notice of sale in a newspaper is the duty of the: County Treasurer Public Trustee Lender County Assessor

Public Trustee Sale date published for 5 consecutive weeks prior to sale More info: A residential foreclosure sale must be within 110 to 125 days of the recording of the Notice of Election and Demand. For agricultural properties the window is 215-230 days.

An extension of credit from a seller to the buyer to allow the buyer to complete the transaction is called a(n)

Purchase money mortgage

A defect or a cloud of title of a property is best cured by:

Quitclaim deed

FIXTURES ARE

REAL PROPERTY

THE RIGHT A MORTGAGOR HAS TO REGAIN THE PROPERTY BY PAYING THE DEPT AFTER A FORE CLOSER SALE IS CALLED

REDEMPTION

AN OFFEREE HAS THE RIGHT TO DO WHAT ON AN OFFER

REJECT AN OFFER

2 BROTHERS AND THEIR SISTER ARE JOINT TT OWNING A PARCEL OF LAND. SIS CONVEYS HER INTEREST TO A CLOSE FRIEND. AFTER THE CONVEYANCE, THE 2 BROTHERS

REMAIN JOINT TT OWNING A 2/3 INTEREST

The type of real estate investment that must by federal law have a minimum of 100 investors is the

Real estate investment trust

In Colorado, water rights are

Real property rights that may be severed and sold separately from the land

How should you respond if a client asks you about sex offenders in the neighborhood in which they are planning to buy a property? Canvas the neighborhood asking about sex offenders Refer them to the local law enforcement agency that keeps the information Call the police station to get the information for them Tell them the information is protected under "fair housing" disability category

Refer them to the local law enforcement agency that keeps the information You should never provide the information for them just refer them to where to get the information. Liability issue.

Federal Truth-in-Lending laws are also known as Equal Credit Opportunity Act. Freedom of Information Act. Regulation Z Title VIII

Regulation Z DEFINITION OF 'REGULATION Z' from Investopedia A specific Federal Reserve Board regulation that requires debt lenders to disclose all the specifics of a given loan. This was done to promote a level of credit protection for the underlying consumer. Most of the requirements imposed by the 1968 Truth in Lending Act are contained within Regulation Z, and the two terms are often used interchangeably.

The coverage afforded by an owner's title insurance policy

Remains fixed over the time of ownership

A broker must keep which of these funds in his trust account? Rental monies received Fire insurance premium monies not part of a real estate transaction Commissions received Relocation referral fees

Rental monies received A broker must keep all money, belonging to clients or other individuals, in his trust account.

The primary purpose of RESPA is to:

Require lenders to make special disclosures without cost to the borrower, for loans of 4 residential units or less

When a licensee acts as a broker involving an interest in real estate, and is a party to a court action involving that same interest, the Commission may:

Require the licensee to furnish copies of all pleadings

The hold over period may be found in all of the following contracts except?

Residential Contract to Buy and Sell Real Estate

Which of the following forms is not a Colorado Real Estate Commission-approved form? Promissory Note for Deed of Trust Agreement to Amend/Extend Contract Lead-Based Paint Disclosures Residential Lease Agreement

Residential Lease Agreement

The seller under an installment land contract:

Retains legal title

A deed restriction can be placed to help control: type, height, and size of buildings, including square footage land use and setbacks architectural style all of the above

Restrictive covenants set standards for all the parcels within a defined subdivision. More info on Deeds: In Colorado real estate, there are several types of deeds, depending on the type/amount of protection given and received from the seller and buyer. From the Colorado Real Estate Manual: Types Of Deeds There are four major classifications of deeds: (1) General warranty deed, (2) Special warranty deed, (3) Bargain and sale deed, (4) Quitclaim deed. The types of deeds differ solely in the degree of protection that the grantor (seller) promises or warrants to the grantee (buyer). No type of deed transfers any greater or lesser interest than another. For example, if a grantor conveys title in fee simple by a general warranty deed, the same fee simple ownership is conveyed as if he or she had used a quitclaim deed. However, the general warranty deed grantor promises to defend against any loss incurred due to any title defect, whereas transfer by quitclaim deed contains no such warrant. 1. General Warranty Deed. A deed in which the grantor warrants or guarantees title against defects that existed before the grantor acquired title or that arose during the grantor's ownership. It does not warrant against encumbrances or defects arising from the grantee's own acts. The usual covenants or warranties contained in a general warranty deed are: a. Covenant of seizin. Guarantees the grantor's ownership and that he or she has the right to convey it. The fact that the property is mortgaged or is subject to some restriction does not breach this covenant. b. Covenant against encumbrances. Guarantees that there are no encumbrances or claims against the property except those specifically excluded in the deed. c. Covenant of quiet enjoyment. Guarantees that the grantee will not be evicted or disturbed in possession of the property. Threats or claims by a third party do not breach this covenant. The grantee would have to actually be dispossessed before being entitled to seek recovery under this covenant against the grantor. d. Covenant of further assurance. Guarantees that the grantor will procure and deliver any other instruments that are subsequently necessary to make the title good. e. Covenant of warrant forever. Guarantees that the grantee shall have title and possession to the property. Sometimes considered part of "quiet enjoyment". The first two covenants relate to the past, and generally do not generally "run with the land" - meaning that only the current grantee may sue the grantor for a breach. The last three covenants protect against future defect and are said to run with the land - allowing any subsequent grantee to seek remedy for breach against any previous grantor. According to Colorado statute, "Covenants of seizin, peaceable possession, freedom from encumbrances, and warranty contained in any conveyance of real estate, or of any interest therein, shall run with the premises, and inure to the benefit of all subsequent purchasers and encumbrancers." (38-30-121 C.R.S.) 2. Special Warranty Deed. The grantor of a special warranty deed warrants the title only against defects arising after the grantor acquired the property and not against defects arising before that time. 3. Bargain and Sale Deed. Technically, any deed that recites a consideration and purports to convey the real estate is a bargain and sale deed. Thus, many quitclaim and warranty deeds are also deeds of bargain and sale. Bargain and sale deeds often contain a covenant against the grantor's acts, whereby the grantor warrants only that the grantor has done nothing to harm the title. This covenant would not run with the land. Examples of bargain and sale deeds with a covenant against the grantor's acts are an executor's deed, an administrator's deed, and a guardian's deed. 4. Quitclaim Deed. The grantor of a quitclaim deed warrants absolutely nothing. A quitclaim deed conveys the grantor's present interest in the land, if any. A quitclaim deed is frequently used to clear up a technical defect in the chain of title or to release lien claims against the property. Examples of such deeds are correction deeds, and deeds of release.

ALL OF THE FOLLOWING ARE ECONOMIC CHARACTERISTICS OF LAND

SCARCITY' PERMANENCE OF INVESTMENT; AREA OF PREFERENCE

REAL PROPERTY CAN BECOME PERSONAL PROPERTY BY

SEVERANCE

What fee will ALWAYS show as a credit on the sellers closing statement? Recording the Warranty Deed Documentary Fee New Loan Amount Sales Price

Sales Price The seller, not the buyer, recieves the sales price of the property, hence it is always Seller Credit.

The blueprint for closing the real estate transaction is the

Sales contract negotiated between the buyer and the seller

A Ttransaction-broker may NOT do which of the following without ending his/her Transaction broker obligations:

Sell a buyer his own personal residence

Since the right of rescission is 3 days, he will not get the check until 3 business days after the closing which would be Friday

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? Snively's can be entitled to credit for half the insurance proceeds resulting from the damage Snively's broker can wait until the roof is repaired then make a decision whether they want to continue with the contract Snively's can demand that the roof be replaced prior to closing Snively's have an option of whether they will or will not proceed with this contract

Snively's have an option of whether they will or will not proceed with this contract

Stanley has made a legal offer and Riley can hold the check without depositing it until the contract is accepted

Colorado tributary water rights and well permits are administered by the

State Engineer

A RE licensee who shows minority buyers homes located in segregated neighborhoods only, is guilty of:

Steering

When a license law complaint is made to the Commission against a licensee, the licensee must:

Submit a written response to the Commission if requested

AN OWNERSHIP INTEREST BASED ON ANNUAL OCCUPANCY INTERVALS IS A

TIME-SHARE

CERTAIN ITEMS ON THE PREMISES THAT WERE INSTALLED BY THE TENANT AND ARE RELATED TO THE TENANTS BUSINESS ARE CALLED

TRADE FIXTURES

TO ASSIGN A CONTRACT FOR THE SALE OF RE MEANS TO

TRANSFER ONE'S RIGHTS UNDER THE CONTRACT

The owner of a treasurer's deed:

TREASURER'S DEED - Tax PROPERTY TAX - Failure to Pay Property Taxes. ALL COVENANTS / NO WARRANTIES

A Corporation, LLC, Partnership must have E&O insurance for entity and employing broker.

TRUE Every active real estate licensee, including licensed real estate companies, shall have in effect a policy of errors and omissions insurance to cover all acts requiring a license.

To become an employing broker, one must:

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

The existing mortgage loan can have its lien priority lowered through the use of a(n)

Subordination agreement

My claim is settled by a title insurance company, the company acquires all rights and remedies of the insured against any other person who is responsible for the loss. This is called

Subrogation

An uncle left his nephew 2/3 interest & left his nephew's wife 1/3 interest in real property jointly and without the right of survivorship. The nephew and his wife will the assume title to an estate that is classfied: A: community property B. joint tenancy C. tenancy in common D. sole ownership

Tenancy In Common - would be created It is not community property because the interests are unequal. Joint tenancy is impossible due to the unequal interest and lack of surviorship. two or more owners can not create sole ownership. A tenancy in common would be created.

Which of the following leases would best protect the interests of a lessee from a lessor's desire to terminate the lease? Tenancy at will Tenancy for years Tenancy at sufferance Tenancy from month to month

Tenancy for years Tenancy for years has a definite ending date.

estate at sufferance

Tenant remains on the property, without the landlord's permission, after the lease has expired

A tenant rented an town-home, signing a 18-month lease. After the lease expired, the tenant paid 1 month's rent and got a receipt. What kind of leasehold does the tenant have? Tenancy at sufferance Gross lease Tenancy at will Teanancy for years

Tenancy at will A tenancy at will is a property tenure that can be terminated at any time by either the tenant or the owner (landlord). It exists without a contract or lease, and is unspecific in duration or the exchange of payment. A tenancy at will arrangement is desirable to tenants and owners wishing to have the flexibility to change rental situations easily and without breaking a contract. In the question - since the signed lease expired, absent a written replacement, the landlord and tenant were in a tenancy at will arrangement. More info on Leasehold Tenancies: Leasehold Tenancy also known as Nonfreehold Estates A nonfreehold estate is an interest in real property that is less than a freehold estate. Nonfreehold estates are not inheritable and are said to exist without seisin. Seisin denotes ownership: an individual who is "seised" of an estate is the owner of the estate. Also known as a leasehold estate, a nonfreehold estate is created through a lease or rental agreement that can be either written or oral. The holder of a nonfreehold estate (the tenant or lessee) holds no ownership interest in the real property, and only has the right to use the property as established in the terms of the lease or rental agreement. Ownership remains with the landlord (lessor). (To learn more, see Becoming A Landlord: More Trouble Than It's Worth?) Types of Nonfreehold Estates Because nonfreehold estates involve tenants, they are often referred to as "tenancies." There are four types of tenancies: Tenancy for Years This is, also called an estate for years or tenancy for a definite term, is an estate that is created by a lease. A lease is a contractual agreement where a tenant takes a leasehold interest in a real property for a specified duration. The defining characteristic of a tenancy for years is that the term must have a definite beginning and end; that is, a beginning date and either a specific time period (such as one year or one month) and an end date must be declared. As long as a lease is for a definite term, it is identified as a tenancy for years. These leases terminate automatically at the specified end date without the need for notice by either party. Tenancy from Period to Period A tenancy from period to period is an estate that exists when the tenancy is for a definite initial time, but is automatically renewable unless terminated by the lessor or lessee with prior notice that the tenancy is to be ended. These estates, which are also called periodic tenancies, are of indefinite duration since they can be renewed indefinitely. A tenancy from period to period may be from year to year, month to month, week to week or even day to day, and renews for a like period of time. For example, a month to month periodic tenancy is renewable in one-month periods until it is terminated at the end of a month through proper notice by either party. (See also, 11 Mistakes Inexperienced Landlords Make.) Tenancy at Will A tenancy at will, or an estate at will, exists at the pleasure of both the lessor and the lessee. This type of tenancy can be terminated at any time "at the will" of either the owner or the tenant. A tenancy at will lease agreement might contain language that expresses that the lease may be terminated instantly when notice is given. In practice, a tenant is generally entitled to a reasonable amount of time in which to vacate the property. Landlords may prefer a tenancy at will when a property is for sale and any tenants would have to vacate quickly. Tenants may favor a tenancy at will if they plan on renting only for a short period of time; for example, prior to moving or while waiting to move into a new home. Tenancy at Sufferance A tenancy at sufferance is the lowest form of estate known to law. Also called an estate at sufferance, it exists indirectly as the result of circumstance, and is never deliberately created. This type of tenancy arises when a person goes into possession of land in a lawful manner, but remains on the property without any right to do so, and without the owner's consent. The only difference between a tenant at sufferance and a trespasser is that the tenant at sufferance had at one time a right to be on the property, but has stayed beyond the terms of the previous agreement. For example, a tenant who remains after a one-year lease has terminated, without consent or recognition from the owner, becomes a tenant at sufferance. The tenant can be evicted at any time without notice.

The Real Estate Settlement Procedures Act requires

That disclosure be made of all costs prior to closing

What are the procedures that a salesperson must follow she the salesperson decides to terminate his or her affiliation with an Employing Broker?

The Associate Broker has a joint responsibility with the Employing Broker to assure that the Real Estate Commission is notified

Who is responsible for the amount of general property tax an owner must pay?

The County Assessor by setting an assessed value

In Colorado license law, the terms,"Employing Broker" and "employed licensee" means that

The Employing Broker has specific supervisory requirements for all employed Licensees

The Lead-Based Paint Addendum must be attached to each Texas real estate sales contract in connection with the sale of a home:

When a real estate broker negotiates the acquisition of an interest in real estate for his own use:

The Real Estate Commission can suspend or revoke the brokers license if he or she violates the licensing statues or commission rules

Who have given the Real Estate Commission rule-making authority?

The State Legislature

Prepayment penalties are permitted on a loan on residential Homestead property if

The amount charged in the first year does not exceed 3% of the outstanding loan balance

What form signed by the buyer and seller instructs and authorizes the title company to prepare all of the closing documents? The closing instructions Contract to buy and sell real estate Title authorization form The amend/extend form

The closing instructions The closing instructions are signed by the seller at the time the listing is taken and by the buyer when he makes an offer for the property.

What is the status of a broker who moves his office down the street but does not notify the Real Estate Commission?

The broker and all of his agents licenses are inactive

Which of the following is true if a broker negotiates a Success Fee under the Exclusive-Right-to-Buy Contract? The listing broker must pay the negotiated fee at closing. The buyer will pay the fee at closing. The buyer will indicate who is to pay the fee The seller always pays the fee

The buyer will indicate who is to pay the fee he Exclusive Right to Buy agreement is often referred to as the Buyer Agency Agreement. This is the contract used when a buyer wants to engage the services of a buyer's agent. In this agreement, Success Fee is a term used for commission. Since the buyer is engaging the agent, the buyer needs to indicate who is going to pay the agent (buyer or listing broker or seller or anybody but me). The form of this payment needs to be indicated i.e. a percentage of the sale or lease, or an hourly rate, or some other form of compensation. If there is a minimum or maximum amount. If they are paying a retainer. In short, a number of different negotiated items all relating to the commission to be paid.

Liens normally derive their priority from:

The date they are recorded

Which of the following best describes the purpose of a building permit?

The evidence of compliance with municipal regulations

Property taxes become a lein on January 1 for the previous year. When may taxes be paid without receiving a penalty:

The first half payment by the last day of February, the second half payment no later than June 15

Property taxes become a lein on January 1 for the previous year. When may taxes be paid without receiving a penalty: The first half payment by the last day of February, the second half payment no later than June 15 All payments no later than Dec 31 All payments by October 15 half payment by April 1, second half payment by July 1

The first half payment by the last day of February, the second half payment no later than June 15 The first half payment by the last day of February, the second half payment no later than June 15

An interest bearing trust account

The interest may be donated to a qualified affordable housing program

An interest bearing trust account The seller gets the interest The interest may be donated to a qualified affordable housing program The buyer gets the interest The broker gets the interest

The interest may be donated to a qualified affordable housing program In Colorado most earnest money interest is donated to CARHOF. ( Colorado Association of Realtors Housing Opportunity Fund)

You listed PROPERTY USING AN APPROVED EXCLUSIVE RIGHT TO SELL LISTING CONTRACT. You show the property you have listed to a potential buyer and provide that buyers name to the seller in writing. Your listing expires and the Sellers list exclusively with another broker. The buyers return and ask you to prepare an offer on the property. If they buy, who is legally entitled to the commission?

The new listing broker earns it all and may agree to split it with your broker.

How is a buyers earnest money deposit treated at closing?

The obeyer gets credit for the deposit as part of the purchase price

Which is NOT true regarding the Counterproposal form:

The only changes allowed are purchase price and earnest money

Which is not true regarding the Counterproposal form:

The only changes allowed are purchase price and earnest money

If general property taxes have not been paid as of March 1: what is the latest date they may be paid to avoid any interest or penalty?

The latest day of April to avoid interest

John Bargas of Buywell Realty wants to place a listing in the phone book. At a minimum he must list:

The minimum is the employing broker's name (the firm, not the person) Buywell Realty

Any excess funds above those required to pay off encumbrances realized at a foreclosure sale belong to:

The mortgagor

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

A private owner sells 10 acres of his 20 acre parcel and retains the other 10 for his personal use. Which statement is true for this owner There are no restrictions or registration requirements The owner may not sell part of his property only a registered subdivider may divide land The owner is not required to register with the real estate commission but must meet local and state requirements for a subdivision The owner must comply with federal land sales rules

The owner is not required to register with the real estate commission but must meet local and state requirements for a subdivision the sale must be done in compliance with state and local regulations , but the owner does not have to register with the real estate commission.

Which of the following is required in the event of a dispute between the parties relating to the Contract to Buy and Sell

The parties must mediate in good faith to seek a settlement for up to 30 days.

An appurtenant easement

The permanent right to use another's land for the benefit of a neighboring parcel is known as:

Proration

The process by which expenses are handled at the settlement of a real estate transaction so that the buyer and the seller pay their respective portions of the debts is called

Which of the following items are signed by the buyer or seller, or lender and not sent to the county for recording?

The promissory note

An apartment owner wants to convert his twelve-unit complex into time shares. He must register the time-shares with: The real estate commission The Colorado time-share commission The subdivision committee

The real estate commission Subdividing any residential property into 20 or more units for sale, transfer, lease or timeshares must be registered with the Colorado Real Estate Commission.

A real estate investor generally requires higher returns on his investment that he would accept on a savings account because

The real estate investment has a higher degree of risk

The seller agrees to replace the furnace prior to closing. The furnace is replaced, and the deal closes, but the seller failed to pay the contractor. The contractor files a mechanics lien. Who is responsible to pay the lien?

The seller (but could be the buyer). The seller signs affidavit of Title guaranteeing no liens.

A seller listed his house for sale with a broker on February 1. The listing agreement was to last five months. In April, the seller decided that the house was no longer for sale. Which of the following statements are true?

The seller has withdrawn the broker's authority to sell the property and may be subject to reimbursing some of the brokers expenses.

"Liquidated damages" refers to which of the following?

The seller's sole remedy in case of default by purchaser is to keep earnest funds received from purchaser

The closing entity must withhold from the sellers proceeds up to 2% of:

The selling price as a possible income tax liability if the seller is from out-of-state

Which of the following describes the practice of single agency

The single agent broker is client oriented

A deed purports to create a joint tenancy with right of survivorship. Which of the following would cause the deed to create tenancy in common instead?

The three parties agree to divide the property 40%, 30%, 30% between them

The seller's property disclosure indicates the condition of all but which of the following? The appliances The title The heating and cooling system The electrical system

The title The title to the property is address in the Exclusive Right to Buy Sell Real Estate (AKA the Purchase Contract)

Colorado Use Tax would apply to:

The transfer of personal property in a business or income residence.

The conditions of a nonjudicial (power of sale) foreclosure include which of the following

The trustee may sell the property for the benefit of the beneficiary

The X and Y coordinate system is a method of describing land used in Colorado. This method of describing land:

The x and y coordinate system divided the state into 3 zones each containing 1/3 of the counties: the northern zone, central zone and the southern zone.

What does a Tax Reserve entry on line 19 of the settlement worksheet indicate?

There is an existing loan being assumed with a reserve balance to transfer the buyer.

A broker has developed a web site advertising the brokers office. What, if anything, does the broker need to include?

There is no need for any additional disclosures. As long as the public can clearly identify the brokerage entity, the requirements are satisfied.

How are court costs and legal fees handled if a dispute over the Residential Contract to Buy and Sell goes to court? They are split evenly between the parties. They are awarded to the winning party. They are awarded to the broker. They are awarded to the losing party.

They are awarded to the winning party.

Which of the following is true of brokers working for buyers under the Exclusive-Right-to-Buy Contract?

They may negotiate an hourly fee to be paid in addition to any other compensation agreed upon.

What recourse do the buyers have if they determine that property they have contracted to purchase is within a special taxing district?

They may terminate the contract by written notice to the seller. Explanation Termination requires written notice of intent to terminate and the buyers must provide written notice to the seller no later than the Off-Record Matters date

Which of the following is true about licensees filling in blanks on a standard commission-approved form? This is the practice of law and must be done by attorneys. This is not the practice of law. This is the practice of law but it is specifically permitted by Colorado law. This must be done entirely with preapproved standard clauses.

This is the practice of law but it is specifically permitted by Colorado law. The Colorado Supreme Court issued a decision that the practice of filling in blanks by real estate licensees is authorized, but that it still constitutes the practice of law.

According to statute, "good funds" include a:

Title insurance corporate check (verifiable).

In a buyer-agency situation, what responsibility does the agent have to the principal? To be vicariously liable for their actions To pay a commission To disclose psychologically impacting events surrounding a property To be an advocate of the buyer's best interests

To be an advocate of the buyer's best interests A buyer agency relationship establishes advocacy, of the buyer's best interest; (it is a fiduciary responsibility).

n which of the following instances would you use the Agreement to Amend/Extend Contract?

To change the loan application deadline in an accepted purchase contract

In which of the following instances would you use the Agreement to Amend/Extend Contract?

To change the loan approval date in an accepted purchase contract

The approved Agreement to Amend/Extend contract form is used:

To get mutual agreement of the parties to any change in a deadline

a quit claim deed be the most appropriate type of deed to use

To remove a cloud on title

Of the following brokerage relationships, which one does not include the duty of advocacy for the principal?

Transaction Broker Explanation Transaction Brokers are only a neutral referee for the transaction doing the paperwork, they do not not take sides for either party. For a Broker to be an advocate, (s)he must be the Clients' agent i.e. a Buyers Agent or a Sellers Agent. FYI - Dual Agency is illegal in Colorado.

The "Additional Provisions" section of the Contract to Buy and Sell Real Estate may include:

Transaction specific items resulting from negotiations or instructions of the parties to the contract Explanation The additional provisions sections is a blank area in which Brokers have broad discretion to enter any necessary language. However, the clauses inserted must be a product of the buyers and sellers negotiation and not language, for example, benefiting the Broker.

When an escrow account is established to hold money belonging to others, what word must it contain?

Trust or Escrow

THE PHYSICAL CHARACTERISTICS OF LAND INCLUDE INDESTRUCTIBLE, IMMOBILE AND

UNIQUENESS

THE CO BUILT A VERY LARGE COMPLEX OF BLDS FROM WHICH IT OPERATES WORLD WID. HOW CAN THE CO EXTRACT THE MAX AMT OF MONEY FROM THESE REAL ESTATE HOLDINGS

USE SALE AND LEASE BACK

IN PA, SALESPERSON MAY ADVERTISE A PROPERTY FOR SALE ONLY IF THEY

USE THE EMPLOYING BROKERS NAME IN THE ADVERTISEMENT

If a property is sold for unpaid taxes, how long does the owner have to redeem

Up to three years from the date of the tax sale

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 surveyer to verify property boundaries Use of Legal and Tax Counsel

Use of Legal and Tax Counsel Brokers are required to recommend use of legal and tax counsel to their clients. This is accomplished through the following verbiage: From the Contract to Buy/Sell Real Estate; RECOMMENDATION OF LEGAL AND TAX COUNSEL. By signing this Contract, Buyer and Seller acknowledge that the respective broker has advised that this Contract has important legal consequences and has recommended the examination of title and consultation with legal and tax or other counsel before signing this Contract.

Using the income approach, calculate the value of a property having a net income of $250,000 using a capitalization rate of 10%

TO BE ENTITLED TO COLLECT A RE COMMISSION, BROKERS MUST BE ABLE TO PROVE ALL OF THE FOLLOWING

VALID RE BROKERS LICENSE; PROCURING CAUSE; ARE EMPLOYED TO PERFORM CERTAIN ACTIVITIES

On October 2 a buyer made an offer, which he agreed to keep open for three days. The seller made a counter offer, which the buyer rejected. The seller then accepted the original offer. The status of the original contract is:

VOID The seller's counter offer has the effect of rejecting the original offer. The seller cannot later change his mind and accept it.

A CONTRACT AGREED TO UNDER DURESS IS

VOIDABLE

A LL LEASES STORE SPACE TO A TENANT FOR A RESTAURANT. THE TT INSTALLS OVENS, BOOTHS, COUNTERS, AND OTHER ITEMS. WHEN DO THESE ITMES BECOME REAL PROPERTY

WHEN THE LEASE EXPIRES

When must an employing broker keep a ledger? When paying salaries to brokers When putting money in an account to maintain it When accepting money belonging to others When receiving an earned commission

When accepting money belonging to others What is a "Ledger"? A record collectively called a "ledger" or an equivalent component of an accounting system which records in chronological sequence all money which is received or disbursed by the broker on behalf of each particular beneficiary of a trust account. This record must show the monetary transactions affecting each individual beneficiary and must segregate such transactions from those pertaining to other beneficiaries of the trust account. The Real Estate Commision does not require a ledger when an Employing Broker is only managing company money. However, if s/he accepts money belonging to others both an escrow account and a ledger for that account is required. If an employing broker does not take physical possession of earnest money (buyers write checks directly to the title company), rents (written directly to owners), security deposits (written directly to owners) and such; then the emplying broker does not need an escrow account. If s/he does not need an escrow account; s/he does not need a ledger.

Under what conditions is it permissible for a broker to pay a referral fee to a person who does not possess a Colorado real estate license? Under no conditions When the duties performed by that person would not normally require a real estate license Only if the unlicensed person is in the employ of and under the direct The unlicensed person may perform any duty deemed acceptable by the broker and receive a referral fee, if permission is granted by all interested parties, and so stipulated in writing

When the duties performed by that person would not normally require a real estate license Colorado law states that you can pay a referral fee to an unlicensed individual as long as that person does not perform an activity requiring a license. RESPA adds a twist that no referral fees may be paid by or to anyone providing settlement services at the closing. Check out Commission Position 2 on Earned Fees for the Real Estate Commission discussion on the topic.

You are a Buyers Agent for the purchase of a home. When may you sign and present an offer to the purchase of behalf of your buyer?

When you have a written and signed Power of Attorney giving that authority

When would a business opportunity not need a real estate license?

Whenever the transfer involves no real estate nor any rights to real property.

Which type of insurance coverage insures the property owner against the claims of employees injured while on the job?

Workers compensation

An encumbrance issued by a court on a property of a defendant in a pending lawsuit for money damages is called an:

Writ of Attachment

Th Inclusions and Exclusions section of the Residential Contract to Buy and Sell calls for inclusion of:

Windows covers, fireplace screens and grates, parking and storage facilities as described in a condo community.

A broker enters into an exclusive right-to-buy contract with a purchaser. The purchaser finds a satisfactory property and makes an offer, which is accepted. The listing broker is unavailable during much of the transaction and the selling broker performs several of the listing broker's responsibilities. In gratitude, the seller offers a $500 bonus to the selling broker. When is it acceptable for the broker to receive this money?

With full written disclosure to both parties

Which of the following statements is true concerning agency?

Written agreement establishes agency

A buyer is concerned that new construction a mile away could have a negative environmental impact on the home they are considering purchasing. Can they make the Contract to Buy/Sell contingent on the result of an environmental impact report? No, it is impossible to determine the negative impact of construction a mile away Yes, you can make a contract contigent on anything

Yes, you can make a contract contigent on anything This is a matter of negotiation between the buyer and seller. The law has no jurisdiction on matters of negotiation between a buyer and seller.

If you have an Exclusive Right-to-Sell Listing Contract:

You have permission to work with other sellers at the same time.

According to Commission Position 31 Acting as a Transaction Broker, you cannot be a Transaction Broker for:

Your brother, Your close friend, Your best client

C.C. & R.'s are appurtenances to real property. The harshest consequences results from the violation of which of the following?

a covenant

The Equal Credit Opportunity Act is

a federal law prohibiting those who lend money from discriminating against borrowers based on race, sex, color, religion, national origin, age, or marital status

A power of attorney appoints:

a fiduciary as attorney-in fact

a five-day right of rescission No developer shall employ a contract that contains a provision waiving a buyer's right to such a cancellation period. This cancellation period runs until midnight on the 5th day following execution of the contract.

A broker is entitled to pay a commission to:

a licensed broker in another state

An agency relationship may be established by:

a written agreement

An agency relationship may be established by: a written agreement an oral agreement Approval of the employing broker written disclosure

a written agreement Agency relationships must be in writing.

It is not appropriate for a listing broker to:

accept a listing at a higher price, knowing your can reduce it later

The real estate broker is liable to the buyer if he:

acts in excess of the authority given by his principal

all of the above Unless otherwise agreed by the buyer and seller, the earnest money must be deposited in the brokers trust account.

A lender requires the use of a Name Affidavit to identify:

all of the alias' used by the borrowers

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.

Which of the following agreements is required to be in writing in order to be enforceable? a) a partnership agreement b) an agreement by a buyer to assume an existing real estate loan c) a lease of real property for one year d) a listing to sell a personal property mobilehome

an agreement by a buyer to assume an existing real estate loan

The License Buyout Addendum to the Contract to Buy and Sell is required for which of the following situations?

an associate is offering a guaranteed buyout arrangement as an inducement to list with his or her company

When an initial contract for sale of property is different than the contract forms approved by the Colorado Real Estate Commission, the contract should be prepared by: broker representing the seller a real estate attorney broker representing the buyer an attorney representing one of the parties to the contract

an attorney representing one of the parties to the contract An attorney of the buyer, the seller, or both, must prepare contract.

Which of the following parties would be most likely to file an unlawful detainer court action? a) a real estate broker enforcing a listing contract b) a defaulting trustor c) a subagent of the selling agent d) an offended lessor

an offended lessor

All of the following liens must be satisfied in order to transfer clear title except: judgments federal tax liens mechanic's liens assumed mortgage

assumed mortgage Judgments and tax liens must be satisfied in order to transfer clear title.

The Certificate of Taxes is:

assurance from the county of any taxes due.

The purpose of the Colorado Real Estate Commission approving a variety of standard forms for the use by licensees is to:

assures the broker's compliance with the Conway-Bogue decision by the Colorado Supreme Court.

Upon receiving your first license, it will: automatically renew on December 31st, of the year you receive it for the following three years be good for three years expire on December 31st, of the year you receive it state your name as independent broker

be good for three years

Earnest money is held in a trust account on behalf of:

both buyer and seller.

Seller is giving the buyer a contingency but doesn't want to be stopped from selling forever. The seller should consider:

countering with an escape clause

A real estate sales contract is not effective unless it is signed by: the buyer the seller both the buyer and the seller either the buyer or the seller

both the buyer and the seller Only the seller signs the deed. To be valid, a sales contract MUST be signed by the seller. The buyer usually also signs the contract. The obvious and best practice is for both parties to sign it

If an owner refuses to pay a broker an earned commission, the broker may properly seek relief by:

bringing a court action

Advocacy of the principal is a benefit of which of the following relationships?

buyer or seller agency

When a contract is rejected by the Seller, the seller should:

check the appropiate box and initial on the indicated line

A claim or interest revealed by a title search is called a:

cloud on title

An unlicensed personal assistant would be permitted to do which of the following? host an open house while the licensed associate is showing another listing and try to negotiate an offer complete contract forms after the licensed associate has captured the important things like price and closing date show a property to a potential buyer when the licensed associate is busy and negotiate price and terms for their offer. complete a comparative market analysis for presentation by the licensed associate

complete a comparative market analysis for presentation by the licensed associate Unlicensed assistants cannot do licensed activities, such as negotiating, providing advise or signing contracts A license is not required for completion of a market analysis as the licensed agent is presenting it.. An unlicensed assistant can show a home. Their restrictions are simply to provide access to the property and confine real estate conversation to info on materials already published by the licensed agent. Which means they can answer a question on the price of the home (that is published on the MLS or in ads) but not answer a question related to "What do you think they will take?" (that answer is a licensed activity). In real life this is a very controversial topic as listing agents generally do not like the idea of unlicensed people taking strangers through their homes

When a tenant terminates a lease because the landlord has not furnished hot water for two months, it is called what type of eviction. forced constructive cooperative absolute

constructive When a tenant early teminates a lease because they claim the property is not habitable, it is called a constructive eviction. There are strict rules and regulations regarding Constructive Evictions in Colorado. They are detailed under the State's Warranty of Habitability which outlines under what circumstances may a property be declared uninhabitable and what steps must be taken by the tenant to perform a constructive eviction to be legally released from a lease.

The covenant implied in a lease that ensures that the tenant will not be evicted by someone claiming prior ownership to that of the lessor is the:

covenant of quiet enjoyment

Ann aquies title as a single female. Ann subsequently marries. Ann then sells the property, signing her married name to the grand deed. This:

creates a cloud on the title.

Mr. Jones has a property valued at $150,000. The 2003 taxes were 27.65 mills. In 2004 the mill levy was reduced to 25 mills but the assessed value increased 10%. Did the taxes:

decrease

Broker attends client closing. What must he/she do with signed closing documents?

deliver immediately to Employing Broker

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 Dates in the contract can result in the contract being terminated or the parties may mutually agree to amend or extend.

Keeping track of earnest money funds received in the course of a transaction is usually: the responsibility of the listing agent the responsibility of the selling agent determined by mutual agreement in accordance with the contract the responsibility of the listing broker

determined by mutual agreement in accordance with the contract The contract to purchase stipulates who will hold the earnest money.

If a member of the public suffers any loss, due to the lack of care or knowledge or skill, which a competent real estate broker should possess, that person can hold the broker liable for such loss through: civil action before the Real Estate Commission disciplinary action before the Real Estate Commission criminal action before the Real Estate Commission civil and disciplinary action before the Real Estate Commission

disciplinary action before the Real Estate Commission The public can request and brokers can be subject to disciplinary action before the Real Estate Commission. Only courts can rule on civil actions and assess damages.

The Definitions of Working Relationships form has the effect of:

disclosing the different types of relationships that are available

Interpretation of the title commitment should be done by: an attorney the title company either an attorney or the title company the listing broker

either an attorney or the title company The licensee should not represent themselves as an expert in title commitments and should refer the purchaser to someone qualified to answer their title questions.

What qualifies as "Good Funds"?

electronic transfer funds, certified check, savings and loan teller's check and cashier's check (Good Funds).

The Closing Instruction form

engages a closing service on behalf of the buyer and seller

The function of a pro forma statement is to:

establish a one-year budget for the property

A commercial lease is terminated by: sale of the leased premises death of the tenant abandonment of the landlord expiration of the term of lease

expiration of the term of lease A lease is terminated when it expires. Sales are made subject to the lease, and a lease is treated as personalty and passes to the heirs of a deceased tenan

A real estate licensee generally acts as:

fiduciary

An in-company transaction is not one in which a broker:

has an agency listing, and the cooperating broker is a transaction broker.

Upon acceptance by the seller of a Purchase and Sale Agreement, the buyer:

has an equitable interest in the property

Any individual who illegally acts as a broker by failure to obtain a real estate license

has committed a misdemeanor

A brokers office must

have a physical address where the commission staff can inspect records

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 Trust accounts must be in Colorado, name the broker as owner of the accounts and be reconciled monthly. T

The inspection is set for March 18. The buyer is unable to have it done by this date.

if the date passes, the property is deemed acceptable

If an agent forgets to renew her license and submits the application to renew 30 days late. The status of her license during this 30 day period is: active suspended expired inactive

inactive On the date a license expires, for the following 30 days it is placed into an "inactive" status and may be renewed by paying the regular renewal fee. After 30 days it is placed into an "expired" status. Renewing an expired license requires the payment of additional fees and satisfying additional educational requirements.

You notice water stains on the ceiling in your listing. As a transaction-broker, you duty is to:

inform the sellers and disclose to the buyers what you saw.

Under an owner's title insurance policy, the insurance company is

insuring that the owner has good and indefeasible title

In Colorado, who of the following is exempt from real estate license law? Property Manager renting single family home for a variety of owners Investor who owns 12 investment properties and sells one to an owner-occupant. Inactive licensee assisting a friend in filling out a purchase offer. Attorney at law collecting a five percent commission for helping

investor who owns 12 investment properties and sells one to an owner-occupant. rivate owners may always act for themselves and are not subject to real estate license laws. Attorneys are normally exempt from real estate license law while practicing law but must have a license to act as a broker. An inactive licensee is still bound by all rules of the commission, and the right-of-way specialist is exempt only for certain specific activities.

A broker's submission of a listing to a multiple listing service (MLS)

is an offer of cooperation and compensation to all other broker members

If the owner signs a listing contract and subsequently dies, the listing

is binding upon the estate

If a licensee develops an addendum to the Contract to Buy and Sell, he:

is in violation of Rule F. YOU CANNOT MAKE YOUR OWN.

The amount of commission a listing broker offers to cooperating brokers: is specified by antitrust law is inserted into the listing contract is regulated by MLS is determined by the actual costs the respective brokers incur

is inserted into the listing contract Commissions are negotiable and included in the listing contract.

The Interstate Land Sales Full Disclosure Act stipulates that:

it requires developments to be registered if they are selling more than 100 lots or condominiums

make no disclosure regarding psychologically impacted properties

According to RESPA, lenders must provide to applicants:

maximum amounts that could be collected at time of closing

Loan discount points

may be paid by the buyer, seller, or a combination of the two.

On what time basis must trust accounts be reconciled:

monthly

A lease in which the tenant pays rent plus maintenance and property charges is a gross lease. fee simple estate. net lease. percentage lease.

net lease. lease in which the tenant pays rent plus maintenance and property charges is a net lease.

A broker is required to disclose any psychologically stigmatizing factors actually known by the broker when he is acting as: a single agent a buyer's agent a transaction broker never

never

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:

not allowable It is illegal for a broker to charge a fee for the preparation of legal documents;

In order for property taxes to not be subject to penalties, but to be considered timely paid, they must be paid or postmarked

on or before January 31 of the year following the tax year for which they are due

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 A non-resident broker is required to open a trust account in a recognized Colorado depository when taking money belonging to others that pertain to properties in Colorado.

Fred would like to open a retail store in the new shopping mall. The type of lease he is most likely to get would be a:

percentage lease

In Colorado, personal property taxes apply to

personal property used in business, such as office furniture or copy machines?

A map showing the location and sizes of streets and lots in a subdivision is called a: survey gridiron plan plat of a subdivision property report

plat of a subdivision The gridiron and curvilinear patterns are street patterns that affect open and recreational development.

After a foreclosure sale, the lender receives the:

proceeds of that sale up to the outstanding debt plus court and collection costs.

Taxes for the current year are usually: prorated and charged to the seller and credited to the buyer at closing a bill is sent to the seller when they are due, and they may forward it to the buyer to pay their share paid by the Title Company as part of the title insurance split 50/50 by buyer and seller since that is the easiest and most equitable way to do it

prorated and charged to the seller and credited to the buyer at closing Since taxes are paid in arrears the seller pays are prorated for the period of time the seller has lived in the property, and is shown on the settlement statement as a debit to the seller and a credit to the buyer since the buyer will be paying the taxes at the end of the year.

The Colorado Real Estate Commission was formed to:

protect the public

The title commitment is used for all of the following purposes except to: disclose liens against the property guarantee the buyer marketable title disclose unpaid judgments against the seller provide a history of transactions related to the property

provide a history of transactions related to the property This called the chain of title and is only included in an abstract.

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

In Colorado, water rights are:

real property rights that may be severed and sold separately from the land. Always check the deed to ensure water rights are on there!

Water rights in Colorado are

real property transferred by deed

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

If your Contract to Buy and Sell does not need the Seller or Private Financing Section, you as broker may do all of the following except:

remove the section in its entirety as it is not applicable

A buyer's agent should do all of the following except: search out appropriate properties for the buyer never encourage the buyer to view properties or attend open houses on their own be available to show the buyers properties at the convenience of the buyer reveal the buyer's motivation to the listing agent

reveal the buyer's motivation to the listing agent A broker must be available for the buyer, must search out appropriate properties and should not encourage buyers to view homes on their own. (REM 13-5)

In respect to the sale of items or services other than real estate, when does an employed licensee process fees through the employing broker?

revenues received by non-brokerage/ non-real estate transactions do not need to pass through the hands of the broker

The return of the rights of the possession and quiet enjoyment to the lessor at the expiration of a lease is known as: recision revision reversion restoration

reversion Reversion or a reversionary interest REVERT back to the lessor at the end of the lease. This also applies to life estates. In general a reversion is an interest in an estate that reverts to the grantor or his heirs at the end of a period

The return of the rights of the possession and quiet enjoyment to the lessor at the expiration of a lease is known as: revision recision reversion restoration

he lessor retains a right to possession after the lease term expires. restrictive constructive personal reversionary

reversionary The lessor retains a reversionary right to possession after the lease term expires.

When using a Counterproposal form, the client submiting the counterproposal would: sign the original offer and check the "is countered" box sign only the counterproposal generate a new contract to purchase sign the original offer, check the "is countered" box and sign the counterproposal

sign only the counterproposal The client submitting the counterproposal would not sign the original purchase offer. The client would instead check the box at the bottom of the offer indicating that the offer is countered, initial same where indicated and sign only the Counterproposal.

One of the requirements of a valid deed is that the deed be:

signed by the grantor

As agent for a principal, a real estate broker can:

solicit an offer to purchase from a prospective buyer

RESPA is

the Real Estate Settlement Procedures Act which applies mostly to lenders

An associate broker may operate from:

the address on his license Your license must be in your broker's office, where you work.

Under 12-61-801, C.R.S., the public and the real estate broker should engage in terms and conditions that are acceptable to: the broker the public (buyers and sellers) the broker and the principal the broker and the customer

the broker and the principal A broker must only offer brokerage relationship that he or she chooses. 12-61-801, C.R.S. address the issue of being able to engage any such real estate broker on terms and conditions that the public and the real estate broker find acceptable such as single agent, subagent, dual agent, or transaction broker.

Under Colorado license law, the terms "employing broker" and "employed broker" mean:

the employing broker has specific supervisory requirement for all licenses.

If a licensee fails to complete the continuing education requirements by the renewal date:

the license is placed on inactive status

Which of the following is required before an owner of a 35-parcel of undeveloped land may drill a well for water only?

the owner must obtain a well permit from the state engineer

The tenant may remove trade fixtures that have been affixed to a building if:

the space is restored to its original condition

If a printed form says one thing, but typing in a blank space says something contradictory:

the typing prevails

What is the purpose of the TD-1000?

to ensure fair and uniform property assessment for real estate tax purposes

A broker acting as a transaction broker for a buyer, with no written agreement needs:

to provide the buyer with a copy of the "Brokerage Disclosure to Buyer" with the broker's signature showing the date it was given to the Buyer.

Colorado State income tax liens have priority over all subsequent liens.

true, and can continue for six years unless paid

If the amount realized at a trustee's sale as part of a deed of trust foreclosure is more than the amount of the indebtedness and expenses, then the excess is reimbursed to

trustor

rue/False - According to Commission Position 40 on Teams, Real estate brokers that function as teams should not advertise teams using the terms "realty", "real estate", "company", "corporation", "corp.", "inc.", "LLC" or other similar language that would indicate a company other than the employing brokerage firm. True False

true CP-40 Commission Position on Teams (4-5-2011) The Commission recognizes that there are benefits to both real estate brokers and consumers in the usage of real estate broker teams. Teams may be formed within a licensed brokerage firm with the approval of the employing broker. Real estate brokers operating as teams need to ensure that they are compliant with Commission rules regarding advertising, name usage and supervision. Advertising and name usage: While there is no prohibition of teams, real estate brokers need to ensure that they do not advertise in a manner that misleads the public as to the identity of the brokers' licensed brokerage. Real estate brokers that function as teams should not advertise teams using the terms "realty", "real estate", "company", "corporation", "corp.", "inc.", "LLC" or other similar language that would indicate a company other than the employing brokerage firm. Advertising includes, but is not limited to, websites, signage, property flyers, mailings, business cards, letterhead and contracts. The advertising of team names should never give the impression that the team is an entity separate from the licensed real estate brokerage. If the identity of the employing broker or the brokerage firm is difficult for the public or the Commission to ascertain, the team may be in violation of Rule E-8 Advertising. Supervision: In addition to the supervision requirements set forth in Rules E-31 and E-32, Rule E-30 Employing broker responsibilities requires that the broker designated to act as the broker for any partnership, limited liability company or corporation, i.e. the employing broker, fulfill the following duties: 1) Maintain all trust accounts and trust account records; 2) Maintain all transaction records; 3) Develop an office policy manual and periodically review office policies with all employees; 4) Provide for a high level of supervision for newly licensed persons pursuant to Rule-32; 5) Provide for a reasonable level of supervision for experienced licensees pursuant to Rule E-31; 6) Take reasonable steps to ensure that violations of statutes, rules and office policies do not occur or reoccur; 7) Provide for adequate supervision of all offices operated by the broker, whether managed by licensed or unlicensed persons. Pursuant to §12-61-118, C.R.S. and Rule E-29, employing brokers are also responsible for providing supervision over such activities with reference to the licensing statutes and Commission rules for all brokerage employees, including but not limited to administrative assistants, bookkeepers and personal assistants of licensed employees. Thus, employing brokers are responsible for the actions of unlicensed persons who perform functions within the real estate broker team. Employing brokers need to ensure that any unlicensed person acting within the team is not engaged in practices that require a real estate broker's license. Employing brokers also need to establish that the compensation paid to an unlicensed person for services provided is not in the form of a commission. Compensation paid to an unlicensed person is not required to to be paid solely by the employing broker. However, §12-61-117, C.R.S. requires that all licensee compensation or valuable consideration for the performance of any acts requiring a broker's license is paid solely by the employing broker.

Assumption of a existing hazard insurance policy is

uncommon due to problems with coverage and insurance contracts

When must a broker disclose relationships:

when discussing financing with a customer.

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