Real Estate Course: Exam Prep Master
Once the Commission has received a complaint against a licensee, which of the following us TRUE? 1 The Commission will investigate and determine whether to set a hearing. If it decides the complaint is improper or there is no reasonable cause that the violation occurred, it will publish an order to that effect. 2 The Commission will automatically set a hearing between the licensee and plaintiff. 3 The Commission will turn the matter over to the Association of Realtors for investigation. 4 The Commission will not investigate a complaint until a 14-day "cooling off" period has passed, after which it may determine whether to set a hearing.
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Which of the following statements is TRUE regarding in-house agency relationships in the state of Indiana? 1 2 agents in the same office may, under Indiana law, represent 2 different clients. 2 The principal broker or managing broker is the person considered to be representing the same client as the licensee assigned to his office. 3 All in-house agency relationships must be in accordance with the definition of a limited agency. 4 Confidential information disclosed by a client may be shared with other licensees at the same office under the rules of an in-house agency relationship.
1: 2 agents in the same office may represent 2 different clients in the same transaction (1 represents the buyer and 1 represents the seller), and limited agency does not apply here.
Patricia helps the Meyer family negotiate for their dream home. The Meyers then ask Patricia for help in securing their mortgage. Patricia knows a lender that pays a referral fee. Should she refer her buyers to this lender? 1 No, because an Indiana salesperson may only receive compensation from her broker. 2 Yes, but only if the lender guarantees the market's best interest rates and terms. 3 Yes, if Patricia discloses in writing to the Meyers that she will receive a referral fee for her actions. 4 Yes, if Patricia and the Meyers have entered into a written agency agreement.
1: A referral fee from a lender to a licensed Indiana salesperson, even handled under the table, so to speak, is wrong. Patricia's only compensation for her hard work must be only from her employing broker.
Which of the following is a TRUE statement regarding advertising requirements in the state of Indiana? 1 Advertising that carries a licensee's name must also contain the name of the principal broker or firm. 2 Display advertising must contain the name of the principal broker or firm, but this is not the case in a classified ad. 3 Internet advertising is exempt from advertising rules that require the name of the principal broker or firm. 4 Advertising placed by a managing broker does not need to contain the name of the principal broker.
1: Any type of advertising, print, electronic or broadcast, placed by any licensee assigned to a principal broker MUST contain the principal broker's name or firm.
Under what circumstances is a broker required to place his own money into an escrow account? 1 To cover account charges made by the financial institution to maintain the account as active. 2 To keep safe parry cash used for day-to-day purposes within the broker's office. 3 To be used as bonus reward money for employed salespersons. 4 To be kept in reserve and paid to the Commission to renew the brokerage's business license.
1: If an escrow account is subject to service charges which must be paid by broker, the broker may maintain $100 of personal funds in an account to cover such charges.
What happens to an agent's license after a payment is made from the Recovery Fund due to the licensee's improper activities? 1 The Commission will suspend or revoke the agent's license. 2 The Commission may increase the licensee's next license renewal fee to $1,000. 3 The Commission may add 5 "penalty points" to the agent's license. 4 The Commission will take no action if the licensee repays the recovery fund within 30 days.
1: If the Commission is required to make any payment from the recovery fund in settlement of a claim, the Commission shall suspend the judgment debtor's license.
Walter, an Indiana licensee, finds a ready, willing and able buyer for his listing with Rose. Rose accepts the buyer's offer in writing, but then decides she really does not want to sell her home. Rose withdraws the acceptance. Which of the following statements is TRUE regarding Walter in this particular situation? 1 Walter is entitled to collect a commission from Rose. 2 Walter may retain the earnest money deposit from the buyer as commission. 3 Walter is without recourse, because the transaction never closed. 4 Walter may sue the buyer for his commission.
1: Since Rose accepted the offer in writing, the broker is entitled to receive compensation in the form of his commission. A change of heart simply does not cancel the transaction, because Rose accepted the offer in writing. The broker may sue Rose to collect that commission.
A real estate salesperson refers buyers to a particular lender knowing that the lender pays a fee for referrals. Which is TRUE? 1 The salesperson has acted injudiciously. 2 The salesperson is well within the bounds of legal business practice if a written buyer agency agreement exists. 3 The salesperson has acted in the best interests of the buyers if the lender offers a competitive interest rate and reasonable terms. 4 The salesperson may do so only upon informing the buyers of the referral fee.
1: The salesperson acted unwisely in this instance because only the employing broker can provide compensation. Referral fees from lenders are illegal.
Under which of the following circumstances may an Indiana licensee represent and be associated with more than 1 Indiana principal broker? 1 This is not allowed under any circumstances. 2 The licensee may do so with written consent from both principal brokers. 3 The licensee may do so with the written permission of the Indiana Real Estate Commission. 4 The licensee may do so if she shows proof that she is in desperate need of income.
1: Under Indiana real estate law, a licensee may represent and/or be associated with only 1 principal broker at a time.
Which of the following accurately describes the relationship between the principal broker and the associated licensee, under Indiana real estate law? 1 The relationship is presumed to be an independent contractor relationship, unless there is an agreement to the contrary. 2 There is no legal presumption of a relationship. 3 It is presumed to be an employer-employee relationship unless there is an agreement to the contrary. 4 It is a client-fiduciary relationship.
1: Unless there is an employment contract that specifies another employment arrangement, a licensee associated with and assigned to a principal broker is considered to be an independent contractor.
What is the minimum age for an individual to be allowed to enter into a legally enforceable contract (with no exceptions) in Indiana? 1 21 2 18 3 25 4 16
2: 18 years is the legal age required for entering into a non-voidable contract in the state of Indiana.
Under Indiana real estate license law, when does a licensee become a limited agent? 1 The licensee becomes a limited agent when he shows a property he previously had listed, but is now listed with another brokerage firm. 2 The licensee becomes a limited agent when he shows only his listings. 3 The licensee becomes a limited agent when he shows a property listed with another brokerage firm. 4 The licensee becomes a limited agent when he shows an in-house listing that is listed with another agent.
2: A licensee becomes a limited agent only when he shows his own listings, the listings of his principal broker or the listings of his managing broker.
Marvin, an Indiana broker, signs a listing agreement with a seller. The agreement contains the following: "If the listed property has not sold after 3 months from the date of this signing, this agreement will automatically renew for additional 3-month periods thereafter until the property is sold." Which of the following is TRUE? 1 The listing agreement is legal, because it does refer to a time limit. 2 The listing agreement is illegal, because it automatically renews. 3 The listing agreement is illegal, because it includes renewal periods that are for more than 30 days. 4 The listing agreement is legal, because the renewal periods are for less than 6 months.
2: A listing agreement must include a definite date of expiration and not just a renewal period. This particular listing agreement does not include a definite date of expiration, and is therefore illegal.
Whitney is a broker who violated the license law, and her actions resulted in monetary damages to a client. Which of the following is TRUE regarding the time frame the injured party has to file a lawsuit that may result in payment from the Indiana Recovery Fund? 1 The injured party must file the lawsuit within 1 year after the alleged violation occurred. 2 The injured party has 2 years after the alleged violation to file the lawsuit. 3 The injured party has 6 months to file a lawsuit after the alleged violation took place. 4 The injured party has 30 days to file a lawsuit after the alleged violation occurred.
2: According to the Indiana Statute of Limitations, the injured party (client) has 2 years from the time of Whitney's alleged violation to file a lawsuit and attempt to receive payment from the Indiana Recovery Fund.
When must a real estate salesperson in Indiana renew his or her real estate license? 1 A salesperson must renew his or her real estate license by March 31st of every odd-numbered year. 2 A salesperson must renew his or her real estate license by June 30th of every even-numbered year. 3 A salesperson must renew his or her real estate license by December 31st of every odd-numbered year. 4 A salesperson must renew his or her real estate license by December 31st of every even-numbered year.
2: An Indiana salesperson must renew his or her real estate license by June 30th of every even-numbered year following the year in which it was issued or last renewed.
Anna is an associated salesperson who is unable to collect a commission from her Indiana principal broker. What recourse does she have? 1 Anna may seek court action to freeze her broker's escrow account. 2 Anna may file a civil lawsuit. 3 Anna has no recourse. 4 Anna may file a claim against the recovery fund.
2: Anna's only recourse would be to file a collection suit in civil court in order to collect her commission.
Which of the following is NOT a requirement for becoming a real estate broker in Indiana? 1 Be at least 21 years of age. 2 Have at least 5 years' continuous experience working in real estate in the period preceding the application. 3 Have successfully completed an approved broker course of study. 4 Have passed a written examination prepared and administered by the Commission.
2: Candidates for a broker license must have 1 year's continuous experience working in real estate in the period preceding the application.
Tina's listing agreement with her seller expired, and now the seller has listed her home with a different brokerage firm. Soon after, however, a buyer working with Tina decides he is interested in said property. Which of the following statements is TRUE? 1 Tina must excuse herself from representing her buyer. 2 Tina may not disclose confidential information to the buyer regarding the seller. 3 Tina is automatically considered a limited agent. 4 Tina does not have to disclose to the buyer any information regarding the physical condition of the property.
2: Confidential information regarding a client remains confidential, even after the agency agreement is dissolved. Tina must disclose physical property information, if any, but information about her previous client must remain confidential.
Which of the following statements is TRUE regarding earnest monies received in connection with a transaction in Indiana? 1 Earnest monies must be paid in cash. 2 Earnest monies must be deposited into the listing broker's trust/escrow account within 2 banking days after acceptance of the offer. 3 Earnest monies must be deposited into the selling broker's trust/escrow account within 48 hours after receipt of the offer. 4 Earnest monies must be paid by the buyer in order for the offer to purchase to be valid.
2: Earnest money may be in the form of cash or a check, but must be deposited into the listing broker's trust/escrow account within 2 banking days after the offer is accepted. Note the difference between 48 hours and 2 banking days.
Fred is an Indiana licensee who decides to sell his property without using a broker. Which of the following is TRUE regarding advertising Fred's property? 1 Fred must disclose the name, address and phone number of his principal broker, even though he is not using a broker to sell his personal property. 2 Fred must disclose the fact that he is indeed a real estate licensee. 3 Fred is prohibited from selling his property in this manner. 4 Fred is acting as a private citizen, and is exempt from disclosing his licensed status.
2: Even though Fred chooses to sell his property without a broker, Fred is still an active participant in the real estate industry. He has the obligation and requirement to disclose his interest in his property. He must disclose his license status in writing to any and all parties involved in this transaction.
Which of the following is one of the guidelines that a principal broker must follow in Indiana? 1 A principal broker is not responsible for the actions of his associated licensees if they are covered by errors and omissions insurance. 2 Principal brokers are responsible for the actions of salespersons and broker-salespersons associated with him. 3 Principal brokers are entitled to employ independent contractors only. 4 Principal brokers are responsible for the actions of the salespersons only and the broker-salespersons are individually liable.
2: Even though salespersons are employed as independent contractors (unless specified otherwise in an employment arrangement), the principal broker is responsible for their actions and the actions of the broker-salespersons.
Which of the following is a condition a broker MUST satisfy to appraise real estate in Indiana? 1 Any broker who appraises real estate in Indiana must be an active member of the Professional Appraisal Association. 2 Any broker who appraises real estate in Indiana must hold one of the Indiana appraiser licenses issued by the board. 3 Any broker who appraises real estate in Indiana must have held a broker license for 2 or more years. 4 Any broker who appraises real estate in Indiana must do so with the written permission of the Commission only.
2: Federal law requires that appraisals of real estate be conducted by individuals who hold Indiana licensed residential appraiser licenses, Indiana certified residential appraiser licenses, or Indiana certified general appraiser licenses issued by the board.
Jerry wants to become an Indiana real estate salesperson. What course must he take first? 1 A 50 hour prelicense course 2 A 90 hour prelicense course 3 A 10 hour finance course 4 A 24 hour post license course
2: Indiana switched over to a 90 hour pre-license requirement in 2014.
Under Indiana real estate law, which of the following does NOT constitute an agency relationship between the licensee and the individual he is working with? 1 If the licensee is showing a property listed with another brokerage firm, there is no agency relationship. 2 If the licensee has a written agreement to the contrary, there is no agency agreement. 3 If the licensee is showing an in-house listing, there is no agency relationship. 4 If the licensee is showing a "For Sale by Owner" there is no agency relationship.
2: Licensees need to establish the agency relationship at first substantive contact. The only reason for not having an agency relationship between the licensee and the client is when the individual signs a waiver to that effect. The individual is basically saying in the written statement that she does not want representation.
Crystal, owner of an Indiana residential property, informs her listing agent that the property was once the site of criminal gang activity. Crystal fears that disclosure of this information to potential buyers could inhibit the sales process, so she instructs her agent not to disclose the facts. A couple of days later a buyer asks the agent if the property has any psychological affectations. What is the agent's obligation in this situation? 1 The agent should tell the buyer that the property is not psychologically affected. 2 The agent should tell the buyer that the seller does not wish to make any representations regarding psychological affectations. 3 The agent should tell the seller about the illegal gang activity. 4 The agent should tell the seller that the facts must be disclosed.
2: Neither the owner nor the agent is obligated or required to disclose any knowledge of a psychologically affected property during a real estate transaction. The agent, however may not lie about the information if asked a direct question. He may only give the fact that the seller does not wish to disclose such information.
Cindy recently passed the salesperson licensing exam. Upon passing, she called her friend, Mona, an Indiana principal broker, and asked Mona to hold her license for the 1-year requirement in order to obtain a broker's license (Cindy already has a full-time job and has no intention of being active in the real estate industry). Which of the following is an acceptable action on Mona's part? 1 Mona should request Cindy's license and hope that she changes her mind and becomes an active licensee. 2 Mona must, ethically and legally, decline to hold Cindy's license. 3 Mona may offer to accept Cindy's license, but only if Cindy signs a written agreement to become a full-time broker associate when she receives her broker's license. 4 Mona may request the license, and she may also charge Cindy a reasonable fee for holding the license.
2: Requesting and/or accepting Cindy's license constitutes incompetent practice on Mona's part, according to the Indiana license law. Doing so would subject Mona to disciplinary action by the Indiana Real Estate Commission.
Jennifer listed her home for sale with a broker on February 1st. The listing agreement was to expire in 5 months. In April, however, Jennifer decided to take her home off the market. Is this allowed? 1 Yes. Jennifer has the right to terminate her agreement at any time without penalty. 2 Yes. Jennifer may withdraw the broker's authority to sell the property, but she may be liable for some expenses. 3 No. Jennifer must wait until the definite date of expiration before she can take her house off the market. 4 Possibly. Jennifer's case goes to the Indiana Real Estate Commission, and that organization will decide if her cancellation is justifiable.
2: Sellers may terminate the written listing agreement, but they may very well be liable for expenses incurred on their behalf, including advertising.
The Franklins and the Johnson's enter into a contract for sale of a residential property. A home inspection revealed a major defect in the property - a defect the Franklins claim to have had no knowledge of. The Johnson's decide not to purchase the Franklin's home. Which of the following statements is TRUE regarding the Franklin's disclosure in light of the defect? 1 The Franklins did not know about the defect, so they have no obligation to change their disclosure form. 2 The Franklins must amend their disclosure form to state that the newly found defect exists. 3 The Franklins must disclose the new defect, but only if asked by a buyer's agent. 4 The Franklins have an obligation to repair the defect before their seller's agent may show the property again.
2: The Franklins were honest when they initially completed the disclosure form. Any new defect found as a result of a home inspection (regardless of who paid for the inspection), must be noted on an amended disclosure form. The repair of the defect may be negotiated by the buyer and the seller, but the Frankins are not required to repair the defect.
If 2 brokers dispute the dispensation of a commission, what action will the Real Estate Commission take? 1 The Commission will settle the dispute at the next scheduled meeting. 2 The Commission will make recommendations as to who should get the commission, but will NOT make the final decision. 3 The Commission will NOT enter into any dispute over commissions between licensees. 4 The Commission may revoke the license of the broker who falsely withheld the commission.
2: The Maine (Indiana?) Real Estate Commission does NOT enter into disputes over commissions between licensees.
Kelly wishes to receive payment from the Indiana Recovery Fund. What must she do? 1 Kelly must file an ethics complaint with the local board of Realtors. 2 Kelly must obtain a final judgment in court against the licensee. 3 Kelly must file a complaint with the real estate commission. 4 Kelly must file the case with the Indiana Attorney General's Office.
2: The court is the only entity that may order payment from the Indiana Recovery fund. Only disciplinary action may be made by the other three choices.
What is the purpose of the Real Estate Commission? 1 To provide mediation in disputes between brokers and Indiana residents. 2 To protect Indiana residents in real estate matters. 3 To assure that licensees collect commissions in accordance with the law. 4 To ensure the property values of Indiana real estate keep increasing.
2: The function of the Real Estate Commission is to protect the public. This is done chiefly by licensing brokers and enforcing the licensing law through rules, forms, and disciplinary proceedings.
If the commission is required to make any payment from the real estate recovery fund against a licensee, how can the licensee get relicensed? 1 The licensee must repay the amount paid from the real estate recovery fund and retake the licensing exam. 2 The licensee must repay the amount paid from the real estate recovery fund plus interest of 12% per annum. 3 The licensee must repay the amount paid from the real estate recovery fund and complete 25 hours of educational training. 4 The licensee must repay the amount paid from the real estate recovery fund and have their license remain on "provisional" for 6 months.
2: The licensee is not eligible to be licensed again as either a broker or a salesperson until the licensee has repaid in full the amount paid from the real estate recovery fund with interest of twelve percent (12%) per annum.
Eldon, an Indiana real estate licensee, embezzled $10,000 from client A, $20,000 from client B, and $25,000 from client C. All three clients received final judgments and payments out of the Indiana Recovery Fund. How much money will each client receive? 1 All three clients will receive the amount they lost. 2 The $50,000 lifetime aggregate for a licensee will be prorated according to the loss of each client. 3 There is a limit of $25,000 per judgment (not per client), and the money must be split three ways in this situation. 4 Only a total of $50,000 per judgment is allowed. Therefore, client A receives $10,000 and clients B and C each receive $20,000.
2: The total lifetime amount that can be paid on the licensee's behalf from the recovery fund is $50,000. Since this judgment involved multiple claims, the $50,000 must be prorated according to each client's loss.
Which of the following is a TRUE statement regarding all purchase agreements in Indiana? 1 Purchase agreements may be oral and still enforce payment of compensation. 2 Purchase agreements in Indiana must be prepared in quadruplicate. 3 Purchase agreements in Indiana may be presented to the seller for formal acceptance or rejection within 5 business days. 4 In Indiana, purchase agreements do not have to include a definite expiration date.
2: Under Indiana real estate law, purchase agreements must be prepared in quadruplicate, no matter how inconvenient or cumbersome.
Cecelia is an Indiana licensee who submitted an offer to purchase from a buyer client to the listing agent. The earnest money was a Rolex watch. Which of the following is TRUE regarding this situation? 1 The watch would have to be sold for cash before being deposited into the escrow/trust account. Jewelry is not acceptable earnest money. 2 Earnest money deposits must be in the form of a personal check. 3 The offer of a Rolex watch could be accepted, but only if the seller is informed of the nature of the deposit prior to acceptance. 4 The offer of a Rolex is acceptable only after a written appraisal and verification that the watch is actually a Rolex.
3: A Rolex watch is perfectly acceptable as an earnest money deposit, but only with the seller's full consent. Any item of value may be offered as earnest money.
Which of the following is TRUE for someone wanting a real estate salesperson's license in Indiana? 1 The person must have completed at least 2 years of college. 2 The person must have at least $25,000 worth of assets. 3 The person must not have been convicted of a crime indicating a propensity to endanger the public. 4 The person must be at least 21 years of age to apply for a salesperson's license in Indiana.
3: A person must not have been convicted of a crime that indicates that person has a propensity to endanger the public. The applicant must be 18 years old and no college is required to obtain a salesperson's license.
A student in a broker or salesperson course session who is not in attendance for at least __________ of the required hours shall not be permitted to complete the course. 1 51% 2 67% 3 75% 4 90%
3: A student in a broker or salesperson course session who is not in attendance for at least seventy-five percent (75%) of the required hours shall not be permitted to complete the course.
hich of the following would violate real estate advertising requirements? 1 A licensee allows her name to appear in smaller type than that of the principal broker. 2 A licensee placed an ad in a church newsletter. 3 A licensee prints his or her name in larger letters than the firm name or the name of the principal broker. 4 A licensee does not place a "For Sale" sign on a property at the seller's request.
3: All advertising MUST include the name of the principal broker or firm. The broker firm's name must be in larger print than the licensee's.
Which of the following may NOT be placed in an Indiana broker's trust account? 1 A client's down payment on a home purchase may NOT be placed in the broker's trust account. 2 Tenant security deposits may NOT be placed in the broker's trust account. 3 MLS fees from associated agents may NOT be placed in the broker's trust account. 4 Rent for a client's apartment may NOT be placed in the broker's trust account.
3: All monies relating to legal real estate activity in the state of Indiana must be placed in the broker's trust or escrow account. MLS money is personal money from licensees, and is considered administrative fees. That type of money may NOT be placed in the broker's trust or escrow account.
Which of the following statements is TRUE regarding an Indiana real estate licensee who has been granted an inactive license? 1 The licensee may manage rental property. 2 The licensee may be compensated for referrals. 3 The licensee is not required to complete her continuing education requirements. 4 The licensee does not have to renew her license, nor does she have to pay a renewal fee.
3: An Indiana licensee who has been granted an inactive real estate license is exempt from taking continuing education courses. The licensee, however, may not perform any act that requires a real estate license.
Which of the following is a penalty for someone found to be in violation of the incompetent practice portion of the Indiana license law? 1 Revocation of the license for a maximum of three years. 2 License suspension and a fine that does not exceed $2,000. 3 Probationary period with mandatory community service. 4 Lifetime revocation of the guilty party's license.
3: An Indiana licensee who is found guilty of incompetent practice may be subject to a probationary period with mandatory community service. Remember, the Indiana Real Estate Commission may impose community service. A fine, if imposed, may not exceed $1,000.
A buyer is interested in seeing a house listed with a real estate company but does not wish to enter into a buyer agency agreement. Which of the following requirements must be met in order for a salesperson from the real estate company to show him an in-house listing? 1 If the buyer verbally agrees to buyer agency 2 If the salesperson obtains the seller's permission 3 If the salesperson provides the buyer with an agency disclosure form stating that the real estate company represents the seller 4 If the salesperson provides the buyer with a dual agency consent form
3: An agency disclosure form should be produced at the first opportunity. The agent represents only the seller.
Which of the following statements is TRUE regarding Indiana certified appraisers and the Residential Real Estate Sales Disclosure Form? 1 Appraisers are entitled to a copy of the disclosure form, but only if the seller and buyer both agree to its release in writing. 2 An appraiser must be given a copy of the form for any purpose that relates to the appraisal itself. 3 An appraiser is entitled to a copy of the form if the appraisal is for financing purposes. 4 An appraiser is not to be given a copy of the disclosure form for any reason.
3: Appraisers have the right to request and receive a copy of the Residential Real Estate Sales Disclosure Form if they are conducting the appraisal for a financial institution that may lend money to the buyer. In addition, an appraiser working for the actual buyer may also request a copy of the form.
When is a seller in Indiana NOT required to give a buyer a Residential Real Estate Sales Disclosure Form? 1 A seller is NOT required to give the disclosure form to a buyer when the buyer has lived on the property as a tenant. 2 A seller is NOT required to give the disclosure form to a buyer when the seller is offering his home as "For Sale By Owner." 3 A seller is NOT required to give the disclosure form to a buyer when the property is zoned commercial. 4 A seller is NOT required to give the disclosure form to a buyer if the seller has not resided on the property during the last year.
3: Commercial properties are the only exemptions listed here.
Shana is an unlicensed real estate assistant. Which of the following duties may she NOT perform? 1 Shana may NOT compute commission checks. 2 Shana may NOT assemble legal documents required for a closing. 3 Shana may NOT explain contract documents to prospective buyers. 4 Shana may NOT prepare and distribute flyers and/or promotional materials.
3: Even if the licensed agent is out of the office for lunch when the prospective buyers drop by, Shana may NOT informally explain documents to the buyers. Only a licensed real estate salesperson or broker may perform such a duty.
Martha is an Indiana real estate licensee who lists the home of a recently deceased elderly owner. What disclosure obligation applies to Martha? 1 Martha is not required to disclose this information, since the property is not psychologically affected. 2 Martha must disclose the death of the elderly owner on the sales disclosure form. 3 Martha is not required to disclose any knowledge of the death. 4 Martha must verbally disclose this information to any potential buyer at the point of first substantive contact.
3: Even though a death in the property qualifies the property as psychologically affected, Martha is not required to disclose this fact. Neither is the executor of the owner's estate.
Fran is an Indiana licensee taking an offer to purchase from a buyer with a $1,000 earnest money deposit. Which of the following accurately describes what Fran should do with the offer and the earnest money? 1 Fran should submit the offer to the listing agent and hold the earnest money in the office safe until mortgage approval. 2 Fran should communicate the offer to the seller immediately, and allow the seller to hold the earnest money until the offer is accepted. 3 Fran should communicate the offer to the listing agent, and submit the earnest money with the offer for deposit by the listing broker after acceptance. 4 Fran should submit the offer to the listing agent, but hold the money in the company's business account until the offer is accepted.
3: Fran's obligation is to communicate the offer with the listing agent, not the seller. In addition, Fran must submit the earnest money along with the offer for deposit by the listing broker after the offer is accepted.
Frank, a licensed Indiana salesperson, was describing his client's listing to Ben, a buyer's agent from another brokerage firm. Frank told Ben that the furnace was new, when in fact it was 20 years old. Frank's client (the seller) was unaware of his misrepresentation. Which of the following is TRUE regarding this situation? 1 Since Ben's buyer was not interested in the house, there is no violation. 2 The seller is liable for the statements that Frank made to Ben, even though he was not aware of Frank's actions. 3 Frank, the licensee, and his principal broker both face liability. 4 Since Frank did not put it in writing, this is not considered disclosure of a material fact about the seller's property.
3: Frank's misrepresentation without verifiable information from the seller and without the seller's knowledge means that he assumes liability for the statement. Because he is an agent of his principal broker, the broker would also be liable.
At the end of the state's fiscal year, the Indiana Recovery Fund has a balance of more than $750,000. The amount in excess of $750,000 will be paid to which of the following? 1 The excess amount is paid to the real estate commission's travel account. 2 The excess amount is paid to licensees who may have lost commission dollars during that fiscal year. 3 The excess amount is paid to the Indiana state general fund. 4 The excess amount is paid to the continuing education fund, and used as scholarships for those licensed salespersons who may not be able to afford continuing education.
3: If the Indiana Recovery Fund has more than $750,000, the excess amount is automatically placed into the state's general fund.
Which of the following statements is TRUE regarding the Indiana Real Estate Recovery Fund? 1 A licensee's license will be suspended for a maximum of 2 years from the time of payment from the recovery fund. 2 The licensee did not have to be licensed as a real estate salesperson or broker at the time of the incident in order for the aggrieved person to receive payment. 3 Licensees may be assessed a surcharge at the time of his or her license renewal if the fund balance is less than $450,000. 4 There is a national Superfund that replenishes each state's recovery fund.
3: If the balance of the recovery fund is less than $450,000 at the end of any given fiscal year, the Indiana Real Estate Commission has the right to assess a surcharge to licensees at the time of their license renewal -- but only to bring the fund to a balance of over $450,000.
6 months after opening, Tyler closed Big Hoop Realty. What must he do in regard to his firm's records? 1 Tyler must destroy all the records within 10 days of closing his firm. 2 Tyler must send all the records to the Commission to maintain. 3 Tyler must inform the Commission as to where the records are being maintained. 4 Tyler must destroy all the records within 30 days of closing his firm.
3: If the brokerage ceases to exist, the most recent principal broker carries responsibility for the firm's records. Such principal broker must inform the Commission as to where the records are being maintained.
An unbroken chain of title must be established for what period of time in order to establish a "marketable title" in Indiana? 1 10 years 2 25 years 3 40 years 4 50 years
3: In Indiana, the chain of title must be established as unbroken for a period of at least 40 years in order to be established as a "marketable title."
Which of the following does NOT qualify as a "psychologically affected property?" 1 A rental unit in which an HIV-related patient lived does NOT qualify as a psychologically affected property. 2 A dwelling where a felony occurred is NOT a psychologically affected property. 3 A dwelling where firearms had been discharged by party-goers is NOT considered to represent a psychologically affected property. 4 A property in which drugs were used and sold does NOT qualify as a psychologically affected property.
3: In order for the discharge of a firearm to qualify a property as psychologically affected, the weapon would have to have been fired by a law enforcement official performing official duties.
Which of the following statements is TRUE regarding an Indiana principal broker with more than 1 office? 1 The principal broker may manage the main office and one branch office. 2 The principal broker must have a managing broker other than herself for each office in a multi-office company. 3 The principal broker may manage one office, but she must have a managing broker in each additional office. 4 The principal broker may appoint an associated salesperson to manage a branch office.
3: Indiana real estate law provides that a principal broker may manage only 1 office. Additional branch offices must be managed by a managing broker, and not an associated salesperson.
Joan is an Indiana licensee entering into a listing agreement and agency relationship with a seller. What are Joan's duties? 1 Joan must present all offers, but only when it is most convenient for her. 2 Joan must seek a price and terms satisfactory to the potential buyers. 3 Joan must exercise reasonable care and skill. 4 Joan must advise the seller on all material matters concerning the structure of their house.
3: Joan has the ethical and legal obligation to exercise reasonable care and skill with each person she establishes an agency relationship with.
Keith is an Indiana licensee. A seller gave Keith the survey and owner's title insurance policy at the time she listed her property with him. When the listing expired, Keith did not return the documents, and claimed they were misplaced. Which of the following statements is TRUE? 1 Keith has no liability since listing agents are only responsible for money given to them for deposit as earnest money. 2 The seller is responsible because she should have kept those documents in a safety deposit box until the closing of the transaction. 3 Keith would be subject to disciplinary action because misplacing the documents amounts to incompetent practice. 4 Keith would be required to pay for the replacement of the documents.
3: Keith has the responsibility and the obligation to account for all funds and documents he receives as part of a legal real estate transaction. While he may not be required to pay for the missing documents, Keith might face disciplinary action for violating the incompetent practice section of Indiana license law.
Lynnette is an Indiana real estate broker who has an agency relationship with a seller. Lynnette knows that the home has a cracked foundation and that a former owner was brutally murdered in the kitchen. Which of the following must Lynnette disclose? 1 Lynnette must disclose both facts to potential buyers. 2 Lynnette must disclose the murder, but not the cracked foundation. 3 Lynnette must report the cracked foundation, but not the brutal murder. 4 Lynnette is not obligated nor is she required to disclose either fact.
3: Lynnette, under Indiana real estate law, is required to disclose all material facts about the property. The cracked foundation is considered a material fact. The murder, no matter how bloody or brutal, is a psychological fact, not a material fact, and does not have to be disclosed.
Maggie is interested in seeing a house listed with ABC Realty, but Maggie does not wish to enter into an agency relationship with an ABC agent. Under which of the following circumstances may an ABC agent show Maggie the property? 1 The agent may show the property to Maggie if the salesperson first obtains the seller's permission. 2 The agent may show the property to Maggie, but must first provide her with a limited agency consent form. 3 Maggie may view the property, but only if she declines the agency relationship in writing before seeing the property. 4 Maggie may see the property once she verbally agrees to buyer agency.
3: Maggie has a choice, and if she does not want to enter into an agency relationship with ABC Realty, that is perfectly fine. She must, however, decline that particular relationship in writing before the agent may show her the listed property.
Matt is an Indiana licensee who has an agency relationship with the Fox family. Which of the following may he disclose without informed written consent? 1 Matt may disclose the factors which motivate the Fox family to sell. 2 Matt may disclose the fact that the Fox family will accept less than the listed price. 3 Matt may disclose material facts regarding the Fox property. 4 Matt may disclose personal information about the Fox family, if it helps sell the property.
3: Material facts about the property must be disclosed to all parties in the transaction. If Matt chooses to disclose any of the other information listed in this question, he is in violation of Indiana real estate law.
A net listing is legal in Indiana under which of the following circumstances? 1 Net listings are legal under any circumstances. 2 Net listings are legal if the commission is no more than $10,000. 3 Net listings must show a maximum amount of commission to be legal. 4 Net listings are legal for a maximum of 6 months.
3: Net listings, where the property is based on a "net price," is legal only when a maximum commission is provided, in writing, on the listing contract.
Nicole is an unlicensed assistant who recently worked late nights and weekends to help ensure the successful closing of a difficult transaction for her broker. Her work included calling the prospective buyers and encouraging them to accept the counteroffer. The broker wants to pay Nicole a commission. Which of the following statements is TRUE? 1 The broker has the legal right to compensate Nicole in the form of a commission. 2 The broker may not pay Nicole a cash commission, but she may choose to make a gift of tangible property. 3 The broker may not pay a commission to Nicole under this situation. 4 The broker may pay Nicole a commission only if Nicole is listed as an independent contractor.
3: Nicole is an unlicensed assistant, and it is illegal under Indiana real estate law for her to perform these duties. The broker may NOT pay Nicole any sort of commission. In addition, both the broker and Nicole are in violation of rules regarding unlicensed assistants.
Sammi is the on-site property manager for Best Hill Apartments. She is responsible for negotiating leases for the apartments. Craig, a licensed Indiana broker, is Sammi's supervisor. Which of the following is true regarding Sammi's position? 1 Sammi must have a salesperson's license since her supervisor is a broker. 2 Sammi must have a broker's license to perform the above listed duties. 3 Sammi is exempt from licensing requirements. 4 Sammi is currently in violation of the license law and subject to penalty and/or fines by the Indiana Real Estate Commission.
3: Since Sammi's job does not include real estate activity, she does not need to hold a real estate license of any kind, so she is exempt from licensure.
Which of the following statements is FALSE regarding Indiana agency law? 1 Principal brokers and managing brokers must only be limited agents. 2 Limited agents may represent both parties in the same transaction. 3 Subagency is permitted if both principal brokers agree to it. 4 Principal brokers are required to develop written office policies.
3: Subagency is NOT permitted under any circumstances in Indiana.
Which of the following would not be a part of the development cost of a lot? 1 Installing curbs 2 Installing storm sewers 3 Constructing a building 4 Installing street lights
3: Subdivisions typically consist of two parts: the "improved building lot" and the structures themselves. The improved lot consists of all the things typically associated with a neighborhood that make it ready to accept a completed home.
Which of the following is NOT a continuing education mandatory course subject for licensees? 1 Indiana licensure and escrow law 2 Fair housing and civil rights law 3 General mathematics 4 Listing contracts and purchase agreements
3: The 8 continuing education mandatory course subjects are; Indiana licensure and escrow law; Indiana agency law; fair housing and civil rights law; listing contracts and purchase agreements; settlement procedures; antitrust; environmental issues; ethics and standards.
Who has the primary responsibility for earnest monies submitted with an accepted offer in the state of Indiana? 1 The selling principal broker. 2 The managing broker is held responsible for the earnest money submitted. 3 The listing principal broker is responsible. 4 The selling agent is held responsible for the earnest monies.
3: The Indiana Real Estate Commission will hold the listing principal responsible for any and all earnest monies submitted with an accepted offer. It is that broker's responsibility to ensure the money is deposited into the company's escrow/trust account within 2 banking days of the accepted offer.
Fritz is a limited agent in Indiana. Which of the following is TRUE regarding his situation? 1 Fritz may not accept compensation from both the buyer and the seller. 2 Fritz is exempt from disclosing to either party that he represents the other in the same transaction. 3 Fritz may disclose property information available through the Multiple Listing Service (MLS) or other information sources to both parties. 4 Fritz may disclose that the buyer will pay more or the seller will accept less.
3: The licensee may give property information to both parties.
How long must a listing principal broker hold true copies of closing statements for all real estate transactions? 1 3 years 2 2 years 3 5 years 4 1 year
3: The listing principal broker in Indiana must retain a true copy of a closing statement for each transaction handled for a 5-year period. The closing statement must show all of the receipts and disbursements for that transaction.
The records of transactions, including bank accounts or deposits referred to in these regulations, shall be 1 destroyed once the transaction has closed. 2 sent to the Commission to maintain. 3 available during usual business hours for inspection by the Commission. 4 kept only in digital formats.
3: The records of transactions, including bank accounts or deposits referred to in these regulations, shall be available during usual business hours for inspection by the Commission, its field representatives, or other employees.
Which of the following is TRUE regarding "For Sale" signs in real estate advertising? 1 "For Sale" signs must contain the name of the licensee. 2 "For Sale" signs are limited to one sign per residential listing. 3 "For Sale" signs may be placed on the property for sale only with the written consent of the seller or the seller's authorized agent. 4 "For Sale" signs do not need to carry the name of the principal broker or firm on open listings.
3: The seller's agent must obtain the seller's written consent before placing a "For Sale" sign on the property. All "For Sale" signs must include the name of the principal broker or firm without exception.
How many members are there on the Indiana Real Estate Commission? 1 10 members 2 7 members 3 12 members 4 16 members
3: There are 12 members serving on the Commission. 9 are real estate brokers, 2 are consumer members, and 1 is an "at-large" member.
Miguel is an Indiana principal broker who becomes incapacitated and dies. Which of the following is TRUE regarding the associates who worked for him? 1 The associates must attach themselves to a new principal broker when their licenses are renewed. 2 The associates may continue selling property for 90 days, and they may continue to accept new business until they associate with a new principal broker. 3 Associates may complete any business that is under contract for a maximum of 90 days, but they may not take any new business. 4 Associates have 180 days to transfer their licenses to a new employing broker.
3: When a principal broker becomes incapacitated or dies associates have 90 days to wrap up their current contracts. They are not permitted to transact new business until they have associated with a new principal broker.
What is the maximum amount that may be paid from the Indiana Real Estate Recovery fund for each violation? 1 $50,000 2 $10,000 3 $20,000 4 $25,000
3: While the lifetime aggregate for each licensee is $50,000, the maximum amount per violation is $20,000.
What must a corporation do to obtain a corporation license in Indiana? 1 The corporation must submit a copy of its principal broker's license. 2 The corporation must certify that all its officers are licensed real estate brokers. 3 The corporation must have a licensed broker residing in Indiana who is an officer or employee of the corporation, and who has the authority to bind the corporation in real estate transactions. 4 The corporation must submit the required application, a $250 fee and a certificate of incorporation.
3: While there is no requirement for all officers to be licensed, a licensed corporation must have an employee or officer who is a licensed Indiana broker and resides in the state.
Which of the following is a requirement for an Indiana salesperson before he or she may renew the license? 1 The salesperson must only pay the required renewal fee to renew his or her license. 2 The salesperson must be actively selling real estate at the time of renewal. 3 The salesperson must have completed at least 6 hours of continuing education each year for the last two years before renewing his or her license. 4 The salesperson must have completed a total of 16 hours of continuing education during the last biennial licensing period.
4: A license renewal fee is required, but continuing education is also a requirement. In Indiana, a salesperson must have completed at least 16 hours of continuing education during the last 2-year licensing period.
Which of the following is NOT an example of competent practice in the real estate industry? 1 Acting as a limited agent in a real estate transaction is NOT an example of competent practice. 2 Giving an opinion of value for listing purposes in NOT an example of competent practice. 3 Completing a sales contract for a purchaser is NOT an example of competent practice. 4 Making a guarantee, based on past market performance, that a property will increase in value is NOT an example of competent practice.
4: A previous increase in value for a property or surrounding properties is no guarantee that the property will continue to increase in value, so giving such an opinion is incompetent.
Ethan is a licensed real estate salesperson in the state of Indiana. What does the Real Estate Commission require as evidence of his licensure? 1 Ethan must carry a Realtors pocket card. 2 Ethan must carry a letter of approval from the commission. 3 Ethan must have a wall certificate prominently displayed at his place of business. 4 Ethan must have a valid pocket card on his person at all times during which he conducts real estate activities.
4: A valid pocket card is the only acceptable evidence of current licensure.
Regarding real estate agent's commissions, which statement is TRUE? 1 Commissions are regulated by the Board of Real Estate Brokers and Salespersons. 2 Commission guidelines are established by local groups of brokers. 3 Commissions are illegal in Indiana; all brokers are compensated with salaries. 4 Commissions are fully negotiable between brokers and clients.
4: Commissions are always fully negotiable between the broker and the buyer or seller.
Cordell, an Indiana licensee, obtains a listing. Which of the following is TRUE regarding his obligations? 1 Cordell is obligated to place advertisements in all local newspapers. 2 Cordell must set up a listing file and issue it a number in compliance with the license law. 3 Cordell must cooperate with each and every real estate office that wishes to participate in the marketing of his listed property. 4 Cordell has the obligation to give a copy of the listing agreement to the seller at the time the agreement is signed.
4: Cordell's only obligation is to provide a copy of the written listing agreement to his seller at the time the agreement is signed.
Courtney is an Indiana licensee who has an agency relationship with Anna, a buyer. Another buyer Courtney represents is interested in viewing the same property Anna would like to see. Which of the following is TRUE regarding Courtney in this situation? 1 Courtney has an obligation to refuse to show the second buyer the home until Anna, the first buyer, states she is no longer interested. 2 Courtney must obtain written permission from Anna, the first buyer, before she may show the property to the second buyer. 3 Courtney must first obtain permission from the seller. 4 Courtney may show the property to the second buyer without first informing the first buyer, Anna.
4: Courtney is under no legal or ethical obligation to inform Anna, the first buyer, before showing the property to the second buyer. The property may be shown even if Anna still shows interest.
Ownership of real property by a married couple in Indiana, unless stated to the contrary in a deed, is presumed to be which of the following? 1 Severalty 2 Tenancy in common 3 Joint tenancy 4 Tenancy by the entirety
4: For a title to be deemed as tenants by the entireties, a couple must be married. If the marriage is dissolved, then the description must be changed to reflect the action, and is then known as tenancy in common.
When are Indiana property taxes due? 1 Property taxes in Indiana are due and payable on April 15th and October 15th. 2 January 1st and December 21st. 3 January 31st and July 31st. 4 May 10th and November 10th.
4: In the state of Indiana, property taxes may be paid in 2 installments. The set dates for the payment of property taxes are May 10th and November 10th.
Jamie is an Indiana licensee. Part of her marketing effort includes an offer to provide and pay for a home warranty policy for sellers if they list their home with her. Which of the following statements is TRUE regarding this practice? 1 Written disclosure to all parties is required at the closing. 2 Jamie must first verbally disclose this arrangement to all parties involved in the transaction at the time of closing. 3 The agreement is between Jamie and the seller, so disclosure to other parties is not necessary. 4 Jamie must provide written disclosure to all parties at the time of any and all offers or acceptance of an offer.
4: Inducements and/or rebates are legal in Indiana real estate practices, but must be disclosed in writing to all parties at the time of an offer or acceptance of an offer, NOT at the time of closing.
Which of the following is TRUE regarding an Indiana licensee who represents a seller exclusively? 1 The licensee must conduct an independent inspection of the property for the buyer. 2 The licensee does not have to disclose material property facts to the buyer's agent. 3 The licensee may give the buyer false information to assist the seller. 4 The licensee may show alternative properties not owned by the seller to prospective buyers.
4: Just because the licensee has an exclusive seller's agreement does not mean he cannot show other properties to prospective buyers. A licensee may have several agency agreements at any given time.
Which of the following statements is TRUE regarding the Indiana Residential Real Estate Sales Disclosure Form? 1 The form warrants the physical condition of the property for 1 year. 2 The form should be completed by the listing agent at the time of the listing. 3 The form must be given to the purchaser at the time of closing. 4 The form is to be completed by the seller and given to the purchaser prior to acceptance of an offer.
4: Listing agents complete a number of forms for the seller during a real estate transaction. The Indiana Residential Real Estate Sales Disclosure Form, however, is not one of them. This form must be completed by the seller, and given to the buyer before an offer is accepted, NOT at closing.
Olivia is an Indiana broker who has an agency relationship with a buyer. Which of the following is TRUE regarding Olivia's responsibilities to the buyer? 1 Olivia must disclose to the seller that her buyer is a minority. 2 Olivia should only present offers to the seller that are acceptable based on her opinion of the property. 3 Olivia should disclose to the listing agent the maximum price her buyer is willing to offer. 4 Olivia should advise the buyer if the listing price of the home is not realistic.
4: Olivia should advise her buyer if a home the buyer is interested in has an unrealistic listing price, even if the buyer can afford it. This falls under her obligation to exercise reasonable care and skill for her client.
XYZ partnership just received its first Indiana license. When will the license expire unless renewed earlier? 1 The partnership's license will expire in 12 months. 2 The partnership's license will expire in 6 months. 3 The partnership's license will expire in 18 months. 4 The partnership's license will expire in 24 months.
4: Partnership and corporation licenses expire on June 30th of even-numbered years, so if a partnership was issued a license on July 1st, 2002, (an even-numbered year), the license must be renewed by June 30th, 2004.
Which of the following activities does NOT require a valid Indiana real estate license in order to be compensated? 1 Writing an option on land for a potential subdivision 2 Leasing a commercial office building 3 Selling a grain elevator 4 Performing a written home inspection
4: Performing a written home inspection does not require a real estate license, all the others do.
Rachel is an Indiana licensee who has an agency relationship with a buyer. Which of the following is TRUE regarding this particular relationship? 1 Rachel may investigate the buyer's ability to perform financially for the benefit of the seller. 2 Rachel may disclose confidential information about her buyer if asked to do so in writing by the seller's agent. 3 Rachel may disclose the buyer's motivation to the seller's agent if asked. 4 Rachel must treat all sellers honestly.
4: Rachel has an obligation to treat each seller her buyer comes in contact with honestly, and with the same respect she would show her buyer.
Rick is a limited agent in the state of Indiana. This designation has limitations regarding Rick's conduct and representation of his clients. Which of the following actions is in violation of those limitations? 1 Rick would be in violation of his limitations if he gave the buyers MLS information regarding other homes that have already sold. 2 Rick would be in violation of his limitations if he failed to tell the seller that the buyer would pay more than the listed price. 3 Rick would be in violation if he refused to tell the buyer why the seller is selling the property. 4 Rick would be in violation of limited agency if he told the buyer that the property appears to be overpriced, and the seller would probably take less.
4: Rick may NOT disclose either party's motivation for buying or selling. Nor may he disclose that the seller would take less for the property or the buyer would pay more.
Roberta is an Indiana licensee who has an agency relationship with a buyer and a seller. The buyer is interested in making an offer on the seller's property. Which of the following statements is TRUE in this situation? 1 The buyer may not make an offer, because Roberta is not allowed to represent both parties in this situation. 2 No, the buyer may not make an offer, because the seller agreed to pay Roberta's commission. 3 Yes, the buyer may make an offer, as long as Roberta has a written agency agreement with each party. 4 Yes, the buyer make may an offer, but only if both the buyer and the seller give their written consent.
4: Roberta has the right in Indiana to represent both the buyer and the seller in the same transaction, but only with the written consent of each party. Note: this is not the same as entering into a written agency agreement with each party, because that does not disclose the fact that Roberta's buyer knows that Roberta also represents the seller.
Which of the following legal description methods are NOT used in Indiana? 1 Recorded plats 2 Metes and Bounds 3 Governmental rectangular surveys 4 Territorial plats
4: Territorial plats, however, are not used in this state, and if used, are not recognized. A, B, and C are recognized methods of survey and legal descriptions in Indiana.
Edward, the owner and principal broker of an Indiana real estate firm, died. At the time of his death, there was $9,500 in the trust/escrow account. Which of the following statements accurately describes how this money should be handled? 1 Edward's heirs should take control of the account since he owned the real estate firm. 2 An associate broker who is familiar with the business should administer the account. 3 Any and all associated salespersons should be responsible for the amount that applies to their individual sales. 4 The Indiana Real Estate Commission should appoint a successive trustee.
4: The Indiana Real Estate Commission is the only organization with the authority to take control of a trust/escrow account in this type of situation. The Commission will appoint a trustee to administer the account.
Charlie is a tenant and asks his landlord for an Indiana Residential Real Estate Sales Disclosure Form, but the landlord refuses to complete the document. Which of the following is a TRUE statement regarding this situation? 1 Charlie may file a complaint with the Indiana Real Estate Commission. 2 Charlie has 2 business days to void any signed agreement. 3 The landlord is required to provide the form prior to execution of the lease agreement. 4 The landlord is not required to furnish the form to Charlie, the tenant.
4: The Indiana Real Estate Sales Disclosure Form is not required in a lease/rental situation where there is not an option to purchase.
Which of the statements about the Indiana Real Estate Commission's Recovery Fund is TRUE? 1 The recovery fund is used to pay charitable donations to non-profits. 2 The recovery fund is used to pay the salaries of the Commission board. 3 The recovery fund is used to pay for advertising to promote real estate throughout Indiana. 4 The recovery fund is used to pay final judgments against licensees who have caused harm to members of the public through wrongful real estate practices.
4: The recovery fund is used to pay final judgments against persons who are or were licensed as real estate brokers or salespersons who have caused damage to the public though wrongful real estate practices and conduct.
Which of the following pieces of information would also be required in this telephone directory listing, "Mr. James Lowe, Real Estate Salesperson, Residential Property My Specialty" ? 1 His personal cell phone number 2 The expiration date of his license 3 His license number 4 The name of his employing broker
4: This listing must also include the name of the employing broker.
Gwen is the principal broker and sole proprietor of a real estate firm in Indiana. Her license was recently suspended for 2 years. What happens to her associated broker-salespersons and salespersons? 1 The suspension has no effect on the associates, and they may continue to act as buyer's and seller's agents for the firm. 2 The associates' licenses would automatically be revoked . 3 Associates would suffer the same penalty as their principal broker. In this case, their licenses would be suspended for two years. 4 The associates' licenses must be returned to the commission.
4: When a principal broker's license is suspended, the associates must return their licenses to the commission until they can obtain a new license after associating with a different principal broker.
Under Indiana agency law, which of the following is considered a TRUE statement? 1 Payment of compensation creates the agency relationship. 2 Written policies are no longer required. 3 Subagency may still be offered to non MLS members. 4 Merely assisting an individual creates a customer relationship.
4: When it comes to Indiana agency law, merely assisting an individual creates a customer relationship. There is a difference, however, between a customer and a client relationship. The agency-client relationship is on a higher level.
Clara is a homebuyer in Indiana who wants to have a clause included in the purchase agreement. The clause states that the seller offers assurances against the existence of ghosts on the property. Should the agent include this clause? 1 Frivolous clauses, such as the "ghost" clause included here, are not permitted and would nullify a contract if included. 2 The licensee is permitted to include additional clauses to blank form contracts, if the clause does not directly involve the conveyance of real property. 3 The selling agent may author the clause, because such disclosures are in general usage. 4 Only a licensed attorney may prepare this type of clause.
4: While Indiana licensees are allowed to fill in the blanks of a preprinted contract, they are not permitted to author additional clauses that could cause a legal consequence for either party. A licensed attorney is the only person permitted to prepare such a clause.
Which of the following statements is TRUE regarding a principal broker who participates in a referral service? 1 The principal broker must obtain approval from the MLS before accepting a referral. 2 The principal must own a franchise that provides a referral service. 3 The principal broker must have an oral agreement with the cooperating broker as to the fees paid. 4 The principal broker must have a written agreement with the referred client.
4: Written agreements are required between the principal broker and the referred client. A written (not oral) agreement is also required between the principal broker and the cooperating broker so that they may set the amount of fees to be paid.
