ch 5 quizzes
The Burks received $25,000 profit on the sale of a property. This figure represents a 20% profit. What was the property's original price? $100,000 $115,500 $125,000 $150,000
$125,000
Mr. Jones wanted to make a $50,000 profit after paying his first mortgage of $21,275 and paying a 6% commission. What would the sale price have to be? $53,000 $74,275 $75,552 $75,825
$75,825
Jim bought his home for $250,000 and it sold for $202,500. What was Jim's percentage of loss? 8% 10% 19% 24%
19%
Which of the following statements is FALSE? A broker may require licensees to carry high levels of automobile insurance. It's a good idea for brokers to carry workers' compensation coverage. A broker is not responsible for the acts of independent contractors. Employee status versus independent contractor status is an IRS issue.
A broker is not responsible for the acts of independent contractors.
An agency relationship is created in each of the following situations EXCEPT which? A broker agrees to sell an un-licensed friend's home for no compensation. A client authorizes a broker to sell, exchange, and manage his property for 1 year. A broker and seller sign a listing agreement for 3 months. A broker shows a tenant an apartment.
A broker shows a tenant an apartment.
Which BEST describes the role of a fiduciary? A broker can only accept a reasonable amount of profit over the agreed upon consideration. A fiduciary relationship is established when a property manager agrees to represent an owner in leasing the owner's property. A fiduciary can only disclose confidential information obtained after termination of fiduciary relationship. A fiduciary relationship is always created when a broker shows a buyer a house.
A fiduciary relationship is established when a property manager agrees to represent an owner in leasing the owner's property.
How frequently must companies access and update the Do-Not-Call Registry? A minimum of every 31 days A minimum of every three months Semi-annually Annually
A minimum of every 31 days
Which of the following types of sale does NOT typically require a property disclosure statement? A sale of a single family home A transfer made by a trustee in bankruptcy The sale of a duplex Newly built homes in a subdivision
A transfer made by a trustee in bankruptcy
What are the two forms of fraud? Primary and secondary Major and minor Direct and nondirective Active and passive
Active and passive
Licensee Judy takes a weekly ad out in the South Side Journal. Judy does not place ads in any of the other neighborhood newspapers. What might be said about Judy's advertisement practices? Judy is targeting her market area. A city-wide ad would be more cost-effective. Ads in only one local paper may appear to be discriminatory. Judy is marketing to potential buyers who fit the profile of those already established homeowners and not practicing discrimination.
Ads in only one local paper may appear to be discriminatory.
Which of these statements is FALSE? Sellers should be away from home during an open house. Agents should not invite the next door neighbors to the open house. Sellers should be sure all yard work is done before the open house. Before the open house, the agent should open the drapes on all windows to let in the natural light.
Agents should not invite the next door neighbors to the open house.
Which of these items is not included in a lease agreement? Use provisions Demising clause Description of premises Alienation clause
Alienation clause
What is the process to make changes to a listing agreement contract? The broker owns the listing and can make changes as needed. All parties must agree to in writing to any changes. The listing agent is the only one that can make changes to the listing contract. All changes can be made by attaching a hand-written note to the existing contact.
All parties must agree to in writing to any changes.
Seller Janet delivers a disclosure statement to Buyer Amanda. Amanda reads it over and decides everything looks good enough to continue with the purchase. A few weeks later, a major hail storm damages the roof and now it leaks. So the original disclosure is no longer accurate. Which statement is false? Amanda can require Janet to replace the roof. Amanda can rescind the purchase agreement within three business days after she receives an amended disclosure. Janet can correct the damage to the roof and tell Amanda nothing. Janet should amend the disclosure statement and deliver it to Amanda.
Amanda can require Janet to replace the roof.
Which of the following is a good example of a unilateral contract? A listing agreement A personal services agreement A sale contract An option to buy
An option to buy
All but which of the following is an AIDA feature? Action Desire Aspiration Interest
Aspiration
Which of the following methods allows you to keep track of your advertising results? Mark outs Assigning a code Override notes Run testing
Assigning a code
Before a buyer broker shows a property, what must he or she disclose to the seller? Seller agency relationship Subagency relationship Buyer agency relationship Dual agency relationship
Buyer agency relationship
In which contract provision would the length of the lease be outlined? Order of Terms Clear Notice of Terms Clear Statement of Term Statement of Limits
Clear Statement of Term
An agency relationship may be involuntarily terminated by which of the following? Performance Condemnation of the property Termination of the relationship by mutual agreement Expiration of the agency agreement
Condemnation of the property
Which of the following duties is NOT owed to a customer? Confidentiality Honesty Reasonable care and skill Proper disclosure
Confidentiality
Which of these components is NOT required in most listing agreements? Property ID Consent to dual agency Promise of compensation Seller signatures
Consent to dual agency
In which of these contracts is the payment of all or part of the sale price deferred? Contract of sale Option Contract for deed Lease
Contract for deed
Which of these words or phrases might be considered discriminatory when used in advertising? No smoking Couples only Handicap accessible Kids welcome
Couples only
What do you call a licensed real estate salesperson, working under the supervision of a real estate broker, who has been assigned to represent a client when a different client is also represented by such real estate broker in the same transaction? Subagent Designated agent Dual agent Single agent
Designated agent
Which of the following types of newspaper ad is the most expensive? Classified Ad Display Ad Block Ad Line Ad
Display Ad
In what section on a seller's disclosure would you find information regarding issues in relation to drainage problems? Structural Systems and Fixtures Water Environmental
Environmental
Which component is not required in most listing agreements? Identification of the property Specifics of compensation defined Signatures collected Escrow company named
Escrow company named
Which of the following is typically NOT a licensee's duty to the brokerage? Work to promote and sell the broker's listings. Be appropriately licensed. Remain knowledgeable about the license laws and rules. Establish compensation agreements with other ancillary service providers.
Establish compensation agreements with other ancillary service providers.
Which kind of lease has no time limit? Estate for years Estate at will Estate from period to period Estate at sufferance
Estate at will
Broker Jill has an agreement with seller Alice that says Jill will receive compensation if anyone except Alice sells Alice's home. What kind of agreement is this? Exclusive agency Net listing Exclusive right to sell Open listing
Exclusive agency
Which of the following statements best defines closing costs? Marketing expenses incurred to sell the property All listing fees Expenses above the price of the property that buyers and sellers normally are required to pay to complete a real estate transaction Expenses not paid by the brokerage
Expenses above the price of the property that buyers and sellers normally are required to pay to complete a real estate transaction
All of the following are common types of agency relationships that exist except which? Single agency Facilitator agency Consensual dual agency Seller/Landlord agency
Facilitator agency
What is the primary directive given to a seller's agent? Provide support to cooperating agents. Find a ready, willing and able buyer. Deal in the best interest of the buyer. Provide opinions based on experience.
Find a ready, willing and able buyer.
What is the best suggestion to give a seller if an interested party shows up at their front door unannounced? Get the person's name and then call your office immediately so an agent can come to do the showing. Tell the seller to conduct a tour. Have the seller give the visitor a flyer and then tell them to call you. Tell the visitor when the next open house is scheduled.
Get the person's name and then call your office immediately so an agent can come to do the showing.
Sally is a subagent working for Seller Pat. What does Sally owe to Buyer Brad? Honesty and fair dealing Confidentiality Advice on negotiations Information about Pat's motivation to sell
Honesty and fair dealing
Behavioral, Financial, and Type of Relationship are IRS verification levels of control and independence regarding contractor status. Title IX verification levels of payment. HUD levels of reimbursement. compensation levels due a contractor based on performance.
IRS verification levels of control and independence regarding contractor status.
Which of the following is not in violation of the CAN-SPAM Act? Failing to identify a commercial e-mail as such. Including an opt-out method for the recipient. Misleading information as to the sender's identity. A deceptive subject line in a commercial e-mail.
Including an opt-out method for the recipient.
Jim holds a commercial lease. Last year his rent went up 4% based on a 4% increase in the wholesale price index. What type of lease does Jim have? Revolving Lease Wholesale Lease Index Lease Leading Indicator Lease
Index Lease
Which kind of advertising aims at increasing sales by informing the public of a company's capabilities? Operational Institutional Product Classified
Institutional
A prospective homebuyer submits a signed offer to buy a house with the condition that the seller pays financing points at closing. The seller disagrees, crosses out the points clause, then signs and returns the document to the buyer. At this point, assuming all other contract validity items are in order, what is the status of the offer? It's an invalid offer. It's still an offer. It's an invalid contract. It's an accepted offer; therefore a valid contract.
It's still an offer.
Buyer Jim agreed to a 20-day window to get a survey done. A number of problems have occurred and after 20 days from the signed contract date, buyer Jim has yet to have a survey completed. What is now the status of the sales contract? The seller must now order a property survey. A new contract must now be written for the sale to proceed. Jim has defaulted on his contract. A hold will be put on the contract, until a survey is completed.
Jim has defaulted on his contract.
An agent's duties to a principal include all of the following except which? Loyalty Accounting Notice Legal advice
Legal advice
Which is the best method to identify a property? Mailing address Legal description Subdivision plot number Property owner's name(s)
Legal description
What is the term given to the person who has entered into a listing agreement with a seller? Buyer's agent Agent-at-large Customer Listing agent
Listing agent
Designated agency means the clients do not have the full level of fiduciary duties available to them that they would have if they were fully involved in seller agency or buyer agency. In this situation, the client gives up the fiduciary duty of undivided what? Loyalty Confidentiality Accountability Blind obedience
Loyalty
Which of the following is NOT a form of listing contract termination? Termination Market breach Expiration Performance
Market breach
Martha signs a listing agreement with Broker Patrick. Which of the following would probably not be found in the agreement they signed? Patrick's commission Martha's price Expiration date of the contract Martha's average utilities
Martha's average utilities
Broker Al offers all his agents the ability to sell their own homes without any commission owed the brokerage. In what part of the work agreement might this information be located? Reporting Authority Miscellaneous benefits Approvals Directives
Miscellaneous benefits
Which of the following is a common complaint buyers have against brokers? Excessive paper work Compensation fees Misrepresentation of the facts Failure to respond to questions
Misrepresentation of the facts
Which marketing technique is used to provide information to neighbors about the listed property? Block Party Newspaper Flyer Neighborhood Canvass Letter Social Calls
Neighborhood Canvass Letter
When a tenant agrees to pay all taxes, insurance, maintenance and repairs, that tenant has what kind of lease? Gross Periodic Net Graduated
Net
Under what conditions might a broker hold an authorized disbursement of escrow moneys claim? Never To receive compensation from all parties To allow the escrow agent to move funds into an active account To allow the listing contract to expire
Never
Which form of advertisement works well for an agent that deals with specialized properties? Billboards Newspaper Ads Newsletters Flyers
Newsletters
All of these items are important to include on your weekly activity report except which? Number of calls that week Agent comments about the property Classified ads placed on the property Number of hits on the company website
Number of hits on the company website
Which type of home tour is designed expressly for other licensees? Office Tours Open House Private Tours Individual Tours
Office Tours
Which training method is conducive for a small brokerage office? Classroom training Lecture style training One-on-one training Group problem-solving training
One-on-one training
Under what type of contract is a seller obligated to sell, but the buyer is not obligated to buy? Lease Recission Option Purchase
Option
What type of training is frequently conducted by multiple office companies? Self-study Organized classroom training One-on-one On-the-job
Organized classroom training
What is a form of implied agency relationship created by the actions of the parties involved rather than by written agreement? Defined agency Ostensible agency At-Large agency Non-Facto agency
Ostensible agency
Which of these is a free form of advertising? Blind ad Press release Telephone directory Shopping guides
Press release
The CAN-SPAM Act requires all of the following EXCEPT: A valid physical address in all commercial e-mails. Identification of the party who initiated the e-mail. Prior permission of the recipient to send commercial e-mails. An opt-out method for the recipient to unsubscribe.
Prior permission of the recipient to send commercial e-mails.
Which of these statements is FALSE? Radio advertising is not as effective as other methods because listeners can be distracted by their activities and not hear the ads. Newsletters can be a very effective advertising forum for niche marketers. Advertising in the telephone directory is cost effective because the directories reach every home in the state. Magazine ads are significantly more expensive than newspaper ads.
Radio advertising is not as effective as other methods because listeners can be distracted by their activities and not hear the ads.
Which of these is not a violation of Sherman Antitrust laws? Boycott Price Fixing Redlining Market allocation
Redlining
What do we call the unreasonable restriction of business activities that results from conspiracy among members of a trade? Market allocation Group boycott Restraint of trade Tie-in arrangement
Restraint of trade
If a cooperating broker accepts the offer of subagency from a listing broker, to whom does the cooperating broker owe fiduciary duties? Listing broker Buyer Seller No one
Seller
A broker can enter into a single agency agreement with any of the following except? Seller Landlord Buyer Seller and buyer
Seller and buyer
What is an agent called who represents only one person in the transaction, either the buyer or the seller? Subagent Designated agent Dual agent Single agent
Single agent
Agent Norm just started working for Sunshine Realty. He was required to pay an initial fee of $120 for training and $50 for business cards. The $170 is usually referred to as what? Allowance Fee Working Costs Attendance Fee Start-up Costs
Start-up Costs
A seller can agree to accept or reject which of these options when he or she signs the listing contract? Subagency Facilitator Disclosure Non-agency
Subagency
Which of the following type of advertisement reach the greatest number of people? Newspaper ads Flyers Business Cards TV ads
TV ads
What marketing technique uses AM/FM radio transmissions that broadcasts a message about the listing? Talking Sign Virtual Agent Talking House Broadcast Listing
Talking House
Obedience of the agent to the principal means what? The agent must follow all those instructions regardless of the consequences. The agent must follow those instructions regardless of personal feelings about them, as long as they do not violate the state or federal laws. The agent must follow all the instructions of the seller even if they violate state law The agent may disobey those instructions in good faith if the agent feels it is necessary
The agent must follow those instructions regardless of personal feelings about them, as long as they do not violate the state or federal laws.
Who is responsible to ensure that all agents in a brokerage are properly licensed? The broker The real estate licensee board MLS licensee board State Board of Professional Licensing
The broker
Seller Joe Needy lists his home for $40,000 and the broker tells the prospective buyer to submit a low offer because the seller is desperate. The buyer offers $38,000 and the seller accepts. Which statement is TRUE about this situation? Any broker is authorized to encourage bidders. The broker's action was proper in obtaining a quick offer. The broker violated the agency relationship. The broker was unethical but because no one was hurt, it is not improper.
The broker violated the agency relationship.
Which party has legal authority to sign a sales contract for a property that is part of an estate? The trust committee The listing broker A judge in the county where the property is located The executor of the estate
The executor of the estate
Which of the following benchmarks might be used by a licensee when selecting a brokerage? The firm employs a number of successful agents. The firm employs a number of unsuccessful agents. The firm encourages self-training. Most agents have short term work histories with the broker.
The firm employs a number of successful agents.
What is an important legal characteristic of an option to buy agreement? The potential buyer, the optionee, is obligated to buy the property once the option agreement is completed. The optionor must perform if the optionee takes the option, but the optionee is under no obligation to do so. The contract can be executed at no cost to the optionee. It is a bilateral agreement.
The optionor must perform if the optionee takes the option, but the optionee is under no obligation to do so.
Which party is responsible for filling out a property disclosure statement? The cooperating agent The listing agent The broker The sellers
The sellers
Which of the following types of transactions typically contain a property disclosure? The transfer of a deed based on a open market sale of a residential property A transfer made by the personal representative of the estate of the decedent or by a trustee in bankruptcy A transfer in which the buyer has expressly waived the receipt of the property disclosure statement A gift or other transfer to a parent, spouse, domestic partner, or child of a transferor or child of any parent, spouse, or domestic partner of a transferor
The transfer of a deed based on a open market sale of a residential property
Which of the following types of agency is not allowed in most states? Broker's agency Buyer's agency Subagency Undisclosed dual agency
Undisclosed dual agency
Which of the following must a broker legally provide to an employee? Sales commission Health insurance Unemployment insurance Pension plan
Unemployment insurance
The CAN-SPAM Act is federal regulation governing Unsolicited fax advertisements. Unsolicited commercial e-mails. Commercial telemarketing. All of the above.
Unsolicited commercial e-mails.
Which of the following best describes "agency coupled with an interest?" When a licensee knows the seller in a property transaction When a licensee knows the buyer in a property transaction When a licensee has previously sold the property in a current transaction When a licensee holds interest in a property transaction
When a licensee holds interest in a property transaction
Murphy, a buyer (customer), does not know about the leaking basement so he proceeds to make an offer. Should the broker (salesperson) who represents the seller have told Murphy about the defect? No, caveat emptor would apply in this case. No, the broker is the agent for the seller he should not mention the basement unless he is asked. Yes, any defects known to the broker should have been disclosed to Murphy. Yes, the broker owes Murphy a fiduciary relationship.
Yes, any defects known to the broker should have been disclosed to Murphy.
You should try to attach a rider strip to your For Sale sign that has what information on it? Your home telephone number Your GRI designation Your cell phone number Your fax number
Your cell phone number
Video tours are geared especially towards marketing low-valued homes. are geared especially towards marketing high-end properties. are difficult to convert to web formats. should not be posted on a licensee's website.
are geared especially towards marketing high-end properties.
Sales of manufactured and mobile homes are typically made with a property disclosure. must have a property disclosure as noted under FEMA rule 33. are exempt from property inspections. are typically made without a property disclosure.
are typically made with a property disclosure.
An agency relationship is based on compensation commission authorization and mutual consent contact and access
authorization and mutual consent
A lease is both an instrument of conveyance and a contract. neither an instrument of conveyance nor contract. a promise note. a document that conveys legal title.
both an instrument of conveyance and a contract.
A contract in which an owner hires a broker to market the property creates an agency relationship between buyer and seller. buyer and broker. broker and seller. broker, buyer, and seller.
broker and seller.
An agency relationship is better accomplished through implication or ratification is always derived by express act always require a written contract can occur through implication (what you might say or do) without a written contract
can occur through implication (what you might say or do) without a written contract
Home tours are oftentimes referred to as caravans. go and shows. circus parades. meet and greets.
caravans.
Work agreements must be on file with the State notarized. dated and signed by the parties. renewed each month.
dated and signed by the parties.
A lease conveys exclusive use and requires recording of a leasehold conveyance. is also called an exclusive freehold estate. is not a binding contract upon agreement. it may also restrict some uses.
it may also restrict some uses.
A listing agreement is a for hire agreement that may or may not result in an agency relationship. legally-binding contract that creates an agency relationship. lateral agreement for services. non-legal contract that does not create an agency relationship.
legally-binding contract that creates an agency relationship.
Antitrust laws prohibit volume discounting market coops. trade unions. market allocation.
market allocation.
Buyer Norm had his father put up earnest money in the amount of $4,000. The contract fell through. The sponsoring broker should release the full amount back to buyer Norm's father. release the full amount back to buyer Norm. release $2,000 to Norm and $2000 to Norm's father. transfer the full amount to an escrow dispersal company for distribution.
release the full amount back to buyer Norm.
When a listing agent signs an agreement, in reality he or she is signing on behalf of a cooperating broker. signing on behalf of all licensees in the company. signing on behalf of all other MLS licensees. signing on behalf of the indicated broker.
signing on behalf of the indicated broker.
The policy and procedures manual should include business agreements. the firm's commission policy. itemization of the managing broker's short-term and long-term business goals. the unique role of each individual employee.
the firm's commission policy.
