Contracts and Regulations 1
The Title Company charges a fee to effect the closing on behalf of the buyer and seller. Who bears the cost of this? 1 It is agreed in the purchase contract who shall pay this cost 2 The listing broker must pay since he usually chooses the Title Company 3 It is illegal for the Title Company to charge this fee 4 The seller always pays this fee
It is agreed in the purchase contract who shall pay this cost
All but which of the following are essential elements in the formation of a contract? 1 Offer 2 Acceptance 3 Consideration 4 Performance
Performance - To be valid, a contract must have offer and acceptance, and good, i.e., valuable consideration.
Which of the following is required to have a real estate license? 1 Resident manager of an apartment building 2 Property manager specializing in handling buildings in commercial districts 3 A salesperson who works in a builder's model homes 4 An appraiser
Property manager specializing in handling buildings in commercial districts - A licensee is someone who offers real estate services to the public.
An agent can advertise a property under his or her name if: 1 He/she is a member of a local real estate board 2 He/she personally listed the property 3 The name of his/her broker is also in the ad 4 He/she personally paid for the ad
The name of his/her broker is also in the ad
When a real estate entity is dissolved: 1 the last employing broker becomes personally responsible for making all final disbursements and accounting for all trust funds 2 the last employing broker must maintain all records for a period of four years 3 the agent's licenses are inactive until they join another real estate entity 4 all of the above
all of the above - All agents have to join another company, and the responsibility of the employing broker is to maintain the records for four years and is responsible for all final disbursements.
The term "rescind" means: 1 change 2 cancel 3 substitute 4 subordinate
cancel - Rescind means that the contract is canceled and everyone returns to their original positions.
Ben agrees to buy Al's real estate for $230,000, he signs a sale contract and deposits earnest money with broker Don. Al is unable to show good title. If Ben demands return of the earnest money from Don as provided in the contract, Don should: 1 deduct his commission and return the balance to Ben 2 deduct his commission and pay the balance to Al 3 return the entire amount to Ben 4 pay the entire amount to Al to dispose of as he decides
return the entire amount to Ben
If a licensee's license has been canceled because her employing broker's license was canceled: 1 she may have her license transferred without charge to another employing broker 2 she should complete all unfinished transactions before transferring her license to another broker 3 her license is not impacted since it was the broker whose license is cancelled 4 she must pass the state exam and then join another employing broker
she may have her license transferred without charge to another employing broker - Canceled is not the same thing as terminated; when a licensee has had his license canceled because his brokers license has been canceled, no business may be transacted until the license is active again.
The Colorado law that requires real estate contracts to be in writing is called the: 1 statute of estoppel 2 statute of descent and distribution 3 statute of frauds 4 statute of limitations
statute of frauds - It is the statue of frauds that requires all contracts to be in writing.
A broker purchases software for contract printing. If there is an error in the contract wording: 1 the Software Company is legally liable for any errors in the package 2 the broker is liable for the contract's accuracy 3 the Software Company must be on the Real Estate Commission's "approved" list of preparers 4 he must send it to his attorney for review before using the software
the broker is liable for the contract's accuracy
If an employing broker leaves a real estate brokerage, what happens to the transaction records? 1 the brokerage retains the records as the company is responsibile for maintenance of records 2 the departing broker is personally responsible for delivering all such records to to his/her new brokerage 3 all funds in escrow must be returned to the rightful parties before being re-deposited with the new brokerage 4 the real estate brokerage can dispose of all records acquired while the former employing broker worked for the company
the brokerage retains the records as the company is responsibile for maintenance of records
According to Colorado license law, which of the following is correct with regard to the terms, "employing broker" and "employed licensee?" 1 supervisory duties of brokers apply only to employees and not to associate brokers who are independent contractors 2 employed licensees cannot be independent contractors under the rules of the IRS 3 the employing broker has specific supervisory requirements for all employed licensees 4 employed licensees must be offered a minimum salary and benefits
the employing broker has specific supervisory requirements for all employed licensees- Rules E-30, E-31, and E-32 apply to supervision of all employed licensees in Colorado. Thus, the employing broker has specific supervisory requirements for all employed licensees.
If a licensee fails to complete the continuing education requirements by the renewal date: 1 the license is placed on inactive status 2 the license is canceled 3 the license is renewed for one 30-day grace period 4 the Commission will review each case individually
the license is placed on inactive status - A real estate license will not be renewed if continuing education requirements are not met; the license would be placed on inactive status.
According to the Statute of Frauds - a real estate sales contract is not effective unless it is signed by: 1 the buyer 2 the seller 3 either the buyer or the seller
the seller - Although Colorado's statute of frauds only provides that the seller must sign the real estate contract, the obvious best practice is for both parties to sign. Statute of Frauds. To prevent fraud through perjury, the law requires that the parties' agreement evidencing their mutual assent must be in writing in certain cases.
Which of the following is true concerning commissions earned by a broker in a real estate sales transaction? 1 they are based on a schedule of commission rates set by the real estate commission 2 they may be deducted from the earnest money deposit and claimed by the broker when the sales agreement is executed 3 they are determined by agreement of the broker and the principal 4 they may be shared with an unlicensed person if that person assisted the broker in bringing the buyer and seller together
they are determined by agreement of the broker and the principal
The lender computed the interest for the previous month on a $120,000 mortgage loan balance at $825. What is the rate of interest? 0.07500000000000001 0.07750000000000001 0.0825 0.085
0.0825 - $825 X 12 = $9900 (Annual Interest) / $120,000 = .0825 or 8 1/4 %
According to the Real Estate License Law, a transaction and trust account record must be kept for a minimum of how many years? 1 2 3 4
4 - The real estate commission requires all records to be kept for four years.
An applicant for a Colorado real estate license who has been licensed in any other state must file which of the following proofs of that licensure? 1 Photocopy of her license from that state 2 Letter from the last employing broker 3 A certificate of licensing history from the other state's real estate licensing authority
A certificate of licensing history from the other state's real estate licensing authority
Buyer Jones makes a full price offer to purchase to seller Smith, who rejects the offer outright. What recourse does Jones have? 1 Sue Smith for damages 2 Sue Smith for specific performance 3 Sue for damages and specific performance 4 Buyer Jones cannot sue
Buyer Jones cannot sue -Since Smith refused the offer, there was no contract created and Jones has no legal complaint. At this point Smith is not obligated to sell his property. However, if the property was listed with a broker, the latter could successfully sue for his full commission.
A resident Colorado broker's office must: 1 Be in a commercial office building to comply with zoning 2 Be a virtual office doing business by phone and using a post office box mailing address 3 Have a physical address in Colorado where the commission staff can inspect records
Have a physical address in Colorado where the commission staff can inspect records - C-2. Resident broker required to have office; exceptions.
When changing from an active to an inactive or unlicensed agent, how much time does the Commission allow for ceasing any and all activity? Immediately 24 hours 12 hours 48 hours
Immediately - To have an active license the licensee must be in compliance with the licensing laws, otherwise any and all activity must stop immediately.
Cindy is an associate broker who received a thank you letter and nice bonus check from the seller of a house several weeks after the closing. Cindy cashed the check because she felt she earned it. Which of the following is true in this situation? 1 Cindy may accept the bonus check because she is licensed as an associate broker 2 Cindy is allowed to accept the money if 30 days have elapsed since the closing 3 It is a violation of commission regulations to accept the money 4 Cindy may accept the money if her broker permits her to do so
It is a violation of commission regulations to accept the money - Agents may only be paid by her employing broker.
In Colorado, a broker may pay a referral fee to an unlicensed person in which of the following circumstances? 1 Only licensed brokers may receive referral fees, thus it is never acceptable 2 It is acceptable as long as the unlicensed person does nothing that requires a real estate license 3 It is acceptable only if the unlicensed person is a party to the transaction 4 It is acceptable if the unlicensed person only helps to identify and qualify one party to the transaction
It is acceptable as long as the unlicensed person does nothing that requires a real estate license - According to the real estate commission, there is no public harm in paying a referral fee to an unlicensed person as long as the person has done nothing requiring a license, and the amount paid is "reasonable" under the circumstances. The most common acceptable example is paying a referral fee to an unlicensed individual whose sole activity was providing a name.
Which of the following is not essential to a valid real estate sales contract? 1 Offer and acceptance 2 Notarization 3 Consideration 4 Description of the property
Notarization - In many states, a real estate contract does not have to be notarized to be valid.
An option is a contract that: 1 Transfers title when signed 2 Does not set the sale price 3 Specifies a time limit in which to buy or lease a piece of property 4 Is a bilateral executory agreement
Specifies a time limit in which to buy or lease a piece of property - An option gives a specific time for the buyer or seller to exercise a specific action.
What is the status of an employing broker who moves his office down the street but does not notify the Real Estate Commission? 1 The broker must notify the Real Estate Commission within 30 days 2 The broker's license is revoked 3 The broker and all of his agents' licenses are inactive 4 The broker's license is suspended but all of the employed agents may continue to conduct business
The broker and all of his agents' licenses are inactive
When a broker terminates his affiliation with an employing broker what must be done? 1 All business cards must be returned to the employing broker 2 The broker's license along with a letter of termination must be sent to the real estate commission 3 The broker must give the employing broker an official letter of termination that he or she can send to the real estate commission 4 The broker and the employing broker have joint responsibility to assure that the real estate commission is notified
The broker and the employing broker have joint responsibility to assure that the real estate commission is notified
A licensee may accept compensation from: 1 The licensee's employing broker only 2 The seller or buyer 3 Any licensed real estate broker 4 Any service provider to the transaction
The licensee's employing broker only - A licensee can only accept compensation from his employing broker.
Which of the following best describes earnest money? 1 The money deposited by the purchaser at the time of signing the sales contract 2 The consideration for the sale of the property 3 The commission to be paid to the broker 4 The money deposited by the purchaser with the broker or seller to pay for the expense of examining the title
The money deposited by the purchaser at the time of signing the sales contract - The earnest money is given when the offer is made. It is returned if the offer is rejected.
An offer may be withdrawn by the offeror any time until: 1 The offeror has been notified that the offer has been accepted and signed 2 The closing date 3 The deed is recorded 4 The offer is signed by the person accepting the offer Explanation Until the offeror is notified of its acceptance by the person recieving the offer, the offer can be withdrawn. It is not enough for the person receiving an offer just to sign it. S/he must notify the offeror that it has been accepted and signed.
The offeror has been notified that the offer has been accepted and signed - Until the offeror is notified of its acceptance by the person recieving the offer, the offer can be withdrawn. It is not enough for the person receiving an offer just to sign it. S/he must notify the offeror that it has been accepted and signed.
A broker that is guilty of an act that is grounds for disciplinary action may: 1 be subject to a criminal prosecution 2 have their license suspended or revoked 3 be subject to a civil action 4 all of the above
all of the above
A contract is void if it involves: 1 misrepresentation of the purchaser's intentions 2 an illegal purpose 3 duress 4 undue influence
an illegal purpose - A contract is void if it involves an illegal purpose: (note: c and d are voidable).
An option: 1 requires the buyer to complete a purchase 2 keeps an offer open for a specified time 3 gives buyer an easement on the property 4 makes seller liable for a commission to broker if buyer does not exercise option
keeps an offer open for a specified time - An option is a unilateral contract, in essence an offer to make an offer.
How are real estate commissions determined in Colorado? 1 set by the real estate commission 2 set by law 3 determined by local brokers 4 negotiable between the broker and the seller or buyer
negotiable between the broker and the seller or buyer - Commissions are always negotiable between the principal and the agent; meaning between the seller or buyer and the broker.
You competed for and won a listing contract by offering a considerably reduced commission. In order to recoup some of your normal fee, you charge for each contract document that you prepare. Your seller agrees to this arrangement. It is: 1 perfectly all right, so long as you use approved forms 2 not allowable 3 all right, so long as the seller's attorney prepares the forms 4 anything that you and the seller agree upon in writing is allowable
not allowable - It is illegal for a broker to charge a fee for the preparation of legal documents; a broker must even pay the Title Company for preparing the warranty deed, and the bill of sale, as the seller cannot be charged for the preparation of legal documents.
A Colorado broker with residence out of state accepts an earnest money deposit on a property located in Colorado. He needs to: 1 open an escrow account in a Colorado bank 2 have a Colorado office open to the public 3 open an escrow account in his state of residence 4 have an active license in his home state
open an escrow account in a Colorado bank - A non-resident broker is required to open a trust account in a recognized Colorado depository when taking money belonging to others that pertain to properties in Colorado.
What portion of the 24-hour continuing education requirement is to consist of the mandatory credits developed by the Real Estate Commission? 4 hours 8 hours 12 hours All 24 hours are mandatory subjects
12 hours - Within every three year license renewal period, a licensee must complete 12 hours of electives and 12 hours of mandatory continuing education for their next license renewal. The 12 hours of mandatory CE are completed by taking the 4 hour Annual Commision Update class.
To renew an active Colorado real estate license, what continuing education is required of the licensee? 24 hours of continuing education and successful completion of the Colorado portion of the state licensing exam 8 hours of mandatory continuing education taken within the last three years 24 hours of approved continuing education, of which 12 hrs must consist of the 4 hour Annual Commission Update Course taken each year 24 hours of additional education from any source
24 hours of approved continuing education, of which 12 hrs must consist of the 4 hour Annual Commission Update Course taken each year
What is the maximum fine that the Real Estate Commission can impose for a violation of commission rules? $2,500 plus punitive damages 2500 No fine only license suspension or revocation $3,500 plus punitive damages
2500 - The maximum administrative fine is $2,500. This can only be assessed after a hearing by an appointed administrative law judge.
When the license of the sole proprietor is suspended for two years, what is the effect on the affiliated associate brokers? 1 Affiliates' licenses will also be suspended for a two- year period 2 Affiliates' licenses will be revoked, subject to reinstatement after one year 3 Suspension of the proprietor has no effect on the affiliates' licenses 4 Affiliates licenses are inactive until they are hired by a new employing broker
Affiliates licenses are inactive until they are hired by a new employing broker - If the broker's license is suspended, the licenses of all associate brokers will be placed on inactive status until these persons are "hired" by a new broker.
Which of the following will not terminate an offer? 1 An offer from a third party 2 Death of an offeror before acceptance 3 A counter offer by the offeree 4 Revocation of the offer before acceptance
An offer from a third party - All of the rest do terminate an offer, but another offer prior to acceptance does not terminate the offer.
Which statement is false about unlicensed assistants? 1 An unlicensed assistant may be paid a commission by a licensee, based on the success of the transaction 2 The broker may allow the assistant to chauffeur and show a listed property with the seller's permission 3 An assistant does not need a license 4 Unlicensed assistants may prepare a market analysis on behalf of the broker
An unlicensed assistant may be paid a commission by a licensee, based on the success of the transaction - Note that this question is looking for which answer is "false" not "true".
Broker A is a sole proprietor. He quits business and goes to work under Broker B. Whose responsibility is it to keep Broker A's previous records? 1 Broker A 2 Broker B 3 Real Estate Commission 4 None of the above
Broker A - A real estate broker is required to keep records (for the Commission) for 4 years.
The seller at closing refuses to pay the broker. What should the broker do? 1 Refuse to close the deal 2 File a complaint with the Real Estate Commission 3 Close the transaction, then sue for the commission 4 Keep the earnest money as commission
Close the transaction, then sue for the commission - The broker is not allowed to delay the transfer of the property
Judy Moore is a licensee in the employ of ABC Real Estate; she may advertise her listing as: 1 For sale, 4 bedrooms, 2 baths. Close to Schools. Call Judy 555-6543 2 Home for Sale. Suburban location. Contact Judy, ABC Real Estate 303-555-5555 3 Home for Sale. Suburban location. Near Catholic schools. Contact Judy, ABC Real Estate 303-555- 5555 4 For sale, 4 bedrooms, 2 baths. Married Couple Only. Contact Judy, ABC Real Estate 303-555-5555
Home for Sale. Suburban location. Contact Judy, ABC Real Estate 303-555-5555 - An ad that does not indicate that the property is offered by a broker and not an owner, is called a blind ad. Religion and maritial status are protected classes.
What, if anything, is required by the broker to be included on his/her web site. 1 License number of the brokerage and a list of all current active licensees 2 Names of active licensees, addresses, and telephone numbers 3 Address of the brokerage's home office and states in which the brokerage holds licenses 4 Name of licensee's brokerage firm must appear on web site.
Name of licensee's brokerage firm - Commission rules regarding advertising of brokerage identity all apply to any web site or internet advertising. Brokerage name must appear on web site.
A broker must keep which of these funds in his trust account? 1 Rental monies received 2 Fire insurance premium monies not part of a real estate transaction 3 Commissions received 4 Relocation referral fees
Rental monies received - A broker must keep all money belonging to others in an escrow (AKA trust) account.
A broker may deposit her personal funds in her trust account in which of the following situations? 1 When a minimum amount is required by the bank to maintain the account 2 Whenever she wants to -- it is withdrawals that are not allowed 3 If an earnest money check bounces to cover the check 4 When she had to use the escrow to pay her rent and she is putting the money back
When a minimum amount is required by the bank to maintain the account - Brokers may only deposit enough money in a trust account to maintain the minimum required balance.
When is a broker to open, or have access to, an escrow account? 1 When he applies for his broker's license 2 When he starts to work as a broker 3 When he receives earnest money 4 None of the above
When he receives earnest money - A broker is not required to open a trust account, in a recognized Colorado depository, until he takes money that belongs to others.
In interpreting a contract, a court would consider that: 1 a contract should be interpreted in favor of the party drafting the instrument 2 a later document takes precedence over an earlier document 3 numerals take precedence over written words 4 a printed clause would take precedence over a handwritten portion of an agreement
a later document takes precedence over an earlier document - A court considers that a later document takes precedence over an earlier document
Every real estate sales contract must contain all of the following except: 1 signatures of the parties bound by the contract 2 consideration 3 offer and acceptance 4 a notary acknowledgment
a notary acknowledgment - There must be offer and acceptance and signatures of the parties bound by the contract. It also must contain consideration, however, real estate sales contracts do not have to be notarized to be valid
If an owner takes property off the market for a definite period of time, for consideration, and grants the right to purchase the property within that period at a stated price, this is called: 1 an option 2 a contract of sales 3 the right of first refusal 4 none of the above
an option - is a contract to enter into a contract.
In Colorado, which of the following must be investigated by the real estate commission? 1 any verified written complaint 2 at least five percent of all brokers annually 3 disputes between brokers regarding commission 4 any licensee accused of a crime
any verified written complaint
If an owner refuses to pay a broker an earned commission, the broker may properly seek relief by: 1 filing a mechanic's lien 2 bringing a formal complaint with the division of real estate 3 bringing a court action 4 bringing a quiet title action against the seller
bringing a court action - An employing broker may sue a seller or buyer for commission pursuant to an exclusive right contract.
When employing broker A sells his company to broker B: 1 broker A is responsible for retention of all records prior to sale 2 broker B is responsible for retention of all records before and after sale 3 broker A is only responsible for records of transactions not completed 4 broker A is only responsible for their personal transactions
broker A is responsible for retention of all records prior to sale - Broker selling company is responsible for retention of all transaction records that occurred prior to the sale of the company.
Deposit money received by a licensee is turned over to the: 1 seller of the property 2 Real Estate Commission 3 broker to deposit in his trust fund 4 seller's attorney
broker to deposit in his trust fund - All earnest money must be deposited in the employing brokers trust account within three business days after acceptance of the contract, unless the buyer and seller instructed the broker, in writing, to do something different.
Who of the following is required to obtain errors and omissions professional liability insurance? 1 the employing broker only 2 every active Colorado licensee 3 active and inactive Colorado licensees 4 resident Colorado brokers only
every active Colorado licensee - Errors and omissions insurance coverage is required for every active Colorado licensee. Inactive licensees are not required to carry this insurance, however, they cannot conduct any real estate activities either
A void contract is one that is: not in writing not legally enforceable rescindable by agreement amortized
not legally enforceable - A void contract, also known as a void agreement, is not actually a contract. A void contract cannot be enforced by law. Void contracts are different from voidable contracts, which are contracts that may be (but not necessarily will be) nullified.
A broker may not lawfully collect a commission from both buyer and seller without: 1 notifying both of this fact after the sale is closed 2 having them both sign a sales contract 3 an exclusive listing agreement 4 prior knowledge and consent of both parties
prior knowledge and consent of both parties - Dual agency is not illegal in some states, it is illegal in Colorado, however, lack of disclosure of dual agency is illegal.
Which of the following is true? 1 A competent person of any age may be given a power of attorney 2 A competent person of any age may be an attorney-in-fact 3 A person of legal age under all circumstances can be given a power of attorney 4 A competent person of legal age may be given a power of attorney
A competent person of legal age may be given a power of attorney
The commissioners are selected in the following way: 1 Popular vote 2 Appointed by the real estate director 3 Appointed by the governor 4 They volunteer
Appointed by the governor - The real estate commissioners are appointed by and serve at the pleasure of governor.
The Real Estate Commission may issue a temporary "hardship" license when the employing broker of a corporate brokerage is unable to continue in that role. This "hardship" license may be issued to: 1 A member of the board of directors 2 A person who has a sufficient ownership in the corporation 3 An officer or director with a broker's license from another state 4 A Colorado licensee approved by the corporate board of directors
A Colorado licensee approved by the corporate board of directors - Every company must have an employing broker at all times. If something should happen to an employing broker, such as leaving the company, the real estate commission can issue a "hardship" license to someone else to act as the interim employing broker while the company settles on a permanent employing broker. The only rule for the "hardship" employing broker is that he/she must have an active Colorado license.
An applicant for a Colorado real estate license who has been licensed in any other state must file which of the following proofs of that licensure? 1 Photocopy of her license from that state 2 Letter from the last employing broker 3 A certificate of licensing history from the other state's real estate licensing authority
A certificate of licensing history from the other state's real estate licensing authority - A certificate of licensing history that indicates the licensee's current status. Any complaints and disciplinary actions taken against the individual must accompany an application for a real estate license in a new state.
Which of the following is the best explanation of specific performance? 1 The date set for closing at which all parties involved, or their attorneys, must be present and must sign and deliver all documents necessary to close the transaction 2 The right of either party to cancel the contract, provided legal notice is given 3 A legal procedure or action brought by either buyer or seller to enforce the terms of a contract 4 An executed contract in which all elements of the contract must be specifically fulfilled
A legal procedure or action brought by either buyer or seller to enforce the terms of a contract - Specific performance is the legal action brought against the party in default of a contract to require them to keep the terms of the contract.
The Real Estate Commission must investigate: 1 Any licensee accused of a crime 2 Disputes between brokers 3 Any verified written complaint 4 At least 5% of all brokers each year
Any verified written complaint - The operative word here is MUST. Colorado law requires investigation of all verified, written complaints. A licensee convicted of a crime may be investigated if the crime involved real estate activities. Also, a licensee may be investigated for any reason, or no reason.
When the employing broker of a corporate brokerage is suddenly unable to continue in that position, to whom may the commission issue a temporary "hardship" license? 1 person with sufficient ownership interest in the corporation 2 Colorado licensee approved by the corporate board of directors 3 member of the board of directors 4 officer or director with a broker's license from another state
Colorado licensee approved by the corporate board of directors - A temporary hardship license for a corporate brokerage can only be issued to a broker licensed in Colorado. The requirements for ownership and director status are waived.
Which of the following would an unlicensed personal assistant be permitted to do? 1 Complete and present a comparative market analysis 2 Drive potential buyers to a listing and discuss purchase options 3 Answer questions about the seller's motivations as long as they are correct 4 Distribute factual literature prepared by a licensed associate
Distribute factual literature prepared by a licensed associate - An unlicensed assistant is allowed to distribute literature, they can chauffeur buyers to a property with the seller's permision as long as no licensed activity is performed and they may complete but not present market analysis.
What, if anything, must an associate broker include in his/her web site advertising? 1 Name of the brokerage firm that holds the associate broker's license 2 Names of all licensees in the broker's office which the associate broker works 3 The brokerage firms home office that holds the associate's license 4 There is no need for additional disclosures
Name of the brokerage firm that holds the associate broker's license
How should you respond if a client asks you about sex offenders in the neighborhood in which they are planning to buy a property? 1 Canvas the neighborhood asking about sex offenders 2 Refer them to the local law enforcement agency that keeps the information 3 Call the police station to get the information for them 4 Tell them the information is protected under "fair housing" disability category
Refer them to the local law enforcement agency that keeps the information
Under what conditions is it permissible for a broker to pay a referral fee to a person who does not possess a Colorado real estate license? 1 Under no conditions 2 When the duties performed by that person would not normally require a real estate license 3 Only if the unlicensed person is in the employ of and under the direct control of the broker 4 The unlicensed person may perform any duty deemed acceptable by the broker and receive a referral fee, if permission is granted by all interested parties, and so stipulated in writing
When the duties performed by that person would not normally require a real estate license - The Colorado Real Estate Commission states that a referral fee payment is permissible provided that an unlicensed person not perform duties requiring a license, and that the fee be a reasonable amount according to the circumstances.
Which of the following is required for a person to be a broker of record for a corporation? 1 a corporate position as a director with voting rights 2 an executive position with the corporation such as president or chief executive officer 3 a valid active Colorado broker's license 4 more than nominal ownership in the corporation
a valid active Colorado broker's license - The only requirement in order to be the broker of record for a corporation is that one have a valid, active Colorado broker's license, and have fulfilled the necessary requirements to be an Independent Broker.
A broker's record-keeping system for his trust account(s) must include the following: 1 a trust account ledger 2 a trust account journal 3 a monthly bank reconciliation worksheet 4 all of the above
all of the above - A trust account ledger and journal must be kept current at all times and the account must be reconciled monthly with the bank statement.
In Colorado, a real estate transaction is closed in escrow when: 1 the buyer's loan cannot be funded at the time of closing 2 the buyers and sellers cannot be at the closing at the same time 3 there is some problem that occurs, and the closing has to be delayed while in process 4 all of the above
all of the above - Because Colorado is not an escrow state, usually transactions are finalized at the closing table. We do close in escrow when certain situations occur: the buyer's loan cannot fund, all parties cannot sign the documents simultaneously, or some problem arises and we have to delay closing.
A broker, Fred Wilcox, is selling a home to Alice Quincy. He tells her the foundation is "solid as a rock," when he knows for a fact that it is slowly sinking into the swampy ground on which it was built. Licensee Wilcox may be subject to: 1 having his license revoked 2 criminal action 3 civil action 4 all of the above
all of the above - Not only is Broker Wilcox in violation of the Real Estate License Law, he is breaking civil and criminal law.
Broker Green sold a home and the buyer gave him a $5,000 check as deposit. Green did the improper thing when he: 1 endorsed it over to the seller upon financial acceptance of the offer 2 held the check until all financing was completed in escrow 3 cashed the check and gave the money to the seller when his acceptance was communicated to the buyer 4 all of the above
all of the above - Unless otherwise agreed by the buyer and seller, the earnest money must be deposited in the broker's trust account.
Consideration is an essential element of valid contracts. Consideration may be: 1 a promise 2 the giving up of some legal right 3 labor 4 all of the above
all of the above - Virtually anything of value may be "consideration." It does not have to be material, it could be for "hugs and kisses and best wishes."
A real estate broker sold property on Friday morning and received a $2,000 deposit in cash. Afraid to carry the money, he quickly deposited it into his own account in a nearby branch of his bank. This is clearly an example of: 1 judicious caution 2 conversion 3 commingling 4 cohabitation
commingling - Commingling is mixing the broker's money with that of his clients. Conversion occurs when a broker spends any of this money, or withdraws any of this money.
At the time of closing, the warranty deed is: 1 given to the grantee 2 delivered to the grantee (Buyer) at the closing then recorded at the County by the title company 3 given to the lender until all payments on the loan have been made 4 brought in by the seller and endorsed over to the buyer
delivered to the grantee (Buyer) at the closing then recorded at the County by the title company At a closing, the deed is signed by the grantor, given to the grantee (delivery) then the title company takes the deed from the grantee (acceptance) and mails it to the county for recording. The county returns the original deed to the grantee after it has been recorded. Title passes at the moment of delivery and acceptance
A broker received an earnest money deposit. Other than depositing it in an escrow account, he may: 1 do whatever the buyer wants him to do 2 do whatever the seller wants him to do 3 do whatever he wants to do because he is responsible for the money until closing 4 do whatever is agreed to by the seller and buyer
do whatever is agreed to by the seller and buyer - A broker is required to follow the written instructions of the buyer and seller when handing earnest money.
Broker K arrives to present an offer to Mrs. G, an invalid, and finds her son and his wife also present. Both individuals persistently urge Mrs. G to accept the offer on her home, though it is much lower than the price she was asking. If Mrs. G signs the offer, she may later claim: 1 that Broker K should not have brought her a low offer 2 that she was under undo duress from her son and daughter-in-law and that the agreement is voidable 3 that Broker K defrauded her by allowing her son and daughter-in-law to see the agreement 4 that her son and his wife have usurped her consumer protection rights
hat she was under undo duress from her son and daughter-in-law and that the agreement is voidable - Because she is an invalid, and her son and daughter-in-law persisted in their efforts to have Mrs. G sign the terms of the contract, (under duress) it is a voidable contract.
A trust account maintained by a licensed broker in Colorado must have all of the following except: 1 be located in the state of Colorado 2 have a regular specified minimum balance 3 designate the broker as trustee 4 be the subject of a record showing deposits and withdrawals
have a regular specified minimum balance - Trust accounts must be in Colorado, name the broker as owner of the accounts and be reconciled monthly.
According to the Colorado Licensing Law, in order for a non-resident to become a broker: 1 he must meet Colorado licensing law only 2 he must be involved in real estate in his home state 3 he must be 21 and have been involved in real estate for two years 4 he must be a broker from his home state and comply with Colorado licensing laws, but need not open an office in Colorado
he must be a broker from his home state and comply with Colorado licensing laws, but need not open an office in Colorado - The minimum age requirement for a license in Colorado is 18. In order to obtain a non-residential license an applicant must be a broker in his own state and comply with Colorado licensing laws. It is not necessary to have an office in Colorado but a Colorado trust account is necessary the minute he receives any money from a client in Colorado.
Unclaimed funds held in escrow after five years: 1 may be used by the broker for the annual office party 2 must be reported and remitted to the state treasurer 3 should be invested in real estate investment trusts 4 should be kept indefinitely
must be reported and remitted to the state treasurer - Must be remitted to state treasurer after five years. These funds do not belong to the Broker.
Which of the following is true for a person activating an inactive or expired Colorado real estate license? 1 are not required to make up for the continuing education requirements they missed 2 must satisfy the continuing education requirement before they apply to activate an inactive license or to reinstate an expired license to active status
must satisfy the continuing education requirement before they apply to activate an inactive license or to reinstate an expired license to active status
An associate broker has developed a web site. What must he or she include on the site? 1 name of the home office of the company that holds the salesperson's license and a list of states in which company is licensed 2 name and location of the brokerage company that holds the associate's license 3 names of all licensees in the broker's office and the states in which they are licensed 4 license number of the brokerage and a list of current active licensees
name and location of the brokerage company that holds the associate's license
Under the Real Estate Commission rules, when a listing broker receives an earnest money deposit on a residential sales contract, he must deposit the earnest money in his trust account: 1 no later than the third business day after he is notified of the acceptance of the contract 2 no later than the first working day after receipt of the deposit 3 no later than 48 hours after the receipt of the deposit 4 when he is instructed to do so by the seller
no later than the third business day after he is notified of the acceptance of the contract - A real estate broker must account to the buyer and seller for all earnest money. It must be deposited in a trust account no later than three business days after acceptance of the contract, unless the buyer and seller instruct the broker in writing to do something different.
If a licensee negotiates a sale of real estate on behalf of a seller while her license is inactive, she may receive a commission from: 1 her employing broker 2 the seller 3 her principal 4 none of the above
none of the above - A licensee must have an active real estate license in order to collect a commission. It is a violation of real estate license law to negotiate a real estate transaction without an active license.
A written office policy regarding brokerage relationships is a requirement of offices that are staffed by: 1 six or more agents 2 three or more agents 3 two or more agents 4 one or more agents
one or more agents - Colorado statutes require all offices to have an office policy regarding agency. And a copy of that policy and all changes are to be given to all associates.
A real estate licensee may represent: 1 any owner who employs him or her 2 not more than one owner at one time 3 only the broker under whom he or she is licensed 4 any broker who is duly licensed
only the broker under whom he or she is licensed - An agent may represent the broker who employees him; the employing broker represents the seller.
Earnest money checks received by a broker in connection with a real estate purchase contract must be: 1 placed in broker's escrow account within 3 business days of acceptance of the contract 2 identified as a check in the purchase contract 3 payable to the listing broker 4 placed in the broker's operating account, then transferred to the escrow account when the contract is accepted Explanation The money must be placed in an escrow account within three business days of acceptance of the contract.
placed in broker's escrow account within 3 business days of acceptance of the contract - The money must be placed in an escrow account within three business days of acceptance of the contract.
When the license of an employing broker is suspended or revoked, his/her licensees must: 1 transfer existing contracts to a new employer 2 continue listing and selling pending an appeal 3 stop listing and selling 4 obtain an independent broker's license
stop listing and selling - A licensee must be affiliated with an approved active broker to practice real estate. They will need to be hired by another Broker.
A breach of contract is a refusal or failure to comply with the terms of the agreement. In Colorado if the seller breaches the contract, the buyer may: 1 sue the seller for specific performance 2 rescind and split the earnest money with the broker 3 sue the seller for liquidated damages 4 all of the above
sue the seller for specific performance - The buyer may always sue the seller for specific performance or damages, or both, regardless of the type of contract used. The buyer is entitled to terminate the contract and have his earnest money returned if he chooses not to sue.
Which of the following is true when an employing broker changes the primary business address? 1 the broker must notify the commission in a manner acceptable to the commission or the license will become inactive 2 each employed licensee must notify the commission of the change 3 the change may be noted at the next license renewal cycle 4 all licenses of employees must be sent to the commission for reissue
the broker must notify the commission in a manner acceptable to the commission or the license will become inactive - The employing broker must notify the commission of the address change in writing or all licenses will be inactive until the change is made. One notification will suffice for the broker and all associated licensees.
When an employing broker changes the primary business address: 1 all of the licenses of employed licensees must be sent to the commission for reissue at the correct address 2 this change will be noted at the next license renewal cycle 3 each employed licensee must notify the commission of the change 4 the broker must notify the commission in a manner acceptable to the commission, or the brokerage license will become inactive
the broker must notify the commission in a manner acceptable to the commission, or the brokerage license will become inactive - The broker must notify the commission in a manner acceptable to the commission, or the brokerage license will become inactive.
As to the preparation of legal documents at closing: 1 the licensee bears the cost for the preparation of all legal documents including those prepared by the Seller's or Buyer's attorney 2 the licensee may charge the Seller or Buyer for the cost of preparation 3 the licensee bears the cost for the preparation of legal documents except those prepared by the Seller's or Buyer's attorney 4 the licensee does not pay for the preparation of legal documents
the licensee bears the cost for the preparation of legal documents except those prepared by the Seller's or Buyer's attorney - E-37. No fees to licensee/agent for legal document preparation
Tina Dooley, a salesperson, ordered this listing in the real estate section of the local phone directory: Tina Dooley, Real Estate Salesperson, Residential Property My Specialty." What additional information must be included? 1 her street address 2 her license number 3 the expiration date of her license 4 the name of her employing broker
the name of her employing broker - All advertising must include the employing broker's name.
Real estate sales contracts are "express" in that: 1 agreement is evidenced by acts and conduct 2 the parties to the contract declare terms, conditions and their intent in writing 3 a promise is exchanged for a condition 4 an act is exchanged for a promise
the parties to the contract declare terms, conditions and their intent in writing - The terms are specific and the contract is in writing.
A bilateral contract is one in which: 1 only one of the parties is bound to act 2 the promise of one party is given in exchange for the promise of the other party 3 a restriction is placed, by one party, to limit the actuarial performance by the other party 4 something is to be done by one party only
the promise of one party is given in exchange for the promise of the other party - A bilateral agreement requires each of the parties to do something for the other.
A high level of supervision: 1 is what an employing broker must provide for all licensed persons 2 would include: review of documents in preparation for a closing, assistance in preparing contracts, monitoring of transactions from contracting to closing, attending closings, or making sure an experienced licensee attends the closing, being reasonably available for consultation 3 is an employing broker giving leads to new agents to help them get business 4 is required to fully understand the Zen of real estate and the psychic Karma of computers as another level in transcendence
would include: review of documents in preparation for a closing, assistance in preparing contracts, monitoring of transactions from contracting to closing, attending closings, or making sure an experienced licensee attends the closing, being reasonably available for consultation
When you, as a licensee, are selling your own property: 1 you are required to list it with another broker 2 you must inform all prospective purchasers that you are the owner as well as a licensee 3 you are required to list it at or under the market price 4 you are not allowed to list your own property
you must inform all prospective purchasers that you are the owner as well as a licensee - A licensed salesperson must inform all prospective purchasers that he is a licensee.
