EXAM QUESTIONS

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Upon removal of a 10 x 12 tool shed in the back yard, the shed becomes personal property because of ___________ . 1. Dissolution 2. Severance 3. De-annexation 4. Adaptation

2. Severance *Severance is the removal; annexation is the attachment.

In Colorado, the deed of trust involves _______ parties. 1. 1 2. 2 3. 3 4. 4

3. 3 *The deed of trust involves three parties: Borrower (Trustor), Lender (beneficiary of the trust) and Public trustee (conveyance of the legal title to a public official).

There are ____ Colorado real estate commissioners who are appointed by the ________. 1. 3, Governor. 2. 5, state legislature. 3. 5, Governor. 4. 7, Governor.

3. 5, Governor.

The state, via eminent domain, wants to take a diagonal strip of land that bisects Farmer Brown's farm. The farm value will decrease far more than the per-acre value offered for the land taken. Farmer Brown should seek _________ . 1. An injunction 2. Severance damages 3. Exemplary damages 4. Nominal damages

2. Severance damages

The maximum civil penalty for a first offense concerning housing discrimination is _________. 1. a warning and/or $1,000.00 fine. 2. $10,000.00 fine 3. $25,000.00 fine. 4. $50,000.00 fine.

2. $10,000.00 fine

In addition to Federal law, Colorado Fair Housing added ___________ as a protected class. 1. Economically disadvantaged citizens of Colorado 2. Sexual orientation 3. Alcoholism 4. Social outcasts

2. Sexual orientation

Changing the zoning to a more restricted use, such as from multi-family to single family which will restrict the density.

Downzoning

If an employing broker chooses to be designated as the agent of a seller, the employing broker must also designate to another associate broker the duties of being the "non-interested party". TRUE OR FALSE

FALSE

Real estate agents love open listings because they give everyone a chance to sell the property. TRUE OR FALSE

FALSE

The act of paying you a commission to sell a house makes you an agent of the payer. TRUE OR FALSE

FALSE

The buyer and seller may make minor modifications to the Contract to Buy and Sell Real Estate orally. TRUE OR FALSE

FALSE

Both buyers and sellers receive a________________ at closing , a document that is prepared by a broker, escrow, or lender, giving a complete breakdown of costs involved in a real estate sal

Settlement statement

Tenant builds above an existing structure.

Sky Lease

An isolated use that is not consistent with surrounding use.

Spot Zoning

What term is used to describe the practice of directing home seekers to particular neighborhoods based on race, color, religion, or sex, for example?

Steering

Lease with a fixed increase at stated intervals, or an increase based upon the appraised value of the property, determined by an arbitration committee

Step Up or Graduated Lease

A TB can "hold accountable" but not necessarily rely on all statements made by a seller's agent. TRUE OR FALSE

TRUE

A broker can list a home as a seller's agent and at the same time work with the seller as a transaction-broker in the purchase of another home. TRUE OR FALSE

TRUE

A broker who works with a buyer as a transaction broker can change status (become a buyer agent) at a later date? TRUE OR FALSE

TRUE

A listing broker can be vicariously liable for the statements of the seller. TRUE OR FLASE

TRUE

A seller may give permission to a real estate broker to disclose seller's motivating factors to buyers. TRUE OR FALSE

TRUE

A settlement statement for the party represented or assisted must be included in the closed transaction file TRUE OR FALSE

TRUE

All licensees who do not acquire E&O Insurance will have their license "put on ice" (inactivated). TRUE OR FALSE

TRUE

A broker is employed to find a ready, willing, and able buyer at the seller's asking price and terms. If he or she does so, and the seller then refuses to sell, the broker is entitled to _________ . 1. No commission 2. Half a commission 3. A full commission 4. Double commission

3. A full commission

A business organizational form in which all general partners actively participate in ownership and management and are liable for all debt and actions, is called __________ . 1. An LLC 2. A joint venture 3. A general partnership 4. A franchise

3. A general partnership

A wood stove insert installed into a fireplace opening becomes real property as a result of ____________ . 1. Accretion 2. Apportionment 3. Annexation 4. Assemblage

3. Annexation *Annexation: Fixing personal property to real property causing it to become a fixture.

Which principle of value is in effect when a buyer purchases a home as part of his or her retirement plan? 1. Supply and demand 2. Highest and best use 3. Anticipation 4. Substitution

3. Anticipation

The following information shall not be disclosed by a transaction-broker without the informed consent of all parties EXCEPT: 1. That a buyer or tenant is willing to pay more than the purchase price or lease rate offered for the property 2. That a seller or landlord is willing to accept less than the asking price or lease rate for the property 3. Any adverse material facts pertaining to the buyer's or tenant's financial ability to perform the terms of the transaction 4. Any facts or suspicions regarding circumstances which may psychologically impact or stigmatize any real property

3. Any adverse material facts pertaining to the buyer's or tenant's financial ability to perform the terms of the transaction

Which of the following information may be disclosed by a transaction-broker without the informed consent of all parties? 1. That a buyer or tenant is willing to pay more than the purchase price or lease rate offered for the property 2. That a seller or landlord is willing to accept less than the asking price or lease rate for the property 3. Any adverse material facts pertaining to the buyer's or tenant's financial ability to perform the terms of the transaction 4. Any facts or suspicions regarding circumstances which may psychologically impact or stigmatize any real property

3. Any adverse material facts pertaining to the buyer's or tenant's financial ability to perform the terms of the transaction

When a partially amortized loan with a 30-year amortization has a provision that at the end of the tenth year all the remaining principal must be paid in one single payment, this is a _______________ loan. 1. Straight 2. Term 3. Balloon 4. Fully amortized

3. Balloon

Both Tenancy in Common and Joint Tenancy give a person the legal right to "use" the total property even though they only "own" a percentage of the property. TRUE OR FALSE

TRUE

Falsifying trust account records is a criminal offense TRUE OR FALSE

TRUE

In a deed of trust, the borrower conveys ____________ to the trustee. 1. Only the improvements 2. The real property but not the improvements 3. Bare title 4. None of the above

3. Bare title

Providing service to your seller does NOT include _______________. 1. Maintaining ongoing communication until the property is sold or leased 2. Creating a specific targeted marketing plan for the property and 3. Providing feedback from potential buyers and tenants 4. Negotiating a contract in your best interest

4. Negotiating a contract in your best interest

The brokerage relationship established between the seller and the designated broker extends to _________________. 1. The employing broker 2. The firm 3. Other brokers employed by the broker 4. No one but the designated broker

4. No one but the designated broker

If a buyer defaults on a note secured by a second deed of trust, the seller must be able to pay off the first deed of trust in order to foreclose on his second deed of trust. TRUE OR FALSE

TRUE

If you know your buyer's lender, you will worry less about your closing. TRUE OR FALSE

TRUE

In Colorado to represent a buyer or seller as an agent you must have an agreement in writing. TRUE OR FALSE

TRUE

Penalties for failure to comply with Federal Lead-Based Paint Disclosure Laws include treble (3 times) damages, attorney fees, costs, and a penalty up to $16,000 for each violation TRUE OR FALSE

TRUE

Real estate agents are responsible for how they draft wording requested by buyers. Agents may be censored by the Real Estate Commission if the wording does not accomplish what was intended. TURE OR FALSE

TRUE

Refundable retainer fees must be held in escrow, and can not be spent until completion of the contracted services. TRUE OR FALSE

TRUE

The Code of Ethics is one of the requirements of being a Realtor. TRUE OR FALSE

TRUE

The Real Estate Commission agrees with H.U.D. concerning the right of agents to give referral fees. TRUE OR FALSE

TRUE

The only good avenue for a broker to protect a commission owed is through mediation, arbitration, or civil action TRUE OR FALSE

TRUE

The second offense of having a shortage in your escrow account can result in revocation of your license TRUE OR FALSE

TRUE

True or false, a benchmark is a reference point or marker placed by a surveyor and used to establish elevations and altitudes?

TRUE

True or false, a smoke alarm bolted to the ceiling of a home is considered a fixture because it would pass the test of attachment? TRUE OR FALSE

TRUE

True or false, the Governmental Survey System (also known as the rectangular survey system) legally describes where property is located in conjunction with principal meridians and base lines?

TRUE

True or false, the concept of "undivided interest" means an individual can own a specified percent of a property, but the exact location or part of the property is not defined?

TRUE

When preparing for a listing appointment you should have a listing contract with you. TRUE OR FALSE

TRUE

When working with a buyer an agent should make sure the buyer has enough for a down payment AND closing costs. TRUE OR FALSE

TRUE

When you get a real estate license, the public may hold you accountable for having as reasonable skill as they would a real estate licensee who has been practicing for 10 years. TRUE OR FALS

TRUE

pCi/L means pico curies (a unit of radiation) contained in a liter of air? TRUE OR FALSE

TRUE

True or false, under Common Law, if a lease does not state that the tenant cannot sublet, then the tenant may sublet without permission from the landlord? TRUE OR FALSE

TRUE *If a lease or state law does not state that the tenant cannot sublet, then the tenant may sublet without permission from the landlord. True.

A landlord shall within one month after the termination of a lease or surrender and acceptance of the premises, return the full security deposit unless the written lease agreement specifies a longer period of time, but not to exceed _____________ . 1. 45 days 2. 180 days 3. 15 days 4. 60 days

4. 60 days

Organizations that respond to advertising and visit real estate offices to test for compliance with fair housing laws may use a ____________ .

Tester

Who signs an Exclusive Right to Sell Listing Contract with the seller of real property?

The listing broker

A check given as earnest money __________ . 1. Must be in the form of "Good Funds" 2. May not be a business check 3. May be held in the broker's safe for safe keeping 4. Must be identified as a check in the sales contract

4. Must be identified as a check in the sales contract

Money held in an escrow or trust account which is due and payable to a broker ______________ . 1. Is a license law violation 2. Must be withdrawn within 48 hours 3. Must be withdrawn within 24 hours 4. Must be withdrawn promptly

4. Must be withdrawn promptly

A broker using an outside source for square footage in a marketing brochure _________________. 1. Must Not state the square footage unless he/she measured it 2. Must have a professional appraiser measure the square footage 3. Must include a note stating that the square footage may not be accurate 4. Must disclose the source of the information

4. Must disclose the source of the information

Loan discount points are ______. 1. Always paid by the buyer 2. Always paid by the seller 3. Are tax deductible only, by the seller 4. Negotiable

4. Negotiable

The holdover period in a listing contract is ____________. 1. 60 days 2. 90 days 3. 120 days 4. Negotiable

4. Negotiable

You meet a buyer who wants to hire you but also wants you to show them one of your own listings. What type of relationship might be possible?

A transaction-broker relationship

Authorization to use well water for single family residences

Well Permit

All licensees must have the E&O Insurance offered by the Real Estate Commission. TRUE OR FALSE

FALSE

An employing broker cannot designate himself as an agent for a buyer. True or FALSE

FALSE

Broker associates may manage property without using the managing brokers trust account. TRUE OR FALSE

FALSE

Compensation is the major consideration for determining agency. TRUE OR FALSE

FALSE

A TB may disclose to a buyer any information received by a seller's agent regardless of the content of the information. TRUE OR FALSE

FALSE

A broker can commingle personally owned rental property accounts with accounts of others as stipulated in Rule E-1(f). TRUE OR FALSE

FALSE

Helping clients postpone foreclosure by adding bogus secondary notes and deeds of trust is being a good and clever agent TRUE OR FALSE

FALSE

A broker is not required to verify statements made by an independent inspector of property. Therefore, if the broker has actual knowledge that differs with the inspector's findings, the broker does not have to make known his/her actual knowledge. TRUE OR FALSE

FALSE

A broker who wants to help a buyer must disclose all the broker relationship options and let the buyer pick. TRUE OR FALSE

FALSE

In advertising a small studio apartment, you may say which of the following? 1. "Cozy for two" 2. "Married couples only" 3. "Singles only" 4. "Adults only"

1. "Cozy for two"

The Colorado Documentary fee is __________ . 1. $.01 per $100 2. $.10 per $100 3. $.001 per $100 4. $.01 per $1000

1. $.01 per $100

Randy and Jeff Minter hire Real Estate Broker Bonnie to list their home in St. Paul, a comfortable and elegant remodeled mountain home. It includes 3 bedrooms, 1 office, and 1 bath with slate bath tiles, granite countertops, stainless steel appliances, and maple hardwood throughout the open floor plan. Nearly 900 square feet upstairs is matched by a light garden-level basement. This home has two decks, a wood burning stove, and a quiet and energy-saving hot water radiant heater. The well pump was replaced, and a constant pressure water system installed in 2009. The septic has been maintained yearly without issue. This house sits on uniquely flat, usable 1.5 acres and is on the school bus route, which is plowed daily throughout the winter season. There is a tool shed, a 3-sided horse shed and a small corral. It is zoned for livestock. Local schools with bus service and daycare for young children are available within the canyon. The Minters list the home for $275,000 on June 15, and Broker Bonnie's commission is 6%. Taxes for last year have not been paid and are $2,300 yearly. Buyer's agent, Daniel Brooks, brings an offer for $267,000, which is accepted and will close on July 30. Buyer Benjamin will be getting a VA loan and will be putting 20% down. Buyer Benjamin has a resale furniture business, and he will store some of his saleable items on the property. Additionally, he plans to build a large storage shed for this purpose. The contract is contingent on the buyer's ability to get a building permit so he can build the needed structure on the property. His broker has added a contingency clause to the contract, which states the contract will terminate if the building permit is not granted by the city. How will the Closing Statement reflect the Buyer's tax liability they pay at closing if closing is July 30. 1. $0. The buyer has no tax liability at closing 2. Credit the buyer $2,300 3. Credit the buyer $2,841 4. Credit the buyer $3,641

1. $0. The buyer has no tax liability at closing *The Buyer has no tax liability at the time of closing. He or she will have to pay the full tax amount next year. The seller has to pay the buyer for the time he or she was in the home, (210 days. $2300 / 360 x 210) at closing.

If a purchaser borrows $150,000 at 6% and has a monthly payment of $850, what is the principal reduction after the first year? 1. $1,200 2. $9,000 3. $10,200 4. $850

1. $1,200 *In order to figure the principal reduction in a loan for one year, when there is a fixed payment, you determine the interest for a year and the total payments made for one year. You then subtract the total interest from the total payments. $150,000 x .06 = $9000 (yearly interest payment) $850 x 12 = $10,200 (monthly Principle and Interest payment) $10,200 - $9000 = $1200

An ad included a term that triggered full disclosure of loan terms. The ad stated ____________ . 1. $10,000 down 2. 8% APR 3. Low down payment 4. Payments less than rent

1. $10,000 down

An ad used a term that triggered full disclosure of loan terms. The ad stated __________ . 1. $10,000 down 2. Payments lesser than rent 3. Low down payment 4. 8% APR

1. $10,000 down

The Real Estate Commission's E&O Insurance has a minimum coverage of 1. $100,000 per claim and $300,000 annual aggregate. 2. $ 40,000 per claim and $250,000 annual aggregate. 3. there is no minimum, amount of coverage is up to the agent. 4. None of the above are true.

1. $100,000 per claim and $300,000 annual aggregate.

A married couple sells their principal residence of 20 years for $750,000.00. The adjusted cost basis is $100,000.00. How much of their gain is taxable? 1. $150,000.00 2. $650,000.00 3. $-0- 4. $750,000.00

1. $150,000.00 *The other substantial tax shelter aspect of home ownership is the taxpayers' ability to exclude up to $500,000 of the profit from the sale of the home. Sale Price minus Married Couple Exemption, minus adjusted cost basis: $750000 − $500000 = $250000 − $100000 = $150000, Review Tax Benefit for Homeowners

If property taxes are $900 and the tax rate is 50 mills, the assessed valuation is: 1. $18,000.00 2. $23,000.00 3. $180,000.00 4. $230,000.00

1. $18,000.00 *AV = T(axes) / R(ate); $900 / .050 Review Real Property Tax Liens

A home sold for $165,000.00. The lender required that the buyer pay 1 and 3/4 points for an 80% loan. What amount did the buyer pay in loan points? 1. $2,310.00 2. $2,887.50 3. $577.50 4. $2,598.75

1. $2,310.00 *$132,000 (loan amount) x 0.0175.

The sales price of a property is $265,500.00. The Colorado documentary fee is _____________ . 1. $26.55 2. $265.50 3. Not applicable 4. $2.66

1. $26.55

When title transfers by foreclosure, ___________ . 1. A lender is part of the transaction 2. The government ends up with title to the property 3. It is known as adverse possession 4. The property owner must be compensated for the value of the property

1. A lender is part of the transaction

Buyer Dan wants to purchase 1695 Argon St. for $230,000 with 15% down and the interest rate is 8%. The lender could reduce the interest rate to 7 ¾% if he paid 3 discount points. If Dan pays the additional amount to reduce his interest rate, much will Dan have to bring to closing? 1. $40,365 2. $195,000 3. $5,865 4. $34,500

1. $40,365 *$230,000 − $34,500 (15%) = $195,500 (loan amount) x .03 = $5865 (3%of loan amount). $34,500 + $5865 = $40,365. One point equals one percent of the loan amount. Discount points are used to "buy down" interest rates.

How much is Mr. Xi willing to pay for the property? The property produces an annual gross income of $52,000 and net operating costs are $6,000. The capitalization rate for comparable properties in the area is 8%. Interest on his loan will be 5%. Cap Rate is 8%. 1. $575,000 2. $650,000 3. $75,000 4. $41,600

1. $575,000 *In order to determine the value of a single property, you must determine the NOI and then divide the NOI by the CAP Rate. $46,000/.08 = (Value) $575,000

For all other than agricultural properties, the right to cure period is ______ days 1. 110 - 125 2. 50 -100 3. 125 - 50 4. 215 - 230

1. 110 - 125 *110 min & 125 max

After notice of election to foreclose has been published, a foreclosure sale through the Public Trustee's office may not be held earlier than __________ . 1. 110 days 2. 60 days 3. 75 days 4. 45 days

1. 110 days *no earlier than 110 days and no later than 125 days from that date.

The maximum right to cure period for non-agricultural property is _____days. 1. 125 2. 175 3. 215 4. 230

1. 125

Lenders are not allowed to collect more than __________ for taxes and insurance, in addition to prorated amounts based on the date of closing. 1. 2 month's escrow 2. 3 month's escrow 3. 6 month's escrow 4. $800.00

1. 2 month's escrow

In the event a home in CO sells for more than $100,000, the closing company will collect________of the selling price from a non-resident seller. 1. 2% or the seller's net proceeds 2. 2% 3. $2,000 4. 10% or less

1. 2% or the seller's net proceeds *In the event a home in CO sells for more than $100,000, the closing company will collect 2% of the selling price (or seller's net proceeds) from a non-resident seller. Example: If the seller owed $6,000 but net proceeds were only $4,500, then $4,500 would be collected.

The number of hours of continuing education you must complete to renew your license every three years is 1. 24 2. 16 3. 8 4. 36

1. 24

How many days prior to termination must a party desiring to terminate a tenancy at will serve a written notice to quit? 1. 3 days 2. 10 days 3. 30 days 4. 60 days

1. 3 days

When must a completed Closing Disclosure form for any transaction that falls under the TRID be provided? 1. 3 days before the closing 2. Within 30 days of the closing 3. Prior to the closing 4. At the closing

1. 3 days before the closing

Objectivity for appraisers is critical, as evidenced by __________ . 1. A certification signed on every appraisal stating the appraiser has no interest in the property being appraised. 2. Appraisers understanding the objective of the analysis, otherwise the conclusion could be invalid 3. The appraisal practice of accepting contingent fees that are subject to supporting a particular value 4. A lack of credibility associated with a broker opinion of value

1. A certification signed on every appraisal stating the appraiser has no interest in the property being appraised.

Working in the Commercial field requires all of the following EXCEPT_________________. 1. A commercial real estate license 2. Similar tools and proficiencies as a residential broker 3. A detailed property analysis 4. Utilization of various additional methods of researching property types, and even possibly lease information, from multiple sources

1. A commercial real estate license

A certificate of taxes is _____________ . 1. A debit to the buyer 2. A debit to the seller 3. A certification of the status of taxes from the assessor's office 4. Only required on governmental loans

1. A debit to the buyer

Which of the following oral contracts is NOT enforceable? 1. A lease for longer than one year 2. A lease for six months that begins in six months 3. A sale of carpet for $500 4. An agreement to split a sales commission 50/50

1. A lease for longer than one year *Statute of frauds applies to all real estate sales contracts and leases: any for longer than 1 year must be in writing

An existing six unit apartment building is located in a zoning district where only two apartment units would be permitted. The local municipality will continue to allow all six units to be leased. This scenario illustrates: 1. A nonconforming use and a grandfathered use 2. A grandfathered use and a zoning variance 3. A zoning variance and a nonconforming use 4. A nonconforming use but not a grandfathered use

1. A nonconforming use and a grandfathered use

Designated broker does not include ___________ . 1. A real estate brokerage firm that consists of only 1 licensed natural person 2. Limited Partnerships 3. Corporations 4. LLCs of 2 or more licensees

1. A real estate brokerage firm that consists of only 1 licensed natural person

Designated brokerage does NOT include: 1. A real estate brokerage firm that consists of only 1 licensed natural person 2. Limited partnerships 3. Corporations 4. Limited Liability Company's of two or more licensees

1. A real estate brokerage firm that consists of only 1 licensed natural person

The owner is obligated to provide ___________ for his or her tenants. 1. A safe and secure environment 2. Deadbolts on all doors 3. Sidewalk lighting 4. Surveillance protection

1. A safe and secure environment

Of the following transactions, which will result in the greatest net proceeds to the seller? 1. A sales price of $110,000 with a commission of 7% and closing costs of $1,280, ? $110,000 x .07 = $7700 + $1,280 = $8,980 ? $110,000 - $8980 = $101,020 2. A sales price of $108,000 with a commission of 6% and closing costs of $1,308, ? $108,000 x .06 + 1,308 = $7,788 ? $108,000 - $7,788 = $100,212 3. A sales price of $106,000 with a commission of 4% and closing costs of $820, ? $106,000 x .04 + $820 = $5,060 ? $106,000 − $5,060 = $100,940 4. A sales price of $105,000 with a commission of 3% and closing costs of $980, ? $105,000 x .03 + $980 = $4,130 ? $105,000 - $4,130 = $100,870

1. A sales price of $110,000 with a commission of 7% and closing costs of $1,280, ? $110,000 x .07 = $7700 + $1,280 = $8,980 ? $110,000 - $8980 = $101,020 *Subtract each commission and closing costs from its respective sale price and compare to find the answer.

Of the following statements, which is false 1. A transaction-broker must disclose to the buyer that the transaction-broker can only help the seller. 2. A transaction-broker must act as a TB for both Seller and Buyer. 3. A transaction-broker must help both the buyer and seller carry out the terms of the contract. 4. A transaction-broker may create a CMA for a prospective buyer.

1. A transaction-broker must disclose to the buyer that the transaction-broker can only help the seller.

The purpose of the "settlement statement" is to ___________ . 1. Account for the buyer's and seller's debits and credits at the time of closing 2. Insure that the title company has paid all of the existing liens on the property 3. Give the buyer and seller one more chance to change their minds 4. None of the above

1. Account for the buyer's and seller's debits and credits at the time of closing

A broker signs a buy-sell contract for the purpose of _______________. 1. Acknowledging receipt of the earnest money deposit 2. Validating the contract 3. To advise buyer and seller that they are to seek legal advise 4. To advise buyer and seller that closing instructions are to follow

1. Acknowledging receipt of the earnest money deposit

Confidential information does not include disclosure of ____________ . 1. Adverse material latent defects within a property 2. Seller's willingness to accept less that listed price 3. Buyer's motivating factors to purchase 4. Facts that may stigmatize a property

1. Adverse material latent defects within a property

Confidential information does not include disclosure of: 1. Adverse material latent defects within a property. 2. Seller's willingness to accept less that listed price. 3. Buyer's motivating factors to purchase. 4. Facts that may stigmatize a property.

1. Adverse material latent defects within a property.

Which is not protected under Colorado housing ____________ . 1. Alcoholism 2. Marital status 3. Ancestry 4. Sexual orientation

1. Alcoholism

A package mortgage _________ . 1. Allows you to bundle your personal and real property as collateral for one loan 2. Is illegal as it combines personal and real property as collateral for one loan 3. Is the type of loan you get when you buy a car. 4. Can be gift wrapped and sent in the mail

1. Allows you to bundle your personal and real property as collateral for one loan

Every active real estate licensee must maintain error and omissions insurance EXCEPT_____________. 1. An attorney licensee who maintains professional malpractice insurance 2. A licensee who has been claim free for three years 3. Licensees who are self-insured by paying into the recovery fund 4. Licensees who conduct fewer than five transactions per year

1. An attorney licensee who maintains professional malpractice insurance

In remodeling their home, the Wades put the items described below in the home. Once in place, all would be fixtures EXCEPT _________ . 1. An oriental throw rug in the front entry hall 2. The built-in kitchen range 3. The built-in dishwasher. 4. Custom fitted wall-to-wall carpet installed over plywood sub-flooring

1. An oriental throw rug in the front entry hall

A couple owns an older home in a neighborhood that is becoming a commercial area. Because of the change in the use of the land, the couple can expect the value of their parcel to increase in some future time. This is an example of the principle of ___________ . 1. Anticipation 2. Growth 3. Appreciation 4. Speculation

1. Anticipation

__________________ wants to know what their property is worth to a buyer and what is possible for the highest sales price or lease price in the current market. 1. Any property owner 2. A commercial property owner 3. A residential property owner 4. An industrial property owner

1. Any property owner

________________ describes the rights, privileges, and improvements that go with a transfer of the land even though they may not be part of the land. 1. Appurtenant 2. Prescription 3. Necessities 4. Servient right

1. Appurtenant *Appurtenant describes the rights, privileges, and improvements that go with a transfer of the land even though they may not be part of it.

An ILC ___________. 1. reveals the location of encroachments 2. is another name for a survey 3. may be legally relied upon for the location of property lines 4. is a precise property corner locator

1. reveals the location of encroachments

A completed Closing Statement and HUD-1 for a transaction that does NOT fall under the TRID rule must be provided __________________. 1. At the closing 2. No later than 30 days from the closing 3. Within 3 days of the closing 4. Prior to the closing

1. At the closing *Under TRID, there will be a new settlement statement called a Closing Disclosure, which must be issued to the borrower at least 3 days prior to closing.

A preprinted contract addendum that does not result from the negotiations of the parties may be __________________ . 1. Attached to any real estate commission form as appropriate 2. Attached only to listing (employment) agreements 3. Inserted into the Additional Provisions section of a buy/sell contract 4. Inserted anywhere in the body of a commission approved form

1. Attached to any real estate commission form as appropriate

The most important test of whether an item is a fixture or not is ___________ . 1. Attachment 2. Size 3. Intention of parties 4. Price

1. Attachment *Method of attachment. The most important test of a fixture is its method of attachment to real property. Use of nails, bolts, cement or glue indicates permanent attachment. If the item can be removed without damage to the structure, such as unhooking drapes or removing a potted plant, the item is probably not a fixture that would be automatically included in the sale.

An agent with less than 2 years experience can expect the employing broker to ___________. 1. Be available to attend closings 2. Be a mentor or assign a mentor 3. Provide weekly meetings and educational programs 4. Co-sign all contracts

1. Be available to attend closings

A U.S. Geological Survey marker used to measure elevation is a __________ . 1. Benchmark 2. Bearing 3. Datum 4. Landmark

1. Benchmark

The broker debit-entry represents an amount received by the __________. to hold for one of the parties. 1. Broker 2. Seller 3. Buyer 4. Lender

1. Broker

Broker Rose has a home listed for sale under an exclusive right-to-sell agreement. Broker Neal contacts the seller directly (while the contract with Rose was still in effect), to negotiate a sale to his buyer after the listing period ends. Is Broker Neal in violation of any rule? 1. Broker Neal is in violation of Rule E-13, the "sign crossing" rule 2. Broker Neal is not in violation of Rule E-13 since the listing period would be over prior to the transaction 3. Broker Rose may have a case for Arbitration or for an Ethics violation, but there is no violation of Commission Rules 4. Broker Neal is in violation of a Commission Position, but not of any rules

1. Broker Neal is in violation of Rule E-13, the "sign crossing" rule

When making disclosures in a lease transaction, a broker may substitute the term "Landlord" for the term "Seller" and the term "Tenant" for the term "Buyer" in the 1. Brokerage Disclosure to Seller. 2. Definitions of Buyer Relationships. 3. Sellers Property Disclosure. 4. Green Addendum.

1. Brokerage Disclosure to Seller. *Rule F: A broker may substitute the term "Landlord" for the term "Seller" and the term "Tenant" for the term "Buyer" in the Brokerage Disclosure to Buyer form, in the Brokerage Disclosure to Seller and Definitions of Working Relationships form when making disclosures in a lease transaction (or use the separate Brokerage Disclosure To Tenant form) .

One result of the Seibel Decision is that ________. 1. Brokers must follow commission rules, even if acting on their own account 2. Brokers must follow commission rules, unless acting on their own account 3. Brokers are required to follow commission rules during any agency relationship with a member of the public 4. Brokers may complete (fill in the blank) of any commission approved forms

1. Brokers must follow commission rules, even if acting on their own account

Colorado Use Tax, a form of sales tax, is payable on the transfer of furniture, equipment, etc. Statute places the obligation to pay this tax by the: 1. Buyer 2. Broker 3. Furniture or equipment manufacturer 4. Seller

1. Buyer

Within the licensee buy-out addendum expenses such as costs and expenses of closing, holding and reselling the property are those of the __________. 1. Buyer 2. Brokerage 3. Seller 4. Buyer and Seller, divided equally

1. Buyer

It is the obligation the _________ to disclose a buyer's financial ability to purchase a home? 1. Buyer agent 2. Transaction broker for seller 3. Seller's sub-agent 4. Both (1) & (3) above

1. Buyer agent *It is the obligation of both the buyer's agent (and transaction broker for the buyer) to disclose a buyer's financial ability to purchase a home.

An earnest money note __________ . 1. Must be identified in the sales contract 2. Must be due and payable prior to the closing date 3. May not be for a lesser amount than $1,000.00 4. Makes a contract voidable

1. Must be identified in the sales contract

John and Mary Apton list their home for $152,000. There is an appurtenant easement to access a large lake which is deeded. A coal-fired power plant is slated to open 5 miles from the property next year. An environmental impact statement is due on March 7. Agent Pacheco presents an offer to the Aptons. It is a land contract for $142,000 with an 8% interest rate due and payable in 10 years. It is accepted. The offer is contingent on the environmental impact results. Closing is scheduled for June 1. Annual taxes are $3,040, commission is 6.5%, (buyer's agent commission is 2.8%), taxes and insurance are $675, and the recording fee is $25 The environmental impact statement showed the value of the property would not be impacted. Use a banker's calendar. Seller is responsible for the day of closing. How does the Closing Statement reflect the buyer's tax liability? 1. Buyer debit $0 2. Buyer credit $3,040 3. Seller credit $3,040 4. Buyer debit $1,249

1. Buyer debit $0

The holdover period applies to ___________. 1. Buyers whose names have been submitted to the seller prior to the end of the listing period 2. Sellers whose names are delivered to the broker prior to the end of the listing period 3. Any buyer or seller that was contacted during the listing period 4. Any buyers who viewed your listed property prior to the end of the listing period

1. Buyers whose names have been submitted to the seller prior to the end of the listing period

The Amend/Extend Contract with Broker 1. Can be used extend the terms of the listing agreement 2. Can be used to change the date of closing as long as it is signed by both brokers 3. Can be used to make changes to the Contract to Buy and Sell 4. Can be used to change the date of closing as long as it is signed by both parties

1. Can be used extend the terms of the listing agreement *The Amend/Extend contract only changes the terms of the Contract to Buy and Sell.

The clock starts on the landlord returning the security deposit after ________ . 1. Cessation of interest (tenant vacates) 2. The walk through 3. The landlord has the property cleaned 4. 30 days

1. Cessation of interest (tenant vacates)

Title insurance extended coverage does NOT cover ______________ . 1. Changes in land use brought about by zoning ordinances 2. Examination of survey 3. Unrecorded liens not known by policyholder 4. Property inspection including unrecorded rights of persons in possession

1. Changes in land use brought about by zoning ordinances

Which of the following would NOT be classified as real property? 1. Chattels real 2. Water rights 3. Easements 4. Mineral rights

1. Chattels real

A form of sales tax, payable on the transfer of furniture equipment, would be ______________. 1. Colorado Use Tax 2. Property Tax 3. Transfer Tax 4. State Income Tax

1. Colorado Use Tax

The major difference between the Colorado Fair Housing Laws and the Federal Fair Housing Act is 1. Colorado applies to both commercial and residential whereas federal only applies to residential. 2. Federal does not protect "familial status". 3. Federal does not have any rules concerning the "over 62 of age" persons. 4. They are the same.

1. Colorado applies to both commercial and residential whereas federal only applies to residential. *Colorado Fair Housing laws apply to both commercial and residential whereas federal only applies to residential.

The following statement about computer generated versions of the approved forms is FALSE 1. Computer generated versions of the approved forms must not be altered in any way 2. Computer generated versions of the approved forms must have controls to prevent the language of the form from being altered 3. A broker may omit part or all of the approved provisions of the Contract to Buy and Sell Real Estate 4. There cannot be alterations, additions or deletions within the body of the approved contract form

1. Computer generated versions of the approved forms must not be altered in any way

A conference-style interaction with a customer, where there is an exchange of ideas, might be called _________________. 1. Consulting 2. Presenting 3. Relevant Appeal 4. Mirrored

1. Consulting

The broker placed funds from his escrow account into his operating account and then used the money to take his client out to dinner. This is called_______. 1. Conversion 2. Convergence 3. Stealing 4. Unethical

1. Conversion

If there is a balance due from the buyer, you will ____________. 1. Credit the buyer, and debit the broker 2. Debit the buyer, and credit the broker 3. Accept a buyer's personal check for the balance due 4. Credit the buyer, and debit the seller

1. Credit the buyer, and debit the broker *This is the amount of money the buyer must bring to closing, and it is a deposit into the closing account in the Broker Debit column.

A point, line, or surface from which a vertical height or depth is measured is known as __________ . 1. Datum 2. Benchmark 3. Marker 4. Measurement

1. Datum

If there is a balance due to the seller, you will __________. 1. Debit the seller, and credit the broker 2. Credit the seller, and debit the broker 3. Debit the seller, and credit the buyer 4. Single-entry debit the selle

1. Debit the seller, and credit the broker

The recording fee for a new deed of trust is a(n) ____________ . 1. Debit to the buyer 2. Debit to the seller 3. Charge to the lender 4. Amount added to the loan balance

1. Debit to the buyer

The buyer is obtaining an FHA insured loan. The cost of the tax service fee is a ________. 1. Debit to the seller 2. Debit to the buyer 3. Debit to the broker 4. Lender expense

1. Debit to the seller

A fee for notarizing the warranty deed would be a __________. 1. Debit to the seller and a credit to the broker 2. Debit to the buyer and a credit to the broker 3. Debit to the buyer and a credit to the lender 4. Debit to the seller and a credit to the buyer

1. Debit to the seller and a credit to the broker *Notary fees are normally charged to the party whose signature is being notarized. For the warranty deed, that is the seller.

When the buyer obtains a new FHA loan, the tax service fee will be a____________. 1. Debit to the seller and a credit to the broker 2. Debit to the seller and a credit to the buyer 3. Debit to the seller and a debit to the lender 4. Debit to the buyer and a credit to the broker

1. Debit to the seller and a credit to the broker *Unit 3 Closings, Section 4 Problems, VA & FHA: A tax service fee is the only remaining closing cost not allowable as a charge to buyer. The VA still has a long list of fees that must be paid by someone (anyone) other than the buyer.

According to the Commission-approved Contract to Buy and Sell Real Estate, the premium for the owner's title insurance policy will be entered on a settlement worksheet as a . 1. Debit to the seller; credit to the broker 2. Debit to the seller; credit to the buyer 3. Credit to the seller; debit to the buyer 4. Credit to the seller; debit to the broker

1. Debit to the seller; credit to the broker

A broker may: 1. Delegate supervisory authority to other experienced licensees in the office 2. Prepare legal documents for sellers who are "For Sale by Owners" 3. Use trust account funds of others as long as he/she replaces them within 30 days 4. Accept a fee from a title company for placing business with them

1. Delegate supervisory authority to other experienced licensees in the office

An employing broker may_______________. 1. Delegate supervisory authority to other experienced licensees in the office 2. As a favor and at no fee, prepare legal documents for a "For Sale by Owner" 3. Accept a fee from a title insurance company for placing business with them 4. Use trust account funds of others, as long as they are replaced within 30 days

1. Delegate supervisory authority to other experienced licensees in the office

A borrower has defaulted on the mortgage. The mortgage contains an acceleration clause. This permits the lender to ____________ . 1. Demand immediate payment of the entire note 2. Start foreclosure 3. Change the locks on the home 4. Charge an acceleration fee

1. Demand immediate payment of the entire note

In many western states the first person to have used water in a stream for a beneficial purposes cannot be forced by his downstream neighbors to share the water during a drought because of the: 1. Doctrine of Prior Appropriation. 2. Federal Water-Sharing Act of 1968. 3. Doctrine of Riparian Rights. 4. Doctrine of Littoral Rights.

1. Doctrine of Prior Appropriation.

If the parties have a dispute and the mediation fails _______________. 1. Either party may file a law suit 2. The parties automatically agree to enter into arbitration 3. The transaction is terminated 4. The transaction is void

1. Either party may file a law suit *If the parties have a dispute and the mediation fails, the parties may agree to enter binding arbitration. Either part may file a law suit either before or after mediation, but the contract may still be in full force (consider mediation over an inspection issue - the contract may still be in effect even after mediation).

Which of the following is not true of a management company hiring its own employees to do almost all of its maintenance is __________ . 1. Employees do not receive Social Security contributions or health insurance 2. There is more control over employee performance 3. Employees may have more interest in doing a better job 4. Mangers have control over firing and hiring

1. Employees do not receive Social Security contributions or health insurance *Some owners choose to have their employees or themselves do almost all maintenance and repair, including emergency repairs or replacements. Pro: If the business has its own employees, there is control over their performance, the ability to hire and fire without as many concerns over terminating a contract with an outside firm, and a greater degree of interest in doing a good job. Whereas, Independent contractors do not receive Social Security contributions or other employee benefits, such as paid vacation or health insurance.

A homeowner owes $70,000 on a home worth $100,000. The $30,000 difference is known as the homeowner's _____________ . 1. Equity 2. Principal 3. Projected gross 4. Cash reserves

1. Equity

On a new loan closing with "Net Loan Proceeds", the worksheet will not reveal __________. 1. Every line used having a debit and credit entry 2. The lender statement having all single-entry items 3. The new loan amount being a credit to the buyer on line 3 4. The old loan amount being a debit to the seller on line 5

1. Every line used having a debit and credit entry

Exemptions of the Civil Rights Act of 1968 does not include ___________ . 1. Exemptions for real estate licensees 2. Exemption for housing operations by qualifying religious groups 3. Exemption for housing operations by qualifying private clubs 4. Exemption for individual owners of single-family homes

1. Exemptions for real estate licensees *Exemptions of the Civil Rights Act of 1968 include: Exemption for individual owners of single-family home (where no real estate broker is used) if the owner does not own more than three such homes and do not sell more than one within 24 months and exemption for housing operations by qualifying religious groups or private clubs.

A broker/salesperson who can work with both the seller and buyer in the same transaction with no fiduciary duties to either is called a _____________ . 1. Facilitator 2. Dual agent 3. Assistant 4. Seller's agent

1. Facilitator

Brokers are not allowed to use forms created by the seller's or buyer's attorney. 1. False. 2. False, except for notes, deeds of trust, and deeds. 3. True. 4. True, if the broker is a buyer's agent and the seller's attorney prepared the document.

1. False.

What relationship implies a position of trust and confidence? 1. Fiduciary 2. Transaction-Brokerage 3. Confidential 4. Principal

1. Fiduciary

A property tax lien is a ___________. 1. senior lien to all other liens 2. senior lien to all other liens except mechanic's liens 3. senior lien to all other liens except an IRS lien 4. senior lien to all other liens except 1st mortgages

1. senior lien to all other liens

Brothers, John, Tom, and Bill purchased forty-eight (48) acres of land as joint tenants. John suggested that they build warehouse condominiums, but Tom and Bill wanted to develop the land as a recreational vehicle resort. If none of the brothers are willing to sell their share nor give in to the other's, what can they do to resolve their difference? 1. File a suit for partition 2. Build the warehouses on 16 acres 3. Wait for John to die 4. File an undivided interest attachment

1. File a suit for partition

An initial broker's license will be issued ___________ . 1. For the remainder of the current year, expiring on December 31 2. For a 3-year period commencing and expiring on the issuance date 3. For a 1-year period commencing on the issuance date 4. For 3 years expiring on December 31

1. For the remainder of the current year, expiring on December 31 *Initial (first time) licenses will be issued for less than 1 full year, from the issuance date until the end of the year, December 31st. No Continuing education is required during this time. After the first partial year, licenses will be issued for 3 years from Jan 1st expiring Dec. 31st, three years later

Standard owner's policy covers ___________ . 1. Forged deeds 2. Parties in possession 3. Survey problems 4. Governmental limitations (zoning)

1. Forged deeds

On your listings your office policy requires you to work ONLY as a Seller's agent. When working with a buyer you will: 1. Give a disclosure definitions page explaining you are a seller's agent and they would be considered a customer 2. Refer the buyer to a buyer's broker 3. Rewrite your office policy before working with this buyer 4. Work with the buyer as a Transaction- broker

1. Give a disclosure definitions page explaining you are a seller's agent and they would be considered a customer

The Colorado Common Interest Ownership Act standardized the following actions _________. 1. Gives power to the association to create a lien on the property if association dues are not paid. 2. Gives power to the association to enter a property in disrepair and make repairs. 3. Gives power to the association to maintain an owner occupancy ratio that meets the needs of lenders. 4. Gives power to the association to sue on behalf of the lenders.

1. Gives power to the association to create a lien on the property if association dues are not paid.

What type of long-term lease is best for a commercial tenant during an inflationary period? 1. Gross 2. Percentage 3. Index 4. Net

1. Gross

In the event of any controversy regarding earnest money held by a broker _____________ . 1. He or she may await written instructions from buyer and seller 2. The parties may seek arbitration from the Real Estate Commission 3. He or she may divide the money equally between the parties 4. He or she may give the earnest money to an attorney for safe keeping

1. He or she may await written instructions from buyer and seller

An example of a fiduciary relationship is one which exists between the listing broker and____________ . 1. His or her client 2. His or her broker 3. His or her customer 4. His or her seller's potential buyer

1. His or her client

A major difference of a Comparative Market Analysis and an appraisal performed for a lender is _______________. 1. Lender's appraisals for federally insured financial institutions must be prepared by licensed appraisers while a CMA is prepared by a real estate broker 2. CMAs review the past 12 months while lenders' appraisals go back only 6 months 3. CMAs compare the area's inflation while lenders' appraisals focus on development 4. CMAs have a variable fee schedule while lenders' appraisals have a set fee

1. Lender's appraisals for federally insured financial institutions must be prepared by licensed appraisers while a CMA is prepared by a real estate broker

According to the Contract to Buy and Sell, if the parties have a dispute 1. The parties agree to split the mediation fees 2. The loser pays for the mediation fees 3. The seller pays for the mediation fees 4. The broker pays for the mediation fees

1. The parties agree to split the mediation fees

The lot and block land description ____________ . 1. Identifies a parcel using a lot number within a specific block which lies within a specific track 2. Describes where property is located in conjunction with principal meridians and base lines 3. May be described with North 90 degrees East 100 feet, then South 45 degrees West 150 feet, then South 90 degrees East 100 feet 4. All of the above

1. Identifies a parcel using a lot number within a specific block which lies within a specific track

Declan wants to sell his book of business to you, but wants his unlicensed friend Alicia to handle the paperwork since she is a paralegal. What would make this a business opportunity sale that would require a real estate broker's license? 1. If Declan also sold land as part of the business. 2. If you purchase the business using a loan or financing. 3. If Alicia also owned a part of the business. 4. If the business was declared a business opportunity.

1. If Declan also sold land as part of the business. *The sale of business opportunities requires a real estate broker's license when the transaction involves a change of ownership or leasehold in real estate.

If the seller had work done on the property and didn't pay the vendor, the vendor could file a lien on the property now owned by a new person. 1. If the buyer had extended coverage he would not have to pay 2. If the seller had extended coverage he would not have to pay 3. The buyer has no protection against this 4. The seller can not sell the property

1. If the buyer had extended coverage he would not have to pay

The grantor and grantee indexes are arranged ___________ . 1. In alphabetical order 2. By date of recording 3. By reference to the parcel number 4. By reference to the legal description

1. In alphabetical order

A contract for deed __________ . 1. Is an installment land contract 2. Is signed by either party 3. Creates legal title 4. None of the above

1. Is an installment land contract

The Real Property Transfer Declaration __________ . 1. Is used to ensure fair and uniform property tax assessments 2. Is used to ensure the completion of the transaction 3. If not filled out, will cause a fine on the grantor 4. Is of no use to the buyer

1. Is used to ensure fair and uniform property tax assessments

When preparing information for ownership, their accountants or lawyers, ____________ . 1. It is far better to provide too much information than too little 2. Less is better 3. Only provide what is asked for 4. It's ok to omit the bad news

1. It is far better to provide too much information than too little *When preparing information for ownership, their accountants or lawyers, it is far better to provide too much information than too little. You should, of course, provide information in the form and at the time ownership requests it. However, always provide all information relevant to the issue. If in doubt, provide more, not less.

When advertising a property for tenants to live in an apartment building, ___________ . 1. It is not a good idea to advertise security features 2. Always state how secure the building 3. It is best to state how safe the neighborhood is 4. Both #2 and #3 are correct

1. It is not a good idea to advertise security features *Unless the property's primary business is providing secure storage or extremely safe and secure housing or business premises with an abundance of security, it is not a good idea to advertise security features. If someone is assaulted and/or their property is damaged or stolen, they will claim that they were induced to rent the property on the basis of the representations that it was secure and safe, and those representations have turned out to be false.

When advertising a property for tenants to live in an apartment building, _____________ . 1. It is not a good idea to advertise security features 2. Always state how secure the building 3. It is best to state how safe the neighborhood is 4. Both #2 and #3 are correct

If a transaction fails and earnest money is unclaimed,______________. 1. It should be turned over to the Colorado State Treasurer after five years 2. It must be interpleaded to the court 3. It shall be returned to the buyer 4. The seller may retain it as "unclaimed"

1. It should be turned over to the Colorado State Treasurer after five years

An existing use permitted from a previous usage despite zoning changes where the use no longer conforms or is permitted is known as ____________ . 1. Legal Nonconforming Use 2. Variance 3. Inclusionary Zoning 4. Spot Zoning

1. Legal Nonconforming Use

If the tenant pays the rent or fixes the lease violation in the 3-day period, the landlord _________ . 1. Must accept it and cannot evict the tenant 2. May still evict the tenant since the tenant is no longer trustworthy 3. May allow the tenant 30 more days and then must leave 4. Can now change the terms of the lease.

1. Must accept it and cannot evict the tenant

A major difference of a Comparative Market Analysis and an appraisal performed for a lender is that__________. 1. Lender's appraisals for federally insured financial institutions must be prepared by licensed appraisers, while a CMA is prepared by a real estate broker 2. CMAs review the past 12 months, while lenders' appraisals go back only 6 months 3. CMAs compare the area's inflation, while lenders' appraisals focus on development 4. CMAs have a variable fee schedule, while lenders' appraisals have a set fee

1. Lender's appraisals for federally insured financial institutions must be prepared by licensed appraisers, while a CMA is prepared by a real estate broker

A broker shall provide a "High level of supervision" for ________________. 1. Licensed persons with less than two years experience 2. All licensees 3. Staff personnel handling the trust account(s) 4. Personal assistants within the office

1. Licensed persons with less than two years experience

Restrictive covenants are all of the following EXCEPT _________ . 1. Liens on real property 2. Encumbrances on real property 3. Private, voluntary agreements governing land use 4. Typically restrict items like maximum height, minimum house size, etc.

1. Liens on real property

When preparing a Competitive Market Analysis (CMA), the most likely highest price would be represented by the average ____________ . 1. List price of three comparable homes listed but not yet sold 2. Sale price of three comparable homes sold in the last six months 3. Assessed value of three comparable homes 4. Appraised value of homes under contract

1. List price of three comparable homes listed but not yet sold *Due to negotiations, sale prices are typically lower than list prices. We would expect the average list price in any CMA to represent the higher price point.

Which of the following statements about marketing commercial property is false? 1. MLS is not usually used for marketing commercial properties. 2. MLS will still be used in most cases to offer the property for sale. 3. Commercial transactions take place off-MLS. 4. MLS includes signage on the street or building, and brochures to area investor/owners.

1. MLS is not usually used for marketing commercial properties.

1. MLS is not usually used for marketing commercial properties. *The MLS will still be used in most cases to offer the property for sale, though many commercial transactions take place off-MLS. Marketing includes signage on the street or building and brochures to area investor/owners.

A broker associate may _____________. 1. Manage property belonging to others if the brokerage company maintains all the books 2. Manage property belonging to others and maintain his or her own books outside of the brokerage company so long as the separate books meet the basic "escrow accounting equation" 3. Both #1 and #2 are true 4. A broker associate's license does not allow the broker associate to manage property unless it is owned by the broker associate

1. Manage property belonging to others if the brokerage company maintains all the books

Real estate closing fees _____________ . 1. May be negotiated between buyer and seller 2. Must be paid for by the listing broker 3. Must be deducted by lender on a net loan proceeds closing 4. Per Conway-Bogue can not be assessed seller or buyer

1. May be negotiated between buyer and seller

If a completed Lead-Based Paint Disclosure form is not attached to a sales contract in which a building permit for a residential dwelling was issued prior to January 1, 1978, the contract _________ 1. May be terminated by the date in the contract 2. Is not acceptable 3. Is extended 4. Is void

1. May be terminated by the date in the contract *If a completed Lead-Based Paint Disclosure form is not attached to a sales contract in which a building permit for a residential dwelling was issued prior to January 1, 1978, the buyer may terminate by the date in the contract. See Lead Paint Disclosure

Which of the following land description methods identifies a parcel of land by specifying its shape and boundaries? 1. Metes and bounds 2. Government survey 3. Recorded plat 4. Assessor's parcel number 5. All of the above

1. Metes and bounds

A broker promises his client that there will be a new highway exit built to help access to a tough location. The buyer's decide to buy, and the highway exit is never built. This is considered __________ . 1. Misrepresentation 2. Failure to disclose 3. Puffing 4. Fraud

1. Misrepresentation

Without checking the facts, a broker who is the seller's agent tells a buyer that the property taxes in a particular neighborhood are among the lowest in the area. The buyer relies on the broker's statement and makes an offer on a house in the neighborhood. Before closing, it is determined that the taxes are actually among the highest in the area. The buyer could seek to rescind the contract on the basis of ______________. 1. Misrepresentation 2. Fraud 3. Puffery 4. Legality

1. Misrepresentation

Trust account cash balances are reconciled to corresponding brokerage liabilities for trust funds, and such reconciliations are retrievable for inspection by the Colorado Real Estate Commission when? 1. Monthly 2. Daily 3. Weekly 4. Whenever deposits are made and checks are written

1. Monthly

Operational guidelines are _______________ than Landlord policies. 1. More specific 2. Broader 3. Harsher 4. Less detailed

1. More specific *Landlord's Policies are broad, general statements of how the landlord wants the manager to manage the property and deal with tenants; the Operational Guidelines are more specific and address as many specific situations as possible, such as what to do when the furnace fails, or whom to call when the sprinkler system shuts

HUD and EPA require the disclosure of known information on lead-based paint and lead-based paint hazards before the sale or lease of _____. 1. Most housing built before 1978 2. All housing 3. Any housing built before 1980 4. Only Federal housing

1. Most housing built before 1978

Broker Elise is buying a new home, she_____________. 1. Must give written notice she is licensed 2. Must disclose, either verbally or in writing, she is a licensed real estate broker 3. Is not required to give notice she is a broker 4. May choose to disclose she is licensed at any time prior to the closing

1. Must give written notice she is licensed

Mary transferred a life estate in her home to John based on the life of Ned Green. John then leased the property. Ned Green's death during the term of the lease would result in all of the following EXCEPT _________ . 1. Ned Green's heirs would inherit his interest in the property 2. Termination of the lease 3. Termination of John's life estate 4. Reversion of title to Mary

1. Ned Green's heirs would inherit his interest in the property *A life estate ends when the life on which it is based ends (through death).

A lease that includes a percentage of operating expenses is a ________ . 1. Net lease 2. Percentage lease 3. Gross lease 4. Operating lease

1. Net lease

A lease that includes a percentage of operating expenses is a __________. 1. Net lease 2. Percentage lease 3. Gross lease 4. Operating lease

1. Net lease

Corporate officers desiring to avoid personal liability for a large loan would ask for a ___________ . 1. Non recourse loan 2. Reverse-Annuity Mortgage 3. Participation Mortgage 4. Convertible Mortgage

1. Non recourse loan *In a recourse mortgage the lender can go after the borrower's other assets or sue to have his or her wages garnished. In a non-recourse mortgage, however, the lender is out of luck. If the asset does not sell for at least what the borrower owes, the lender must absorb the difference and walk away.

An INCORRECT statement concerning an applicant for a broker's license who has been convicted or pleaded nolo contendere to a misdemeanor or a felony, or any like municipal code violation, or has such charges pending, etc., within the last ten years is _____________ . 1. Not eligible to obtain a Colorado broker's license 2. Required to write and sign a personal explanation and detailed account of the facts surrounding each violation 3. Required to have his or her anticipated employing broker submit a letter stating his/her knowledge of the specific charges and/or convictions 4. Required to submit a REC form inclusive of copies of the charges, disposition, pre-sentencing report and most recent probation or parole report

1. Not eligible to obtain a Colorado broker's license

Association reserve funds previously collected are____________. 1. Not prorated at closing 2. Prorated at closing 3. The responsibility of the seller at closing 4. The responsibility of the buyer at closing

1. Not prorated at closing *Association reserve funds represent wear and tear during the seller's ownership, and are not prorated.

'M's purchase offer affords the seller three days to accept. One day after making the offer, and before acceptance, 'M' wants to withdraw the offer. 'M's buyer agent should inform 'M' that the ___________ . 1. Offer may be withdrawn without penalty 2. Earnest money will be forfeited to the seller 3. Offer is irrevocable 4. Offer may be revoked only in the event of death

1. Offer may be withdrawn without penalty

'M's purchase offer affords the seller three days to accept. One day after making the offer, and before acceptance, 'M' wants to withdraw the offer. 'M's buyer agent should inform 'M' that the __________________ . 1. Offer may be withdrawn without penalty 2. Earnest money will be forfeited to the seller 3. Offer is irrevocable 4. Offer may be revoked only in the event of death

1. Offer may be withdrawn without penalty

A "teaser" rate is __________ . 1. Often used for ARM loans 2. Prohibited by federal and state lending laws 3. Prohibited by federal but not state law 4. Prohibited by state but not federal law

1. Often used for ARM loans

High density rules restricting oil and gas development would apply _____________. 1. On lots that are smaller than two acres 2. On lots that are larger than two acres 3. Only in areas where the rules are approved by the municipality 4. In all urban areas

1. On lots that are smaller than two acres

A small brokerage firm has 4 earnest money deposits while managing 6 single-family residential units. They have accepted 6 security deposits from the respective tenants. At a MINIMUM, they must maintain how many escrow accounts? 1. One 2. Three 3. Sixteen 4. Two

1. One

The Colorado Documentary Fee is based on ______________ . 1. One cent for each $100.00 of sales price 2. One cent for each $1,000.00 of sales price 3. Ten cents for each $10,000.00 of sales price 4. One dollar for each $1,000.00 of sales price

1. One cent for each $100.00 of sales price

All "money belonging to others" accepted by a resident or non-resident broker doing business in this state shall be deposited in ____________ . 1. One or more accounts separate from other money belonging to the broker or brokerage entity 2. An attorney's trust account 3. The title company's trust account within 24 hours of receipt 4. The broker's operating account within the first business day of receipt

1. One or more accounts separate from other money belonging to the broker or brokerage entity

Encroachment occurs when 1. One's improvement enters onto the real property of another 2. A fence or single wall straddles the lot line between two properties 3. A property owner receives the rights from another's land to use the adjacent land 4. The seller would be required to give an appurtenant easement for access

1. One's improvement enters onto the real property of another

The phrase "a note secured by a deed of trust", means that the note's collateral may be _________ . 1. Only the specific property named in the deed of trust 2. All real property owned by the borrower 3. Only personal property 4. Only residential property

1. Only the specific property named in the deed of trust *The note is the promise to pay, the deed of trust is the specific real property security behind that promise.

Disciplinary actions against a licensee are _________ . 1. Open to the public 2. Are retained by the Colorado real estate commission for 7 years 3. Retained in the office of the Secretary of State 4. Cannot be subpoenaed

1. Open to the public

Pam entered into a contract for Joe's land, which included a payment. Joe's land was not for sale at the time. Pam changed her mind and will not get her payment back. This type of contact is a(n) ___________ . 1. Option contract 2. Land contract 3. Contract for deed 4. Illegal contract

1. Option contract

Joe Green and his wife Mary own a residence as joint tenants. When Joe dies Mary will ___________ . 1. Own the property as a tenant in severalty 2. Own the property as a tenant in entirety 3. Own the property as a joint tenant 4. Own the property as a tenant in common

1. Own the property as a tenant in severalty

Dates and deadlines are found in the Contract to Buy and Sell in. 1. Paragraph 3 dates and deadlines 2. In each section as it applies 3. Paragraph 4 price and terms 4. Paragraph 5 financing terms

1. Paragraph 3 dates and deadlines

Three years and eleven months after the closing, the commission contacts Broker Pendleton and requests to audit the transaction file. What must Broker Pendleton do now? 1. Pendleton must submit the file for review 2. Pendleton is not required to submit the file because the three year time limit on file retention has passed 3. After two years, the file was not required to be maintained, but if Pendleton has a copy, it must be produced 4. Only those documents in the file that are not "confidential" in nature should be shared with the commission

1. Pendleton must submit the file for review

Presenting refers to what style of presentation? 1. Performance 2. Conference 3. Consultative 4. Relevant appeal

1. Performance

When a seller is providing seller financing, the approved Contract to Buy and Sell 1. Permits the seller to terminate the contract based on the buyer's credit information 2. Requires the seller to perform a background check on the buyer 3. Permits the buyer to terminate if the seller asks for the buyer's credit information 4. Requires the buyer put at least 20% down as earnest money

1. Permits the seller to terminate the contract based on the buyer's credit information

The note is evidence of the debt and is considered ____________ . 1. Personal property 2. Evidence of a lien on the property 3. Real property 4. An obligation to repay a loan and not a promise to pay

1. Personal property *Promissory Note: Actual promise to repay a loan. The note is evidence of the debt. The note creates the debt. It is a negotiable instrument and is considered personal property.

When a broker prepares a competitive market analysis, consideration includes the ___________ . 1. Physical depreciation, and functional and economic obsolescence 2. Applicable capitalization rate 3. Reproduction cost 4. Replacement cost

1. Physical depreciation, and functional and economic obsolescence

If a condominium owner is delinquent in the payment of valid association fees, the homeowners association will most likely ______________ . 1. Place a lien on the property 2. Give 30 days notice before starting eviction proceedings 3. Hire a broker to sell the property 4. Both #1 and #2 are true

1. Place a lien on the property *HOA's have statutory authority to lien property to collect delinquent dues. One cannot "evict an owner"

Cities may enact ordinances intended to provide for health, safety, and general welfare under their ________. 1. Police power 2. Injunction power 3. Escheat power 4. Power of eminent domain

1. Police power

Responsibilities of a commercial realtor or broker include_______________. 1. Property leasing, sales, and marketing 2. Loan underwriting 3. A buyer's creditworthiness 4. Title searches

1. Property leasing, sales, and marketing

Which of the following events would AUTOMATICALLY cancel a listing agreement? 1. Property owner's death 2. Listing agent's death 3. Death in seller's family 4. Property owner is unhappy with agent

1. Property owner's death

Colorado Real Estate Commission broker license law was passed to 1. Protect the people of Colorado. 2. Protect the real estate industry by standardizing it. 3. Assist lawyers by creating standardized forms so brokers could fill in the blanks. 4. help administer the Colorado Fair Housing Act

1. Protect the people of Colorado.

A real property transfer declarations (TD-1000) purpose is to _____________ . 1. Provide essential information to the county assessor to help ensure fair and uniform assessments for all property for property tax purposes 2. Report and remit the 2% special tax on out-of-state owners to the Colorado Department of Revenue 3. Provide sales data to the county treasurer for tax purposes 4. Provide data to the city that the property is situated within

1. Provide essential information to the county assessor to help ensure fair and uniform assessments for all property for property tax purposes

An environmental impact statement typically describes the effects of a proposed project on factors such as ___________ 1. Public health and safety 2. Economic growth 3. Financial opportunity 4. Transportation needs

1. Public health and safety

A broker may _____________ . 1. Rebate a portion of his or her commission to the seller to secure the listing 2. Place an earned commission in his or her trust account 3. Accept a fee from a title insurance company for directing business to them 4. On the same transaction represent the Seller as a Sellers' Agent and assist the buyer as a transaction-broker

1. Rebate a portion of his or her commission to the seller to secure the listing

A township is ______________ . 1. six miles square. 2. one mile square. 3. six square miles. 4. one square mile.

1. six miles square.

If the broker receives a cash payment in an amount of $10,000 or greater from a single transaction, he or she must __________________. 1. Report the payment to the IRS on Form 8300 2. Report the payment to the Real Estate Commission 3. Report the payment to the Colorado Treasury Department 4. All above are true

1. Report the payment to the IRS on Form 8300

Interest bearing accounts: 1. Require disclosure within contracts as to who will benefit from the earnest interest 2. Are not permitted by the Colorado Real Estate Commission 3. Require any earned interest to be credited to the broker's client 4. Allow earned interest to be credited to the Broker

1. Require disclosure within contracts as to who will benefit from the earnest interest

For __________ property, the right to cure period is 110-125 days. 1. Residential 2. Industrial 3. Agricultural 4. All properties

1. Residential

A three-day right of rescission shall NOT be granted purchasers of which of the following? 1. Residential mortgages created to finance the acquisition or initial construction of the consumer's principal dwelling 2. Time-share interests 3. Condominium and loft conversions 4. Raw land subdivisions

1. Residential mortgages created to finance the acquisition or initial construction of the consumer's principal dwelling *The right of rescission is a right, set forth by the Truth in Lending Act (TILA) under U.S. federal law, of a borrower to cancel a home equity loan or line of credit with a new lender, or to cancel a refinance transaction done with another lender other than the current mortgagee, within three days of closing.

Provisions placed in a deed to control future use of the property are known as _________ . 1. Restrictions 2. Allowances 3. Limitations 4. Transfer

1. Restrictions

The_____________ will be debited for the owner's title policy 1. Seller 2. Buyer 3. Broker 4. Title company

1. Seller *The seller pays for the owner's title policy. The buyer pays for the lender's title policy.

The notary fee for the warranty deed is paid by the ____________ . 1. Seller 2. Broker 3. Buyer 4. Closer

1. Seller *Warranty deeds are signed by the seller/grantor who then pays to have the signature notarized.

What is NOT an acceptable form of square footage disclosure? 1. Seller measurements 2. Prior appraisal 3. Building plans 4. Assessor's office

1. Seller measurements

An example of a local protected class NOT covered in Federal law is ____________. 1. Sexual orientation 2. Race 3. National Origin 4. Sex

1. Sexual orientation

Money held in an escrow or trust account, which is due and payable to broker, ______________. 1. Shall be withdrawn promptly 2. Is a license law violation subjecting broker to possible disciplinary action 3. Must be withdrawn within 48 hours 4. Must be withdrawn within 72 hours

1. Shall be withdrawn promptly

A signed listing contract does NOT grant a Broker the right to: 1. Sign for the seller to facilitate the sale of the property 2. Accept earnest money deposits pursuant to a proposed sales contract 3. Seek assistance from and offer compensation to brokers outside of the listing company if seller has checked the appropriate boxes 4. Have agreements with other sellers to market and sell their properties

1. Sign for the seller to facilitate the sale of the property

Which of the following factors would be included in a description of replacement cost? 1. Similar utility, current material, and design 2. Similar utility, replica of material, and design 3. Different utility, current material, and design 4. Different utility, replica of material, and design

1. Similar utility, current material, and design

Radon is naturally occurring and is produced in many different types of soils and rocks. Which of the following statements regarding radon is FALSE? 1. Since Radon comes from the soil, it is only a problem in the basement of a home. 2. It is chemically inactive. 3. It can build up and become a health concern, by increasing the likelihood of developing lung cancer. 4. Radon is measured in units of pico curies.

1. Since Radon comes from the soil, it is only a problem in the basement of a home.

A buyer is obtaining a new loan, and the mortgagee's title insurance appears on the settlement statement. The entry is a _________ . 1. Single-entry debit to the buyer 2. Single-entry debit to the seller 3. Debit to the buyer, and a credit to the broker 4. Debit to the buyer, and a debit to the broker

1. Single-entry debit to the buyer

The release fee shown on a lender's new loan statement and paid by the lender is a . 1. Single-entry debit to the seller 2. Single-entry debit to the buyer 3. Debit to the seller and credit to the broker 4. Debit to the buyer and a credit to the broker

1. Single-entry debit to the seller *All entries from a lender's new loan statement are paid before loan funds are disbursed to the borrower and are therefore a single-entry. No broker payout = no broker credit entry.

The trust deed payoff appears on the new loan statement in the amount of $89,000. The entry on the worksheet is a __________ . 1. Single-entry debit to the seller 2. Debit to the seller and credit to the broker 3. Single-entry credit to the seller 4. Credit to the buyer and debit to the broker

1. Single-entry debit to the seller *The lender's new loan statement entries are paid in advance by the lender, and therefore are single-entries on the settlement statement—i.e. not calculated in amounts collected and paid during closing. Therefore, there is no corresponding broker column entry.

The approved language of the Contract to Buy and Sell 1. Specifies that the seller will provide a Seller's Property Disclosure form 2. Requires the seller to fill out the Seller's Property Disclosure form 3. Makes the Seller's Property Disclosure form mandatory 4. Specifies that if no property disclosure is provided by the seller the broker may fill it out to his/her best knowledge

1. Specifies that the seller will provide a Seller's Property Disclosure form *however the form is not mandatory.

Unless a dispute between tenants involves matters impacting the premises, the best policy is to ____________ . 1. Stay out of it and let the tenants resolve their own problems 2. Arrange for mediation 3. Have a conference call with both parties to discuss 4. Call the police

1. Stay out of it and let the tenants resolve their own problems

Pat and Paige own property together and neither may sell without consent of the other. This is an example of _____________ . 1. Tenancy by the Entirety 2. Tenancy in Sovereignty 3. Ownership in Severalty

1. Tenancy by the Entirety

Some properties may be subject to property taxes from a special taxing district serving a defined area. If buyers determine that the property is within a special taxing district, they may _____________. 1. Terminate the contract by written notice to the seller 2. Require the seller pay the indebtedness of such a district at or before closing 3. Petition to be excluded from the district 4. Terminate the contract automatically on the off-matters date deadline

1. Terminate the contract by written notice to the seller

Some properties may be subject to property taxes from a special taxing district serving a defined area.If buyers determine that the property is within a special taxing district they may: 1. Terminate the contract by written notice to the seller 2. Require the seller pay the indebtedness of such a district at or before closing 3. Petition to be excluded from the district 4. Terminate the contract automatically on the off-record matters deadline

1. Terminate the contract by written notice to the seller

Standard Forms covers _________. 1. The Colorado Real Estate Commission's rules governing approved forms. 2. The Colorado Real Estate Commission's rules governing separate accounts. 3. The Colorado Real Estate Commission's rules governing commission payments. 4. All of the above are true.

1. The Colorado Real Estate Commission's rules governing approved forms.

The Civil Rights Act of 1968 applies only to programs funded by ______________ and does not apply to FHA or VA loans. 1. The Federal Government 2. State legislature 3. NAR 4. Independent financing

1. The Federal Government

An out-of-state property owner contacts a broker associate asking him or her to manage 15 rental properties on the owner's behalf. _______________. 1. The broker associate should ask his employing broker if he or she may manage these properties and if the employing broker will establish the necessary escrow accounts and accounting records 2. The property owner should set up an escrow account in the state he or she resides in 3. The broker associate accepts the job and sets up the proper accounting records and escrow accounts in his or her name 4. The broker associate collects rents and mails them to the out-of-state owner

1. The broker associate should ask his employing broker if he or she may manage these properties and if the employing broker will establish the necessary escrow accounts and accounting records

Once the title company is selected by the parties to the contract, _____________ . 1. The broker is still responsible for accuracy of the closing statements 2. The broker is no longer responsible for the accuracy of the closing statements 3. The title company will prepare the contract for sale 4. The IRS shall be notified of the selection

1. The broker is still responsible for accuracy of the closing statements

To complete a short sale,___________________. 1. The broker shall include signed short sale addenda and required CREC forms 2. The seller shall give the broker notice of the required forms needing to be signed 3. The buyer must agree to accept the lenders standard addendum to a short sale 4. The CREC must be notified through the signing and delivery of the Short Sale Addendum (form SS45-20)

1. The broker shall include signed short sale addenda and required CREC forms

The seller wants to remain in the property for two months after closing;___________________. 1. The broker should recommend a lease be signed between the buyer and seller 2. The closing must be delayed to allow for the occupancy 3. The title company shall prepare a lease for use by the buyer and seller 4. The "Escrow" (or funds at the title company) must be held until the property is vacated

1. The broker should recommend a lease be signed between the buyer and seller

If a broker disburses a greater amount than the balance shown on the beneficiary's ledger record, ______________. 1. The broker was using money that belonged to a different beneficiary 2. The broker must return the funds within 24 hours 3. The broker can be fined by the commission 4. All of the above

1. The broker was using money that belonged to a different beneficiary

According to the Contract to Buy and Sell, if the parties have a dispute _______________. 1. The parties agree to split the mediation fees 2. The loser pays for the mediation fees 3. The seller pays for the mediation fees 4. The broker pays for the mediation fees

1. The parties agree to split the mediation fees

In an executory Contract to Buy and Sell Real Estate the purchase price is $150,000. If the appraisal comes in at $145,000 1. The buyer may elect to terminate the contract, try and renegotiate the price or buy at the contract purchase price 2. The buyer would not be able to get the proposed loan so the contract would terminate. 3. The seller is obligated to respect the appraised value. 4. The seller has the option to sell at $145,000, or terminate the contract.

1. The buyer may elect to terminate the contract, try and renegotiate the price or buy at the contract purchase price *Review the Commission-approved Contract to Buy and Sell Real Estate, In an executory Contract to Buy and Sell Real Estate the purchase price is $150,000. If the appraisal comes in at $145,000. The buyer may elect to terminate the contract, try and renegotiate the price or buy at the contract purchase price.

Randy and Jeff Minter hire Real Estate Broker Bonnie to list their home in St. Paul, a comfortable and elegant remodeled mountain home. It includes 3- bedrooms, 1 office, and 1 bath with slate bath tiles, granite countertops, stainless steel appliances, and maple hardwood throughout the open floor plan. Nearly 900 square feet upstairs is matched by a light, garden-level basement. This home has two decks, a wood burning stove, and a quiet and energy saving hot water radiant heater. The well pump was replaced, and a constant pressure water system was installed in 2009. The septic has been maintained yearly without issue. This house sits on a uniquely flat, usable 1.5 acres and is on the school bus route, which is plowed daily throughout the winter season. There is a tool shed, a 3 sided horse shed, and a small corral. It is zoned for livestock. Local schools with bus service and daycare for young children are available within the canyon. The Minters list the home for $275,000 on June 15, and Broker Bonnie's commission is 6%. Taxes for last year have not been paid and are $2300 yearly. Buyer's agent Daniel Brooks brings an offer for $267,000 which is accepted and will close on July 30th. Buyer Benjamin will be getting a VA loan and will be putting 20% down. Buyer Benjamin has a resale furniture business and he will store some of his saleable items on the property. Additionally, he plans to build a large storage shed for this purpose. The contract is contingent on the buyer's ability to get a building permit so he can build the needed structure on the property. His broker has added a contingency clause to the contract, which states the contract will terminate if the building permit is not granted by the city. The buyer has not heard back from the city about the building permit, and it's now July 29. What is the best action to take? 1. The buyer should request an extension of the contingency deadline and closing to give the city time to respond. 2. Nothing needs to be done at this time. 3. Broker Bonnie should call the city to find out what's going on and extend the contingency deadline. 4. The buyer should terminate the contract.

1. The buyer should request an extension of the contingency deadline and closing to give the city time to respond.

A buyer asked her agent to write a contract on a home even though she is already under contract on another home but wants to back out now. Which of the following statement is FALSE? 1. The buyer's agent always must follow the instructions of a buyer, even if it means writing a contract that is not "in good faith" 2. The buyer's agent should advise the buyer that she may be buying two homes and/or she may lose her earnest money 3. The buyer's agent is not obligated to write a contract for a buyer once she is under contract in another home unless she wants to buy 2 homes 4. The buyer must terminate the contract in writing before writing another offer

1. The buyer's agent always must follow the instructions of a buyer, even if it means writing a contract that is not "in good faith" *The buyer's agent SHOULD NOT follow the instructions of a buyer, if it means writing a contract that is not "in good faith".

Before delivering a security deposit to an owner, _____________. 1. The fact that the owner will hold the deposit must be disclosed in the tenant's lease and the property management agreement 2. The tenant must show proof that there are funds to cover the check 3. Funds may be withheld from the deposit for non-payment of rent 4. Tenant may request the owner's true name and current mailing address if there is a dispute regarding an amount withheld

1. The fact that the owner will hold the deposit must be disclosed in the tenant's lease and the property management agreement

The financing statement for the sale of this business includes the mineral rights on the property. Thus, ______________. 1. The financing statement must be filed with the clerk and recorder 2. The financing statement must be filed with the Secretary of State's Office 3. The contract must include a financing statement 4. The TD-1000 form must be completed to include all of the minerals listed individually that are found on the property before it can be filed with the clerk and recorder's office.

1. The financing statement must be filed with the clerk and recorder

The Real Estate Commission audits which of the following real estate company accounts of XYZ Real Estate Company? 1. The licensed broker's company trust accounts 2. Answer #1 (above) and the licensed broker's personal accounts 3. Answer #2 (above) and all broker associate accounts 4. Answer #1 (above) and all other company operating accounts

1. The licensed broker's company trust accounts

A seller listed his house with a broker for 3 months. After one month the seller decided to take the property off the market. 1. The listing is irrevocable and may not be unilaterally cancelled without cause 2. The seller can withdraw the listing and will not be responsible for paying any of the broker's expenses 3. The seller cannot take the property off the market 4. The broker should sue the seller to perform the contract

1. The listing is irrevocable and may not be unilaterally cancelled without cause

Broker Robin measures a new listing, prior to putting it into a local MLS. What must occur regarding the square footage of the new listing? 1. The methodology or manner used to measure must be disclosed. 2. The square footage Robin determines must be verified with the local assessor. 3. The square footage Robin determines must be verified through any other source, such as an appraisal. 4. The seller must verify the square footage prior to entry into the MLS.

1. The methodology or manner used to measure must be disclosed.

Tax pro-rations per contract are to be based on which of the following methods? 1. The most recent mill levy and assessment, taxes for the calendar year preceding closing, or as otherwise agreed 2. The current calendar year's actual taxes prorated between the parties 3. A current certificate of taxes due from the county assessor's office 4. The appraised value of the improved property and vacant lo

1. The most recent mill levy and assessment, taxes for the calendar year preceding closing, or as otherwise agreed

For income tax purposes, an owner's adjusted basis in a property is _____________ . 1. The purchase price, plus the cost of any improvements, minus allowable depreciation 2. The same thing as the owner's equity 3. The taxable portion or gain after the sale of a property 4. Both #1 and #2 are correct

1. The purchase price, plus the cost of any improvements, minus allowable depreciation

One advantage an FHA (Government) loans is _________ . 1. The purchaser only needs a small down payment 2. The discount points are always less than conventional loans 3. The loan to value ratios make it harder to qualify for government loans 4. None of the above. There are no differences between government loans and conventional loans.

1. The purchaser only needs a small down payment *FHA is generally 3% down. Review VA & FHA Loans

At a minimum an independent broker's written office policy must identify and describe 1. The relationships offered to the public by such broker 2. The broker's fair housing policy 3. The broker's antitrust office policy 4. Property listing procedures, including release of listings

1. The relationships offered to the public by such broker

A Colorado real estate sale withholding tax in the amount of 2% of the sales price OR the net sales proceeds amount is not applicable or handled if . 1. The sales price is less than $100,000 2. The entity providing the closing service must remit the amount to the Colorado Department of Revenue 3. The tax must be remitted within 30 days of closing 4. The seller is debited and the buyer is credited the tax amount

1. The sales price is less than $100,000

The following statement is False. When a Counterproposal is used 1. The seller should sign both the contract and the counterproposal 2. The contract is not signed by the seller 3. The counterproposal must be signed 4. The counterproposal should be presented (attached) to the original contract

1. The seller should sign both the contract and the counterproposal *When a Counterproposal is used the original contract is not signed by the seller. The counterproposal must be signed and should be presented (attached) to the original contract.

A valid contract would be unenforceable because of __________ . 1. The statute of limitations 2. The absence of consideration 3. A death 4. Lack of disclosure form

1. The statute of limitations

An important consideration in brokering a business opportunity would be _____________. 1. The value of stock or inventory 2. The value of the non-transferable property 3. The cost of the broker's services as an average over the last year 4. Personal financial information of the seller, which should always be delivered for review to the purchase

1. The value of stock or inventory

In most states, real estate brokers have no duty to disclose that _________ . 1. There may have been a homicide or suicide in the home 2. The roof is leaking 3. There may be radon in the home 4. All of the above

1. There may have been a homicide or suicide in the home

Once a customer starts a relationship with you as a transaction-broker, _______________ . 1. They can change the relationship to a client type if they change their mind, as long as you do not have any other agreements in place that contradict the change. 2. They can change the relationship to a client type if they change their mind, even if you have any other agreements in place that contradict the change. 3. You must always be a transaction-broker during the life of the agreement. 4. The rules and law are silent on this issue.

1. They can change the relationship to a client type if they change their mind, as long as you do not have any other agreements in place that contradict the change.

Broker James and Broker Laura agree in a phone call to each take listings on their respective sides of a creek that divides the Creekside Neighborhood. 1. This is market or customer-allocation and is a violation of the Sherman Act. 2. This is an example of an acceptable verbal agreement between brokers. 3. The brokers are engaging in bid-rigging and are violating the Clayton Act. 4. As long as no customers price is affected then there is no violation.

1. This is market or customer-allocation and is a violation of the Sherman Act.

When using a title company, the Closing Instructions form is used by brokers 1. To hire title companies to complete legal forms 2. To hire the broker to complete the forms 3. To hire the broker to close the transaction 4. All of the above

1. To hire title companies to complete legal forms *The title company acts as a scrivener for the broker.

Why must a broker set up trust accounts? 1. To protect the public by having their money separate from other money belonging to the broker 2. To protect the salaries of the employees of the broker 3. To protect the commissions owed to broker associates 4. All of the above

1. To protect the public by having their money separate from other money belonging to the broker

Sellers must be made aware that they may not request _________ . 1. To sell the house to a particular type of person 2. The buyers submit additional earnest money 3. The buyer's lender to include a letter of pre-qualification if the seller is concerned about financing 4. The listing broker offer open houses

1. To sell the house to a particular type of person *Demands to give certain persons preferential treatment or promises to give the licensee a bonus if the right type of buyer is delivered, are not acceptable.

Advocacy is not a part of working as a: 1. Transaction-Broker 2. Seller's Agent 3. Single Agent 4. Buyer's Agent

1. Transaction-Broker

You are analyzing a retail property with multiple tenants. While reviewing the leases, you determine that the tenants are responsible for the reimbursement of their pro-rata share of operating expenses. Which type of lease is this? 1. Triple Net Lease 2. Gross Lease 3. Percentage Lease 4. Modified Gross Lease

1. Triple Net Lease

It is possible for the public to get the address and number of a licensee from the Real Estate Commission. TRUE OR FALS

1. True

A time share estate can be considered "Real Property" in the state of Colorado. 1. True. 2. True only in the mountain areas. 3. True if they include the land below them. 4. False.

1. True.

The independent contractor agreement between an employing broker and a broker associate is a(n) ________ . 1. Unilateral contract 2. Implied contract 3. Bilateral contract 4. Executed contract

1. Unilateral contract *Unilateral is a promise for an act. "I promise to pay if you perform, but you are not obligated to perform".

Ann needs to vacate her unit due to a job change that will require her to move to the Western Slope. Ann _______________. 1. Unless the lease states otherwise, may sublet her unit 2. Must receive permission from her landlord in order to sublet her unit 3. Will automatically forfeit her entire deposit if she moves 4. Will be requested by the landlord or owner a verification of the job change before allowing Ann to vacate the unit

1. Unless the lease states otherwise, may sublet her unit

The offering party can rescind (take back) the offer _____________ . 1. Until a contract is accepted 2. Within 24 hours of acceptance 3. Anytime, but the buyer's earnest money will be lost 4. Anytime, prior to the Inspection Deadline

1. Until a contract is accepted

Resigning your position as the property manager of a Condominium association requires _______________ . 1. Upon termination of the engagement delivery to the owner of all records utilized for such management 2. The manager to retain all original records and ledgers for 4 years 3. The manager to copy all records and turn over the copies to the association 4. The destruction of the records allowing the association to start anew

1. Upon termination of the engagement delivery to the owner of all records utilized for such management

Capitalization rates are used for appraising income producing property. When the cap rate is lowered, ____________ . 1. Values increase 2. Values decrease 3. Remain the same 4. There is no effect on value

1. Values increase

The purpose of the bank reconciliation worksheet sheet is to . 1. Verify that the financial data reported in the office records satisfies the basic escrow accounting equation 2. Balance the cash on hand with the "sales trust account" 3. Provide agreement between the "sales trust account" and the "management trust account" 4. Verify the broker's company balance with the broker's trust accounts

1. Verify that the financial data reported in the office records satisfies the basic escrow accounting equation

The contract to buy and sell real estate residential grants the buyer a walk- through of the property (with reasonable notice) to: 1. Verify the physical condition of the property and/or inclusions 2. Re-inspect the physical condition of the property and/or inclusions 3. Renegotiate the inspection notice 4. Escrow funds at closing for future repairs

1. Verify the physical condition of the property and/or inclusions

In an emergency situation, such as a flood, it's best not to _____________ . 1. Wait until danger is imminent to start evacuation 2. Follow the recommendations of the experts 3. Have a specific plan for evacuation 4. See to the evacuation of the people that need help first; children, elderly, disabled, injured

1. Wait until danger is imminent to start evacuation *Follow the recommendations of the experts and have a specific plan for evacuation, including the location of the nearest safe shelter. See to the evacuation of the people that need help first; children, elderly, disabled, injured, etc. If the emergency is threatened rather than in progress (possible flood, tornado, fire), start the evacuation as soon as recommended by authorities, not when the water is lapping at the front door.

A seller revealed the property has no termites, but upon an inspection of the premises, the buyer learned there were termites. The buyer chose to go through with the contract and close. This is an example of ___________ . 1. Waiver 2. Rescission 3. Accord and satisfaction 4. Reformation

1. Waiver

Your clients' children who _______ do not have to be in a "child seat" while you show property, if the parents don't care. 1. Weigh more than 40 lbs. 2. Are over 6 months 3. Are more than one year 4. Do not want to be

1. Weigh more than 40 lbs.

At what time can a licensed broker commingle tenant security deposits and sales escrow account? 1. When the brokerage maintains less than seven single family residential units. 2. When the brokerage maintains only one unit that can be either a multi-family or residential unit. 3. When the brokerage only manages one apartment complex of fifteen units or less. 4. Never is this allowed in the practice of real estate.

1. When the brokerage maintains less than seven single family residential units.

The buyer represents that they have received the lead base paint disclosure, if required, _________ 1. When they sign the offer 2. At closing 3. After the contract has been accepted 4. Prior to closing

1. When they sign the offer

A title company or brokerage firm check __________________ . 1. Would not be considered "good funds" 2. Would be considered "good funds" 3. Must be cash 4. Must be a certificate of deposit

1. Would NOT be considered "good funds" *"Good funds" must be equal to cash.

If your warranty deed states that you own the property "subject to" an existing loan, __________ . 1. You are not personally liable for the loan payments 2. The lender may sue both you and the the seller if the loan is in default 3. The seller may make the loan payments if you default and take back the property 4. Both #1 and #3 are true

1. You are not personally liable for the loan payments *But you could still lose the property through foreclosure if the seller defaults.

You are found to be a transaction-broker when ___________ 1. You have no signed agency or tb agreement with a buyer/seller 2. You act as a limited agent 3. You are working with a seller and a buyer wants to write an offer on the home 4. You are working with an investor that you have worked with before

1. You have no signed agency or tb agreement with a buyer/seller *If yo have no signed agreement with a buyer or seller you default to transaction brokerage. A transaction-broker cannot be an agent by definition

A conditional use permit would MOST LIKELY pertain to __________ . 1. Zoning 2. Deed Restrictions 3. Building codes 4. Covenants

1. Zoning

A Single agent is _____________ 1. a broker who is engaged by only one party to a real estate transaction 2. not a limited agent 3. an agent represents both principals in the transaction 4. a transaction broker

1. a broker who is engaged by only one party to a real estate transaction

If a buyer does not wish to work with a licensee as either an agent or a TB the buyer would be considered 1. a customer 2. a client 3. a person who can only buy from "For Sale by Owners" 4. a non buyer

1. a customer

After a brokerage relationship has ended, 1. all confidential information received during the course of the engagement stays confidential. 2. the broker is free to be hired by others and disclose any previous confidential information which would be beneficial to the new client. 3. the broker is required to not show properties to new clients that may still be of interest to his past client. 4. all ties are cut and the broker is free to do as he/she wishes.

1. all confidential information received during the course of the engagement stays confidential.

Which one of the following is NOT correct regarding the Sherman Antitrust Act: 1. allows monopolies to be eliminated by lack of consumer demand 2. price-fixing of real estate commissions is prohibited as commissions are negotiable 3. it makes sure there are incentives for businesses to operate efficiently 4. authorizes injured private parties to bring suits for treble damages

1. allows monopolies to be eliminated by lack of consumer demand *The Sherman Antitrust Act prohibits any conduct that monopolizes or attempts to monopolize the relevant market and will bring suit and action upon the violator.

The licensing law sets a standard for 1. competency and integrity. 2. performance. 3. intelligence. 4. creativity.

1. competency and integrity.

The additional provisions sections of the Contract to Purchase may 1. contain only transaction specific items negotiated between the parties 2. not contain transaction specific items negotiated between the parties 3. contain transaction specific items written by the broker prior to negotiations 4. contain only items previously approved by an attorney

1. contain only transaction specific items negotiated between the parties

An initial license issued to a broker will be active: 1. for the remainder of the current year, expiring on December 31st 2. for a 3-year period commencing and expiring on the issuance date 3. for a 1-year period commencing on the issuance date 4. for 3 years expiring on December 31st

1. for the remainder of the current year, expiring on December 31st *Initial (first time) licenses will be issued for less than 1 full year, from the issuance date until the end of the year, December 31st. No Continuing education is required during this time. After the first partial year, licenses will be issued for 3 years from Jan 1st expiring Dec. 31st, three years later

Eminent Domain is ___________ . 1. government's right to take your property through condemnation with compensation of market value. 2. government's right to take your property through condemnation without compensation. 3. government's right to take property that has been used for illegal purposes. 4. government's right to take property owned by subordinate levels of government.

1. government's right to take your property through condemnation with compensation of market value.

A seller's proceed sheet will show ____________ . 1. how much they have to spend for a new home when using proceeds from their current sale. 2. exactly how much they have to spend for a new home. 3. how much the buyer will be paying in cash without loans or grants included. 4. all of the lender financing charges that will be paid at closing.

1. how much they have to spend for a new home when using proceeds from their current sale.

Leases and mortgages must be in writing ___________. 1. if longer than one year. 2. if exactly one year or less. 3. to be enforceable. 4. if greater than six months and the property is a commercial property.

1. if longer than one year. *Statute of Frauds refers to the requirement that certain kinds of contracts be written down in signed document that clearly outlines the agreement. Real estate agreements fall under this law

When using the Licensee Buy Out Addendum, __________. 1. it is acceptable for a broker/buyer who is using the Licensee Buy Out to make a profit from the resale of the property 2. it is unacceptable for a broker/buyer who is using the Licensee Buy Out to make a profit from the resale of the property 3. it is acceptable for a broker/buyer who is using the Licensee Buy Out to keep the property in his portfolio and not try to resell the property 4. it is acceptable for a broker/buyer who is using the Licensee Buy Out to take the property off the market

1. it is acceptable for a broker/buyer who is using the Licensee Buy Out to make a profit from the resale of the property

A licensee will be put on probation for all of the following EXCEPT 1. keeping earnest money in a title company's trust account. 2. acting for more than one party without all parties' acknowledgment. 3. keeping earnest money in the broker's main checking account. 4. giving a "referral fee" to a non- licensee employee who only "shows" properties for sale.

1. keeping earnest money in a title company's trust account.

If you were measuring the outside of a standalone residential structure, what type of space would you be calculating? 1. livable space 2. maximum space 3. rentable space 4. usable space

1. livable space *Livable space of a standalone residential structure is calculated using the outside dimensions of the structure

A licensee working with a tenant as a tenant agent ___________. 1. must use a Commission approved Exclusive Tenant Contract 2. is not required to complete any paperwork as there is no Commission approved tenant agent form. 3. may help the tenant find a rental, but cannot charge a fee for assisting. 4. the fee owed by tenant cannot be greater than 10% of the gross lease.

1. must use a Commission approved Exclusive Tenant Contract

A licensee working with a tenant as a tenant agent 1. must use a Commission approved exclusive tenant contract. 2. there is no Commission approved tenant agent form. 3. may help the tenant find a rental, but cannot charge very much for helping. 4. the fee owed by tenant can never be greater than 8% of the gross lease.

1. must use a Commission approved exclusive tenant contract.

When the public enters into a brokerage relationship, the relationship is 1. only with the designated broker 2. only with the designated broker and the broker's company 3. only with the designated broker and the employing broker 4. only with the brokers of the designated company

1. only with the designated broker

The recovery fund could be used for 1. payment of out-of-pocket losses and reasonable attorney fees to the public in civil suits against licensees. 2. payment of out-of-pocket losses and reasonable attorney fees to the public in criminal suits against licensees. 3. negligence even if the licensee has errors and omissions insurance coverage. 4. all of the above.

1. payment of out-of-pocket losses and reasonable attorney fees to the public in civil suits against licensees.

When you obtain a license permit, you have ________. 1. temporary access which terminates upon the death of the person granting the right or easement, or upon the sale of the property. 2. an unlimited lease agreement stating your privileges. 3. a "limited lease" for less than six (6) months 4. an easement in prescription that expires in twenty-four (24) months.

1. temporary access which terminates upon the death of the person granting the right or easement, or upon the sale of the property.

The real estate recovery fund is maintained by 1. the State Treasurer. 2. the Real Estate Commission. 3. the State Judiciary. 4. the State Legislature.

1. the State Treasurer.

You may refuse to rent to a disabled person if _____________. 1. the disabled person demands you make reasonable modifications at your cost. 2. the disabled person demands you let her/him make reasonable modifications at her/his cost. 3. the disabled person is just too disabled. 4. the building is an apartment building with no access for wheel chairs.

1. the disabled person demands you make reasonable modifications at your cost.

If payment is made from the recovery fund for a judgment against a licensee 1. the licensee automatically loses his license. 2. the licensee loses his license only after the Real Estate Commission reviews the case. 3. the licensee loses his license for a period of one year. 4. the licensee keeps his license if a payment schedule is created to pay back the fund's money.

1. the licensee automatically loses his license.

To make a change to a contract, 1. the licensee must use an amend/extend contract. 2. the licensee must have the buyer/seller cross out all parts that are being amended. 3. the licensee must have the buyer/seller cross out the parts that are being amended and then have both parties initial the crossed out portion. 4. the licensee must have the buyer/seller cross out the parts that are being amended, write in the change and then have both parties initial and date the amended parts.

1. the licensee must use an amend/extend contract.

If a Lead-Based Paint Disclosure (Sales) form is not completed and signed by all parties by the date in the contract, 1. the purchase contract is voidable. 2. the purchase contract is valid, and all parties will be liable for fines. 3. the purchase contract is valid, and all parties must sign the disclosure form before closing to avoid any fines. 4. the disclosure is just one more option for the buyer to choose or not to choose in the purchase contract.

1. the purchase contract is voidable.

If possession is on the "day of delivery of deed", 1. the sellers must remove all their possessions prior to the possession time. 2. the sellers must remove all their possession before the day of closing. 3. the buyers must wait 24 hours from the hour of closing to move in their possessions. 4. on the day of closing, the buyers may move their possessions into the property beginning 12:01 am.

1. the sellers must remove all their possessions prior to the possession time.

If the buyer fails to redeem the Earnest Money Promissory Note 1. they will be liable for all reasonable costs of collections 2. the seller is in default 3. the seller may pay it 4. the broker may pay it

1. they will be liable for all reasonable costs of collections *(the seller has the option to terminate the transaction)

A buyer should use the Inspection Objection ________. 1. to request repairs to be done before closing 2. to request all repairs to be done after closing 3. to terminate the contract due to inspection issues 4. to request that the seller pay for the inspection

1. to request repairs to be done before closing

If a broker receives interest in their trust accounts they could do all of the following except 1. use the money for covering expenses. 2. pay the buyer the interest if the property sells. 3. pay the buyer the interest if the property does not close. 4. transfer the interest earned to an affordable housing fund

1. use the money for covering expenses. *If a broker receives interest in their trust accounts they could pay the buyer the interest if the property sells or does not sell or transfer the interest earned to an affordable housing fund.

A broker's license that expires on December 31 ________________. 1. will be renewed for a 3-year period 2. will be renewed for a 2-year period 3. will be renewed for a 1-year period 4. will be renewed for two full years and expires on the anniversary date that the license was first issued during the third year

1. will be renewed for a 3-year period

If you list a home that has a tenant 1. you are bound by the terms of the lease. 2. the tenant must leave at such time as the home sells. 3. the tenant has 30 days in which to move if the house goes under contract. 4. the landlord must pay the tenant one month's rent and moving costs in order to force the tenant to move.

1. you are bound by the terms of the lease.

What language must be stated in Addendums (not commission approved) to contracts? 1. "Buyer and Seller acknowledge that the specific expertise of the brokers and their agents is limited to the conduct and completion of real estate transactions." 2. "This addendum has not been approved by the Colorado Real Estate Commission. " 3. The broker is practicing law and it is advised that Seller/Buyer seek legal advice. 4. Both (1) and (2) must be included.

2. "This addendum has not been approved by the Colorado Real Estate Commission. "

If water and sewer are paid in arrears, with the August/September bill of $48.01 coming due October 1, at an August 30 closing, how much does the buyer owe for water and sewer? 1. $48.01 2. $-0- 3. $25.19 4. $22.82

2. $-0- *The buyer will get a credit for the seller portion from August 1 through August 29, and will pay the regular bill on October 1 for all of August and September. Prorations

A parcel of land sold for $99,950.00, and the seller is moving out of state after the closing. What is the correct amount the closer must withhold from the seller proceeds? 1. $2,000.00 2. $0.00 3. $1,999.00 4. $2,050.00

2. $0.00 *Withholding is not required when the sales price is less than $100,000.

The last monthly interest payment on a mortgage was $825.77. If the interest rate was 7.2%, what was the balance due on the principal? 1. $158,730 2. $137,628 3. $118,764 4. $131,741

2. $137,628 *T-bar question where you have the PART (monthly interest x 12 to get the annual interest), divided by the annual interestRATE (7.2%) to get the TOTAL. $825.77 x 12 = Interest for 1 year. Int for 1 yr. divided by 7.2% = $137,628.

If property was appraised using the "market approach," what would the value of the property be if the weighted comparables were the following: Property A sold for $160,000 and is weighted at 75%. Property B sold for $145,000 and is weighted at 15%. Property C sold for $140,000 and is weighted at 10%. 1. $150,750 2. $155,750 3. $140,000 4. $160,750

2. $155,750 *Study Hint: ($160k x 75%) + ($145k x 15%) + $140k x 10%) = $155,750. Review the meaning of "correlation" and "reconciliation"

A woman resided in her personal residence for 7 years. She married last month and deeded a one-half (1/2) interest in her home to her husband. She moved to his house and listed her home for sale. Upon sale, the maximum exclusion of capital gains tax is __________ . 1. $25,000 2. $250,000 3. $500,000 4. $1,000,000

2. $250,000

Kevin is preparing a Comparative Market Analysis (CMA) on a commercial net leased office property that has 100% occupancy and income of $67,000, with expenses of $22,000 and a management fee of 5% of the gross income. The property is assessed by the municipality at $425,000. If Kevin considers a 9% rate of return to be reasonable for this income property, what would Kevin recommend as a listing price? 1. $744,444 2. $462,778 3. $500,000 4. $597,000

2. $462,778 *$67,000 - $22,000 - $3,350 (5% management fee) = $41,650 / 09 = $462,778 *NOI (effective gross income - operating expenses) /cap rate = sales price $41,650/ .09 = $462,778

The current market rate is 5.75% with an amortized monthly payment on $1,000 to be $5.84. Your buyer wants to get a loan for $150,000. What would his payment be? 1. $87.60 2. $876.00 3. $575.00 4. $875.00

2. $876.00 *If you know what a payment would be on $1,000, to figure the payment on a loan, just divide the loan amount by $1,000 and then multiply the answer times the payment. $150,000/$1,000 = $150 x $5.84 = $876

In order to avoid the payment of capital gains, 'A' traded his commercial lot plus $10,000 to 'B' for farm land under a Tax Deferred Exchange. Based on this scenario, what occurs pertaining to the "boot" (additional money)? 1. 'A' will be taxed on $10,000 2. 'B' will be taxed on $10,000 3. Both parties will be taxed because this is not a like-kind trade 4. This trade defers all taxes under IRS Code 1031

2. 'B' will be taxed on $10,000 *Any additional capital or personal property included to make the value of the exchange equal is "boot". The receiver of the boot (additional money) must pay taxes on the value of the boot. 'B' will be taxed on $10,000

An IRS category of corporation that is treated like a partnership for tax purposes, avoiding taxation of corporate profits and subsequent taxation of dividends to shareholders, is called a(n) ___________ . 1. LLC 2. 'S' Corp 3. General partnership 4. Franchise

2. 'S' Corp

After notice of election to foreclose has been published, a foreclosure sale through the Public Trustee's office may not be held later than ____________ . 1. 45 Days 2. 125 Days 3. 75 Days 4. 60 Days

2. 125 Days

In order to qualify for a tax-deferred exchange, a seller must complete the acquisition of another property within how many days of closing the first transaction? 1. 45 days 2. 180 days 3. 90 days 4. 365 days

2. 180 days

Lender reserves at closing shall NOT exceed _______________ . 1. 1 month 2. 2 months 3. 1 year 4. 3 months

2. 2 months

A completed Closing statement and HUD-1 for a transaction that falls under the TRID rule must be provided 1. at closing 2. 3 days prior to closing 3. 3 days after closing 4. at time of contracting

2. 3 days prior to closing

The maximum amount of interest an irregular mortgagee may charge is _____________ . 1. Any amount 2. 45% 3. 10% 4. 18%

2. 45% *For mortgage lenders not regulated by an agency of state or federal government, the finance charge rate limitation is 21%. If the loan is a first mortgage for the acquisition, new construction, or refinance of a residence (includes mobile home), the finance charge rate limitation is 45%.

A special assessment in favor of the City for street paving is 1. A debit to the seller, and a credit to the buyer 2. A debit to the seller, and a credit to the broker 3. No entry 4. A debit to the buyer, and a credit to the broker

2. A debit to the seller, and a credit to the broker

It is unethical for an appraiser to accept compensation for performing an assignment when the assignment results are contingent upon __________ . 1. The reporting of a predetermined result unless prominently disclosed 2. A direction in assignment results that favors the cause of the client 3. The appraiser paying a fee to secure an assignment 4. Any special assumption

2. A direction in assignment results that favors the cause of the client

An owner may properly refuse to rent to a prospective tenant because the prospective tenant is ___________ . 1. A drug addict 2. A drug addict with abusive behavior 3. An alcoholic 4. A recovering alcoholic

2. A drug addict with abusive behavior

"The SW ¼ of the SW ¼ of Section 15, Township 3 South, Range 5 East" is not a complete legal description because it is missing which of the following elements? 1. Point of beginning 2. A principal meridian 3. A benchmark 4. A recorded plat reference

2. A principal meridian *All GSS descriptions are tied to a principal meridian and baseline in order to be able to locate the appropriate township. Without those the reader does not know even what state the description is referencing. e.g. Legal descriptions are made in a building-block fashion from small to large, for example, referring to the southwest quarter of the northeast quarter of Section XX, Township XX North (of a particular base line), Range XX West (of a particular meridian). Review Real Property, Land Descriptions, Governmental Survey System

A broker's personal funds shall not be commingled with money belonging to others except that an arrangement may be made with a depository to deposit ___________ . 1. $50.00 2. A sufficient amount of the broker's funds to maintain such account 3. $100.00 4. An amount deemed reasonable to cover any NSF funds received by broker

2. A sufficient amount of the broker's funds to maintain such account

A broker's personal funds shall not be commingled with money belonging to others, except that an arrangement may be made with a depository to deposit ____________ . 1. $50.00 2. A sufficient amount of the broker's funds to maintain such account 3. $100.00 4. An amount deemed reasonable to cover any NSF funds received by broker

2. A sufficient amount of the broker's funds to maintain such account

______________ is the judicial process through which the existence of a water right is confirmed by court decree. 1. Appropriation 2. Adjudication 3. Augmentation 4. Designation

2. Adjudication

The right to use property belonging to another for a specific reason is called ____________ . 1. Negative easement 2. Affirmative Easement 3. Prescriptive easement 4. Easement in right

2. Affirmative Easement

A broker supplies the financing for a project to build condominiums with the stipulation that he has the exclusive right to sell the completed condos. Which of the following BEST describes this relationship? 1. Conflicted 2. Agency coupled with an interest 3. Dual Agency 4. Illegal

2. Agency coupled with an interest

If a buyer chooses liquidated damages in a real estate purchase contract, the buyer has ___________ . 1. Guaranteed to the seller that he or she will not breach the contract 2. Agreed to forfeit only the earnest money in the event of buyer breach of the contract 3. Agreed with the seller that the seller shall lose money only if the seller breaches the contract 4. Bound the seller to liquidate the property to pay damages resulting from any seller breach of contract

2. Agreed to forfeit only the earnest money in the event of buyer breach of the contract *"Liquidated damages" limits the seller to earnest money only in the event of buyer breach, and precludes the seller from pursuing specific performance of the contract or additional punitive monetary damages.

Illegal commingling is not illustrated when ___________ . 1. Diversion occursCORRECT ANSWER 2. All rental receipts are deposited in the property management trust account 3. Conversion takes place 4. The broker fails to account for funds belonging to others

2. All rental receipts are deposited in the property management trust account

An item or property which might attract curious children to their detriment is known as ________. 1. A negative attraction 2. An attractive nuisance 3. A problem 4. An owner negligence

2. An attractive nuisance

A contract is void if it involves ___________ . 1. Misrepresentation of the purchaser's intentions 2. An illegal purpose 3. Duress 4. Undue influence

2. An illegal purpose

Which of the following would most likely not qualify for real estate broker license renewal continuing education credit 1. completing 24 hours of continuing education including the required minimum number of hours of the Annual Real Estate Commission update course 2. An office meeting conducted by the Managing Broker of your firm where your attendance is recorded and is made available for review 3. taking and passing the entire real estate broker licensing exam 4. none of the above

2. An office meeting conducted by the Managing Broker of your firm where your attendance is recorded and is made available for review

A common interest community checklist is _________________. 1. Mandatory when listing condos or townhomes 2. An optional use form 3. A required form to be filled out by the management company 4. Required by buyers to be attached to the sales contract

2. An optional use form

Bricks used to build a backyard patio become real property through the process of ____________ . 1. Severance 2. Annexation 3. A Bundle of Rights 4. Progression

2. Annexation *Annexation: An addition to property by the act of joining on thing to another, as in attaching personal property to real property and thereby creating a fixture.

Interest bearing trust accounts ___________ . 1. Are not allowed via real estate commission rules 2. Are allowed, but the broker can not earn the interest unless their is a written agreement stating otherwise 3. Require written consent by all parties 4. Via credit unions where non- members are not insured are acceptable by a Real Estate Commission position statement

2. Are allowed, but the broker can not earn the interest unless their is a written agreement stating otherwise

The buyer's broker signs the Contract to Buy and Sell 1. As a party to the contract 2. As a receipt for earnest money 3. In order to ensure the proper commission percentage 4. To help the closing company prepare the documents

2. As a receipt for earnest money

Your next door neighbor states that you can remove some of his wonderful garden dirt to be used in your garden. The garden dirt __________ . 1. Is considered a fixture 2. Becomes personal property when you put it in the wheelbarrow and becomes real property when you dump it into your garden 3. Is always real property 4. None of the above

2. Becomes personal property when you put it in the wheelbarrow and becomes real property when you dump it into your garden

E&O Insurance must be in place _____________. 1. Within 30 days of licensure 2. Before an active license can be issued 3. For an attorney licensee with professional malpractice insurance. 4. For all active licenses

2. Before an active license can be issued

An optionee properly notified the optionor that the optionee was exercising the option. The option now is a(n) ________ . 1. Voidable contract 2. Bilateral contract 3. Unilateral contract 4. Implied contract

2. Bilateral contract

Personal property is transferred by 1. Deed 2. Bill of Sale 3. Special Warranty Deed 4. Settlement

2. Bill of Sale

The owner of an interest in commonly held property wishes to dispose of the property, while the other owners DO NOT want to do so, will probably ____________ . 1. Develop an proportionate part of the property 2. Bring a suit to partition the monetary investment 3. Sue to quiet the title 4. Waiting out the death of the obstructing Tenants

2. Bring a suit to partition the monetary investment *Partition: A means by which people in an undesirable common relationship can free themselves of the relationship incidental to such common ownership.

Initially you are going to work with a buyer as a transaction broker. Before showing a property to the buyer you will provide the buyer with a: 1. Definitions of working relationships 2. Brokerage disclosure form to buyer 3. FSBO brokerage disclosure 4. Transaction broker disclosure

2. Brokerage disclosure form to buyer

Colorado Use Tax, a form of sales tax, is payable on the transfer of furniture, equipment, etc. Statute places the obligation to pay this tax on the _____________ . 1. Seller 2. Buyer 3. Broker 4. Furniture or equipment manufacture

2. Buyer *The Colorado Use Tax- Every state that has a sales tax also has a "companion" tax for purchases made where sales tax is not charged. This may happen if the business qualifies for the small business exception or if you buy a product online from a foreign company. In Colorado, this companion tax is called Consumer Use Tax. To be compliant with tax laws, you must report and pay consumer use tax when sales tax is not collected by the seller on a taxable product. Examples of taxable products (often referred to as "goods") are electronics, appliances, furniture, home accessories, jewelry/watches, clothing, shoes, sports equipment or any other tangible personal property. Buyer is responsible.

Not included as a definition of "Good Funds" is __________ . 1. Cash 2. Buyer's personal check 3. Electronically transferred funds 4. A certified check

2. Buyer's personal check

What restrictions are there on fully assuming an FHA mortgage? 1. The current amount of the loan must not exceed $150,000. 2. Buyers must be qualified for loans originated after 12/15/1989. 3. The origination date of the loan must be prior to 1999. 4. The original loan amount must be less than $200,000.

2. Buyers must be qualified for loans originated after 12/15/1989.

Rhonda buys a house in a planned subdivision. Her deed tells her that the use of her property is subject to the terms of the CC&Rs. In the CC&Rs are these restrictions: "nor shall any backyard fence exceed six feet high nor any fence, in front of a house, exceed four feet". Rhonda apparently thinks that nobody will care when she builds an eight-foot fence around her house to "ensure my privacy". The homeowners association notifies her in writing that she is violating her deed restrictions. Rhonda doesn't respond to repeated warnings, the association then _____________. 1. Will remove the fence 2. Can sue her to remove the fence or make it shorter 3. Will replace the fence with a shorter one 4. Can place a lien on her property

2. Can sue her to remove the fence or make it shorter *The association can sue her for an order to remove four feet of the fence in front and two feet in back. If there were no association with enforcement powers, other homeowners who are bound by the terms of the CC&Rs could sue her directly for the same order.

What is the required accounting system if there is no written agreement to the contrary? 1. Accrual 2. Cash basis 3. There is no required accounting system 4. Debit/credit accounting

2. Cash basis

The Good Funds Law allows ______________ at closing. 1. Brokerage escrow account checks 2. Cashier's checks 3. Cash 4. Personal checks

2. Cashier's checks *"Good funds" must be available immediately from any bank and must include cashier's checks, teller's checks, and federal wire transfers.

Document preparation charged by the title company closing your sale is _____________ . 1. Charged to the buyer 2. Charged to the broker 3. Charged to the seller 4. There is no such charge

2. Charged to the broker

According to the Residential Contract to Buy and Sell Real Estate 1. The buyer must pay for the appraisal 2. Check the box to specify who pays for the appraisal 3. The seller pays for the appraisal 4. The buyer and seller split the cost of the appraisal

2. Check the box to specify who pays for the appraisal

Even if a loan applicant's current income seems adequate to qualify for a certain loan, the Equal Credit Opportunity Act allows a lender to refuse the loan as a high risk if the applicant's main source of income is ___________. 1. Pension fund 2. Commission sales 3. Disability 4. Social Security

2. Commission sales

CAM stands for ________________. 1. Commercial Agreement Management Fee 2. Common Area Maintenance Fees 3. Commercial Area Management 4. Colorado Arena Management

2. Common Area Maintenance Fees

The owner of a fee-simple deeded interest in a warehouse cubicle or residential unit with shared ownership to common elements, MOST LIKELY owns what kind of interest? 1. Cooperative 2. Condominium 3. Leasehold 4. Commercial tenancy

2. Condominium *A condominium is ownership of unit airspace PLUS shared ownership of the common elements. A condo may be either residential or commercial

A judgment has been properly recorded. Any subsequent purchasers, whether they have actually examined the record or not, have been given ___________. 1. Prescriptive notice 2. Constructive notice 3. Actual notice 4. Proper notice

2. Constructive notice

An Installment Land Contract is a ____________ . 1. Form of lease in which installment payments apply to the purchase price 2. Contract to buy now with title transferred when paid in full 3. Sellers equitable interest in title 4. Form of seller carry-back financing

2. Contract to buy now with title transferred when paid in full

A possessory interest for a unit in a multi-unit building, evidenced by a proprietary lease, would be a ____________ . 1. Leasehold estate 2. Cooperative unit 3. Time share estate 4. Condominium unit

2. Cooperative unit *Co-op residents are shareholders, and do not have a deed. Review Cooperative Ownership

A certificate of taxes is verification from the _________ of the taxes owed. 1. IRS 2. County 3. City 4. Title company

2. County

An assumed loan amount is a ____________ . 1. Credit to the seller and a debit to the buyer 2. Credit to the buyer and a debit to the seller 3. Debit to the seller and a debit to the buyer 4. Debit to the seller and a credit to the broker

2. Credit to the buyer and a debit to the seller

A new loan will be a ___________. 1. Debit to the buyer; credit to the broker 2. Credit to the buyer, single-entry 3. Debit to the buyer; credit to the seller 4. Debit to the seller

2. Credit to the buyer, single-entry *(all loans are always a buyer credit).

Recording a new trust deed is a _______________ . 1. Debit the seller 2. Debit the buyer 3. Credit the seller 4. Credit the buyer

2. Debit the buyer

Sellers agreed to carryback a 2nd deed of trust in the amount of $10,000 at 9.25% interest per year, for five years. The first payment is February 1. The closing is December 4. The entry for interest on the new loan on the settlement statement is ____________. 1. Debit the seller $70.96 and credit the buyer $70.96 2. Debit the buyer $70.96 and credit the seller $70.96 3. Debit the buyer $69.62 and credit the seller $69.62 4. Debit the seller $7.60 and credit the buyer $7.60

2. Debit the buyer $70.96 and credit the seller $70.96 *Prorations: Interest at closing is for Dec 4 through 31. The 1st loan payment on Feb 1 will contain all interest for January $10,000 x .0925 = $925 / 365 = 2.53 x 28 = $70.96 The buyer is responsible for the day of closing

How would the charges for an attorney to examine the title documents normally appear on the settlement worksheet? 1. Debit the seller, and credit the broker 2. Debit the buyer, and credit the broker 3. Debit the seller, and credit the buyer 4. Credit the seller, and debit the broker

2. Debit the buyer, and credit the broker

In a new loan closing, the net loan proceeds becomes a __________ . 1. Credit to the broker 2. Debit to the broker 3. Credit to the buyer 4. Credit to the seller

2. Debit to the broker *In a new loan closing, the net loan proceeds is a debit to the broker (deposited into the title company trust account to pay the bills).

A mortgagee's title insurance premium is a _____________ . 1. Debit to the seller 2. Debit to the buyer 3. Credit to the seller 4. Debit to the broker

2. Debit to the buyer

The Colorado Documentary fee is a __________ . 1. Debit to the seller 2. Debit to the buyer 3. Credit to the seller 4. Credit to the buyer

2. Debit to the buyer

The sales price will appear as a _________ . 1. Debit to the seller; credit to the buyer 2. Debit to the buyer; credit to the seller 3. Debit to the seller; credit to the broker 4. Debit to the broker; credit to the seller

2. Debit to the buyer; credit to the seller

A release of a deed of trust is a _________ . 1. Debit to the buyer 2. Debit to the seller 3. Credit to the seller 4. Credit to the buyer

2. Debit to the seller

The buyer's Closing Statement shows ____________ . 1. Debits only for the buyer 2. Debits and credits only for the buyer 3. Debits for the seller 4. Debits for both the buyer and seller

2. Debits and credits only for the buyer

If you actively participate in the management of your personally owned income property, you may ___________ . 1. Not deduct your losses from your personal income 2. Deduct your losses from your personal income 3. Deduct your losses only from other like investments 4. Deduct your losses up to the amount of net profit

2. Deduct your losses from your personal income

Exchanging a property (1031) 1. Eliminates capital gain tax 2. Defers capital gain tax 3. Must be simultaneous to defer taxes 4. Can not be simultaneous to defer taxes

2. Defers capital gain tax

A lender has a claim against the borrower after the property securing the loan was foreclosed at an auction that did not equal or exceed the debt amount. The lender may pursue a ___________. 1. Subordination agreement 2. Deficiency judgment 3. Defeasance clause 4. Right of redemption

2. Deficiency judgment

Which statement is correct regarding depreciation? 1. Homeowners may depreciate their personal residences. 2. Depreciation is a loss in value from any cause. 3. Accrued depreciation will occur in the future. 4. Appraisers depreciate land and structures.

2. Depreciation is a loss in value from any cause.

The __________ is responsible for the accuracy of closing statements and six- column worksheet. 1. Buying broker 2. Designated broker 3. Listing broker 4. Managing broker

2. Designated broker *The listing/selling broker is responsible for the accuracy of the closing statements and the six-column worksheet, with the employing broker responsible for supervising the listing/selling broker.

Commercial Banks, Nationally Chartered Banks, State Charted Banks, Savings and Loans, and Credit Unions are _________ . 1. Mortgage brokers 2. Direct lenders 3. Indirect lenders 4. Potentially direct or indirect lenders

2. Direct lenders

Changing the zoning to a more restricted use, such as from multi-family to single -family, which will restrict the density, is called __________ 1. Upzoning 2. Downzoning 3. Rezoning 4. Hardzoning

2. Downzoning

Changing the zoning to a more restricted use, such as from multi-family to single family which will restrict the density is called ___________ . 1. Upzoning 2. Downzoning 3. Rezoning 4. Hardzoning

2. Downzoning

The concept of scarcity is (a)n ___________. 1. Physical characteristic of real estate 2. Economic characteristic of real estate 3. Is a byproduct of a slow market place 4. Both #2 and #3 are true

2. Economic characteristic of real estate

A burden, voluntary or involuntary, that reduces a property's value or use and may affect title or physical condition is an _____________. 1. Easement 2. Encumbrance 3. Attachment 4. Encroachment

2. Encumbrance

The Uniform Power of Attorney Act was created to ___________. 1. Empower real estate brokers to act for their principal without the principal's consent. 2. Ensure to third parties that they can rely upon the actions of the agent (who is created by the power of attorney). 3. Give spouses the right to sign for each other. 4. Allow parents to buy and sell real estate in their children's name.

2. Ensure to third parties that they can rely upon the actions of the agent (who is created by the power of attorney).

Which of the following contracts would use the term "exclusive, irrevocable contract?" 1. Licensee Buy-Out AddendumCORRECT ANSWER 2. Exclusive Right-to-Sell 3. Contract to Buy and Sell Real Estate 4. both (2) & (3)

2. Exclusive Right-to-Sell

Square footage of the home 1. Must be measured by the broker 2. Must be obtained from a reliable source 3. Must be measured by the broker or an assistant 4. Is not required

2. Must be obtained from a reliable source

The Colorado Real Estate Commission must investigate a written complaint against a licensee concerning all of the following EXCEPT ____________ . 1. A violation of the Colorado Consumer Protection Act 2. Failure to disclose stigmatized property 3. Commingling of client funds 4. Disparate treatment

2. Failure to disclose stigmatized property *Facts or suspicions regarding circumstances occurring on a parcel of property which could psychologically impact or stigmatize the property are not material facts and do not need to be disclosed.

A business organizational form in which partner(s) are liable for all debts and actions, is a _________. 1. Joint venture 2. General Partnership 3. Franchise 4. Limited Liability Company

2. General Partnership

A business organizational form in which general partner(s) are liable for all debts and actions is called a _________ . 1. Joint venture 2. General partnership 3. Franchise 4. Limited liability company

2. General partnership

Ownership of common stock in a corporation _____________ . 1. Gives an interest classified as real property 2. Gives an interest classified as personal property 3. Comes with no voting rights 4. Limits an investor's liability to $100,000

2. Gives an interest classified as personal property

A month-to-month tenancy on a residential property would MOST LIKELY be a___________. 1. Net lease 2. Gross lease 3. PITI lease 4. Percentage lease

2. Gross lease

The day after a broker's listing on a house expired, it was listed with another broker and offered in the MLS. Several days later, a third licensee called the first broker and asked for the key to show the home. The broker should inform the caller that ____________ . 1. He should not buy this home 2. He is no longer the listing agent 3. The home is no longer on the market 4. He should call the seller

2. He is no longer the listing agent

A designated broker may share confidential information with: 1. Any other brokers within his own office 2. His supervising broker as authorized by the informed consent of the party the designated broker is assisting or working with 3. His supervising broker who then becomes an additional designated broker to the party the designated broker is assisting or working with 4. No one

2. His supervising broker as authorized by the informed consent of the party the designated broker is assisting or working with

When can an agent disobey a principle? 1. Never, due to fiduciary duty 2. If a law would otherwise be broken 3. If the agent feels the principle is wrong 4. If the agent feels uncomfortable

2. If a law would otherwise be broken

A lease may be overridden and a tenant forced to vacate if: 1. the landlord sells the property. 2. If the lender forecloses a loan that was recorded prior to the lease agreement. 3. the lender forecloses and the property is sold at auction. 4. A lease may never be canceled by a sale.

2. If the lender forecloses a loan that was recorded prior to the lease agreement. *Foreclosures; Can the Property be Sold?; Foreclosure of a mortgage recorded before a lease on the same property will terminate the lease, unless the lender agrees to subordinate to the lease and let the tenants stay. CREM Trust Deeds and Liens

Which of the following statements regarding a valid option contract is CORRECT? 1. The optionee/buyer may not assign the option contract 2. If the option is not exercised, the optionor/owner retains the option consideration 3. The optionee/buyer must purchase the property before the option expires 4. It allows the optionor/owner to sell to another party at a higher price

2. If the option is not exercised, the optionor/owner retains the option consideration *An option is a contract by which an optionor (generally the owner) gives the optionee ( a prospective purchaser or lessee) the right to buy or lease the owner's property at a fixed price within a certain period of time. The optionee pays a fee for this option right. The optionee has to decide to either exercise the right or allow the option to expire. An option is enforceable by the optionee only making it a unilateral contract

The real estate contract for a specific property for use as an unlicensed whiskey sales operation was forced to terminate. The termination was the result of _____________ . 1. Operation of law 2. Impossibility of performance 3. Defeasance clause 4. Incompetent parties

2. Impossibility of performance *The termination was the result of impossibility of performance. Impossibility is when the duties and contractual obligations of one or more parties cannot be fulfilled under normal circumstances.

The previous tenant of your investment listing died of AIDS. Should you disclose this to potential buyers, and why? 1. Yes, state laws require the disclosure 2. In most states, Fiduciary Duty of Confidentiality precludes you from disclosing non-material facts (however some states do require disclosure). 3. No, Illegal acts need not be disclosed. 4. Yes, This is a material fact under full disclosure contract requirements.

2. In most states, Fiduciary Duty of Confidentiality precludes you from disclosing non-material facts (however some states do require disclosure).

Once a contract is accepted, earnest money should be deposited _________________. 1. In the trust account no later than the fifth business day 2. In the trust account no later than third business day following the day on which the broker receives notice of acceptance 3. In a timely manner 4. Within 24 hours of the day on which the broker receives a notice of acceptance

2. In the trust account no later than third business day following the day on which the broker receives notice of acceptance

Which of the following would be considered community property? 1. Property inherited by a wife during a marriage 2. Income earned by one spouse during the marriage 3. A property gift to a husband during the marriage 4. Income earned from a property acquired before the marriage

2. Income earned by one spouse during the marriage

The law presumes that, as a buyer, you are responsible for having researched the public records for property information. This is known as ________________ . 1. Actual notice 2. Inquiry notice 3. Constructive (legal) notice 4. Advanced notice

2. Inquiry notice *Actual notice is direct communication. -Constructive notice is in the public records. -Inquiry Notice: The law presumes that you, as a buyer, will research public records of anyone giving visible or recorded notice of ownership of the property.

A Licensee Buy-Out Addendum includes all of the following statements EXCEPT ____________. 1. Is between Seller and the licensee named on said addendum, as Buyer 2. Is always binding on the listing company broker, the licensee buyer and seller 3. Seller acknowledges that Buyer is licensed by the Colorado Real Estate Commission 4. Following closing Buyer is exposed to possible losses or profits

2. Is always binding on the listing company broker, the licensee buyer and seller *The Licensee Buy-Out Addendum is between the Seller and licensee named on the addendum as the buyer. Seller acknowledges that Buyer is licensed by the Colorado Real Estate Commission. Following closing Buyer is exposed to possible losses or profits.

The threshold rule _______. 1. Means that showing a property always entitles the broker to get paid 2. Is one determining factor in procuring cause 3. Is not applicable to commercial properties 4. Is only applicable to residential properties

2. Is one determining factor in procuring cause

If an appraiser provides a copy of a prior appraisal to a prospective client as a sample of his or her work product without authorization from the client for whom the work was performed, ____________ . 1. It is a record keeping rule violation 2. It is a confidentiality rule violation 3. It is not a USPAP violation 4. It is a management rule violation

2. It is a confidentiality rule violation

The city is voting next Tuesday to down-zone an area you are showing property in. 1. You must tell your buyer only if you knew that down-zoning was being considered. 2. It is your responsibility to know that it is being considered and must tell your buyer. 3. You are only responsible to tell your buyer if it would affect his decision to buy. 4. Gee, who reads the paper anyway?

2. It is your responsibility to know that it is being considered and must tell your buyer.

An incorrect statement concerning an offer to purchase is ____________. 1. It may be withdrawn by buyer prior to seller's acceptance thereof. 2. It may not be withdrawn by buyer. 3. It must be presented in a timely manner regardless of whether the Property is subject to a contract for sale. 4. Broker shall account for all money and property received.

2. It may not be withdrawn by buyer.

Lack of liquidity in the real estate market means _____________ . 1. Development is limited by the supply of water 2. It often takes time to sell property 3. It is not subject to damage by flooding 4. Financing is more available and less available at different points in time

2. It often takes time to sell property

Mary transferred a life estate in her home to John for as long as Ned Green lives. What happens if John dies? 1. Ned Green would inherit title. 2. John's heirs would inherit the life estate. 3. The lease would terminate. 4. Title would revert to Mary.

2. John's heirs would inherit the life estate. *The life tenant, John (and his heirs) own until Ned Green dies.

Which statement is correct regarding the Square Footage Disclosure? 1. Licensee must measure the square footage of the property 2. Licensee must disclose the source of the square footage measurement 3. Licensee must provide exact square footage measurements 4. The Square Footage Disclosure is for valuation purposes only

2. Licensee must disclose the source of the square footage measurement

When working with a buyer, an agent should ________________ . 1. Let the lender do his job and stay out of it 2. Make sure the buyer has enough for a down payment and closing costs 3. Tell the buyer to work with the agent's lender only 4. Trust the buyer regarding money to close

2. Make sure the buyer has enough for a down payment and closing costs

According to the Residential Contract to Buy and Sell Real Estate, a buyer who is dissatisfied with inspection results..... 1. Must offer the seller an opportunity to satisfy the problems 2. May terminate the contract with written notice immediately 3. May terminated the contract verbally, immediately 4. Must present the seller with a list of items to be fixed within 1 day of the resolution deadline

2. May terminate the contract with written notice immediately

The parties to the approved listing form agree to _______________if there is a dispute about the listing 1. Arbitration 2. Mediation 3. Got to an attorney 4. Nominal damages

2. Mediation

Lead is most often found in all the following EXCEPT_____________ 1. Paint 2. Minerals in the ground 3. Water sources caused by old lead pipes 4. Lead solder

2. Minerals in the ground

A property manager has a chance for a management contract for a large commercial building that has been vacant for 2 years. The manager should insist upon a _____________ . 1. Holdover clause 2. Minimum fee 3. Percentage fee for unforeseen repairs 4. Fee based on net income

2. Minimum fee

Which of the following lenders uses its own money to fund loans that will be sold in the secondary mortgage market? 1. Mortgage broker 2. Mortgage banker 3. Dept. of Veterans Affairs 4. Fannie Mae

2. Mortgage banker *A mortgage banker uses its own money to fund loans that will be sold in the secondary mortgage market.

A(n) ___________ originates loans as well as services them. 1. Subordinating lender 2. Mortgage company 3. Licensed real estate broker 4. FHA-approved lende

2. Mortgage company

The broker's books, when terminating a brokerage relationship,______________. 1. Are the property of the broker and do not need to be closed out 2. Must always be closed out showing where the funds went and a balance of -0- 3. Must always be closed out within 30 days 4. Are the responsibility of the broker for a period of 7 years

2. Must always be closed out showing where the funds went and a balance of -0-

Refundable retainer fees _____________ and cannot be spent until completion of the contracted services 1. May be held in the brokers personal account 2. Must be held in the brokers escrow account 3. May be held in the brokers business account 4. Cannot be held in the brokers escrow account

2. Must be held in the brokers escrow account

A seller reviewing the buyer's credit report for seller financing .... 1. May discuss the credit report with anyone he feels necessaryCORRECT ANSWER 2. Must be kept confidential 3. May be shared but only with his broker 4. May share the information with any lender

2. Must be kept confidential *Credit information provided to a seller for seller financing must be kept confidential.

In preparing an appraisal, an appraiser __________ . 1. Must have a minimum of 2 years' experience in appraising a similar property type 2. Must correctly employ those recognized methods and techniques that are necessary to produce a credible appraisal 3. May disclose the client in the appraisal report as long as this does not violate a specific request of the client 4. Must report an opinion of value that would be acceptable to the appraiser's peers

2. Must correctly employ those recognized methods and techniques that are necessary to produce a credible appraisal

The seller wants to sell his home before he can buy a bigger one. The broker... 1. May use the Contract to Buy and Sell as an offer to purchase the property, no addendum needed 2. Must use both the Contract to Buy and Sell as well as the Licensee Buy Out addendum to purchase the home 3. May not purchase his client's home 4. May use the Licensee Buy Out Addendum alone without the Contract to Buy and Sell to purchase the home

2. Must use both the Contract to Buy and Sell as well as the Licensee Buy Out addendum to purchase the home

All of the following are true of joint tenancy EXCEPT _____________ . 1.Unities of time, title, interest, and possession must be present 2. New joint tenants may be added without forming a new joint tenancy 3. Survivorship exists among joint tenants 4. A husband and wife may hold title as joint tenants

2. New joint tenants may be added without forming a new joint tenancy

The brokerage relationship established between the seller & designated broker extends to: 1. The employing broker. 2. No one but the designated broker. 3. The firm. 4. Other brokers employed by the broker

2. No one but the designated broker.

A leasehold estate is also known as a(n) ____________ . 1. Freehold estate 2. Non-freehold estate 3. Estate in severalty 4. Modified freehold estate

2. Non-freehold estate *Ownership = Freehold; Leasing = Non-freehold.

The Contract to Buy and Sell provides that faxed signatures may be acceptable for negotiations... 1. Original signatures will be provided no later than the title deadline 2. Parties may agree to use faxed signatures 3. Original signature will be provided at closing 4. Parties must agree to provide original signatures by closing

2. Parties may agree to use faxed signatures *The Contract to Buy and Sell provides that faxed signatures may be acceptable for negotiations. (by checking the box) Parties may agree to use faxed signatures and/or original signature will be supplied upon request.

In order to renew a real estate license, a licensee may _____________ . 1. Obtain a written waiver for worked performed versus continuing education 2. Pass the Colorado portion of the state exam in place of 24 hours of CE 3. Use a birth certificate to prove his or her age 4. Waive Errors and Omissions insurance if he or she are claim free

2. Pass the Colorado portion of the state exam in place of 24 hours of CE

At the time of harvest, crops that require annual planting are generally considered to be 1. Annual 2. Personal property 3. Owned by the buyer 4. Fixed

2. Personal property

______________ is the constitutional authority and inherent power of the state to adopt and enforce laws and regulations to promote and support the public health, safety, morals, and general welfare. 1. Eminent domain 2. Police power 3. Taking 4. Statutory power

2. Police power

An easement created by adverse use would be an easement by __________ . 1. Necessity 2. Prescription 3. Reservation 4. Grant

2. Prescription

An escalator clause __________ . 1. Is included in leases for commercial space with escalators 2. Provides for fluctuation in rent based on an index 3. Allows tenants to terminate a lease if taxes and insurance increase to a certain level 4. Provides for a significant rent increase if the tenant fails to give possession at the end of a lease term

2. Provides for fluctuation in rent based on an index

An escalator clause ____________ . 1. Is included in leases for commercial space with escalators 2. Provides for fluctuation in rent based on an index 3. Allows tenants to terminate a lease if taxes and insurance increase to a certain level 4. Provides for a significant rent increase if the tenant fails to give possession at the end of a lease term

2. Provides for fluctuation in rent based on an index

A deed of trust to a ______ is a nonjudicial foreclosure. 1. Private trustee 2. Public trustee 3. Court 4. Lender

2. Public trustee

_____________ is a period of time established by law during which a property owner has the right to redeem real estate after a foreclosure or tax sale by paying the sales price, interest and costs. 1. Trial period 2. Redemption period 3. Renewal period 4. Payment period

2. Redemption period

A_____________ loan pays off an existing loan against the property with the proceeds of the new loan. 1. Construction 2. Refinance 3. Balloon 4. Construction

2. Refinance

When a broker changes firms, any listing agreements ______________ . 1. Go with the departing designated broker 2. Remain with the brokerage firm 3. Are terminated 4. Seller decides if they remain or leave

2. Remain with the brokerage firm

A tenant has the right to meet the terms offered by any prospective new tenant when the current lease expires. What is this right called? 1. Option 2. Right of first refusal 3. Extension agreement 4. Holdover provision

2. Right of first refusal

Investments regulated by law where investors are inactive participants, are known as _____________. 1. Property management 2. Securities 3. Transactions 4. Personal property

2. Securities *Securities are investments which are regulated by state and federal law where investors are inactive participants. Investment condominiums with a mandatory rental pool agreement are regulated by the Securities and Exchange Commission.

In a loan assumption closing, the remaining principal balance being assumed by the buyer is a debit to the ___________. 1. Buyer; credit to the seller 2. Seller; credit to the buyer 3. Broker (closing entity) 4. Buyer

2. Seller; credit to the buyer

Real property becomes personal property through ____________ . 1. Partition 2. Severance 3. Separation 4. Accretion

2. Severance

The Contract to Buy and Sell Real Estate has a provision, if agreed upon, allowing for signatures to be evidenced by electronic delivery. Original signatures 1. Are no longer required. 2. Shall be provided upon request of any party. 3. Shall be provided to the other party within 72 hours of contract acceptance. 4. Are required on all documents retained by the broker for later inspection by the Colorado Real Estate Commission.

2. Shall be provided upon request of any party.

The Contract to Buy and Sell real estate has a provision if agreed upon allowing for signatures to be evidenced by facsimile. Documents with original signatures: 1. Are no longer required 2. Shall be provided upon request of any party. 3. Shall be provided to the other party as soon as possible. 4. Are required on all documents retained by the broker for inspection by the Commission.

2. Shall be provided upon request of any party.

A seller decides to counter an offer. The seller will ____________. 1. Sign the original offer and counter proposal 2. Sign the counter proposal only 3. Mark across the face of the contract to buy and sell that a counter proposal will be prepared by the listing broker 4. Have an attorney prepare a counter proposal

2. Sign the counter proposal only

The statement "I will only live in Boulder" is an example of __________ . 1. Non-homogeneity 2. Situs 3. Fixity 4. An ego problem

2. Situs *Situs = the preference by people for a certain location.

The director of the Real estate commission cannot issue a temporary license to prevent hardship to a: 1. Partnership 2. Sole proprietor 3. Corporation 4. Limited Liability Company

2. Sole proprietor

Special permission for a use to exist where the current zoning would not normally allow it is called ________. 1. Certificate of Occupancy 2. Special Use Permit 3. Variance 4. Zoning

2. Special Use Permit

Betty is selling her home and a title defect is found from the previous owner. Betty is not responsible so she has a ____________ deed. 1. Bargain and Sale Warranty 2. Special Warranty 3. Quit claim 4. Grant

2. Special Warranty *The special warranty deed limits the grantor's liability for title defects arising after the property is transferred. When property is transferred using a special warranty deed, if a title defect is found, the grantor is only responsible for costs related to defects that came into existence while he owned the property. If it is discovered that the defects already existed when the grantor purchased the property, the grantor is not liable for costs or damages. The special warranty deed also releases the grantor from any responsibility for defects that arise after the property is transferred to the purchaser.

A city puts in curbs, gutters, and sidewalks in a six-block area, benefiting abutting landowners. The city pays for these improvements through ______________ . 1. General tax revenues 2. Special assessments of abutting land owners 3. General assessments of abutting land owners 4. Raising taxes

2. Special assessments of abutting land owners

The Contract to Buy and Sell Real Estate 1. Requires the Seller to provide to buyer all CIC governing and financial docs only for time share properties. 2. States the Seller authorizes the Association to provide the Association Documents to Buyer, at Seller's expense 3. States if neither box in this § 7.3 is checked, Seller will cause the Association Documents to be provided to Buyer, at Seller's expense, on or before Association Documents Deadline 4. States the Seller authorizes the Association to provide the Association Documents to Buyer, at Buyer's expense

2. States the Seller authorizes the Association to provide the Association Documents to Buyer, at Seller's expense *The Contract to Buy and Sell Real Estate requires the Seller to provide to buyer, all CIC governing and financial docs, or that the Seller authorizes the Association to provide the Association Documents to Buyer, at Seller's expense.

The definition of time share includes all the following except_______. 1. Estate for years 2. Subdivision 3. Interval estate 4. Vested future interest

2. Subdivision

A process for two or more people coming together to operate an investment, such as partnerships or corporations, is ___________ . 1. Ownership 2. Syndication 3. Investment 4. Transacting

2. Syndication

If you have not completed 24 hours of continuing education credit, you may still renew your license on an active basis by ____________ . 1. Submitting an acceptable written Dr.'s excuse as to why you were unable to complete your continuing education requirements 2. Taking and successfully passing the Colorado portion of the Broker's exam 3. Submitting your college transcript revealing real estate as your major 4. Submitting a written certification from your Broker regarding work experience in lieu of courses taken

2. Taking and successfully passing the Colorado portion of the Broker's exam

A tenant received permissive possession without a tenancy agreement. The tenant was a ____________ . 1. Trespasser 2. Tenant at will 3. Tenant at sufferance 4. Month-to-month tenant

2. Tenant at will

An escrow or trust account may contain which of the following funds 1. Commissions payable 2. Tenant security deposits 3. Employee bonuses 4. Investment plans for the benefit of licensees

2. Tenant security deposits

In the Exclusive Right-to-Sell Listing Contract, all of the following would be considered a material fact to be disclosed to a buyer, EXCEPT_______________. 1. That the house has lead paint 2. That the home has not been tested for radon 3. That the roof leaked two years ago, but has been repaired 4. That the neighbor next door has an easement to cross the property

2. That the home has not been tested for radon

In the Exclusive Right-to-Sell Listing Contract, all of the following would be considered a material fact to be disclosed to a buyer, EXCEPT ____________ . 1. That the house has lead paint 2. That the home has not been tested for radon 3. That the roof leaked two years ago, but has been repaired 4. That the neighbor next door has an easement to cross the property

2. That the home has not been tested for radon *Also, The roof leaked two years ago, but has been repaired The neighbor next door has an easement to cross the property

In the case of a sublease, which of the following statements is true? 1. The sublessee pays the rent directly to the lessor. 2. The sublessor is liable for damage caused by the sublessee. 3. The sublease is not valid as there was no provision in the lease for subletting. 4. The lessor can terminate the lease.

2. The sublessor is liable for damage caused by the sublessee.

Any broker using a franchise or trade name owned by another on "for sale" signs on specific property shall clearly and unmistakably include ____________ . 1. The name of the listing agent and his or her phone number 2. The Broker's name, as registered with the Commission 3. The name of the real estate office in print larger than the listing agents name 4. The address of the real estate company

2. The Broker's name, as registered with the Commission

A broker's escrow account balance appears on ___________ . 1. A ledger 2. The account journal 3. The statement of settlement 4. The worksheet broker credit column

2. The account journal

A broker's escrow account balance appears on _____________. 1. A ledger 2. The account journal 3. The statement of settlement 4. The worksheet broker credit column

2. The account journal

Which of the following programs allow interest earned on sales escrow accounts to be paid to an account other than the beneficiary's trust account? 1. Any non-profit program 2. The affordable housing program 3. Both of the above 4. Neither of the above

2. The affordable housing program

Since the associate broker is now responsible for his or her closing, ____________. 1. The managing broker no longer needs to maintain books that deal with the associate broker's contracts 2. The associate broker is just as responsible for keeping an accurate file of the closing documents as the managing broker 3. The associate broker should also maintain a copy of the company records that pertain to the broker associate's contracts 4. The associate broker is an agent of the managing broker and is not responsible for the closing documents

2. The associate broker is just as responsible for keeping an accurate file of the closing documents as the managing broker

When brokers print approved contract forms _____________ . 1. They must include all financing options in the contract form 2. The blank spaces provided may be enlarged 3. They may insert any financing options as proposed by the broker's attorney. 4. They may alter or delete paragraphs as necessary

2. The blank spaces provided may be enlarged

In the event a branch office maintains a trust account, _____________. 1. The separate trust account must be maintained if the branch office is 25 miles away from the main office 2. The branch office must maintain a separate record keeping system 3. The number of trust accounts must be limited to three 4. The managing broker must maintain separate records

2. The branch office must maintain a separate record keeping system

When the parties have a dispute about the earnest money 1. The broker may keep the earnest money 2. The broker may interplead the matter and send the parties to court 3. The seller must return the earnest money to the broker 4. The seller must return the earnest money to the buyer

2. The broker may interplead the matter and send the parties to court

In order to extend the deadline date for loan objection 1. The broker must obtain the buyer's permission 2. The broker must obtain the seller's permission 3. The broker must obtain the lender's permission 4. The broker must obtain a letter from the lender

2. The broker must obtain the seller's permission *the broker must obtain the seller's permission since it is the buyer's deadline.

A seller will Not complete a Seller's Property Disclosure and the broker suspects there are material defects in the property. If the seller does not disclose these facts_______________. 1. The broker is not responsible 2. The broker should refuse the listing 3. The broker should speak with an attorney 4. The broker should take the listing and fill out the disclosure

2. The broker should refuse the listing

If the property owner has a 50-unit apartment building, ______________. 1. The broker's record would need to have fifty separate lines for the income collected for each individual unit 2. The broker's report would show gross rent collected for fifty units 3. The cash received and disbursed must be shown on a weekly report 4. The broker's record would need to show at least three separate line items for gross rent collected

2. The broker's report would show gross rent collected for fifty units

A buyer made an offer and received a counteroffer back. The buyer found a new property she likes better and wants to make an offer. 1. The buyer must first wait for the counteroffer to expire 2. The buyer can walk away from the counteroffer without responding and make a new offer on the new property 3. The buyer must first terminate the counteroffer before making an offer on the new property 4. The buyer may not make another offer unless she wants to buy 2 properties

2. The buyer can walk away from the counteroffer without responding and make a new offer on the new property

When acting as a Buyer's Agent; 1. The broker is vicariously liable for the acts of the buyer 2. The buyer is only vicariously liable for the acts of the broker that buyer approved, directed or ratified. 3. The broker assists the seller and buyer throughout the transaction without becoming an advocate for either party. 4. A written agreement is not required

2. The buyer is only vicariously liable for the acts of the broker that buyer approved, directed or ratified.

When acting as a Buyer's Agent: 1. The broker is vicariously liable for the acts of the buyer 2. The buyer is vicariously liable for the acts of the broker that buyer approved, directed or ratified 3. The broker assists the seller and buyer throughout the transaction without becoming an advocate for either party 4. A written agreement is not required

2. The buyer is vicariously liable for the acts of the broker that buyer approved, directed or ratified

Pursuant to the contract to buy and sell, if a buyer does NOT notify the seller that the buyer has been unable to obtain the loan commitment by the Loan Conditions Deadline and the loan is subsequently NOT funded _____________. 1. The buyer will not be able to close and his/her earnest money with be refunded 2. The buyer will be in default and subject to the loss of the earnest money and other remedies as agreed upon by contract 3. The buyer has until the Resolution Deadline to try and obtain another loan 4. The seller may terminate the contract

2. The buyer will be in default and subject to the loss of the earnest money and other remedies as agreed upon by contract

Per Colorado water law, the owner of a 35-acre tract can expect ____________ . 1. The right to a well permit 2. The water rights specified when he purchased 3. The same water rights as the neighboring 35 acre tract 4. The right to use adjacent river water

2. The water rights specified when he purchased

A buyer's agent is unable to attend the closing. Another licensee has been designated to attend the closing in the buyer agent's absence. Who is responsible for the accuracy, completeness, review, and delivery of the closing documents? 1. The buyer's agent 2. The buyer's agent, additional licensee, and employing broker 3. The additional licensee 4. The buyer's agent and the employing broker

2. The buyer's agent, additional licensee, and employing broker

The term "subdivision" includes _____________ . 1. The selling of memberships in campgrounds 2. The conversion of an existing structure into a common interest community of twenty or more residential units 3. Bulk sales and transfers between developers 4. Sales by public officials in the official conduct of their duties

2. The conversion of an existing structure into a common interest community of twenty or more residential units

The term "point of beginning" refers to _____________ . 1. A permanent reference marker 2. The first corner of the parcel to be surveyed 3. A benchmark 4. The intersection of a principal meridian with its base line

2. The first corner of the parcel to be surveyed

When using a quitclaim deed __________ . 1. Only partial interest is transferred 2. The grantor makes no promise that the property is free of any liens 3. It guarantees that the property is free of debt 4. It guarantees that no one else claims to own the property

2. The grantor makes no promise that the property is free of any liens

When setting up a real estate trust account with an FDIC lender for a real estate company that is a corporation, the trust account must be maintained in the name of ______________ . 1. The licensed corporation 2. The licensed corporation and the licensed broker 3. The licensed broker 4. None of the above

2. The licensed corporation and the licensed broker *When setting up a real estate trust account with an FDIC lender for a real estate company that is a corporation, the trust account must be maintained in the name of the licensed corporation and the licensed broker.

When managing property for others, _________________. 1. Property owner ledgers and tenant/guest ledgers may be combined 2. The managing broker must insure that separate ledgers are maintained for each beneficiary 3. Money collected from one property can be used to pay expenses on another 4. You may have an owner ledger with a negative balance as long as sufficient money is entered into the account in a timely manner

2. The managing broker must insure that separate ledgers are maintained for each beneficiary

Any excess funds realized at a foreclosure sale belong to: 1. The mortgagee 2. The mortgagor 3. The public trustee 4. The broker

2. The mortgagor

In a 1031 exchange all of the following are true EXCEPT: 1. The seller defers paying taxes on the sale of income property. 2. The party buying the seller's property must have a property that the seller wants for the exchange. 3. There is a third party (the exchange company) who "holds the seller's money after the sale" until a property is located which the seller wishes to purchase. 4. In general in order to defer taxes, the seller must use his total proceeds from the sale of the old property toward the purchase of the new property.

2. The party buying the seller's property must have a property that the seller wants for the exchange.

When selling a home built prior to Jan. 1, 1978, who is responsible for providing (to a potential buyer) the EPA pamphlet? 1. The broker 2. The seller 3. The employing broker 4. It's the buyer's responsibility

2. The seller *It's the obligation of the seller to provide the EPA pamphlet, though the listing broker may assist. Brokers should make sure all parties are in compliance.

With a Seller's Property Disclosure... 1. The seller's statements are approximate 2. The seller certifies to truth of disclosure based on current actual knowledge 3. The seller and broker should fill this out together 4. All of the above

2. The seller certifies to truth of disclosure based on current actual knowledge

A balance due from the seller would appear below the subtotals on a settlement worksheet in the_________________. 1. The seller debit column and the broker credit column 2. The seller credit column and the broker debit column 3. A balance due from the seller is not possible 4. The seller credit column and the buyer debit column

2. The seller credit column and the broker debit column

When the short sale is closed,____________. 1. The buyer will have negative information added to their credit report 2. The seller may still owe the remaining loan balance to the lender 3. The seller will not have negative loan information added to their credit report 4. The lender will still owe the balance of the loan prior to the release being recorded

2. The seller may still owe the remaining loan balance to the lender

As a seller's agent, if a broker intends to work both sides of a transaction without the buyer being a "customer", what accommodation must be made? 1. The Exclusive Right-to-Sell Listing Contract must have been signed as "Transaction-Broker". 2. The seller must sign a "Change of Status, Transaction-Broker Disclosure" form. 3. The seller and buyer must have signed "Change of Status, Transaction-Broker Disclosure" forms at the time of their respective listings. 4. The seller must have elected to allow the change of status at the time the listing was signed.

2. The seller must sign a "Change of Status, Transaction-Broker Disclosure" form.

As a seller's agent, if a broker intends to work both sides of a transaction without the buyer being a "customer", what accommodation must be made? 1. The Exclusive Right-to-Sell Listing Contract must have been signed as Transaction-Broker. 2. The seller must sign the change of status form 3. The seller and buyer must have signed "Change of Status, Transaction-Broker Disclosure" forms at the time of their respective listings. 4. The seller must have elected to allow the change of status at the time the listing was signed by checking the box on the listing contract.

2. The seller must sign the change of status form

The term "subdivision" does not include _______________ . 1. The conversion of an existing structure into a common interest community of twenty or more residential units 2. The selling of memberships in campgrounds 3. A group of twenty or more time shares intended for residential use 4. A group of twenty or more proprietary leases in a cooperative housing corp

2. The selling of memberships in campgrounds

When an owner owns multiple properties, ________________. 1. There can never be a negative balance on a property ledger 2. There can be negative balance in some property ledgers if the total balance for the owner is a positive balance 3. Money must be spent before being deposited 4. Markup fees for providing in-house maintenance and repairs may be charged

2. There can be negative balance in some property ledgers if the total balance for the owner is a positive balance

If someone builds a fence on your property which of the following statements is true? 1. They are entitled to an appurtenant easement to use your property. 2. They have encroached on your property. 3. They have a license to use your property. 4. You may only remove the fence with the sheriff present.

2. They have encroached on your property.

If revenues are recorded when cash is actually received and expenses are recorded when they are actually paid, ______________. 1. No further reporting is necessary 2. This is the cash basis method 3. This is known as the accrual method 4. Both #1 and #2 are correct

2. This is the cash basis method

A broker's license that expires on December 31 will be renewed for __________ . 1. Two full years and will expire on the anniversary date that the license was first issued during the third renewal year 2. Three full years 3. Another year after completing the continuing education requirements 4. Two years after completing the continuing education requirements

2. Three full years

A _______ is the arrangement whereby several joint owners have the right to use a property as a vacation home under a written agreement. 1. Cooperative 2. Time-share 3. Condominium 4. Subdivision

2. Time-share

The intended use of an appraisal would not include which of the following uses? 1. Just compensation in condemnation proceedings 2. To arrive at a predetermined value 3. As a basis for taxation 4. To establish rental schedules and lease provisions

2. To arrive at a predetermined value

Specific performance is the remedy available____________ in the Contract to Buy and Sell. 1. To the buyer only 2. To both the buyer and seller 3. To the seller only 4. To the broker and seller

2. To both the buyer and seller

A tenant in a commercial building installed a large sign that was anchored to the building with steel rods. Which of the following terms properly describes the sign? 1. Fixture 2. Trade Fixture 3. Real property 4. Emblement

2. Trade Fixture

An Option contract, where a buyer agrees to purchase a property if the seller decides to sell, is an example of a(n) __________ . 1. Bilateral contract 2. Unilateral contract 3. Expressed contract 4. Executed contract

2. Unilateral contract

A seller accepts an offer one day after the acceptance deadline. The offeror may choose to treat the late acceptance by the offeree as a valid contract under the principle of _____________ . 1. Novation 2. Waiver 3. Rescission 4. Accord and satisfaction

2. Waiver *Either party may always choose to ignore or waive a breach by the other party. Review the use of waiver to create a valid contract.

A special common-law right held by owners of land adjacent to rivers, lakes, or oceans and restriction the rights of land ownership, is called ____________ . 1. Ownership rights 2. Water rights 3. Private rights 4. Government rights

2. Water rights

At what time can a licensed broker commingle property management money with sales escrow account? 1. Never 2. When the brokerage maintains less than seven single family residential units 3. When the brokerage only manages one apartment complex of 15 units or less 4. Both #2 and #3 are true

2. When the brokerage maintains less than seven single family residential units

Personal property __________. 1. Will be conveyed if they are attached as of the date of the Contract to Buy and Sell 2. Will be conveyed by bill of sale and not part of the Contract to Buy and Sell 3. Are part of the Contract to Buy and Sell 4. Are considered real property

2. Will be conveyed by bill of sale and not part of the Contract to Buy and Sell

The listing broker must deposit earnest money in an appropriate trust account 1. Within 3 business days following receipt of an offer 2. Within 3 business days after notice of acceptance of an offer 3. Within 5 days after notice of acceptance of an offer 4. Within a reasonable amount of time

2. Within 3 business days after notice of acceptance of an offer

Your sister signs a contract and gives you $10,000 as earnest money on a home you have listed. It being Saturday, you put the money in your personal account until Monday to cover some unexpected expenses. On Monday, you pick up your commission check from another closing and transfer the full $10,000 into your trust account. Which of the following best describes your situation? 1. Your actions were proper because all the funds were replaced and no one was hurt. 2. Your actions were improper, you commingled funds, and your license can be revoked. 3. Your actions were proper because your sister would not mind as long as the funds were replaced. 4. Your actions were improper, but there is no sanction because all the funds were replaced and no one was hurt

2. Your actions were improper, you commingled funds, and your license can be revoked.

A state-run program where real estate license fees are used in part to pay non- collectible judgments against licensees is a 1. bonding program. 2. recovery fund. 3. Both (1) and (2). 4. None of the above.

2. recovery fund.

A ____________ is one of 36 sub-units within a township that is one mile square in the Governmental Survey System. 1. Tier 2. section 3. Quadrangle 4. Range

2. section

You are a buyer's agent, and a buyer directs you to keep looking for properties after making an offer. 1. Your contract states you will not continue looking for property when the buyer makes an offer. 2. Your contract states you will not continue looking for property after the buyer's offer is accepted. 3. There is no problem with looking for another property as the buyer can get out of the present contract using the inspection clause. 4. It's up to you whether you want to continue looking for properties as it really doesn't matter

2. Your contract states you will not continue looking for property after the buyer's offer is accepted.

If a buyer who has signed a buyer broker contract purchases only a share in a property, 1. a commission is not owed. 2. a commission is owed as the contract states a purchase has occurred if "any interest" is transferred.

2. a commission is owed as the contract states a purchase has occurred if "any interest" is transferred. *Exclusive Right-to-Buy Contract

A subdivision is created if ______________. 1. a residential property is divided into more than 15 real property interests. 2. a residential property is divided into more than 20 real property interests. 3. a commercial property is divided into more than 20 real property interests. 4. a residential property is divided into more than 20 real property interests excluding time-share interests

2. a residential property is divided into more than 20 real property interests.

You can become an employing broker 1. after 1 year and passing an additional test. 2. after 2 years and completing additional education. 3. after 3 years and passing an additional test. 4. after 4 years and passing an additional test.

2. after 2 years and completing additional education.

Which of the following easements benefits an individual or entity regardless of their being adjacent to the servient estate? 1. an appurtenant easement. 2. an easement in gross. 3. an apparent easement. 4. a community easement.

2. an easement in gross. *Appurtenant benefits the adjacent landowner. Gross benefits the grantee without requiring a proximate connection to the land. Review Easements.

When fencing his property, John misaligned the fence and extended it one foot onto the neighbor's property. This is an example of: 1. a license. 2. an encroachment. 3. an easement by necessity. 4. an easement by prescription.

2. an encroachment.

A seller's agent may be paid 1. only by the seller. 2. by buyer, seller and buyer's lender if all parties agree prior to contract. 3. by anyone from whom the agent can secure a payment agreement. 4. All of the above.

2. by buyer, seller and buyer's lender if all parties agree prior to contract.

The Colorado State Constitution provides for a preference to those claiming use of water for 1. beneficial use. 2. domestic purposes. 3. agricultural purposes. 4. diversionary use.

2. domestic purposes.

The earnest money receipt form acknowledges __________. 1. receipt for earnest money from the Broker to buyer 2. earnest money receipt from the Closing entity to broker 3. receipt for the earnest money to be held by the broker for the seller 4. closing company to receipt for its closing fees

2. earnest money receipt from the Closing entity to broker

You may NOT use personal assistants to 1. show clients properties. 2. go over purchase contracts when you are not available. 3. gather information on a property that is being listed. 4. hand out pre-printed information on a property.

2. go over purchase contracts when you are not available.

If the buyer, who has signed an exclusive buyer broker contract, finds a For Sale by Owner, 1. then the buyer has the option to use the broker services or not. 2. he must tell the broker and let the broker set up the appointment and handle the negotiations. 3. he should negotiate the sale without the broker and then pay the broker to "write it up for a smaller commission. 4. for sale by owners are not covered in buyer broker contracts.

2. he must tell the broker and let the broker set up the appointment and handle the negotiations.

A licensed appraiser _______________. 1. needs only to pass the real estate license exam. 2. is a person licensed, registered or certified by the Appraisal Board and does not need a real estate license. 3. is a person licensed, registered or certified by the Appraisal Board in conjunction with a real estate license. 4. any one can act as an appraiser in the state of Colorado without a license.

2. is a person licensed, registered or certified by the Appraisal Board and does not need a real estate license.

"Good faith money" 1. is considered option money. 2. is tendered as earnest money. 3. is the American dollar. 4. required for a valid contract

2. is tendered as earnest money.

A broker listing a residential property _____________. 1. is required to measure the property to determine the square footage 2. may use a reliable source of measurement 3. must have his/her assistant measure the property to determine the square footage 4. must use public records if he/she does not measure the square footage

2. may use a reliable source of measurement

After reviewing a buyer's offer, the seller decides to counter the offer. In the counteroffer, what role will each party be respectively called 1. offeree 2. offeree and the seller is the offeror 3. offeror 4. seller is presenting party

2. offeree and the seller is the offeror

The Commission-approved Contract to Buy and Sell Real Estate (Residential) provides for signatures to be evidenced by facsimile, but: 1. original signatures must be presented within three (3) business days. 2. original signatures must be provided upon request of any party. 3. the buyer (not the seller) must provide original signatures prior to closing. 4. the seller (not the buyer) must provide original signatures prior to closing.

2. original signatures must be provided upon request of any party.

The Colorado Fair Housing Act does NOT apply to ____________ 1. owners renting out their own personal residence. 2. owners renting out a room in their personal home. 3. real estate agents from other states. 4. housing created solely for persons 55 or older.

2. owners renting out a room in their personal home.

Which one of the following would be considered commingling of funds: 1. when the broker maintains more than one trust account 2. placing funds of others into the broker's operating account 3. occurs when the broker has multiple signer's on the trust account 4. both 2 and 3 are correct

2. placing funds of others into the broker's operating account

All the following are true about floodplains EXCEPT: 1. zoning may require that you build in a certain area of the property or prescribe building height requirements 2. septic systems would not require any additional requirements as they have a constant flow of water 3. flood insurance is an additional insurance rider to cover flood specific issues 4. flood zones areas change from time to time

2. septic systems would not require any additional requirements as they have a constant flow of water

A broker 1. shall be required to offer or engage in any one or in all of the brokerage relationships enumerated in the brokerage relationships disclosure form. 2. shall not be required to offer or engage in any one or in all of the brokerage relationships enumerated in the brokerage relationships disclosure form. 3. shall only disclose to potential customers/clients the types of brokerage relationships the broker is willing to perform. 4. (1) or (3)

2. shall not be required to offer or engage in any one or in all of the brokerage relationships enumerated in the brokerage relationships disclosure form.

In the Exclusive Right-to-Sell Listing Contract, if a buyer calls the seller, the seller should 1. show the property to the buyer. 2. tell the buyer to call his agent. 3. tell the buyer about the home, and then if the buyer is interested, to call his agent. 4. tell the buyer if he would wait 60 days, he could sell the home without the agent.

2. tell the buyer to call his agent.

According to the contract to Buy and Sell Real Estate, if a buyer will seek a new VA-guaranteed loan, the value of the property is established by _____________. 1. the appraiser 2. the Veteran's Administration's appraiser 3. HUD 4. the VA-approved lender

2. the Veteran's Administration's appraiser

If a buyer, after having a liquidated damages purchase contract accepted, purchases a car which causes the buyer not to qualify for the loan, and if seller does not timely receive written notice to terminate, 1. the purchase contract terminates and the buyer receives the earnest money back. 2. the buyer is in default and will forfeit the earnest money. 3. the contract provides 10 days for the buyer to seek alternative financing 4. the buyer's actions change the contract from "liquidated damages" to "specific performance"

2. the buyer is in default and will forfeit the earnest money. *If a buyer, after having a liquidated damages purchase contract accepted, purchases a car which causes the buyer not to qualify for the loan, and if seller does not timely receive written notice to terminate, the buyer is in default and will forfeit the earnest money. Contract to Buy and Sell Real Estate, Para 5

The purchase contract states that the buyer may select financing appropriate and acceptable to Buyer, including a different loan than initially sought. If the buyer cannot get the original loan 1. the contract is automatically terminated. 2. the contract may be terminated by purchaser. 3. the purchaser did not contract in good faith. 4. the seller gets the earnest money.

2. the contract may be terminated by purchaser. *Contract to Buy and Sell Real Estate Para 4.5.4 states 'If the New Loan is unsatisfactory to Buyer, then Buyer may terminate this Contract pursuant to § 5.2 no later than Loan Conditions Deadline

In the Denver Bar Association versus the Title Guaranty Company _____________. 1. the court ruled that title companies, like real estate brokers, could prepare legal documents for others. 2. the court ruled that title companies, unlike real estate brokers, could not prepare legal documents for others. 3. the court ruled that title companies could prepare only notes and deeds of trust for others. 4. the court ruled that title companies may give limited legal advice.

2. the court ruled that title companies, unlike real estate brokers, could not prepare legal documents for others.

In the Exclusive Right-to-Sell Listing Contract, all of the following would be considered a material fact to be disclosed to a buyer except 1. the house has lead paint. 2. the home has not been tested for radon. 3. the roof leaked two years ago, but has been repaired. 4. the neighbor next door has an easement to cross the property

2. the home has not been tested for radon.

When a real estate broker prepares a competitive market analysis (CMA)for any reason other than the anticipated sale or purchase of the property 1. the broker must also be a licensed appraiser. 2. the licensee must include a notice stating: "The preparer of this evaluation is not registered, licensed or certified as a real estate appraiser by the state of Colorado." 3. the broker must use it for marketing purposes only, and state that it is not an appraisal. 4. the broker would be in violation of license law.

2. the licensee must include a notice stating: "The preparer of this evaluation is not registered, licensed or certified as a real estate appraiser by the state of Colorado."

When a broker associate leaves one real estate company for another 1. the listings created by the broker associate go with him/her to the new company. 2. the listings created by the broker associate stay with the first company. 3. the "sales" currently held by the broker associate are moved to the new company. 4. the broker associate cannot leave for the new company until all current sales are completed.

2. the listings created by the broker associate stay with the first company.

If the seller wants to counter the buyers offer, which one of the following is a true statement: 1. the seller must request his agent prepare a new offer based solely on the seller's terms and conditions 2. the seller may request his agent prepare a counteroffer outlining provisions of the buyer's offer that the seller disagrees with 3. the seller should request his agent prepare a new offer and a counteroffer so the buyer can decide which might be the best offer 4. the buyer should request his agent prepare a new offer and a counteroffer so the seller can decide which might be the best offer

2. the seller may request his agent prepare a counteroffer outlining provisions of the buyer's offer that the seller disagrees with

Corporations or businesses that are private clubs do not fall under the Colorado Fair Housing Act if __________. 1. their business to supply housing is less than 30%. 2. the supply of housing is not part of their commercial purpose. 3. their main business activity is the housing of just members. 4. all housing falls under the Colorado Fair Housing Act.

2. the supply of housing is not part of their commercial purpose.

At the time of closing, the commission check can be made out to 1. the licensee if the employing broker states that it is ok. 2. to the brokerage company (employing broker). 3. to both the brokerage company and the licensee. 4. all of the above are true.

2. to the brokerage company (employing broker).

A property with a market value of $100,000 is assessed at 26% of the market value. The mill rate for is 75. Property taxes for the year would be: 1. $75.00 2. $750.00 3. $1,950.00 4. $19,500.00

3. $1,950.00 *$100,000 market value x 26% = $26,000. $26,000 assessed valuation x 75 mills (.075) = $1,950 taxes. Math: review how to calculate assessed valuation, property taxes

Total rents declined $1,000 per month as a result of the city banning on-street parking in front and along side a small office building. Assuming a capitalization rate of 8%, the building suffered a decline in value of ___________ . 1. $8,000.00 2. $64,000.00 3. $150,000.00 4. $96,000.00

3. $150,000.00 *$1,000 x 12 = $12,000 (annual rent) divided by 8% = $150,000

Violations for not complying with the Do-Not-Call Registry include penalties up to 1. $7,232 2. $12,559 3. $18,926 4. $25,000

3. $18,926

The lender's statement to the broker shows the loan amount of $119,225 and a net loan proceeds of $28,597.08. The broker received a $3,000 earnest money check and the balance due from buyer in the amount of $4,646.93. What amount will appear as a subtotal in the broker debit subtotal on the settlement worksheet? 1. $36,244.01 2. $155,469.01 3. $31,597.08 4. $122,225.00

3. $31,597.08 *Net loan proceeds and earnest money are the only funds in the transaction. The amount due from the buyer is added to this subtotal to reach the broker debit total. *$28,597.08 + $3,000 = $31,597.08

If an investor desires a rate of return on his money of 15%, how much would he offer on a one-year old, fully-leased apartment building with an annual NOI of $75,000? 1. $750,000.00 2. $300,000.00 3. $500,000.00 4. $100,00

3. $500,000.00 *$75k / 15% = $500k; Investment = NOI divided by rate of return.

The original listed price was for $129,900 but the contract purchase price is $125,500. If the seller agreed to pay a 6% commission, what amount appears in the seller debit column? 1. $7,500.00 2. $7,794.00 3. $7,530.00 4. $8,785.00

3. $7,530.00 *$125,500 X .06 =$7,530.00 *Commission is based on the actual sale price, not the list price.

A property manager needs to have a bid on floor coverings based on this statement of fact. "The building he manages is 90' by 60'. Sixty percent of the building will be carpeted at a cost of $16.00 per square yard, and the remainder will be tiled at a cost of $8.00 per square yard. Estimate the cost of the floor covering. 1. $2,560 2. $5,760 3. $7,680 4. $23,040

3. $7,680 1. One square yard equals nine square feet 2. Divide the number of square feet by nine, and you'll get the number of square yards of floor covering you'll need. (sq. feet / 9 = sq. yards) *90 x 60 = 5,400, 5,400 x 0.6 = 3240 / 9 x $16 per square yard = $5,760; 2,160 / 9 x $8 per square yard = $1,920; $5,769 + $1,920 = $7,680

John and Mary Apton list their home for $152,000. There is an appurtenant easement to access a large lake which is deeded. A coal fired power plant is slated to open 5 miles from the property next year. An Environmental Impact Statement is due on March 7. Agent Pacheco presents an offer to the Aptons. It is a land contract for $142,000 with an 8% interest rate due and payable in 10 years. It is accepted. The offer is contingent on the environmental impact results. Closing is scheduled for June 1. Taxes are $3040, the commission is 6.5%, (buyer's agent commission is 2.8%), taxes and insurance are $675, recording fee is $25 The environmental impact statement showed the value of the property would not be impacted. Use a banker's calendar. Seller is responsible for the day of closing. With the information given in the scenario, what costs will the buyer need to bring to closing? 1. $5951 ($3040/360 x 151= 1275 + 2.8% x $142,000 = $3976 + $675, + $25) 2. $4,676 (2.8% x $142,000, 675 25) 3. $700 ($675, $25) 4. $3740 ($3040 + $675, + $25)

3. $700 ($675, $25) *$700 ($675, $25). The buyer does not pay any taxes until next year and does not pay the agent's commission.

An owner listed the same property with 3 separate agents. The owner gave an Exclusive Right-to-Sell Listing to broker A, an Exclusive Agency/Brokerage Listing to broker B, and an Open Listing to broker C. Broker C sold the house and collected a commission while the other listings were still in effect. What are the rights of 'A' and 'B' as to a commission? 1. 'A' and 'B' both are entitled to a split of the commission from 'C'. 2. 'A' and 'B' are entitled to a second commission to be split between them 3. 'A' and is entitled to a commission but B is not. 4. 'A' and 'B' are not entitled to any commission

3. 'A' and is entitled to a commission but B is not. *Exclusive Right-to- Sell Listing Agreement entitles the listing broker to a commission regardless of who sells the property, while the Exclusive Agency/Brokerage Agreement reserves the right to the owner to sell himself without paying a commission under that agreement.

An easement created by continuous, notorious and hostile use of the property for a statutory uninterrupted period of time __________ . 1. Easement by Abandonment 2. Easement in Gross 3. *Easement by Prescription 4. Easement by Necessity

3. *Easement by Prescription

Under the Colorado Fair Housing Act an "Aggrieved Person" must file a claim with the Colorado Civil Rights Commission alleging any unfair housing practice within the time frame noted below, or it shall be barred within ____________ . 1. 6 months 2. 30 days 3. 1 year 4. 3 years

3. 1 year

The minimum right to cure period for nonagricultural property is _____ days. 1. 150 2. 175 3. 110 4. 230

3. 110 *The minimum right to cure period for nonagricultural property is 110 days and not more than 125 days after recording of the NED for residential property

Which of the following is NOT considered a valid legal description? 1. The North 1/2 of the South 1/2 of Section 36, T1N, R2W, of the 6th P.M. 2. Section 36, T1N, R2W, of the 6th P.M. 3. 1296 Concord Ave., City of Boulder, County of Boulder, State of Colorado. 4. Lot 1, Block 2, Majestic Heights 1, County of Boulder, State of Colorado.

3. 1296 Concord Ave., City of Boulder, County of Boulder, State of Colorado. *1296 Concord Avenue is a street address, but not legally sufficient.

For an out of state seller, the closing entity is responsible for collecting the __________ . 1. Property tax for next years' taxes 2. 1% withholding if the tax applies 3. 2% withholding if the tax applies 4. All net loan proceeds from the seller

3. 2% withholding if the tax applies

The maximum right to cure period for agricultural property is _____days. 1. 175 2. 215 3. 230 4. 240

3. 230

There is/ are _____ Commission Approved Deed(s) of Trust 1. 1 2. 2 3. 3 4. no

3. 3

An abstract of title is __________ . 1. A theoretical real estate concept that is similar to the bundle of rights 2. A document which evidences ownership of a parcel of real estate 3. A history of title that contains a statement of all liens and other recorded liabilities and is written 4. More broadly defined than a chain of title

3. A history of title that contains a statement of all liens and other recorded liabilities and is written

The Commission-approved Licensee Buy Out Addendum to Contract to Buy and Sell Real Estate is required when a licensee buys ____________. 1. A property listed with the brokerage firm 2. A listed property for investment purposes 3. A listed property to facilitate the property owner's purchase of another property 4. A property for personal use

3. A listed property to facilitate the property owner's purchase of another property.

The arrangement between an owner of commercial property and a broker who agrees to procure renters, and collect rents and security deposits, is commonly known as _____________. 1. An escrow agreement 2. A sublease 3. A management agreement 4. A leasehold agreement

3. A management agreement

A "customer" is: 1. A party to a real estate transaction with whom the broker has a brokerage relationship 2. Another word for transaction broker 3. A party to a real estate transaction with whom the broker has no brokerage relationship 4. A person a broker owes a fiduciary duty to

3. A party to a real estate transaction with whom the broker has no brokerage relationship

An Inspection Objection allows the buyer the following remedies EXCEPT ___________. 1. A right to terminate the contract based on the physical condition of the property or inclusions that are unsatisfactory to the buyer 2. A right to withdraw the Notice to Correct and elect to proceed with the contract 3. A right to change the resolution deadline date 4. A right to require Seller to correct any unsatisfactory physical condition(s) of the property or inclusions on or before a repair deadline

3. A right to change the resolution deadline date *An inspection objection gives the right to terminate the contract based on the physical condition of the property or inclusions that the buyer has found unsatisfactory. It allows the buyer to withdraw the Notice to Correct and elect to proceed with the contract. It allows the buyer to require the Seller to correct the conditions found on the property before the repair deadline.

The following answer regarding seller liability is False. 1. A seller can be vicariously liable for actions of the broker if the broker is carrying out the instructions of the seller. 2. A seller can cancel a listing at any time. 3. A seller can be vicariously liable for any actions of the listing agent if the seller has signed an Exclusive Right- to- Sell Contract. 4. A seller may turn down an offer that meets all the terms of a listing contract.

3. A seller can be vicariously liable for any actions of the listing agent if the seller has signed an Exclusive Right- to- Sell Contract *A seller can be vicariously liable for actions of the broker ONLY if the broker is carrying out the instructions of the seller

All of the following are true EXCEPT _______________ . 1. A seller can be vicariously liable for actions of the broker if the broker is carrying out the instructions of the seller 2. A seller can cancel a listing at any time 3. A seller can be vicariously liable for any actions of the listing agent if the seller has signed an Exclusive Right- to-Sell Contract 4. A seller may turn down an offer that meets all the terms of a listing contract

3. A seller can be vicariously liable for any actions of the listing agent if the seller has signed an Exclusive Right- to-Sell Contract

Two weeks after obtaining a listing on a residence, you learn that the property is within a special improvement district. The Seller must disclose that _____________ . 1. The area is being rezoned 2. Future construction will face more stringent building codes 3. A special improvement district has been formed and the purchaser should investigate the debt 4. No additional disclosure is required

3. A special improvement district has been formed and the purchaser should investigate the debt

Which deed would a seller use if he warrants that he owns the property and has had no title problems during his period of ownership but makes no warranty against defects existing before the time of his or her ownership? 1. A bargain and sale deed 2. A general warranty deed 3. A special warranty deed 4. A quitclaim deed

3. A special warranty deed *A special warranty deed is a deed in which the seller warrants or guarantees the title only against defects arising during the period of his or her tenure or ownership of the property. The grantor makes no warranty against defects existing before the time of his or her ownership.

In the case of seller assisted down payments, you should work with all of the following to avoid inaccurate sold data EXCEPT _____________ . 1. A title company or closing agent 2. The appraiser 3. A tax consultant 4. MLS services

3. A tax consultant

A listing licensee is responsible to ___________. 1. Measure the square footage of all residential listings taken 2. Measure the square footage of residential listings when representing a buyer 3. Accurately represent any source of square footage 4. Use the square footage provided by the County Assessor's office

3. Accurately represent any source of square foota

Which of the following is an INCORRECT fact about RESPA? 1. Primarily administered by HUD 2. Requires lenders to provided a loan applicant within 3 days after application with a booklet explaining the costs involved and giving a "good faith estimate" 3. Administered by the Colorado real Estate Commission 4. Requires the lender or their agent to prepare a Uniform settlement Sheet for closing

3. Administered by the Colorado real Estate Commission

A Real Estate Investment Trust (R.E.I.T.) ______________ . 1. Is real property 2. Is handled mostly by REALTORS® 3. Allows small investors to participate in large commercial real estate projects 4. Is a type of partnership

3. Allows small investors to participate in large commercial real estate projects

How many trust accounts may a broker maintain at one time? 1. One 2. Two 3. An unlimited number of trust accounts 4. Three

3. An unlimited number of trust accounts

How many trust accounts may a broker maintain at one time? 1. One 2. Two 3. An unlimited number of trust accounts 4. Three

3. An unlimited number of trust accounts

Carbon Monoxide Detectors must 1. Be installed within 15 feet of the entrance to each room lawfully used for sleeping 2. Be installed within 10 feet of the entrance to each room lawfully used for sleeping 3. Be installed within 15 feet of the entrance to each room lawfully used for sleeping when the home is marketed for sale 4. Be installed within 10 feet of the entrance to each room lawfully used for sleeping prior to closing

3. Be installed within 15 feet of the entrance to each room lawfully used for sleeping when the home is marketed for sale

When must a disclosure be given relating to how the broker will work with a potential client? 1. At the time the contract is written. 2. Prior to the time the contract is written. 3. Before a broker receives confidential information from a buyer or tenant about their needs, motivations, or financial qualifications. 4. Before meeting the potential client

3. Before a broker receives confidential information from a buyer or tenant about their needs, motivations, or financial qualifications.

"Good funds" may be _____________. 1. A cashier's check 2. A teller's check 3. Both #1 and #2 are correct 4. A money market check

3. Both #1 and #2 are correct

Before investing in a limited partnership, one should _______________ . 1. Determine if the partnership is suitable for his or her personal objectives 2. Investigate the past performance of the general partners. 3. Both #1 and #2 are correct 4. Neither #1 nor #2 are correct

3. Both #1 and #2 are correct

What is the purpose of public records? 1. For individuals to post constructive notice that they own a recorded property 2. For prospective real estate purchasers to determine the true owner of a recorded property 3. Both #1 and #2 are correct 4. Neither #1 nor #2 are correct

3. Both #1 and #2 are correct

The cost approach to valuation takes into consideration _________ . 1. Estimated depreciation 2. The market value of vacant land 3. Both #1 and #2 are correct 4. Cost of living index

3. Both #1 and #2 are correct *Replacement building value - depreciation + land value.

When calculating Net Operating Income (NOI), an appraiser must consider ____________ . 1. Vacancy allowances 2. Reserves for replacements 3. Both #1 and #2 are correct 4. Mortgage debt on the property

3. Both #1 and #2 are correctYOUR ANSWER

In order to extend a loan objection deadline 1. The seller must be notified by the lender of a new deadline 2. The buyer must send notification to the seller in writing 3. Both parties must agree in writing 4. The lender must agree in writing

3. Both parties must agree in writing *Any modification to the contract is valid only if it is in writing and signed by both parties.

The listing salesperson requires a phone call prior to setting showings. Unable to contact the listing salesperson, a buyer's agent proceeds to show the property. While in the property, there are fumes that make the buyer ill. Who is responsible for the buyer's illness? 1. Listing Salesperson 2. Seller 3. Buyer's Agent 4. Employing Broker

3. Buyer's Agent

If a sales contract is not able to close by the time specified in the contract, the buyer's agent must do which one of the following: 1. Buyer's agent must call the title company and ask them to reschedule the closing to a later date and get the verbal approval of both parties to the contract including the listing agent 2. Buyer's agent must immediately inform the listing agent that the buyer will need more time to close and the agents can agree verbally to extend closing so long as it occurs prior to the expiration of the time period in the contract 3. Buyer's agent must initiate an amendment to extend the closing date and have the parties sign the amendment prior to the expiration date of the closing date as stated in the Contract 4. Contact the buyers' lender directly to ask for an extension of time to close

3. Buyer's agent must initiate an amendment to extend the closing date and have the parties sign the amendment prior to the expiration date of the closing date as stated in the Contract

'L' deeds a property to 'M'. After the conveyance, the parties agree to rescind the transaction. How can they accomplish this? 1. By writing "canceled" on the deed and both signing it 2. By 'M's returning the deed to 'L' 3. By 'M' giving a new deed to 'L' 4. By destroying the original deed

3. By 'M' giving a new deed to 'L'

When must a buyer sign the Lead-Based Paint Disclosure Form? 1. After completion of the risk assessment or after inspection of the property 2. After receiving the pamphlet "Protect Your Family From Lead in Your Home". 3. By the date set forth in the contract. 4. Only if the property was built after January 1, 1978.

3. By the date set forth in the contract.

A condominium master deed describes all of the following EXCEPT __________ . 1. Common elements 2. Air space 3. By-laws 4. Separate units

3. By-laws *When a developer plans to divide a parcel of land into condominiums units, a master deed must be prepared and recorded with the appropriate government office in the jurisdiction where the land is located. This deed will show the division of property into separate units, as well as indicate where the common areas will be on the proposed development. As with all deeds, any restrictions to use of the property are also generally noted on the master deed. Bylaws are association rules. Review Real Property; Combined Types of Ownership; Condominiums; Master Deed

In determining the value of an apartment building, a bank appraiser would most likely give the most weight to the value achieved by which of the following methods? 1. Direct sales comparison 2. Cost approach 3. Capitalization (or Income) approach 4. Multiple unit approach

3. Capitalization (or Income) approach

A potential seller wants you to list his luxury penthouse and informs you that there is also a storage unit above the penthouse that comes with the unit....how can you be sure it is part of the property before marketing the property? 1. By just the seller's word 2. Check the deed 3. Check the HOA docs 4. Check the title company

3. Check the HOA docs

The following answer regarding income tax deduction is FALSE: 1. Interest is fully deductible up to a limit of $1 million for a home loan plus one, second home 2. Interest up to $100,000 is deductible on home equity loans 3. Discount points paid by the buyer are not deductible 4. Property taxes are deductible as allowed by law

3. Discount points paid by the buyer are not deductible

A potential seller wants to list his luxury penthouse and informs you that there is also a storage unit above the penthouse that comes with the unit....how can you be sure it is part of the property before marketing the property? 1. By just the seller's word 2. Check the deed 3. Check the HOA docs 4. Check the title company

3. Check the HOA docs *If the condo has assigned storage units -- most likely the case -- then the storage unit is assigned, (and not owned by you). The rules that govern your usage, will be in your condo association docs. In most condominium developments, storage units are either common areas (which cannot be sold), or included as part of the condominium units themselves (and not separately saleable).The only way to know for sure what type of property your storage unit is, and whether you can sell it, is to study your development's governing documents; particularly the Declaration of Covenants, Conditions, and Easements (CC&Rs), the Condominium Map, and any other relevant rules and regulations.

Through the adoption and promulgation of Commission Rule F, it did not become compulsory, when applicable, for all brokers to use _____________ . 1. Exchange contracts 2. Seller's Property Disclosure 3. Construction contracts 4. Counterproposals

3. Construction contracts

For a conveyance from 'A' to 'B', for the life of 'B', and then to 'C' if 'C' out lives 'B'; what is 'C's interest in the property at the time of the original conveyance is called ___________. 1. Fee simple 2. Reversionary interest 3. Contingent remainder interest 4. Vested remainder interest

3. Contingent remainder interest *A contingent remainder interest is a future estate with some uncertainty - either in the identity of the possessor ("then to my children" leaves uncertainity as to how many children there will be) or if the person will actually take the estate ("to my son, unless he moves away").

An appraiser calculating depreciation due to: -A 20-year old roof -An antiquated floor plan -An adjacent trailer park The appraiser would most likely be applying which of the following approaches to value? 1. Depreciated value approach 2. Income approach 3. Cost approach 4. Direct sales comparison approach

3. Cost approach

The Real Property Transfer Declaration is used by__________ the to reconcile the closing documents. 1. Employing broker 2. City 3. County assessor 4. IRS

3. County assessor

A homeowner sells his home to a buyer and agrees to finance $15,000.00 of the purchase price on an installment note. The $15,000.00 on the closing statement will be ______________ . entered as: 1. Debit Buyer and Credit Seller 2. Debit Buyer and Debit Seller 3. Credit Buyer and Debit Seller 4. Credit Buyer and Credit Seller

3. Credit Buyer and Debit Seller

A balance due from the seller is a ___________ . 1. Debit to the seller, and credit to the broker 2. Credit to the seller, and debit to the buyer 3. Credit to the seller, and debit to the broker 4. Debit to the seller, and credit to the buyer

3. Credit to the seller, and debit to the broker

Zoning that permits a less restricted use as well as the designated use is known as ____________ . 1. Exclusionary zoning 2. Inclusionary zoning 3. Cumulative zoning 4. Aesthetic zoning

3. Cumulative zoning *For example, single-family homes may be built interspersed with multi-family use.

For a closing on August 18, with the seller responsible for costs up to and including the day of closing, the proration of the year's taxes of $1,320 using a 360-day (banker's) year would be ___________ . 1. Debit Purchaser $484; credit Seller $836 2. Debit Seller $836; credit Purchaser $484 3. Debit Seller $836; credit Purchaser $836 4. Debit Seller $832.34; credit Purchaser $832.34

3. Debit Seller $836; credit Purchaser $836 *$1,320 (/) 360 (x) 228 days = $836.

Net loan proceeds show up as a __________. 1. Debit to the broker and a credit to the seller 2. Debit to the broker and a credit to the buyer 3. Debit to the broker only 4. Debit to the seller only

3. Debit to the broker only

The contract states that the buyer and seller agree to split the title closing fee. It will appear on the worksheet as a ____________. 1. Single-entry debit to the buyer 2. Single-entry debit to the seller 3. Debit to the buyer at 50%, a debit to the seller at 50%, and a credit to the broker at 100% 4. Debit to seller and a credit to the broker

3. Debit to the buyer at 50%, a debit to the seller at 50%, and a credit to the broker at 100% *Splitting a payment or charge simply means a debit to both parties for whatever amount is agreed to and a normal entry for the amount the broker (closer) will pay out.

The initial license issued to a broker expires 1. January 1st of the first year 2. three years from the issuance date 3. December 31st of the first year 4. one year from the anniversary date of issue

3. December 31st of the first year

Title is transferred with a ______________ . 1. Abstract 2. Chain 3. Deed 4. Suit to quiet title

3. Deed *To transfer title, you will need to prepare a deed, execute that deed, and record it.

The ___________ is the amount for which the borrower is liable if the foreclosure sale does not result in a payment of the full balance due on the loan. 1. Mechanic's lien 2. Estoppel lien 3. Deficiency 4. Statutory lien

3. Deficiency

Without ____________ ,there is no value 1. Economic change 2. Social change 3. Demand 4. Demographics

3. Demand

"Licensee Buyout Addendum" is not required when a licensee: 1. Enters into a contract to purchase a property concurrent with the listing of such property 2. Enters into a contract to purchase a property as an inducement or to facilitate the property owner's purchase of another property, the purchase or sale of which will generate a commission or fee to the licensee 3. Desires to acquire a listed property solely for personal use or future resale 4. Enters into a contract to purchase a property from an owner but continues to market that property on behalf of the owner under an existing listing contract

3. Desires to acquire a listed property solely for personal use or future resale

The seller's right to cure an unsatisfactory title condition in the contract to buy and sell real estate extends to on or before the closing date. The acceptability of the cure is as ___________. 1. Agreed to by the parties 2. Determined by the title insurance company 3. Determined by the buyer 4. Determined by the seller's attorney

3. Determined by the buyer

An appraiser can calculate the annual gross rent multiplier by _________ . 1. Capitalizing the annual gross income 2. Multiplying the monthly gross income by 12 3. Dividing the price by the annual gross income 4. Dividing the annual gross income by the price paid

3. Dividing the price by the annual gross income

If your home is destroyed by fire, and you have comprehensive homeowner's insurance, the insurance company ____________ . 1. Owes you the value of the land plus improvements 2. Owes you the value of the land plus improvements up to the value of the policy 3. Does not owe you for the value of the land but may owe you the total cost of replacement of the home 4. Will get a new home to replace your old home

3. Does not owe you for the value of the land but may owe you the total cost of replacement of the home

Net Operating Income (NOI) is best represented by which of the following formulas? 1. Gross Income − Vacancy − Collection Loss 2. Gross Income − Operating Expenses − Replacement Reserves 3. Effective Gross Income − Operating Expenses − Replacement Reserves 4. Effective Gross Income − Operating Expenses − Fixed Expenses − Replacement Reserves

3. Effective Gross Income − Operating Expenses − Replacement Reserves

In the case that the tenant causes minor damages to the rented property, the landlord policies should include ___________ . 1. Contact information for local civil defense authorities 2. Procedures to follow for evacuation of tenants 3. Emergency repair personnel or contractors to call 4. Phone numbers for police

3. Emergency repair personnel or contractors to call *In this category, we are talking about damage to the rented space and/or the common area caused by a tenant, whether intentionally or due to negligence. This type of damage is more likely to be less serious than a natural disaster and will, hopefully, involve only the leased space. It can range from soiled carpet or a wall in need of paint.

One's legal interest in property—either freehold or non- freehold—is known as ____________ . 1. Deed 2. Title 3. Estate 4. Ownership

3. Estate

Which statement regarding ethics is INCORRECT? 1. Good ethics generally equates to good business. 2. Ethics go beyond what the law requires. 3. Ethics set forth minimum acceptable standards of behavior. 4. A good test for ethics is the Golden Rule

3. Ethics set forth minimum acceptable standards of behavior.

Which of the following is NOT a test for determining a fixture? 1. Agreement of the parties 2. Method of attachment 3. Exterior dimensions and weight 4. Adaptation of the item to the real estate

3. Exterior dimensions and weight

What legal duties does a seller's agent owe to an unrepresented buyer? 1. Loyalty, fidelity, and disclosure of material facts about the property 2. No specific duties - agency duties are to the principal 3. Fair and honest dealing and disclosure of material facts about the property 4. Honest dealing and full disclosure of anything the broker knows about the

3. Fair and honest dealing and disclosure of material facts about the property

The introduction into your real estate market of many HUD and VA foreclosed properties will probably cause the value of similar properties in a specific area to __________ . 1. Rise in the short term 2. Rise in the long termCORRECT ANSWER 3. Fall in the short term 4. Remain unchanged

3. Fall in the short term

Which of the following would a listing broker be responsible to pay? 1. Water and sewer if seller is out of town. 2. Lawn care.CORRECT ANSWER 3. Food and drink used at an open house. 4. Cleaning service.

3. Food and drink used at an open house.

Commission approved contracts allow for specific performance 1. For residential property only 2. For commercial property only 3. For all types of property 4. For residential property only if the box is checked

3. For all types of property

The Americans with Disabilities Act affects real estate brokers in all of the following EXCEPT ________. 1. By stating architectural barriers will be removed. 2. Making services available to persons with disabilities within their procedures and policies manual. 3. For companies of ten brokers or more, to have at least one van that is retrofitted for wheel chair use. 4. The absence of auxiliary aids does not create an environment that would exclude those with disabilities.

3. For companies of ten brokers or more, to have at least one van that is retrofitted for wheel chair use. *The Americans with Disabilities Act affects real estate brokers by stating architectural barriers must be removed, by making services available to persons with disabilities within their procedures and policies manual and with the absence of auxiliary aids not creating an environment that would exclude those with disabilities.

A Licensee Buy Out Addendum to Contract to Buy and Sell Real Estate is required when a licensee enters into a contract to purchase a property in all the following circumstances EXCEPT _________. 1. Concurrent with the listing of such property 2. As an inducement or to facilitate the property owner's purchase of another property 3. For personal use or future resale 4. When a licensee continues to market that property on behalf of the owner under an existing listing contract

3. For personal use or future resale *A "Licensee Buy Out Addendum to Contract to Buy and Sell Real Estate" is required when a licensee enters into a contract to purchase a property in all the following circumstances as an inducement or to facilitate the property owner's purchase of another property, concurrent with the listing of such property, and when a licensee continues to market that property on behalf of the owner under an existing listing contract. CREM Commission Approved Forms, and CREM 3, CP-23

Real property includes all of the following except ____________ . 1. Land 2. House 3. Furniture 4. Rights inherent of ownership

3. Furniture *Real Property: Land plus all improvements (things permanently attached to it), which also includes the bundle of rights—interests, benefit, and rights inherent of ownership.

Who acknowledges a warranty deed? 1. Notary public 2. County clerk and recorder 3. Grantor 4. Grantee

3. Grantor

Brokers in a community agreed that they would not cooperate with a broker who offered flat fees or lower rates of commissions and who wished to expand to their area. This agreement would be considered _________ . 1. Redlining 2. Price-fixing 3. Group boycotting 4. Market allocation

3. Group boycotting

An appraiser ___________. 1. Is human and will always be guided by client input when supporting value 2. Is an advocate for either the buyer or the seller, but cannot be an advocate for both 3. Has a professional responsibility to support value estimates with objective facts 4. Is not required to apply judgment, when all of the comparable data is from the subject neighborhood

3. Has a professional responsibility to support value estimates with objective facts

The first rule to reduce risk is to _________. 1. Speak with an attorney 2. Keep 2 copies of everything 3. Have complete records 4. Always use electronic records

3. Have complete records

Of the following, which factor does not influence the supply of new housing construction? 1. Increases in income. 2. The cost of long-term financing. 3. Higher levels of education. 4. Proximity to employment.

3. Higher levels of education.

A licensee may accept a commission or fee from ____________ . 1. A cooperating broker 2. A title insurance company 3. His or her employing broker 4. The lender making the new loan for his or her client/customer

3. His or her employing broker

A broker associate should return the closing file __________ to the brokerage. 1. Within a week of the closing 2. Within 3 days of the closing 3. Immediately following the closing 4. Within 24 hours of the closing

3. Immediately following the closing

All trust accounts must be maintained ______________. 1. In the name of signer for the account only 2. In the name of two or more signers 3. In the name of the broker 4. In the name of the owner of the funds

3. In the name of the broker

The formula that best represents the capitalization (income) approach to determine market value is ______________ . 1. Income times rate = value 2. Rate divided by income = value 3. Income divided by rate = value 4. Value divided by rate = income

3. Income divided by rate = value

The Fair Credit Reporting Act gives an individual the right to ___________ 1. Bring suit under Regulation Z 2. Bring suit under the Truth-in-Lending Act 3. Inspect his or her file at a credit bureau 4. Bring suit under the Federal Consumer Credit Protection Act

3. Inspect his or her file at a credit bureau

Escrow or trust accounts may NOT contain which of the following funds? 1. Owner reserves 2. Tenant security deposits 3. Insurance premiums and/or IRS employee's withholding funds 4. Rental receipts

3. Insurance premiums and/or IRS employee's withholding funds

A trust under which property is transferred by a living trustor to a trustee with instructions for management of assets and for distribution of income, is known as a(n) ______________ . 1. Testamentary trust 2. Conservation trust 3. Inter Vivos Trust 4. Beneficial trust

3. Inter Vivos Trust

A property manager would prefer shorter-term residential leases when ___________ . 1. There is a high vacancy factor 2. The property is subject to rent control 3. Interest rates and inflation are increasing 4. Overbuilding is likely

3. Interest rates and inflation are increasing

A mortgage company offers the broker $100.00 for placement of a loan. This fee ___________. 1. Is illegal 2. Is a violation of Colorado Real Estate Commission rules 3. Is allowable if broker fully informs any party with whom he has established a brokerage relationship, or worked with as a customer, and obtains written consent of such party 4. Must be deducted from the agreed upon real estate commission amount

3. Is allowable if broker fully informs any party with whom he has established a brokerage relationship, or worked with as a customer, and obtains written consent of such party

The walk-through inspection, called for in the Contract to Buy and Sell 1. Allows the buyer one more chance to find defects before closing 2. Is to verify that the condition of the property meets the buyers requirements 3. Is to verify that the condition of the property meets the requirements of the contract 4. Is mandatory

3. Is to verify that the condition of the property meets the requirements of the contract

In regulations regarding lead-based paint, HUD requires 1. Homeowners to test for its presence 2. Paint to be removed from surfaces prior to the sale 3. Known paint hazards to be disclosed 4. Only licensed contractors deal with the removal

3. Known paint hazards to be disclosed

A neighbor built a new garage that was in violation of the subdivision restrictive covenants. Once it was complete you realized it obstructed your view, so you took the neighbor to court. Which of the following is most likely the reason the judge allowed the garage to remain? 1. Parol evidence 2. Lis pendens 3. Laches 4. View Easement

3. Laches *Laches is a legal doctrine that prevents seeking recourse from a court because of a lapse of time. For example, a neighbor built a second story addition and the roof exceeds the architectural code height restriction. Waiting until the addition is complete before seeking remedy in court is too late; a lache.

Which of the following best defines "Real Estate"? 1. Land and the air above it 2. Land and the buildings permanently affixed to it 3. Land and all things permanently affixed to it 4. Land and the mineral rights in the land

3. Land and all things permanently affixed to it

An arrangement between an owner of commercial property and a Broker who agrees to procure tenants, collect rents and security deposits is a _____________. 1. Sandwich lease 2. Sublease 3. Management agreement 4. Rent assignment

3. Management agreement

When selling your primary residence, ____________ . 1. You will not be taxed on the gain 2. There is a one time exemption from taxes on the gain 3. Married couples have no tax consequences if the gain is $500,000 or less 4. There will be no tax consequences unless the gain is over $500,000

3. Married couples have no tax consequences if the gain is $500,000 or less

A comprehensive growth plan that guides the long-term zoning, use, and development of a community is a (an) __________. 1. Urban renewal plan 2. Environmental impact policy 3. Master plan 4. Inclusionary community action plan

3. Master plan *Comprehensive planning is a process that determines community goals and aspirations in terms of community development. The outcome of comprehensive planning is the Master Plan which dictates public policy in terms of transportation, utilities, land use, recreation, and housing. Comprehensive plans typically encompass large geographical areas, a broad range of topics, and cover a long-term time horizon.

Homeowner Association Records ______________. 1. Belong to the association and need not be available in the case of a commission audit 2. Belong to the broker who manages the association 3. May be copied for retention of the broker, at the broker's expense, and at the end of the broker's management term 4. Belong to the commission

3. May be copied for retention of the broker, at the broker's expense, and at the end of the broker's management term

Funds belonging to different classes of beneficiaries ___________. 1. Are always deposited into a pooled escrow bank account 2. Are never commingled 3. May be deposited into a pooled escrow bank account, provided that the individual ledger records clearly show how much money belongs to each beneficiary 4. May be commingled if the balance of the account is lower than $10,000

3. May be deposited into a pooled escrow bank account, provided that the individual ledger records clearly show how much money belongs to each beneficiary

What law requires a potential buyer to contact law enforcement officials for further information if the presence of a registered sex offender is a concern to the buyer? 1. Colorado Fair Housing 2. RESPA 3. Megan's Law 4. Colorado Privacy Act

3. Megan's Law

What law requires a potential buyer to contact law enforcement officials for further information if the presence of a registered sex offender is a concern to the buyer? 1. The Amber alert. 2. The Psychological Impact Law 3. Megan's Law 4. Colorado Fair Housing Act

3. Megan's Law

Which of the following are examples of funds that may NOT be placed in an escrow or trust account? 1. Tenant security deposits 2. Earnest money deposits 3. Money the broker owes their licensees for bonuses or investment plans for the benefit of their licensees 4. Money advanced by a broker for the benefit of another may be placed in the trust account and identified as an advance but may be withdrawn by the broker only on behalf of such person

3. Money the broker owes their licensees for bonuses or investment plans for the benefit of their licensees

The brokerage must reconcile the cash balance shown in the journal with the cash balance for all ledgers and the corresponding bank balance on a _______ basis. 1. Daily 2. Weekly 3. Monthly 4. Biannual

3. Monthly

A deed of trust to a private trustee being foreclosed will be treated as a ___________. 1. Trust indenture 2. Promissory note 3. Mortgage 4. Torrens Certificate of Title

3. Mortgage

An impound account belongs to the __________ . 1. Trustee 2. Mortgagee 3. Mortgagor 4. Beneficiary

3. Mortgagor

Money belonging to others _________. 1. Must not be deposited into a trust account 2. Needs to be deposited into a trust account in the name of the owner of the funds 3. Must be kept separate from other money belonging to the broker or the brokerage company 4. Must be kept together in a separate trust account

3. Must be kept separate from other money belonging to the broker or the brokerage company

A facilitator or transaction broker ___________ . 1. Has the same duties as a buyer agent 2. Is vicariously liable for both the buyer's and the seller's statements 3. Must disclose all known adverse material facts concerning the property to both buyer and seller 4. Must put the customer's interests ahead of his or her own

3. Must disclose all known adverse material facts concerning the property to both buyer and seller *A facilitator/intermediary/transaction broker is a non-agent and does not have fiduciary duties. But ALL brokers must disclose ALL known adverse material facts about a property.

After closing and taking possession of a home, the buyer found that the seller had removed the chandelier. The buyer __________ . 1. May look to the broker for the cost of replacing the chandelier 2. Has no recourse, as he or she should have performed a "walk-through" prior to closing 3. Must turn to the inclusions section of the Buy/Sell Contract to determine his or her rights 4. Has a three-day right to rescind the closing

3. Must turn to the inclusions section of the Buy/Sell Contract to determine his or her rights

Commission approved forms generated by computer software 1. Can include language as approved by the broker's attorney 2. Must use language as approved by the firm's office policy 3. Must use language exactly as approved by the Real Estate Commission 4. May be substituted with forms approved by the firms attorney

3. Must use language exactly as approved by the Real Estate Commission

A real estate broker who refers a seller or buyer to a service provider he owns or co-owns __________. 1. Is acting illegally 2. Is acting unethically 3. Must use the Affiliated Business Disclosure to disclose his ownership of the provider to the seller or buyer on or before referring them to the provider 4. Must refer his client to another broker

3. Must use the Affiliated Business Disclosure to disclose his ownership of the provider to the seller or buyer on or before referring them to the provider *An affiliated business arrangement is a relationship with, or an ownership interest (more than 1%) by one provider of settlement services (real estate broker, title insurer, lender, attorney, surveyor, etc.) in another provider of settlement services. Licensed Colorado real estate brokers must disclose affiliated business arrangements to any client so referred and to the Colorado Division of Real Estate.

Bids, invoices, contracts, or other written documentation must support all disbursements of funds from an escrow or trust account. Disbursements will be further revealed in the trust account, journal, and individual ledgers. For funds disbursed, the records maintained need NOT include ____________ . 1. Date of payment and check number 2. Amount paid and the resulting balance 3. Name of the person who wrote the check off the account 4. Vendor documentation or physical records verifying purpose of payment

3. Name of the person who wrote the check off the account

If a buyer chooses not to sign a disclosure document the broker will: 1. Advise the buyer the broker may not show the property until the buyer signs 2. Refer the buyer to a buyer's agent 3. Note the fact that the buyer chose not to sign on a copy of the document and retain such copy 4. Show the property

3. Note the fact that the buyer chose not to sign on a copy of the document and retain such copy

The terms of an agency relationship have been violated. All of the following are court remedies EXCEPT _____________ . 1. Specific performance 2. Compensatory damages 3. Rescission 4. Punitive damages

3. Rescission *A court cannot rescind a contract, but may take the other three actions. Review Remedies for an Agency Relationship that Have Been Violated

All "money belonging to others" accepted by a resident or non-resident broker doing business in this state shall be deposited in: 1. The broker's operating account within the first business day of receipt 2. The title company's trust account within 24 hours of receipt 3. One or more accounts separate from other money belonging to the broker 4. An attorney's trust account

3. One or more accounts separate from other money belonging to the broker

After receipted by the broker, the broker may transfer the tenant security deposit to the owner _____________. 1. True, since the money belongs to the owner 2. Only by delivering notice to the owner 3. Only after delivering notice to the tenant via first class mail 4. Only as long as financial responsibility remains with the broker in the management agreement

3. Only after delivering notice to the tenant via first class mail

The distinction between a gross lease and a net lease involves __________ . 1. The size of the rented property 2. The number of units included 3. Only the tenant's payments of rent versus sharing the owner's costs 4. Established lease period versus no termination date

3. Only the tenant's payments of rent versus sharing the owner's costs

In determining net operating income, a cost deducted from the gross income would be ____________ . 1. Interest expense 2. Payments of loan principal 3. Operating expenses 4. Depreciation

3. Operating expenses

The seller will pay for the ____________at closing 1. Lender's title policy 2. Mortgagee's title policy 3. Owner's title policy 4. Recording the warranty deed

3. Owner's title policy *The seller pays for the owner's title policy. The buyer pays for the lender's title policy.

Prior to the closing, the buyer has paid for the appraisal. This will be entered on the settlement statement as a ____________. 1. Single-entry debit to the buyer 2. Debit to the broker; credit to the buyer 3. POC 4. Debit to the buyer; credit to the seller

3. POC *POC stands for "Paid Outside Closing".

Which of the following caps for an ARM Loan could cause negative amortization? 1. Life of loan cap 2. Yearly cap 3. Payment cap 4. None of the above

3. Payment cap *Negative amortization occurs when the payment made does not cover the payment owed, which can happen in ARM loans.

A lessor believes the desirability and sales volume of a large retail store will increase dramatically in the next few years. In negotiating a long-term lease for the premises, the lessor would ask for which type of lease? 1. Flat 2. Triple Net 3. Percentage 4. Gross

3. Percentage

A lease for a commercial property, in which a tenant agrees to pay $5,000.00 per month plus 4% of the gross monthly sales, is called a ____________ . 1. Triple net lease 2. Ground lease 3. Percentage lease 4. Net lease

3. Percentage lease

A _________ is a detailed map that illustrates the geographic boundaries of individual lots. 1. Survey 2. ILC 3. Plat 4. Boundary map

3. Plat

In a buyer agency relationship, the buyer is considered the ______________ 1. Customer 2. Agent 3. Principal 4. None of the above

3. Principal

In the Exclusive Right-to-Sell Listing Contract, if the transaction-brokerage box is checked at the top, which of the following should the T-B not do? 1. Date the contract for a set period of time 2. Keep the seller informed regarding the transaction and accounting in a timely manner. 3. Promote the interests of seller with the utmost good faith, loyalty and fidelity. 4. Find a ready, willing, and able buyer.

3. Promote the interests of seller with the utmost good faith, loyalty and fidelity.

A tax certificate issued by the county failed to reveal additional taxes due. These additional monies will be the responsibility of _____________ . 1. Seller 2. Buyer 3. Public Trustee (Treasurer) 4. Broker

3. Public Trustee (Treasurer)

Foreclosure on a deed of trust would take place at a __________ . 1. Private sale by the bank 2. Public sale by the bank 3. Public sale by the public trustee 4. Private sale by the public trustee

3. Public sale by the public trustee

Randy and Jeff Minter hire Real Estate Broker Bonnie to list their home in St. Paul, a comfortable and elegant remodeled mountain home. It includes 3 bedrooms, 1 office, and 1 bath with slate bath tiles, granite countertops, stainless steel appliances, and maple hardwood throughout the open floor plan. Nearly 900 square feet upstairs is matched by a light garden level basement. This home has two decks, a wood burning stove, and a quiet and energy saving hot water radiant heater. The well pump was replaced, and a constant pressure water system was installed in 2009. The septic has been maintained yearly without issue. This house sits on a uniquely flat, usable 1.5 acres and is on the school bus route, which is plowed daily throughout the winter season. There is a tool shed, a 3- sided horse shed, and a small corral. It is zoned for livestock. Local schools with bus service and daycare for young children are available within the canyon. The Minters list the home for $275,000 on June 15, and Broker Bonnie's commission is 6%. Taxes for last year have not been paid and are $2,300 yearly. Buyer's agent, Daniel Brooks, brings an offer for $267,000, which is accepted and will close on July 30. Buyer Benjamin will be getting a VA loan and will be putting 20% down. Buyer Benjamin has a resale furniture business, and he will store some of his saleable items on the property. Additionally, he plans to build a large storage shed for this purpose. The contract is contingent on the buyer's ability to get a building permit so he can build the needed structure on the property. His broker has added a contingency clause to the contract that states that the contract will terminate if the building permit is not granted by the city. The appraiser noted that an inspection of the property by a certified roofer showed that the roof is severely damaged and needs to be repaired/replaced. Which of the following is not an option for the buyer? 1. Terminate the contract. 2. Ask the seller to replace or repair the roof prior to closing. 3. Reduce the price and close as planned. 4. Pay the full purchase price in cash.

3. Reduce the price and close as planned.

A broker is instructed not to show a property while the owner, who is caucasian, is away. While the owner is out of town, an African American couple requests to be shown the property. The broker should ___________ . 1. Show the property 2. Inform the prospects that the home is no longer available to purchase 3. Refuse to show the property 4. Ask HUD for an exception to the Fair Housing Act (Note: This is not a fair housing issue this is obeying owner's wishes)

3. Refuse to show the property

Marc conveyed ownership of a home to his cousin, but reserved the right to continue to live in the home until he dies. The interest the cousin owns while Marc is still alive is a __________ . 1. Non-freehold estate 2. Fee simple determinable estate 3. Remainder estate 4. Reversionary estate

3. Remainder estate

Interest bearing trust accounts ______________ . 1. Are not permitted by the Colorado Real Estate Commission 2. With proper notification transfer accumulated interest to the operating account of the broker acting as escrow agent 3. Require the contract to disclose who will benefit from the interest earned 4. Require any earned interest to be credited to the broker's client

3. Require the contract to disclose who will benefit from the interest earned

Under the 1988 Fair Housing Amendment Act, families with children may be _____________ . 1. Charged a higher security deposit 2. Restricted to ground-floor units for safety reasons 3. Required to supervise children using the swimming pool 4. Permitted to live only in designated "family sections" of apartment complexes

3. Required to supervise children using the swimming pool

Dual contracting is all of the following EXCEPT __________ . 1. A form of loan fraud 2. Is prohibited by the Colorado Criminal Code 3. Requires two signatures on the note in favor of the lender 4. Involves presenting a false contract with a larger purchase price to a lender

3. Requires two signatures on the note in favor of the lender

"A" purchased a commercial lot from "B" based on "B's fraudulent representation as to lot size, zoning, and water connections. "A" cannot use the parcel purchased. What remedy should "A" seek? 1. Specific performance 2. Waiver 3. Rescission 4. Reformation

3. Rescission

Reasonable supervision of licensees with two or more years of experience shall include____________________. 1. Assistance in the preparation of contracts 2. Review of documents in preparation of closing 3. Review of all executed contracts in order to maintain assurance of competent preparation 4. Specific training in office policies

3. Review of all executed contracts in order to maintain assurance of competent preparation

A transaction-broker may NOT do which of the following without breaching an obligation or responsibility: 1. List competing properties for sale 2. Show properties in which the buyer is interested to other prospective buyers 3. Sell a buyer his/her own personal residence 4. Serve as a single agent or transaction broker for the same or for different parties in other real estate transactions.

3. Sell a buyer his/her own personal residence

John and Mary Apton list their home for $152,000. There is an appurtenant easement to access a large lake which is deeded. A coal-fired power plant is slated to open 5 miles from the property next year. An environmental impact statement is due on March 7. Agent Pacheco presents an offer to the Aptons. It is a land contract for $142,000, with an 8% interest rate due and payable in 10 years. It is accepted. The offer is contingent on the environmental impact results. Closing is for June 1. Taxes are $3,040, commission is 6.5%, (buyer's agent commission is 2.8%), taxes and insurance are $675, and the recording fee is $25. The environmental impact statement showed the value of the property would not be impacted. Use a banker's calendar. Seller is responsible for the day of closing. How does the Closing Statement reflect the Seller's tax liability? 1. Seller debit $3,040; Buyer credit $3,040 2. Seller debit $1,266; Buyer credit $1,266 3. Seller debit $1,275; Buyer credit $1,275 4. Buyer credit $3,040; Broker credit $0

3. Seller debit $1,275; Buyer credit $1,275 *Since the buyer will pay the full year's taxes next year (taxes are paid in arrears), the seller needs to pay the buyer at closing for the time he or she lives in the home (from January 1 through closing). For the National Exam, remember that the seller usually pays the closing day. $3,040 / 360 x 151 = $1,275

If Buyer Jennifer fails to apply for a loan on or before the time period stated within the sales contract and financing supplemental addenda, what will occur 1. She will be given 48 hours past the time period and if not approved by then, the contract will terminate 2. She must verbally request an extension of time period from the seller 3. She will have breached the contract 4. She must apply for the loan within 24 hours of the stated deadline as there is a grace period that applies to the loan application

3. She will have breached the contract *If a party to the contract fails to complete a contract provision on time, it is regarded as a breach of contract.

A licensee may share confidential information about a client to the employing broker _________. 1. Anytime 2. If needed 3. So long as it has been authorized by the parties to the contract 4. Without authorization

3. So long as it has been authorized by the parties to the contract *The Commission allows the supervising broker to receive confidential information so long as it has been authorized by the parties to the contract. This is done by signing the listing contract.

A Licensee Buy-Out Addendum to the Contract to Buy and Sell Real Estate is required when a licensee enters into a contract to purchase a property in all the following circumstances EXCEPT:_____________. 1. Concurrent with the listing of such property 2. As an inducement or to facilitate the property owner's purchase of another property, the purchase or sale of which will generate a commission or fee to the licensee 3. Solely for personal use or future resale 4. When a licensee enters into a contract to purchase a property from an owner but continues to market that property on behalf of the owner under an existing listing contract.

3. Solely for personal use or future resale *A Licensee Buy-Out Addendum to the Contract to Buy and Sell Real Estate is required when a licensee enters into a contract to purchase a property in all the following circumstances: As an inducement or to facilitate the property owner's purchase of another property, the purchase or sale of which will generate a commission or fee to the licensee, concurrent with the listing of such property and the licensee must continue to market that property

A ______________ is a lien created by statute without any action by the property owner. 1. Mechanic's lien 2. Mortgage 3. Statutory Lien 4. HELOC

3. Statutory Lien

Business conditions, levels of employment and unemployment, income levels, and availability of financing are all factors of __________ . 1. Supply 2. Demand 3. Supply and demand 4. Profitability 5. Risk

3. Supply and demand

A leased farm is sold. The growing crops belong to the ____________ . 1. Seller 2. Buyer 3. Tenant 4. Tenant and buyer

3. Tenant *Emblements: Growing crops, produced annually, which are considered personal property even before harvest. The tenant has the right to take the crop resulting from his labor,even if the harvest occurs after the tenancy has ended.

If you have a valid will, you are said to die _____________ . 1. Intestate 2. Will less 3. Testate 4. Invalid

3. Testate

Which of the following statements regarding Federal Lead-Based Paint law is INCORRECT? 1. Buyers are to receive a booklet "Protect Your Family from Lead in Your Home". 2. Buyers of residential property must be given a 10-day period to inspect and assess risks associated with lead- based paint. 3. Testing is required for the presence of lead-based paint. 4. If sellers refuse to correct lead paint problems, the buyer may terminate a contract and are entitled to the return of all earnest money.

3. Testing is required for the presence of lead-based paint.

A landlord may refuse to accommodate a known alcoholic with a history of one of the following without incurring a civil rights violation ________________ . 1. The alcoholic also has the AIDS virus 2. The alcoholic has Down Syndrome 3. The alcoholic has exhibited disruptive, abusive and/or dangerous behavior 4. The alcoholic is less likely to be qualified

3. The alcoholic has exhibited disruptive, abusive and/or dangerous behavior

During the listing presentation, the seller questions the amount of commission to be paid and is told that ____________ . 1. The amount of the commission is always 6% 2. The amount of the commission will vary depending on the time the home is on the market 3. The amount of commission is negotiable 4. The amount of the commission is determined by the employing broker

3. The amount of commission is negotiable

If the buyer finances the PMI into the loan, how does this affect the worksheet? 1. The loan amount would be increased and the PMI charge would be removed from the buyer debit column 2. An additional entry would be required for interest due on the PMI 3. The amount of the loan would be increased 4. The PMI amount would appear in the broker credit column

3. The amount of the loan would be increased *Including the PMI in the loan means an additional amount borrowed. But there is still a charge to the buyer for the upfront PMI fee.

A broker may discuss and negotiate the terms upon which to take a future listing or, alternatively, may take a listing to become effective upon expiration of any existing exclusive listing when ______________ . 1. The broker contacts a seller and the seller agrees to future dealings 2. The broker contacts the current listing broker and receives permission to seek the seller's future business 3. The broker is contacted by the current seller 4. The broker's attorney approves the prospective listing

3. The broker is contacted by the current seller

A designated broker who cannot attend the closing asks another broker to attend. The designated broker ________________ . 1. Is no longer obligated for the closing 2. And the broker who agreed to attend are the only ones responsible 3. The broker who attends and the employing broker are all responsible 4. Is not obligated if the employing broker signs him or her off

3. The broker who attends and the employing broker are all responsible *The designated broker, the broker who attends, and the employing broker will all be responsible for the closing documents for the party they represent.

The designated buying broker is responsible for ____________. 1. All closing statements and figures 2. The seller's statements and figures 3. The buyer's statements and figures 4. None of the above; the designated broker is not responsible, the title company is

3. The buyer's statements and figures

If a buyer was shown the wrong property and then wrote a contract which was accepted, ____________ . 1. The real estate agent would have to buy the property 2. The buyer is in an enforceable contract as it is not the fault of the seller that the buyer saw the wrong property 3. The contract could be deemed not valid because there was not mutual assent (mistake) 4. The contract is not valid but the buyer would have to forfeit his earnest money

3. The contract could be deemed not valid because there was not mutual assent (mistake)

When a Counterproposal is used _________. 1. The seller should sign both the contract and the counterproposal 2. The contract is signed by the seller 3. The counterproposal must be signed by both the seller and buyer 4. The counterproposal has no time requirements for signing

3. The counterproposal must be signed by both the seller and buyer

Marie dies intestate, and her property will transfer according to intestate succession. This means 1. The courts will give the property to the state 2. The courts will give the property to the descendent 3. The courts will give the property based on state law 4. The courts will give the property to her siblings

3. The courts will give the property based on state law

How can a listing agreement terminate with a couple other than the contract termination date? 1. Death of one principle 2. Death of the agent 3. The home burns down 4. A principle is hospitalized

3. The home burns down *Death or illness of one principle or the agent will NOT terminate the contract. Because there are 2 clients (not one), the death or illness of one principle will NOT terminate the contract. (if there was only one seller and he died, the contract would terminate). A far as the agent goes, if she dies, the brokerage would designate another listing agent.

Community property laws are based on ____________ . 1. Spanish and French law 2. English common law 3. The idea that spouses are equal partners in the marriage 4. English parliamentary law

3. The idea that spouses are equal partners in the marriage

A short sale may not be possible IF, _______________ 1. The buyer is not pre-qualified by the lender 2. The seller is not pre-qualified by the lender 3. The lender will not accept less than the current amount due on the loan 4. There are remaining tax liabilities owed by either of the parties to the transaction

3. The lender will not accept less than the current amount due on the loan

_________ must verify square footage. 1. The seller of a property 2. The buyer of a property 3. The listing broker 4. The selling broker

3. The listing broker

All of the following are true EXCEPT: 1. The employing broker is normally the supervisor of the transaction. 2. The employing broker may designate him or herself as agent of the seller. 3. The listing broker must always work with a buyer as a customer.YOUR ANSWER 4. The seller and the listing broker are the only parties in the brokerage relationship.

3. The listing broker must always work with a buyer as a customer.

The equity in your home is equal to _____________ . 1. The market value of the home 2. Your loan balance 3. The market value less the loan balance 4. The potential sales price of the home minus closing costs

3. The market value less the loan balance

When establishing an escrow bank account, all of the following information must appear on the customer deposit agreement EXCEPT _________ . 1. The full "Licensed Company Name", or the "Company Trade Name (d.b.a.)" and the "TIN/SSN" of the true account owner 2. The "account label" followed by either "Escrow" or "Trust" 3. The name of the person(s) authorized to sign checks 4. The name of the "Natural Person" licensed as the employing broker

3. The name of the person(s) authorized to sign checks

Fees for real estate closing services shall be paid at closing by __________. 1. Seller 2. Buyer 3. The negotiated arrangement of the parties 4. Broker

3. The negotiated arrangement of the parties

Constructive eviction means ____________ . 1. The landlord had to prove to the judge that the landlord had the right to evict 2. The tenant leaves the property without notice to the landlord 3. The property becomes so run down that the tenant must leave. 4. None of the above

3. The property becomes so run down that the tenant must leave.

If a broker and seller agree to conceal material defects that are discovered after closing, 1. The broker is primarily responsible 2. The seller is primarily responsible 3. The seller and broker are responsible 4. The managing broker is primarily responsible

3. The seller and broker are responsible

There was no mention in the management agreement with the owner or the lease agreement with the tenant regarding the placement of deposits, therefore ________________ . 1. The broker may invest the funds 2. The broker may use the funds toward the payment of management bills 3. They must be placed in an escrow or trust account 4. They may be used as long as they can be replaced in a timely fashion

3. They must be placed in an escrow or trust account

An interval ownership interest with an exclusive right of occupancy for a specific period of time is a __________ . 1. Cooperative 2. Leasehold interest 3. Time share 4. Real Estate Investment Trust

3. Time share *An individual with an undivided interest in a unit coupled with the exclusive right of occupancy for either a designated or floating period each year, along with an interest in common areas, such as the use of a pool or tennis courts, has a Time-Share.

A FICO score is NOT used __________. 1. To evaluate borrowers 2. To predict borrowers future credit performance 3. To determine the amount of loan the buyer can qualify for 4. By Freddie Mac or Fannie Mae

3. To determine the amount of loan the buyer can qualify for

The Real Estate Recovery Fund ___________ . 1. Is subject to a claim by a licensee involving a transaction in which the applicant performed acts for which a broker's license is required 2. Is liable for losses attributable to pain and suffering or mental anguish 3. Together with a policy of errors and omissions insurance, protects members of the public from financial losses 4. Is administered through the office of the Attorney General of the State of CO

3. Together with a policy of errors and omissions insurance, protects members of the public from financial losses

Barber chairs, display cases, and specialty lighting are all examples of ___________ . 1. Appurtenances 2. Annexation 3. Trade fixtures 4. Real property

3. Trade fixtures

Which of the following would NOT be considered "good funds"? 1. Cash 2. Cashier's check 3. Trust account check 4. Wired funds

3. Trust account check *"Good funds" are those funds immediately available and that cannot bounce.

Which of the following is NOT required of the broker to assess and receive broker mark-ups and/or other compensation for services performed by any third party or affiliated business entity is to __________. 1. Fully account for the amounts or percentages of compensation assessed 2. Obtain prior written consent 3. Use the appropriate form to notify the Real estate commission 4. Retain records that verify disclosure and consent

3. Use the appropriate form to notify the Real estate commission

Which of the following is NOT required of the broker to assess and receive broker mark-ups and/or other compensation for services performed by any third party or affiliated business entity? 1. Fully account for the amounts or percentages of compensation assessed 2. Obtain prior written consent 3. Use the appropriate form to notify the Real estate commission 4. Retain records that verify disclosure and consent

3. Use the appropriate form to notify the Real estate commission

A Change of Status form is __________ . 1. Used and signed with each agency listing agreement 2. Used and signed with each transaction-broker listing agreement 3. Used at the time a broker changes the brokerage relationship from an agency relationship to a transaction- broker relationship 4. Used and signed by brokers and submitted to MLS for property information changes

3. Used at the time a broker changes the brokerage relationship from an agency relationship to a transaction- broker relationship

The Post-Closing Occupancy Agreement is_____________. 1. Meant for long term leases 2. A tool that a buyer can use to rent to own 3. Used when a residential transaction calls for a Seller to rent-back after closing, up to 60 days 4. Address all the risks and responsibilities of a long-term occupancy

3. Used when a residential transaction calls for a Seller to rent-back after closing, up to 60 days *The Post-Closing Occupancy Agreement is offered as a tool for a Broker to use when a residential transaction calls for a Seller to remain in possession of a property (Seller Rent-Back) after closing. It is intended for short-term occupancy (1 to 60 days). The Post-Closing Occupancy Agreement Form is intended to address major risks and responsibilities of a delayed possession following closing and should be completed at time of contract. It is not intended to address all of the risks and responsibilities of a long-term occupancy (longer than 60 days) for which a properly drafted lease is recommended.

The highest and best use is the use that provides the greatest _________ . 1. Benefit to the community 2. Gross 3. Value 4. Taxable Basis

3. Value

When can a managing broker deposit into the "sales escrow" security deposits received from rental property that is managed by the broker? 1. Never, security deposits must have their own identifying trust or escrow account 2. When the brokerage manages less than nine residential units 3. When the brokerage manages less than seven residential units 4. Only when the brokerage is renting properties that are listed for sale

3. When the brokerage manages less than seven residential units

When can a managing broker deposit into the "sales escrow" security deposits received from rental property that is managed by the broker? 1. Never, security deposits must have their own identifying trust or escrow account. 2. When the brokerage manages less than nine residential units. 3. When the brokerage manages less than seven residential units. 4. Only when the brokerage is renting properties that are listed for sale.

3. When the brokerage manages less than seven residential units.

Under what circumstances may the buyer be held vicariously liable for the acts of his agent? 1. Under no circumstances. 2. When the buyer broker is acting under the directions of the seller. 3. When the buyer broker is acting under the directions of the buyer. 4. When the buyer is out of town.

3. When the buyer broker is acting under the directions of the buyer.

Under what circumstance may a managing broker commingle his personal funds with property management trust or escrow accounts? 1. Never 2. When the owner of the rental property pays the managing broker for renting the property 3. When there is an agreement with the bank to maintain a sufficient amount of money to keep the trust open 4. Both #2 and #3 are true

3. When there is an agreement with the bank to maintain a sufficient amount of money to keep the trust open

Foreclosure commences ______. 1. 30 days after the borrower's paying is delinquent 2. 60 days after the borrower's paying is delinquent 3. With the lender filing the Notice of Election and Demand 4. After the borrower receiving the foreclosure package

3. With the lender filing the Notice of Election and Demand

When making personal notes, one negative aspect could be __________ . 1. Keep notes on anything unusual that happens 2. Notes can provide substantial support for your memory of what happened 3. Writing something derogatory about someone could be a problem later 4. Notes can serve as evidence later

3. Writing something derogatory about someone could be a problem later *You may want to make notes on anything unusual that happens. It is possible they would be admitted as evidence if a dispute were to go to court, and could provide substantial support for your memory of what happened. Remember, however, that this means whatever you write at the moment might be a problem. For example, if, in a moment of anger or frustration, you write something detrimental about an owner or tenant, you may regret it later.

If the buyer cannot meet the loan objection deadline, 1. The buyer's broker may inform the seller verbally to keep the agreement from terminating 2. The buyer's broker must send a certified letter to the seller to keep the agreement from terminating 3. Written mutual agreement is required to extend the deadline 4. The transaction will terminate

3. Written mutual agreement is required to extend the deadline

The title company you delegated to close your transaction charges for the preparation of legal documents. Their fee is the responsibility of ____________. 1. The seller 2. The Buyer 3. Your Broker 4. The parties designated in the sales contract or closing instructions

3. Your Broker

You are considered _______________ if you promote the sale or lease of a subdivision. 1. lucky 2. a real estate licensee 3. a developer 4. both (2) and (3)

3. a developer

If you practice real estate without a license you will be prosecuted by 1. the sheriff. 2. the attorney general. 3. a district attorney. 4. the Real Estate Commission.

3. a district attorney.

An individual who charges a fee to sell options on real estate must have 1. an option dealer's license. 2. a securities license. 3. a real estate broker's license. 4. (2) and (3) are both true.

3. a real estate broker's license

A farmer desiring to sell some water rights to a developer must do so by 1. statutory dedication. 2. a state engineer grant. 3. an appropriate form of deed. 4. including some land since water cannot be separated from the land.

3. an appropriate form of deed.

Johnathon, a newly licensed salesperson went to work for Broker Jones, what would Broker Jones have Johnathon sign: 1. an employee contract outlining his daily responsibilities and time schedule 2. an IRS W-2 form 3. an independent contractor agreement 4. both 2 and 3 are correct

3. an independent contractor agreement

"Special Assessment" taxes are taxes that ______________. 1. are levied according to your net worth. 2. add value to your property. 3. are levied for local improvements. 4. None of the above.

3. are levied for local improvements. *A special assessment tax is an amount you must pay above and beyond your normal property taxes to pay for special projects that benefit your neighborhood. The amount you pay for special assessment taxes may be based on the assessed value of your home.

Additional Provisions can be used to add ___________. 1. transaction-specific terms that result from negotiations 2. transaction-specific terms that result from the instructions of the parties to the contract 3. both of the above statements are true. 4. All of the above plus any other standard terms that the brokerage company puts in all contracts.

3. both of the above statements are true.

It is a good business practice for a transaction-broker to let 1. the buyer know why the seller is selling. 2. the seller know why the buyer is buying. 3. both parties see a CMA if one party requests a CMA. 4. All of the above.

3. both parties see a CMA if one party requests a CMA. *Comparative Market Analysis

If a person buys one rental property, collects the rent, but makes no payments on any existing encumbrance, the person 1. can be charged with a misdemeanor 2. can be charged with a class 4 felony. 3. can be charged with a class 5 felony 4. can be awarded equitable redemption after any foreclosure

3. can be charged with a class 5 felony

You must renew your license every 1. year. 2. every 2 years. 3. every 3 years. 4. every 6 years.

3. every 3 years. *Rules For initial (first time) licensees, the first cycle will be less than one year, from issuance date until Dec 31. After your first renewal, it will become a regular 3 year cycle.

If a seller refuses to sell and pay a commission to the broker, the broker should 1. record a listing contract that is in dispute. 2. advise buyers to record their purchase contracts. 3. go to court to prove a claim. 4. advise sellers concerning their rights in listing contracts.

3. go to court to prove a claim.

If there is a fire in the home prior to closing the following is true EXCEPT 1. if the home burns to the ground the buyer has the right to purchase the home and use the seller's insurance to re build the home. 2. if the home's damage is less than 10% the seller can repair the damage and enforce the contract. 3. if the home's damage is less than 10% the contract is voidable by buyer. 4. if the damaged property is a condominium, the association's rights concerning the hazard insurance is taken into account.

3. if the home's damage is less than 10% the contract is voidable by buyer. *If there is a fire in the home prior to closing, all the following is true: If the home burns to the ground the buyer has the right to purchase the home and use the seller's insurance to re build the home, if the home's damage is less than 10% the seller can repair the damage and enforce the contract and if the damaged property is a condominium, the association's rights concerning the hazard insurance is taken into account.

How many acres are in the NE 1/4 of the NW 1/4 of the SE 1/4 of Section 2, T1N R2W of the 6th Prime Meridian? 1. 320 acres 2. 160 acres 3. 5 acres 4. 10 acres

4. 10 acres *640 acres in a Section, divided by 4, divided by 4, divided by 4, equals 10 acres.640 / 4 = 160; 160 / 4 = 40; 40 / 4 = 10.

The Commission position on earnest money deposits states that 1. the broker must release all monies to buyer if the contract does not close. 2. the broker must hold all monies in a trust account until a written agreement is made between all parties concerning the release of the earnest money. 3. if transaction fails to consummate and there is no dispute, earnest money should be returned to buyer without seller's written authorization. 4. the broker must release the earnest monies to the seller if the buyer does not show up at closing.

3. if transaction fails to consummate and there is no dispute, earnest money should be returned to buyer without seller's written authorization.

A developer _____________. 1. is an owner of a photographic shop. 2. is a licensee who sells new homes. 3. is an owner of a parcel of land that has been subdivided into 20 or more residential lots. 4. is an owner of a parcel of land that has been subdivided into at least 10 residential lots.

3. is an owner of a parcel of land that has been subdivided into 20 or more residential lots.

It is _________ for brokers and sellers to disclose material facts on properties sold "as is". 1. illegal 2. recommended 3. mandatory 4. good for marketing

3. mandatory *As is means the seller will not repair.

A seller who receives the inspection objection _______. 1. must agree to the requested repairs 2. must terminate the offer if he does not agree with the inspection notice 3. may offer an alternative resolution if he does not agree with the inspection objection 4. may agree to pay for all the repairs and have them completed after closing

3. may offer an alternative resolution if he does not agree with the inspection objection

The seller of a property that was used as a methamphetamine lab ____________. 1. must ALWAYS disclose this past use 2. must NEVER disclose this past use 3. must disclose this past use if the property has not been cleaned to state certification standards 4. must disclose this past use if the property has been cleaned to state certification standards

3. must disclose this past use if the property has not been cleaned to state certification standards

The written disclosure of brokerage relationships 1. must be signed by the individual the licensee plans to work with. 2. is a binding contract and therefore must be signed by the licensee and the customer/client. 3. must have a signature line for the customer/client to sign. 4. both (1) & (2)

3. must have a signature line for the customer/client to sign.

Software used to generate approved standard forms 1. must be approved by the commission 2. must be in WORD format 3. must have controls to prevent the language of the form from being altered 4. all of the above

3. must have controls to prevent the language of the form from being altered

If the buyer terminates the contract as per the inspection contingency, the broker _____________. 1. would hold the buyer's earnest money until the seller signed an agreement to release it 2. would hold the buyer's earnest money for 3 days and then release it 3. must return the earnest money immediately 4. must put in a request for release of earnest money within 24 hours

3. must return the earnest money immediately *Some brokers unnecessarily require a signed release by both parties even when there is no disagreement. Audits have disclosed many instances where brokers have held deposits for extended periods just because one or both parties will not sign a release. While good judgment is always urged, releases are not a requirement of the Real Estate Commission. In addition, where one party has given written authorization for the release of a deposit to another, a written release by the other party is not require

A buyer's agent, arranging to show a For Sale By Owner property, 1. does not have to worry about disclosure since the agent is working for the buyer 2. must only disclose that he is a licensed agent 3. must use the approved Brokerage Disclosure to Seller (FSBO) form 4. will not get paid a commission by the FSBO owner

3. must use the approved Brokerage Disclosure to Seller (FSBO) form

According to the Contract to Buy and Sell Real Estate, the buyers get possession 1. at 12:01 a.m. the day of closing. 2. 3 days after delivery of deed. 3. negotiable. 4. when the seller signs the deed at closing.

3. negotiable.

Brokers are allowed to charge the buyers and/or sellers for closing costs that do not include "document preparation". 1. Always. 2. only if the sellers and buyers agree, either orally or in writing, to be charged. 3. only if the sellers and buyers agree, in writing, to be charged. 4. Never

3. only if the sellers and buyers agree, in writing, to be charged.

A water right is 1. personal property because the water may be moved. 2. an improvement to the land. 3. real property. 4. real property once adjudicated by a water court.

3. real property.

A listing terminates upon expiration of the listing agreement, and ______________. 1. the broker has no further obligations even if the property is under contract 2. the broker must have the seller fill out and sign a new listing agreement 3. the broker is obligated to close the property even if the listing has expired 4. the brokerage firm may designate another broker to close the transaction

3. the broker is obligated to close the property even if the listing has expired

The buyer makes an FHA offer of $101,000 with 5% down and the property does not appraise 1. the buyer must buy even if the property appraises at $110,000. 2. the contract automatically terminates as FHA requires the property to appraise. 3. the buyer has the option to add money to the down payment and proceed with the purchase. 4. the seller has the option to sell at $110,000 or terminate the contract.

3. the buyer has the option to add money to the down payment and proceed with the purchase.

If buyer and seller do not agree in writing to settlement of inspection objections by the contract Resolution Deadline, 1. the buyer has one calendar day following the Resolution Deadline to withdraw the Notice to Correct 2. the buyer has two calendar days following the Resolution Deadline to withdraw the Notice to Correct 3. the buyer may sign the BUYER'S WITHDRAWAL OF INSPECTION OBJECTION and move forward with the contract 4. the buyer must terminate the contract

3. the buyer may sign the BUYER'S WITHDRAWAL OF INSPECTION OBJECTION and move forward with the contract

A stock pond built on large acreage is owned by 1. the party who built the pond. 2. the city or county nearest the parcel of land. 3. the citizens of the state of Colorado unless adjudicated. 4. the first person to register the pond with the state engineer.

3. the citizens of the state of Colorado unless adjudicated.

A short sale in real estate is defined by which one of the following: 1. when properties begin to deflate due to economic conditions 2. when there is an abundance of supply of homes on the market but few demands from customers for properties 3. when a mortgage lender has given a financially distressed homeowner the approval to move forward with selling his or her property for less than the amount due on the mortgage 4. when a mortgage lender attempts to sell a group of mortgages on the secondary mortgage market to various investors at a lower interest rate

3. when a mortgage lender has given a financially distressed homeowner the approval to move forward with selling his or her property for less than the amount due on the mortgage

All personal property ___________. 1. is part of the real estate transaction and will transfer with the deed 2. is not part of the real estate transaction 3. will transfer with a bill of sale 4. will transfer after closing

3. will transfer with a bill of sale

If there is a foreclosure in process 1. you can not list the home for sale until the seller stops the foreclosure. 2. you can list the home, but need not let all other real estate agents know it is in foreclosure. 3. you can list the home for sale and try to get it sold and closed before the foreclosure sale. 4. you can list the home for sale and try to get it sold and closed until the end of the owner's redemption period

3. you can list the home for sale and try to get it sold and closed before the foreclosure sale.

You are working with a buyer as a transaction broker and have written an offer on a home. The seller's agent provides you with a pre-listing inspection, done 3 months ago. Your buyers ask you if they should rely on that inspection. Your best response would be ______________ . 1. "Yes, since it was done by a license inspector" 2. "No, you don't know that inspector" 3. "Yes, since the home seems to be in great shape" 4. "No, the buyer's should hire their own licensed inspector"

4. "No, the buyer's should hire their own licensed inspector" *A TB can "hold accountable" but not necessarily rely on all statements made by a seller's agent. The buyers should have the home inspected.

A home 42 feet by 36 feet was built 15 years ago on a lot now valued at $27,900.00. The home would have a current value equal to a reproduction cost of $108.00 per square foot if it were not for depreciation. The depreciation of the house is due to its flat roof, which must be resurfaced at a cost of $4.00 per square foot. To the nearest thousand, the current value of the property is ___________ . 1. $184,000.00 2. $191,000.00 3. $157,000.00 4. $185,000.00

4. $185,000.00 *42' X 36' = 1,512 square feet X $108.00 = $163,296.00; then 1,512 sq. ft. X $4.00 = $6,048.00, which is subtracted from $163,296. = $157,248; plus land = $185,148.00

Homeowners association dues of $89.00 per month are payable in advance on the first of each month. The HOA instructed the title company to collect the September dues at the August 30 closing. What is the total amount due from buyer for homeowner fees? 1. $89.00 2. $91.87 3. $83.26 4. $94.74

4. $94.74 *The buyer owes HOA dues of $89.00 for September plus 2 days' proration for August 30 and 31. 89 /31 = 2.87 x 2 = 5.7 + 89 = 94.7

The reasoning behind the creation of the "single licensing law" was 1. to bring the law in line with actual practice. 2. to stop the practice of a new real estate broker working independently, as their own company. 3. to stop the practice of real estate brokers overseeing newly licensees. 4. (1) & (2) are both true.

4. (1) & (2) are both true. *The reasoning behind the creation of the "single licensing law" was to bring the law in line with actual practice and to stop the practice of a new real estate broker working independently, as their own company.

A sales commission is due to the broker with an Exclusive Right to Sell Listing Contract 1. when the property sells. 2. when a ready and willing and able buyer has made an offer that meets the terms in the Seller's listing agreement and the seller decides not to sell. 3. if the property is found to have title defects which make it not saleable. 4. (1) and (2) are true.

4. (1) and (2) are true.

If the buyer is assuming the seller's loan 1. the buyer has the right, after reviewing the loan documents, to decide not to purchase. 2. the seller must give the buyer the loan documents to review prior to the writing of the contract. 3. if the buyer does not state, in writing, his disapproval of the loan documents by a certain date, the contract stays in full force. 4. (1) and (3) are both true.

4. (1) and (3) are both true.

Which of the following has fiduciary duties? 1. Transaction-broker 2. Buyer's agent 3. Seller's agent 4. (2) & (3) are both true

4. (2) & (3) are both true.

The Real Estate Commission has the power to 1. audit all brokers, but must make an appointment. 2. audit all files and may show up without an appointment. 3. investigate all licensees without any complaints made against the licensee. 4. (2) and (3) are both true.

4. (2) and (3) are both true.

In Colorado the documentary fee, when the title is transferred, __________ is of the selling price. 1. 10% 2. 0.01 3. 0.001 4. 0.0001

4. 0.0001 *In Colorado the doc fee, when the title is transferred, is $0.01 per $100 of the selling price (0.0001 x selling price).

Title companies _______. 1. do prepare legal documents, such as deeds, for brokers. 2. who prepare legal documents for brokers, such as deeds, violate the law. 3. if they make mistakes on a deed, brokers are legally responsible for them 4. 1 and 3 are correct.

4. 1 and 3 are correct. *Title companies do prepare legal documents, such as deeds, Brokers are legally responsible for any mistakes made on a deed that was prepared by a title company

If the agreement by which the broker was engaged is not performed or completed for any reason, the relationship shall end no later than 1. 3 months after the date of the engagement. 2. 6 months after the date of the engagement. 3. 9 months after the date of the engagement. 4. 1 year after the date of the engagement.

4. 1 year after the date of the engagement.

Which of the following statements is true regarding tenants' security deposits? 1. Security deposits MUST ALWAYS be deposited in the property management escrow account within 3 business days of the receipt 2. Security deposits may only be used for non-payment of rent 3. A broker receipting for security deposits may deliver such deposits to an owner without the tenant's written authorization or notification 4. A broker receipting for security deposits shall NOT deliver such deposits to an owner without the tenant's written notice

4. A broker receipting for security deposits shall NOT deliver such deposits to an owner without the tenant's written notice

Not included as a definition of "Good Funds" is ____________ . 1. Cash 2. Electronically transferred funds 3. A certified check 4. A broker's trust account check

4. A broker's trust account check

An owner has purchased a cabin in a development where he can park his boat for most of the year and has a fee simple interest in the cabin along with 5 percent of the swimming beach, boat ramp, parking lot, and laundry room. What type of ownership interest it this? 1. A time share estate 2. A camping membership 3. A standard subdivision 4. A condominium unit

4. A condominium unit

The exception to a contract or form falling within the purview of Commission Rule F is ______________ . 1. A counterproposal 2. An amend/extend contract with broker 3. Seller's property disclosure 4. A construction contract with builder warranties

4. A construction contract with builder warranties

Of the following, which may NOT be used as earnest money? 1. A note. 2. A personal check. 3. Cash. 4. A deed of trust.

4. A deed of trust.

A deed of trust to a private trustee or mortgage is all of the following EXCEPT ______________ . 1. Foreclosed in and through the courts 2. A conditional conveyance of the real estate directly from the mortgagor to the mortgagee 3. Exempt from rescission requirements 4. A notice that an action at law is pending that may affect the title to the land

4. A notice that an action at law is pending that may affect the title to the land *Trust deeds and mortgages are both used in bank and private loans for creating liens on real estate, and both are typically recorded as debt in the county where the property is located. However, a mortgage involves two parties: a borrower (or mortgagor) and a lender (or mortgagee). In contrast, a trust deed involves three parties: a borrower (or trustor), a lender (or beneficiary), and the trustee. The trustee holds title to the lien for the lender's benefit; if the borrower defaults, the trustee will initiate and complete the foreclosure process at the lender's request.

Which of the following statements regarding leases is true? 1. A vertical lease describes a condominium lease. 2. A ground lease describes a lease for space in a shopping center that includes the ground space adjacent to the store. 3. A net lease rental payment is based on the net income of the tenant. 4. A percentage lease allows the property owner to inspect the tenant's accounting records.

4. A percentage lease allows the property owner to inspect the tenant's accounting records.

If an owner defaults on a mortgage payment, the lender could call the entire loan balance due if the loan contained a(n) ___________ . 1. Due-on-sale clause 2. "Or more" clause 3. Defeasance clause 4. Acceleration clause

4. Acceleration clause

Zoning that requires that new structures match an existing architectural style is called ____________ . 1. Exclusionary zoning 2. Inclusionary zoning 3. Cumulative zoning 4. Aesthetic zoning

4. Aesthetic zoning

A benchmark _____________ . 1. Is a visible marker, either natural or artificial 2. Is a reference point or marker placed by a surveyor and used to establish elevations and altitudes 3. Can be an iron stake used as a reference point 4. All of the above

4. All of the above

A cooperating broker selling a property listed with a Multiple Listing Service may be __________ . 1. A sub-agent of the listing broker in some states 2. A buyer's agent 3. An intermediary or facilitator 4. All of the above

4. All of the above

A definite termination date is needed for _________________. 1. Listings for business opportunities 2. Commercial listings 3. Open listings 4. All of the above

4. All of the above

Private deed restrictions are _____________ . 1. Restrictive covenants 2. Restrict the use of the property 3. Encumbrances 4. All of the above

4. All of the above

The following are duties and obligations of a single agent: 1. Perform the terms of the written agreement while exercising reasonable skill and care. 2. Promote the interests of the principal and comply with license law requirements. 3. Comply with federal, state, and local laws, rules and regulations.CORRECT ANSWER 4. All of the above

4. All of the above

The settlement statements must be signed by whom? 1. The seller 2. The buyer 3. The licensee attending the closing 4. All of the above

4. All of the above

The sum of the balances on each ledger record . 1. Will be the same as the bank balance as shown on the bank statement 2. Should be the same as the balance in the broker's journal 3. Is the same as the balance in the trust account 4. All of the above

4. All of the above

An amortized loan _____________ . 1. Is the same as a budget loan if it includes taxes and insurance 2. Allows the borrower to "re-borrow" the remaining principal each year at the established interest rate until there is no principal left to borrow 3. Has a fixed monthly payment 4. All of the above are correct

4. All of the above are correct

If a tenant gives a broker $1800.00 of which $900 is rent and $900 is for a security deposit, what must the broker do with the money? 1. Make an accounting to the tenant ledger record 2. Make an accounting to the landlord ledger record 3. Make an accounting to the broker management escrow journal 4. All of the above are true

4. All of the above are true

A non-disturbance clause in a mortgage provides that tenants ___________ . 1. Have a covenant of habitability 2. Are entitled to quiet enjoyment of the premises 3. Will not disturb other tenants 4. Are NOT subject to eviction in the event the mortgagee forecloses a prior mortgage

4. Are NOT subject to eviction in the event the mortgagee forecloses a prior mortgage

The escrow accounting equation includes . 1. Escrow account bank balance = total liability of all money belonging to others 2. Ending journal balance = the sum of all pending transactions plus broker ledger 3. Ledgers = the reconciled escrow bank account balance at the same point in time 4. All of the above are true

4. All of the above are true *The basic "escrow accounting equation" could be understood as escrow account bank balance = total liability of all money belonging to others. ending journal balance = the sum of all pending transactions plus broker ledger. and Ledger = the reconciled escrow bank account balance at the same point in time.

Does Colorado law dictate the ethical standards for the real estate industry? 1. Indirectly. 2. Indirectly through public wrongs (the law of crimes). 3. Indirectly through private wrongs (the law of torts). 4. All of the above.

4. All of the above.

If a licensee has knowledge that the buyer may not have financial ability to purchase a home, which of the following licensees must notify the seller of this fact? 1. Buyer agent. 2. Transaction-broker. 3. Seller's agent. 4. All of the above.

4. All of the above.

To promote the interests of the seller, the agent must 1. seek acceptable terms and prices. 2. disclose, counsel and advise. 3. take care of accounting and inform of the possibility of vicarious liability. 4. All of the above.

4. All of the above.

Under which of the following circumstances could a listing agent's license be subject to revocation, suspension or reprimand by the Real Estate Division? 1. Marketing a home without a listing agreement. 2. Failing to give copies to each person who signs a document. 3. Representing both parties on the same sale and not mentioning this fact to either of the parties involved. 4. All of the above.

4. All of the above.

The following statements are all true EXCEPT ___________ . 1. The size and nature of a project will dictate the responsibilities of a property manager 2. Keeping an eye on 2 single-family homes will take less time than a 200-unit apartment complex 3. Many responsibilities will be common to most property management situations 4. All property managers will have the same daily tasks and responsibilities

4. All property managers will have the same daily tasks and responsibilities *The size and nature of a project will, obviously, dictate the responsibilities of a property manager. Keeping an eye on 2 or 3 small, single-family homes is likely to take less time and attention than a 200-unit apartment complex or a 100,000 square foot shopping center. However, many of the following will be common to most property management situations.

The Commission's position concerning Megan's Law is all of the following EXCEPT ___________ . 1. The chief of police is the designated place of registration for offenders residing within any city, town or city and county 2. The office of the county sheriff is the designated place of registration for those living outside any city, town or city and county 3. Per statute the CBI is to post on the internet identifying information, including a picture of each sex offender sentenced as a sexually violent predator or convicted of a sexual offense involving children 4. All real estate licensees should inform a potential buyer of a home of the location of a registered sex offender within that neighborhood

4. All real estate licensees should inform a potential buyer of a home of the location of a registered sex offender within that neighborhood

When developing a system to keep track of messages _______. 1. Keep notes on the back of the return call slip or type notes into your computer after making a return call 2. Take notes as you clear voice mail, noting the time and message 3. Attempted return calls should be noted 4. All the above

4. All the above

To comply with the 1031 Exchange rules and defer paying taxes, the seller_______. 1. Must prepare a form identifying no more than 3 potential properties that the seller may want to acquire 2. Must purchase a property within 180 days of the closing of the old property identified on the form 3. Must hold title to both the old and the new property in the same name 4. All the above

4. All the above *1031 Exchange: The old property and the new property must qualify as "1031 property". Within 45 days of the closing of the seller's old property, the seller must prepare a form identifying no more than 3 potential properties that the seller may want to acquire. Within 180 days of the closing of the old property (which is 135 days after the expiration of their 45-day period), the seller must purchase and close on one of the properties listed on the 45-day form. The seller may not touch the money. Typically the money is held by the exchange company (Qualified Intermediary). The holder of title to both the seller's old property and the seller's new property are the same.

The ______________ form is used to change the Inspection Objection Deadline. 1. Inspection Notice 2. Inspection Resolution 3. Amend/ Extend with Broker 4. Amend/ Extend

4. Amend/ Extend

The _______ form can be used to change the Objection Deadline. 1. Inspection Notice 2. Inspection resolution 3. Amend/Extend with Broker 4. Amend/Extend

4. Amend/Extend

Residential property management companies are generally paid based on _______. 1. A flat fee 2. An agreed percentage of the annual gross income 3. An agreed percentage of the monthly net income 4. An agreed percentage of the monthly gross income

4. An agreed percentage of the monthly gross income

While an appraisal is an estimate of the value of a property, a CMA is __________. 1. An estimate of the property's highest and best use 2. An estimate of the sold properties in the last 6 months 3. An estimate of the property value 4. An estimate of the most probable sales price in the current market

4. An estimate of the most probable sales price in the current market

How many trust accounts may a broker maintain at one time? 1. One 2. Two 3. Three 4. An unlimited amount

4. An unlimited amount

Monthly statements will include all of the following EXCEPT ________. 1. Income from rent 2. Security deposits 3. Income from vending machines 4. Annual debt service

4. Annual debt service *Monthly Statements: The monthly statement will show, at a minimum, income from rents, security deposits, laundry, vending machines, and any other source, as well as all expenses.

Any easement running with the land and benefiting the dominant tenement is known as an _____________ . 1. Easement in gross 2. Affirmative easement 3. Easement by necessity 4. Appurtenant Easement

4. Appurtenant Easement *An appurtenant easement is any easement running with the land and benefiting the dominant tenement

After investigating and after holding a hearing, the Colorado Real Estate Commission could NOT _____________ . 1. Impose an administrative fine not to exceed $2,500.00 for each separate offense 2. Censure a licensee 3. Temporarily suspend or permanently revoke a license 4. Assess actual damages

4. Assess actual damages

A transfer of personal property through a valid will is known as a _____________ . 1. Devise 2. Dower 3. Gift 4. Bequest

4. Bequest

Conveyance of a riding lawn mower included in a residential property sale would be by a 1. Special warranty deed 2. Bargain and sale deed 3. Financing statement 4. Bill of sale

4. Bill of sale

Brokers generating contract forms by use of a computer shall comply with the following EXCEPT ______________ . 1. Commission approved language must be reproduced exactly as is 2. There shall be software program security capability to prevent basic language from being inadvertently changed or deleted by the computer user 3. Contract provisions developed for computer generated forms must be contained in a properly identified addendum and not within "Additional Provisions" unless they are transaction specific 4. Blank spaces in the form may be filled in prior to negotiations between principal parties to the transaction

4. Blank spaces in the form may be filled in prior to negotiations between principal parties to the transaction

Broker Bob is listing a home for Andy as a transaction broker. The first offer he received for the home was below the offer price and the deal fell when the seller's counter offer was not accepted. Therefore, which of the following statements is true? 1. Bob may tell any other interested parties about the previous counter offer to ensure the new buyers make an offer acceptable to seller. 2. Bob must tell any other interested parties about the previous counter offer to ensure the new buyers make an offer acceptable to seller. 3. Bob may not tell any other interested parties about the previous counter offer. 4. Bob may disclose the existence and amount of the offer or counter but he must have the seller's permission to do so.

4. Bob may disclose the existence and amount of the offer or counter but he must have the seller's permission to do so.

If the broker, has earnest money in a trust account for five pending transactions, the total of these five liabilities should be _____________. 1. The same as the trust account balance 2. The same as the corresponding escrow account liabilities 3. Commingled with the trust account balance 4. Both #1 and #2 are correct

4. Both #1 and #2 are correct

Which of the following is true concerning PMI (Private Mortgage Insurance)? 1. PMI reduces the lender's risk in making loans. 2. PMI is required on conventional loans greater than 80% loan-to-value ratio. 3. PMI insures the borrower's late payments. 4. Both #1 and #2 are correct

4. Both #1 and #2 are correct

When must an accurate Closing Statement be provided to both the seller and the buyer? 1. At closing 2. At delivery and acceptance of the deed 3. 2 days prior to closing 4. Both #1 and #2 are correct

4. Both #1 and #2 are correct *The Closing Statement must be delivered at closing (delivery and acceptance of deed) or 24 hours prior, when possible.

The Homestead Exemption __________ . 1. Protects your primary residence from creditors 2. Can be waived in a deed of trust or mortgage 3. Allows for land grants 4. Both #1 and #2 are true

4. Both #1 and #2 are true

A Planned Unit Development (P.U.D.) is a ___________ . 1. Form of common interest community 2. Form of real estate investment trust (R.E.I.T.) 3. Form of municipal or county zoning 4. Both #1 and #3 are correct

4. Both #1 and #3 are correct

A carry back is _________ . 1. A loan with real property plus personal property as security 2. Another name for owner financing 3. When the seller loans money to the buyer 4. Both #2 and #3 are correct

4. Both #2 and #3 are correct

A protected class under the Colorado Anti Discrimination Act is ___________ . 1. Economically disadvantaged citizens 2. Sexual orientation 3. Marital status 4. Both #2 and #3 are correct

4. Both #2 and #3 are correct

Which of the following listing contracts allows the seller to sell the home without having to pay the broker? 1. Exclusive Brokerage (Agency) Listing Addendum 2. Exclusive Right-to-Sell 3. Open Listing addendum 4. Both (1) & (3)

4. Both (1) & (3)

1. The city may have the right via eminent domain to pay the farmer and take his position for the right to use the water 2. The city must first go through the legal condemnation process for approval 3. The city does not have the right to take Farmer Joe's water since he was using it first 4. Both (1) and (2) are correct

4. Both (1) and (2) are correct

Who of the following must be warned that they could be vicariously liable for your actions? 1. Customer of a transaction-broker. 2. Client of buyer broker. 3. Client of listing agent. 4. Both (2) & (3)

4. Both (2) & (3)

You are a buyer's agent with two clients with similar wants. You have appointments to show a property to Buyer A in the morning and the same property to Buyer B in the afternoon. Buyer A decides to make an offer on the property 1. Since you are a buyer agent for A, you remove the property from the list to show buyer B. 2. Your contract with buyer A allows you to show the property to buyer B. 3. You are in an uncomfortable position and should keep all parties informed when there is interest in a property. 4. Both (2) and (3) are true.

4. Both (2) and (3) are true.

Your next door neighbor is going to Europe for the summer. They had their home rented for the summer but the tenants changed their mind. They are asking for your help as they must leave in 3 days. Will you please find a tenant for the home, and then call their attorney who will prepare the lease. 1. You must have a real estate license to help your neighbor. 2. If the neighbor pays you a finders fee, you need a real estate license. 3. You do not need a real estate license if you do not receive any fee or consideration for helping out. 4. Both (2) and (3) are true.

4. Both (2) and (3) are true. *You do not need a real estate license if you do not receive any fee or consideration for helping out. If the neighbor pays you a finders fee, you need a real estate license

If the title commitment shows there is a defect 1. The seller may have the right to try and correct the defect 2. The buyer has the right to terminate the contract 3. The title policy will insure it 4. Both 1 and 2 are correct

4. Both 1 and 2 are correct

The Licensee Buy Out Agreement _____________. 1. States that the seller will NOT pay a commission 2. States that the seller will NOT be liable for any loss or expense incurred by the broker/buyer after closing 3. States that the seller will pay a commission 4. Both 1 and 2 are correct

4. Both 1 and 2 are correct

To determine if there is an encroachment a buyer would 1. Order an Improvement Location Certificate 2. Order a Survey 3. Order a Home Inspection 4. Both 1 and 2 are correct

4. Both 1 and 2 are correct

Which of the following approaches MOST reliably estimates the sales price of a single-family residence? 1. Market data approach 2. Sales comparison approach 3. Cost approach 4. Both 1 and 2 are correct

4. Both 1 and 2 are correct

The Residential Addendum to the CBS ___________. 1. Is attached to a Contract to Buy and Sell Real Estate (Land) if there is a residential structure on the property 2. Is attached to a Contract to Buy and Sell Real Estate (Commercial) if there is a residential structure on the property 3. Excludes the Appraisal Provision 4. Both 1 and 2 are correct.

4. Both 1 and 2 are correct. *Attach this Addendum to a Land Contract if there is a residential structure on the Property. This Residential Addendum may also be included on a Commercial Contract that requires these Sections be addressed.

A best practice recommendation to a real estate licensee would include 1. disclose all known defects in writing 2. recommend only their favorite home inspector 3. encourage all inspections 4. Both 1 and 3 are correct

4. Both 1 and 3 are correct

The buyer's broker signs the Contract to Buy and Sell 1. As a receipt for earnest money 2. In order to ensure the proper commission percentage 3. To disclose their brokerage relationship 4. Both 1 and 3 are correct

4. Both 1 and 3 are correct

Regarding square footage 1. A buyer's broker may rely on a listing broker's square footage 2. A buyer's broker must measure the square footage of the home 3. A buyer's broker is responsible for obvious signs of mismeasurement by others 4. Both 1 and 3 are correct

4. Both 1 and 3 are correct *A buyer's broker may rely on a listing broker's square footage but is still responsible for obvious signs of mismeasurement by others.

During the right to cure period, the borrower must _________. 1. Pay off the entire principal owed 2. Bring the loan current 3. Pay any additional fees such as attorney fees 4. Both 2 and 3

4. Both 2 and 3

If there is no well on the property, the Source of Water Addendum ___________. 1. Is not required 2. Should state how the water is obtained 3. Should list the water provider 4. Both 2 and 3

4. Both 2 and 3 *The Source of Water Addendum asks for well permit, if any, or Water Provider. If neither, list how the water is obtained.

A broker who is engaged by only one party to a real estate transaction is known as a _____________ 1. Transaction Broker 2. Single Agent 3. A limited agentCORRECT ANSWER 4. Both 2 and 3 are correct

4. Both 2 and 3 are correct

Any broker may buy a property with another broker as long as they use 1. The Licensee Buy Out Addendum 2. The Contract to Buy and Sell Real Estate 3. A disclosure that the broker has a license 4. Both 2 and 3 are correct

4. Both 2 and 3 are correct

When a listing has expired ________. 1. You must wait 5 days to call the owner 2. You may call the owner immediately 3. It's courtesy to call the broker first to see if the seller is relisting 4. Both 2 and 3 are correct

4. Both 2 and 3 are correct

The Licensee Buy Out Addendum to the Contract to Buy and Sell 1. Is valid only if the principle broker signs the bottom of the addendum 2. Is binding on the buyer (licensee) who personally signs the form 3. Is binding on the brokerage firm if the supervising broker signs the form 4. Both 2 and 3 are correct

4. Both 2 and 3 are correct *unless the supervising broker of the brokerage firm also signs.

Which party to a sales contract always has a right to enforce the contract by specific performance? 1. Broker 2. Buyer 3. Seller 4. Both Buyer and Seller

4. Both Buyer and Seller

If a listing broker cannot attend the closing and sends another broker in his or her place, then __________ is/are responsible for the accuracy of the closing statements. 1. The listing broker 2. The attending broker 3. Both brokersCORRECT ANSWER 4. Both brokers and the managing broker

4. Both brokers and the managing broker

Vacancy rates are a reflection of __________ . 1. Supply factors 2. Demand factors 3. Neither supply or demand factors 4. Both supply and demand factors

4. Both supply and demand factors

A FSBO seller and buyer agree to terms on a contract to purchase. The buyer then finds a structural defect during his inspection, and cancels the contract. 1. Agent M is liable to buyer C. 2. Only the seller would be liable to buyer C. 3. Buyer C has no recourse because he did not perform an inspection! 4. Both the FSBO seller and Agent M are liable.

4. Both the FSBO seller and Agent M are liable. *The FSBO seller makes cosmetic repairs to cover the damage, and lists the property with Agent M and informs him of the defect. Buyer C buys the home, and does not perform an inspection. Only after closing and moving into the home does buyer C discover the material defect.

Which of the following people may NOT write a prepared addendum for the Commission- approved Buy and Sell contract 1. Seller's Attorney 2. Buyer's Attorney 3. Principal party to the transaction 4. Broker who is acting as an agent

4. Broker who is acting as an agent

If the buyer owes a balance at closing, the amount due will appear under the subtotals on the settlement sheet as __________. 1. Broker 2. Seller 3. Buyer and broker debit column 4. Buyer credit and broker debit

4. Buyer credit and broker debit *The amounts due to/from buyer or seller are not true "entries" but are derived from the differences between the debit and credit column subtotals. In this case, the buyer's debit subtotal exceeds the buyer's credit subtotal (the normal closing scenario). The difference is added to the smaller number (credit column) to balance the two buyer columns and is then entered in the opposing broker column as a debit to balance the row across.

An example of occupancy without any underlying agreement is _________ . 1. Estate for years 2. Periodic tenancy 3. Tenancy at will 4. Tenancy at sufferance

4. Tenancy at sufferance

Deed restrictions are all of the following EXCEPT 1. Put limits on the use of the property 2. Run with the property 3. Can not be altered or removed by subsequent owners 4. Can be changed if you do not agree with it

4. Can be changed if you do not agree with it *Deed restrictions put limits on the use of the property, run with the land and can not be altered or removed by subsequent owners

Once an Inspection Objection form is submitted to the seller from the buyer, the seller will submit a(n) ________ form outlining which issues will be resolved. 1. Inspection Resolution 2. Amend /Extend 3. Addendum 4. Choose either the Inspection Resolution or Amend/extend, as both will amend the contract.

4. Choose either the Inspection Resolution or Amend/extend, as both will amend the contract. *Once buyer and seller have come to terms with the Inspection issues to be resolved, the parties will complete the Inspection Resolution form to memorialize these items. The resolution can also be memorialized in an amend/extend form. If an Inspection Resolution Form is not used, the parties may also execute an Amend/Extend. The Resolution Form has the same affect.DO NOT use both an Inspection Resolution Form AND an Amend/Extend Form. Choose one, as both will amend the contract.

Concerning psychologically impacted properties, which of the following statements is correct? 1. Customers of a transaction-broker must be told about the psychologically impacted property. 2. Clients of a buyer agent must be told about psychologically impacted properties. 3. Clients of a listing agent must disclose information about psychologically impacted properties. 4. Clients of a listing agent are not required to disclose information concerning psychologically impacted properties.

4. Clients of a listing agent are not required to disclose information concerning psychologically impacted properties.

A broker lists a property at $125,000 for 120 days and actively markets it. No offers come in during the first 30 days. The broker advises her seller to lower the price by $5,000 to encourage some activity. The seller is adamant that the property is worth the list price and refuses. After another fifteen days with no offers, the seller reluctantly lowers the price. He also tells the broker that he doesn't feel she is trying hard enough to sell the property, and he's going to take it off the market if nothing happens. A week later, an offer for $100,000 comes in from another company, which is presented and rejected. The seller is quite upset at the low offer and demands to be released from the listing. There is no further communication between the parties, but the listing is never formally terminated. Three weeks later, the broker learns that the seller has entered into a contract with the same buyer for $110,000 and closing is set. The broker is very upset and wants to protect her commission. What can she do? 1. Escrow the disputed commission 2. File a mechanics lien 3. Record the listing contract 4. Commence mediation, arbitration, or civil action (as appropriate)

4. Commence mediation, arbitration, or civil action (as appropriate) *Nothing prevents a licensee from asserting any legal claim against a principal. (Recording the listing contract will usually have the effect of clouding title to the property, which in turn affects the closing between buyer and seller. The broker should not interfere in the process of transferring title to property.)

The means of taking private property for public use upon the payment of just compensation is known as __________ . 1. Escheat 2. Eminent domain 3. A variance 4. Condemnation

4. Condemnation *The means of taking private property for public use upon the payment of just compensation is known as condemnation, the right to take is eminent domain.

The legal "means" or "process" of taking water from a private owner for public use, together with compensation to the owner is known as: 1. Escheat 2. Variance 3. Eminent domain 4. Condemnation

4. Condemnation *The right to do so is known as eminent domain.

1988 Fair Housing Amendments familial status protects all of the following EXCEPT a __________ . 1. 17 year old living with a parent 2. Father with legal custody of a 16-year-old girl 3. Pregnant woman 4. Couple with 3 dogs

4. Couple with 3 dogs *Familial Status includes: One or more individuals (who have not attained the age of 18 years) who live with: A parent or another person having legal custody of such individual or individuals and the designee of such parent or other person having such custody, with the written permission of such parent or other person. The protections afforded against discrimination on the basis of "familial status" also apply to any person who is pregnant or is in the process of securing legal custody of any person under the age of 18 years.

Which of the following is NOT an essential element of a deed? 1. Written instrument 2. Name of parties 3. Recital of consideration 4. Date

4. Date

An agency agreement would automatically be terminated by all of the following EXCEPT ___________ . 1. Death of the broker 2. Bankruptcy of the principal 3. Insanity 4. Death of the corporate officer who entered into the agreement

4. Death of the corporate officer who entered into the agreement *Corporations are legal entities and their contracts survive the death of their representatives. If the corporation ceased to exist, its agency contracts would terminate. Review the conditions that end an agency relationship.

Which of the following does NOT terminate a listing agreement? 1. Death of the principal 2. A basement fire which severely damages the property 3. Death of the employing broker 4. Death of the designated broker

4. Death of the designated broker

The seller holds security deposits in the amount of $1,500 from six tenants. At closing, you would ______________ . 1. Credit the seller and debit the buyer $9,000 2. Credit the seller and debit the broker $9,000 3. Debit the seller and credit the broker $9,000 4. Debit the seller and credit the buyer $9,000

4. Debit the seller and credit the buyer $9,000

The previous years' taxes in the amount of $1,578.00 have been paid, and the closing takes place August 30. Property taxes for the current year should appear as a _________________. 1. Debit to the seller $1,041.91; credit to the broker $1,041.91 2. Debit to the seller $1,046.24; credit to the buyer $1,046.24 3. Debit to the seller $1,047.62; credit to the buyer $1,047.62 4. Debit to the seller $1,041.91; credit to the buyer $1,041.91

4. Debit to the seller $1,041.91; credit to the buyer $1,041.91 *Prorations: $1,578 divided by 365 x (actual number of days, Jan 1 through Aug 29) The seller receives a debit, and the buyer a credit to reimburse the buyer for the seller's share of taxes that the buyer will pay in full next year.

A special assessment is entered on the worksheet as a ____________. 1. Charge to the seller based on 2% of the sales price 2. Split between the seller and buyer 3. Debit to the buyer and a credit to the broker 4. Debit to the seller and a credit to the broker

4. Debit to the seller and a credit to the broker

Taxes for the current year are a _____________ . 1. Debit to the buyer and a credit to the seller 2. Debit to the buyer and a credit to the broker 3. Debit to the seller and a credit to the broker 4. Debit to the seller and a credit to the buyer

4. Debit to the seller and a credit to the buyer *The buyer pays the full years' taxes the following year. The seller must credit the buyer for the time he lived in the home at closing. Prorations

A property management agreement normally includes a(n) _________ . 1. Agreement that the manager carry liability insurance 2. List of the property's current tenants 3. Statement of the manager's qualifications 4. Description of the manager's fiscal responsibilities

4. Description of the manager's fiscal responsibilities

A property management agreement normally includes a(n) ____________ . 1. Agreement that the manager carry liability insurance 2. List of the property's current tenants 3. Statement of the manager's qualifications 4. Description of the manager's fiscal responsibilities

4. Description of the manager's fiscal responsibilities

The ___________ closing the transaction is solely responsible for the figures on the Closing Statement for the closing. 1. Title insurance company 2. Listing broker 3. Buyer's broker 4. Designated broker

4. Designated broker *While the title company may be responsible under a closing instructions agreement, the designated broker for each party is responsible for the correctness of the closing for the party.

Establishing a business relationship creates an exception to the ___________ . 1. CAN-SPAM Act 2. Brokerage disclosure to a buyer 3. Mail Standards Act 4. Do Not Call Registry and the Junk Fax Prevention Act

4. Do Not Call Registry and the Junk Fax Prevention Act

The ____________ estate is the parcel of real property that has an easement over another piece of property. 1. Servient 2. Master 3. Conveyance 4. Dominant

4. Dominant *The dominant estate is the parcel that receives the right (permission) from the Servient estate to use the adjacent lands. Example: "Right-of-Way" for road access

In some states, when a wife must also sign a deed in order for the husband to sell his property, the wife's interest is called __________ . 1. Lifetime homestead 2. Pur autre vie 3. Courtesy rights 4. Dower rights

4. Dower rights

A designated broker may serve as any or all of the following EXCEPT: 1. Transaction-Broker 2. Buyer's Agent 3. Seller's Agent 4. Dual Agent

4. Dual Agent

Which of the following is required in a tenancy in common relationship? 1. Each tenant must own 50% of the whole property 2. Tenants in common must obtain their interest by the same deed 3. Tenants will have the same rights of survivorship as in a joint tenancy 4. Each owner has the right to leave his share of the property to any beneficiary upon the owner's death

4. Each owner has the right to leave his share of the property to any beneficiary upon the owner's death *Tenancy in common is a situation in which two or more people have ownership interests in a property. Each owner has the right to leave his share of the property to any beneficiary upon the owner's death. Tenancy in common is different than joint tenancy because the transfer of the property to a beneficiary in the event of an owner's death is different: In a joint tenancy agreement, the title of the property is passed to the surviving owner, while in a tenancy-in-common agreement, the title can be passed to a beneficiary of the owner's choosing.

An earnest money check is held by 1. The buyer's broker until closing 2. The listing broker until closing 3. The title company until closing 4. Either the listing firm or the title company until closing

4. Either the listing firm or the title company until closing

A landlord wishes to build a neighborhood grocery store on a busy street in an area zoned for residential use. Which of the following would not be used to obtain permission for this store? 1. Conditional use permit 2. Zoning variance 3. Building permit 4. Eminent Domain

4. Eminent Domain

________ is a situation where a property owner violates the property rights of his neighbor by building something on the neighbor's land or by allowing something to hang over onto the neighbor's property. 1. Easement 2. Encumbrance 3. Attachment 4. Encroachment

4. Encroachment

A deed restriction is best described as a(n) __________ . 1. General lien 2. Specific lien 3. Constructive lien 4. Encumbrance

4. Encumbrance

Leases ___________ . 1. Expire automatically 2. Renew automatically 3. Allow the tenant to remain in possession after termination 4. Expire and renew per the terms of the lease

4. Expire and renew per the terms of the lease *While this seems straightforward, both landlord and tenant should be careful to note what the lease says about this. For example, it is not uncommon for a lease to provide that if the lease expires but the tenant remains in possession, the agreement becomes a month-to-month tenancy on the same terms as before, meaning that the rent and the rules remain the same, but the lease can be terminated by either party by giving the proper notice.

Which of the following protected classes was NOT listed in the Fair Housing Act of 1968? 1. Race 2. Ethnicity 3. Religion 4. Familial status

4. Familial status

An organization NOT engaged in the secondary mortgage market is __________ . 1. Fannie Mae 2. Freddie Mac 3. Ginnie Mae 4. Federal Housing Administration

4. Federal Housing Administration

Loans are not originated with ___________ . 1. Savings and loan companies 2. Credit unions 3. Friends 4. Federal National Mortgage Association (Fannie Mae)

4. Federal National Mortgage Association (Fannie Mae)

You convey an offer to a seller. He or she is very upset because it is from someone with children. The seller wants to sell to someone without children. You should ______________ . 1. Obey the seller's instructions and only present offers from those without children 2. Have only advertised for empty nesters 3. Refer the seller to a firm specializing in adult only sales 4. File a complaint seeking damages

4. File a complaint seeking damages

A seller provides a buyer with a Seller's Property Disclosure form ____________. 1. Filled in by seller at initial contract 2. Prior to buyer signing offer to purchase 3. Filled in with the assistance of the listing Broker 4. Filled in to the best of Seller's current actual knowledge

4. Filled in to the best of Seller's current actual knowledge

To perfect a lien against personal property, a creditor would record a(n) ____________ . 1. Bill of sale 2. Personal property mortgage 3. Attachment 4. Financing statement

4. Financing statement

A standard title insurance policy covers __________ . 1. Rights of parties in possession 2. Defects that would be revealed by a correct survey 3. Zoning restrictions 4. Forged documents

4. Forged documents

The adoption and promulgation of Standard Forms ___________ . 1. Became compulsory for Attorneys in Colorado to use Commission approved forms 2. Grants buyers and sellers a better understanding of their respective closing costs 3. RESPA came into being 4. Helps to insure the broker's compliance with the Colorado Supreme Court's decision of Conway-Bogue Realty Co. vs. Denver Bar Association

4. Helps to insure the broker's compliance with the Colorado Supreme Court's decision of Conway-Bogue Realty Co. vs. Denver Bar Association

Potential employers for property managers include all of the following EXCEPT ___________ . 1. Property owners and apartment complex owner 2. Corporations and partnerships in the real estate business 3. Independent management firms 4. Home Builders

4. Home Builders *There are many potential employers in property management, including: Many private property owners; Federal, state and local governments; Franchise owners; Corporations and partnerships in the real estate business; Independent management firms; Apartment complex owners; Shopping center owners; Real estate investment trusts.

The buyer may terminate the contract under the inspection provision ____________. 1. If the buyer has first had the property inspected 2. If the buyer provides a professional inspector's report documenting the issues 3. With no reason at all 4. If the buyer has found an unsatisfactory condition with the home

4. If the buyer has found an unsatisfactory condition with the home

A mortgage company offers the broker $100.00 for placement of a loan. This fee ___________ . 1. Is illegal 2. Is a violation of Colorado Real Estate Commission rule 3. Must be deducted from the agreed upon Real Estate Commission amount 4. Is allowed by the Real Estate Commission if the broker fully informs the party who he has a brokerage relationship with and obtains written consent of such party

4. Is allowed by the Real Estate Commission if the broker fully informs the party who he has a brokerage relationship with and obtains written consent of such party

The Torrens title system is all of the following EXCEPT __________ . 1. Requires governmental registration and a certificate 2. Is used to verify ownership and encumbrances 3. Is not commonly used in the U.S 4. Is the same as title insurance

4. Is the same as title insurance *The Torrens title system is a method of registering titles to real estate. Real estate that is recorded using this method is also called registered property or Torrens property.

The Deans had a custom built cabinet made for their family room which was not permanently attached but was made specifically to fit that space. When they sell their home, 1. They would take it since it was not attached 2. They do not have to list it as an inclusion in the listing contract 3. It becomes an emblement 4. It would stay in the home, since it was built for that space

4. It would stay in the home, since it was built for that space

The additional provisions section of a contract to buy and sell real estate is designated for ___________ . 1. Personal provisions of the brokerage firm 2. The commission payable to the brokerage firm 3. Personal disclaimers or exculpatory language of the brokerage firm 4. Items that are transaction specific resulting from the negotiations or instruction of the parties

4. Items that are transaction specific resulting from the negotiations or instruction of the parties

Two unrelated friends are buying a home together and want the property to pass to the other when one of them dies. What is the best way for them to take title? 1. Tenants in Common 2. Tenancy in Severalty 3. Tenancy by the Entirety 4. Joint Tenants

4. Joint Tenants *Joint tenancy - an estate in real estate that is owned by two or more persons, all owning equal shares with rights of survivorship.

Associate Jones has Kathy under contract to purchase Lonnie's property. Jones will receive commission from whom? 1. Buyer Kathy 2. Seller Lonnie 3. Both Kathy and Lonnie 4. Jone's employing broker

4. Jone's employing broker

Examples of confidential information under Designated Brokerage do not include: 1. Motivating factors such as why the seller is selling 2. A known fact that the seller will accept less for the property 3. A murder that occurred on the real property 4. Latent material defects

4. Latent material defects

Which of the following would NOT have an obligation to inform the seller of buyer's financial inability to perform the contract? 1. Transaction-broker, if known. 2. Buyer's agent, if known. 3. Seller's agent, if known. 4.Lender.

4. Lender.

Title insurance does not protect owners and their lenders against 1. Defects in the title for specific risks 2. Forged deeds 3. Unrecorded liens 4. Liens recorded after purchase

4. Liens recorded after purchase

A security deposit does/is NOT __________ . 1. Protection for the landlord for damage to the rented premises 2. Protection for the landlord for a breach of the lease agreement by the tenant 3. Different than the Application Deposit 4. Limited to one month's rent

4. Limited to one month's rent *A security deposit is money given to a landlord to provide some protection to a landlord for damage to the rented premises or for some other breach of the lease agreement by the tenant. A security deposit should not be confused with an Application Deposit. There is no limit on how much a landlord can charge for a security deposit.

A clause in a mortgage that provides for the assignment of rents benefits the ___________ . 1. Tenant 2. Mortgagor 3. Property Manager 4. Mortgagee

4. Mortgagee

A pay-out from the Recovery Fund will result in all of the following EXCEPT ____________ . 1. The automatic revocation of the license of the judgment debtor 2. No broker can be licensed again until the fund has been repaid in full plus interest at the statutory rate 3. No broker can be licensed again until 1-year has passed from the date of revocation 4. No pay-outs can exceed $50,000.00 per licensee, regardless of the number of judgments entered against the licensee, parcels of real estate involved, number of licensees involved, or number of persons aggrieved

4. No pay-outs can exceed $50,000.00 per licensee, regardless of the number of judgments entered against the licensee, parcels of real estate involved, number of licensees involved, or number of persons aggrieved

Breach of Warranty of Habitability by the landlord does not include __________ . 1. Unfit conditions of the premises 2. Lack of heat in the apartment 3. Flooding in the apartment 4. Noisy neighbors

4. Noisy neighbors

Of the following, who must warn a buyer about psychologically impacted properties? 1. Customer of a transaction-broker. 2. Client of a buyer agent. 3. Client of a listing agent. 4. None of the above

4. None of the above

The seller and broker may withhold which of the following material information from the buyer _______. 1. A leaking roof that has been painted over so no one can see it 2. Water in the basement which only occurs only during heavy rains 3. Foundation work which has been repaired 4. None of the above

4. None of the above *All material defects must be disclosed.

The __________ is solely responsible for the accuracy of the figures on the buyer's Closing Statement at closing. 1. Closer 2. Listing brokerage 3. Listing broker 4. None of the above

4. None of the above *Primary responsibility is with the designated broker for each individual party: the buyer's designated broker is responsible for the Buyer's Closing Statement.

The net loan proceeds of a new loan appear as a debit to the on the _____________ closing statement. 1. Buyer 2. Seller 3. Buyer and Seller 4. None of the above

4. None of the above *The net loan proceeds appear on the six column worksheet as a debit to the broker and do not appear on the Closing Statement.

The grantor or mortgagor who has defaulted on the mortgage payments and who, after foreclosure sale on agricultural property wishes to reclaim their land, may do so in Colorado within a period of ___________. 1. 75 days after the sale 2. 6 months after the sale 3. 45 days after the sale 4. None of the above

4. None of the above' *Owner's can no longer redeem property after the sale.

In the event of any controversy regarding the earnest money and things of value held by broker or closing company, unless the holder of the earnest money and things of value receive mutual instructions, broker or closing company shall __________. 1. Seek arbitration from the Colorado Real Estate Commission 2. Divide the money equally between the parties 3. Deposit the money with an attorney 4. Not take any action but instead may await any proceeding

4. Not take any action but instead may await any proceeding

The Colorado documentary fee is based on ___________ . 1. One cent for each $1,000 of sales price 2. One dollar for each $1,000 of sales price 3. Ten cents for each $10,000 of sales price 4. One cent for each $100 of sales price

4. One cent for each $100 of sales price

Which of the following is true: 1. Only Firm Name, Address and Phone Number may be added to the Commission- approved forms. 2. Only Firm Name, Address, Phone Number and email address may be added to the Commission-approved forms. 3. Only Firm Name, Address, Phone Number, Email address and Trademark may be added to the Commission-approved forms. 4. Only Firm Name, Address, Phone Number, Email address,Trademark and other identifying information may be added to the Commission-approved forms

4. Only Firm Name, Address, Phone Number, Email address,Trademark and other identifying information may be added to the Commission-approved forms

If a seller has actual knowledge that the property is in foreclosure, the seller must fill out the Contract to Buy and Sell Residential (CO Foreclosure Protection Act) 1. There is no Foreclosure Property Addendum, listing agents must not mention that the property is in foreclosure. 2. Only if the property is residential 3. Only if the property is commercial 4. Only if the property is residential and the buyer is an investor

4. Only if the property is residential and the buyer is an investor *If a seller has actual knowledge that the property is in foreclosure, the Contract to Buy and Sell Residential (CO Foreclosure Protection Act) must be used if the property is residential and the buyer is an investor.

An agent with less than two years experience can expect the employing broker to __________ . 1. Be or assign a mentor 2. Provide training within weekly sales meetings 3. Co-Sign all contracts 4. Personally, or through an assigned experienced licensee, attend closings or be available for assistance

4. Personally, or through an assigned experienced licensee, attend closings or be available for assistance

The lender who granted a construction loan to a builder would provide the builder with the final installment payment upon __________ . 1. Receipt of a final inspection of the premises 2. Notice of completion 3. Receipt of the deed 4. Proof of payment of pending mechanics lien

4. Proof of payment of pending mechanics lien

A valid 1031 Exchange requires that ________ . 1. The properties must be of equal value 2. The exchange requires back-to-back closings 3. The exchange property must be multi-family type 4. Properties must be of like-kind and held for income or investment purposes

4. Properties must be of like-kind and held for income or investment purposes

If a broker associate is classified as an independent contractor for income purposes, the employing broker must _________ . 1. Withhold income taxes from the associate's commission income 2. Pay part of the Social Security taxes on the associate's commission income 3. Provide a W-2 at the end of the year 4. Provide a 1099 at the end of the year and the associate pays the total Social Security tax

4. Provide a 1099 at the end of the year and the associate pays the total Social Security tax *All income and social security tax payment and accounting is the responsibility of the independent contractor.

If Buyer is to pay all or part of the purchase price by obtaining a new loan, buyer agrees to comply with all of the following EXCEPT _________. 1. Satisfy the reasonable requirements of lender 2. NOT withdraw the loan application 3. Not cause any change in circumstances which would prejudice lenders' approval 4. Provide seller with a letter that the loan application deadline was met

4. Provide seller with a letter that the loan application deadline was met

Mrs. Smith had to pay Mr. Jones $50,000 in excess of Mr. Joneses' out-of-pocket damages from a court order when Mrs. Smith breached her contract with Mr. Jones. What is the $50,000 called? 1. Specific performance 2. Liquidated damages 3. Compensatory damages. 4. Punitive damages

4. Punitive damages

In a quitclaim deed, the covenant of seizin means __________ . 1. You warrant that you are well seized of the property. 2. You guarantee that no other person has the right to occupy the property. 3. The Seller and all previous owners guarantee and warrant the deed is correct. 4. Quitclaim deeds do not have a covenant of seizin.

4. Quitclaim deeds do not have a covenant of seizin. *Only warranty deeds contain warrants or covenants (promises). Quitclaim deeds have no covenants at all.

The use of more than one appraisal method with different weights assigned to each method describes ____________ . 1. The quantity survey method 2. The development method 3. A certified appraisal 4. Reconciliation

4. Reconciliation

Not included in "normal wear and tear" is 1. Stained carpet 2. Dirty window screens 3. Hole in the wall 4. Repair needed to fire damaged oven

4. Repair needed to fire damaged oven

As part of a purchase agreement, the seller agreed to complete a roof repair, prior to closing. The seller has now changed his or her mind and refuses to complete the repair. What rights does the buyer have? 1. Reformation 2. Novation 3. Accord and Satisfaction 4. Rescission

4. Rescission

If an owner fails or refuses to consummate a transaction through no fault or neglect of the purchaser, the broker must ______________. 1. Divide the earnest money between the broker and seller as agreed to within the listing contract 2. Ask an attorney representing one of the parties to prepare an earnest money distribution agreement 3. Obtain a signed release of earnest money by both parties before returning the earnest money to the buyer 4. Return the deposit to the purchaser at once

4. Return the deposit to the purchaser at once

____________ is an example of what is NOT included in an operational guideline. 1. Broken water pipe 2. Fire threat 3. Tenant dispute over parking 4. Roof replacement

4. Roof replacement *Roof replacement details would be found in the Landlord Policies

The Gross Rent Multiplier is _________ . 1. Gross Income * Sales Price 2. Sales Price / Market Value 3. Gross Rent * Sales Price 4. Sales Price / Gross Rent

4. Sales Price / Gross Rent

The Exclusive Right to Sell listing contract is between __________. 1. seller and buyer 2. Seller and principal 3. Seller and listing broker 4. Seller and the brokerage firm

4. Seller and the brokerage firm *The agreement itself is owned by the brokerage firm.

An inappropriate source of square footage would be which of the following? 1. Prior appraisal 2. Building plans 3. Assessor's office 4. Seller measurements

4. Seller measurements

Which of the following would be an inappropriate source of square footage would be? 1. Prior appraisal 2. Building plans 3. Assessor's office 4. Seller measurements

4. Seller measurements

Before ratification of a contract for housing sale or lease, sellers and landlords must do all the following except _______. 1. Give the "Protect Your Family From Lead In Your Home" pamphlet to buyer 2. Disclose any known information concerning lead-based paint or lead-based paint hazards. 3. Provide any records and reports on lead-based paint and/or lead-based paint hazards which are available to the seller or landlord 4. Sellers must provide homebuyers a 30-day period to conduct a paint inspection or risk assessment for lead-based paint or lead-based paint hazards.

4. Sellers must provide homebuyers a 30-day period to conduct a paint inspection or risk assessment for lead-based paint or lead-based paint hazards.

A Colorado real estate license is required when ________________. 1. A regularly salaried employee of an owner of an apartment building or complex acts as an on-site manager 2. A real estate broker licensed in another state who receives a share of a commission or finder's fee on a cooperative transaction from a licensed Colorado broker 3. A regularly salaried employee of an owner of condominium units who acts as an on-site manager 4. Selling time-shares

4. Selling time-shares

A real estate license is required when ___________ . 1. Selling new homes as a salaried employee of a home builder partnership 2. A regularly salaried employee of an apartment complex acts as an on- site manager 3. A person is the manager of a Homeowner Association 4. Selling time-shares

4. Selling time-shares

Net loan proceeds are a ________. 1. Credit to the buyer and a debit to the broker 2. Not entered on the worksheet. 3. Single-entry credit to the broker 4. Single-entry debit to the broker

4. Single-entry debit to the broker *All lender's new loan statement entries are single- entry. The bottom line amount (remaining funds after all items on the list have been paid) is then entered as a deposit (debit) into the broker column. Memory key: Broker credit = Broker Payout, Broker debit = Money deposited into the broker (closer) account to be used for the transaction

Which of the following is the least effective identification for a property? 1. Rectangular survey 2. Lot-and-block 3. Metes and bounds 4. Street address

4. Street address

When a complaint against a licensee is received by the Colorado Real Estate Commission, said licensee MUST __________. 1. Surrender his or her license 2. Pay a fine 3. Appear before the Real Estate Commission within 30 days 4. Submit a written response

4. Submit a written response

A ___________ is "good funds" at closing. 1. Title company check 2. Corporate check 3. Personal check 4. Teller's check

4. Teller's check *"Good funds" must be available immediately from any bank and include cashier's checks, teller's checks, and federal wire transfers.

A property that is co-owned without the right of survivorship but has undivided interests is an example of ______________ . 1. A joint tenancy 2. Community property 3. Tenancy by the entirety 4. Tenancy in common

4. Tenancy in common *Tenancy in common allows two or more people ownership interests in a property. Each owner has the right to leave his share of the property to any beneficiary upon the owner's death. Tenancy in common is different than joint tenancy because the transfer of the property to a beneficiary in the event of an owner's death is different: in a joint tenancy agreement, the title of the property is passed to the surviving owner, while in a tenancy-in-common agreement, the title can be passed to a beneficiary of the owner's choosing.

In order to accommodate a handicap, a tenant installed handrails in the public hallways leading to the tenant's apartment. As to the installation of the handrails, the __________ . 1. Landlord must reimburse the tenant's costs 2. Tenant is not allowed to install handrails 3. Tenant must pay the landlord an additional security deposit 4. Tenant has acted within the law but must remove them when the tenancy ends

4. Tenant has acted within the law but must remove them when the tenancy ends

As an agent, you are obliged to disclose ____________ . 1. That the seller is infected with acquired immune deficiency syndrome 2. To the buyer that someone was previously murdered on the premises 3. That the seller's wife recently committed suicide on the premises 4. That radon ratings are higher than the EPA standard

4. That radon ratings are higher than the EPA standard *Elevated Radon readings are a material fact, which facts must always be disclosed. The others are psychological impacts. Review disclosures that a seller's agent must give to buyers.

Two brokers from different companies have gotten together to discuss what commission they will charge. This is prohibited by ___________ . 1. RESPA 2. Equal Credit Opportunity Act 3. Truth-In-Lending 4. The Sherman Anti-Trust Act

4. The Sherman Anti-Trust Act *Common antitrust violations that are associated with the real estate industry include price fixing, boycotting competitors, and allocating customers or markets. Sherman Anti-Trust

An owner of real property died one month after signing a three-month Exclusive Right-to-Sell Listing contract. The day after the owner's death, the listing agent procured a buyer for the full list price. The administrator of the owner's estate does not want to sell. What are the rights of the parties? 1. The buyer can obtain specific performance 2. The listing broker has earned a commission 3. The listing broker can obtain specific performance 4. The administrator need not sell and is not liable for a commission

4. The administrator need not sell and is not liable for a commission

Preparation of the warranty deed is charged to whom? 1. The buyer 2. The seller 3. The lender 4. The broker

4. The broker *Conway-Bogue, a broker may not charge the public for legal document preparation.

When brokerage companies go out of business, . 1. They no longer have business on the books 2. All escrow funds belong to the broker 3. The broker must return all money belonging to others to the owner 4. The broker must transfer all money belonging to others to a new brokerage company

4. The broker must transfer all money belonging to others to a new brokerage company

A For Sale by Owner brokerage relationships disclosure document requires _____________. 1. The FSBO to pay a commission 2. The FSBO to sign an Exclusive Right-To- Sell Listing Contract 3. The FSBO to sign an Exclusive Listing Contract 4. The broker to disclose his/her relationship with the buyer

4. The broker to disclose his/her relationship with the buyer

In preparing for a Commission audit, the ending bank statement cash balance must be reconciled with all of the following records EXCEPT _____________ . 1. The journal 2. All open ledgers 3. If applicable, the broker's ledger 4. The broker's operating bank account checkbook balance

4. The broker's operating bank account checkbook balance

The listing broker has presented an offer to the sellers who accept the offer. At that moment the broker receives a call stating that the offer is withdrawn 1. The proposed contract is void 2. Since the seller accepted the contract it is valid 3. The buyers may withdraw the offer at any time 4. The buyers may only withdraw the offer prior to the listing broker delivering it to the sellers

4. The buyers may only withdraw the offer prior to the listing broker delivering it to the sellers *The listing broker has presented an offer to the sellers who accept the offer (verbally). At that moment the broker receives a call stating that the offer is withdrawn. The buyers may withdraw the offer at any time, until they learn of acceptance (once the sellers sign the contract the buyers may no longer withdraw the offer).

John and Mary Apton list their home for $152,000. There is an appurtenant easement to access a large lake which is deeded. A coal fired power plant is slated to open 5 miles from the property next year. An environmental impact statement is due on March 7. Agent Pacheco presents an offer to the Aptons. It is a land contract for $142,000 with an 8% interest rate due and payable in 10 years. It is accepted. The offer is contingent on the environmental impact results. The environmental impact report showed that the home value would likely decrease due to the opening of the coal fired power plant. How does this affect the contract? 1. The sellers must reduce the offer price. 2. The contract would be void. 3. The contract is automatically terminated. 4. The buyers may proceed.

4. The buyers may proceed.

In the Contract to Buy and Sell 1. The buyer pays for the cost of the appraisal 2. The seller pays for the cost of the appraisal 3. The cost of the appraisal is split between buyer and seller 4. The cost of the appraisal fee is negotiated between the buyer and seller

4. The cost of the appraisal fee is negotiated between the buyer and seller *(in practice, the buyer usually pays for the appraisal fee)

The __________________ determines the relationship between the public and the employed brokers 1. The owner of the company. 2. The Real Estate Commission of Colorado. 3. The buyer or the seller. 4. The employing broker.

4. The employing broker.

Earnest money is held by 1. The broker 2. The listing broker 3. The title company 4. The entity named in the contract

4. The entity named in the contract *The Contract to Buy and Sell gives the authority to a named entity, normally either the broker or the title company.

Errors and Omissions insurance must be purchased through _________ . 1. A geographical E&O carrier for your region 2. Only the group E&O company that the real estate commission contracts with 3. E&O is not a statutory requirement, therefore need not be purchased 4. The group E&O company that the real estate commission contracts with or any independent if the coverage complies with the minimum requirements established by the commission

4. The group E&O company that the real estate commission contracts with or any independent if the coverage complies with the minimum requirements established by the commission

The holdover clause in the listing 1. provides that the broker will receive a commission if the listing sells within 30 days of the expiration date 2. provides that the broker will receive a commission if the listing sells within 60 days of the expiration date 3. provides that the broker will receive a commission if the listing sells within 90 days of the expiration date 4. The holdover clause in the listing is negotiable

4. The holdover clause in the listing is negotiable

A listing contract is preserved in whose transaction files? 1. Both the listing and selling brokers 2. The title company, listing broker, and selling broker 3. The selling broker only 4. The listing broker only

4. The listing broker only

When REALTORS® prepare opinions of real property value or price, other than in pursuit of a listing or to assist a potential purchaser in formulating a purchase offer, such opinions shall include all of the following EXCEPT ___________ . 1. Identification of the subject property 2. Date prepared 3. The defined value or price 4. The opinion is considered an appraisal

4. The opinion is considered an appraisal

A promissory note for earnest money should be made payable to ______________. 1. The listing broker 2. The listing brokerage firm 3. The title company 4. The party holds the earnest money as agreed to in the purchase contract

4. The party holds the earnest money as agreed to in the purchase contract *

Which of the following is not considered a "material fact" which must be disclosed? 1. Leaking roof. 2. A foundation problem that has been corrected. 3. Trees that are diseased. 4. The property boundary dimensions.

4. The property boundary dimensions. *Material facts are generally adverse and either physical, title, or environmental defects.

Unless otherwise agreed to, all earnest money shall be deposited in the broker's escrow or trust account within _____________ . 1. 24 hours of contract acceptance 2. 5 days of contract acceptance 3. A reasonable amount of time 4. The third business day following the day on which broker received notice of acceptance of a sales contract

4. The third business day following the day on which broker received notice of acceptance of a sales contract

A prescriptive easement arises in all of the following EXCEPT __________ . 1. In the same manner as adverse possession or "squatters" rights 2. When the owners of the dominant tenement make a certain use of servant tenement for a long enough period of time 3. Through state law 4. Through the owner transferring title to the tenant

4. Through the owner transferring title to the tenant

An individual with an undivided interest in a unit coupled with the exclusive right of occupancy for either a designated or floating period each year, along with an interest in common areas, such as the use of a pool or tennis courts, has a _____________ . 1. Condominium 2. Cooperative 3. Partnership 4. Time-share

4. Time-share

Which of the following is NOT a primary function of the secondary market? 1. To make funds available anywhere in the USA 2. To give lenders a place to sell their 3. To help stabilize the real estate market 4. To loan money directly to borrowers

4. To loan money directly to borrowers

When acting in a licensed capacity or when a licensee sells or buys real property on the licensee's own account, such licensee shall NOT have a continuing duty _________. 1. To disclose any known conflict of interest that may arise during the transaction 2. To disclose the fact that they are a real estate licensee 3. To disclose any known material defect in the property 4. To use a "Licensee Buy Out Addendum"

4. To use a "Licensee Buy Out Addendum"

When acting in a licensed capacity or when a licensee sells or buys real property on the licensee's own account, such licensee shall NOT have a continuing duty _____________ . 1. To disclose any known conflict of interest that may arise in the course of the transaction 2. To disclose the fact that they are a real estate licensee 3. To disclose any known material defect in the property 4. To use a "Licensee Buy Out Addendum"

4. To use a "Licensee Buy Out Addendum"

The EPA recommended radon safe zone is ___________ . 1. Up to 1 pCi/L 2. Up to 2 pCi/L 3. Up to 3 pCi/L 4. Up to 4 pCi/L

4. Up to 4 pCi/L *pCi/L = picoCuries per Liter of Air.

To assess and receive broker mark-ups and/or other compensation for services performed by any third party or affiliated business entity the broker must first do the following EXCEPT: 1. Fully account for the amounts or percentages of compensation assessed 2. Obtain prior written consent 3. Retain records that verify disclosure and consent 4. Use the appropriate form to notify the Commission of your intentions

4. Use the appropriate form to notify the Commission of your intentions

4. Use the appropriate form to notify the Commission of your intentions *To assess and receive broker mark-ups and/or other compensation for services performed by any third party or affiliated business entity the broker must first: Fully account for the amounts or percentages of compensation assessed, Obtain prior written consent and Retain records that verify disclosure and consent.

If a Lead-Based Paint Disclosure (Sales) Form is not signed by the seller and required real estate licensees prior to accepting an offer on a residential dwelling for which a building permit was issued prior to January 1, 1978, the contract is 1. Voidable by the seller 2. Valid unless challenged 3. Lacking and possibly amended or extended 4. Valid, the LBP disclosure must be signed by the date set forth in the contractV

4. Valid, the LBP disclosure must be signed by the date set forth in the contract

When could the sale of condominium units be considered the sale of a security? 1. When there is a special charge of the use of the golf course, swimming pool and other common elements 2. When the condominium complex has more than 100 units 3. When some of the condominiums are offered for rent in vacation areasCORRECT ANSWER 4. When money collected is pooled and disbursed to owners according to their proportionate interests

4. When money collected is pooled and disbursed to owners according to their proportionate interests

When may a transaction-broker act as an agent for a seller or buyer? 1. When selling an in-house listing to the buyer. 2. When negotiating an offer between both buyer and seller. 3. When the buyer or seller checks the box in the employment agreement allowing this change during the contract term. 4. When single agency is created in writing, ending a transaction-broker relationship

4. When single agency is created in writing, ending a transaction-broker relationship

In the Contract to Buy and Sell __________________. 1. The buyer pays for the appraisal 2. The seller pays for the appraisal 3. Payment of the appraisal is split between buyer and seller 4. Who pays for the appraisal fee is negotiated between the buyer and seller

4. Who pays for the appraisal fee is negotiated between the buyer and seller

A city rezoned the east end of the downtown area as residential, but a family-owned grocery store continued to operate. This is an example of ____________. 1. a conditional use permit 2. rezoning 3. a variance 4. a nonconforming use

4. a nonconforming use *Nonconforming Use - The existing use (for example, residential, commercial, agricultural, light industrial) of a parcel of real estate that is now zoned for other kind of use Generally, a nonconforming use is permitted only if the use was legally established but now violates a zoning ordinance because the property was rezoned or the law was changed. For example, a corner parcel that has been used for a gasoline station for years might lie in an area now zoned for residential use only. The nonconforming use will be allowed ("grandfathered in"), but if the station were torn down or abandoned for a certain period of time, only residential use would be allowed going forward

Under the contract to buy and sell real estate, the purchaser can ___________. 1. freely assign the contract 2. never assign the contract to another 3. assign the contract with an additional deposit 4. add the option to assign in the additional provisions and only execute if seller accepts.

4. add the option to assign in the additional provisions and only execute if seller accepts.

The Colorado Fair Housing Act prohibits discrimination based on some of the following EXCEPT ___________. 1. race 2. marital status 3. sex 4. age

4. age *The Colorado Fair Housing Act prohibits discrimination based on race, marital status, sex and more

You can transfer all your ownership in a property 1. by signing a general warranty deed. 2. by signing a quitclaim deed. 3. by signing a special warranty deed 4. all of the above are true

4. all of the above are true

If required _______ must sign the lead base paint disclosure. 1. listing broker 2. selling broker 3. transaction broker 4. all parties

4. all parties

All of the following are considered unfair housing practices except _____________. 1. having an oral inquiry concerning the number of children in the family. 2. writing an ad that states "difficult for wheel chairs." 3. stating in an ad that the area is a "preferred area" for people who like to speak more than one language. 4. an ad that states, "college students need not apply.

4. an ad that states, "college students need not apply. *An ad that states, "college students need not apply" is not in violation of Fair Housing laws. Inquiring about the number of children in the family, stating difficult for wheelchairs and stating that the area is a preferred area for bilingual people is in violation.

If you list a property which has a lease on the security system, a licensee should: 1. check to see if the lease is transferable 2. if it is assumable, a purchase contract would state the terms in "Additional Provisions". 3. if it is leased, you do not check the Inclusions box marked, "security systems". 4. both (1) and (2) are true.

4. both (1) and (2) are true.

An offer or counteroffer may be terminated by law by which one of the following: 1. death of one of the parties 2. property going into foreclosure 3. bankruptcy of one of the parties 4. both 1 and 3 are correct

4. both 1 and 3 are correct

A broker may add a clause to additional provisions of the Contract to Buy and Sell Real Estate 1. limiting the broker's ability for confirming zoning 2. requiring the seller to provide the property in professionally clean condition at closing 3. requiring the seller to have a professional clean and service the furnace prior to closing 4. both 2 and 3 are correct

4. both 2 and 3 are correct

Brokers, as a rule, use ___________ contracts. 1. implied 2. expressed 3. written 4. both 2 and 3 are correct

4. both 2 and 3 are correct

The Licensee Buy Out Agreement _____________. 1. states that the seller will NOT pay a commission 2. states that the seller will NOT be liable for any loss or expense incurred by the broker/buyer after closing 3. states that the seller will pay a commission 4. both a and b are correct

4. both a and b are correct

When the earnest money will be held by an entity that is not a brokerage firm involved in the transaction, the Closing Instructions should be signed __________. 1. at the closing 2. by the Title deadline 3. prior to closing 4. by the time earnest money is delivered to the entity

4. by the time earnest money is delivered to the entity

When performing a sales comparison appraisal, the appraiser will do all of the following EXCEPT: 1. compare properties with the same square footage and similar features and style 2. use properties that have sold within the past 6 months 3. make adjustments to properties having larger lots or garages 4. compare properties that are the exact same age, same square footage, and located in different cities

4. compare properties that are the exact same age, same square footage, and located in different cities *An appraiser would not use a comparable property that matches only in age and square footage and located in different cities from the one being appraised.

A water right that entitles the owner to divert a specified flow of water from its source for immediate use is a: 1. diversion right 2. a priority right 3. prior appropriated right 4. direct flow right

4. direct flow right

A licensee must 1. offer all forms of brokerage relationship to potential clients/customers. 2. disclose all forms of brokerage relationship to potential clients/customers. 3. create a transaction-broker relationship in writing. 4. disclose those brokerage relationships identified in office policy along with a statement that different brokerage relationships are available.

4. disclose those brokerage relationships identified in office policy along with a statement that different brokerage relationships are available.

You do not need a real estate license if you 1. for a fee, sell a business opportunity that includes a lease. 2. for a fee, offering a property for sale (but the property never sells). 3. for a fee, giving out information on properties for rent. 4. for a fee, offer to sell a gas lease.

4. for a fee, offer to sell a gas lease.

An employing broker does all of the following EXCEPT 1. maintain trust accounts. 2. develop an office policy manual. 3. high level of supervision for brokers who have been in the business for less than 2 years. 4. give the seller earnest money when the seller asks for its release.

4. give the seller earnest money when the seller asks for its release

The following is true EXCEPT ____________. 1. listing contracts can be assigned, with the consent of the owner, to another company if the listing company goes out of business. 2. you must have a real estate license to sell a modular home that is attached to land. 3. your license becomes inactive if you do not have errors and omissions insurance. 4. having a company logo and address on the body of the purchase contract makes the logo and address a legal part of the contract and may be countered.

4. having a company logo and address on the body of the purchase contract makes the logo and address a legal part of the contract and may be countered. *Listing contracts can be assigned, with the consent of the owner, to another company if the listing company goes out of business. You must have a real estate license to sell a modular home that is attached to land. Your license becomes inactive if you do not have errors and omissions insurance

All the following are true regarding a suit to quiet title EXCEPT: 1. requires court action 2. owner cannot convey title until cloud on title is removed 3. leads to a judge's decision on the matter 4. is the same as a lis pendens

4. is the same as a lis pendens *A lis pendens is not the same as a suit to quiet title as lis pendens is notice that action has been filed on the property due to someone claiming an interest in the property.

All of the following would be considered as due diligence EXCEPT: 1. licensee advises seller on aspects of property that could affect value 2. licensee reviews documents to ensure they are complete 3. disclosures required by law have been provided by licensee 4. licensee recommends buyer depend on seller provided property condition disclosure in lieu of inspections

4. licensee recommends buyer depend on seller provided property condition disclosure in lieu of inspections *A licensee should never encourage the buyer to depend on property condition disclosure in lieu of performing inspections.

When an appraiser is using the sales comparison approach, all of the following would trigger an adjustment to the comparable EXCEPT: 1. physical features and amenities 2. market conditions 3. property rights 4. listing price

4. listing price

The "Walk-through and Verification of Condition" paragraph of the Commission-approved Contract to Buy and Sell Real Estate (Residential): 1. allows the buyer to walk-through unannounced to verify the true condition of the property. 2. applies only to new construction. 3. requires the seller to correct any newly identified problems before closing. 4. may be deleted if by Counterproposal from the seller signed by the buyer

4. may be deleted if by Counterproposal from the seller signed by the buyer *The CBS allows the buyer the right to walk thru the property prior to closing to verify the condition of the property. If the seller refuses he/she will have to counter the contract and the buyer will agree by signing the counter proposal. 19.4. Walk-Through and Verification of Condition. Buyer, upon reasonable notice, shall have the right to walk through the Property prior to Closing to verify that the physical condition of the Property and Inclusions complies with this Contract.

An ad valorem tax ___________. 1. is deductible for income tax purposes by investors only. 2. is a real property tax assessed in some special improvement districts. 3. is a real property tax that is only paid by those who receive the benefit. 4. means a tax levied according to the value of the property.

4. means a tax levied according to the value of the property.

A listing contract grants a "Holdover Period". It is _______________. 1. 60 days 2. 90 days 3. 180 days 4. negotiable.

4. negotiable.

The Electronic Signatures in Global and National Commerce Act (ESIGN) is a federal law that was passed in 2000 to promote interstate and foreign commerce, stating that a contract, signature, or other record relating to a transaction may 1. be used in all forms of communications with local city, state and federal governments that provide public services. 2. be denied legal effect if one party refuses to use the electronic digital platform. 3. be used in all forms of communications. 4. not be denied legal effect or enforceability solely because it is in electronic form.

4. not be denied legal effect or enforceability solely because it is in electronic form.

Brokers are 1. obligated to verify the accuracy and completeness of statements made by buyers and sellers 2. obligated to verify the accuracy and completeness of statements made by buyers only 3. obligated to verify the accuracy and completeness of statements made by sellers only 4. not obligated to verify the accuracy and completeness of statements made by buyers and sellers

4. not obligated to verify the accuracy and completeness of statements made by buyers and sellers

A lead based paint disclosure must be given to a buyer ______________. 1. of any property 2. of any property with improvements completed after Jan. 1, 1978 3. of any property with a building permit issued after Jan. 1, 1978 4. of any property with a building permit issued before Jan. 1, 1978

4. of any property with a building permit issued before Jan. 1, 1978

If you own a motel 1. you are bound by the Real Estate Commission rules on trust accounts. 2. the agreement you have with customers is a lease. 3. you are required to have a real estate license. 4. owning a motel does not require a real estate license.

4. owning a motel does not require a real estate license.

An Improvement Survey differs from an Improvement Location Certificate primarily in 1. affirmative certification of the survey by the surveyor. 2. no significant difference. 3. non-acceptability of the improvement location certificate in residential transactions. 4. the precise boundary locations of the survey

4. the precise boundary locations of the survey

On the Exclusive Right to Sell Contract, if a buyer forfeits his earnest money check, ___________. 1. the seller gets all the earnest money 2. the seller must split the earnest money equally with the listing broker 3. the seller and broker split the difference after the broker expenses are deducted 4. the seller and broker decide who gets the earnest money by checking the box on the contract

4. the seller and broker decide who gets the earnest money by checking the box on the contract *Exclusive Right-to-Sell Contract and listing Contract, Forfeiture of Payments The seller and broker decide who gets the earnest money by checking the box on the contract.

All of the following are ways a seller can handle multiple offer situations EXCEPT: 1. the seller accepts the most favorable offer out of the offers received 2. the seller counters the offer closest to the price and terms needed by the seller 3. the seller requests all buyers to make their highest and best offer by a certain time and date 4. the seller counters more than one buyer's offer at the same time

4. the seller counters more than one buyer's offer at the same time

The Colorado Common Interest Ownership Act includes all of the following EXCEPT _________. 1. condominiums. 2. cooperatives. 3. subdivisions with common interest ownership of pools and tennis courts.CORRECT ANSWER 4. trailer parks.

4. trailer parks. *The Colorado Common Interest Ownership Act includes condominiums, townhouses and cooperatives

Under the Equal Credit Opportunity Act, lenders are prohibited from discriminating based on all of the following EXCEPT: 1. marital status 2. age 3. receiving public assistance 4. work history

4. work history *Considering work history is not an item that is protected against discrimination under the Equal Credit Opportunity Act

Credit union accounts are suitable for __________ . 1. Earnest money deposits 2. Security deposits 3. Rental receipts 4. A company's operating account 5. All of the above

5. All of the above

Which of the following are methods of describing the location of a parcel of land? 1. Metes and bounds 2. Rectangular survey system 3. Recorded plat 4. Assessor's parcel number 5. All of the above are correct

5. All of the above are correct

In checking the title to a parcel, which of the following would the title examiner ignore? 1. Grantor-Grantee index 2. Lis Pendens filings 3. Judgment rolls 4. Mechanic's lien filings 5. The examiner would check all of the items listed.

5. The examiner would check all of the items listed.

Placed on a debtor's real and personal property until a judgment is paid in full. (Can become a general lien until paid in full.)

Abstract of Judgment

The borrower is called the trustor and the lender is the __________ in a deed of trust.

Beneficiary

The practice of inducing panic selling in a neighborhood for financial gain is known as _____________ .

Block busting

Zoning that permits a higher use as well as a lower use or the designated use.

Cumulative Zoning

Broker Dave was guilty of______________ funds when he placed the tenant's rent money in his personal account.

Commingling

Special permission for a use to exist where the current zoning would not normally allow it.

Conditional Use Permit

The acceptance of a fee from the selling broker would make you the ________.

Cooperating broker

The acceptance of a fee from the selling broker would make you the _______________.

Cooperating broker

The employing broker of your firm is taking a listing and appoints another experienced broker to supervise the transaction. That person would be the _________.

Designated broker

The employing broker of your firm is taking a listing and appoints another experienced broker to supervise the transaction. That person would be the _______________.

Designated broker

_____________________ prohibits creditors from discriminating against credit applicants on the basis of race, color, & religion, to name a few.

ECOA (The Equal Credit Opportunity Act)

Once a contract is signed by all parties, the __________ deposit must be deposited with either the title company or the brokerage firm within 3 days.

Earnest Money

A buyer's agent always must follow the instructions of a buyer, even if it means writing a contract that is not "in good faith". TRUE OR FALSE

FALSE

Once a broker and the seller agree on a price and sign a mutually acceptable purchase agreement, the broker/salesperson will collect the earnest money and deposit it in an _____________ account with the title company.

Escrow

Zoning that prohibits a specific use or zoning that may unintentionally exclude minorities or low-income people.

Exclusionary Zoning

A TB may disclose previous non-successful counters with new buyers in order to insure the new buyers make an offer acceptable to seller. TRUE OR FALSE

FALSE

The facilitator is being paid by the seller. The buyer offers $180,000 for the seller's home, and tells the facilitator in confidence that if the seller counters at $190,000, the buyer would accept. Since the facilitator is being paid by the seller, he or she is obligated to inform the seller of the buyer's willingness to accept a counteroffer of $190,000. TRUE OR FALSE

FALSE

There is no difference between a CMA and an appraiser's appraisal for a bank. TRUE OR FALSE

FALSE

Under Colorado license law, a broker may act as a dual agent under certain circumstances. TRUE OR FALSE

FALSE

You cannot call expired listings to see if you can list the property until 5 days have passed in order to allow the previous listing agent time to re-list the property. TRUE OR FALSE

FALSE

You may borrow from a trust account if you can return the money, if needed. TRUE OR FALSE

FALSE

You will be an employee of your managing broker. TRUE OR FALSE

FALSE

Your clients' children who weigh less than 40 lbs do not have to be in a "child seat" while you show property, if the parents don't care. TRUE OR FALSE

FALSE

A broker may omit part or all of any provisions in the Commission-approved contracts so long as the provision's caption or heading is unaltered on the form followed by the words "OMITTED". TRUE OR FALSE

FALSE *A broker may only omit applicable sections

A transaction-broker working with both seller and buyer in the same transaction must advise each party what fees each should include in the contract. TRUE OR FALSE

FALSE *The TB can assist the parties in complying with the terms and conditions of any contract including closing the transaction. The T-B can help fill out and explain contracts, give the parties comparative market analysis, and all other transaction related duties. What a T-B cannot do is advise either party on what should be offered/accepted. He or she cannot help one party to the detriment of the other. For example: "Should I have the seller pay for having the home professionally cleaned?" does not get a "Yes" answer but rather, "You can put in the offer whatever you like!" The T-B cannot suggest to the buyer to have the seller clean the home, or say such things as "Yes you can, but I think it would blow the deal." A T-B helps communicate the negotiations, but does not give advice on what to negotiate. Advising 'how to negotiate' is an agency relationship.

A broker has the same right as everyone else and can record a listing contract to stop a sale which is occurring without the broker's participation. TRUE OR FALSE

FALSE *Prohibited Remedies for Compensation. No licensee shall file a lien, a lis pendens or record a listing contract to secure the payment of a commission or other fee associated with real estate brokerage duties in a residential transaction. A licensee involved in a residential transaction shall not cause the title to a property to become clouded or otherwise interfere with the transfer of title when the licensee is not a principal in the transaction

If a buyer broker gets a property under contract and then the sellers change their mind and will not close, the buyer owes the buyer broker 1/2 of the returned earnest money TRUE OR FALSE

FALSE *Contract to Buy and Sell - Return of Earnest Money

James and Julie Smith own property as tenancy by the entirety. True or false, when Julie dies, she can leave her share to children from a previous marriage? TRUE OR FALSE

FALSE *If tenancy by entirety exists, and one spouse dies, the remaining spouse receives the deceased spouse's interest by the right of survivorship.

Jerry sells one-half (1/2) of his property to Joan. True or false, this would create Joint Tenancy?

FALSE *Joint Tenancy requires unity of title, time, interest, and possession. Since Jerry owned the property first and then sold part of it to Joan, the four unites are not created. This scenario would create a Tenancy in Common.

Verbal leases are invalid? TRUE OR FALSE

FALSE *Verbal leases for under one year are valid.

_____________ is a federal law designed to subject nonresident aliens and foreign corporations to U.S. Income tax upon their gain from the disposition (sale) of real property in the U.S.

FIRPTA (Foreign Investment in Real Property Tax Act)

Lenders can hire brokers to prepare an opinion of value which will be used to determine the buyer's loan ratios. TRUE OR FALSE

False

Your company has a policy that all transactions shall be as a transaction broker. When you list your own personal residence, you must act as a TB. TRUE OR FALSE

False

Protection applied to any person who is in the process of securing legal custody of any individual who has not obtained the age of 18 years is known as ______________ .

Familial Status

Flat land adjacent to waterways that is subject to overflow and subject to government control

Flood plain

A claim against all of the debtor's personal and real property

General Lien

A tenancy for years whereby a tenant leases land and usually improves it. When the lease is up, the landlord gets the improvements unless otherwise stated.

Ground Lease

US Department of Housing & Urban Development is also known as _________ .

HUD

The________ is a standard government real estate form that was once used by the settlement agent to itemize all charges imposed upon a borrower and seller for a real estate transaction and is still used for reverse mortgages.

HUD1

Having a physical or mental impairment that substantially limits one or more major life activities is known as _______________ .

Handicapped

A lien against the property without the owner's consent.

Involuntary Lien

A______ is money paid to someone who is not a party to the contract, and thus may be a violation of license law and/or RESPA

Kick back

Legal recourse is jeopardized due to delay.

Laches

The sum of the balances on each ___________ should be the same as the balance in the broker's journal, which is the same as the balance in the trust account.

Ledger Record

An existing use permitted from a previous usage despite zoning changes where the use no longer conforms or is permitted.

Legal Nonconforming Use

Notice to the public that legal action affecting a particular piece of property is pending.

Lis Pendens

The landowner's right to use and enjoy water when their property borders a lake, pond or sea.

Littoral Rights

Tenant pays the base rent plus a portion of the operating expense of the building, such as utilities.

Net Lease

Tenant pays the base rent plus a portion of the operating expenses of the building and taxes and insurance.

Net Net Lease

Used with commercial, usually retail, leases which have a fixed basic rent plus a percent of gross income.

Percentage Lease

Underground water not confined to a defined underground waterway

Percolating Water

Common in western states, the right to divert un-appropriated waters of a natural stream to beneficial use according to priority of usage.

Prior Appropriation Water Rights

A landlord can hire a ________________ to take care of the daily responsibilities at their rental property.

Property Manager

The__________________ is a federal disclosure act that requires a lender to give borrowers a good-faith estimate of the settlement costs and an information booklet.

Real Estate Settlement Procedures Act (RESPA)

Common in eastern states, the right of a landowner whose property borders streams or rivers to use and enjoy that water.

Riparian Rights

Which part of the Fair Housing Law makes it illegal to discriminate on the basis of race, color, religion, or sex to name a few?

Title VIII of the Civil Rights Act of 1968

Tenant pays the base rent plus operating expenses plus taxes and insurance plus a portion of the maintenance.

Triple Net lease

Using their best judgment, Brokers are allowed to "fill in the blanks" on non- commission approved pre-printed forms like warranty deeds and leases. TRUE OR FALSE

True

A permanent exception granted by the local zoning office to either build a structure or conduct a use that would not be permitted under the current zoning

Variance

The seller gets a lien if purchaser does not pay full amount.

Vendor Lien

A lien against the property that the owner has knowledge of and has granted consent.

Voluntary Lien

The court holds the defendant's property during a lawsuit to protect the plaintiff from having the property sold before the case is complete.

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