PA Exam 3

What type of activity are rental listing referral agents licensed to conduct? A Collecting rental information in order to refer prospective tenants to rental units. B Showing residential rental units in multifamily housing to potential tenants. C Managing commercial property for more than one employing broker at the same time. D Collecting rental application fees and security deposits on behalf of a rental property owner.

A A rental listing referral agent is a person or entity that collects rental information in order to refer prospective tenants to the rental units. They are not authorized to show units, collect fees or manage property.

Which of the following best describes the relationship between broker and salesperson? A A salesperson represents the broker and does not represent a client directly in a transaction. The salesperson is called a fiduciary of the employing broker. B A salesperson represents the Commission and the standards it promotes. The salesperson is an employee of the broker but does not represent him or her. C A salesperson is a free agent with no responsibilities of representation to anyone. D A salesperson represents the client first and foremost, and the broker in a secondary capacity.

A A salesperson represents the broker and does not represent a client directly in a transaction. All business is done in the name of the broker, the salesperson is called a fiduciary of the employing broker. Only the employing broker can issue commission checks to the salesperson, associate broker, or cemetery salesperson.

Which of the following does NOT need education or training prior to licensure? A Cemetery salespeople B Timeshare salespeople C Campground membership salespeople D Rental listing referral agents

A Cemetery salespeople are excluded from needing specific educational coursework and from taking the exam. Campground membership salespeople, time-share salespeople and rental listing referral agents must all complete education or training requirements for licensure.

When broker Christine is facing a dual agency situation within her firm, she appoints designated agents. Ted becomes the designated agent for the sellers, while Dusty is named the designated agent for the buyers. If all parties act as appointed, has the dual agency been avoided? A No, Christine is considered a dual agent in this situation. B No, Christine's real estate firm is, in name, acting as a dual agent. C Yes, because designated agents take the place of dual agents in this situation. D Yes, provided Christine notifies the Commission of her actions and they agree in writing.

A In this situation the employing broker (Christine) is still considered a dual agent, and as such, owes specific duties to the seller and the buyer.

Which statement is TRUE regarding a Rental Listing Referral Agent? A A licensee may work without the supervision of a broker. B A license applicant must have 30 hours of education. C A license applicant is not required to pass an exam. D A license applicant must be 21 years of age.

A License requirements state a licensee may work without supervision of a broker. In addition, 60 hours of education, passing the exam and being 18 years of age are needed.

Which of the following does the Pennsylvania Real Estate Commission's statutory authority NOT include? A Issue licenses and registration certificates to people that meet the requirements established by license law. B Waive all or part of continuing education requirements for a licensee due to emergency or hardship. C Approve schools that offer real estate courses. D Prescribe the subjects that are to be tested during the license exam.

A The Department of State issues licenses and registration certificates, not the PREC. The other duties all fall under the authority of the Commission.

When advertising an individual property for sale, a broker must include what? A The business name of the broker as designated on the license. B The name and business phone number of the listing licensee C A statement or logo about the licensee's commitment to nondiscriminatory practices. D The price of the property

A The business name as designated on the license must be included in all advertising. In addition, if the ad contains the name and telephone number of a salesperson or associate broker, the telephone number of the broker must also be included.

Which of the following transactions is NOT exempt from the Property Condition Disclosure Act? A Sale by a licensee of a 2-unit residential property that is sold "For Sale By Owner" B Foreclosure sale C Conveyance of a primary residence from a former spouse under a divorce settlement agreement D Sale of a newly constructed home that is covered by a builder's warranty

A There are only 9 situations where disclosure requirements do not apply under the Real Estate Disclosure Act and sale of a 2-unit property by a licensee as a "For Sale By Owner" is not one of them. The other transactions mentioned here are exempt under the act.

Which of the following must an exclusive listing agreement contain? A The duration of the agreement B An automatic renewal clause C A listing period of more than 1 year D A listing period of more than 18 months

A While an exclusive listing agreement must address the duration of the agreement, and set this forth in specific terms, it is ILLEGAL to either set forth this time period as exceeding 1 year in length, or to include an automatic renewal clause.

A partnership, association or corporation will only be granted a broker's license in Pennsylvania if A every member and officer actively participating in the business has a broker's license. B 1 officer or partner is designated the broker of record. C the business has paid a one-time fee to the recovery fund. D the business files the appropriate paperwork with the Secretary of State.

B 1 individual within a corporation, partnership or association must meet the individual requirements for a broker's license and be named the broker of record for the organization to be issued a broker's license.

When must a broker deposit funds received into a escrow or trust account? A Within 5 business days B By the end of the next business day C Within 14 business days D Within 3 business days

B A broker must deposit money belonging to another into an escrow account by the end of the next business day following its receipt in the real estate office where the escrow records are maintained.

Which of the following is NOT required on a current listing agreement? A An expiration date B A provision requiring the seller to notify the broker of intent to cancel the listing after the expiration date. C The price D A definite beginning date

B A current listing agreement does NOT require a provision requiring the seller to notify the broker of intent to cancel the listing after the expiration date. Once the contract expires, the agreement has ended and there is no automatic renewal.

When is a seller NOT required to provide a property condition disclosure to a potential buyer? A If the buyer has occupied the property as a tenant of the seller. B During the sale of commercial property. C If the seller is the owner/occupant but has not lived in the property for the last year. D When the seller is not represented by a real estate agent.

B A property condition disclosure is not required in the sale of commercial property. It is required even if the owner has not lived at the property for a year, or if the buyer was a tenant or it's a "For Sale By Owner."

Which of the following would be considered an exclusive listing agreement? A An exclusive short-term tenancy agreement. B An exclusive right-to-lease agreement. C An one-time verbal purchase offer. D A non-exclusive option to purchase.

B An exclusive listing agreement can be the exclusive agency of the broker, an exclusive right-to-sell agreement, or an exclusive right-to-lease agreement - a listing agreement does not only refer to purchases.

Which of the following violations by a licensee does the Commission NOT have the authority to take disciplinary action against? A A person violating the Pennsylvania Human Relations Act. B A person violating the Sherman Anti-Trust Act. C A person violating the PREC rules and regulations. D A person violating the Real Estate Licensing and Registration Act.

B Anti-trust laws are enforced by federal and state agencies, not the PREC. The other acts and regulations all fall under the jurisdiction of the Commission.

Which of the following is NOT an option of disciplinary action open to the Real Estate Commission? A A reprimand going on a licensee's permanent record. B A temporary suspension of a license. C A permanent revocation of the license with NO chance of reinstatement. D A fine of up to $1,000.

C A licensee stripped of their license by permanent revocation MAY apply for reinstatement after 5 years.

Which of the following actions by a broker is NOT a violation of license law? A Placing a "For Sale" sign in a yard without permission of the owner. B Openly soliciting salespersons and associate brokers to change employing brokers. C Failing to supervise the activities of licensees who are independent contractors. D Failing to put definite termination date in a listing contract.

B It is perfectly legal for a broker to recruit salespeople and associate brokers that are employed by competitors. However, neglecting to use a specific termination date on a listing contract, failing to supervise independent contractors and advertising a property without the owner's permission are all violations of license law.

Which of the following are NOT grounds in Pennsylvania for revoking a broker's license? A Being convicted of a felony B Agreeing with the seller to accept a commission that is more than the standard rate C Depositing an earnest money check into the broker's personal account D Advertising as a member of the Pennsylvania Association of Real Estate Professionals when the broker is not really a member

B It is perfectly legal to agree to accept a commission that is more than the agreed uplon commission, as the seller wants to pay a bonus.

When the broker of a sole proprietorship dies, the law states the business must be closed. Which of the following rules must the broker appointed by the estate to terminate the office follow? A Unexpired listing agreements may not be promoted, nor may any other advertisements be made during the termination period. B Unexpired listings will expire automatically 90 days after the broker dies and may not be renewed. C New listing agreements may be entered into as long as the listing agreement is written to expire within 90 days of the former broker's death. D Unexpired listings may be renewed and transferred to another brokerage with the client's consent.

B No new listing agreements may be entered into, and no new licensees may be hired. Existing listings will expire 90 days after the broker's death.

What is the purpose of Pennsylvania license law? A To promote real estate business throughout the state B To ensure public interest is protected C To generate license and renewal fees for the state treasury D To prevent criminals in the real estate industry

B The purpose of all laws, including license laws, is to provide for the good, safety and welfare of the public.

Which of the following are NOT, by definition, included in a broker's activities? A Performing a comparative market analysis B Representing oneself as a real estate consultant or counselor C Appraising real estate D Managing real estate

C A broker's duties do not, by definition, include appraising real estate. Appraisal activities are regulated by the State Board of Certified Real Estate Appraisers which is not a part of the Pennsylvania Real Estate Commission that oversees licensees.

Which of the following descriptions best explains a "manager of record," as defined in the current Pennsylvania Act? A A broker who has entered into a written agreement with a seller/landlord to market property as a seller's agent, dual agent or transaction licensee. B A licensee who, without entering into an agency relationship with the consumer, provides communication or document preparation services or performs other acts listed in the definition of ''broker'' or ''salesperson.'' C The individual rental listing referral agent responsible for the rental listing transactions of a partnership, association or corporation that holds a rental listing referral agent's license. D A licensee who enters into an agency agreement with the consumer for the purpose of selling real estate.

C A manager of record is the rental listing referral agent responsible for the rental listing transactions of a partnership, association or corporation that holds a rental listing referral agent's license.

Which of the following must real estate salespeople, when advertising property for sale do? A Give only a telephone number to call for further information. B Include only the salesperson's home phone number. C Include the name of the brokerage as licensed. D Identify the location of the property.

C All advertisements by licensees must contain the name and telephone number of the employing broker.

Who of the following DOES need a real estate license? A A trustee acting under the authority of a court order or will. B An attorney-in-fact working as an attorney who is receiving fees as an attorney, not as a real estate broker. C An individual helping a third party negotiate and purchase real estate. D An employee of a public utility company purchasing right-of-way rights for electric lines.

C Anyone actively involved in buying or selling real estate needs to be licensed. Trustees carrying out a will, attorneys-in-fact acting as attorneys and public utility employees purchasing right-of-way rights do NOT need licenses.

Which of the following requirements must be met if an individual with a salesperson's license in another state wants to obtain a Pennsylvania license? A The individual must prove they sold in excess of $750,000 of real estate within the previous 12 months. B The person must move to Pennsylvania. C The license issued by the other state must have been active within the 5 years prior to submitting the application for a Pennsylvania license. D The individual must prove the license from the other state is on inactive status in that state.

C For an individual with an out-of-state license to receive a Pennsylvania license, the person must show that the license has been active for the 5 years prior to submitting the application and pass the Pennsylvania part of the license exam. It is legal to hold active licenses in 2 states simultaneously, and residency is not a requirement.

Which of the following is NOT unlawful under the Pennsylvania Human Relations Act ? A Refusing to sell property to a person based upon their religious beliefs. B Evicting an occupant of a housing accommodation prior to the end of the lease because of pregnancy or the birth of a child. C Evicting an occupant of an apartment complex for failing to keep their side of the written or oral lease agreement. D Refusing a mortgage for the acquisition of a property because of their visual disability and need of a guide dog.

C It is unlawful under the Pennsylvania Human Relations Act to refuse to sell property to; refuse a mortgage to; anyone based upon their race, gender, handicap, nationality, etc. It NOT unlawful to evict an occupant for failing to adhere to a lease agreement.

What must be included in an advertisement if a broker is going to advertise his or her production or market position? A The number of license branch offices the broker maintains in the market B The number of cooperating brokers in the market C The municipality that the market includes D The dollar volume of sales transactions in the market

C License law requires that any advertisements of production or market position by a broker must include the municipality that the market comprises. There are no requirements for including the number of licensed branch offices, volume of sales transactions or number of cooperating brokers.

Which of the following persons may be disciplined by the Real Estate Commission? A Anyone who pays a referral fee to an individual who is licensed in another state. B Anyone who holds an inactive license. C Anyone who advertises his or her services in a misleading manner. D Anyone who sells real estate owned personally as "For Sale By Owner".

C Misleading or misrepresentation by a licensee in any advertisement is in violation of real estate law, and the person doing so may be subject to disciplinary action by the Commission.

Which of the following is TRUE concerning listings based on a "net price?" A Net listings are illegal in Pennsylvania. B They are legal in Pennsylvania provided the net price is no greater than 17% of the property sale price. C Net listings are legal in Pennsylvania, although discouraged. D Net listings are permissible with approval of the Real Estate Commission.

C Net listings are legal in Pennsylvania, however they can lead to a conflict of interest between agent and seller so are not recommended.

Which of the following is NOT grounds for the Commission to investigate a licensee? A A written complaint from a consumer B On its own initiative C By random selection of active licensees D By a motion from a Commission member

C The Commission is not allowed to randomly select licensees for investigation. It may, however, launch an investigation based on its own initiative or on a complaint from a member or consumer.

Which of the following statements is TRUE regarding completion of the property condition disclosure? A The agent should assist the seller, providing advice about which property conditions to disclose and which to ignore. B The disclosure covers a very narrow range of structural conditions. C The agent should advise the seller that disclosure of known property conditions is required by law. D The property condition disclosure is optional.

C The licensee should advise the seller of the disclosure requirements and of the seller's obligation to comply with those requirements. The property condition disclosure statement is required in most residential transactions and covers a broad range of issues.

Which of the following statements concerning listings is FALSE? A A copy of the listing agreement must be provided to the seller. B Listing agreements must contain expiration dates. C Both the buyer and the seller must sign the listing agreement. D Listing agreements may not have automatic extensions.

C The listing agreement is a contract between the owner of the property wishing to sell (seller) and the agent. It is signed before the property goes on the market and therefore before a specific buyer comes into the picture. The buyer does not need to sign the listing agreement.

Which of the following may the Commission, during either a routine or special inspection, NOT do? A Inspect all areas of the office. B Examine all office records relating to real estate transactions. C Interview clients that are currently conducting business with the licensee being inspected. D Access records of the licensee's escrow account.

C While the Commission may access records, conduct office inspections and interview licensees, there is no provision allowing the commission to interview consumers in relation to an inspection.

Which of the following is TRUE regarding a broker's commission in a real estate transaction? A It is determined by the Commission. B It is determined by the Commission only if there is a dispute. C It is set to standard rates agreed upon by local real estate brokers. D It is negotiated between the broker and seller and stated in the listing agreement.

D A commission is agreed upon between a broker and seller and must be in the listing agreement. Commissions are not determined by any outside party.

Which of the following is a licensed real estate agent required to do if he owns an apartment building for investment purposes? A Deposit rents into an escrow account. B Hire his employing broker to act as property manager. C Pay a referral fee to a salesperson employed with the same broker if a referred prospect leases a unit in the building. D Disclose licensure to prospective tenants BEFORE a lease is signed.

D A licensee can lease their own real estate, but is required to disclose licensure before entering into an agreement. Rent is not required to be deposited in an escrow account, and referral fees are never paid to salespeople - only brokers may compensate licensees.

Which of the following is subject to disciplinary action by the PREC? A A real estate appraisal company's employees B Officers of a bank that handles real estate transactions C An attorney-in-fact providing services under a power of attorney D A campground membership salesperson

D Campground membership salespersons are required to be licensed and are therefore subject to disciplinary action from the Commission. Appraisal firms are governed by the State Board of Certified Appraisers, and bank officers and attorneys are excluded from license law.

Which of the following is NOT considered a breach of the Pennsylvania Human Relations Act? A Discrimination against an individual who is a handler or trainer of support or guide animals. B Discrimination against an individual who is deaf. C Discrimination against an individual who is blind. D Discrimination against an individual who is a convicted felon.

D Discrimination against individuals or groups by reason of their race, color, familial status, religious creed, ancestry, age, sex, national origin, handicap or disability, use of guide or support animals because of the blindness, deafness or physical handicap of the user or because the user is a handler or trainer of support or guide animals is a matter of concern of the Commonwealth. Occupational licensing agencies may consider any felony in Pennsylvania.

Which of the following regarding the duties of a personal real estate assistant is TRUE? A A personal real estate assistant must hold a license to conduct clerical office duties. B A personal real estate assistant must become licensed within 6 months of employment date. C A personal real estate assistant may make deposits and withdrawals from the firm's escrow account without a license. D A personal real estate assistant may host open houses for the public only if licensed.

D Only licensed employees of a broker may conduct open houses and deposit into the broker's escrow account. Real estate assistants may be employed by a broker or a salesperson to perform clerical duties without a license.

When is the seller of a single-family residence is required to provide a property condition disclosure? A At the time the seller agrees to an offer B At the time of the property inspection C At closing D Prior to the buyer making a written offer

D Pennsylvania law requires a property condition disclosure be provided by the seller to the buyer before entering into an agreement of sale.

Which of the following can an employing broker NOT have a licensed salesperson perform, on their behalf? A Negotiate a real estate loan B Assist the broker in managing residential, multifamily real estate C Negotiate the purchase, sale or exchange of commercial real estate D Conduct the appraisal of a federally related mortgage loan

D Real estate licensees are not authorized to appraise real estate. Appraisal activity is regulated by the State Board of Certified Real Estate Appraisers. Salespeople are permitted to perform the other duties under license law and commission rules.