Real Estate State Practice Exam.

Mandatory topics for continuing education during each licensing period in Alabama include risk management, and ________.

Commission-approved courses.

One of the following licensee's actions would constitute commingling. Which is it?

Cynthia deposited her client's earnest money check into the firm's operating account.

Cheryl, the aggrieved claimant on a complaint against a licensee, has just won her claim. She demonstrated that the licensee was responsible for her losing $60,000. She also paid for a lawyer, which was another $5,000. With other fees and incidentals, her total damages are $67,000. What is the amount she'll receive? $25,000 $50,000 $65,000 $67,000

$25,000 Any one claimant can claim as much as $50,000, but the limit for damages rewarded for any one transaction is $25,000. If Cheryl wants to claim $50,000, she'll need to file at least two complaints and have both judgments go her way.

Tim, an Alabama licensee, is affiliated with principal broker Ashton. After a team meeting, Tim asked him, "Why do we need to keep purchase documents and closing statements?" How should Ashton respond?

"Alabama law requires us to keep transaction-related records or else risk penalties."

Lee is wondering if he really needs to complete his CE requirements during this licensing cycle. Which of these questions should you ask him to help him determine if he has to or not? "Are you a broker or a salesperson?" "Are you at least 60 years old?" "Have you held a reciprocal license for less than a year?" "Have you managed other licensees within the last six months?"

"Have you held a reciprocal license for less than a year?"

LuAnn is selling some property, and she wants broker Richard to represent her. He explains that she needs to sign a brokerage agreement, and she asks, "What does it mean when I sign this?" What's the best answer Richard can give? "It means that I can enter into a subagent relationship with another firm to get you the best representation." "It means that you're giving me permission to represent you as well as any potential buyer of your property." "It means that you understand and accept the conditions of our agency relationship." "It means you're contractually obligated to stick with me until I sell your property."

"It means that you understand and accept the conditions of our agency relationship."

After discussing Kathy's requirements for the house she wants to buy, licensee DeVonn presents her with the Real Estate Brokerage Services Disclosure form. Kathy asks, "Why should I sign this?" What's the best answer DeVonn can give?

"This form describes the kind of brokerage services I can offer you. Signing it shows you understand what they are." The Real Estate Brokerage Services Disclosure form is designed to help customers know what kind of brokerage services an agent can offer. Kathy doesn't need to sign this to establish an agent relationship, but does show she understands the information.

Licensee Leo is found guilty of giving false information to a consumer. What's the maximum fine the Alabama Real Estate Commission can impose?

$2,500

What's the maximum fine the Alabama Real Estate Commission can impose on a licensee?

$2,500

Appeal notices are typically filed in the circuit court of Montgomery County, along with a ______ appeal bond.

$200

FDIC insurance covers every owner of funds deposited into a trust account, up to __________each.

$250,000

Louis gave a $45,000 down payment to his agent Tim, a managing broker, who cashed the check and promptly left the country. Louis has just won his claim against Tim. His total amount lost, owing to bank fees and lawyer expenses, is $55,000. How much will he receive from Alabama's Recovery Fund, assuming he files two complaints?

$50,000. If Louis only files one complaint (and it's successful), he can be awarded a maximum of $25,000. However, if he wants to be awarded the maximum amount he can from the fund, Louis can file two complaints. If he wins both, his maximum payout is $50,000.

The qualifying broker at Choice Realty has become incapacitated. How long does the company have to choose a salesperson or broker to apply for a temporary qualifying broker's license?

30 days.

The commission has received Carol's notice to appeal. How many days does the commission have to file the case record with the circuit court?

30 days. Once it receives notice of an appeal, the commission has 30 days to file the case record with the circuit court.

In Alabama, what's the post-licensing education requirement for active temporary licensees?

30 hours within the first six months of active licensure

How many hours of post-licensing education are active temporary salespeople required to take in Alabama?

30. Active temporary Alabama licensees must complete 30 hours of PLE within the first six months of licensure.

What license status is needed to perform real estate services?

Active

Who's required to take 30 hours of post-license education during their first six months after getting an initial license in Alabama?

Active temporary licensees

Percy and Jackson have formed a team within their Montgomery real estate brokerage firm. They're drafting some advertisements to help launch their team. What do they need to keep in mind when designing their marketing materials?

Ads must include the brokerage firm name.

Which body comprises appointed members who oversee license law in Alabama?

Alabama Real Estate Commission

The ______ enforces Alabama real estate rules and regulations.

Alabama Real Estate Commission.

Tim, an Alabama licensee, is affiliated with principal broker Ashton. After a team meeting, Tim asked him, "Why do we need to keep purchase documents and closing statements?" Ashton's response should be: _______.

Alabama law requires us to keep transaction-related records or else risk penalties.

Amy works under the supervision of Corinne at Rolling Hills Realty. Which of the following must be true? 1. Amy could be either a salesperson or a broker. 2. Amy must be a salesperson. 3. Corinne must be a broker, and Amy must be a salesperson. 4. Either Corinne or Amy is a salesperson.

Amy could be either a salesperson or a broker. Only brokers can supervise others, but brokers can work independently, or they can be supervised by someone else. Since Amy is working under supervision, she can either be a salesperson or a broker.

Which of the following actions is representative of an agent's due diligence and ethical behavior?

An agent notices a discrepancy between what the homeowner says and what the property shows, so he investigates.

Jeung gave her agent an earnest money check, and the seller accepted Jeung's offer. What will happen to the check now?

An escrow agent will hold the funds in a trust account until the agreement's terms are satisfied.

What information about a property is the licensee required to disclose to potential buyers?

Any material, adverse information that the licensee has actual knowledge of concerning the physical condition of the property

The commission is holding a hearing for licensee Dana. Which of the following is she NOT allowed to do?

Ask a commission member to testify on her behalf.

Where can licensure applicants obtain the license application?

At the testing center after passing the exam.

What information does the commission use to determine an applicant's suitability for licensure?

Background check

An Alabama assistant must ______ to answer client questions about offers and negotiations.

Be licensed

Which one of the following statements about real estate licenses is true?

Before you can legally perform any activities that licensed real estate professionals perform, you must have your real estate license.

Candi, an Alabama licensee, knows that her seller client's new roof leaks. When speaking about this roof, she only tells potential buyers, "This roof is just a few years old!" What license law violation, if any, has Candi committed?

Behaving in an untrustworthy or dishonest manner.

Suzanne received notice that her license may be revoked for ______.

Being convicted of drug possession. Criminal convictions are a big no-no for license eligibility and may lead to the license being revoked.

Which of the following actions performed by these licensed salespersons is a common real estate violation?

Benjamin places a lock box in an inconspicuous location on the sellers' property without their permission.

Your license status and ___ need to be included on your business cards.

Brokerage name

How does the requirement for licensing protect the public?

By requiring licensees to have certain education, training, and standards

How does the requirement that real estate professionals be licensed protect the public?

By requiring licensees to have certain education, training, and standards

How does the Alabama requirement for licensing protect the public?

By requiring licensees to have certain education, training, and standards.

Which of the following are considered trust funds? Cash, checks, and other items of value. Cash only. Checks and cash only. General operating funds only.

Cash, checks, and other items of value.

A licensee has several tasks to perform for seller clients. What's one of those tasks?

Communicate all offers and counter-offers to the sellers.

Which of the following is one of the requirements necessary to reactivate an inactive Alabama real estate license?

Complete 15 hours of CE.

Milt has had a temporary real estate license since April. Which of the following must he do to convert it to an original license?

Complete his post-licensing requirements by October.

When it comes to earnest money, which one of the following statements is true?

Earnest money must be placed in a trust account.

What's the chief function of licensing laws?

Ensure that consumers are protected

Which of these tasks must a licensee perform for buyer clients?

Ensure that the buyer receives copies of all signed paperwork.

Lisa's commute to her current broker's office is too long, so she's found a new broker with whom to affiliate. What must her new broker do?

File a request for the transfer of her license and assume liability for her actions.

Which area of real estate law covers the rights of ownership and tenancy, and the government's rights and authority under eminent domain?

General property law.

What happens to the company license if the qualifying broker dies or becomes incapacitated?

It becomes invalid.

If an Alabama licensee violates a compensation law, what's one possible sanction the commission may impose?

License suspension.

Which of the following statements about licensee compensation in Alabama is true?

Licensees may only receive compensation for real estate services through their qualifying broker.

Which of the following statements about continuing education requirements is true for real estate salesperson licensees in Alabama?

Licensees must complete 15 hours of CE within their two-year licensure cycle.

Broker Al presents consumer Cathy with the Real Estate Brokerage Services Disclosure form. After they discuss it, he requests that she sign it to acknowledge its receipt. She refuses. What should Al do?

Make a note on the form that she refused to sign it.

Broker Joseph tells his client that a property is zoned as residential, even though he knows it's zoned as commercial. This violation is an example of ______.

Making a substantial and willful misrepresentation

Which of the following statements about escrow accounts is correct?

Managed by escrow agents, and are used to hold funds belonging to others, such as earnest money deposits.

In advertising, ______ is essentially the same as committing fraud.

Misrepresentation.

Which of the following is an example of commingling?

Mixing earnest money with personal funds.

What are trust funds?

Money belonging to others held for a specific purpose in the course of a real estate transaction.

In Alabama, appeal notices are typically filed in the circuit court of which county?

Montgomery

What's one of the steps you need to take if you choose to affiliate with a different broker? Give notice to the Alabama Association of REALTORS®. Notify the commission by certified or registered mail. Obtain approval from the governor's office. Receive approval from the commission.

Notify the commission by certified or registered mail.

Salesperson Phyllis has had a temporary salesperson license for 13 months. She hasn't completed her post-licensing education. Which of the following is true about her situation?

Phyllis's license has lapsed.

Non-trust funds, as long as they're not commingled with trust funds, are not bound by _______.

Real estate laws

What responsibility does the seller's agent have to the seller? Advocate for and ensure the sale is profitable for the seller. Advocate for the seller and help present the property in the best light, even if it means covering up material defects. Ensure the sale is profitable for the seller. Seek a sale at the best price at terms acceptable to the seller.

Seek a sale at the best price at terms acceptable to the seller.

Beverly is a fairly new licensee. She's at a listing appointment and notices some stains on the ceiling and cracks in the basement walls. What should she do related to these items?

She should ask the sellers about these issues and ensure that they are disclosed to buyers.

An associate broker, received an earnest money check from his buyer client. Which of the following actions is appropriate and complies with real estate license law?

The associate broker turns the check over to his broker for deposit into the firm's escrow account.

Which of the following is a true statement regarding trust accounts?.

The broker is a fiduciary/trustee of the funds, but doesn't own them.

In a buyer agency relationship, who does the licensee represent?

The buyer

In Alabama, who prepares the buyer's estimated closing statement?

The buyer's agent.

In Alabama, which of the following statements is true about an estimated closing statement?

The client must sign it to acknowledge receipt. Both buyer and seller clients must sign estimated closing statements to acknowledge receipt, and licensees must maintain signed copies for the clients they represent.

Which of the following events does NOT happen after a licensee files a notice of appeal and an appeal bond? The appellant files a complaint with the court. The commission files a formal written apology with the court if its judgment is not upheld. The commission files the case record with the circuit court. The court affirms, reverses, or modifies the commission's decision.

The commission files a formal written apology with the court if its judgment is not upheld.

Debra's listing agent, Raj, just called to tell her that he'd received an offer on her house and an earnest money check for $4,500. "I'm on my way over to go through the offer with you. I think you'll like it!" Debra's excited, and she knows exactly what she wants to spend that $4,500 on. What's wrong with Debra's thought process?

The earnest money doesn't belong to Debra. It will be held in an escrow account.

Real estate law covers general property law, related federal- and state-specific laws, law of contracts, and ______________. Constitutional law Criminal law Income tax law The law of agency

The law of agency.

Which area of real estate law covers how an agency relationship is created and the duties of an agent to the principal?

The law of agency.

Jessica has just taken her Alabama real estate license exam. If she passes the exam, what will the exam proctor provide to her?

The licensure application. If Jessica earns a passing score, the proctor will provide her with the licensure application.

In Alabama, an estimated closing statement must be provided to seller clients ______. At least three days before closing On the day of closing When an offer is presented When an offer is signed

When an offer is presented

Meghan filed a notice of appeal and a $200 bond in the circuit court of Montgomery County. She did this 21 days after she received the outcome of her hearing. She is waiting now for the commission to file the case record with the circuit court. Did Meghan file her notice of appeal correctly? No, she has to file a complaint with the circuit court. No, she should have filed her appeal within 15 days of receiving the outcome of her hearing. No, she should have filed her notice of appeal in the county where she lives. Yes, she's done everything right so far.

Yes, she's done everything right so far. She does have to file a complaint with the circuit court, but only after the commission files the case record with the circuit court (She is currently waiting for it to take this action).

Agent Terry meets a potential seller, Cate, who's unhappy with her agent. "Break your contract with your agent," Terry says, "and I'll work hard for you." Less than a week after Cate breaks with her agent and signs with Terry, he puts her house on the MLS and puts a for sale sign on her property with her permission. The two of them arrange an open house. Did Terry break any rules? No, Terry did nothing wrong. Yes, because Terry needs his brokerage's permission to list on the MLS. Yes, when he arranged an open house less than a week after signing Cate. Yes, when he induced Cate to break the contract with her agent.

Yes, when he induced Cate to break the contract with her agent.

Robert is 18, has a high school diploma, and wants to be a real estate salesperson in Alabama. If he completes the 60 hours of required education, is there anything that might prevent him from taking the licensing exam?

Yes. He can't take the exam yet because he must be at least 19 years old.

What's the difference between a temporary and an original salesperson license in Alabama?

You get your temporary license when you pass your exam; you get your original license when you pass your PLE.

Which of the following is a reason why the Alabama Real Estate Commission might impose a disciplinary penalty against you?

You make false and dishonest promises to clients or customers.

What does it mean to affiliate with a broker?

You will work as the agent of a broker who is responsible for your actions and required to supervise you.

After passing the real estate exam, applicants must send their application for licensure to the commission within _____ days. 120 days 30 days 60 days 90 days

90 days

Alabama licensee Terrence can conduct a lottery to persuade people to do business with him under which, of any, of the following circumstances?

He can't conduct a lottery under any of these circumstances. Holding these types of lotteries is illegal in Alabama.

Temporary active Alabama licensee Ken is studying for his post-licensing course. What happens if Ken fails to complete the post-licensing course requirements within the allotted timeframe?

His license will be placed on inactive status.

AREC is looking for a new commission member to fill the "consumer" slot. Which of the following people is eligible?

Terry, 43, who worked as a real estate licensee until he was 28. He now owns a small bakery in Tuscaloosa.

Kevin is about to submit his broker's license application. Currently, he works for Gadsden Realty and wants to continue there. Assuming he is successful, what happens next?

His qualifying broker must return his salesperson license to the real estate commission.

Buyer Susie's a little nervous about the $20,000 earnest money check she just deposited with the title company. When should she expect to see this money applied toward her purchase of the property?

When conditions are met at closing.

Trust funds have better protection when deposited into trust accounts because they are ______.

Protected from seizure.

Julie is working with buyer clients and has prepared an estimated closing statement. Which of the following statements is true?

She must provide it when an offer is signed.

Broker Jewel knows she must advocate on her client's behalf and put her client's interests ahead of any other party. What does this mean?

She must put her client's interests ahead of those of other parties, unless doing so violates her duties to another party.

Which of the following is NOT a source of revenue for the Alabama Recovery Fund? A $30 assessment on all new broker licenses. A $30 assessment on all new salesperson licenses. A 5% assessment on all licensee commissions for a month. An assessment on every licensee in the state when the amount falls below $500,000.

A 5% assessment on all licensee commissions for a month. AREC doesn't replenish the Alabama Recovery Fund by assessments on commissions, but it does charge a $30 fee in the other situations represented here.

Aiden, a licensee in Tuscaloosa, recently helped buyer client Rita close on a real estate transaction. Which of the following is illegal for him to give or receive after this transaction ends?

A cash gift to Rita as part of an inducement to persuade her to use his services in the first place.

Which of the following would be illegal for an Alabama licensee to receive for helping a seller client close on a real estate transaction?

A cash rebate from the seller

Which one of the following scenarios describes an adverse condition that would need to be disclosed?

A hail storm damaged some shingles last year.

Which of these is an example of a real estate violation?

A licensee didn't inform all parties that she was showing her own listing.

Which of the following is true of agency agreements?

A listing agreement.

Which of the following statements about material facts is true?

A material fact may have more or less effect on a buyer based on the buyer's needs and values.

If your license is suspended, it's only temporary. If your license is revoked, it is permanently removed and requires ______. Additional education A new license application after the penalty period A small fee A verbal reprimand

A new license application after the penalty period

Which of the following is required In order to conduct real estate activities as a business entity in Alabama?

A qualifying broker and a company license for each branch office or location

Under RECAD, a licensee acting as either a buyer's agent or seller's agent is acting in which of the following capacities?

A single agent

What must you have to apply as a real estate salesperson in Alabama?

A sponsoring broker.

Which of the following is true about disciplinary actions in Alabama?

A suspended license can be reinstated once the licensee has completed certain actions.

Which of the following actions is representative of an agent's due diligence and ethical behavior? A buyer client wants to waive an inspection. The agent follows the request without question. An agent deposits a buyer client's earnest money check into her personal bank account. An agent notices a discrepancy between what the homeowner says and what the property shows, so he ignores it. An agent notices a discrepancy between what the homeowner says and what the property shows, so he investigates.

An agent notices a discrepancy between what the homeowner says and what the property shows, so he investigates.

Amber is a new licensee in Alabama. She's having trouble getting her sales off the ground, so she's considering offering commission rebates or holding a lottery. Which of the following is a true statement?

Any type of rebate or lottery related to a real estate transaction is always illegal.

Agent Walt has met with Diane, a seller, three times. The first time, she told him she wanted him to help her sell her house. The second time, at the open house, Diane told him, "Honestly, I want to list this place for $400,000, but I'd be open to offers as low as $315,000." The third time, Walt presented three offers to Diane. When should he have presented her with the Real Estate Brokerage Services Disclosure form?

At their first meeting, after Diane asked him for representation.

Jill needs to pay the web developer who created a new website for her brokerage, but her checking account is low, so she floats herself a loan from earnest money kept in the brokerage's escrow account to pay the developer. Which answer correctly identifies the violation(s) Jill has committed?

Commingling and conversion.

Danielle doesn't live in Alabama. She's entered into a written agreement with an Alabama broker that says that they agree to work together on a particular transaction. The written agreement gives details about the property in question, and Danielle now has to file the written agreement with AREC. What kind of agreement is this?

Co-brokerage. This is the definition of co-brokerage. A licensee who lives in another state can enter into a co-brokerage agreement with a broker from Alabama (if the other state allows it).

Mandatory topics for continuing education during each licensing period in Alabama include risk management and ______.

Commission-approved courses

Which of the following is a step that Pauline must take to change her license status from inactive to active?

Complete the 15 hours of CE that are required for the current licensing period.

Which of the following statements about reactivating your license in Alabama is true? 1. Completing 15 hours of CE during the current licensing period is one step toward reactivation. 2. To reactivate, you need to take all your pre-licensing education over again. 3. You must write a letter to the AREC asking them to reactivate your license. 4. Your current broker is responsible for reactivating your license.

Completing 15 hours of CE during the current licensing period is one step toward reactivation.

Which of the following duties does NOT belong solely to qualifying brokers?

Completing continuing education requirements every licensing period.

Which area of real estate law governs the use of contracts, explains the elements required to make a contract valid, and describes what happens if a breach of contract should occur?

Contract law

Which of the following documents are Alabama brokerages required to retain for three years, according to Alabama law?

Copies of agency contracts and receipts for escrow moneys received.

Which of the following documents are Alabama brokerages required to retain for three years, according to Alabama law?

Copies of contracts and receipts for escrow moneys received

License candidates must request a ____________ prior to applying for an Alabama real estate license.

Criminal record check with fingerprinting.

Which of the following is a minimum service that an Alabama licensee must provide to her clients?

Disclosing any material facts the licensee knows about that the client couldn't reasonably ascertain.

Norma, a real estate licensee, is working with the buyers in a transaction. She suspects mortgage fraud. What should she do?

Discuss the situation with her broker.

Woodrow helps his neighbor sell his home by assisting with negotiations. He receives no compensation for his assistance. Based on this one transaction, Woodrow ______.

Doesn't need a real estate license

Jonathan has come up with a plan. He's going to offer to buy property belonging to his neighbor, who's struggling financially, collect rent from his neighbor, and not make the mortgage payments. He'll rake in the rent until the bank forecloses. Which type of mortgage fraud scheme is this an example of?

Equity skimming.

Elite Realty in Tuscaloosa needs a qualifying broker. Which of these people is qualified for this position?

Erica, a broker who works full time

Maya violated Alabama real estate license law. Which disciplinary action is NOT a possible penalty?

She will not be able to take continuing education classes.

Which statement is true about licensing authorities? Each state has its own licensing authority. Each state has the exact same requirements for licensure. Enforcement is conducted at a national level. The National Association of REALTORS® enforces licensing laws nationally.

Each state has its own licensing authority.

Buyers may provide assurance they won't back out of the sale by offering to deposit _______ money that will be kept in escrow until the conditions are met at closing.

Earnest.

A buyer client is preparing an offer on a property. He wants to make sure his offer stands out above all others and is accepted, so he discusses waiving the inspection contingency. What should the agent do?

Encourage the buyer to get an inspection, and if he still wants to waive it, put it in writing that you advised against waiving the inspection and have him sign.

Seller Emmy wants licensee Jake to represent her as a single agent. To make this happen, which of the following does he NOT have to do? Ensure that his broker is present when he and Emmy enter into an agency relationship. Explain to Emmy what single agency means. Get his broker's approval. Have Emmy sign a standard brokerage agreement form.

Ensure that his broker is present when he and Emmy enter into an agency relationship.

Which one of the following tasks must licensees perform for seller clients?

Ensure that the buyer's earnest money is deposited.

A licensee must perform which of the following tasks for a buyer client?

Ensure the buyer understands the importance of due diligence, including a professional inspection of the property.

George wants to co-broker a home purchase in Alabama. His state allows this arrangement. Which of the following is a requirement he must meet?

Enter into a written agreement with an Alabama broker.

Which of the following statements about estimated closing statements in Alabama is true? An estimated and an actual closing statement are two terms for the same document. Estimated closing statements help prevent mortgage fraud by showing all costs up front. Licensees are required to prepare an estimated OR an actual closing statement, but not both. Presenting your client with an estimated closing statement is not necessary, but it's a good idea.

Estimated closing statements help prevent mortgage fraud by showing all costs up front.

Tammy received her license renewal notice from the Alabama commission. When will the renewal deadline fall? Every two years on August 31 of even-numbered years Every two years on September 30 of odd-numbered years On her birthday On the anniversary of the date Tammy's license was issued

Every two years on August 31 of even-numbered years

Isabelle decided to take her career in a different direction and didn't renew her license when her renewal deadline came around. What is her license status?

Expired

Bob wants to reinstate his license. Which license status must he have to ask the commission to reinstate?

Expired.

The funds placed in trust accounts are insured by the ______.

FDIC

Which of these circumstances are grounds for real estate license suspension in Alabama?

Failing to notify AREC about a criminal conviction.

In most states, which of the following situations would most likely be grounds for suspension or revocation of a real estate license?

Failure to specify a definite termination date in a listing contract.

Ned doesn't want the lenders to have his personal information, so he's applying for a home loan under an assumed name. Which type of mortgage fraud scheme is this an example of?

False identity

While reviewing documents, you notice that the buyer has the exact same name and birth date as a buyer you worked with previously. What might this indicate?

False identity

For which of the following actions can the Alabama Real Estate Commission impose a penalty on licensee Joseph?

Falsely promising his customer that she wouldn't have to pay closing costs

Applicants must pay the required exam and licensing fees, as well as _____.

Fees for the background check/fingerprinting process.

Janice is interested in becoming an Alabama real estate broker. Which of these is a requirement she has to meet?

Have held an active salesperson license for at least 24 of the last 36 months.

Clint has an inactive real estate license. Which of the following is true?

He can keep his license in this status indefinitely as long as he pays his license renewal fees.

If a candidate is unsure of her eligibility for an Alabama real estate license due to a prior felony conviction or crime involving moral turpitude, what can she do to verify her eligibility? File for a Determination of License Eligibility File for a Determination of Moral Eligibility File for a Waiver of Criminal Record File for a Waiver of Immorality

File for a Determination of License Eligibility.

Bethenney is Jason's agent. Jason made an offer on a property and wrote an earnest money check, which he gave to Bethenney. What should Bethenney do with the check?

Follow brokerage procedure for handling monies entrusted to agents by clients.

Frances collected an earnest money check from her client, but didn't have an opportunity to deliver it to the escrow agent before close of business on Friday. For safekeeping, she deposited it into her personal checking account over the weekend and wrote the escrow agent a new check on Monday morning. Which of these statements is true?

Frances is guilty of commingling.

Should the broker end up in litigation, any trust funds not safely tucked away in a trust account could be ______.

Frozen. This is one of several reasons that trust funds must be deposited into trust accounts. If the broker ends up in litigation, money in trust accounts can be frozen.

It's October 1 of an even-numbered year. Gary forgot to renew his license. What happens now?

Gary's license is placed on inactive status. Gary's license goes inactive if he doesn't renew it by September 30 of every even-numbered year.

Eliza, your client, wants to buy a property with her sister. She asks you, "But what's the difference between joint tenancy and tenancy in common? I know they're both forms of property ownership, but I'm unclear on how they're different." Of course, as a licensee, you know the answer—but if you didn't, which of these laws could you consult?

General property law

Giles and Maddy both work at Hoover Realty. Giles has worked there for seven years, and Maddy's worked there for 10 years. Giles supervises the transactions of all the associated licensees. Which of the following is true?

Giles is the qualifying broker, and Maddy is an associate broker.

Melanie has decided to switch career paths and get an MBA, so she's going to resign as qualifying broker for Talladega Realty. Which of the following does she have to do to terminate her status?

Give a written termination notice to Realty and the real estate commission

Jimbo doesn't yet have a real estate license. Which activity is he legally allowed to perform without one?

Give advice to a friend who is negotiating the purchase of a house.

Which one of the following actions would be considered a real estate violation? 1. Hailey ran out of copies of the brokerage engagement form, so she drafted a copy on a blank sheet of paper. 2. Igor suggests his clients talk with an attorney about whether purchasing a property as tenants in common is a good idea. 3.Jesse is working with an executor who asks what certain language in a will may mean. Jesse refers the executor to a lawyer for clarification. 3. Kevin's clients ask whether a paper they have is a legal deed. He suggests they contact a lawyer.

Hailey ran out of copies of the brokerage engagement form, so she drafted a copy on a blank sheet of paper.

According to Alabama law, what should Alabama real estate licensees do when they receive an earnest money check?

Handle the check in a timely fashion.

Gerome is an Alabama salesperson applying for his broker license. He's moving across the state, and his broker license will be issued to a new brokerage. Which of the following is a true statement? He can continue to perform real estate activities as long as his current qualifying broker gives him written permission. He can continue to perform real estate activities as long as his new qualifying broker gives him written permission. He can't perform real estate activities until the new qualifying broker receives his broker license. His current qualifying broker isn't required to return his salesperson license to the real estate commission.

He can't perform real estate activities until the new qualifying broker receives his broker license. When applying for a broker license, the qualifying broker must return the license to the commission. If the broker license will be issued to a new company, licensees must wait until the new license is issued before continuing real estate activities.

In which of these matters is AREC most likely to get involved? Adam has been engaging in real estate activities, but his license lapsed five years ago. Consuela, a real estate developer, failed to file crucial information about her latest apartment complex with the county. Devin is an appraiser, and he has just declared bankruptcy. Gina, an attorney, has helped many Birmingham brokerages with their contracts. She's just been accused of fraud.

He has been engaging in real estate activities, but his license lapsed five years ago.

Carl has just received his Alabama salesperson real estate license. Which of the following must be true?

He is at least 19 years old.

Tavier deposited a $3,000 earnest money check into his personal account for safekeeping while he was on vacation. The balance in his account when he left on vacation was $4,200, and when he returned, it was $2,800. He withdrew enough funds from his savings account to cover the earnest money check and delivered the funds to the escrow agent. Which statement best represents Tavier's issue?

He is guilty of commingling and conversion.

Alabama licensee Frank has just met with consumer Emily, who's in the market for a house. Which of the following is true of this situation? Frank isn't required to present the consumer information booklet to Emily at any time, but he may do so if he'd like. Frank must present the consumer information booklet to Emily after they've signed a brokerage agreement. Frank must present the consumer information booklet to Emily at closing. Frank must present the consumer information booklet to Emily before obtaining any confidential information from her.

He isn't required to present the consumer information booklet to her at any time, but he may do so if he'd like. Licensees aren't required to provide the consumer information booklet to consumers, but they may do so. This form is optional.

Agent Jeff has just received an offer for his seller client Maggie. He goes over the terms of the offer with her and explains what some of the contract-specific language means. What else, if anything, does he have to do to avoid breaking Alabama license law?

He must explain that she will have to pay closing costs.

What's Alabama licensee Jake's duty to his seller client?

He must fulfill all his lawful obligations in the agency contract. Alabama licensees must provide certain minimum services to clients, including fulfilling obligations of the agency agreement.

Alabama broker Jim is acting as a dual agent for seller Christine and buyer Blake. Which of the following is required for Jim to act in this capacity?

He must get the written, informed, advance consent before entering into the relationship.

Alabama broker Jim is acting as a limited consensual dual agent for seller Christine and buyer Blake. Which of the following is required for Jim to act in this capacity?

He must get the written, informed, advance consent before entering into the relationship.

AREC has just asked Newman for a large number of his transactional records. What is Newman required to do now?

He must provide these records to AREC within a reasonable timeframe.

It's September 5 of an even-numbered year. Tobias hasn't renewed his broker's license yet. Which of the following is true?

He needs to pay a late fee if he renews by September 30.

Chester is moving on up! He and his wife are ready to sell their condo and purchase a new place. Chester is a real estate licensee and will list the property himself. What must Chester disclose to prospective buyers?

He owns the property. Licensees with personal interest in a property must disclose it to prospective buyers.

Licensee Flip tried to compel the Browns to accept the buyer's offer, saying that he knew a better offer wouldn't come along. What's Flip's mistake?

He violated Alabama license law.

Ben has been a real estate licensee for two years. Which of these actions may provide grounds for the revocation of his license?

He's convicted of drunk driving.

It's October 1 of an even-numbered year, and Candace hasn't completed her CE requirement. Which of the following is true?

Her license is now inactive, and she has to reactivate it before she can practice real estate in Alabama.

Which of the following is an example of conversion? Amy deposited a buyer's earnest money deposit into her broker's trust account. Herve withdrew funds from the trust account to pay the brokerage's rent. Jacob deposited earnest money into the firm's operating account. Jalen deposited his commission check into his personal bank account.

Herve withdrew funds from the trust account to pay the brokerage's rent. When licensees/escrow holders use money that they received on behalf of the principals for a reason other the intended use, it's known as conversion, and it is illegal.

Which of the following tasks would require a real estate license? Assemble closing documents Calculate a commission check Host an open house Place a for-sale sign in a front yard

Host an open house Administrative tasks are fine, but anything that involves activities normally performed by a licensee (such as meeting with the public to show real estate) would require a license.

Jasmine hasn't completed her CE requirements, and it's August 28 of an even-numbered year. Which of these options can she do?

If she can't finish her CE by the end of August, she can finish it by the end of September and pay a late renewal fee. Jasmine has until the end of September to finish her CE and renew her license, but after August 31, she will have to pay a late fee.

Georgina is an escrow agent who's holding funds for several transactions. Which of these statements about how she'll disburse these funds is true?

If the transaction doesn't close, disburse the earnest money as instructed by the parties or according to state law.

Josef is a salesperson in Alabama. His buyer clients have just given him a check for earnest money. What should he do with it?

Immediately turn it over to his qualifying broker. Alabama licensees must immediately turn over all trust funds to their qualifying broker.

Which of the following agents does NOT need to present the Real Estate Brokerage Services Disclosure form to the consumer? Bruce is looking to buy a piece of commercial property and asks Donna to represent him. Fran and James Bloom are looking for a house in a certain neighborhood and want to know if agent Chad can help them. In his capacity as a property manager, Chad meets with the DeLucas, who want to rent a unit in that property. Lucia tells agent Polly that she wants someone to act as her transactional agent when she puts her house on the market.

In his capacity as a property manager, Chad meets with the DeLucas, who want to rent a unit in that property. Agents must present this form to ALL buyers and sellers—even if the buyer is only looking for transactional agency or a commercial property. However, licensees engaged in rental or property management services don't have to present the form.

To change his license status, Ennis has paid a $25 fee to the AREC. The two-year licensing period is almost over in Alabama, so he's quickly finishing his required 15 hours of CE before the deadline. He's also planning on completing 15 more hours of CE during the next licensing period. Ennis is changing his license status from _______ to _______.

Inactive to active

Becky has practiced real estate for the past six years, but it's October 1 of an even-numbered year and she hasn't completed her CE requirements. She did remember to pay her renewal fee. Becky also has three consumer complaints filed against her with the AREC. What is her license status?

Inactive, since she paid her renewal fee.

Which of the following is an Alabama broker's responsibility regarding trust funds? Immediately deposit all checks into a trust account. Maintain records of all funds belonging to others for three years. Reconcile each trust account once every three months. Teach their licensees how to disburse trust account funds .

Maintain records of all funds belonging to others for three years.

The Wilsons are selling their home and have asked that an appraiser they know perform the appraisal on the property. Sidney, the buyer's agent, is surprised when the appraised value comes in considerably higher than the competitive market analysis she prepared. Sidney is concerned that this might be an example of which type of mortgage fraud scheme?

Inflated appraisal

Sue believes she's about to get into an undisclosed dual agency position. What should she do?

Inform all parties to the transaction

Which one of the following tasks must a licensee perform for seller clients?

Inform sellers of their responsibility to make all required property condition disclosures.

You're walking through a property with a new seller client. The seller tells you that the property is serviced by the public sewer system, but when walking up the drive you noticed the access hatch for a septic system. What should you do?

Inquire about the homeowner's claim to ensure the property really is on public sewer.

Susie has opted out of opening an escrow account with her mortgage lender, which means she has a lower monthly payment. She still needs to save up, though, to make sure she can pay for taxes and ______.

Insurance

Jerrold reviews the floor plan of the Knoxville house he's going to sell. It's 3,800 square feet. In his advertising, he bumps that number up to 4,000 square feet to better justify its asking price. What has Jerrold done?

Intentional misrepresentation

A property is listed as having four bedrooms and two-and-a-half bathrooms. However, when showing your buyer clients the property, you only count three bedrooms. As their agent, what should you do as part of your due diligence?

Investigate this discrepancy.

In which of the following situations does Alabama's consumer information statement replace the Real Estate Brokerage Services Disclosure form?

It can never be used to replace the disclosure form.

Huntsville licensee Caden gave his buyer client a cash rebate as part of a recent real estate transaction. Which of the following statements about the cash rebate is true?

It's illegal for licensees to give cash rebates as part of a real estate transaction.

When it comes to contracts for sale or lease in Alabama, which of the following statements is true?

It's illegal for real estate licensees to interfere with contracts for sale or lease.

Which of the following statements about the Alabama Real Estate Brokerage Services Disclosure form is true? It creates an agency relationship between the licensee and consumer. It's a legal agreement between the licensee and consumer. It's informational and doesn't create a relationship between the licensee and consumer. It's optional for licensees to provide this form to consumers, but if it's provided and signed, it becomes a legal contract between the parties.

It's informational and doesn't create a relationship between the licensee and consumer.

Cecilia is an AREC commission member. Which of the following statements is true?

It's possible that she isn't a real estate licensee.

You might not have to worry about ________ in Alabama if you violate real estate compensation laws, but you should be concerned about other serious disciplinary penalties.

Jail time.

Valentia is getting ready to renew her real estate license. Beginning on what date can she renew online during the renewal period?

June 15.

Pablo, a salesperson for Freedom Realty in Montgomery, let his license lapse, and a client claims that his actions cost her money. Pablo and his qualifying broker Justin are looking into the situation, as is AREC. If AREC finds that damage has been done, who will be held responsible?

Justin. As qualifying broker, Justin will be held responsible for Pablo's actions if Pablo is found guilty of violating license law.

Karen is an Alabama salesperson who has just accepted a check from a client for earnest money. Which of the following is true? Karen has seven days in which to deposit the funds. Karen must immediately deposit the funds into the brokerage trust account. Karen owns the funds. Karen's qualifying broker is responsible for the funds she has just received.

Karen's qualifying broker is responsible for the funds she has just received. Licensees must immediately turn over trust funds to their qualifying broker, who is responsible for all funds received by the licensees he supervises.

Keith is a real estate agent. Which of the following pieces of information about him does the Alabama Real Estate Commission (AREC) most likely have on file?

Keith passed his test and got his real estate license 10 years ago. AREC is concerned with real estate licensing rather than Keith's commissions, tax records, or law-related activities. That means that AREC would have Keith's real estate license status on file.

Buyer Kristin has a buyer agency agreement with Carlotta, a licensee. Kristin's brother, Dalton, is going to showings with Kristin and working to help her decide which house is the best fit. Who is/are Carlotta's client(s)?

Kristin

Maria is the buyer's agent, and Julia is the seller's agent in a real estate transaction in Alabama. Jack is Maria's qualifying broker. Julia works for Kyle's firm. From whom can Julia accept compensation?

Kyle.

Landon wants to transfer his license from his current managing broker, Daria, to a new managing broker, Roy. Landon has had his real estate license for 10 months. Which of the following is true about his situation? After Landon submits his request to the AREC, Roy can print a temporary license for Landon to use until he gets his official one. After Landon transfers, his new license will be good for the next two years. Landon can't transfer his license until he's been a licensee for 12 months. Landon must inform Daria of his decision to transfer to a new managing broker.

Landon must inform Daria of his decision to transfer to a new managing broker. Landon has to let Daria know of his intent to transfer, and he has to do so in writing.

Margot has been engaging in some shady real estate practices, but no one has filed a complaint against her. However, the Alabama commission hears about them. What options does the commission have? Find someone who will file a written complaint. Launch an investigation without a written complaint. Refer the issue to a court of law. Wait until someone files a complaint.

Launch an investigation without a written complaint. A written complaint isn't required in order for AREC to launch an investigation if there's reason to believe violations have occurred.

Sandy is a new licensee. One of her recent clients, Phil, complained that she gave information to her customer that was confidential. Which laws can Sandy check to make sure that she didn't fail in her duties to Phil?

Law of agency

Should a client incur financial hardship because of the misuse of trust funds, the broker could be held ______.

Liable

Which of the following statements is true regarding the Alabama Real Estate Brokerage Services Disclosure form? It's optional for licensees to provide it to any consumer. It's used to form brokerage agreements between licensees and consumers. Licensees only need to provide it to consumers if there's a dual agency situation. Licensees should ask, but not require, that consumers sign to acknowledge its receipt.

Licensees should ask, but not require, that consumers sign to acknowledge its receipt.

Which of the following statements about allowed agency relationships in Alabama is true?

Limited consensual dual agents must have written consent from all parties because they act as an agent for both sides.

Which of the following is NOT considered a license law violation? Accepting commission or valuables from someone other than the qualifying broker. Committing fraud, misrepresentation, and deceit. Failing to disclose a property's material defects. Listing a family member's home, with proper disclosure.

Listing a family member's home, with proper disclosure. As long as licensees follow proper disclosure procedures, license law allows them to list family members', friends', and even their own homes.

To which of the following situations does the law of contracts apply?

Max's client doesn't like a particular clause in the agency agreement document that they're about to sign, so Max crossed it out.

Which of the following must be reported to AREC via certified mail within 10 business days? Connor received two parking tickets in one week. Dmitri changed his territory to a new part of town. Maxine had a pending criminal action against her, but it was dismissed. Polly's client accused her of taking too long to respond and wants to break their agency contract.

Maxine had a pending criminal action against her, but it was dismissed.

Lucinda is 25 and licensed in Alabama. She has been actively engaged in real estate for the past three years and has taken 60 hours of broker pre-licensing coursework. She used to be licensed in Florida, but her license there was revoked four years ago. She also has five unpaid parking tickets. Assuming she passes her licensing exam, is she qualified to be a broker?

Maybe, if the commission approves her application.

Adele's received notice of a complaint and a request for a hearing from the Alabama commission. Where will her hearing most likely be conducted?

Montgomery County

Sheila was a defendant in a case in which a former client charged her with fraud. Her lawyer just informed her that the case was dismissed. Which of the following is true about this situation?

Must notify AREC of this news within 10 days.

AREC has just noticed that the amount of money in the Alabama Recovery Fund has dropped below $500,000. Can it impose a fee on an inactive licensee?

No, but it can have inactive licensees pay the fee when they reactivate.

Danny is 19 years old. He has a GED and has been working in real estate for the last 18 months. He's completed 60 hours of approved broker pre-licensing coursework online. Is he ready to take his broker's licensing exam?

No, he must have worked in real estate for at least 24 months. Danny's nearly there, but he does have to have at least 24 months of experience—and that experience must have been in the past 36 months.

Are Alabama salespersons allowed to work from a home office? No, Alabama licensees aren't allowed to work from a home office. No, only brokers are allowed to work from a home office. Yes, as long as they keep all business records at the place of business. Yes, if the home office is in their qualifying broker's home.

No, only brokers are allowed to work from a home office. Only Alabama brokers who live in rural areas are allowed to work from home offices.

It's 2010, and Miranda has had her Alabama real estate license for 40 years. At 83 years old, she still works part-time. How many hours of continuing education does she need to renew her Alabama license?

None.

What is the difference between the process of renewing a salesperson's license and renewing a broker's license?

Nothing. The process is the same for both kinds of license.

Once handed over, trust funds belong to the _______ until the transaction for which they were designated has been completed, or they're disbursed according to the agreement between the parties.

Party who submitted them. Trust funds belong to the party who submitted them until the transaction for which they were designated has been completed, or they're disbursed according to the agreement between the parties.

Patty is writing an online ad for several condos she's selling. "More than 3,000 square feet!" she writes. She's pretty sure that this is the average size of the condos. She included her brokerage firm and her license status on the advertisement, as well. How did Patty do?

Patty could be held responsible for misrepresentation if her estimate is incorrect.

What's one of the steps required for you to take if you choose to affiliate with a different broker? Give notice to the Alabama Association of REALTORS. ® Obtain approval from your existing broker. Pay the required transfer fees. Receive approval from the commission.

Pay the required transfer fees. Among other requirements, if you choose to affiliate with a different broker the commission requires you to pay the required transfer fees.

The Alabama commission is holding a hearing to investigate a complaint against Lucy. What actions is Lucy allowed to take at the hearing? Administer oaths to witnesses. Counter-investigate the complaint. Excuse subpoenaed witnesses Produce evidence and cross-examine witnesses.

Produce evidence and cross-examine witnesses.

Which of the following is a true statement regarding qualifying brokers in Alabama?

Qualifying brokers are responsible for the actions of licensees who work under them.

Which of the following is a true statement regarding the termination of qualifying broker status in Alabama?

Qualifying brokers have to notify their brokerage and the commission in writing if they wish to terminate their status.

Which area of real estate law covers the requirements of a licensee when performing real estate activities within the state, including continuing education requirements, supervisory requirements, and prohibited conduct? Contract law General property law Law of agency Real estate license law

Real estate license law

Joe's a consumer who's been awarded a judgment for his real estate agent's misrepresentation on a sale. But the licensee is broke. What fund is available in Alabama to provide Joe relief?

Real estate recovery fund

Which of the following is a buyer's agent's task or duty?

Representing the buyer's interests.

Which of the following is NOT a disciplinary action that the commission may take? 1. Impose a fine of $300. 2. Require the licensee to leave the state. 3. Require the licensee to take continuing education. 4. Revoke the license.

Require the licensee to leave the state. The commission can't require a licensee to leave the state. It can, however, take the other disciplinary actions.

When done for others and for compensation, which of the following may be done by someone who does NOT hold a real estate license?

Researching school districts and crime statistics for various neighborhoods.

As a licensee, you'll have several tasks you must perform for your buyer client. One of these tasks is to ______.

Review transaction documents with the buyer, clarifying anything that could be confusing, without stepping outside the scope of your license.

If the commission finds that a licensee has committed serious crimes, it will likely _______ the individual's license.

Revoke

If the commission finds that a licensee has committed serious crimes, it will likely _______ the individual's license.

Revoke.

Lisa wants to transfer her license to another brokerage, where she would be managed by Richard. Currently, her managing broker is Diane. Which of the following is NOT part of the license transfer process? Lisa must give the AREC written notice that she wants to transfer. Richard must file a request for Lisa's transfer with the AREC. Richard must file a statement with the AREC that assumes liability for Lisa. Richard must get Diane's permission in writing.

Richard must get Diane's permission in writing.

Greta is working with agent Brandon to sell some property. Nelson represents the buyer, Rigby. Of these four parties, who will pay the earnest money?

Rigby. Buyers pay earnest money to indicate that they're serious about the purchase.

Which of the following activities can a person do without a real estate license in Alabama?

Selling personally-owned property

The months are just flying by, as they seem to do, and Alabama licensee Audrey has yet to complete her annual CE requirement. Assuming this is an even-numbered year, by what date does she need to have her 15 hours of continuing education documented?

September 30

The months are just flying by, as they seem to do, and Alabama licensee Audrey has yet to complete her annual CE requirement. By what date does she need to have her 15 hours of continuing education documented?

September 30. Licensees in Alabama must complete their 15 hours of annual CE requirements by September 30.

Before the commission can convene a hearing, which of the following must it do? Ask the accused licensee to submit a formal, written defense Provide the licensee with the hearing's details at least 30 days before Receive a letter from the licensee's qualifying broker that speaks on the licensee's behalf Serve the accused licensee with a copy of the formal complaint

Serve the accused licensee with a copy of the formal complaint The commission must serve the licensee with a copy of the formal complaint before the hearing. It also has to provide the hearing's details (date, time, and location) but it only needs to provide 15 days' notice.

Joe is an unlicensed real estate assistant. Which of the following acts can he complete?

Set up showing appointments.

Closing day is finally here! As an Alabama qualifying broker, how much time does Amanda have to disburse all funds held in trust for the transaction?

Seven days. Qualifying brokers must disburse all funds held in trust for a transaction within seven days after the transaction closes.

Wendy is the qualifying broker for both Huntsville Realty and Davis Realty. Which of the following is true about her situation?

She can serve as qualifying broker for both brokerages as long as they are in the same location.

Andie is just about to enter into an agency relationship with a real estate licensee, Clark, so he can help her find a house. But first, she wants to make sure that Clark is a licensed agent in good standing. How can she find out? She can call her local association of REALTORS®. She can find and read federal real estate legislation. She can talk to a few of Clark's other clients. She can verify Clark's license status on the AREC website.

She can verify her license status on the AREC website.

Of the following, which one could be considered a real estate violation? Before showing a buyer customer his listing, Mitchell explained to the buyers that he represents the sellers. Henry provided customers with a copy of their signed broker engagement agreement. Isabelle keeps all signed broker engagement agreements in a safe but accessible location in the broker's office. Mandy didn't disclose to potential buyers that she was showing her own listing, or that she represents the sellers.

She didn't disclose to potential buyers that she was showing her own listing, or that she represents the sellers.

Marissa wants to renew her license. She has completed her CE and has logged on to the renewal website. Does she need to do anything else?

She has to pay the renewal fees.

Susan is a real estate licensee. Her mother is moving to a facility for active seniors and has asked Susan to sell her home. What information does Susan need to disclose to prospective buyers?

She is related to the seller (her mother).

Your assistant, Ella, often answers client questions about offers and negotiations. What do we know about Ella? She must be at least 20 years old. She must be licensed for this to be legal. She must have had a least two years of experience in real estate. She's a very helpful assistant who goes the extra mile.

She must be licensed for this to be legal.

Nan is licensed in Mississippi. Her client has found the perfect property to buy—in Alabama. She wants to co-broker this purchase, and her state allows it. Which of the following statements is true?

She must enter into a written co-brokerage agreement.

As an Alabama broker who lives in a rural area, Pam is allowed to work from a home office. Which of the following is true about her situation? She can allow other licensees to work from her home office. She can keep brokerage records at her home office. She isn't required to have signage at her home identifying it as a real estate office. She must have a separate telephone number, entrance, and signage identifying it as a real estate office.

She must have a separate telephone number, entrance, and signage identifying it as a real estate office.

Brynn, a licensee from another state, wants to obtain a reciprocal license in Alabama. Which of the following statements is true?

She must provide her licensing history to the commission within 120 days before the commission issues the license.

The commission placed Holly's license on inactive status because she didn't complete the 30-hour post-licensing education requirement within six months of receiving her temporary Alabama real estate license. What does this mean for her?

She'll need to complete the post-licensing education within one year of receiving her temporary license. In the meantime, she can't practice real estate. Failure to complete the post-licensing education requirements within six months of receiving your temporary Alabama real estate license will cause the commission to place your license on inactive status, which means you can't practice real estate.

Mavis is a buyer's agent working with Blaine, an unrepresented seller. Mavis's buyer, Cintra, makes an offer on Blaine's property. Mavis assists Blaine with the paperwork. What's Mavis's relationship to the parties?

She's an agent to Cintra, and the seller is her customer.

Ned represents Sofia in the sale of her townhome. Luciana represents Sofia's buyer, Arturo. What is Sofia's relationship to Luciana?

Sofia is Luciana's customer.

Which one of these individuals needs a real estate license?

Someone performing real estate services for others for a fee.

RECAD was designed to do all of the following EXCEPT which of these? Define the roles that Alabama licensees can fill when working with consumers. Explain the kinds of agency relationships that are allowed. Outline the duties that Alabama licensees owe their clients and customers. Specify best practices for choosing a real estate agent.

Specify best practices for choosing a real estate agent. Consumers must do their own due diligence when choosing their real estate agent. RECAD is designed to clarify licensee roles and allowed agency relationships, as well as to outline licensee duties toward clients and customers.

At what level does real estate licensing take place?

State

At what level does real estate licensing take place? County Federal Municipal State

State

Which of the following is true about subagency in Alabama?

Subagents owe their client the same duties that the agent owes that client.

Which of these is a document-related task that's required of licensees? 1. Provide a copy of all transaction-related documents to all relevant parties up to five years after the transaction. 2. Send copies of all transaction-related documents to the commission once every two years. 3. Surrender a document to its rightful owner after the licensee has possessed it. 4. Turn over all transaction-related documents to any other brokerage that requests them.

Surrender a document to its rightful owner after the licensee has possessed it.

Broker Tanner and buyer Sarah are working together to look for a house for her. They don't have a written brokerage agreement. What's their brokerage relationship?

Tanner is acting as a transaction broker.

When homebuyers agree to open an escrow account for their mortgage, the mortgage lender uses that money to pay ______.

Taxes and insurance.

What is the title of the person who serves for six months in the place of a qualifying broker who dies or becomes incapacitated?

Temporary qualifying broker

Jeremy is serving in the place of a qualifying broker who became incapacitated. What is his title?

Temporary qualifying broker.

After an investigation and hearing, Jeremy was found guilty of violating license law. Against which entity would he submit an appeal? The Alabama Association of REALTORS® The Alabama Real Estate Commission The Department of Licensing The deputy attorney general

The Alabama Real Estate Commission

Which of the following entities created the consumer information booklet?

The Alabama Real Estate Commission.

After a few meetings, the Stinsons sign a listing agreement with broker Vera so she can sell their house. The house has already generated interest from a potential buyer named Sergei, who has spoken with Vera about the house's square footage and potential as an investment. Which of the following is true about this situation?

The Stinsons and Vera have an agency agreement.

AREC commission members Dale, Sherry, Jasmine, and Ted have convened to impose a penalty on a broker who's been found guilty of fraud. Which of these reasons could prevent them from doing this work? The fact that all of these AREC members have served for less than one year. The fact that Jasmine has no real estate experience. The fact that only four members have convened, and there need to be at least five. The fact that these four members are from four different congressional districts.

The fact that only four members have convened, and there need to be at least five.

When a licensee represents a seller, which one of the following statements is true about the licensee's ability to list other properties that are for sale? The licensee isn't permitted to list other properties for sale. The licensee is permitted to list other properties for sale as long as they're not competing properties. The licensee is permitted to list other properties for sale, even if they're competing properties. The licensee must list the seller's property only for the first 90 days, after which the licensee may list other properties.

The licensee is permitted to list other properties for sale, even if they're competing properties.

Which of the following is NOT required in Alabama purchase contracts?

The names of all involved agents' managing brokers

Which of the following statements about Alabama company real estate licenses is true? 1. A single company license is issued for all locations licensed under a qualifying broker. 2. If the qualifying broker dies or becomes incapacitated, the license is valid until September 30 of the following year. 3. The qualifying broker for each location must apply for the license. 4. The qualifying broker isn't allowed to maintain more than one place of business.

The qualifying broker for each location must apply for the license. The qualifying broker must apply for the company license, and a separate license is required for each location.

Which of the following is true about trust funds in Alabama?

The qualifying broker is responsible for all trust funds received by all the licensees they supervise.

In a seller agency relationship, which party does the licensee represent?

The seller

Randy, a licensee, is in a seller agency relationship with Brent, a seller. The buyer is Tim. Who's Randy's client?

The seller (Brent).

Which of the following scenarios describes actual knowledge that an Alabama licensee must disclose?

The seller didn't disclose any leaks, but the licensee sees moisture on the basement floor.

In a buyer agency relationship, what relationship does the seller have to the licensee?

The seller is the licensee's customer.

In Alabama, who generally prepares the seller's estimated closing statement?

The seller's agent.

Licensee Randy is in a seller agency relationship with Brent, a seller. The buyer is Tim. Who is Randy's client?

The seller.

David is a qualifying broker for Merit Real Estate. He's also agreed to serve as qualifying broker for First Choice Realty, which is an affiliate company that operates out of the same office. Both companies have agreed in writing, but what else also needs to happen in order for this arrangement to be legal in Alabama?

The written consent must be filed with the commission.

Which of the following is a true statement regarding temporary qualifying brokers in Alabama? They are appointed by the company president when a qualifying broker dies or becomes incapacitated. They are appointed by the real estate commission when a qualifying broker dies or becomes incapacitated. They are chosen by the company when a qualifying broker dies or becomes incapacitated but must apply for a temporary qualifying broker's license. They must have been a broker for at least five years.

They are chosen by the company when a qualifying broker dies or becomes incapacitated but must apply for a temporary qualifying broker's license.

Which of the following is true about Alabama Real Estate Commission hearings?

They are usually held in Montgomery County.

What are the main ways that license laws ensure consumer protection?

They establish requirements, define activities, and describe standards of conduct.

What action may licensees take if they're unhappy with the commission's final decision on their hearing?

They may request a rehearing.

An associate broker received an earnest money check from his buyer client. Which of the following actions is appropriate and complies with real estate license law?

They turn the check over to his broker for deposit into the firm's escrow account.

Licensee Stephanie tells Betty and George, her buyer clients: "Since you want to get $300,000 for your house, let's list it at that price for three months. If it sells, I'll keep anything above that amount as my commission. How does that sound?" Has Stephanie violated license law?

This is a net listing, which is illegal in Alabama.

Stan wants to drum up business, so he decides to hold a lottery-style contest, offering prizes to anyone who does business with him in November and a big prize to the lottery winner. Which of the following is true?

This is illegal. Stan needs to make a new plan.

Which of the following best describes an inactive license?

This license status means that you've paid your license fee but haven't completed your CE requirements.

Baker just closed a transaction with his seller client. How long must Baker keep the transactional records?

Three years.

Which of the following duties does an Alabama licensee have with regard to offers made on a property the licensee has listed?

To accept delivery of offers and present them to the seller. When listing a property, a license must, at minimum, accept delivery of offers, counter-offers, and addenda, present them to the seller, and assist the seller in negotiating the same.

What's the purpose of the Real Estate Brokerage Services Disclosure form? To create an agency relationship between the broker and the consumer To describe the types of brokerage services available to consumers in real estate transactions in Alabama To form a legally binding contract in which the broker agrees to work for the consumer, and the consumer agrees to pay the broker a commission To inform the consumer that real estate professionals can't be held liable or accountable for any transactions that don't end well

To describe the types of brokerage services available to consumers in real estate transactions in Alabama.

What's the difference between an inactive license and an expired license?

To keep your license inactive, you must pay the yearly license fee; expired licenses don't require this. To keep your license on inactive status, you must pay the renewal fee every licensing period. If you don't, your license expires.

What is the purpose of licensing?

To protect the public by requiring certain education, training, and standards of licensees.

Which of these is a broker's responsibility under RECAD?

To provide all licensees with a copy of the agency disclosure office policy.

What's an agent's responsibility related to home inspections?

To recommend a buyer have a professional inspection performed.

Adele's been a real estate agent in Alabama for the last three years. She just received a notice from the Alabama Real Estate Commission assessing her $30. What's the assessment for? To cover an annual recovery fund fee To defray the commission's court costs To pay an annual education fee To replenish the recovery fund

To replenish the recovery fund. When Alabama's recovery fund contains less than $500,000, every real estate licensee in Alabama is assessed a fee of $30 to replenish it.

Jojo, a licensee, has just received her annual briefing about her brokerage's agency disclosure office policy. She then received a copy of the policy. Which of the following is her responsibility?

To sign an acknowledgment saying that she has received and understands the written policy.

What's another name for an escrow account?

Trust account.

Even the most honest broker can make a mistake from time to time. Keeping trust funds in ___________ diminishes the possibility of accidental misuse of trust funds.

Trust accounts. Trust funds belong in trust accounts. This creates a safety net from many troubles, including accidental misuse of the funds.

Which of the following is a true statement regarding handling trust funds in Alabama?

Trust fund monies should be deposited in a timely fashion.

Moneys given for purchase deposits are _______.

Trust funds.

When labeling Alabama trust accounts, the term ______ must be used in the account title to properly identify them.

Trust or escrow

Which of the following statements about unlicensed assistants in Alabama is true?

Unlicensed assistants may not perform any activities for which a license is required.

In Alabama, which of the following practices related to trust funds is illegal?

Using trust funds held for one client to pay expenses for another client.

What's one form of documentation the commission will accept as proof of an applicant's age?

Valid driver's license.

A licensee who advises a seller client to break an existing contract to accept a better offer is ________________.

Violating Alabama's license law

A real estate license is required ______.

When performing real estate activities for others, for compensation of any kind.

Under what circumstances would undisclosed dual agency be most likely to occur?

When representing a seller and assisting an unrepresented buyer. Because an agency agreement is already in place with the seller (the listing agreement), assisting the buyer too much can lead to undisclosed dual agency.

Which of the following statements is true under RECAD in Alabama?

While licensees are required to use the Real Estate Brokerage Services Disclosure form, use of the consumer information booklet is optional.

Which of the following statements is true under RECAD in Alabama? Both the Real Estate Brokerage Service Disclosure form and the consumer information booklet are optional. Both the Real Estate Brokerage Service Disclosure form and the consumer information booklet are required. While licensees are required to use the consumer information booklet, use of the Real Estate Brokerage Services Disclosure form is optional. While licensees are required to use the Real Estate Brokerage Services Disclosure form, use of the consumer information booklet is optional.

While licensees are required to use the Real Estate Brokerage Services Disclosure form, use of the consumer information booklet is optional.

In Alabama, RECAD requires that all purchase agreements designate which of the following? That closing will occur within 30 days of signing the contract What the brokers' commission is What type of counter-offers the seller will consider Who represents whom in the transaction

Who represents whom in the transaction. Remember that RECAD is Alabama's agency law, so RECAD requires disclosure about the agency / brokerage relationships in the transaction.

Jenna owes the commission some money. She doesn't have enough money in her account right now to cover the fee, but she'll get paid in a week. However, if she waits until then to pay, she'll have to pay a late fee, as well. Jenna has some options. Which one violates license law?

Write a check now. When it bounces and gets returned to her in a week, she'll have the money.

Each qualifying broker must explain the agency disclosure office policy, which specifies the types of agency relationships allowed, to licensees at least once every ______.

Year.

Tanya represents Marco, who's selling his condo. Dan is interested in buying it; his agent is Terryl. Tanya and Terryl work for the same brokerage. According to RECAD, is this arrangement allowed?

Yes, as long as all parties give consent to this limited consensual dual agent situation.

Manda is representing Jim, who's selling his condo. She hears him telling a potential buyer "I think this building was built in 2015." She knows it was built in 2005. Does she have an obligation to provide the correct information?

Yes, because by not speaking up, she would be guilty of misrepresentation.

Adele's not at all happy with the commission's final decision on her hearing because she believes the commission is forcing her to sell off many of the assets of her brokerage. "Can it really do that?" Adele wonders. Does she have a reason to file an application for a rehearing?

Yes, because she has reason to believe that the commission acted outside its legal authority.

Licensee Bert's seller client asks him not to tell prospective buyers that he's selling his house because he's lost his job and can't continue to afford the mortgage payments. Should Bert obey him?

Yes, because this is a lawful instruction, and this information should be kept confidential.

Clint has always had an interest in real estate. He's helped a few friends determine the asking price for their properties, and now he's considering going into business doing this kind of work. Will Clint need a real estate license?

Yes, he will.

Carl is an Alabama salesperson applying for his broker license. Can he continue to perform real estate activities while he waits for his broker license to be issued?

Yes, if the broker license will be issued to the same company as the salesperson license.