texas sae real estate brokerage
Rachel is subject to court-ordered supervision due to an antitrust violation. This oversight may continue for as long as ______.
10 years
A state attorney general may recover up to how much in damages (civil penalties) resulting from Sherman Act violations? An amount equal to the damages Five times the amount of damages Three times the amount of damages Two times the amount of damages
3xs In a civil action, states may recover up to three times the amount of damage suffered due to violations of the federal Sherman Act. The federal government can recover up to two times the amount of damage suffered by victims or gain made by perpetrators.
It's difficult to make business plans too far into the future, so most long-range plans aren't longer than ________. Five years Four years Three years Two years
5 yrs
How are market trends and specialization related? A brokerage can capitalize on a trend to identify a niche. Both are permanent. Both drive real estate prices. Neither are important to brokerages.
A brokerage can capitalize on a trend to identify a niche. Market trends, such as the interest in green housing, may point to a lucrative niche for a brokerage.
how are market trends and specialization related? A brokerage can capitalize on a trend to identify a niche. Both are permanent. Both drive real estate prices. Neither are important to brokerages.
A brokerage can capitalize on a trend to identify a niche. Market trends, such as the interest in green housing, may point to a lucrative niche for a brokerage.
The 1970 case against Prince George's County Board of REALTORS® involved a consent decree. What is this? A compromise where the party agrees to stop certain illegal actions without admitting guilt A decision issued by the court ordering the defendant to stop performing certain illegal actions A guilty plea An innocent plea
A compromise where the party agrees to stop certain illegal actions without admitting guilt. consent decree is a compromise
Mike and Ike set up a real estate company. Mike, Ike, and Spike each own a portion of the stock. Mike & Ike Realty is a legal entity of its own. Mike is involved in a ______. Corporation Limited liability company Partnership Sole proprietorship
A corporation is a legal entity. Most likely, this is a close corporation.
Sarina's firm primarily uses electronic marketing communications, including emails, Twitter feeds, and Facebook posts. Which of the following marketing tools might receive special attention?
A hand-written thank you note
When accepting compensation, which of the following statements is most accurate, according to the NAR Code of Ethics? A licensee shall not accept compensation directly from more than one party to a transaction. A licensee shall not accept compensation from anyone. A licensee shall not accept compensation from more than one party to a transaction without consent from the client. A licensee shall not accept compensation from more than one party to a transaction without the consent of all parties.
A licensee shall not accept compensation from more than one party to a transaction without the consent of all parties. Licensees may only accept compensation from more than one party with the full knowledge and consent of all involved parties. As a reminder, compensation goes through the broker and isn't given directly to the licensee by the parties involved.
Question 58 Which of the following statements is true regarding real estate licensing requirements? A person assisting a friend in selling a home must have a real estate license, even when no compensation is given. A person must have a real estate license in order to research a property that's for sale. A person selling a home as 'for sale by owner' must have a real estate license. A person who receives a $50 gift certificate for performing real estate activities on a friend's behalf must have a real estate license.
A person who receives a $50 gift certificate for performing real estate activities on a friend's behalf must have a real estate license.
What's a financing portfolio? A collection of your investments in the stock market A credit application A proposal presented to lenders or investors when seeking funding A summary of the various types of funding your firm uses
A proposal presented to lenders or investors when seeking funding A financing portfolio contains information that lenders or investors can use to determine the viability of funding your request.
Rob doesn't know much about accounting, so he just reviews the monthly financial statements. He figures he doesn't need an accountant because Sally, who's been with the firm since it opened, does all the work, and she's very protective of the records. What's wrong with Rob's approach? A single individual shouldn't handle all accounting tasks. Everyone in the firm should have access to the records. Hiring an accountant will free Sally up to perform other tasks. Rob should know how to maintain the accounting records in case Sally leaves.
A single individual shouldn't handle all accounting tasks. One very important standard that helps prevent fraud is that no one person should perform all accounting tasks for a firm. Separating those duties helps prevent fraud and reduces the temptation to commit it.
Alison is taking steps to become the owner of her own real estate brokerage, Honesty Homes. She and the two real estate professionals who will become her first employees are drafting the firm's vision statement. Which of the following should be included?
A statement of what the company's future results, achievements, and successes will be
Who would likely have the most difficult time creating a new relationship with the sales staff when transitioning into a managing broker role? A former managing broker from the same office A managing broker from another office An associate broker at the same office An associate broker from another office
An associate broker at the same office
Which of the following statements about buyer representation is true? An exclusive agency relationship offers the buyer the highest level of representation, but restricts the buyer's right to self-represent. An exclusive right-to-represent relationship offers a buyer the lowest level of representation, and affords the buyer the greatest amount of autonomy. An open agency relationship gives the buyer flexibility, but limits the amount of representation received from any one professional. Open agency, exclusive agency, and exclusive right to represent all support a buyer's right to self-represent.
An open agency relationship gives the buyer flexibility, but limits the amount of representation received from any one professional. Open agency offers buyers with the most flexibility to work with multiple agents but limits the level of representation.
All commercial leases should contain the conditions under which the lease can be terminated; the names and signatures of all parties; and ______. A clause determining who will pay to have an attorney review the agreement A list of repairs the landlord needs to make to the property before the tenant can move in Any additional information based on negotiations and specific situations Restrictions as to utilities use
Any additional information based on negotiations and specific situations
Which generation will likely be in the homebuying market? Any generation could be Baby boomers Gen Xers Millennials
Any generation could be
Which of the following statements is true about a centralized management system? Administrative functions (e.g., training, accounting) tend to be decentralized. Authority is heavily concentrated at the top. Each major organizational function operates as a separate business unit. It is responsive and allows for more flexibility.
Authority is heavily concentrated at the top. centralized structure, authority is at the top and flows down to levels of senior management.
Jarvis, a broker, discusses antitrust scenarios at staff meetings and makes certain his firm makes independent decisions about co-op fees. This is a great way to __________. Avoid antitrust violations Eliminate the competition Get in trouble with the DOJ Inadvertently violate antitrust law
Avoid antitrust violations
Stating or implying that property values may deteriorate because members of a specific class are moving into or out of a neighborhood is called _______. Blockbusting
Blockbusting, or panic peddling, is the term used for trying to induce sales by communicating that members of a particular class are moving into or leaving a neighborhood.
Brian received an earnest money check from his buyer. He presented it to the seller's broker. What should he do now? Ask for the check back to deposit it into his business account. Get and keep a receipt for the funds he transferred. Note on the contract that he transferred the funds. Record the disbursement in his escrow ledger.
Brian wouldn't use an escrow ledger because he didn't deposit the funds. He should get a receipt for the check and retain the receipt in his transaction files.
Which of the following statements describes business objectives? Business objectives are derived from business goals and align with the strategies that direct the actions laid out in the company's long-range plan. Business objectives are derived from situational analysis data and align with and expand upon the company's mission to define what the organization will focus on for the duration of its long-range plan. Business objectives are derived from the company's strategies and expand upon them to define how much money the company will make by the end of its long-range plan. Business objectives are derived from the company's vision statement and expand upon it to define what the company's reputation will be at the conclusion of its current long-range plan.
Business objectives are derived from situational analysis data and align with and expand upon the company's mission to define what the organization will focus on for the duration of its long-range plan. The situational analysis data and company mission form the basis for the creation of business objectives, which will define what the organization will focus on for the duration of its long-range plan.
How do government regulations impact a real estate brokerage?
By increasing liability (more to comply with)
Question 39 Which of the following is true about the security of your clients' information? Client data can be compromised if the brokerage's computer system is compromised. Data security is one-size-fits-all. Poor record retention ensures data security. There is nothing a licensee can do to safeguard client data.
Client data can be compromised if the brokerage's computer system is compromised.
What is a flat-fee pricing strategy?
Clients are charged a pre-set fee for a pre-determined service.
A broker is following a problem-solving process to handle a situation in which one of her licensees has violated a brokerage policy. Which of these actions must be part of the solution she pursues to resolve the problem?
Communication
One of the IRS tests for classifying a brokerage's independent contractors as statutory non-employees is ______. Confirmation the worker has a valid real estate license No overtime pay Reduced benefits Regular paydays
Confirmation the worker has a valid real estate license Benefits, a steady paycheck, and overtime pay don't apply. A license is required.
Which of the following is true about corporations? Close corporations are located near company headquarters. Corporations are sole legal entities created under state law. Corporations require the use of state-certified trade names. General corporations pass liability on to the owners.
Corporations are sole legal entities created under state law.
Up the Hill Realty has purchased a contact list. New licensees at the brokerage are asked to spend three hours a week cold-calling individuals on this list. Which of these actions is NOT one they need to take before making these calls?
Create a fake phone number that individuals will see on their caller ID.
When a sales associate is interested in possibly pursuing a switch to a managerial role, the broker can use ______________ to help the associate decide if it will be a good fit. A training presentation Counseling Cross-training Mentoring
Cross-training is a way to help a worker experience another type of role before making a decision.
A(n) ________________ is certain to save a brokerage money.
Culture of retention
Which of the following statements are true regarding determining the amount of office space needed for your brokerage? Desk fees should be calculated to determine how many licensees are needed to cover expenses. Offices and cubicles require the same amount of space. Principal working quarters should not be more than 50 square feet per staff member. The need for conference rooms and separate training rooms won't increase the size requirements.
Desk fees should be calculated to determine how many licensees are needed to cover expenses.
When Andrew schedules a sales meeting at his brokerage, he prepares well in advance by ___________.
Developing an agenda, talking points, visuals, and handouts
Which of the following most completely describes the cost of sales concept? Commissions paid to sales staff Cooperating broker commissions the firm received Direct costs, plus a portion of indirect brokerage expenses Direct costs, such as referral fees and cooperating broker commissions
Direct costs, plus a portion of indirect brokerage expenses Every dollar a firm earns has a cost. Some costs, such as referral fees and commissions, are easy to attribute directly to a specific sale. A portion of other brokerage expenses, such as utilities and rent, should also be allocated to each sale.
Question 38 What is the best way for a brokerage to be culturally savvy? Advertise to a diverse segment of the community. Attend community events. Employ staff who are familiar with the customs, languages, and needs of people from different backgrounds and cultures in your community. Require all employees to take cultural diversity training.
Employ staff who are familiar with the customs, languages, and needs of people from different backgrounds and cultures in your community.
Population growth and decline in an area is usually the result of which type of changes?
Employment opportunities
The balance sheet includes assets, liabilities, and ________. Cash flow Equity Expenses Net income/loss
Equity
Who in a brokerage firm should know the firm's code of ethics?
Everyone
Which two agencies enforce antitrust laws? Department of Justice and the Department of State Federal Trade Commission and Department of Justice Federal Trade Commission and Department of State United Nations and Federal Communications Commission
Federal Trade Commission and Department of Justice
Question 46 Which of the following is essential software for most brokerages? Desktop publishing Financial management software Image editing Servers
Financial management software
Which of the following is a lagging economic indicator? Consumer confidence index Consumer inflationary index Consumer price index Gross domestic product
GDP
Which type of partner shares full personal liability for the partnership's debts and obligations? Close Franchisee General Limited
General partners share full personal liability for the partnership's debts and obligations to the extent of their ownership.
Alison has written the mission and vision statements and defined objectives for her up and coming brokerage business, Honesty Homes. Now it's time to set some goals. She asks her mentor, brokerage owner James, for some guidance on what goals are, and how to write them. What advice do you think James would offer Alison? Goals regarding future revenue should be based on solid assumptions. Goals should be challenging and based on what experienced competitors are doing. Goals should be specific, measurable, attainable, realistic, and timely. Goals should have strict start dates and flexible end dates. Goals should be SMART: specific, measurable, attainable, realistic, and timely.
Goals regarding future revenue should be based on solid assumptions. X Goals should be challenging and based on what experienced competitors are doing. X Goals should be specific, measurable, attainable, realistic, and timely. Goals should have strict start dates and flexible end dates. X ans: Goals should be SMART: specific, measurable, attainable, realistic, and timely.
Nat has a friend who's in the home construction business, and he says that in the last six months, there's been an increased demand from developers to build homes that are more energy efficient and use sustainable, non-toxic building materials. What current market trend is this an example of?
Greener buyers
Commonly, the Federal Trade Commission will receive leads about a potential antitrust violation through which avenue?
Hearing consumer complaints
Charli is thinking about buying only liability insurance for the office building she owns. She knows she'll have to pay for any damage to the building. What factors should Charli consider in making this decision?
Her willingness and ability to withstand the risk posed by carrying only liability insurance (risk tolerance)
Which of the following actions could compromise your security when meeting with a customer for the first time in the field?
Ignoring a lewd comment
A consistent disparity in listing versus selling prices may reflect ___________.
Inaccurate competitive market analyses
Cityville administrators are trying to control urban sprawl, but they still need to plan for the growing population. They've revamped zoning laws to allow residential units to be built on smaller lots, and multi-family housing to be built in areas once zoned for single-family housing. Which real estate trend does this describe?
Increased density
Which option best describes what an environmental impact statement is?
It describes and analyzes a proposed action that may have a significant effect on the environment.
A coaching framework is useful at a brokerage because ______.
It gives structure to the coaching process, which helps it be most effective
Which of the following statements is true regarding risk identification? It involves analyzing the level of exposure associated with risks the firm faces. It involves reviewing every aspect of the firm's operations to determine what risks each poses. It's the final step in risk management. It's the process of categorizing financial risks of various investments.
It involves reviewing every aspect of the firm's operations to determine what risks each poses.
Developing and implementing a solid business plan is challenging. The challenge can be lessened by following some key concepts. Which of the following is a concept that applies to a good business plan? It allows the company to invest time, money, and resources into some risky ventures. It encourages the owner to abandon the course in response to unforeseen market conditions. It focuses solely on the present market conditions and the organization's strengths. It requires buy-in and integration throughout all levels of the organization.
It requires buy-in and integration throughout all levels of the organization. A business plan is the organization's guidepost to doing what's right, and it requires cooperation and commitment from everyone in order for it to be effective.
why is the Consumer Price Index (CPI) important? It's a measure of the public's confidence. It's the best general indicator of inflation. It's used by the Federal Reserve to adjust monetary policies. It tracks growth or lack of growth of personal consumption.
It's the best general indicator of inflation. CPI essentially measures changes to the cost of living. A high CPI indicates lower purchasing power for consumers and potentially less demand for goods and services.
Broker Sam has extended an offer to licensee Jane, who has accepted the offer. Jane will work as an independent contractor for Sam. Based on this, which of the following statements is true?
Jane will need to fill out a W-9 for IRS reporting purposes. Independent contractors are required to fill out a W-9 for IRS reporting purposes. Only actual employees are required to complete the W-4.
Which of the following is a test the IRS uses for establishing a licensee as a self-employed independent contractor? Compensation is paid by the buyer or seller in the transaction directly to the independent contractor. Language in the written agreement states that the licensee will not be treated as an employee for federal tax purposes. Taxes are withheld from a licensee's compensation. The licensee is paid hourly.
Language in the written agreement states that the licensee will not be treated as an employee for federal tax purposes.
A leader who displays the quality of being a visionary is able to do what?
Look ahead at trends to meet future market demands
Question 44 A ______ would fulfill his or her assigned role within the brokerage by supervising licensees and staff. Clerk Manager Personal assistant Sales associate
Managers are responsible for directing the work of others to ensure that business goals are met.
Which factor should be considered when evaluating the competition in a given market area? GDP Market share New building permits Vacancy rates
Market share
Trina's brokerage is a key player in the real estate marketplace. After 12 years of steady expansion, growth has slowed to a less-aggressive pace, allowing Trina and her management team to evaluate current operating structures and assess whether to take on new ventures. What stage of the business life cycle is Trina's business in? Decline Growth Maturity Midlife
Midlife In the midlife stage, the company is a key player in the marketplace. Growth is less aggressive, and taking on new ventures is an option
A general business objective is designed to expand on which of the following? The company's core values The company shareholders' goals The company's mission statement The company's vision statement
Mission Statement-The purpose of business objectives is to state what the company will focus on to fulfill its mission, and to become the priorities during the plan's defined timeframe.
This essential feature of a business computer system allows communication within a brokerage and teleconferencing to remote locations, and allows staff to share files and folders stored on their hard drives with each other. Cloud computing Networking Security management Transaction management
Networking connects people in an office to each other and to the files and folders stored on various computers located at the firm
Rogelio is preparing a sales contract form for his buyers. He's leaving those areas that don't pertain to this transaction blank. Is this correct? No, because Rogelio didn't ask his clients for permission to leave those areas blank. No, it's best not to leave any area of a contract blank. Yes, anything written in those areas would confuse the issue. Yes, if they don't apply. Rogelio should put the words "not applicable" or the abbreviation "N/A" in any area of the contract that's not relevant to a particular transaction.
No, it's best not to leave any area of a contract blank. Rogelio should put the words "not applicable" or the abbreviation "N/A" in any area of the contract that's not relevant to a particular transaction.
Remembering the acronym ______ can help you remember the fiduciary duties an agent owes to a client. ARMOR CANDOR FARMOR
OLD CAR Remember the acronym OLD CAR. It stands for the duties of obedience, loyalty, disclosure, confidentiality, accounting, and reasonable skill and care.
A budget _____ means that the amount budgeted for a specific line item has been overspent. Deficiency Deficit Overage Overrun
Overrun If you've budgeted $10,000 for marketing and have spent $12,000, that's a budget overrun.
Licensee Audrey was convicted of an antitrust violation. What is the maximum prison sentence she can serve? 10 years Five years No prison time Two years Penalties for violating antitrust laws can include fines of as much as $1 million and a prison term of up to 10 years.
Penalties for violating antitrust laws can include fines of as much as $1 million and a prison term of up to 10 years.
What is the most fundamental management activity? Accounting Investment Planning Training
Planning is the most fundamental of all management activities. Every subsequent business decision should flow from the business plan.
Alison has begun developing her brokerage's long-range plan, and she asks her mentor, brokerage owner James, for his guidance. He wants to encourage her, yet make sure she understands the challenges she may face. "There are some business plan concepts that can really challenge an organization," he says. Which of the following is an example of a challenging business plan concept that James should share with her? A plan doesn't have to be implemented right away. A plan is a strict management tool that should be state in stern and realistic terms. If a plan doesn't appear to be effective in the first three months, it should be abandoned. Planning takes time and money up front.
Planning takes time and money up front. Developing and implementing a business plan requires realistic expectations, patience, and diligence. Be prepared to spend time and money up front and understand that it will take time for the plan to materialize once implemented.
Within the firm, in what document(s) would a licensee find information about the company's risk management processes? Independent contractor agreement Office newsletter Policies and procedures manual Transaction files
Policies and procedures manual
Which one of these professional development opportunities is designed to give a licensee expertise in a particular area and to recognize the licensee's commitment to professional education? Professional designation or certification Real estate conference Real estate seminar Required continuing education
Professional designations show an ongoing commitment to professional education and offer a way to become an expert in an area of interest.
Question 45 Which of the following programs at a brokerage will be most effective at incentivizing most associates to perform better? A disciplinary meeting when performance doesn't meet brokerage goals An annual performance review and rating Public recognition, such as at a sales meeting, of an associate's accomplishment Public reprimand, such as at a sales meeting, for inadequate performance Public recognition for accomplishments is a strong motivator for most people, while discipline and reprimands are much less effective.
Public recognition, such as at a sales meeting, of an associate's accomplishment
Reggie has thoroughly reviewed the sales contract with his clients, the Arnolds, and has confirmed that they understand all of the terms and provisions. What should Reggie do next? Ask the Arnolds if he can provide them with any legal advice about the contract. Ask the Arnolds to complete a satisfaction survey and rate their experience with him. Make a copy of the contract and send it to the seller's agent. Recommend that the Arnolds review the sales contract with an attorney before signing it.
Recommend that the Arnolds review the sales contract with an attorney before signing it. It's always a good idea for licensees to recommend their clients review the sales contract with an attorney before signing it.
Which of these would be an advantage for the broker of hiring licensees as salaried employees, rather than as independent contractors on a commission-based compensation plan?
Sales agents will probably make fewer errors as a result of more broker control and supervision.
Question 60 The number of houses sold over a period of time is reflected in _______. Inventory rates New building permits Price levels Sales volume
Sales volume is the number of houses sold. The smaller the market, the more indicative this is of market conditions. For instance, sales volume for a city is less indicative for a home in a given neighborhood than sales volume for that neighborhood.
Broker Amanda is getting discouraged. Even though she's only had her brokerage open for a few months, she's having second thoughts about her business's original long-range plan. What should she do? She should scrap the original long-range plan immediately and come up with a new one. She should stick with the original long-range plan for however long it takes to make it work, even if it's several years down the road. She should stick with the original long-range plan until her brokerage has been in business for at least six months, and then come up with a new plan. She should stick with the original long-range plan until she's established her company's position in the marketplace.
She should stick with the original long-range plan until she's established her company's position in the marketplace. When you're creating a business, there may be trends or ideas that tempt you to change course. Your long-range plan is there to remind you of your end goal, and the reliable, strategic road map you're following to get there.
To prevent issues with computer systems, a brokerage should concentrate on ________. Having a small and manageable computer system Hiring a systems specialist Software updates, antivirus scans, and software and utility scans System damage and replacement plans
Software updates, antivirus scans, and software and utility scans Three key areas brokerages should concentrate on for system maintenance include software updates, antivirus scans, and software and utility scans.
income statement might also be called the ________.
Statement of profit or loss
Which of the following requires that contracts transferring ownership of real property be in writing to be enforceable? Code of ethics Fair Housing Act Statute of frauds Statute of limitations
Statute of frauds
avalanche Developing is building a new urban, mixed-used development that will cater to young singles and couples who are just starting their careers. Of the following, which is the best advertising medium for marketing this upcoming development? Billboards Classified ads Internet ads QR codes
Strategically placed billboards will blast information and images about this new development to many individuals, multiple times.
If you're going to take advantage of cloud computing to store sensitive client information, you will need what security measures to protect the data?
Strong passwords, limited access, and virus protection
Substantial contract performance has occurred when ______. Both parties fully meet all contract obligations Essential elements of the contract have been completed, but perhaps not to the exact contract specifications One or more terms of the contract has not been met One party is being held to exact contract terms after having breached the contract
Substantial performance is a form of partial performance. Essential contract terms have been met, but perhaps not to specification. For example, substitution of eggshell paint finish for satin paint finish.
Which of the following business planning activities breaks the long-range plan down into smaller tasks and identifies which segment(s) of the company are responsible for doing what? Market analysis Situational analysis Strategic planning Tactical planning
Tactical planning is the most granular level of planning. Once the long-range plan has been broken down into smaller tasks, the management and staff are responsible for carrying out the tactics.
The firm's target market information in the marketing plan includes which of the following? Average time on market Demographics Interest rate trends Inventory of homes
Target market information includes demographics, location, and price point related to potential buyers and sellers.
Which of these statements most accurately represents existing federal antitrust legislation? The Clayton Act supports the Sherman Antitrust Act's purpose of prohibiting monopolies by prohibiting mergers or acquisitions that would create a monopoly. The Federal Trade Commission Act established the Sherman and Clayton acts to prevent collusive activities that limit competition. The Federal Trade Commission Act prevents one large firm from acquiring another similar firm that would result in a restraint of trade. The Sherman Antitrust Act was passed to supplement the Clayton Act in an effort to prevent mergers that create monopolies.
The Clayton Act of 1914 supports the Sherman Antitrust Act of 1890 by prohibiting mergers or acquisitions that would result in an unreasonable reduction in competition or the creation of monopolies.
Which of the following agencies dictates records retention requirements? Local association of REALTORS® NAR® The IRS Your local MLS
The IRS IRS dictates the retention of financial records, while states regulate the retention of transaction records. Question 41
Question 37 Which phase of the business life cycle is characterized by a small scope of work, a tight budget, and an efficient operating structure? Birth Growth Maturity Midlife The birth stage is characterized by a small scope of work, tight budget, and efficiency.
The birth stage is characterized by a small scope of work, tight budget, and efficiency.
Which of the following is one of the IRS requirements for a real estate brokerage worker to be classified as a statutory non-employee?
The individual and the employing broker have a written contract.
Which of the following is one of the IRS requirements for a real estate brokerage worker to be classified as a statutory non-employee?
The individual and the employing broker have a written contract. the written contract must describe the real estate services that the individual will perform and must explicitly state that the individual will not be treated as an employee for federal tax purposes.
Identify the forms that current law requires to be used in all lender-financed residential closings. GFE and Loan Estimate GFE and TIL Loan Estimate and Closing Disclosure Loan Estimate and TIL
The law requires two specific forms—the Loan Estimate and Closing Disclosure—to be used for all residential closings.
The Brendon Group is evaluating a new market and wants to know the market's cultural composition. That's likely because _________.
The licensees don't do any active selling.
Which of the following important components of a business plan outlines an organization's fundamental purpose? Goals statement Mission statement Purpose statement Vision statement
The mission statement is a reminder of why the organization is in business.
Why does it matter if a brokerage decides to maintain a sales staff of 50 mostly new licensees, rather than 10 very experienced licensees? The brokerage can make more money with many licensees, regardless of experience level. The brokerage will be required to pay fewer taxes with a large group of new licensees than for a small group of experienced licensees. The brokerage will have more difficulty finding experienced licensees who want to switch brokers, so recruiting will be costlier. The number of licensees and their experience levels will affect the working relationships the brokerage has with its licensees.
The number of licensees and their experience levels will affect the working relationships the brokerage has with its licensees. Staffing the sales force requires the broker to make decisions about number of licensees and their experience level, because these factors will affect the working relationship the broker needs to have with sales associates to ensure their success.
Alison has set the goals for her new brokerage, and now she's ready to figure out the strategies. She's met with her mentor, James, so he can provide some guidance on strategy. James starts by explaining the purpose of strategy. Assuming James is an expert on the subject, which of the following statements would he make about the purpose of strategy? The purpose of a strategy is to provide alternative ideas, options, strategies, and resources when unexpected conditions arise. The purpose of a strategy is to state what the company will focus on to fulfill its mission, and determine what are to become the priorities during the plan's defined timeframe. The purpose of a strategy is to support and help reach a goal by determining the method by which the goal can be achieved. The purpose of strategy is to divide a company's general objectives into realistic, manageable, smaller accomplishments.
The purpose of a strategy is to support and help reach a goal by determining the method by which the goal can be achieved.
After years of dreaming of starting a real estate brokerage, Alison Jones is taking steps to make her dream a reality. Her mentor, James Jewels, a successful brokerage owner, has explained that having a business plan is both smart and necessary. He says that some companies fail because they don't plan sufficiently (or at all) for various reasons. Which of the following is one common reason companies fail to develop and implement a business plan? Lack of excitement Lack of incentive Lack of motivation Lack of talent
The top reasons some companies don't develop and implement business plan include the lack of time, money, and talent.
Question 47 When comparing a leader to a manager, which of the following actions or traits demonstrates leadership? Being people-focused Being process-focused Directing Establishing policies and procedures
There's always a little crossover between traits a leader and a manager must have, but typically, leaders are more focused on people; managers are more focused on policies and procedures.
Which of the following actions can licensees take related to signs? They can only place signs on property they own. They can place signs on an owner's property with the owner's written consent. They can place signs on properties for which they are the listing agent, with or without the owner's permission. They can't place signs anywhere.
They can place signs on properties for which they are the listing agent, with or without the owner's permission.
Broker Craig fires salesperson Enrique for violating a provision of the license law. Which of the following is true of this situation? This is a valid reason to terminate the licensee's affiliation with the broker. This is not a valid reason for the broker to terminate his affiliation with a licensee. This is only a valid reason for the broker to terminate his affiliation with the licensee if the broker's given the licensee a written warning before the licensee violated the law the last time. This is only a valid reason for the broker to terminate the licensee's affiliation if the real estate commission has revoked or suspended the licensee's license for this legal violation.
This is a valid reason to terminate the licensee's affiliation with the broker. A salesperson who's guilty of violating real estate law or brokerage policy should receive disciplinary action and possibly termination, depending on the severity of the misconduct.
How is inorganic growth achieved? By adding similar services to those already offered By incorporating industrial sales into a business model By naturally expanding geographically throughout the market area Through the acquisition or merger of another company
Through the acquisition or merger of another company
Question 56 When working with a developer who's purchasing undeveloped land for a new subdivision, ABC Realty stipulates in the contract that in order to purchase the undeveloped land, the developer must purchase grading services from Bulldozers-R-Us. Which antitrust violation is this? Group boycotting Market allocation Price fixing Tie-in arrangement
Tie-in arrangement
Which of these is an example of antitrust violations common to real estate? Fraud, concealment, and misrepresentation Profiteering, racketeering, and domineering Puffery, hyperbole, and exaggeration Tie-in arrangements, market allocation agreements, and group boycotting
Tie-in arrangements, market allocation agreements, and group boycotting In addition to price fixing, antitrust violations include tie-in arrangements, market allocation agreements, and group boycotting.
joe's total current assets are $278,000, his total assets are $455,000, and the equity amount on his balance sheet is $276,000. What is the total of his liabilities? $177,000 $179,000 $2,000 $394,000
Total assets less equity equals liabilities. Assets - liabilities = owner's equity, or $455,000 - $276,000 = $179,000.
Question 59 Charli has chosen to purchase only liability insurance on the office building she owns. Which of the following combinations of risk handling is she using? Acceptance and avoidance Avoidance and mitigation Mitigation and transfer Transfer and acceptance
Transfer and acceptance
A ______ plan for a merger should include financial guidelines for how each firm will share profits in the future. Acquisition ROI Transaction Transition
Transition
Alison has written the mission and vision statements for her brokerage, Honesty Homes. Armed with those and the situational analysis data, she's ready to begin forming business objectives. Starting out, her brokerage will be small, with only three licensees and a part-time administrative assistant. How many objectives would be reasonable to start off with? Five Four Three two
Two: While the number of objectives varies based on the brokerage's size, its number of employees, and how complex it is, a small organization usually has only two general objectives.
A ____ breaks a more general budget line item into details, making it easier to use in guiding business operations. General operating budget Monthly operating budget Profit center budget Variable expense budget
Variable expense budget A variable expense budget breaks high-level budget figures from the general operating budget into more detailed categories and amounts.
Adding a mortgage lending service to a real estate brokerage operation is an example of what type of growth? Geographic expansion Horizontal expansion Organic growth Vertical expansion
Vertical expansion Adding a mortgage lending service is an example of expanding into vertical markets that typically are performed before, after, or in conjunction with a real estate transaction.
When selecting a site for a brokerage, in addition to suiting your purpose and cost efficiency, what else should you consider? Availability of financing Competition Storage Visibility
Visibility Considerations when selecting a brokerage site include visibility, ease of access, parking, whether or not it suits the purpose, and cost efficiency.
Which of the following training topics would be appropriate for a brokerage to offer to both new licensees and experienced salespeople? How to develop a sphere How to write a contract The basic process for a transaction What to do about structural defects
What to do about structural defects Some training topics are too basic for experienced salespeople, but are necessary for new licensees. Other topics, such as handling structural defects, are part of an associate's ongoing education.
Jake is considering the hardware and software needs of his brokerage. When determining his needs, what should he consider first? Software The central processor The computing memory The user's level of experience
When determining hardware and software needs, it makes sense to consider the software first. That's because the computing power, speed, and memory required by a hard drive or central processor will be affected by the demands of the software applications.
Joan is trying to determine the amount of space she needs for her brokerage. Most of her licensees are rarely in the office .Which site selection considerations are most important for her needs? Energy efficiency Environment Parking Who uses the office Space priority should be given to those who use the office the most. She should consider who uses the office to decide if she needs a small or large space.
Who uses the office
Darius reviews the items on his sales meeting agenda. He wants to make sure that his associates see the meeting as time well spent, so he checks that all agenda items ________. Are directly related to real estate or licensing laws Are strategies backed by well-known real estate gurus Can be represented as a dollar value to his licensees Will help his licensees perform better or more easily
Will help his licensees perform better or more easily. Sales associates want a sales meeting to provide information and tools that will help them build their businesses or become better producers, so Darius is wise to keep his topics aligned with that need.
Question 49 Ginny counters Tom's offer of $250,000 for her house, asking for $255,000. Ginny's agent sends the counteroffer to Tom's agent. Tom is out of town for the week and can't be reached. On Tuesday, Ginny decides to revoke her counteroffer and instead ask for $260,000. Can she do this? No, because Ginny can't write two counteroffers. No, because Tom's agent has Ginny's first counteroffer. Yes, because she didn't write the original offer. Yes, because Tom hasn't accepted the first counteroffer.
Yes, because Tom hasn't accepted the first counteroffer.
Ricky is working for Matt, a buyer client, who is interested in a property at which the listing agent offers compensation to cooperating agents. The listing agent has offered Ricky or any cooperating agent additional compensation if the transaction closes within 40 days. Is this ethical? No, it's never ethical for a licensee to accept compensation from more than one party. Yes, but only if all of the involved parties have full knowledge and provide consent. Yes, but only if the Matt has full knowledge of the compensation arrangement and provides consent. Yes, licensees can receive compensation from multiple parties in the transaction.
Yes, but only if all of the involved parties have full knowledge and provide consent. Licensees can only accept compensation from more than one party with the full knowledge and consent of all involved parties. That compensation must also go through the brokerage firm.
Who has the most valuable information about your firm's operations to assist in identifying potential risk? Risk management consultants You and your staff Your attorney Your financial experts
You and your staff
You'll have various levels of business planning. When you get started, though, your focus should be on _____________. How quickly you can be up and running Your business's long-range plan Your end goal Your objectives
Your long-range plan, also known as the blueprint, master plan, general plan, or strategic plan, is the beginning point for the organization.
On a balance sheet, which of the following would be considered a liability? A bank account Accounts receivable A debt owed
a debt owed
Which of the following is an example of a service expansion, as opposed to a geographic expansion? Dave's firm decided to take on a new niche: golfers. Jennifer's brokerage opened up a new market across town. Ralph's firm began charging a slightly higher commission to its clients, based on market averages. Simone's brokerage used to service the east side only, but began serving clients on the west side as well.
a. Service expansion methods focus on offering services to additional niches, or more generalized services that could be used by many consumers.
Clarence's brokerage has been selected for an audit by the state regulatory agency. He doesn't worry, though, because he has ______. Accurate records A smart accountant Audit insurance The right to appeal any findings
accurate records
Question 53 Which of the following is a preventive measure that takes very little time and can save hours of work if a computer system crashes? Backing up data Reinstalling software Rekeying data Retrieving data
backup data
Reese and his staff have developed an engaging, action-oriented listing presentation to present to potential sellers. Which component in the marketing model does the listing presentation represent?
communicating
central element of an antitrust violation is _______. A contract Customer relationships High stakes Interstate dealings
contract Antitrust involves a contract and conspiracy among competitors. Question 60
Which of the following should your contingency files contain?
copies of insurance policies and licenses
Mike and Ike set up a real estate company. Mike, Ike, and Spike each own a portion of the stock. Mike & Ike Realty is a legal entity of its own. Mike is involved in a ______. Corporation Limited liability company Partnership Sole proprietorship A corporation is a legal entity. Most likely, this is a close corporation.
corporation
Question 50 Tyrone started a job in the sales department of a large firm. In an organizational chart, his department is shown alongside many others. Departments are run as teams with individuals at all levels responsible for making business decisions. What type of organizational structure is this? Centralized Decentralized Monolithic Vertical
decentralized
Which of the following gives employers the right to hire and fire people with or without a reasonable cause? The doctrine of employment-at-will The doctrine of independent contractor status The Fair Labor Standards Act The U.S. Equal Employment Opportunity Commission
doctrine of Employment-at-will is in place in all states, but may be applied differently when the state has other laws or regulations that affect it.
The balance sheet includes assets, liabilities, and ________. Cash flow Equity Expenses Net income/loss The balance sheet includes assets, liabilities, and equity.
equity
Which special lease clause stipulates increased rental rates at specific times during the lease term, or requires tenants to pay a proportionate amount of the overall increased utility expense, in addition to their base rent? Assignment/subletting Escalation Service included Tax
escalation Because expenses continue to increase to the point that landlords end up with no profit on real estate investments, many current office leases are designed to "pass on" the increase to individual tenants through an escalation clause.
Most business plans include a synopsis of the plan as a whole, designed to be read by shareholders, lenders, and other third parties with an interest in learning about the organization. What is this synopsis called? Company description Description of services Executive summary Mission statement
executive summary
James is an unlicensed assistant at Franklin Brokerage and is paid a monthly salary. According to labor standards he is classified as a(n) ______ employee. Exempt FLSA Non-exempt Tax free
exempt
What's the purpose of a firewall? It backs up your files to an external hard drive. It encrypts your email. It prevents hackers from infecting your system with viruses, worms, and malware. It stores logins and passwords.
hacking
Personality type models should be used to ____________.
inform and understand
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 Kristin and Dalton Kristin and the seller The seller
kristin
Question 51 As a broker-owner, you should be most concerned with __________ laws. Antitrust Local Local, state, and federal RESPA
local, state and federal
What business affiliation is used as part of an operational strategy whereby broker participants cooperatively share listing data and offer consumer access to MLS databases? Business networking association Multiple listing service National Association of REALTORS® Shared client service
mls: Multiple listing service
Question 52 What is a benefit of affiliating with a national corporation? Increased decision-making authority Maximum control and flexibility Name recognition Shared office space
name recognition
Which of the following factors most directly determines the complexity of an organization's operating structure?
number of job roles
Sydney decided to add housing inspection services to her company, so she got licensed as an inspector and started offering her services to buyers. What type of growth is this? Corporate growth Inorganic growth Non-corporate growth Organic growth
organic growth
Question 57 A sales associate's ability to work most effectively is affected by five factors. These are the physical and technical environment, communication, knowledge and skills, motivation, and ___________. Emotional intelligence Organizational effectiveness Organization's size The real estate market The business model and the organization's mission, vision, goals, and values are the foundation that the sales associate must work within, so organizational effectiveness is one of the five factors that affect performance.
organizational Effectiveness
Brainstorming and focus groups are a big part of this style of management. Coercive Dictatorial Laissez-faire Participatory
participatory
A market analysis of the economic, _______, and competitive business environments should all be part of planning a new business. CCI GDP Regulatory Sales data
regulatory An analysis of the market includes a thorough evaluation of three key environments: economic, regulatory, and business.
The final step in the risk management process is _______. Risk handling Risk identification Risk management Risk tolerance
risk handling
Broker Allie wants to attract new licensees to her brokerage. Which of the following is a good way to do this? Ask her current licensees to act as ambassadors with their colleagues. Network at local real estate commission meetings. Pass out her card to licensees she meets at industry events. Talk to real estate school instructors.
talk to real estate school instructors. Strategies for recruiting new licensees include developing a relationship with real estate school instructors and simply talking about real estate as a career with non-licensees.
Local demographic, zoning, political, and infrastructure changes may all impact your firm's sales. Which of the following is the best method to use to stay informed about these issues? Following national business news Keeping tabs on U.S. unemployment data Networking and checking local business reports Reading the Wall Street Journal
the best local resource is networking with other professionals in your area, including city government, banking, and other related industries. Local business reports provide a good source of information, too.
Edgar and his management staff identified their work with real estate contracts as a potential risk to the firm. If Edgar hires an attorney to review every contract written in his office, which risk-handling strategy does this represent?
transfer
