The CE Shop Real Estate - Practical Applications Section

Which of the following statements is true about advertising rules and technology-based media? Advertising rules apply online, just as they do in other media. Licensees shouldn't advertise online. Only brokers can advertise online. Only certain types of properties can be advertised online.

Advertising rules apply online, just as they do in other media.

A brokerage relationship in which a broker represents one and only one party in a transaction and advocates for that party as their client, including performing fiduciary duties

Single agency

What's true about the Definitions of Working Relationships document? It describes how the commission oversees real estate licensees. It describes the relationships a consumer could have with a licensee. It discloses a pre-existing relationship. It's a binding contract.

It describes the relationships a consumer could have with a licensee.

What's the best way to explain to sellers why you won't lower your commission rate? "My broker won't allow me to lower my rate." "My fee is based on the services I provide." "This is the industry standard." "This is the standard rate for this market."

"My fee is based on the services I provide."

About what percentage of licensees make it in real estate?

13%

When a buyer makes an offer on a property that's currently under contract with another buyer; seller and second buyer negotiate the terms and conditions of the back-up offer and reach a binding agreement, which will go into effect only if the primary contract terminates

Back-up offer

In order to succeed in real estate, you need to ______. Be disciplined and diligent Focus on making money, not building relationships Never work for free Understand that it's a better hobby than a business

Be disciplined and diligent

When a contract dispute goes to mediation, who pays for it? Both parties The party who requested it The seller The wronged party

Both parties

Typically an estimate of price on distrssed properties in case the lender must foreclose; often involves a drive by the property, photos, and paperwork for the lender in exchange for a small fee

Broker price opinion: (BPO)

You represent Andi, a tenant, as a single agent and are showing her several apartments today. Which form would you provide to prospective landlords so they know what relationship exists? Brokerage disclosure Change of Status Definitions of Working Relationships Lease

Brokerage disclosure

Before closing, who should get a home inspection? Buyer Lender Seller Title insurance company

Buyer

On the Colorado Exclusive Right-to-Buy Listing Contract, the buyer relationship options are ______ or transaction-broker. Brokerage Broker agency Buyer agency Seller agency

Buyer agency

A principal-agent relationship where the broker is the agent for the buyer, with fiduciary responsibilities to the buyer (broker represents the buyer under the law of agency)

Buyer agency agreement

Who typically attends the final walk-through of a property?

Buyer and buyer's broker

How might a company help its non-English-speaking agents from another country succeed in its U. S. offices? By forcing them to speak English By giving them an Anglo boss By giving them bonuses for excellent work By providing English as a second language (ESL) classes and tutors

By providing English as a second language (ESL) classes and tutors

After being required to put a minimum of 25% down on a loan, Duane invested in a multi-unit apartment building. What type of property does Duane own? Commercial Commercial residential MUD Residential

Commercial residential

Multifamily housing of five or more units

Commercial residential

Sales comparison approach to produce an opinion of a subject property's market price range

Comparative (or competitive) market analysis (CMA)

Which two items will appear on a closing disclosure? Credits and debits Repair invoices and seller credits Seller net and buyer net Title liens and buyer inspection items

Credits and debits Credits and debits appear on the closing disclosure.

What section of the residential sales contract provides the contract-to-closing timeline?

Dates and Deadlines

How do current homeownership rates compare to the rates in 2004? Declined Plummeted to less than 60% of the 2004 rate Slightly higher Stayed flat

Declined

Which document is used to establish proof of ownership and to transfer the title? Abstract of title Deed Survey Title insurance policy

Deed

Turns information into indecipherable code

Encryption

What is the Colorado Real Estate Commission's buyer agency agreement called? Buyer Agency Contract Exclusive Right-to-Buy Listing Contract Right-to-Buy Buyer/Tenant Agreement Right-to-Purchase Contract

Exclusive Right-to-Buy Listing Contract

All parties to the transaction gather together to settle

Face-to-face closing

Hardware/software that controls network Internet access

Firewall

A ______ investor purchases fixer-uppers, fixes them, and then sells them for a profit. Buy-and-Hold Commercial Fix-and-flip Wholesaler

Fix-and-flip

Leisure properties

Golf courses, hotels, movie theaters, restaurants, and motels

What must a person do to legally be a property manager in Colorado? Become a member of a homeowner association Follow accounting-specific rules from the Colorado Real Estate Commission Hold an accounting certificate Hold a real estate broker license

Hold a real estate broker license

A listing agreement clause that protects the broker's commission if the buyer and seller try to negotiate independently after the listing agreement expires

Holdover clause

In what type of market might an agent ask the multiple buyers who have submitted offers to submit their highest and best? Cold Hot Neutral Stagnant

Hot

Why should you know when the seller can vacate the property? If a buyer wants to close before the seller can vacate, the seller may need to rent it back from the buyer. You'll need to know when you can have the property staged. You'll want the house empty for showings. You'll want to schedule the closing during the seller's occupancy.

If a buyer wants to close before the seller can vacate, the seller may need to rent it back from the buyer.

The four essential elements to a valid contract

Legally competent parties, offer and acceptance, legal purpose, and consideration. Contracts must also be in writing and signed by all parties, per the statute of frauds

Given to buyers on or within three days of applying for a loan; lists the charges a buyer is likely to pay at settlement and discloses mortgage loan specifics, such as key features, costs, and risks

Loan Estimate

Lena's buyer client Mindy is making an offer on Joe's house. Which party decides how much earnest money to offer? Joe Joe's agent Lena Mindy

Mindy

Non-traditional office building types

Mixed-use, office parks, and office condominiums

In order for intuition to be an effective tool for your personal safety, you must learn to recognize it, listen to it, and ___________. Act on it Deny it Ignore it Turn it off

Act on it

What form does a broker use to change an accepted sales contract in Colorado?

Agreement to Amend/Extend Contract; can also be used to change a previously agreed-upon deadline

Employment contract between a property manager and a building owner

management agreement

A document given by the property manager to the building owner detailing plans for supervising the property

management proposal

Jose's client verbally agrees to a buyer's offer. This is considered _______. Binding acceptance Legal acceptance Non-binding Partial acceptance

Non-binding

Which of the following items might appear on the title commitment as a condition that must be satisfied before a title insurance policy will be issued? Disclosure of closing fees and costs Payment of moving expenses Payment of prior liens Review of prorated payments to be made by buyer and seller

Payment of prior liens

Tyra owns a nail salon that's located in a strip mall. Her rent every month includes $1,800 base rent and 10% of her gross sales. What kind of lease does Tyra have? Graduated Gross Net Percentage

Percentage

Tenants pay a base rent plus a percentage of their gross sales once sales exceed a certain threshold

Percentage lease

Items a seller paid in advance and that the buyer must reimburse, e.g., utilities

Prepaid items

In a neutral market, what pricing strategy may generate interest in the property, possibly prompting multiple offers? Pricing above market value Pricing at market value Pricing below market value Pricing in line with comparable properties

Pricing below market value In a neutral market, pricing below market value invites interest in the listing and may prompt multiple offers, up to and beyond market value.

Prohibits licensees from negotiating a contract with a consumer who's currently under an exclusive agreement with another licensee (sign-crossing)

Rule 6.15: Sign Crossing

Allows the employing broker to designate another experienced broker to perform some of the supervisory responsibilities of the employing broker to avoid a possible conflict of interest

Rule 6.3.F: Delegation of Supervision

Which of the following actions should be taken when holding an open house? Limit advertising. Only be present to open and close the house. Schedule the open house for a day and time when the owner can be present. Schedule the open house soon after the property hits the market.

Schedule the open house soon after the property hits the market.

Who commonly accepts liquidated damages for a breach of contract—seller or buyer?

Seller

Your buyer client, Daniel, submitted an offer to purchase with an inspection contingency. He's left you a voicemail indicating that since the home is being inspected, there are some cosmetic issues and small repairs he'd like to address. How should you respond? Ask him to include you in the meeting so you can make sure he addresses all of the cosmetic issues. Tell him that the inspection period is not the time to nitpick the seller with cosmetic details. Tell him that you think he should also include the broken tiles in the bathroom in his list of repairs. Tell him you think it is a good time to address these issues.

Tell him that the inspection period is not the time to nitpick the seller with cosmetic details.

Seller Darla hasn't met her required obligations. Through his agent, buyer Alvin has delivered a Notice to Terminate. What's true regarding Alvin's earnest money? Alvin must forfeit half of the earnest money. Alvin must forfeit his earnest money. The entire amount of Alvin's earnest money will be returned. Twenty percent of the earnest money will be withheld.

The entire amount of Alvin's earnest money will be returned.

Lenders usually require _______ in reserve funds for homeowner's insurance, taxes, and mortgage insurance. One month Six months Three months Two months

Two months Lenders usually require that buyers bring to closing reserves equal to two months' costs for insurance and taxes.

Colorado sellers are required to disclose any known off-record title defects by the Off-Record Title Deadline on the purchase contract. Which of the following is an example of an off-record title defect? A recorded first mortgage Unpaid property taxes Unpaid water bill Unrecorded second mortgage

Unrecorded second mortgage

Manufacturing property

Used for industrial activities such as production, manufacturing, assembly, warehousing, research, storage, and distribution

Which of the following statements is true regarding the termination date of the Exclusive Right-to-Buy Listing Contract? A definite termination date must be included. No termination date is required. The termination date may not be extended. The termination date must be within 60 days of execution.

A definite termination date must be included.

During the rental application process, a property manager can't disqualify a tenant for which of these? A disability Insufficient income Lack of credit Poor credit history

A disability

Someone a licensee works with, but does not represent

Customer

Jane would like to be represented by Colorado broker Hercule when she sells her mansion. What do Jane and Hercule need to do to establish an agency relationship? Hercule needs to act like an agent. Jane and Hercule need to agree verbally to the relationship. Jane needs to agree to compensate Hercule for his services. Jane needs to sign an express, written agreement with Hercule.

Jane needs to sign an express, written agreement with Hercule.

You're listing a property and have identified a comparable property for your CMA. If the comparable, which sold for $172,000, has one bedroom less than the subject property (worth $7,550), but—unlike your subject property—has central air (worth $3,500) and a finished basement (worth $5,500), what's the comp's adjusted price? $145,450 $152,450 $155,450 $170,550

$170,550

How much should a new licensee expect to spend in start-up costs?

$2,000 to $4,000

Which of the following best describes a mixed-use property? A building that has a book store with a coffee shop in it A building that melds classic design with modern design A building that serves as a halfway house A building with commercial below and residential above

A building with commercial below and residential above

Hester has been doing her research and attending city planning meetings in hopes of finding a single-family home on the edge of a commercial district. What type of investment opportunity is Hester looking for? A conversion A fixer-upper A historic property A home targeted for rezoning

A home targeted for rezoning

Which of the following are reasons you should insist clients enter a space first? If you enter a space first, you could be cornered, locked in, or pushed from behind and disabled. It is poor etiquette. The person might see something you don't want them to see. The person might take one look at the property and try to leave.

If you enter a space first, you could be cornered, locked in, or pushed from behind and disabled.

Who's responsible for completing the Seller's Property Disclosure form in Colorado? A property inspector The buyer The seller The seller's broker

The seller

Who holds the most responsibility for a property's contamination clean-up costs? The current property owner The Environmental Protection Agency The mortgage company The property owner responsible for the problem

The current property owner

What's the inspection resolution deadline in the Colorado residential sales contract? The date by which negotiated repairs must be made The date by which the inspection must be performed The date by which the inspector must be paid for services The date by which the seller must respond to the Inspection Objection

The date by which the seller must respond to the Inspection Objection The seller must respond to the requests made in the Inspection Objection by the inspection resolution deadline.

Dominic's seller clients want him to lower his commission rate. What's the best way for him to reply? "I base my fees on my services. Which services would you like to give up?" "No way!" "Sure!" "This is the standard rate in this market."

"I base my fees on my services. Which services would you like to give up?"

When a seller's need is related to obtaining a specific price, what can a buyer offer to meet that need? An escalation clause A quick closing Full price or more than full price Waive appraisal

Full price or more than full price

Which of the following closing activities occurs on the day of closing? A pre-approval letter is provided to the seller. A preliminary title report is issued. Funds are transferred. The buyer receives loan approval.

Funds are transferred.

One who leases from another

lessee

What is a survey? A description method that uses principal meridians and base lines A description of the land that specifies the boundaries and location of a specific piece of real property An object used as a boundary or starting point for a metes-and-bounds description A professional, on-site measurement of the lot lines and dimensions of a property

A professional, on-site measurement of the lot lines and dimensions of a property

What is a title search? An attorney's opinion of whether the property's title is clear A review of public records related to a specific property A review of the file numbers assigned to title policies A summary of a property's previous owners

A review of public records related to a specific property

A change to an existing contract term

Amendment

Investor Ingmar is looking for an investment where location is a significant factor. Specifically, she needs a large piece of land that requires access from a large population who are looking for a way to spend the day, and don't want to spend the day getting there. What type of investment is Ingmar interested in? A golf course A hotel A manufactured home park An amusement park

An amusement park

Which of the following would be a factor that would cause a delay in closing? All loan documents obtained on time An appraisal lower than the contracted price An inspection performed with no findings An unbroken chain of ownership

An appraisal lower than the contracted price

What's the basic process for preparing a CMA?

Gather data on the subject property, select comparable properties from the MLS, and then make adjustments to the comparable sales prices to determine a listing price range for the subject property

Ted's looking for a large parcel of real estate—at least 150 acres—and he wants it to have gently rolling terrain. What type of special real estate investment is Ted most likely pursuing? Amusement park Congregate care center Golf course Manufactured home park

Golf course

When preparing a buyer presentation, what should you keep in mind? The buyer's national origin Ways to build trust Your commission Your well-rehearsed sales pitch

Ways to build trust

WILD CARD

Ways to terminate an offer: withdrawal by offeror, insanity, lapse of time, death, counter-offer, acceptance, rejection, destruction of the property

Your buyer clients, Cindy and Ray, want to make an offer on a house you showed them. However, they can't qualify for a loan until they've sold their current home. How will you advise your clients? Let's get to work on finding a buyer for your home. With any luck, the house you want will still be on the market when you're ready. Try asking someone in your family, such as your parents, if they can cover your mortgage payments on the new house until your current home sells. We can make your offer contingent upon the sale of your current home. If your home doesn't close within a certain time period, you can withdraw from the contract. We'll go ahead and make your offer, and we'll do our best to find a buyer for your house quickly, so you're not saddled with two mortgage payments.

We can make your offer contingent upon the sale of your current home. If your home doesn't close within a certain time period, you can withdraw from the contract.

Which of the following represents a safety risk and should be avoided when meeting with clients? Carrying a fully charged cell phone Entering the room last Wearing comfortable clothing Wearing high-heeled shoes

Wearing high-heeled shoes

What are the three areas of technology where licensees are most exposed to litigation risks? Presentation software, emails, and word processing software The MLS, emails, and voicemails Websites, emails, and spreadsheets Websites, social networking, and emails

Websites, social networking, and emails

One under an agency contract (such as a property management agreement) in whom trust is placed by another

fiduciary

One authorized to act for a principal in a specific range of matters

general agent

"Income received before expenses are deducted" is the definition of ______. Effective gross income Gross income Net income Taxes

Gross income

Headhunters Anonymous rents office space in a large office building owned by CEO Properties. CEO Properties pays all expenses for the property, including taxes, insurance, and routine maintenance. What type of commercial lease does Headhunters Anonymous have? Gross lease Net lease Office space lease Percentage lease

Gross lease

Landlord pays all expenses related to the property and recoups these expenses in the rent rate

Gross lease

In what type of lease does the landlord pay taxes, maintenance, and insurance? Gross lease Net lease Percentage lease Triple net lease

Gross lease With gross leases, the landlord typically pays all expenses, such as taxes, maintenance, and insurance.

One criteria that defines an AfBA in Colorado is as an arrangement in which a settlement service provider has either an affiliate relationship with or ______________________________ another service provider. Collects fees from Conducts closings with Has ownership interest of more than 1% in Is owned by

Has ownership interest of more than 1% in

Although a completed Seller's Property Disclosure form is supposed to be accurate, buyers are encouraged to ________. Have an inspector of their choice inspect the property Have their broker inspect the property Perform a self-inspection of the property Review any previous inspections performed on the property

Have an inspector of their choice inspect the property

Brandon is interested in purchasing a piece of property, but before doing so, he'd like to verify the accuracy of the legal description. Which of these options will accomplish this? Having a home inspection performed Having an appraisal performed Having a survey conducted Looking up the property on Google

Having a survey conducted

Why might you opt out of working with a buyer unless you're working under an agency agreement? An agency agreement is required by law. Having an agency agreement allows you to represent the buyer's interests. It commits the buyer to a two-year contract. It would be dual agency.

Having an agency agreement allows you to represent the buyer's interests.

Which of the following is a benefit of unimproved land? All of the plumbing and electrical are already there. Existing structures are usually ready to be torn down. Existing structures usually don't require improvement. If land is scarce, it can be valuable.

If land is scarce, it can be valuable.

Which type of office building is one to three stories tall? High-rise Low-rise Mid-rise PUD

Low-rise

Common office type buildings

Low-rise (one to three stories), mid-rise (four to 10 stories), and high-rise (11+ stories)

Douglas has invested in a complex of office buildings that share a parking lot and are surrounded by landscaped grounds. What type of property is this? Five-plex Mixed-use building Office condominium Office park

Office park

Truth in Lending Act; requires lenders disclose to borrowers all finance charges and the true cost of obtaining credit; also known as Regulation (or Reg) Z

TILA

TILA and RESPA Integrated Disclosures; include Loan Estimate, which replaces the Good Faith Estimate, and Closing Disclosure, which replaces the HUD-1

TRID

Who's responsible for verifying that a client knows what documentation to bring to closing? The client The lender The licensee who's representing the client The title insurance representative

The licensee who's representing the client

Your buyer client Haley is making an offer on her first home Although she can afford the full listing price, you advise her to offer 10% below the list price. What's a good reason for doing so? The market is cold. The market is heating up. The market is hot. The market is neutral.

The market is cold.

______is the preferred method of dispute resolution. Arbitration Litigation Mediation Negotiation

Mediation

If a buyer breaches a contract, who may terminate unilaterally?

The seller only; the buyer may not terminate

For which utility does a Colorado closing company withhold funds at closing? Electricity Gas Trash removal Water

Water

Buyer may work with an unlimited number of brokers, and must compensate the broker who locates the property

Open agency

Divisions of expenses and income between buyer and seller according to who owes what to whom

Prorations

Apps designed to protect your personal safety, such as tracking your location or requiring you to "check in" at certain time intervals

Safety mobile apps

What's a trade fixture?

A piece of equipment or other item that is on or attached to the real estate which is used in a trade or business and may be removed by the business owner as a personal item

Claudius has some trust issues; he's been to three different brokerages already and still refuses to sign an agency agreement. He says he wants to "keep my options open." What should you tell him? "I can't represent you without a written agreement." "If you sign today, I'll waive the administrative fee." "Signing the form is legally required." "You won't be able to enter into a contract without buyer representation."

"I can't represent you without a written agreement." You can't represent someone without a signed agency agreement. You can assist him with administrative tasks, but you can't advocate for him in a fiduciary capacity in any way.

Dawn is a real estate licensee working with Midge, a buyer. If Dawn were trying to explain the advantages of a buyer representation to Midge, what could she say? "All buyers are required to sign buyer representation agreements." "Buyer representation agreements don't obligate you in any way." "Without a written representation agreement, I don't represent you." "You won't owe as much commission if we work under an agreement."

"Without a written representation agreement, I don't represent you."

Dawn is a real estate licensee working with Midge, a buyer. If Dawn were trying to explain the advantages of a buyer representation to Midge, what could she say? "All buyers are required to sign buyer representation agreements." "Buyer representation agreements don't obligate you in any way." "Without a written representation agreement, I don't represent you." "You won't owe as much commission if we work under an agreement."

"Without a written representation agreement, I don't represent you."

Your cousin wants to get into real estate. Now that you know the reality, you tell your cousin, ______. "Buy advertising; it always works." "This is the easiest job you'll ever have." "Where you work doesn't really matter." "You should have six months' living expenses set aside before beginning."

"You should have six months' living expenses set aside before beginning."

Your seller client's home measures 1,500 square feet and has three bedrooms, two bathrooms, and a finished basement. The comp you're considering sold for $325,000, and is 1,200 square feet (worth $110 per square foot), with two bedrooms (worth $7,000), one-and-a-half bathrooms (worth $3,000), and an unfinished basement (worth $6,000). How should you adjust its price for your CMA? $265,000 $279,000 $344,300 $374,000

$374,000

Juan purchased a property for $420,000 and financed $336,000 of it. The assessed value of the property is $387,000. The property appraisal came in at $432,000. Which of these amounts is used in calculating the property tax? $336,000 $387,000 $420,000 $432,000

$387,000 The property tax will be calculated based on the home's assessed value ($387,000).

If a property has a potential gross income of $50,000, a vacancy and collection loss of 10%, and taxes are another 10%, what's the effective gross income? $40,000 $45,000 $50,000 $55,000

$45,000 To solve this, use this equation: potential gross income - vacancy and credit losses = effective gross income. Plugging in the numbers, that's $50,000 - $5,000 (which is 10% of the PGI) = $45,000. Disregard the tax information, because taxes are not part of this calculation.

Now in its second year, Pop to It, a gourmet popcorn shop, reached annual sales of $1.5 million. It has a monthly base rent of $4,000 ($48,000 annually) and pays 4% in additional rent for any gross sales over $1.2 million. What did Pop to It pay in rent for its second year? $120,000 $4,000 $48,000 $60,000

$60,000

A property has 10 units and is 90% occupied. Rent is $500 per month. Total vacancy and collection loss equals 10%. What's the potential gross income? $4,500 $5,000 $54,000 $60,000

$60,000 Potential gross income is the income the property would realize if it were fully rented. 10 units × $500 = $5,000 per month × 12 months = $60,000.

Shelly's flower business is blooming and it's time for her business to grow. She plans to take out a business loan to open two more shops on the north side of town. Which lending institution would she most likely go to for the loan? A commercial bank A credit union An investment group A savings and loan

A commercial bank

What is a contingency?

A condition that must be met before the purchase contract is complete and enforceable

Related to title insurance, what is "subrogation"? A covered party grants permission to the title company to pursue the party who caused a claim or loss. The act of conveyance when the seller turns over all property rights to the buyer with a clear, marketable title. The process by which the lender receives coverage under a title insurance policy the borrower has purchased. The process by which the title policy pays out any claims to the buyer or lender.

A covered party grants permission to the title company to pursue the party who caused a claim or loss. When the title company is forced to pay a claim against the policy, the covered parties give the title company permission to pursue the party who caused the loss. The covered parties are said to "subrogate" their rights to the title company.

Which of these policies is an example of discrimination based on familial status? A landlord charges an extra $100 security deposit for each child living in a property. All residents must show a U.S. birth certificate as part of the application process. No barbecue grills are allowed on balconies. No skateboards, bicycles, wheelchairs, or anything else that could scuff the historic hardwood floors are allowed in the building.

A landlord charges an extra $100 security deposit for each child living in a property.

Which of the following is the most accurate definition of a listing contract? A legally binding, oral contract between a property seller and a brokerage firm A legally binding, oral contract between a property seller and a listing broker A legally binding, written contract between a property seller and a buyer broker A legally binding, written contract between a property seller and a listing (employing) broker

A legally binding, written contract between a property seller and a listing (employing) broker

Which of these situations requires the services of a state-licensed or state-certified appraiser? A buyer's agent needs to convince his client that he's offering too much for a property. A lender needs an appraisal for a federally related transaction. A real estate professional needs some comparables to include in her listing presentation. Mr. and Mrs. Cobb want to know the value of their home to set an appropriate listing price.

A lender needs an appraisal for a federally related transaction.

What would you likely find on a rent roll? A list of all of the current tenants and how much trouble they are A list of current tenants, when their leases are up, and how much each tenant is paying for rent The credit score of each tenant and when their lease is up The type of unit and the tenant's credit score

A list of current tenants, when their leases are up, and how much each tenant is paying for rent

An exclusive right-to-sell agreement must include ______. A protection clause A start and end date for the listing period The name of the attorney who drafted the agreement The seller's requested closing date

A start and end date for the listing period

The Simpsons are buying a five-acre lot that was part of a much larger tract of acreage. When the owners of the large acreage decided to subdivide it, they needed to have a legal description created for the five-acre lot. What was used as the starting point for creating that legal description? A benchmark A plat map A survey Metes

A survey A survey is used to create, verify, or correct a legal description. It's a professional on-site measurement of the lot lines and dimensions of a property.

What is an improvement location certificate (ILC)?

A survey that indicates whether any boundary encroachments exist on a property being sold

Which of the following provides a summary of the title history? Abstract of title Chain of encroachments Survey Title insurance policy

Abstract of title

Damian enters into a contract to sell his home to Lori, who puts down a $5,500 earnest money deposit. At the last minute, Lori backs out of the deal. Damian keeps the earnest money deposit. Of what is this an example? Accepting liquidated damages Accepting partial performance Suing for damages Suing for specific performance

Accepting liquidated damages

Necessary property manager skills

Accounting, lease law knowledge, building system familiarity, negotiation, general housing market knowledge, ecological/environmental awareness

Expenses a seller owes at the day of closing but buyer will eventually pay, e.g., taxes on real property

Accrued items

What does the buyer's signature on the Seller's Property Disclosure form indicate? Acceptance of the property as-is Acknowledgment of receiving the form Offer to purchase property Waiver of the right to a home inspection

Acknowledgment of receiving the form

You're producing a CMA for a five-bedroom, five-bath home with solar panels that produce the majority of the home's electricity. None of the comparable properties you find have solar panels. The value of this feature in the area is $14,000. What adjustment will you make? Add $14,000 to each comparable property Add $14,000 to the subject property Subtract $14,000 from each comparable property Subtract $14,000 from the subject property

Add $14,000 to each comparable property

Terry just passed her licensing exam, and she's been working with a broker for the last two months. So far, though, she doesn't have any clients. How can she spend her time most productively? Add new connections to her sphere or her niche. Buy some new clothes so she will look successful when she does get a client. Call up all her friends and ask them a third time for referrals. Purchase some office supplies.

Add new connections to her sphere or her niche.

An addition to a sales contract that doesn't change any of the other contract terms

Addendum

Which contingency allows the earnest money deposit to be delivered separately from the contract?

Alternative Earnest Money Deadline

What are the duties of a listing agent?

Advocate for the seller and seek a sale of the property at the best price and terms acceptable to the seller, and inform the buyer of the agency relationship with the seller

Software to generate ads that installs itself on your computer when you download some other (usually free) program from the Web, then tracks keyboard searches in order to target ads to you

Adware

What form assures the title company and the buyer that the seller has not introduced new title defects and has revealed any non-publicly known title defects? Affidavit and Agreement Affidavit of Clear Title Affidavit of Liens Liens and Encumbrances Declaration

Affidavit and Agreement The Affidavit and Agreement, sometimes called an affidavit of title, provides assurance from the seller that no new title defects have been introduced and all non-publicly known defects have been revealed.

A form used to either change a contract term or extend a contingency deadline

Agreement to Amend/Extend Contract

The ______ modifies the terms of or changes the due dates on an original signed purchase contract. Addendum of Sale Agreement to Amend/Extend Broker's Agreement Agreement to Amend/Extend Contract Counterproposal

Agreement to Amend/Extend Contract

The ______ modifies the terms of or changes the due dates on an original signed purchase contract. Addendum of Sale Agreement to Amend/Extend Broker's Agreement Agreement to Amend/Extend Contract Counterproposal

Agreement to Amend/Extend Contract

Noah owns an LLC that buys and sells stocks on the NASDAQ 100. He needs some additional financing. To which type of lending institution might he prefer to go? A commercial bank A credit union An investment group A savings and loan

An investment group

According to the Colorado Real Estate Manual, the following statement must accompany a CMA prepared by a real estate licensee for any reason other than the anticipated sale or purchase of the property: "This evaluation was prepared by a licensed real estate broker ________. This evaluation cannot be used for the purposes of obtaining financing." And is not an appraisal And is only an estimate of value Qualified to prepare real estate appraisals Under the supervision of an appraiser Continue to Unit 1: From Offers to Contracts Return to Unit 1: Practicing the CMA View Exam Results

And is not an appraisal

How may licensees market office exclusive listings? Announcements to other licensees affiliated with the same brokerage firm A page on the firm's website Emails to a curated list Private listing network

Announcements to other licensees affiliated with the same brokerage firm With office exclusive listings, the listing agent may only market the listing to other licensees affiliated with the listing brokerage, who may then promote the listing to their own buyer clients.

Detailed estimation of value prepared by a licensed or certified appraiser; usually ordered by a lender for financing purposes

Appraisal

Which of the following contingencies are all considered standard in a purchase agreement for residential property? Appraisal, financing, inspection Appraisal, inspection, trade-in of buyer's property Approval of others, financing, appraisal Sale of buyer's property, assumption, appraisal, annulment

Appraisal, financing, inspection

When someone stands or sits too close, it may be a sign that they ______. Are potentially dangerous Mean you no harm Possess good nonverbal communication skills Understand personal space

Are potentially dangerous

REALTOR® Arnold was instructed by his client Sebastian to find a buyer who would "fit into the neighborhood." What is Arnold's responsibility in this situation? Arnold must comply with his client's instruction, regardless of his own feelings on the subject. Arnold must conduct his usual advertising strategies and find covert methods for selecting buyers that meet his client's desired profile. Arnold must explain to his client the responsibilities for fair treatment that they both have under fair housing laws. Arnold must explain to Sebastian that he cannot continue to work as his agent under the circumstances.

Arnold must explain to his client the responsibilities for fair treatment that they both have under fair housing laws.

When are apartment owners and property managers required to screen against a specific list of specially designated nationals and blocked persons? As a routine part of the tenant screening process Every 10th applicant Only if English isn't the applicant's first language Only if the applicant looks and acts suspicious

As a routine part of the tenant screening process

After the contract is signed, Jonathan decides he can't bear to leave the heating stove his granddaddy built that wasn't excluded from the sale. In Colorado, what's the best solution to this dilemma? Ask his broker to prepare an amend/extend and hope the buyer agrees to sign it. Negotiate with the buyer behind the scenes to take the stove. Take the stove when he goes. It's not physically attached to the property. Terminate the contract and return the buyer's earnest money.

Ask his broker to prepare an amend/extend and hope the buyer agrees to sign it.

Why is it important that the buyer know if the property being purchased is subject to an owners' association? A representative from the association must attend the closing. Association dues, fees, assessments, and regulations may be more expensive or restrictive than the new owner wants. The association may dictate which neighborhood school children attend. The association may have final say in whether the buyer can purchase the property.

Association dues, fees, assessments, and regulations may be more expensive or restrictive than the new owner wants.

Prior to signing the closing documents, what should the parties have already done? Assured themselves that the conditions and contingencies of the purchase agreement have been met. Moved locations. Paid the balance of the purchase price to the seller. Paid the title representative for the closing.

Assured themselves that the conditions and contingencies of the purchase agreement have been met.

When are the mortgage loan commitment and title insurance contract signed? At the closing The day after closing on the property to ensure proper transfer of title The day prior to closing Weeks prior to closing

At the closing

When meeting a new client for the first time, where would be an ideal place to meet? At a home the client wants to see At your brokerage In your car In your home office

At your brokerage

Which of the following will an underwriter evaluate prior to loan funding? Available funds Census statistics on viability of employment Tax write-offs Utility bills

Available funds

What usually constitutes a cause for termination?

Breach of contract by the other party

Which of the following would property managers be expected to personally do as part of their assigned duties? Budget preparation and oversight Employee supervision Overnight care of tenant pets Property maintenance

Budget preparation and oversight

Which of the following is a zoning restriction that may impact a business? Building height Earnings potential Population served Water supply restrictions

Building height

What type of insurance protects the business if it is unable to produce income due to a covered event? Business interruption Casualty Commercial multi-peril Surety bonds

Business interruption

Which type of investor markets to renters rather than buyers? Buy-and-hold Deep pocket Fix-and-flip Wholesale

Buy-and-hold

If the buyer needs to move in to their new home a week before closing, and the seller agrees, this is known as ____________. Buyer early possession Illegal trespass Legal trespass Seller grace period

Buyer early possession

When there's a time gap between when a buyer must vacate a current home, and when that buyer can close on the new home, two common remedies are a seller grace period and ________. A long-term lease A sale fail Buyer early possession Cohabitation

Buyer early possession

Which of the following options allows a buyer to move into a home before the closing date? Buyer early possession Illegal trespass Legal trespass Seller grace period

Buyer early possession

Representing the best interests of a buyer in a transaction as the buyer's agent (requires a signed agency agreement)

Buyer representation

Which of the following is a true statement about the loan approval process? Buyers shouldn't buy new furniture, but can put it on layaway before closing. Buyers shouldn't incur debt or spend money unnecessarily prior to closing. Lenders run a buyer's credit only once during the loan approval process. Once the lender has approved the buyer's credit, the buyer is free to incur new debt.

Buyers shouldn't incur debt or spend money unnecessarily prior to closing.

How does a Colorado buyer's broker verify the presence or absence of an owners' association? By asking the listing broker By reviewing property tax records By reviewing the MLS listing and performing other research By reviewing the State of Colorado's website that lists all addresses that are part of owners' associations

By reviewing the MLS listing and performing other research The MLS listing should state if the property's part of an association, but the broker should do additional research as well.

Via her broker, Irene makes an offer of $285,000 for Don's house. Don has decided he won't sell for less than $290,000. How does he convey this to Irene? By calling her By emailing her By having his broker call her broker By using a counter proposal

By using a counter proposal

Once there is an accepted sales contract and you've filled in the effective date, what else should you do? Call the other agent to notify him of the final acceptance Contact the loan underwriter Contact your lawyer Present a new offer to your client

Call the other agent to notify him of the final acceptance

When showing a home, which of the following is something you should do? Carry a fully charged cell phone. Enter the room first. Wear high-heeled shoes. Wear uncomfortable clothing.

Carry a fully charged cell phone.

Which of these individuals may benefit from USDA Rural Development program offerings? Community-managed lenders Low-income urban borrowers Non-profit businesses Start-up business borrowers

Community-managed lenders The USDA Rural Development program supports loans to community-managed lenders.

Why did the implementation of TRID impact closing dates? Buyers must now be given at least seven days to review the Closing Disclosure. Certain financing changes may trigger a new three-day waiting period. Lenders must give buyers five working days to review the Closing Disclosure. Once the Closing Disclosure is issued, the loan underwriter must perform a final review and approval.

Certain financing changes may trigger a new three-day waiting period. Increases in the annual percentage rate, the addition of a pre-payment penalty, or changes to the basic loan product require that the lender issue a new Closing Disclosure, necessitating a new three-day waiting period.

What's another term for a trade fixture? Appliance Chattel Corporeal Dowry

Chattel Trade fixtures are personal property, which is also called chattel.

The real estate sales contact issued by the Colorado Real Estate Commission

Contract to Buy and Sell Real Estate (Residential)

Which act was the first to prohibit any exceptions for discrimination based on race or color? Civil Rights Act of 1866 Fair Housing Amendments Act of 1988 Federal Fair Housing Act of 1968 Housing for Older Persons Act of 1995

Civil Rights Act of 1866 Unique among anti-discrimination law, the Civil Rights Act of 1866 recognized all U.S.-born persons as citizens and allowed no exceptions for discrimination based on race or color.

Someone who has signed an agency agreement with a licensee

Client

Which of the following is true about personal safety in the office? Clients/customers should not be left unsupervised in the office. It's okay to leave client paperwork out in the open. It's okay to share personal information about your family. You should proudly display photos of your family.

Clients/customers should not be left unsupervised in the office.

Copying a website for the purpose of obtaining money or data

Cloning

Which of the following describes the process of making a copy of a website for the purpose of obtaining money or data from unsuspecting users? Backing up files to an external hard drive Cloning Encrypting your email Storing logins and passwords

Cloning

The settlement of a real estate transaction

Closing

Given to borrowers a minimum of three business days before closing on a mortgage loan; discloses transaction costs so consumers can compare final closing costs and terms to Loan Estimate

Closing Disclosure

Manages the closing process, presents and explains all of the closing documents to the parties, and obtains signatures; typically a title company representative

Closing agent

Closing delays can impact many things, including ______. Closing cost prorations Earnest money amounts The appraised value of the property The sales price of a home

Closing cost prorations

Which document is signed and agreed to at closing and reconciles what the final financial obligations are for both the buyer and seller? Affidavit of title Closing disclosure Sales agreement Title insurance policy

Closing disclosure

What documents does the closing agent deliver to the buyer and seller after the closing? Closing documents for the appropriate side of the transaction The purchase contract marked "closed" The released deed of trust Title policies

Closing documents for the appropriate side of the transaction The closing agent will deliver copies of each party's respective closing documents. The released deed of trust isn't delivered via the closing agent, and title policies are delivered only to the buyer and the lender.

Which of the following is an example of a light manufacturing property? Clothing assembly plant Clothing design firm Clothing store Vehicle manufacturing plant

Clothing assembly plant

Rhonda and Jade both consider themselves to be African-American, although Rhonda has much darker skin and hair than Jade. When Rhonda went to the Valley Falls apartment manager's office to request a rental application, she was told there were no vacancies. Jade went in a day later and received an application. This may be discrimination based on _______. Color National origin Race Sex

Color

What entity has the authority to enforce regulation of oil and gas drilling in Colorado? Colorado Department of Revenue Colorado Environmental Protection and Mineral Rights Authority Colorado Oil and Gas Conservation Commission Colorado Oil and Gas Producers Coalition

Colorado Oil and Gas Conservation Commission

A small text file that remembers your preferences or tracks your browsing activities

Cookies

The subject property is a three-bedroom, two-bath, 1,980-square-foot house on a half-acre lot. Which one of the following options describes the best comparable? Comp. A: A six-bedroom, two-bath, 4,000-square-foot house on an 18-acre lot that's located 0.25 miles from the subject. Comp. B: A one-bedroom, four-bath, 850-square-foot house on a 0.47-acre lot that's located 18 miles from the subject. Comp. C: A three-bedroom, two-bath, 1,937-square-foot house on a 0.45-acre lot that's located 0.30 miles from the subject. Comp. D: A three-bedroom, two-bath, 2,000-square-foot house on a half-acre lot that's located 12 miles from the subject.

Comp. C: A three-bedroom, two-bath, 1,937-square-foot house on a 0.45-acre lot that's located 0.30 miles from the subject.

Which of the following provides an opinion of list price range by looking at recently sold properties, comparing current competing properties and properties that didn't sell, and estimating buyer appeal regarding the style, location, and size? Appraisal Broker price opinion Collective market analysis Comparative market analysis

Comparative market analysis These are all factors of a thorough comparative market analysis, or CMA. In addition, a licensee should consider the position in the market, the seller's motivation, and how the property stacks up against the competition.

Margaret has received her Closing Disclosure from the lender. To best protect her interests, what should she do with it? Compare it to the Loan Estimate. File it with her mortgage papers. Take it to the closing. Use the information to compare loan costs with those of other lenders.

Compare it to the Loan Estimate.

A property manager has just started working for a new property owner who owns a small apartment building. The property manager learns that construction of a large apartment complex has been approved one block away from his client's apartment building. What type of analysis would include this information? Analysis of alternatives Competitive analysis Market analysis Property analysis

Competitive analysis

How should a licensee prepare for a listing presentation?

Complete a comparative market analysis (CMA) and a basic marketing plan to demonstrate knowledge of the local market

Which option is an item on the buyer's checklist to do before closing on a home? Complete loan application Give an affidavit of title to the title insurance company Make all requested repairs to the property Request a loan payoff statement

Complete loan application

Many lawsuits have been filed against companies that fail to protect the security of what? Confidential client data Personal belongings of employees Public information Your bowl of jelly beans

Confidential client data

In Colorado, which OLD CAR fiduciary duty is included in the duty of loyalty? Accountability Confidentiality Disclosure Obedience

Confidentiality In Colorado, the duties loyalty and confidentiality are both included in the duty of loyalty.

In a real estate transaction, which of the following is established when the parties enter into an agreement voluntarily with a full understanding of the contract terms? Consent Consideration Legal competency Legal purpose

Consent

An additional condition that must be met before a sales contract is complete and enforceable, such as appraisal, financing, and inspection

Contingency

What are some financing sources for buyers looking to purchase agricultural or rural properties?

Farm Credit System, Farmer Mac, USDA Loan Programs in the Farm Service Agency, USDA Rural Development Program

Which act provides consumers with remedies if they become victims of discrimination in the sale, rental, or financing of housing? Civil Rights Act of 1866 Equal Credit Opportunity Act of 1974 Fair Housing Amendments Act of 1988 Housing and Community Development Act of 1974

Fair Housing Amendments Act of 1988

The law requires that property managers use credit reporting ______. As a means to avoid getting stuck with a deadbeat tenant At least once a week Fairly Only when a tenant has other application red flags

Fairly

An offer made in response to an unacceptable offer; both buyers and sellers can make these

Counter-offer

Used to amend terms of the Contract to Buy and Sell Real Estate, including price, financing terms, and deadlines

Counterproposal

A(n) _____ is used to amend an original offer to purchase. Addendum Amend/extend form Counterproposal form Revised contract of sale

Counterproposal form

On the closing statement, what's the term for an amount that shows up in the party's favor? Balance Credit Debit Mortgage

Credit

Jacob, the seller in a transaction, is David's client. Dawn is David's buyer customer in the same transaction. What is the difference in how David works with each of these individuals? David is a dual agent for Dawn and Jacob. David provides assistance to Jacob and represents Dawn's best interests in the transaction. David represents Jacob's best interests and assists Dawn during the transaction. David's duty is to provide only assistance to both Jacob and Dawn.

David provides assistance to Jacob and represents Dawn's best interests in the transaction.

Mario lives in a state that requires an abstract of title for property conveyance. The chain of title is broken approximately 50 years prior to the current date. Which of these properly identifies the status of Mario's title? As long as the chain of title is traceable for at least the past 30 years, Mario will have marketable title. Depending on his state's laws, Mario may have marketable title. Mario will have to perform his own research to find information necessary for repairing the broken link. Unless the chain of title can be tracked back to its beginning, Mario won't have marketable title.

Depending on his state's laws, Mario may have marketable title. If a link in the chain of title is broken, the attorney performing the search will branch out from public records to try to mend the link. State laws dictate how far back the chain must be unbroken for a title to be marketable.

Which step of the transaction process involves the buyer writing a check to show good faith in making the offer? Depositing the earnest money Getting homeowners insurance Performing the property appraisals Performing the property inspections

Depositing the earnest money

The property management proposal includes information such as ______. Details about the property manager's personal interests and hobbies Details about the property manager's qualifications Personal information about the property manager's family The benefits and bonuses the owner will give the property manager in return for services rendered

Details about the property manager's qualifications The proposal should provide information about the property manager's qualifications, the duties the property manager will perform, and the reports the property manager will provide to the owner.

Investor clients have _______________ than most clients who are purchasing a personal residence. Different goals Less to lose More money Similar goals but more money

Different goals

You present your CMA and suggested price range to your sellers, demonstrating your knowledge of the local market. They seem happy with the information thus far, so what is your next step? Ask them to sign a contract. Discuss options for terms for closing. Discuss plans to market the property. Start taking pictures.

Discuss plans to market the property.

When a policy negatively impacts a protected class more than it negatively impacts others, this is called what? Disparate impact Disparate treatment Targeted discrimination Unequal discrimination

Disparate impact

Home inspector Murray is explaining to first-time buyers what he looks for during a home inspection. What is his primary goal? Document health and safety issues that may affect both the cost and enjoyment of the home. Estimate how much cosmetic upgrades may cost the buyers. Verify lot lines and acreage calculations. Verify the presence of any easements or encroachment on the property.

Document health and safety issues that may affect both the cost and enjoyment of the home.

Changed previous RESPA and TILA requirements; charged the Consumer Financial Protection Bureau (CFPB) with adopting specific mortgage rules; implemented TILA-RESPA Integrated Disclosures (TRID)

Dodd-Frank Wall Street Reform and Consumer Protection Act

Your buyer clients Jen and Tony really like the patio set and bedroom furniture in the house you've just shown them. Because the market is hot, what would you advise they do? Ask for the one thing they like best as part of their offer but not the other. Ask for those items and more as part of their offer. Ask for those items as part of their offer. Don't include those items in their offer.

Don't include those items in their offer.

Supports the use of electronic transactions and signatures and their legal effect

E-Sign Act

Who must agree to conduct a transaction via electronic methods for electronic signatures and documents to be considered valid? Each party to the transaction The brokerage firm The buyer The seller

Each party to the transaction

John, a broker, is transferring an earnest money check he received from a buyer to the title company that will hold the earnest money in escrow. What form should he be sure to get from the title company? Earnest Money Notification Earnest Money Receipt Earnest Money Release Earnest Money Transfer

Earnest Money Receipt

Donald and Martina decided to purchase a newly built home, and their agent, Ed, recommended that they get a professional home inspection done. The couple tells Ed that they thought inspections were only for older homes. How should Ed respond to that? Ed needs to inform his clients that home inspections are most important for newer properties. Ed should let them know that lenders for new construction loans require inspections. Ed should remind them that every dwelling, no matter the age or size, should have a home inspection. Ed should tell him that he doesn't trust the builder.

Ed should remind them that every dwelling, no matter the age or size, should have a home inspection.

How many floors could a mid-rise office building have? 15 Eight Eleven Three

Eight

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. Follow the buyer's wishes without question. Ignore the buyer's request to waive the inspection. Personally perform an inspection.

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.

After the closing, what's the broker's responsibility for closing documents? Ensure that all documents are properly recorded. Ensure that the buyer and seller receive their copies of the closing documents. Ensure that the firm's transaction file is complete. Ensure that the lender's file is complete.

Ensure that the firm's transaction file is complete. The broker should ensure that all required documentation is in the transaction file.

Which of the following best describes a marketable title? Conveys ownership of the property. Ensures the title to property is free and clear of liens and only subject to loan payoff and any taxes owed. Protects the buyer from defects in the title. Provides a title commitment or abstract of title via a search of public records.

Ensures the title to property is free and clear of liens and only subject to loan payoff and any taxes owed.

The increase a property's value beyond what the investor originally invested as a down payment is called _______. Equity buildup Pyramiding Rate of return Satisfaction of mortgage

Equity buildup

A buyer, hoping to beat out all other offers, included a clause in the offer that reads, "Buyer to beat all competing offers by $1,000 up to a price of $700,000. Seller to provide copies of competing offer to buyer on acceptance." What type of offer is this? Bad Dynamic Elevator Escalator

Escalator

A neutral third party, or escrow agent, handles the exchange on the buyer's and seller's behalf

Escrow closing

Rick finds that some of his ongoing expenses as a licensee are paid monthly, some quarterly, and some annually. How can he arrive at a standard monthly figure that will help him manage his cash flow? Estimate total annual expenses and divide by 12 for a monthly amount. Estimate total annual expenses and multiply by 12 for a monthly amount. Ignore any expense that doesn't occur monthly and assume he'll be able to cover it when it is charged. Take one month of expenses and multiply by 12 for an annual amount.

Estimate total annual expenses and divide by 12 for a monthly amount.

Broker is the exclusive agent for the buyer (buyer may buy without the broker's assistance, but the broker will still be owed a commission)

Exclusive buyer representation

When working with a seller, you signed a listing agreement that ensured you'd receive a commission, provided the property sold during the listing term. What type of listing agreement did you sign? Exclusive agency Exclusive right to collect commission Exclusive right to sell Net listing

Exclusive right to sell

Which type of listing agreement ensures payment of a commission to the listing brokerage no matter who procures the buyer? Closed Exclusive agency Exclusive right to sell Open

Exclusive right to sell

What's a licensee's role in the title search process? Conduct an independent investigation of title. Explain the purpose of the title search to the buyer. Select the title insurance company on behalf of the buyer. Split the cost of the title search with the buyer.

Explain the purpose of the title search to the buyer.

What's something you should definitely do when conducting a buyer presentation? Ask probing financial questions. Explain the transaction process. Focus on your track record as a sales professional. Obtain copies of the buyer's last two pay stubs.

Explain the transaction process.

What's one of the things a licensee must do in order to prepare a client for closing? Explain who will be at the closing and what to expect. Perform a home inspection. Provide an abstract of title. Provide the Loan Estimate.

Explain who will be at the closing and what to expect.

Why are new condominiums an issue with FHA loans? FHA doesn't loan on condominiums. FHA requires 50% of the units to be under contract FHA requires HOA boards to submit monthly reports to the lender. FHA won't loan if HOA fees are more than $200 per month.

FHA requires 50% of the units to be under contract

Sam has a degree and experience in agricultural studies. In which of the following real estate areas would Sam's education and experience be the most helpful? Commercial properties Farm and ranch properties Industrial properties Leisure properties

Farm and ranch properties

Kate is a broker who just sold a 40-acre property used as a horse boarding operation. What specialization does Kate likely have that allowed her to make this sale and keep her clients happy? Business opportunities Commercial investment property Farm, ranch, and land Government property

Farm, ranch, and land

Dave and Rebecca are buyer clients who are looking for a property that they can run as a dude ranch. What area of specialized knowledge should their real estate broker have? Commercial investment Farm, ranch, and land sales Mountain properties Multi-family housing

Farm, ranch, and land sales

Which act created the Office of Fair Housing and Equal Opportunity under the Department of Housing and Urban Development? Americans with Disabilities Act of 1990 Equal Credit Opportunity Act of 1974 Federal Fair Housing Act of 1968 Housing and Community Development Act of 1974

Federal Fair Housing Act of 1968

Which entity provides disclosures and public information about the financial condition of FCS? Farm Credit Administration Farm Credit Services of America Farm Credit System Insurance Corporation Federal Farm Credit Banks Funding Corporation

Federal Farm Credit Banks Funding Corporation

Which of the following requires a landlord or property manager to obtain a tenant's written consent before sharing any information about the tenant with an unaffiliated third party? Fair and Accurate Credit Transaction Act of 2003 (FACTA) Fair Credit Reporting Act (FCRA) Federal Trade Commission (FTC) privacy rule USA PATRIOT Act

Federal Trade Commission (FTC) privacy rule

Tenant qualification and acquisition is an important part of Ron's duties as a commercial property manager. Which of the following tasks is likely to maximize his success when performing this duty? Adhering to operational and capital reserve budgets Developing a list of stable contractors who are available at a moment's notice for emergencies Finding a mix of long- and shorter-term tenants for steady and maximum income Finding a way to reduce janitorial and maintenance costs

Finding a mix of long- and shorter-term tenants for steady and maximum income Qualifying potential tenants to find the right mix of long- and short-term tenants allows a property manager to ensure a steady stream of income for the owner.

"Complete remodel that's move-in ready!" is a phrase you'd most likely use when marketing a property for a ______ investor. Buy-and-hold Deep pocket Fix-and-flip Wholesale

Fix-and-flip

What does the Inclusions section of the residential purchase contract cover?

Fixtures and other items that are assumed to convey with the property sale, such as window coverings, heating stoves, and garage door openers

Which type of investor would be interested in a "fixer" property? Buy and hold Deep pocket Flipper Wholesaler

Flipper

What are some good ways a broker can become an expert in rural land sales?

Focus on a specific property type or geographic area, develop relationships with communities and other professionals

Jerome was excited to close on a fixer-upper in a former industrial area, since he believed the area would someday rejuvenate into a hipster nightclub scene. He'd paid his earnest money and was already drawing up plans. Two weeks before closing, the city condemned the building. What's true for Jerome? He can file suit against the government. He can terminate the contract and receive his earnest money. He must stick to the contract and try to wait for reimbursement from the government. He will most likely have to take the seller to court to retrieve his earnest money and other damages.

He can terminate the contract and receive his earnest money. Jerome can terminate the contract for cause.

Kirk is in the process of screening a new batch of tenant applicants. As part of his normal process and in an accordance with the USA PATRIOT Act, Kirk checks the SDN list. What is Kirk checking for? He is checking each applicant's credit history. He is checking to see if all of the applicants have Social Security numbers. He is checking to see if any of the applicants are on the FBI's Most Wanted list. He is screening his tenants against a specific list of specially designated nationals and blocked persons.

He is screening his tenants against a specific list of specially designated nationals and blocked persons.

The buildings associated with this type of real estate property are outfitted much differently than other types of office buildings because of their unique use. For example, plumbing and electrical are often much more substantial, and there is usually a need for reception areas and examination rooms. Health care Industrial Leisure Retail

Health care

Fran, a broker, recently had a real estate transaction implode on her when the ______ was overly concerned about cosmetic details of a property. Home inspector Mortgage broker Title company Title representative

Home inspector

What are some examples of third-party vendors involved in a closing?

Home inspector, appraiser, lender, title company, closing agent, and attorney

Sara is your buyer customer. She doesn't want to sign a buyer agency agreement. What duty do you owe her? Confidentiality Honesty and fairness Negotiation of the best price Undivided loyalty

Honesty and fairness

What are some examples of commercial business areas in which a Colorado broker may specialize?

Hotels, amusement parks, golf courses, senior housing, medical buildings

Which of the following statements about electronic transmission and the sales contract is true? Although the electronic transmission of some real estate documents is allowed, this does not include the sales contract. If signed by all parties, the electronic transmission of the sales contract constitutes acceptance of the agreement. Only electronic transmission of the buyer's initial offer is acceptable. Only the seller has to consent to the use of electronic transmission in a sales contract.

If signed by all parties, the electronic transmission of the sales contract constitutes acceptance of the agreement.

Which of the following are three common causes for transaction failures in Colorado? Agents trying to please both sides, buyers changing their minds, fraudulent inspections Buyers having too many choices, inaccurate inspections, fraudulent appraisals Inaccurate lender timeline projections, agents losing track of the goal, poorly written contingencies Sellers changing their minds, bidding wars, inaccurate surveys

Inaccurate lender timeline projections, agents losing track of the goal, poorly written contingencies

Items to be left with the property at closing and items to be removed from the property at closing

Inclusions and exclusions

In which section of the Colorado Contract to Buy and Sell (Residential) can the parties indicate items that the seller will leave? Estate section Inclusions/Exclusions section Property section Settlement section

Inclusions/Exclusions section

In which section of the Colorado Contract to Buy and Sell (Residential) can the parties indicate items that the seller will leave? Estate section Inclusions/Exclusions section Property section Settlement section

Inclusions/Exclusions section

What's effective gross income?

Income after losses from vacancies and credit losses are deducted

"Effective gross income" most closely means ______. Income after losses from vacancies and credit losses are deducted from potential gross income Income after operating expenses are deducted Income after taxes are deducted Income that a property could bring if it were leased at full capacity

Income after losses from vacancies and credit losses are deducted from potential gross income

What's gross income?

Income received before expenses are deducted

What's the definition of "potential gross income"? After-tax income Before-tax income Income received after expenses are deducted Income that a property could bring if fully leased

Income that a property could bring if fully leased

What's potential gross income?

Income that a property could bring in if it were leased at full capacity

Examples of brokerage trends

Increased business models, increased reliance on technology, increased specialization (niche markets)

Because of the lack of control over the individual by the employing party, which of the following persons is not classified as an employee? Common law employee Hired worker Independent contractor Statutory employee

Independent contractor

How are independent contractors compensated and their income reported? Independent contractors do not receive a salary and must pay self-employment taxes. Independent contractors do not receive a salary, and the broker pays federal and state unemployment taxes on the workers' behalf. Independent contractors receive a salary and must pay self-employment taxes. Independent contractors receive a salary, and taxes are withheld from their pay.

Independent contractors do not receive a salary and must pay self-employment taxes.

The closing agent performs two steps in opening escrow for a real estate transaction. One step is to assign a file number. What's the other step? Calculate prorations. Initiate title search. Order final loan documents. Order title insurance.

Initiate title search. The closing agent will initiate the title search process that ultimately results in the title commitment and title insurance policies.

As a property manager, your role likely includes which task on the day the tenant moves out? Do a thorough cleaning. Inspect the property's condition. Return the security deposit. Write a tenant reference letter.

Inspect the property's condition.

Which of the following is a form that creates a contingency that protects buyers if they terminate the contract based on findings from a home inspection? Inspection Addendum Inspection Agreement Inspection Objection Inspection Resolution

Inspection Objection The Inspection Objection form creates a contingency which protects the buyers' earnest money should they choose to terminate the contract based on inspection findings or failure to negotiate desired repairs.

Roberta's broker submits an Inspection Objection form to Ingrid and her broker after the home inspection. What's the name of the form used to respond to this objection? Agreement to Repair Inspection Objection Agreement Inspection Objection Rebuttal Inspection Resolution

Inspection Resolution

Which of these should tenants keep in mind regarding trade fixtures? Installation and removal should not cause damage to the property. The tenant bears no responsibility for removing trade fixtures. The tenant bears no responsibility when installing trade fixtures. They become property of the landlord once installed.

Installation and removal should not cause damage to the property.

One of the best ways to select a brokerage and managing broker with whom to work would be to ________. Call the Better Business Bureau Interview other new licensees Interview several managing brokers Request an income guarantee

Interview several managing brokers

In a federally related transaction, the lender is required to hire an appraiser who ______. Has both an appraiser's license and a real estate license Is requested by the seller Is state-licensed or state-certified Submits the lowest bid on the project

Is state-licensed or state-certified

What effect does a pre-approval letter have on an offer? It assures the seller that the buyer's financial information has been verified. It has no effect. It kills it. It provides some assurance to the seller, but not as much as a pre-qualification letter would.

It assures the seller that the buyer's financial information has been verified.

Which of the following is true about performing an Internet search on your name? It can help you monitor your online reputation. It can hurt your reputation. It can't help your personal marketing efforts. It is a waste of time.

It can help you monitor your online reputation.

Why is it important to help estimate buyers' closing costs? It helps buyers determine what they can afford and what a home purchase costs. It helps sellers negotiate the contract. It provides a comparison for the loan disclosures they'll receive. It's a requirement of both regulatory agencies and the NAR.

It helps buyers determine what they can afford and what a home purchase costs. Neither regulatory agencies nor NAR require that licensees help buyers estimate closing costs, though some brokerage firms may require or encourage it. Estimation is usually provided as a way of helping buyers determine affordability.

Which of the following is a reason you should avoid posting photos of yourself with expensive jewelry or belongings? It allows strangers to connect with you through your personal social media accounts. It can make your client's home a target while you're away. It gives criminals a road map to your door. It may attract thieves.

It may attract thieves.

What must take place in order for an oral offer involving the transfer of real property to become an accepted valid contract? Both parties must orally agree to the terms. It must be committed to writing and both parties must sign the contract. One party signs the contract. Something of value must be given in return for a promise.

It must be committed to writing and both parties must sign the contract.

What's the purpose of title insurance? It protects the buyer against loss resulting from previously unreported title defects. It protects the buyer against unexpected expenses from any future improvements. It protects the lender against any future default in the buyer's payment. It protects the property against future damage.

It protects the buyer against loss resulting from previously unreported title defects.

How does title insurance affect the lender? It protects the lender against any future default in the buyer's payment. It protects the lender against unexpected increases in loan costs. It protects the lender from loss due to defective titles. It protects the lender from the property value decreasing due to market fluctuations or property damage.

It protects the lender from loss due to defective titles.

Enacted to give electronic signatures, records, and contracts legal recognition equal to that of paper records and signatures

Uniform Electronic Transactions Act (UETA)

Which of the following best represents the value of a CMA? It provides a guarantee to the client that the home will sell within that range. It's an appraisal of the home that is free of charge for your clients. It's a representation of the current market that helps identify a listing price for the subject property. It's a way for licensees to show clients what is happening with the economy.

It's a representation of the current market that helps identify a listing price for the subject property.

Susan's employing broker told her that she must not disclose that the former owner of her new listing had HIV/AIDS. This is because ________. It might offend some buyers. It's a latent defect. It's a stigma that may not be disclosed. It's public knowledge.

It's a stigma that may not be disclosed.

What happens to an initial offer from the buyer after a seller counters? It becomes the back-up offer. It's accepted by the seller until the buyer accepts the counter. It's no longer in play. Sellers cannot counter a buyer's initial offer.

It's no longer in play.

Broker Ross has been very successful specializing in selling business opportunities that include property, such as laundromats, car washes, and family restaurants. Which of these characteristics does the Colorado Real Estate Commission require of Ross in order to work in this area of real estate? A degree in business management Involvement in the local chamber of commerce Knowledge and expertise in the operations of small businesses Long-time resident of the area where he works

Knowledge and expertise in the operations of small businesses

Unimproved land

Land that has no structures built upon it

In order to protect the confidentiality of client data, which of the following should you avoid? Displaying photos of your family. Ensuring that client paperwork is properly secured. Leaving clients/customers unsupervised in the office. Sharing personal information about your family.

Leaving clients/customers unsupervised in the office.

UETA's purpose is to provide national guidelines ensuring that electronic records and signatures are __________. Always used Forced on consumers Legally valid Used as much as possible

Legally valid

What can contractors can use to foreclose on a property when they're not paid for their work or materials? Judgment lien Mechanic's lien Non-payment judgment Sheriff's order

Mechanic's lien

What's the relationship between the Loan Estimate and the Closing Disclosure? Lenders issue the Loan Estimate to verify the figures detailed on the Closing Disclosure. Lenders issue the Loan Estimate within three days of receiving an application, and Closing Disclosure figures should be similar to the Loan Estimate. Loan Estimate figures should match Closing Disclosure figures exactly. The Closing Disclosure outlines the lender's responsibilities to the borrower.

Lenders issue the Loan Estimate within three days of receiving an application, and Closing Disclosure figures should be similar to the Loan Estimate.

Provides information regarding what terms would make an offer more acceptable to the offeree

Letter of non-acceptance

Congratulations! The crowd funding worked. Now you can start manufacturing your own line of yoga clothing. But first, you need a location to do all of that sewing. Which building would you select? Heavy industrial Light manufacturing Residential Retail outlet

Light manufacturing

As a security precaution, which of the following is something you should do? Limit the amount of personal information you post. Post addresses to open houses on social media sites. Post photos of yourself with expensive jewelry or belongings. Post that you're alone at an open house.

Limit the amount of personal information you post.

What should you do when working alone in the office? Eat all of the donuts Lock doors and windows Move a lot of files around so it looks like you've been busy Open the doors and windows to attract foot traffic

Lock doors and windows

How can you, as an agent, cause a transaction to fail? Lose sight of the overall goal Stay in constant communication with your client Stay within your area of expertise Take time to explain the process

Lose sight of the overall goal

Pitfalls in commercial real estate

Mechanic's liens, zoning restrictions, and environmental issues

The fiduciary duty of ____________________ requires you to put your clients' interests above all other parties', including your own. Disclosure Loyalty Obedience Reasonable skill and care

Loyalty

If a real estate professional discovers that another real estate professional is engaging in discriminatory marketing practices, what action should he or she take? Make a complaint to the Department of Justice Make a complaint to the National Association of REALTORS® or to the Department of Housing and Urban Development Make a complaint with the county commissioner Make a complaint with the local police

Make a complaint to the National Association of REALTORS® or to the Department of Housing and Urban Development

Software designed to infiltrate or damage a computer system without the user's informed consent

Malware

Which one of the following residential property managers' duties requires that they handle leases, address tenant complaints and emergencies, supervise move-ins and move-outs, and evict tenants? Find and screen tenants. Maintain and make repairs to the property. Manage tenants. Set and adjust rent levels on move-ins/move-outs to keep pace with the market.

Manage tenants.

What does a CMA determine? Availability of funding Cost of replacement Cost per square foot Market price range

Market price range

Personal ___________ is an area where many people do not consider their safety. Checking Choice Marketing Space

Marketing

What's the first step for parties in a sales contract who can't resolve their differences?

Mediation

What is the funnel system as used in real estate?

More leads in = more potential commission

Darrel loves working in the mortgage lending industry. On a daily basis, he works with multiple lenders to find and negotiate the best deals for his customers. What is Darrel's profession? Mortgage banker Mortgage broker Mortgage servicer Real estate investor

Mortgage broker Darrel is a mortgage broker. Brokers work with multiple lenders and aren't tied to a specific suite of loan products, as mortgage bankers may be.

Structure that provides housing for more than one household

Multi-family

Carolyn represents John in the sale of his home. Which listing agreement clause would authorize and obligate her to distribute the listing to other brokers? Broadcast clause Broker extension clause Marketability clause Multiple listing clause

Multiple listing clause

Which clause in the listing agreement gives the listing broker the authority and obligates the broker to market the property to other brokers? Broadcast clause Marketing clause Multiple listing clause Provisionary clause

Multiple listing clause This is the MLS clause.

A marketing organization composed of member real estate professionals who agree to share their listing agreements with one another in the hope of procuring ready, willing and able buyers for their properties more quickly than they could on their own

Multiple listing service (MLS)

Leases may be terminated by expiration, eviction, or ______. Death Extermination Mutual agreement Relocation

Mutual agreement

Which of the following describes a mediator? Circuit court judge Knowledgeable of the requestor's experience Member of the Colorado Real Estate Commission Mutually acceptable and neutral

Mutually acceptable and neutral

The ______ is a purpose-driven organization propelled by a passionate combination of entrepreneurial spirit, cultural heritage, and the advocacy of its members. Asian Real Estate Association of America (AREAA) Minority Real Estate Professionals of America (MREPA) National Association of Hispanic Real Estate Professionals (NAHREP) National Association of Real Estate Brokers (NAREB)

National Association of Hispanic Real Estate Professionals (NAHREP)

As a licensee, what should you do if closing will be delayed? Don't tell your clients. Instruct your client to default on the contract. Negotiate a new closing date. Write a new contract.

Negotiate a new closing date.

Lance just bought a home, but can't move in until November 1. He has to vacate his rental unit by October 20. What's Lance's best option? Lease-option Negotiate a seller grace period Negotiate early possession Sale-leaseback

Negotiate early possession

Which one of these commercial property manager's duties requires the property manager to secure a profitable deal for the landlord and also to negotiate a lease the commercial tenant can afford? Evict tenants who fail to comply with the terms and conditions of the lease agreement. Negotiate leases. Oversee the maintenance of buildings on the property. Qualify potential tenants.

Negotiate leases.

Which of these is generally a commercial property manager's responsibility, but not a residential property manager's responsibility? Collecting rent Evicting tenants Negotiating leases Overseeing maintenance

Negotiating leases

Tenant pays one, two, or three expenses related to the property—taxes, insurance, and maintenance (TIM)—in addition to the rent

Net lease

A fixed, specified price below which owner will not sell and at which broker receives no commission; broker receives everything over fixed price (strongly discouraged in Colorado)

Net listing

When preparing the sales contract, when is it acceptable for a licensee who is not an attorney to offer legal advice to the client? Never When covering the options for terms and contingencies When determining the amount of the purchase offer When discussing the amount of earnest money to place as a down payment

Never

When do real estate professionals prepare appraisals?

Never; only licensed or certified appraisers conduct appraisals

Fair housing laws give homeseekers a legal right to which of the following? Access to a "rent to own" program for properties when they can't pay the required down payments Complaint process for rejected home offers, even if the offer is significantly below list price Credit to purchase the home of their choice, regardless of ability to repay No discriminatory limitations on communities or locations of housing

No discriminatory limitations on communities or locations of housing

Which is one of the benefits of the USDA loan program? Farmers don't pay interest rates. It provides rural home financing for low-income borrowers. No down payment is required. There's no limit to the loan amount.

No down payment is required. The USDA loan program doesn't require a down payment for the loan.

The best way to start comparative market analysis data collection is to use properties that sold within which timeframe? 18 to 24 months ago Between two and three years ago In the last 12 to 18 months No later than three to six months ago

No later than three to six months ago

What percentage of a licensee's income should be devoted to marketing?

No more than 30%

Jax works for the owner of an apartment complex. He performs maintenance on the property. If a tenant complains of a problem such as a broken refrigerator or a blocked drain, he's the one who tackles the problem and gets it fixed. Does Jax need a real estate license? No, Colorado doesn't consider property management a real estate activity requiring a license. No, Jax isn't doing anything that requires a real estate license, such as collecting rent or negotiating leases. Only if he works on commission rather than as a salaried employee. Yes, all employees who work with tenants in any capacity are required to hold a real estate license.

No, Jax isn't doing anything that requires a real estate license, such as collecting rent or negotiating leases.

Your buyer's Colorado contract contains an inspection deadline of June 14. On June 16, the buyer states that she wishes to terminate the contract because of items found during the inspection. Does she have grounds to terminate the contract? No. Contracts can't be terminated based on inspection results. No. She would be in default of the contract's terms Yes. Inspection results aren't subject to contingency deadlines. Yes. The Dates and Deadlines section of the contract is flexible.

No. She would be in default of the contract's terms

Duties that licensees owe whether they are acting as single agents or transaction-brokers are called ________. Agent duties Commission duties Common law duties Uniform duties

Uniform duties

Petra represents Inova Investors and helps the company locate, buy, and resell fixer-uppers. Recently, one of Petra's other investor clients, Hammond, Inc., decided to purchase an Inova condominium complex listed with Petra. Hammond has agreed to be represented by another broker in Petra's firm for the purchase transaction with Inova, but Hammond wants Petra to be the listing agent for the individual condominiums. According to CP-31, could this be considered a conflict of interest? No, Petra can list Hammond's condos because it is a separate transaction. No, Petra can list Hammond's condos because neutrality is no longer a concern. Yes, Petra can't be the listing agent for condos that Hammond purchased from one of Petra's clients. Yes, Petra can't represent both Hammond and Inova as a listing agent.

No, Petra can list Hammond's condos because it is a separate transaction. It's not a conflict of interest for Petra to be the listing agent for Hammond's individual condominiums because those are separate transactions from the Inova-Hammond transaction.

Mardee represented condo owner Carol, and they signed an exclusive agency listing agreement. If Carol found her own buyer, would she owe Mardee a commission? No, because Carol is not a real estate licensee. No, because Carol procured the buyer. Yes, because they have an exclusive agency listing agreement. Yes, but she only owes the listing commission.

No, because Carol procured the buyer.

Samantha is reviewing applications to fill the vacant unit in a building she manages. The standout applicant also happens to be a single mother with two young children. Samantha knows that most of the tenants in the building don't have young children, and she's concerned that applicant's children will be disruptive. Can Samantha deny the application because of this? No, because Samantha can't discriminate against protected classes, even if she questions the tenant's compatibility. Yes, because compatibility trumps a tenant's status as a protected class. Yes, because Samantha has the authority to select whichever tenants s he wants. Yes, because Samantha has to do what's best for the entire building.

No, because Samantha can't discriminate against protected classes, even if she questions the tenant's compatibility.

Nonny is purchasing a rental property where the tenants pay month-to-month rent. Which of the following is the most likely way for the rent to be prorated? Nonny will begin to receive prorated rents starting on the first of the month following the closing date. Nonny will receive all rents collected as of the first of the month in which the closing is held, even if closing is on the last day of that month. Nonny will receive full rents for tenants whose leases expire within one month of the closing date, and prorated rents as of the day of closing for other tenants. Nonny will receive prorated rents beginning the day of closing.

Nonny will receive prorated rents beginning the day of closing.

Usually communicated unconsciously; often more accurate indicators of true feelings or intentions than words; include facial expression, eye contact, personal space invasion, vocal tone and pitch, posture, and gestures

Nonverbal cues

Madeline is a property manager who's calculating the vacancy rate for the apartment building she manages. What formula would she use to do this? Number of vacant units ÷ total units Number of vacant units x total units Period of time ÷ number of vacant units Total units ÷ number of vacant units

Number of vacant units ÷ total units

The term "______ deadline" is used in the Dates and Deadlines section of the Colorado purchase contract for the various contingency deadlines. Buyer/seller Contingency Contractual Objection

Objection Certain deadlines for action in the purchase contract are called objection deadlines.

Written document that includes the terms under which the offeror agrees to purchase a property

Offer

Your buyer clients are submitting an offer on a newly built home in a very trendy part of town. The seller requires that the home be sold for at least $450,000. What is a good strategy for structuring the offer in this case? Offer a quick close. Offer full price or more. Waive the appraisal. Waive the escalation clause.

Offer full price or more.

Marigold loves her new office space. She is one of several individuals who own their own units and share maintenance responsibilities for the lobby, hallways, landscaping, and parking lot, as well as other common areas. What type of office building is this? Five-plex Mixed-use building Office condominium Office park

Office condominium

What is an open listing agreement? One in which anyone can find the buyer, but the listing agent still gets paid One in which only the person who finds the buyer gets paid One in which the price is negotiable within a specified range One in which there's no end date

One in which only the person who finds the buyer gets paid

An oral offer is one that is ________. An enforceable contract Either spoken or in writing Only in writing Only spoken

Only spoken

James, a seller, signed a listing agreement that allowed him to contract with multiple agents but only pay a commission to the agent who located a buyer. This type of listing agreement is called ______. Exclusive agency Exclusive right to sell Open Seller's choice Continue to Unit 5: Working With Sellers, Part Two Return to Unit 4: Working With Sellers, Part One View Exam Results

Open

An agreement between an owner and many brokers (if a broker produces a ready willing, and able buyer, a commission is due, but the owner still has the right to sell the property without paying commission)

Open listing

Randa is trying to lower the vacancy rates for the commercial property she manages because her revenue targets will increase by 8% over the next year. What type of budget contains this revenue detail? Capital reserve Operating budget Stabilized Variable

Operating budget

Rescission, suit for specific performance, liquidated damages, and acceptance of partial performance are all examples of what? Clauses found in an agreement of sale Mediation techniques used to resolve agreement of sale disputes prior to closing Options a wronged party has to remedy a breach of contract Types of contingencies

Options a wronged party has to remedy a breach of contract

Which one of the following commercial property managers' duties requires that they keep the property and facilities in good condition and schedule and budget for needed repairs and upkeep work? Lease the property. Negotiate leases. Oversee the maintenance of buildings on the property. Qualify potential tenants.

Oversee the maintenance of buildings on the property.

What kind of title policy insures buyers against title policy exceptions? Buyer's standard policy Lender's standard policy Owner's extended coverage (OEC) policy Owner's policy exception coverage

Owner's extended coverage (OEC) policy

Janice is working with seller clients to determine a listing price for their property. Which of the following is the best strategy to use? Perform a detailed comparative market analysis and base the price on recent comparable sales. Price the home at whatever price the seller thinks is reasonable. Price the home higher than market value. Price the home lower than market value to induce a bidding war.

Perform a detailed comparative market analysis and base the price on recent comparable sales.

It's important that you present yourself both professionally and safely in your _____________. Conversations with friends Family life Personal marketing plan Private life

Personal marketing plan

Property owner Susan and property manager Phil just entered into a property management agreement. Which of the following is NOT something that would be addressed in the agreement? Fees to be charge tenants by the property manager Fees to be paid by the owner Phil's power to sell the property without consulting Susan The extent of the manager's authority to act for the owner

Phil's power to sell the property without consulting Susan

Misleads people into divulging confidential info by making fraudulent requests for information

Phishing

Which document is used to give a buyer an overview of the title history and information about what is or isn't covered in an insurance policy? Abstract of title Guarantee of title Preliminary report Title insurance

Preliminary report Title insurance companies issue a preliminary report with the current title history and any liens or encumbrances. It outlines what the insurance company will or won't cover on its forthcoming insurance policy if the title is found to be acceptable.

______ are items that go in the seller's credit column and the buyer's debit column when you are determining prorations. Credits Debits Prepaids Prorations

Prepaids

What's the best way to ward off seller objections to a suggested list price? Prepare a professional CMA. Remind the sellers how much work their house will be for the new buyers to bring up to snuff. Tell the sellers you know what you're doing. Tell the sellers you won't represent them if they don't agree to your price.

Prepare a professional CMA.

Protects consumers by providing full disclosure of settlement charges and prohibiting practices that increase settlement charges

Real Estate Settlement Procedures Act (RESPA)

What's the best course of action when a Colorado seller will not be able to meet the inspection resolution deadline stated in the contract? Call the buyer's broker and ask for an extension of time. Don't worry, only the objection deadlines are important. Draft an inspection resolution and present it anyway. Prepare and present an Agreement to Amend/Extend the contract.

Prepare and present an Agreement to Amend/Extend the contract.

What is the broad, primary role of the title company when performing a closing? Calculate prorations. Ensure the seller makes a profit. Prepare for and manage the closing meeting. Provide advice to the buyer and seller.

Prepare for and manage the closing meeting.

When multiple offers are received, which of the following is something a licensee should do? Encourage the seller to accept the highest price offer. Give preference to the first offer. Prepare a net proceeds statement for the highest-price offer. Prepare net proceeds statements on all offers.

Prepare net proceeds statements on all offers.

Hilda is your new seller client. You know that homes like hers are currently selling for between $325,000 and $375,000, but Hilda insists that her home, which hasn't been updated since the 1980s, is worth at least $400,000. What's the best thing you can do to demonstrate to Hilda that the current market is unlikely to pay that much? Listing at $425,000 and waiting for Hilda to see the lack of showings or offers Listing at whatever price Hilda wants, so you don't lose her business Preparing a CMA Refusing to work with Hilda unless she prices accurately

Preparing a CMA

Marilyn is reviewing the inspection report with her buyer clients. Which of the following issues in the report should Marilyn flag as most significant? Broken dishwasher Lack of deadbolts Non-working sump pump Presence of mold

Presence of mold

Which statement best describes your responsibility when presenting offers to a client? Don't present offers below the asking price. Present all offers in a timely manner. Present only offers at asking price. Use your own judgment to decide which offers to present.

Present all offers in a timely manner.

The financial reports you've prepared over the past several months indicate a gradual increase in the number and cost of maintenance calls. What does this most likely indicate to your owner? Current tenants are being too hard on the property. Maintenance staff salaries are too high. More staff is needed to field maintenance requests. Preventive maintenance tasks may need to be increased.

Preventive maintenance tasks may need to be increased.

A broker specializing in farm, ranch, and land sales should be familiar with the typical ____________ in the area where he works, since it will factor into every transaction. Density restrictions Homeowners association fees Price per acre Residential rental rates

Price per acre

You're the agent for a seller who will do whatever it takes to get top dollar for his house. What should you tell him when you present your CMA, which is less than the amount he had hoped to net from the sale? Most sellers overprice their property anyway to adjust for the negotiations. Pricing the property at your suggestion is something we can try, and could result in a big win. Pricing the property fairly is the best way to ensure you save money in the long run. The longer an overpriced property stays on the market, the better the offers will get with time.

Pricing the property fairly is the best way to ensure you save money in the long run.

What problems can a VA loan pose in the approval process? Hefty down payment requirements High interest rates Mortgage insurance requirement Prohibition against buyer-paid repairs

Prohibition against buyer-paid repairs

The portion of the property management plan that discusses the property's current condition and recommendations to stall or reverse obsolescence is called the _______. Analysis of alternatives Competitive analysis Market analysis Property analysis

Property analysis

Which type of analysis that a property manager performs includes a discussion of the property's current condition and recommendations to stall or reverse obsolescence? Analysis of alternatives Competitive analysis Market analysis Property analysis

Property analysis

Creates an agency relationship between property managers and owners

Property management agreement

In property management, what's the legal and binding contract that spells out the duties for both the property manager and property owner? Power of attorney Property management agreement Property management proposal Service contract Continue to Unit 1: CO Practical Applications Course Wrap-Up Return to Unit 4: Property Management in Action View Exam Results

Property management agreement

Details obligations a property manager will have for a property owner; it includes property description, duties and reporting provided, and the property manager's qualifications, among other items.

Property management proposal

A report given by the property manager to the owner, detailing expenses, income, and other items from the prior month

Property management report

A person who manages properties for various owners and has the primary duties of securing and keeping tenants, providing financial records and accounts, and performing and overseeing property maintenance.

Property manager

The income from what reliable source benefits the entire community by funding essential services and public works? Fundraisers Private donations Property taxes Special assessments

Property taxes

As a licensee, what should you do as soon as it's known that closing will be delayed? Instruct your client to default on the contract Instruct your client to do nothing Instruct your client to write a new contract Provide an estimated timeline to your client

Provide an estimated timeline to your client

The use of one investment to finance another is called _______. Blockbusting Churning Equity build-up Pyramiding

Pyramiding

Using one investment property to finance another

Pyramiding

What are the three primary acts that impact mortgage loan disclosure? RESPA, TILA, and Dodd-Frank RESPA, TRID, and Dodd-Frank TRID, TILA, and Dodd-Frank TRID, TILA, and ECOA

RESPA, TILA, and Dodd-Frank

Whose responsibility is it to understand the ins and outs of the sales contracts? Brokers Buyer agents Real estate professionals and their clients Seller agents

Real estate professionals and their clients Not only should real estate professionals understand the sales contract, they should explain it thoroughly so their clients understand it, as well.

Paying attention to any uneasy feelings you have and asking yourself if anything feels out of place are two ways to do what? Avoid intuition Ignore intuition Recognize intuition Replace intuition

Recognize intuition

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.

Candidates must demonstrate competence in order to __________ throughout their career as a real estate licensee. Avoid purchasing E&O insurance Earn the highest commissions Receive a bonus Safeguard the public's best interests

Safeguard the public's best interests

When you're planning your personal marketing materials, you should always consider ___________ a top priority. Economics Government control Safety the Internet

Safety

Deborah was initially thrilled when she signed a listing agreement with her client, Jeb, to sell his five-bedroom colonial in a beautiful neighborhood. Since then, however, it was becoming more and more difficult to get along with Jeb. She felt like she was doing her best to sell his house, but with every day that passed without an offer, he became more and more disagreeable. She wondered what she could do to resolve the situation. What advice would you give Deborah? Might as well ask your broker to send back your license; you're not cut out for this business. Refer Jeb to a colleague who might be a better match and take the referral fee. Tell Jeb what a jerk he is and that he'd better shape up if he really wants his house to get sold anytime soon. Tough it out and do what it takes to make the client happy.

Refer Jeb to a colleague who might be a better match and take the referral fee.

Which items should sellers put into storage to help de-personalize their home? Expensive artwork Prescription medications Refrigerator magnets and children's artwork Window coverings

Refrigerator magnets and children's artwork

Sarah is a property manager who needs to determine the amount of coverage for property insurance for her owner/client. If she uses the cost to purchase the property today as the basis, she would be using the __________method. Blanket coverage Cash value Depreciation Replacement cost

Replacement cost

Property manager's obligations to the owner

Reporting, budgeting, property maintenance and improvements, careful handling of landlord-tenant responsibilities, and tenant location and selection

What are some areas in which a Colorado broker can specialize?

Residential, commercial, industrial, rural, farms, ranches, agricultural

Amy is about to complete her very first sales contract. What should she do to prepare? Grab waters for herself and her clients. Have a drink. It's time to celebrate! Nothing. The sales contract will write itself. Review the contract and make sure she understands what each section means.

Review the contract and make sure she understands what each section means.

David owns a commercial building. He'd like to raise some capital for another project, so he sells the property to Gabby (an investor), then leases the space from Gabby. What type of arrangement is this? Ground lease Percentage lease Sale leaseback

Sale leaseback

How may a listing agreement be terminated?

Sale of the property, mutual agreement, expiration, agent abandonment, and seller's request (seller may owe commission)

Agatha helped her client Rufus complete the form that documents Rufus's purchase offer to the seller for the property he'd like to buy. What is this form? Buyer representation agreement Listing agreement Promissory note Sales contract

Sales contract

What activity signals a closing agent to open escrow on a transaction? Listing agreement signed Sales contract delivered to closing agent Sales contract signed by all parties Title insurance policy ordered

Sales contract delivered to closing agent The closing agent opens escrow on a transaction when the broker delivers a signed sales contract.

Complete this formula: Net to seller = ______ x (100% - commission rate) Closing costs Commission rate Market value Sales price

Sales price

Net to seller equals the ______ multiplied by the percent to seller. Closing costs Commission rate Sales price Tax rate

Sales price

Rachel loves convenience. As you can imagine, she was thrilled when she was able to finance her mortgage through the same institution where she deposits her payroll checks. Which of these most likely financed Rachel's mortgage? Insurance company Investment group Mortgage broker Savings and loan

Savings and loan

Which type of lender specializes in taking in savings deposits and then lending money out to consumers through mortgages and other loans? Credit union Mortgage banker Mortgage broker Savings and loan

Savings and loan

Joe and Mary are going to leave their kitchen appliances in the home they're selling. Where is this information included on the Colorado purchase contract? Section 2.5, Inclusions; Subsection 1, Inclusions - Attached Section 2.5, Inclusions; Subsection 2, Inclusions - Not Attached Section 2.5, Inclusions; Subsection 3, Personal Property - Conveyance Section 2.5, Inclusions; Subsection 4, Other Inclusions

Section 2.5, Inclusions; Subsection 4, Other Inclusions Use the Other Inclusions portion of the contract's Inclusions section to note any additional items that the seller has agreed to leave on the property.

What's a good way to learn the property management side of real estate? Flip properties using your own money Ignore the tenants' complaints Manage properties on the side without telling your broker Seek a mentor's advice

Seek a mentor's advice

A(n) ___________________ allows the seller to remain in the home after closing. Buyer grace period Early possession Late possession option Seller grace period

Seller grace period

Because each person and each situation is different, it's important that you ______. Do nothing Ignore your intuition Rely on others to decide the best way to proceed Stay calm and assess the situation

Stay calm and assess the situation

What can listing agents prepare for their clients to give them unofficial estimates of all closing costs? Brokerage escrow estimate Good Faith Estimate Loan Estimate Seller net sheet

Seller net sheet A seller net sheet is a closing estimate prepared for sellers to let them know their estimated closing costs, as well as how much money they'll receive at the closing table.

What form do Colorado sellers fill out to disclose the property's current condition?

Seller's Property Condition Disclosure; The form is not mandatory, but gives buyers more peace of mind.

Optional form a seller may use to disclose property conditions

Seller's Property Disclosure

Who has an obligation to be knowledgeable about the real estate market conditions and property pricing for the seller client? Buyer Buyer's agent Seller Seller's agent

Seller's agent

When preparing a property for showing, which of the following is true? Buyers prefer low light, so high-wattage lightbulbs should be swapped out for those with low wattage. Sellers should be present so that they can point out the home's features. Sellers should leave as many personal items around as possible to give the home personality. Sellers should not be present for showings.

Sellers should not be present for showings.

Which of these situations do licensees commonly encounter when working with sellers? Sellers who are eager to reduce the price of their home when the market dictates Sellers who are unwilling to recognize the market value of their home Sellers who believe they'll get better service by paying a higher commission Sellers who refuse to negotiate with buyers

Sellers who are unwilling to recognize the market value of their home

A real estate appraisal may be used to ______. Detect structural defects in a building Determine the fee to be paid to the real estate agents at closing Find potential issues with the title to the property Set a value for property that's part of an estate

Set a value for property that's part of an estate Real estate appraisals are used in many situations where property value must be determined, not just for real estate transactions.

The Housing and Community Development Act of 1974 added which protected class to federal fair housing law? Color Disability Religion Sex

Sex

Nora is a real estate broker with experience in single-family residential sales. When some friends ask her to help them sell their 20-acre farm, she agrees. Which of these is an acceptable way for Nora to meet her responsibility to have knowledge and experience in this area? She can recruit a colleague experienced in farm sales to help her list and market the property. She can review similar properties on the MLS to see how they are marketed. She must disclose her lack of experience in the area of farm and land sales to her client. She should request support from the Colorado Real Estate Commission.

She can recruit a colleague experienced in farm sales to help her list and market the property.

Tess is a Colorado broker who wants to specialize in selling rural property. Which of the following statements is true about Tess's responsibility as a broker? She must have a bachelor's degree in agriculture, in addition to her broker's license, to legally work within this specialty area. She must obtain a designation in the area of Land Sales before serving clients who buy or sell rural property. She must obtain the education and experience to perform competently in this area before serving clients on her own. She must prove competence in selling residential property for at least two years before being allowed to specialize in any other area.

She must obtain the education and experience to perform competently in this area before serving clients on her own.

Jennifer is closing on the sale of her current home on August 19, but she won't close on her new home until August 23, and she can't move in early. As her agent, what would you recommend? She should negotiate a buyer grace period with the buyers of her current home. She should negotiate a buyer grace period with the sellers of her new home. She should negotiate a seller grace period with the buyers of her current home. She should negotiate a seller grace period with the sellers of her new home.

She should negotiate a seller grace period with the buyers of her current home.

Georgia, an employing broker, has been found guilty of misclassifying a worker at her brokerage. What's likely to happen to Georgia? She'll be fined for employing an unlicensed person to perform licensed activities. She'll be fined for treating an employee as an independent contractor. She may face prison time for employing an undocumented worker. The brokerage license will be suspended and Georgia will be fined.

She'll be fined for treating an employee as an independent contractor.

Shenandoah, a Colorado broker, represents Pete, a seller, as a single agent. What took place to create this relationship? Shenandoah and Pete expressly agreed verbally to an agency relationship. Shenandoah and Pete signed an express written agreement. Shenandoah performed actions that only an agent is allowed to perform. Shenandoah's employing broker assigned her to work with Pete.

Shenandoah and Pete signed an express written agreement.

According to UETA, any law that requires a physical record will be satisfied by an electronic record, and any signature requirement can be met by an electronic ____________. Document Fax Person Signature

Signature

Sue is buying a property and has solicited the help of Cindy, a Colorado real estate broker. Sue and Cindy have signed an express, written agreement to establish their relationship. What relationship most likely exists? Dual agency Non-agency Single agency Transaction-brokerage

Single agency

Examples of market trends today

Smaller houses - bigger houses; greener buyers; increased density; aging of baby boomers

What's the ideal time range to look for when selecting recently sold comparables?

Sold within the last three to six months

In Colorado, buyer and seller close at different times of the day in either the same closing office or different office branches

Split closing

Software that secretly collects and sends information about your computer to others over the Internet

Spyware

Forecasting the income and expenses that we can reasonably expect to bring in and pay out over a short term results in a budget that's every property manager's dream. That budget is ______. A capital reserve An expense Historical Stabilized

Stabilized

A(n) _______ is an independent contractor who's an employee by statute for certain employment tax purposes. An example is a food delivery driver who's paid on commission. Common law employee Independent contractor Statutory employee Statutory non-employee

Statutory employee

Sharilyn's business and adjacent businesses are arranged in a neat row. Customers enjoy the open-air walkways when they visit her business and others. In which commercial space is Sharilyn's business likely located? Office building Office park Regional shopping center Strip mall

Strip mall

Retail developments

Strip malls, neighborhood centers, and factory outlets, and regional, super-regional, and mega malls

You know a property's effective gross income and its operating expenses. How would you calculate the net operating income? Add income to tax deductions. Multiply annual return by .05 of the property's value. Multiply monthly income by 12. Subtract operating expenses from effective gross income.

Subtract operating expenses from effective gross income.

Sue, the seller, and Carl, the buyer, are preparing to close on their transaction. Who is responsible for reviewing the settlement statement before closing? Carl only Sue and Carl Sue only Sue's and Carl's attorneys

Sue and Carl

Wynona contracted with a gutter company that advertises a "Lifetime Guarantee of Trouble-Free Gutters." The agreement is that the company will replace her gutters with premium quality seamless aluminum. After she makes payment, she learns that the new gutters are poor quality material and leak at the corners. The company refuses to remedy the situation. What can Wynona do to recoup the money she's lost? Accept partial performance Rescind the contract unilaterally Sue for damages Sue for specific performance

Sue for damages

If sales contract deadlines aren't met, the non-defaulting party can terminate, accept liquidated damages, sue for damages, or ____________. Have the defaulting party arrested Order the property to be condemned Sue for double the amount of the sale price Sue for specific performance

Sue for specific performance

Lloyd thinks he has purchased an investment property, but the seller refuses to deliver the title to him. Lloyd has met all of his obligations per the written contract that he and the seller signed. He decides to take the seller to court in an effort to force her to hand over the title. Of what is this an example? Accepting partial performance Rescinding the contract unilaterally Suing for damages Suing for specific performance

Suing for specific performance

Minimizing risk in part means avoiding public networks, unsecure sites, and ______ sites. All Encrypted Secure Suspicious

Suspicious

With a triple net lease, the tenant pays _______ separately from the base rent. Insurance, utilities, and maintenance Maintenance, insurance, and debt service Taxes, debt service, and lease payment Taxes, insurance, and maintenance

Taxes, insurance, and maintenance

Sofia has rejected tenant applicant Mick based on his credit report. In addition to notifying Mick in writing of the rejection, what else must Sofia do? Give other property managers in the area Mick's information. Notify the credit reporting agency of the rejection. Tell Mick how to obtain a copy of the credit report. Verify receipt of the written notification with a phone call.

Tell Mick how to obtain a copy of the credit report.

The end of an agency agreement (may be terminated by mutual agreement, completion, expiration, or due to bankruptcy of either the broker or the client)

Termination

When you interview with a broker, which of the following goals should your questions help you confirm? That the broker provides health benefits That the broker's licensees are guaranteed a certain amount of income That the broker will give you the training and support you need to build your business That the broker will not require you to work floor time

That the broker will give you the training and support you need to build your business

Name some items to bring with you to a listing presentation.

The CMA, MLS listing sheets for comparable properties, your marketing plan for the property, and listing contracts

What's the relationship between TILA, RESPA, and TRID? The Dodd-Frank Act requires that lenders use the TILA-RESPA Integrated Disclosures (TRID). TILA and RESPA require lenders to use TRID. TILA, RESPA, and TRID mandate the lender disclosures required for federally related transactions. TRID mandates the type of disclosures for TILA- and RESPA-related transactions.

The Dodd-Frank Act requires that lenders use the TILA-RESPA Integrated Disclosures (TRID). TRID stands for TILA-RESPA Integrated Disclosures, which the Dodd-Frank Act implemented for all federally related mortgage transactions.

Which of the following statements about property inclusions and exclusions is true? Items to be excluded from the property sale must be removed before showing and contract execution. The Additional Provisions section of the contract allows for a listing of items included or excluded from conveyance. The Inclusions section of the contract provides a list of items that must remain on the property unless specifically excluded. The Inclusions section of the contract provides an area where the broker can list all included or excluded property.

The Inclusions section of the contract provides a list of items that must remain on the property unless specifically excluded.

Kenneth plans to shop around for his mortgage loan to be sure he's getting the best interest rate and terms. What lender-provided document outlines loan rates and fees so he can make comparisons? Kenneth's settlement statement details all closing costs, so he can use it to compare lender loan products. The buyer's net sheet provides all the figures necessary for comparing loan products. The Closing Disclosure discloses all loan costs, so he can compare costs between lenders. The Loan Estimate permits Kenneth to comparison shop.

The Loan Estimate permits Kenneth to comparison shop.

What's a great source of information about current trends in the real estate industry?

The National Association of REALTORS® (NAR)

Contingencies normally include the responsible party's name, the deadline for the contingency removal, and ______. The actions required for removal The date the contingency was added The reason the contingency was added Three reasons the contingency is required

The actions required for removal

Who's primarily responsible for ensuring that all parties to the transaction are communicating as necessary, deadlines are being met, and clients/customers are receiving the necessary support? The brokers The closing agent The lender The seller

The brokers

Your buyer client asks you the purpose of a financing contingency. Your response should be that it protects _________________. The bank The buyer The listing agent The seller

The buyer

Who reviews the Loan Estimate? The buyer The lender The seller The title insurance rep

The buyer The buyer is responsible for reviewing the Loan Estimate provided by the lender.

What does the buyer's signature on Colorado's Seller's Property Disclosure form mean? The buyer accepts the property as its condition is listed on the form. The buyer acknowledges receipt of the form. The buyer acknowledges that the seller completed the form independently from the broker. The buyer has had the form reviewed by a property inspector.

The buyer acknowledges receipt of the form.

Who does a pre-closing final walk-through of a property? The buyer and the buyer's agent The lender The seller and the seller's agent The title insurance representative

The buyer and the buyer's agent

Who's responsible for doing the final walk-through of a property? The buyer and the buyer's agent The lender The seller and the seller's agent The title insurance representative

The buyer and the buyer's agent

Whose responsibility is it to keep track of all buyer contingency deadlines and ensure they're not missed? The buyer The buyer and the buyer's agent The seller The seller and the seller's agent

The buyer and the buyer's agent

Who should review the settlement statement before closing? Only the buyer Only the seller The buyer and the lender's attorney The buyer and the seller

The buyer and the seller

Which of the following responses to a low property appraisal might impact the buyer's equity in the home? The appraiser revises the original appraised value. The buyer makes up the difference between the appraised value and the purchase price. The seller provides closing concessions to the buyer. The seller reduces the sale price.

The buyer makes up the difference between the appraised value and the purchase price.

What is buyer early possession? A contingent sale A walk-through to determine whether the property is unchanged The buyer moves into the new home before closing Trespassing

The buyer moves into the new home before closing

What is put at risk if a buyer misses a contingency deadline? The agent's license The broker's reputation The buyer's earnest money The sales price

The buyer's earnest money

In a sales contract, what would generally be considered liquidated damages?

The buyer's earnest money deposit

What is the Inspection Objection form used for? The appraiser's objection to inspection findings The buyer's objection and request to repair property defects The seller's objection to inspection findings The seller's suggested resolution to the buyer's repair requests

The buyer's objection and request to repair property defects The Inspection Objection form is used to invoke a contingency allowing the buyer to have the property inspected. If the inspection uncovers problems, the buyer has the right to object and request that the seller make repairs.

What is the final step to a successful closing? The change in ownership must be recorded. The closing must be performed. The earnest money must be deposited. The title search must reveal a clear title.

The change in ownership must be recorded.

What is the closing agent's role in preparing the Closing Disclosure? The closing agent coordinates preparation of the Closing Disclosure with the buyer. The closing agent isn't involved in the preparation or delivery of the Closing Disclosure. The closing agent prepares the Closing Disclosure with input from the lender. The closing agent provides certain data to the lender, who then prepares and delivers the Closing Disclosure.

The closing agent provides certain data to the lender, who then prepares and delivers the Closing Disclosure.

When making adjustments, which property do you adjust: the subject or the comparable?

The comparable property

Four things that must occur before the contract can be considered binding and effective

The contract must be in writing; the two parties (buyer and seller) must sign the final contract and initial all changes; acceptance is complete; the last party to accept the agreement lets the other party (or the other party's agent) know that written acceptance of the contract has occurred

Which of the following statements is true about constructive eviction? The court may award damages to the tenants. The court may order the vacated tenants to pay monetary damages to the landlord. The landlord can shut off the power to the unit, thereby forcing the tenant out. The tenants who abandoned the property may never legally re-enter the premises.

The court may award damages to the tenants.

Which of the following statements is true about activities related to the closing process? A lender's attorney is always present at a title closing. At closing, the seller must be paid the balance of the purchase price with a personal check. The funds a buyer brings to closing must be provided in the form of a cashier's check, a certified check, or a wire transfer. With the seller's signed, written agreement, the buyer may bring a personal check to pay for all closing funds.

The funds a buyer brings to closing must be provided in the form of a cashier's check, a certified check, or a wire transfer.

Which of the following statements about the number of contingencies in a sales contract is true? Every sales contract should contain a minimum of three contingencies. The inclusion of numerous contingencies makes it less likely that the buyer's offer will be accepted. The more contingencies, the better from the seller's perspective. The number of contingencies is directly related to the cost of the home. The higher the asking price, the greater number of contingencies.

The inclusion of numerous contingencies makes it less likely that the buyer's offer will be accepted.

What level of interaction will the buyer's and seller's attorneys and the buyer's insurance agent have with other parties to the transaction? The insurance agent and attorneys will interact with each other during the closing process. The insurance agent and attorneys will participate in all steps in the closing process. The interaction of these three vendors is limited, and their closing-related tasks are very specific. The interaction of these three vendors is limited to only the clients who hire them.

The interaction of these three vendors is limited, and their closing-related tasks are very specific.

Who is responsible for ordering a property appraisal? The buyer The buyer's broker The lender The seller

The lender

Kelly is closing on the house she's purchasing on Wednesday. Which of these statements is true? Kelly must receive the Loan Estimate at least four days before closing. The closing officer must deliver the Closing Disclosure at closing. The lender must provide the Closing Disclosure by Friday of the week before closing. The Loan Estimate amounts must be within 1/4 of a percent of the final settlement costs.

The lender must provide the Closing Disclosure by Friday of the week before closing.

Raphael received an offer to purchase his property that he felt was so low it was insulting, and told his agent to ignore it altogether. Three days after the offer expired, the same buyer made another offer, at list price, which Raphael accepted. Which of the following choices provides the best legal explanation for how the first offer was terminated? Raphael rejected the offer by refusing to acknowledge it. The buyer's first offer was novated. The offer expired through lapse of time. The seller countered the offer with a new one.

The offer expired through lapse of time. Because the first offer received no response, it expired through lapse of time.

In pricing a property, what might expired listings tell the real estate professional? The price at which a property is most likely to sell The price at which a property won't sell The property's competition When the home will sell

The price at which a property won't sell

If your buyer client makes a back-up offer on a property, you should advise your client that ____________. Once the seller signs the back-up offer, your client won't be able to withdraw from the contract The back-up offer must have a higher purchase price than the primary offer The primary contract is more likely to be completed as a result The primary contract is more likely to fall through as a result

The primary contract is more likely to be completed as a result

The Farm Credit System funds are acquired from ______. Local lenders Mortgage-backed securities Private investors The sale of debt securities and international money markets

The sale of debt securities and international money markets The Farm Credit System money comes not from deposits, but from the sale of debt securities in the U.S. and in international money markets.

If a buyer wants to write an offer and asks for your help but doesn't want to sign an agency agreement with you, who do you represent? Both the buyer and the seller No one The buyer The seller

The seller

Who is responsible for completing the Seller's Property Disclosure form in Colorado? The home inspection agent The seller The seller's broker The selling broker

The seller

Without a buyer agency agreement in place, which party does the agent who's assisting the buyer represent? No one The agent The buyer The seller

The seller

Without a buyer agency agreement in place, which party does the agent who's assisting the buyer represent? No one The agent The buyer The seller

The seller

According to custom, who pays the costs on the day of closing for property taxes, utilities, etc.? The buyer The buyer and seller split these costs. The seller Typically, the broker pays the costs on the day of closing.

The seller Although some local practices say that the buyer pays these costs, typically the seller pays them.

Who is responsible for providing the title insurance company with an affidavit of title? The buyer The lender The seller The title insurance rep

The seller The seller is responsible for proving an affidavit of title if requested by the title insurance company

What does it mean when the seller signs and dates the Seller's Property Disclosure form? The seller is accepting the buyer's purchase offer. The seller is acknowledging receipt of the disclosure. The seller is acknowledging the completeness and accuracy of the disclosure. The seller is guaranteeing that the property and its systems are in good condition.

The seller is acknowledging the completeness and accuracy of the disclosure. The seller is verifying that the form is complete and accurate as of the date it is signed.

Buyers should be made aware that the Seller's Property Disclosure is _______. A full detailing of everything obvious and latent about the property A guarantee of the property's condition An alternative to a home inspection The seller's current understanding of the condition of the home as it's known to the seller

The seller's current understanding of the condition of the home as it's known to the seller

Which one of these activities occurs on the day of closing? A pre-approval letter is provided to the seller. A preliminary title report is issued. The buyer receives loan approval. The seller's proceeds are sent via wire transfer.

The seller's proceeds are sent via wire transfer.

Martin has a new listing. He wants to post a for sale sign in his seller's yard. What must he obtain before doing so? A flier box A permit A separate phone number The seller's written permission

The seller's written permission

A law that states contracts involving the creation or conveyance of an interest in real property must be in writing to be enforceable

The statute of frauds

Seller Jamison is closing on his property with buyer Conrad. Jamison paid the current year's property taxes already. Is this a prepaid or accrued expense, and how will it be represented on the settlement statement? The taxes are an accrued expense, and will appear as a buyer credit and a seller debit. The taxes are an accrued expense, and will appear as a buyer debit and a seller credit. The taxes are a prepaid expense, and will appear as a buyer credit and a seller debit. The taxes are a prepaid expense, and will appear as a buyer debit and a seller credit.

The taxes are a prepaid expense, and will appear as a buyer debit and a seller credit.

Which of the following statements about the title commitment is true? The title commitment is a request by the buyer to conduct a title search. The title commitment is the same as the title insurance policy. The title commitment is the title insurance company's promise to issue a title insurance policy. The title commitment is used as proof of ownership.

The title commitment is the title insurance company's promise to issue a title insurance policy.

Stella and Josie want to buy a house that already has an accepted offer. They want to submit a back-up offer. Which of the following is true? Stella and Josie do not have to provide earnest money unless the first offer falls through. The back-up offer gives Stella and Josie more bargaining power. The first buyer's contract may be voided if Stella and Josie's offer is better. Their offer will become effective if the first offer falls through.

Their offer will become effective if the first offer falls through.

Which of the following are true about nonverbal cues? They are always communicated consciously. They are never a red flag for danger. They are not accurate indicators of someone's true feelings. They are often more accurate indicators of someone's true feelings than the words they speak.

They are often more accurate indicators of someone's true feelings than the words they speak.

When a seller counters the buyers' original offer, what options do buyers have? They can accept, counter, or reject the offer. They can accept the offer and counter back. They can only accept or reject the counter-offer. They can only accept the counter-offer.

They can accept, counter, or reject the offer.

Which one of the following characteristics makes property taxes a reliable target for taxation? They don't hold their value. They have a high compliance rate. They have high collection costs. They're easy to conceal.

They have a high compliance rate.

Jan is a real estate licensee gathering information to help her seller determine a good listing price. How could expired listings help her in this process? They denote the property's competition. They determine approximately how long it will take the property to sell. They help determine the price at which the property is most likely to sell. They illustrate the price at which the property won't sell.

They illustrate the price at which the property won't sell.

Which of the following is true about net listings? The listing agent is guaranteed at least some commission. They don't include compensation for the buyer's agent. They often involve a conflict of interest. They're legal in all 50 states.

They often involve a conflict of interest.

Which of the following is true about for sale signs? They must be located at least 20 feet away from the mailbox. They must be visible from the sidewalk. They must be visible from the street. They require the seller's written permission to post.

They require the seller's written permission to post.

When a sales contract terminates, what happens to the terms and obligations specified between the buyer and seller in the sales contract?

They terminate as well

Both the buyer and the seller have to sign the purchase and sale agreement in order to demonstrate that ______. An attorney has reviewed the contract Their agents have agreed to the terms and conditions The very first offer was accepted They understand the terms

They understand the terms

Why might some agents work for buyers without ever having met them? It's the most effective use of their time. They believe they'll be able to get the buyer to commit to an agency agreement later. They don't particularly like people. They're afraid to turn down any business.

They're afraid to turn down any business. Some agents are willing to work for buyers without an agency agreement and without ensuring buyer loyalty. This can be a waste of time.

Which of the following statements is true of independent contractor licensees? Their brokerage firm pays certain expenses, such as gas and travel time. They receive benefits, such as sick pay, from their brokerage firms. They're paid by the job. They're required to do work in a certain order.

They're paid by the job.

An office property manager has responsibility for which area? Determining and collecting assessments for capital expenditures and maintenance Negotiating residential leases Planning the construction of large projects, such as shopping centers, apartment buildings, and industrial parks Thinking about how much build out or change to the design, floor plan, and power requirements a tenant will require

Thinking about how much build out or change to the design, floor plan, and power requirements a tenant will require Office property managers need to consider how much build out or change to the design, floor plan, and power requirements a tenant will require.

Steven opens a letter from an attorney describing a claim against his property title from an event arising after he purchased his title policy. Which of the following statements is true? Steven's OEC (owner's extended coverage) insures him against this claim. Steven's title policy covers this if the claim is made within 90 days of purchasing the policy. The lender's policy protect Steven against this type of claim. This claim isn't covered by the existing title insurance policies.

This claim isn't covered by the existing title insurance policies.

Buyer Lainie and seller Jackson are a week from closing on their sales contract when Lainie loses her job. She notifies Jackson right away, because without a job, she can't get a mortgage. Jackson understands the situation, and the two agree to cancel the contract. Jackson returns Lainie's earnest money. Which of the following is true of this situation? This is an example of accepting partial performance. This is an example of mutual rescission. This is an example of suing for specific performance. This is an example of unilateral rescission.

This is an example of mutual rescission.

Who get the earnest money when a contract terminates?

This is determined by the wording in the sales contract

Once buyers submit their loan application, they must be given their Loan Estimate. At the very least, they must receive the Loan Estimate within ______. Five business days after submitting the loan application One week after submitting the loan application Three business days after submitting the loan application Two business days after submitting the loan application

Three business days after submitting the loan application

You're acting as the buyer's agent in a residential transaction. Your client's lender has hired an appraiser to determine the mortgage value of the property. How is the appraiser paid? From a commission based on the property's sales price From a commission based on the property value found by the appraiser Through a fee typically paid by the buyer Through the Appraiser Payment Fund that all lenders must contribute to

Through a fee typically paid by the buyer

Which of the following is a typical accrued adjustment? Heating oil in the tank Prepaid taxes Unpaid real estate taxes Utilities billed and paid in advance

Unpaid real estate taxes

Avery is about to close on his first home. What will protect him from financial loss if his ownership later comes into question? Abstract of title Chain of title Title insurance Title search

Title insurance

Insurance contract insuring the policy owner against financial loss if title to real estate is defective; seller pays for buyerʼs owner's policy; buyer pays for lenderʼs policy

Title insurance

What type of insurance is a form of indemnity insurance that can protect both the buyer and the buyer's lender? Collateral insurance Hazard insurance Mortgage insurance Title insurance

Title insurance

What's designed to protect buyers from financial loss if the title to the property they buy has defects? Abstract of title Chain of title Title insurance Title search

Title insurance

Which of the following protects the owner against financial loss if the real estate title has defects? Abstract of title Chain of title Deed Title insurance

Title insurance

Your buyer is worried that after she closes on her property, she'll find out someone else has a claim to its ownership. What can reassure her? Abstract of title Chain of title Title insurance Title search

Title insurance Title insurance protects property buyers from financial loss due to title defects. However, it covers only those items included in the policy.

Which of the following is used to protect the buyer from title defects after closing? Abstract of title Chain of title Survey Title insurance policy

Title insurance policy

Why might a property owner ask you to prepare a report showing the trend in rental delinquency rates? To assess the adequacy of tenant income screening processes To assess your ability to manage tenant relations To determine if rental rates are too high compared to your competitors' rates To forecast the amount of effort that will be required to collect the late rents

To assess the adequacy of tenant income screening processes

Jennings has received a Closing Disclosure from his lender. What's the purpose of this form? To detail all costs Jennings will owe at closing To disclose the distribution of commissions that will occur at closing To estimate closing costs To estimate the seller's net proceeds

To detail all costs Jennings will owe at closing

What's the purpose of the Square Footage Disclosure in Colorado? To disclose to the buyer and seller the source of the square footage measurement the broker used in marketing materials To disclose to the listing broker the square footage of the house for marketing purposes To notify the county assessor's office of the home's square footage To verify the accuracy of the appraiser's square footage measurements

To disclose to the buyer and seller the source of the square footage measurement the broker used in marketing materials The listing broker completes the Square Footage Disclosure to inform both parties of how the square footage of the home was measured and that the measurements may not be exact.

What would be a reason for getting a home inspection done before closing on a property? To check for any defects in the title to the property before purchasing title insurance To ensure the title is marketable before putting any money down To get more detailed information about the overall condition of the home and find any defects or repairs that are needed before purchasing the property To verify the validity of the home price to avoid paying too much

To get more detailed information about the overall condition of the home and find any defects or repairs that are needed before purchasing the property A home inspection would be done to get more detailed information about the overall condition of the home and to find any defects or repairs that are needed before purchasing the property

Which of the following best describes the purpose of a buyer agency agreement? To identify the terms of a sales transaction between the seller and the buyer To identify the terms of the buyer broker/buyer agency relationship To identify the terms of the buyer broker/employing broker relationship To identify the terms of the listing broker/buyer agency relationship

To identify the terms of the buyer broker/buyer agency relationship The buyer agency agreement identifies the terms of the buyer broker/buyer agency relationship.

Ellen is a state-certified appraiser who's been hired to perform an appraisal on a home that has an accepted purchase offer. What is the most common purpose for Ellen's appraisal in this situation? To develop an estimate of replacement cost for insurance purposes To help the buyer renegotiate the sales price based on defects the appraiser discovered To inform the buyer's lender of the value of the property that will be acting as security To reassure the seller and listing agent that the price they accepted was appropriate

To inform the buyer's lender of the value of the property that will be acting as security

What's the purpose of advising sellers to remove personal effects from their homes prior to showings? To give the impression that they need money so that buyers will make their offers higher To increase the likelihood that they'll be out of the house by the time the transaction closes To make it easier for prospective buyers to visualize themselves in the home To remove objects that may be tempting to thieves

To make it easier for prospective buyers to visualize themselves in the home

Why should you always meet new clients at the brokerage first? To impress them with your work space. To make sure they're really interested in the listing. To photocopy their ID and introduce them to others. To show them other listings they might be interested in.

To photocopy their ID and introduce them to others.

Under which of the following circumstances would a counter proposal be used? To amend a signed purchase contract To extend the termination date of a listing agreement To propose an amendment to an unsigned offer to purchase To propose new financing terms to the lender

To propose an amendment to an unsigned offer to purchase

Why do the seller's and buyer's agents attend the closing? To ensure all of the closing documents are complete and accurate To provide support to their clients To represent their clients' legal interests To verify that the closing actually took place as scheduled

To provide support to their clients

Lawrence is a buyer closing on a home purchase for which he's obtaining financing. He receives a Loan Estimate from his lender. What's one purpose of this document? To detail the amount Lawrence needs to bring to closing To disclose the interest rates available on this lender's various loan programs To disclose the lender's source of loan funds To provide the estimated closing costs for Lawrence's loan

To provide the estimated closing costs for Lawrence's loan

What's an agent's responsibility related to home inspections? To encourage buyers to waive an inspection To hire an inspector for the buyers To perform them To recommend a buyer have a professional inspection performed

To recommend a buyer have a professional inspection performed

What's the Seller's Property Disclosure form used for in Colorado real estate transactions? To list repairs the seller agrees to make To provide the appraiser with information needed to appraise the property To provide the lender with information needed to approve the buyer's loan To state the seller's understanding of the property's current condition

To state the seller's understanding of the property's current condition

An act that damages another person and can lead to legal action

Tort

Occurs when one person intentionally damages the other person's contractual or other business relationships

Tortious interference

Amy owns a salon and spa. She's leasing a prime piece of real estate in which she's installing salon chairs, counters, massage tables, spray tan vestibules, washers, and dryers. What are these items considered? Extravagant Real property Trade fixtures Unnecessary

Trade fixtures

Which type of development centers around proximity to public transportation? Eco-Green Increased-density Multi-family housing Transit-oriented community

Transit-oriented community

Which of the following items would an owner's extended coverage (OEC) title policy cover? Damage to the property value from the use of easements that appeared in the public record Flood hazards not covered by traditional homeowner's insurance Publicly recorded deeds and other events affecting title to the property Unrecorded mechanic's liens

Unrecorded mechanic's liens Most OEC policies cover the owner's for claims made based on unrecorded liens and encumbrances.

Alex lives in a rural area where there's plenty of open space, though not many people. She thinks it would be perfect for development of a theme park she has in mind, one with lots of roller coasters. What is the most likely factor that would make Alex's idea a poor investment? Climate Geography Safety Visitor access

Visitor access Amusement parks need plenty of visitors to be successful investments, and Alex lives in an area where there aren't many people to come to her park.

______ conveys the emotional content of words. Angry, disrespectful, or inappropriate words directed at you may be indicators of a threat. Eye contact Fidgeting Sweating Vocal tone

Vocal tone

Dani is in love with the ranch-style home on Cardinal Avenue, says she simply must have it, and is willing to pay cash. The seller is concerned about an appraisal. Which of the following would be a good strategy for structuring her offer? Include an escalation clause. Offer a quick close. Waive the appraisal. Waive the inspection.

Waive the appraisal.

If a seller is concerned about an appraisal, what can a buyer do to address this need when structuring the offer? Allow an escalation clause. Offer a quick close. Offer full price or more than full price. Waive the appraisal.

Waive the appraisal.

Buyer's final inspection of the property; determines if conditions in the purchase agreement have been satisfied

Walk-through

Prior to the closing, one final inspection should take place. This is also known as the final what? Loan commitment Secondary home inspection Title commitment Walk-through

Walk-through

Real estate broker Wallace has recently partnered with a few other service providers to form a company that specializes in closings in order to increase his revenue stream. Which of the following is true? Wallace and the other service providers will no longer own their own businesses. Wallace has created an affiliated business arrangement. Wallace may not accept any monetary compensation from this arrangement. Wallace must present an Affiliated Business Arrangement Disclosure statement to each of the other service providers.

Wallace has created an affiliated business arrangement.

What is tortious interference? When a person accidently damages another's contractual relationships When a person damages another's reputation When a person intentionally damages another's contractual relationships When a person is responsible for damages, even if she weren't at fault

When a person intentionally damages another's contractual relationships

When do you adjust down (subtract value)?

When the comparable has a feature the subject property lacks

When do you adjust up (add value)?

When the comparable lacks a feature the subject property has

The Butlers have countered an offer from Conner, but then they receive an even better offer from Audrey. What should the Butlers do before accepting Audrey's offer? Accept the offer from Conner. Reject the offer from Conner. Send a letter of non-acceptance to Conner. Withdraw their counter-offer to Conner.

Withdraw their counter-offer to Conner.

Both tenants and property owners file lawsuits against property managers. Which item is a common tenant grievance? Breach of contract Mishandling of funds Theft Wrongful entry/invasion of privacy

Wrongful entry/invasion of privacy

Does the order in which the closing agent requests recording of legal documents after a closing matter? No, as long as the closing agent provides instructions for the county recorder. No, the documents can be submitted and recorded in any order. Yes, the new promissory note should be recorded before the seller's Release of Deed of Trust. Yes, the seller's Release of Deed of Trust must be recorded before the buyer's new Deed of Trust.

Yes, the seller's Release of Deed of Trust must be recorded before the buyer's new Deed of Trust.

Your buyer clients Josie and Terry made an offer that was accepted on a cute bungalow in a city neighborhood. They just received the inspection report and were delighted to see only minor condition issues. They'd like the sellers to replace two windows that have broken seals. In response, the sellers asked for a copy of the inspection report. What must you do? You can copy the pages related to the windows and provide those. You can only provide a copy if you get permission from Terry and Josie. You must request permission from the inspector, who holds the copyright. You're required to provide a copy of the report to the sellers.

You can only provide a copy if you get permission from Terry and Josie.

Which of the following best describes the fiduciary duty of confidentiality? You must keep all material facts confidential. You must keep all parties' information confidential. You must not discuss confidential matters with your client. You must not share your client's confidential information.

You must not share your client's confidential information.

In order to be able to act on your intuition, it is important to have an "escape plan." What does that mean? You've identified a way to remove yourself from the situation. You've identified that the situation is threatening. You've identified ways to distract yourself from your uneasy feelings so you can ignore them. You've removed all chances of encountering a dangerous situation.

You've identified a way to remove yourself from the situation.

If someone steals this, they could have access to your family, personal information, contacts, photos, email, and social media accounts. What is it? Family photos Your Agent of the Month award Your car keys Your cell phone

Your cell phone

A large retailer that draws in traffic for other stores

anchor store

One who leases to another

lessor

A property manager's detailed plan for expenses

operating budget

You average one client from every 10 leads, and each client represents 85% of a closed transaction. Each transaction you close has an average dollar value of $6,000. Using the funnel, how much can you expect to earn from every 10 leads? $12,000 $5,100 $6,000 $8,200

$5,100

Which of these items should you expect to include when calculating your start-up costs as a licensee? Desk fee License fee Renewal fee Self-employment tax

License fee

In which two places should a new licensee focus marketing dollars?

Sphere and farm area

What's a password vault? A security tool that stores logins and passwords Malware hackers use to steal passwords Software that encrypts your email Software that prevents hackers from infecting your system with viruses, worms, and malware

A security tool that stores logins and passwords

In real estate marketing terms, what's a farm area? An agricultural district A targeted market Vacant land Your sphere of influence

A targeted market

Must be disclosed, if known by the licensee, to all parties in all transactions

Material fact

What acronym can you use to recall the fiduciary duties an agent owes to a client? OLD CAR OLD FARM OUR CAR OUR FARM

OLD CAR

Which of the following is a reason that the federal and state government classify workers into taxing categories? To determine whether the worker is exempt or non-exempt for purposes of the Fair Labor Standards Act To ensure brokers withhold income taxes from their independent contractors To ensure brokers withhold taxes for independent contractors To ensure that both employees and independent contractors receive health insurance benefits

To determine whether the worker is exempt or non-exempt for purposes of the Fair Labor Standards Act

Karen, a new licensee, is interviewing at a brokerage and asks to see its policies and procedures manual. Why might she do this? To determine whether there are systems in place for her success To find out if the brokerage has a policy of promoting from within To look like she knows what she's doing to the broker To see if the brokerage pays overtime

To determine whether there are systems in place for her success

Informs a party that you're assisting, but not representing or advocating for that party

Transaction-Brokerage Relationship Disclosure

Chuck is a Colorado managing broker. He recently hired two broker associates at his firm. If he intentionally misclassifies them as independent contractors in order to save a few bucks on payroll taxes, what amount of a fine could he face for his first offense? $1,000 $10,000 $2,500 $5,000

$5,000

Which of the following is considered a plex? A building with two dwelling units A condo An apartment building A townhome

A building with two dwelling units

Low-income and minority buyers face a number of obstacles to homeownership, including: An insufficient supply of affordable housing Competition from foreign investors for affordable housing Immigration status Long-term rental leases

An insufficient supply of affordable housing

Lisette is an employee at ABC Brokerage. She's not licensed and her role is to answer phones and process paperwork. She's supervised by broker Bob. Which of the following statements is true? Bob can control the number of hours that Lisette works each day. Bob can define the results he wants Lisette to achieve, but he isn't allowed to direct how she does her work. Lisette is paid according to what she produces at work, not by the number of hours she works. Lisette is responsible for paying her own work expenses.

Bob can control the number of hours that Lisette works each day.

Created designated brokerage, and defined the roles of the employing broker and employed broker

Designated Brokerage Relationships in Real Estate Act

Defined single agency and transaction-brokerage as the two allowable brokerage relationships in Colorado

Designated Relationships in Real Estate Act

In which type of dwelling would you likely see an owner living in one half and renting out the other half? Duplex Single-family dwelling Townhome Triplex

Duplex

Which of the following designations were defined by the Designated Brokerage Relationships in Real Estate Act? Designated brokerage and single agency Designated brokerage and transaction-brokerage Employing broker and employed broker Single agency and dual agency

Employing broker and employed broker The Designated Brokerage Relationships in Real Estate Act created designated brokerage and defined the employing broker and employed broker roles.

Rick finds that some of his ongoing expenses as a licensee are paid monthly, some quarterly, and some annually. How can he arrive at a standard monthly figure that will help him manage his cash flow? Estimate total annual expenses and divide by 12 for a monthly amount. Estimate total annual expenses and multiply by 12 for a monthly amount. Ignore any expense that doesn't occur monthly and assume he'll be able to cover it when it is charged. Take one month of expenses and multiply by 12 for an annual amount.

Estimate total annual expenses and divide by 12 for a monthly amount.

Katherine is the seller's agent for Gerome, who's selling his 30-year-old home. The home still has all of its original fixtures. Katherine suggests that Gerome acquire the services of a ______ now to ensure that there are no surprises later. Home inspector Mortgage broker Title company Title representative

Home inspector

Which of the following statements about plexes is true? Investors can use their live-in plex as a tax shelter. Investors who don't live in their plex can write off maintenance costs and property taxes. It's illegal for investors to own more than one plex at a time. Plexes are rarely a lucrative investment.

Investors can use their live-in plex as a tax shelter.

Which of the following is most true about a career in real estate? It requires a strong work ethic. It's all about schmoozing. It takes minimal effort to succeed. Most people succeed.

It requires a strong work ethic.

Which of the following is the best reason to support diversity in a real estate office? It creates a challenging workplace. It's hard to find employees. It's politically correct. It's the best way to provide service to a broad array of clients.

It's the best way to provide service to a broad array of clients.

Obtaining a home loan is not the simplest process. Immigrants from some countries may find it particularly difficult because ______. Credit tends to be easier and simpler to obtain in their home countries Lack of English language skills make the homebuying process hard to follow The concept of a mortgage does not exist in their country Their savings can be tied up in foreign investments

Lack of English language skills make the homebuying process hard to follow

Select the criteria below that indicates an AfBA In Colorado. If a client uses one settlement service provider in an AfBA, the client may be required to use other providers in the AfBA. Neither settlement service provider owns the other settlement service provider. One settlement service provider owns another settlement service provider. One settlement service provider positively influences clients to select another specific settlement service provider.

One settlement service provider positively influences clients to select another specific settlement service provider.

Who may call themselves a REALTOR®?

Only a member of the National Association of REALTORS®

Why do most licensees fail in real estate?

Poor time management, poor financial planning, and they don't work hard enough

Georgia, an employing broker, has been found guilty of misclassifying a worker at her brokerage. What's likely to happen to Georgia? She'll be fined for employing an unlicensed person to perform licensed activities. She'll be fined for treating an employee as an independent contractor. She may face prison time for employing an undocumented worker. The brokerage license will be suspended and Georgia will be fined.

She'll be fined for treating an employee as an independent contractor.

Lana is a client who is seeking to purchase some investment property. What does this tell you about her transaction? Security and comfort are important elements of her purchase. She'll most likely use a conventional or government-backed mortgage. She'll want cash flow or a high rate of return. She's looking for a property that will appeal to her emotions.

She'll want cash flow or a high rate of return.

Angus and his partner, Fergus, are so discouraged. All they want is a modest place to call home—not one of those McMansions that they see in every new subdivision. What current market trend is this an example of? Aging of Baby Boomers Greener buyers Increased density Smaller houses, bigger houses

Smaller houses, bigger houses

______ aren't material facts and shouldn't be disclosed by a Colorado licensee. Known latent defects Plumbing defects Roof issues Stigmatized property facts

Stigmatized property facts

Not a material fact and may not be disclosed by real estate licensees (e.g., property was the site of a murder)

Stigmatizing information about a property

It's your first week in real estate and you realize you made a terrible selection with your broker—she's awful! What is your best course of action? Quit the business Sit tight; you can't leave until two years have passed Switch brokerages Turn in a letter of resignation

Switch brokerages

What's floor time? Overtime Time spent at an open house that is vacant, without chairs Time spent evaluating carpeting and linoleum for possible upgrades Time spent in the office instead of the field

Time spent in the office instead of the field

You're researching information to estimate annual income and find that the average sales price of a home in the area you'll be working is $400,000. Your expected commission is 2.5%, your broker takes a 50% split, and you plan to make six transactions in the year. What will your estimated income for the year be? $15,000 $30,000 $300,000 $60,000

$30,000

How many members does the National Association of REALTORS® have in the U.S.?

1 million +

Which of the following statements about commercial residential properties is true? A commercial residential property is a multi-family residential property. Commercial residential properties have less stringent financing requirements than residential properties. Commercial residential properties have two or more dwelling units. Commercial residential properties include duplexes, triplexes, and fourplexes.

A commercial residential property is a multi-family residential property. A commercial residential property is a multi-family residential property with five or more dwelling units.

Alec is considering investing in an older, but charming single-family home, then renovating the home by adding multiple kitchens and bathrooms. What type of investment opportunity is Alec contemplating? A conversion A fixer-upper A home targeted for rezoning An historic property

A conversion

Lizzie's on the hunt for an older, single-family house she can rehab and then put back on the market. If she has to rent the place for a while, so be it, but her ultimate goal is to sell the place for a profit. What type of investment opportunity is Lizzie considering? A conversion A fixer-upper A home targeted for rezoning An historic property

A fixer-upper

Grant is on the hunt for older, single-family homes with status ... and a tax credit of as much as 20% to offset the expense of any needed renovations. What type of investment opportunity is Grant looking for? A conversion A fixer-upper A historic property A home targeted for rezoning

A historic property

Employing broker Saul has agreed to hire Lisa as an independent contractor. Lisa and Saul review the contract together before signing. What clause is required by Colorado law? A compensation clause identifying the exact hourly rate Lisa will earn. A description of the quality standard Lisa must meet in order to maintain employment. A place of business clause identifying the location where Lisa must conduct the bulk of her work. A statement that Lisa isn't entitled to unemployment compensation from Saul.

A statement that Lisa isn't entitled to unemployment compensation from Saul.

Nichole's brokerage is part of an AfBA. The brokerage's parent company owns and operates several settlement service providers. According to Colorado law, Nichole must disclose this information to all consumers in all transactions in which _________________. A federally related loan is involved An offer is made for real property A title is transferred She refers a party to one of her affiliate settlement service providers

A title is transferred In Colorado, an AfBA must be disclosed to all consumers in all transactions in which a title is transferred.

Broker Terry is a partner in an AfBA. When should he disclose this information to his clients? As soon as possible Before closing During closing When he refers his client to one of his affiliates

As soon as possible Terry should disclose his AfBA to his clients as early as possible in the relationships. At the very latest, he should disclose his AfBA upon execution of an offer to purchase real property.

A ______ investor buys properties to earn income by leasing them. Buy-and-hold Commercial Fix-and-flip Wholesaler

Buy-and-hold

Katrina wants to find a way to curb her spending. She has decided to take a look at her variable expenses. Which of the following is a variable expense? Car payment Clothing Gym membership Rent

Clothing

Which of the following describes marketing to one's sphere? Buying ad space on bus benches Buying display advertising Connecting with your own network of family and friends Picking a geographic area in which to concentrate efforts

Connecting with your own network of family and friends

A Colorado broker working for one party must provide the other party with brokerage relationship disclosures upon initial contact, and before engaging in any brokerage activities. Which of the following should trigger a brokerage disclosure? A buyer calls the seller's agent to ask how many square feet the unfinished basement has. A prospective buyer calls and asks whether the kitchen has a dishwasher. During an open house, an attendee asks what amenities the neighborhood offers. During an open house, the seller's agent asks if a prospective buyer has been pre-approved for a loan and for how much.

During an open house, the seller's agent asks if a prospective buyer has been pre-approved for a loan and for how much.

When a website has an S in the "http" portion of the URL, such as: "https://www.google.com," what does it mean? It is a phishing website. It is a secure website. It is a single sign on website. It uses more than one "http."

It is a secure website.

Melissa is a new licensee. Which of these items will be among the expenses she will incur as she begins her business? Business tax Desk fee Lockbox fee Self-employment tax

Lockbox fee

Brianna is a new licensee who spent $480 on her business to get started. How does this compare to the typical licensee's start-up costs? About average Higher than average Lower than average Much higher than average

Lower than average The typical start-up costs for a new licensee average $2,000 or more, so Brianna is coming in quite low.

You want to make $50,000 in a year from your real estate business. You know that about 15% of the leads you get turn into clients. You earn an average of $8,000 on every closed transaction. Is this everything you need to know to use a funnel to determine how many leads you need to generate to get your $50,000? No, you also need to know the percentage of clients who turn into closed transactions. Yes, this means you'll need 1,200 leads to earn $50,000. Yes, this means you'll need 3,333 leads to earn $50,000. Yes, this means you'll need 41 leads to earn $50,000.

No, you also need to know the percentage of clients who turn into closed transactions. The funnel requires some average or estimated numbers to make the calculation complete.

What may a licensee do when a consumer refuses to sign a Definitions of Working Relationships disclosure? Insist on a signature. Note the date and consumer's refusal to sign and retain the form for her records. Tell the consumer he is legally required to sign. The licensee doesn't have to keep a copy of the form, since it's unsigned.

Note the date and consumer's refusal to sign and retain the form for her records.

Should be given to any parties (or potential parties) to a transaction when you already work under a brokerage relationship with the other party.

Pre-Established Relationship Disclosure

Cal is a real estate licensee interested in developing expertise in a particular area and demonstrating his commitment to professional education. What type of educational opportunity would be the best choice for him? Professional designation or certification Real estate conference Real estate seminar Required continuing education

Professional designation or certification

Lakshmi is a new licensee. Which of these professional development opportunities is the best way for her to receive a quick introduction to a topic from an expert, or to dive more deeply into an area with other experienced professionals? Cross-training Professional designation or certification Real estate seminar Required CE

Real estate seminar

Natasha is a new licensee who needs to estimate her business expenses. Which of these is a recommended way for Natasha to do this? Make a wild guess. Research typical expenses for a licensee through the internet and by asking colleagues. Take her total start-up expenses and divide the amount by 12 to arrive at an estimated monthly figure. Use her history of expenses from another business that she had that wasn't related to real estate.

Research typical expenses for a licensee through the internet and by asking colleagues.

The employing broker may receive confidential information about an employed broker's client if prior written authorization has been given by the client

Rule 6.3.G: Confidential Information

The Brokerage Relationships in Real Estate Act created which of the following brokerage relationships in Colorado? Designated brokerage and transaction-brokerage Single agency and dual agency Single agency and transaction-brokerage Single agency and transaction-brokerage

Single agency and transaction-brokerage Single agency and transaction-brokerage The Brokerage Relationships in Real Estate Act created two brokerage relationships in Colorado: single agency and transaction-brokerage.

The way in which independent contractors and employees are compensated and how their income is reported to the IRS differ. Which of the following statements describes how independent contractors are compensated and their income reported? The worker does not receive a salary and must pay self-employment taxes. The worker receives a salary and must pay self-employment taxes. The worker receives a salary, and taxes are withheld from his pay. The worker receives a salary, and the brokerage firm pays federal and state unemployment taxes on the worker's behalf.

The worker does not receive a salary and must pay self-employment taxes.

What happens if an independent contractor earns $600 or more during the tax year? Nothing, but the worker must still pay self-employment taxes. The broker must withhold income taxes and FICA from the worker's pay. The independent contractor must change his worker classification to employee and have taxes taken out of his pay. The worker's brokerage firm must prepare and submit forms 1096 and 1099 to the IRS and distribute form 1099 to the worker.

The worker's brokerage firm must prepare and submit forms 1096 and 1099 to the IRS and distribute form 1099 to the worker.

Why are most new real estate licensees hesitant to market to their friends and family? Their brokers don't want them marketing to that audience. They are afraid they'll be asked to reduce their commissions. They don't want to seem pushy. They want wealthier clients than their friends and family.

They don't want to seem pushy.

Statistically, black and Hispanic applicants for conventional home loans are more likely to be denied than white applicants because ______. They apply for a larger loan They are more likely to make mistakes on the credit application They do not speak English as well They tend to make significantly less money per year

They tend to make significantly less money per year

Martin, a licensee, is planning to do a New Year's calendar mailer. He wants to target homeowners who have been in their homes for over three years in a suburban starter home community. Which of his third-party provider relationships can help identify these addresses? Home inspector Mortgage broker Title company Title representative

Title company

Which third-party provider helps keep the closing on track? Home inspector Mortgage broker Title company Title representative

Title representative A good title rep can make problems disappear by keeping track of paperwork that's due, reminding the parties of upcoming events and deadlines, making sure that all signatures are there, etc.

A brokerage relationship in which a broker assists one or both parties to a transaction, performing basic uniform duties for each party, but not advocating for either party

Transaction-brokerage

___________ are the same regardless of whether the licensee is acting as a single agent or transaction-broker. Agency duties Fiduciary duties General duties Uniform duties

Uniform duties

Lucy was so excited about her new listing that she ran home to upload photos to her Facebook page. She logged on with the trusty password she used for all of her accounts (LucyG00sy) and uploaded photos of the kitchen, living room, dining room, and master suite. She included her broker's contact information and her cell phone number, clicked "Post," and imagined the commission check rolling in. Did Lucy do anything wrong here? No. She's jumping right into social media marketing. Yes. She shouldn't have put anything about her business on social media. Yes. She shouldn't use the same password for all of her accounts. Yes. She should've included more photos.

Yes. She shouldn't use the same password for all of her accounts.

A situation where a person in a position to refer settlement services—or an associate of that person—has either an affiliate relationship with or a direct or beneficial ownership interest of more than 1% in a provider of settlement services and who then refers business to that provider or in some way influences the selection of that provider

Affiliated business arrangement

Ready to perform a magic trick? As a Colorado broker, which of the following documents, when signed, allows you to change from a single agent to a transaction-broker? Brokerage disclosure Buyer representation agreement Change of Status Definitions of Working Relationships

Change of Status

Which of the following describes the process of making a copy of a website for the purpose of obtaining money or data from unsuspecting users? Backing up files to an external hard drive Cloning Encrypting your email Storing logins and passwords

Cloning

What organization's mission is to promote democracy in housing? Asian Real Estate Association of America (AREAA) Minority Real Estate Professionals of America (MREPA) National Association of Hispanic Real Estate Professionals (NAHREP) National Association of Real Estate Brokers (NAREB)

National Association of Real Estate Brokers (NAREB)

Luis is estimating his annual income. He researches and finds the average sale price of homes in the area where he'll be working. He expects his commission to be 3%. What other data point does he need to estimate his annual income? Number of homes listed in his area Number of homes sold annually in his area Number of licensees working in the area Number of transactions he expects to close in the year

Number of transactions he expects to close in the year

Your client asks you which properties are multi-family residential. The most complete answer you can give is ______. Duplexes and triplexes Duplexes, triplexes Duplexes, triplexes, and fourplexes Plexes and apartment buildings

Plexes and apartment buildings More than two dwelling units is multi-family residential. This includes those with five dwellings and up, which are commercial multi-family residential.

Which of these professional development opportunities is the best way for a licensee to receive a quick introduction to a topic from an expert, or to dive more deeply into an area with other experienced professionals? Cross training Professional designation or certification Real estate seminar Required continuing education

Real estate seminar

Stephanie, a mortgage broker, would like to thank Felicia, a real estate licensee, for all of the clients she's referred to Stephanie. Which of the following is an appropriate way for Stephanie to say thank you? Pay Felicia a $50 referral fee for each referral, whether or not it results in business for Stephanie. Refer clients to Felicia who are looking to buy or sell a home. Reward Felicia with box seats to a Broncos game. Send Felicia a $25 Target gift card for each referral that results in a mortgage client for Stephanie.

Refer clients to Felicia who are looking to buy or sell a home.

Norma's thrilled to have her real estate license and to be hired on at Acme Brokerage. She's not positive about Saul, her employing broker, though. He seems a little sketchy. For example, when she looks at her independent contractor agreement, it says that she's not entitled to unemployment insurance and has to pay her own income taxes. What should she do? Consult with a more experienced licensee at Acme Brokerage to find out if this is standard practice for independent contractors at the firm. Contact the Department of Labor and report Saul for attempting to avoid his legal obligations as her employer. Find a new broker to work for; Saul's trying to take advantage of her inexperience. Review the requirements for independent contractors and be prepared to pay her own income tax and unemployment insurance.

Review the requirements for independent contractors and be prepared to pay her own income tax and unemployment insurance.