Colorado Contracts & Regulations Online Midterm & Final

A broker associate who has several rental properties is asked by his relative to manage the relative's three rental properties. What may the broker associate do? a. He must obtain his employing broker's permission b. He may manage the properties without involving the employing broker because it is for a relative c. He must sign a management agreement and set up a trust account d. He should open a separate account for funds to avoid commingling

a

According to Rule F, all of the following would be acceptable as a substitute for the Contract to Buy and Sell Real Estate EXCEPT a. a contract drafted by the brokerage firm's attorney for general use by all brokers in the firm b. a new home sales contract with builder warranties c. a contract drafted by the seller's attorney d. a contract drafted by the buyer's attorney

a

Adjudicated water rights may be taken from an owner involuntarily for public use by a. condemnation b. severance c. water court decree d. suit for partition

a

All of the following are protected classes under federal and Colorado fair housing EXCEPT a. retirement age b. color and race c. familial status d. national origin

a

All of the following statements refer to the Square Footage Disclosure EXCEPT a. it is used for all types of properties b. it should not be used for loan or other valuation purposes c. if the property is measured, the broker must tell how, or if using other measurements, must list the source of the measurement d. it is the responsibility of the listing broker who must use a reliable source

a

An owner selling her property as an FSBO asks her friend who is a broker associate to complete a Contract to Buy and Sell Real Estate and help her with the closing. The broker associate agrees to help and asks to be paid $500 under the table after the property closes. Which is TRUE about the broker associate? a. If the broker associate completes the transaction without a listing contract with the brokerage firm, the associate will be in violation of Conway-Bogue b. The broker associate may complete the contract but may not accept the fee c. The broker associate would be in violation of Rule F for accepting the fee without going through the brokerage firm d. The broker associate may complete the contract and accept the fee as long as income taxes are paid

a

Errors and omissions (E&O) insurance is required for all of the following EXCEPT a. inactive licensees renewing on inactive status b. all active brokers c. brokerage firms d. nonresident brokers with active Colorado licenses

a

Errors and omissions insurance is required for a. all licensed corporations and limited liability companies b. utility companies buying right of ways c. partnerships who are buying real estate for their own account d. inactive brokers

a

If a property is in a special taxing district, the approved Residential Contract to Buy and Sell Real Estate provides that the a. buyer may terminate the contract upon learning of the district b. buyer has 30 days after closing to rescind the contract c. buyer must be informed but has no recourse d. seller must pay off the present and future obligations to the district

a

If the basement in a listed property has obvious water marks from water seeping in and the floor is damp a. the seller and the broker could both be liable if they do not disclose the problem b. only the seller will be liable for the problem if not disclosed c. the seller should instruct the broker to keep this confidential d. the seller does not have to mention it, as it is apparent

a

In the residential Contract to Buy and Sell Real Estate, which is TRUE regarding the financing language? a. A broker may print forms with only the financing terms needed for the transaction b. All financing provisions must be printed in every contract c. A broker may omit the financing terms and leave a space for licensees to draft the terms that fit d. The form may not be computer generated because it would be too easy to change

a

Jim is the designated broker for an Acme Realty listing. Beyond Jim, who is presumed by law to have a brokerage relationship with the seller? a. nobody b. the buyer's broker c. all the brokers at Acme Realty d. Acme Realty's employing broker

a

Per the Loan Objection section of the Residential Contact to Buy and Sell Real Estate, all of the following are true EXCEPT a. if the buyer does not send the seller written notice of acceptance of terms, the contract terminates b. the seller could keep the buyer's earnest money if the terms of the section are not followed c. the buyer has until the loan objection deadline to decide it he loan terms are acceptable d. in subjective opinion, the buyer may decide if the loan terms are acceptable

a

The approved Residential Contract to Buy and Sell Real Estate calls for general property taxes to be prorated between the a. seller and buyer as indicated by checking the appropriate box b. seller and broker on the taxes for the preceding calendar year c. seller and buyer based on the assessed value and mill levy d. seller and buyer based on the taxes for the preceding calendar year

a

The buyer must receive a Lead-Based Paint Disclosure if the a. building permit was issued prior to January 1, 1978 b. certificate of occupancy was issued prior to January 1, 1978 c. property improvements were completed prior to January 1, 1978 d. fixtures were attached prior to January 1, 1978

a

The earnest money must be deposited within three business days after a. offer, acceptance, and communication of acceptance b. the offer is made c. acceptance of the offer by the buyer d. receipt of the money from the buyer

a

The least-serious form of disciplinary action the Real Estate Commission can take is a. letter of admonishment b. license suspension c. license revocation d. censure

a

The seller is selling "as is" and does not want to complete the Seller's Property Disclosure. The broker should a. ask the seller for a written list of all material facts b. complete the disclosure for the seller c. not be concerned because the broker is covered under caveat emptor d. tell the seller that disclosure of material facts is optional because the property is selling "as is"

a

To change the closing date, the broker would use a(n) a. Amend/Extend Contract b. Amend/Extend Contract with Broker c. Contract to Buy and Sell Real Estate d. Counterproposal

a

What form(s) may earnest money take? a. Any form the seller will accept b. Cash or good funds only c. Cash, check, or promissory note d. Cash or check only

a

When and how must you inform a for-sale-by-owner (unrepresented) seller that you are an agent for a buyer who wants to see the house? a. In writing, at the first physical contact b. Orally, when you first call the seller c. In writing, when you first call the seller d. Orally, when you meet the seller

a

Which of the following terminates a purchase offer and constitutes a new offer? a. Counterproposal b. Seller's Property Disclosure c. Inspection Resolution d. Agreement to Amend/Extend contract

a

A broker has been asked to do a CMA/BPO (broker price opinion) by a bank on a foreclosed property. The broker will not be listing the property for the bank and, in this case, the broker a. must get permission from his employing broker before completing the CMA b. must state that she is not a registered or licensed appraiser c. should make sure to use only foreclosed properties as comparables d. may not receive a fee for completing the CMA

b

A broker is working with a seller who has many properties she wishes to sell. How many properties can the listing broker and brokerage firm list? a. Six properties at a time b. As many property as they can effectively manage c. No more than ten properties with one broker d. Only those properties that are within the firm's marketing area

b

A broker who is the agent of the buyer should do which of the following? a. Disclose to the seller that the buyer is a minority b. Advise the buyer if the listing price of the seller's house is unrealistic c. Present to the seller only offers that are acceptable d. Disclose to the seller the maximum price the buyer is willing to pay

b

A listing broker holding an open house is informed by the buyer that the buyer has signed a buyer representation agreement with another broker. The listing broker should a. have the buyer call the broker and have the other broker show the house b. show the buyer the house c. not show the buyer the house d. show the buyer the house and have the buyer sign an Exclusive Right-to-Buy Listing Contract with the listing broker

b

A nonresident seller's investment property sold for $200,000. Which of the following is responsible for withholding taxes? a. Title company b. Closing entity c. Listing broker d. Seller's attorney

b

A seller approaches a broker about listing her property. The broker determines that the property is listed with ABC Realty, another company. The broker a. has broker Rule E-13 (sign crossing) and may be investigated b. may list the property after the current listing expires c. must tell the seller that, because she has a binding contract with ABC, the broker cannot talk to her now d. can take the listing and start marketing it now because the seller is dissatisfied

b

According to the approved residential Contract to Buy and Sell Real Estate, if a built-in dishwasher fails between contract and closing dates and before occupancy by the buyer, the a. buyer is at risk during this time b. seller may repair or replace it with a similarly used appliance c. buyer may repair it after closing and charge the seller d. seller must replace it with a new appliance

b

An agent double-ending a transaction and whose agency agreements allow him to become a transaction-broker should a. inform both parties verbally that he has changed status b. notify both parties of the change in writing using the Change of Status form c. do nothing because he can only represent one party as a transaction-broker d. do nothing because he automatically becomes a transaction-broker

b

An employing broker who leaves town a. must send written notice of who is supervising the office to the Real Estate Commission b. can delegate authority, in writing, to a qualified broker c. must give written notice of nonsupervision to all the employed brokers d. must make sure the assistant can sign on the trust account

b

Colorado fair housing complaints must be filed within one year with which of the following? a. Colorado Association of REALTORS b. Civil Rights Commission c. HUD d. Real Estate Commission

b

Colorado fair housing law protects all of the following EXCEPT a. commercial property b. retirement age c. sexual orientation d. marital status

b

If a buyer is submitting an offer on an approved Contract to Buy and Sell Real Estate in which the seller has requested liquidated damages if the buyer is in default a. this may be specified by marking the correct box in the Remedies section b. this is the contract default, and the buyer and seller do not need to do anything c. the seller will check the appropriate box after accepting the offer d. the proper language must be inserted in Additional Provisions

b

In a transaction with a listing broker and a buyer's agent, who usually holds the earnest money deposit? a. Buyer's broker b. Listing broker c. The brokers establish a joint trust account d. Must be in a neutral escrow company

b

The loan objection deadline was August 5. On August 7, the lender informs the buyer that the buyer failed to qualify for a loan under the terms requested in the Contract to Buy and Sell Real Estate. What should the buyer's broker do in this situation? a. send an Amend/Extend Contract form to change the loan objection deadline and then inform the seller and the listing broker of the buyer's inability to obtain funding b. inform the buyer that the earnest money will be kept because the loan contingency expired c. use the Amend/Extend Contract form to extend the contingency, as verbally agreed to by the seller, to have the buyer's earnest money returned d. use the Notice to Terminate to inform the seller and the listing broker of the termination and request that the earnest money be returned as required by the contract

b

The sale of a business opportunity that included the inventory and a lease would require a. a business opportunities license b. a real estate license c. no license d. a securities license

b

The seller declines at listing to complete the Seller's Property Disclosure. The listing broker should a. tell the seller that disclosure of material facts is optional b. tell the seller that the buyer will request the form c. resign the listing, since the seller won't complete the form d. complete the form for the seller

b

To become a licensed real estate broker in Colorado, the licensee must be at LEAST how old? a. 19 b. 18 c. 16 d. 21

b

What is the buyer broker's responsibility for square footage measurements provided by a listing broker? a. disclose that square footage will be determined by the appraisal b. point out any obvious mismeasurement by others c. measure the property on behalf of the buyer d. complete a list of all the sources of measurement

b

What is the purpose of the broker's signature on the sales agreement? a. if confirms the brokers are witnessing this important legal document for the buyer and seller b. it provides a receipt for the earnest money and confirms the brokerage relationship c. it confirms the commission split between cooperating brokers d. the brokers are fiduciaries and, therefore, parties to the agreement who must sign

b

A Colorado well permit a. guarantees a minimum amount of water b. is issued by the Real Estate Commission to provide water c. provides permission to drill and maintain a well d. is real property, but not an appurtenance

c

A broker employed by the listing brokerage, who is not the designated broker, wants to purchase one of the brokerage firm's listings. He should a. submit only a Licensee Buy-Out Addendum b. negotiate directly with the seller c. submit a Contract to Buy and Sell Real Estate d. submit a Contract to Buy and Sell and a Licensee Buy-Out Addendum

c

A broker using computer-generated forms must a. make sure that certain sections, as allowed, are fully deleted b. make sure the blanks are filled in with bold typeface c. make sure the program reproduces the approved language exactly d. use italics in all blanks

c

According to the approved residential Contract to Buy and Sell Real Estate, if a buyer is receiving seller financing and has provided the seller with the buyer's credit information, a. only a lender can review this information for the seller b. the seller must request that the buyer update the information annually c. the seller must not share the information with others d. this information can be shared with other parties the seller knows

c

An associate broker advertising a property for sale must include the a. broker associate's license number b. seller's phone number c. brokerage firm's name d. broker associate's phone number

c

An employing broker hires a broker who has just received his license. The employing broker a. must make sure that he attends post-licensing classes b. must withhold employment taxes c. is responsible for a high level of supervision, such as attending the new hire's closings d. is responsible for a reasonable level of supervision, such as holding a monthly sales meeting

c

If, after foreclosure, the lender is still owed money, the lender can file a(n) a. mechanic's lien b. election and demand c. deficiency judgement d. default judgement

c

In a single-party listing, which of the following provisions or contingencies does NOT apply? a. mediation b. commission c. holdover d. financing

c

License discipline records maintained by the Real Estate Commission a. are available only to those who have won a case against the licensee b. can only be reviewed at the Real Estate Commission office c. are open to the public and on the Real Estate Commission website d. are closed after four years

c

Licensees who fail to renew their license within 32 days after their anniversary date need to a. pay the renewal fee plus pass the state exam b. take the ACU course plus pay the renewal fee c. pay the renewal fee plus a reinstatement fee of one-half of the renewal d. pay the renewal fee within 35 days or pay a fine

c

Rule F applies to all contracts a. for new homes with warranties b. written by an attorney for one of the parties to the transaction c. used by real estate brokers d. used by subdivision developers

c

The approved Change of Status form is a. notice to the seller that the broker will become either a dual agent or a transaction-broker for a specific transaction b. notice that the broker will be a transaction-broker for any transactions following the notice c. a notification to the seller and/or buyer that the change agreed to in the listing is now effective for this transaction d. a new agreement giving the broker permission to change from agency to transaction-broker status

c

The broker's office policy establishes all of the following EXCEPT a. commissions charged by the firm b. how commissions are split with the agent and the firm c. commission agreements with other firms d. how brokers are to be designated

c

The buyer and the seller in an approved Contract to Buy and Sell Real Estate have a dispute about a contract provision. The parties may agree a. that the broker will interplead the matter and send them to court b. to binding arbitration, and the costs are split between them c. that they will submit to mediation with the fees split between the parties d. to accept the decision of the mediator

c

The exclusive right-to-sell contract must have a. signatures of both the buyer and seller b. a term of at least 90 days c. a beginning and ending date d. the seller's minimum acceptable price

c

The listing broker has given the buyer's broker a counteroffer. This means that the original offer is a. still valid until its acceptance deadline b. binding only on the original offeror c. rejected or terminated d. accepted

c

The purpose of the Property Transfer Declaration form is to a. give notice to the public trustee to start the foreclosure b. list all the personal property that is to be included in the sale c. ensure fair and uniform tax assessments d. serve as the bill of sale at closing

c

To be in compliance with Conway-Bogue, a Colorado broker must do all of the following EXCEPT a. have a connection to the transaction b. use only standard or approved documents unless an attorney prepares them for a party to the transaction c. give a written disclosure prior to accepting any confidential information d. not charge a separate fee for completing legal documents

c

When may a broker rebate part of a commission to an unlicensed seller? a. Only with the buyer's permission b. Never c. When negotiating or renegotiating the commission d. RESPA always prohibits such rebates

c

Which is TRUE about association documents in the Residential Contract to Buy and Sell Real Estate? a. The association must deliver the documents to the buyer no later than the Association Documents Deadline b. The seller will have until four days prior to closing to resolve the buyer's issues c. If the buyer finds unsatisfactory issues, the buyer may terminate the contract d. The association and seller will have until the Association Documents deadline to resolve the buyer's issues

c

Which statement is TRUE regarding an owner's policy of title insurance? a. it covers defects are exceptions listed in the title commitment b. it protects the lender against superior claims c. it covers title defects found after closing d. it is issued prior to closing and paid for after the closing

c

A Colorado broker has a brokerage relationship with both the buyer and seller in a single transaction. The brokerage relationship must be a. customer b. dual agency c. single agency d. transaction-broker

d

A broker who has a brokerage relationship with both the seller and the buyer must be a(n) a. customer of the buyer b. agent for the seller c. employing broker d. transaction-broker

d

A broker writes a contract for the purchase of the property and then writes another on the same property at a higher price to give to the lender. This is a. standard practice b. acceptable, if using a down payment assistance program c. dual contracting and is illegal in Colorado but acceptable in other states d. dual contracting and is illegal in every state

d

A nonresident Colorado broker must do all of the following EXCEPT a. agree to accept legal action in Colorado b. keep all funds in a Colorado depository c. have an office in the nonresident broker's home state d. have an office in Colorado that is open to the public

d

An unlicensed assistant could do all of the following EXCEPT a. hold an open house b. measure a property for square footage c. sign checks on a trust accounts d. show a property and answer a buyer's questions

d

Brokers owe the fiduciary obligation of reasonable skill and care to a. customers b. other cooperating brokers c. the party that paid them d. the party that employed them

d

During the executory period, the a. seller must buy title insurance b. grantor is the offeror c. vendee has legal title d. buyer has equitable title

d

If a property sale includes leased appliances, the brokers must a. have the seller cancel the lease b. exclude these terms, since the lease cannot be transferred to a buyer c. have the seller remove the items prior to marketing the property d. check the appropriate box or boxes in the Personal Property section of the Contract to Buy and Sell Real Estate

d

In describing the difference between a transaction-broker and an agent, the agent could be described as a(n) a. third party b. competent professional c. professional administrator d. advocate

d

In the approved Contract to Buy and Sell Real Estate, dates and deadlines are a. approximate, and reasonable compliance is acceptable b. listed and summarized in each relevant section c. listed in each relevant section d. listed only in the section as a checklist for compliance

d

Selling interests in a time-share with a mandatory rental pool required what type of license? a. developer's b. options c. insurance d. securities

d

The Lead-Based Paint Disclosure for a property built before 1978 must be provided by the a. buyer's broker when preparing an offer b. listing broker at the time of listing c. seller before closing d. seller before accepting an offer

d

The listing broker has requested an extension and price reduction of her listing contract. The seller has agreed to price reduction but has asked the broker to reduce her commission. Is the broker allowed to give the seller this rebate? a. No, brokers are not allowed to pay unlicensed consumers any fees b. Yes, if her assistant works on the transaction and she can lower her fees c. No, because commissions are set by the Real Estate Commission d. Yes, as part of a commission renegotiation with a seller

d

The purpose of the statute of frauds is to a. require all contracts be in writing b. make oral leases illegal c. protect brokers from lawsuits d. avoid problems of oral contracts

d

The seller and the buyer have reached an agreement on which terms the seller will complete as part of the buyer's inspection request. Which form should the broker use to document this agreement? a. Amend/Extend Contract with Broker b. Inspection Objection c. Amend/Extend Contract d. Inspection Resolution

d

The sellers told the listing broker that they are very motivated and will consider all offers. To be in compliance with agency law and brokers' fiduciary duties, the broker should a. put "motivated sellers" in the MLS and all other advertising b. lower the listing price in the MLS and e-mail all the office brokers the new pricing to generate more offers c. tell any buyers or buyer's agents to bring offers lower than the listing price d. ask for the sellers' informed consent to share their motivations in writing before using the information to market the property

d

Under the Colorado Brokerage Relationships Act, a broker providing real estate services to a member of the public without a written agreement is a. in violation of license laws and subject to discipline b. presumed to be an agent for the buyer c. presumed to be an agent for the seller d. presumed to be a transaction-broker

d

When must a broker disclose an existing brokerage relationship to another party to a potential transaction? a. prior to a rapport-building conversation at an open house b. upon initial contact at an open house c. before holding a general conversation about values in a particular area d. before eliciting confidential information

d

Which duty would be appropriate for an agent and NOT for a transaction-broker? a. Presenting all offers in a timely manner b. Accounting in a timely manner for money and property c. Exercising reasonable skill and care d. Counseling as to material benefits and risks

d

Which form is intended to help ensure fair and uniform tax assessments? a. Certificate of Taxes b. Change of Status c. Statement of Settlement d. Real Property Transfer Declaration

d

Which of the following is NOT true about the Real Property Transfer Declaration form? a. it is required by statue b. it provides information for the county assessor c. it ensures fair assessments d. it transfers personal property

d

Which of the following would constitute a reasonable level of supervision by an employing broker? a. having a weekly meeting b. withholding taxes c. making sure all licensees have a mentor d. having the licensee read and sign the office policy

d