MARK YARBROUGH PRACTICE EXAM

LuAnn is selling some property, and she wants broker Richard to represent her. He explains that she needs to sign a brokerage agreement, and she asks, "What does it mean when I sign this?" What's the best answer Richard can give?

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

How many days do licensees have to request a hearing after AREC issues them a violation notice?

15

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

90 days

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

A hailstorm damaged some shingles last year.

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

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

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

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

Depositing trust funds into a trust account provides protection for those funds should the broker or licensee be faced with ______.

Accidents, death, or litigation

Which entity administers and enforces Alabama's residential and commercial laws for activities that require a license?

Alabama Real Estate Commission

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

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

Which of the following are considered trust funds?

Cash, checks, and other items of value

Which of the following terms describes a situation in which a broker mixes trust funds with the broker's own money?

Commingling

Seth is a licensee representing seller Dora. Which of these items is Seth required to disclose to prospective buyers about the property?

Dora doesn't use the back door because the steps leading to the yard are rotted.

Clint has an inactive real estate license. Which of the following is true?He can keep his license in this status indefinitely as long as he pays his license renewal fees.

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

Gerome is an Alabama salesperson applying for his broker license. He's moving across the state, and his broker license will be issued to a new brokerage. Which of the following is a true statement?

He can't perform real estate activities until the new qualifying broker receives his broker license.

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

He violated Alabama license law.

Walt has been through a hearing, an appeal, and a rehearing. The court has just handed down its judgment and has upheld the commission's decision. What can Walt expect now?

He will need to pay the court costs.

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

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

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

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

Serious violations of the real estate license laws typically result in which disciplinary action or actions?

License suspension or revocation

Which of the following is an Alabama broker's responsibility regarding trust funds?

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

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

Making a substantial and willful misrepresentation

Seller Trevor calls licensee Nate. "My current agent isn't doing anything to sell my house," Trevor says, "and I need to get it sold! I saw your billboard, and I'm wondering if you can represent me." What should Nate do?

Nate should tell Trevor that he's happy to be his agent, but he'll have to wait until his current agency contract has ended.

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

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

Which area of real estate law covers the requirements of a licensee when performing real estate activities within the state, including continuing education requirements, supervisory requirements, and prohibited conduct?

Real estate license law

Broker Samuela has just explained her agency disclosure office policy to new agent Kyle. He told her that he understands the policy. She asks him to sign an acknowledgment saying that he has received the policy and understands it, and Kyle does so. What happens next?

Samuela must retain a copy of this acknowledgment for three years.

Dean was very motivated to sell his house and was excited when he got an offer. When he realized the buyer couldn't qualify for the purchase price, he decided to accept a second mortgage without mentioning it to his lender and reduce the sales price accordingly. Which type of mortgage fraud scheme is this an example of?

Silent second

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

Tanner is acting as a transaction broker.

AREC commission members Dale, Sherry, Jasmine, and Ted have convened to impose a penalty on a broker who's been found guilty of fraud. Which of these reasons could prevent them from doing this work?

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

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

The names of all involved agents' managing brokers

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

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

A real estate license is required ______.

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

Michael's had quite a day. He forgot to get his client's signature on a contract, so he had to hunt her down and have her sign it. Then, he chatted with Sue, who wants him to represent her. He told her to come see him when her current agency agreement expires. Next, he realized he needed to pay some fees to the commission, so he put a check in the mail, crossing his fingers that there would be enough money in his checking account. Which of these actions, if any, could violate license law?

Writing a possibly bad check to the commission

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

Yes, because this is a net listing, which is illegal in Alabama.

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

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

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

You make false and dishonest promises to clients or customer

Which of the following actions might be considered a red flag signaling mortgage fraud?

Your buyer requests a specific appraiser.

Licensee Randy has a written listing agreement with Brent, a seller. The buyer is Tim. Who is Randy's client?

brent is her client

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

brokerage name

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

expired

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

general property law

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

kyle

In Alabama, hearings are typically held in which county?

montgomery