Practice Test questions
You adjust a property price by $35,000 for your comparable. If the original sales price was $225,000 but since then property values have dropped by 8%, what is the adjusted price?
$172,000 MATH THAT I DID 225,000 X .08= 18,00 225,000 - 18,000 - 35,000 = 172,000
Which of the following is the correct quantity of Continuing Education required?
24 hours of continuing education credits including the 12 mandatory commission update credits designed by the real estate commission per 3 year period WHY? During each 3 year cycle, a real estate broker must complete the 12 hours of mandatory commission update credits and 12 additional hours of education from approved course providers on topics such as real estate law, finance, appraisal, ethics, brokerage administration, and any other subject matter approved by the Commission.
Which of the following best describes a blind offer?
A blind offer in real estate is a purchase contract written by a buyer without seeing the property. This is common in commercial properties such as apartment complexes, and it's not uncommon in multi-family homes such as duplexes and fourplexes. It's not typical in single-family homes or apartments.
In order to be valid, all exclusive listings must include:
A definite date of expiration WHY? Listing agreements must have specific "from-to" dates attached. Moreover, they may not be automatically renewed but must be renegotiated. (Usually that's just a routine extension, but it's still a new agreement.)
What's an improvement survey?
A formal survey that includes a scale drawing of a parcel's boundaries as well as the location of buildings and hardscapes WHY? An improvement survey contains the boundaries as shown on a land survey plat, and also includes the location of buildings and hardscapes on the property.
What best describes an attorney-in-fact?
A power of attorney is a written instrument giving authority to an agent, called an attorney-in-fact. Don't confuse with attorney-at-law.
What is a survey?
A professional, on-site measurement of a property's lot lines and dimensions. WHY? A survey is a professional, on-site measurement of the lot lines and dimensions of a property and may include the location of any improvements (such as a house) on the lot, any encroachments that may exist, and any easements of public record.
The law, which has been enacted by most states, provides that when the parties agree to electronic contracting, the following rules apply:
A record or signature may not be denied legal effect or enforceability solely because it is in electronic form. A contract may not be denied legal effect or enforceability solely because an electronic record was used in its formation. If a law requires a record to be in writing, an electronic record satisfies the law. If a law requires a signature, an electronic signature satisfies the law.
Which of the following does not constitute an acceptable cause for a referral fee?
A title company referral is explicitly requested. WHY? Referrals involving settlement services are not compensable, regardless of whether a recommendation is requested by a client, under the Real Estate Settlement Procedures Act (RESPA). Referral fees between brokers, brokerage firms and non-settlement providers are permitted when an actual introduction of businesses has been made or contractual relationship has been established between the referring parties.
Which statement is false regarding an Office Policy Manual?
A written office policy manual is recommended as a best practice by the Division of Real Estate. WHY? The Division of Real Estate requires real estate brokerages to maintain an office policy manual. It is not just a recommended best practice. All other possible answers describe additional provisions of the requirement.
6. Question Which statement regarding a Veterans Affairs (VA) mortgage is FALSE?
A: A VA mortgage does have minimum property requirements in order to ensure the veteran-buyer the property is safe, sanitary and sound.
A parcel of land is 140 feet by 75 feet and the seller is asking $130 per square foot. What is the asking price?
A: b. $1,365,000 DO 140 X 75 X 130
Which clause allows the entire loan balance due if a borrower defaults on a payment?
Acceleration clause WHY? The acceleration clause is a provision in a mortgage or deed of trust that allows a lender to accelerate and make due the balance in its entirety in the event a borrower defaults on a payment. View results
Which entity has the responsibility for determining property values for real property tax purposes?
Assessor's office WHY? The primary function of the county assessor is to establish an assessment roll each year that reflects the assessed value of real property within the county.
10. Question For this question, disregard selling costs, taxes, etc. and choose the closest answer. A parcel of land is sold for $163,000. If it appreciates at 14% compounded per year and the seller keeps it for seven years, how much will the seller pay for it?
C: To solve use the formula: V = P(1+r/n)nt V = future value of the investment ($163,000) P = principal investment amount r = annual interest rate (14%) n = number of times that interest is compounded per year (1) t = number of years the money is invested for (7) $163,000 = P(1+0.14/1)1*7 $163,000 = P(1.14)7 $163,000 = P(2.5022) $163,000/2.5022 = P P = 65,142 P = 65,000
You represent a buyer as a single agent. The buyer wants to see one of your listings, for which you're also a single agent. Which disclosure must you provide to continue working with both the buyer and the seller?
Change of Status WHY? Dual agency is illegal in Colorado. In order to continue working with both parties, you would need to use a Change of Status form to switch from single agent to transaction-broker for both parties.
Which of the following refers to the document that incorporates the terms of the contract to buy and sell real estate and from which the closing statements are prepared?
Closing Instructions WHY? The closing statements are prepared by the closing company in accordance with the written instructions which have been signed by the buyer and seller confirming their accuracy and incorporating the terms of the contract. All of these parties and the brokers who represent them must confirm the accuracy of closing statements and sign them. If any of the written instructions differ from the contract, the buyer and seller must execute an Agreement to Amend/Extend Contract.
A claim that has the appearance of having valid title, but in reality, the person either does not hold actual title, or there is a significant defect in the written documents supporting title, that makes it invalid. This an example of which legal concept:
Color of Title WHY? Color of title refers to a claim to title that appears to be legally valid but may be defective. This legal concept is often discussed in adverse possession claims. If adverse possession is claimed under color of title, usually the claims are met sooner or in an easier fashion.
A broker's real estate license is suspended. Going forward, that broker may still be paid commissions for which of the following?
Commissions earned prior to the change in status WHY? If one's license is suspended, all activities requiring a license must cease immediately regardless of whether the client was already under contract or working with the broker prior to the change. Commissions earned prior to the suspension may still be disbursed to the licensee regardless of license status.
The recording of an instrument gives:
Constructive notice WHY? Constructive Notice attaches once a document is recorded. Once recorded, subsequent buyers will be deemed to have received "Constructive Notice" regarding the document and its effect on the property in question. This could also be given by taking possession of a property. Actual Notice is when an individual has first-hand knowledge of something- for example, if a buyer has knowledge that someone has taken possession of the property that is for sale.
Which of the following items must be named under Exclusions if the seller wishes to take it with them to their new home?
Curtains WHY? These items are always included in the sale unless explicitly listed as an exclusion: lighting, heating, plumbing, ventilating and air conditioning units, TV antennas, inside telephone, network and coaxial wiring and connecting blocks/jacks, mirrors, floor coverings, intercom systems, kitchen appliances, sprinkler systems and controls, built-in vacuum systems, garage door openers, storm windows, storm doors, window and porch shades, awnings, blinds, screens, window coverings and treatments, fireplace inserts, grates and screens, heating stoves, storage sheds, carbon monoxide alarms, smoke/fire detectors and all keys.
The Federal Housing Administration's (FHA) Section 8 program helps low- and moderate-income people by
D: FHA's Section 8 program helps low- and moderate-income people by paying part of their rent.
DUST
Demand: This means the desire to buy and an ability to pay. Utility: The item satisfies a human need or desire; such as shelter, income, or recreation. Scarcity: Limited in supply, as supply diminishes, value increases. Transferability: Able to transfer from one owner to another.
An agent at a multiple person firm who is engaged to work with a party in a transaction must be assigned in writing by the employing broker as which of the following?
Designated broker WHY? A designated broker is the broker that has been designated by their employing broker to a transaction, either by request of the consumer or assignment by the employing broker. Brokerage firms comprised of only one person need not provide a written designated broker.
The primary purpose of Truth in Lending is to:
Disclose the true costs of obtaining credit WHY? Truth in Lending (otherwise known as Regulation Z) is intended to do away with deceptive financing tactics, especially those involving hidden costs- for example, advertising a $250 car lease as zero-down and then tacking a $1,200 upfront payment at the time of contract disguised as an "incidental" acquisition fee.
When a policy negatively impacts a protected class more than it negatively impacts others, this is called what?
Disparate impact WHY? When actions or policies cause greater negative consequences for a protected class than for others, it's called disparate impact.
Marsha can't close on her new home until June 6, but she has to be out of her current home by June 1. Which of the following options would fix this situation?
Early possession WHY? With the buyers inflexible on move-in date, Marsha's only option (besides finding a temporary living situation) is negotiating early possession of her new home with the seller.
What is the best definition of economic rent?
Economic rent is defined as the rent expectancy if the property were available at the time of its appraisal. The amounts the owner actually receives in rents and payment for the use of property designated in a lease relate to contract rent.
Which type of listing agreement is most often used in Colorado?
Exclusive right to sell
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.
If an earnest money deposit is offered, it is given to the broker at the time a sales contract is authorized by the seller and handed over to the buyer. Absent any specific instructions in the sales contract, the broker has a legal responsibility to:
Explanation: The broker must comply with all lawful instructions of his/her client. Absent specific instructions to the contrary, the broker must deposit all earnest money funds in the brokerage's special trust account as soon as possible.
Why might you opt out of working with a buyer unless you're working under an agency agreement?
Having an agency agreement allows you to represent the buyer's interests. WHY? Buyer agency agreements helps to ensure buyer loyalty for the term of the agreement and allow the agent to represent the buyer's interests.
Colorado allows entities to decide whether or not to use electronic records or to send and accept electronic signatures in the course of their everyday operations. However, if they choose to do so, they must follow the Office of Innovation and Technology's regulations. Colorado's secretary of state has the responsibility to adopt rules that concern the state's UETA. These include:
How electronic records will be created, communicated, transmitted, received, and kept, as well as approve any involved systems Which electronic signature may be required and how they will be affixed to the electronic document Which processes and procedures will effectively preserve and keep electronic records secure and confidential
There is an exception to the normal continuing education credit hours requirements for the renewal of a broker's license. Which is it?
If the broker has passed the real estate license examination within the previous 3 years. WHY? If the broker has passed the real estate license examination within the previous 3 years, they are exempt from additional continuing education requirements for license renewal. Real Estate license renewal requires the licensee to complete 24 continuing education credits in the previous 3 years or passage of the Colorado portion of the real estate exam.
The Asian Real Estate Association of America (AREAA) membership "includes housing and real estate professionals of all cultural backgrounds and is open to those who support the mission of ______."
Increasing sustainable home ownership in the Asian community
Which IRS forms are independent contractors and employees required to complete?
Independent contractors fill out W-9s, and employees fill out W-4s. WHY? Independent contractors complete form W-9, which is the Request for Taxpayer Identification Number. Employees complete form W-4, the Employee's Withholding Allowance.
Essentially, electronic documents, signatures, and contracts don't lose their legal effect or enforceability simply because they're in electronic form. The Colorado UETA specifies that electronic records include:
Information contained on a tangible medium or stored electronically or via other media and is retrievable Data created or generated, sent, communicated, received, or stored via electronic methods
The fifth and fourteenth amendments of the U.S. Constitution authorize the government to exercise its power of eminent domain. Eminent Domain is often used for:
Infrastructure Explanation: Eminent Domain is a term used to describe the right of the government to take charge of privately owned real estate usually despite the owners' wishes. This often happens for land that is required for infrastructure like highways, major pipelines, railroads, etc. The fifth and fourteenth amendments of the U.S. Constitution authorize the government to exercise its power of eminent domain.
Which of the following is a form of seller financing?
Installment Land Contract WHY? An Installment land contract is an agreement for the purchase of real estate on a payment plan to the owner rather than a mortgage lender in which the deed is withheld until the full purchase price, or a predetermined percentage, is paid by the buyer. The real estate commission has revoked its approval of the installment land contract and cautions that any use of such a contract must be drafted by an attorney and poses significant risk to all parties involved in the transaction.
Which of the following is not a type of depreciation used in the cost approach?
Intangible Deterioration
Which of the following is a true statement about working in real estate?
It involves nights and weekends. WHY? Real estate is not a hobby, and it involves working nights and weekends. Persistence and a dedicated work ethic are both required to be successful.
Jason signed an exclusive agency agreement with Blue Mountain Brokerage. What happens if Jason sells the property himself?
Jason isn't obligated to compensate Blue Mountain Brokerage. WHY? Under the terms of the exclusive agency agreement, Jason reserves the right to sell the property himself and isn't obligated to compensate the listing brokerage if he does.
Who must consent to the terms of a short sale transaction in order for the closing to occur?
Lien Holder, Seller, and Buyer WHY? In a short sale transaction, the seller has debts secured by liens on the property which the sale price will not be enough to pay off. In addition to the buyer and seller coming to an agreement, as with any residential property transaction, the lien holder must also agree to the terms of the transaction. The lien holder may agree to release the lien against the property either by accepting less than the amount owed to repay the debt or agreeing to release the lien on the property without releasing the seller from liability for the unpaid portion. A closing cannot occur without the signatures of all three parties.
Freehold estates include:
Life estates WHY? The distinctive characteristic of freehold estates is that they endure for an interminable duration.
The contract between a property owner and the brokerage firm employed for property management on behalf of the owner is known as which of the following?
Management Agreement WHY? When a broker is hired to provide property management services, he is to provide a management agreement drafted by an attorney which outlines the duties and responsibilities of both parties. This agreement is between the licensee and landlord and may be used in conjunction with the exclusive right to lease listing contract if the licensee is offering the service to lease as well as manage the property. A lease agreement is an agreement between the tenant and landlord. Exclusive tenant contract is used when a tenant hires a broker to find a rental property and provide leasing services to the tenant.
Based on Article 10 in the NAR Code of Ethics, the NAR appears to take what stand on discriminatory practices by its members?
Members must not discriminate based on the federally protected classes and several others.
Insurance companies not willing to deal directly with borrowers usually pay a loan servicing and preparation fee, and make real estate mortgage loans to purchase indirectly through:
Mortgage companies WHY? Insurance companies usually make loans through mortgage companies. These "loan correspondents" negotiate and service their loans.
Acceleration is a term associated with which type of document?
Mortgages WHY? Acceleration is a term associated with mortgages. The acceleration clause is a contract provision that allows a lender to require a borrower to repay all of an outstanding loan if payments are not being made or there is a breach of contract. Usually, if a borrower isn't making any payments on the property the acceleration clause will come into effect. Which demands immediate payment for the said property. It's more of a legal clause that they add for protection to make sure borrowers aren't taking advantage of them.
Trudy is very popular with her friends right now. She's just completed a deal bringing a Trader Joe's® grocery store to the area. What type of retail location is Trader Joe's® likely going into?
Neighborhood center
For the past 30 years, the Stone family has operated a neighborhood grocery store. Last week the city council passed a zoning ordinance that prohibits packaged food sales in the area where the Stone's grocery store is located. The store is now an example of a/an:
Nonconforming use WHY? This is an example of "grandfathering" that's common when new zoning rules are put into place. Basically it means that businesses and buildings that were in compliance before the new code was established may continue to operate or exist under their present owners. However, if the Stone's want to sell their business, it must be to an enterprise that meets the new requirement.
The payment of commissions to a broker establishes what kind of relationship between the parties?
Nothing WHY? Brokerage relationships and duties are established through contractual agreement between the parties. The payment or acceptance of commissions, in itself, does not establish a relationship or responsibilities between parties.
Seller Jeremiah has no cash on hand, but the buyers have outlined some repairs they want made in order to close on the purchase. Which of the following is his best option if he wants this transaction to close?
Offer a seller credit to cover the cost of the repairs. WHY? Provided the repairs aren't required for buyer financing, offering a seller credit is an easy way to solve the needs of both parties.
Rescission, suit for specific performance, liquidated damages, and acceptance of partial performance are all examples of what?
Options a wronged party has to remedy a breach of contract
Buyer, seller and broker signatures on closing statements do not attest to which of the following?
Parties in the transaction shall be immune from civil liability regarding the property. WHY? The closing statement is prepared and signed by all parties to the transaction to ensure accuracy and completeness. However, no party waives their right to pursue civil action in the future should a situation come to light that would warrant arbitration, mediation or civil proceedings.
Adam and Linda are members of the baby boomer generation. In which of the following housing trends would they traditionally be most interested?
Planned or mixed use communities WHY? Baby boomers traditionally look for property within or near amenities like healthcare and recreation.
With certain types of off-market listings only the listing agent, the seller, and individuals the seller and listing agent have informed know the property is for sale. What's another term these listings are also known as?
Pocket listings
Receiving a fee for negotiating, purchasing, selling, or leasing real property on another's behalf requires a real estate license. However, performance of these services is exempt from licensure for certain purposes in Colorado. Which of the following is not one of the exempt purposes?
Private dwelling WHY? Telecommunication lines, water collection distribution or storage, and electric generation, transmission and distribution are all purposes for which a person may purchase, lease or sell real estate for another for a fee without a license. The sale or leasing of private dwellings for another for a fee is not exempt and requires a real estate license.
The secretary of state may also:
Promote consistency between Colorado government agencies and other state and federal agencies as well as private businesses Identify various specification levels for different document purposes
Each of the following could be grounds for suspension of one's real estate license if that real estate broker is found guilty, except:
Refusal to cooperate with other brokers WHY? While cooperating with other brokers is a best practice and often required by fiduciary duty to a broker's client, failure to do so is not itself a violation of license law. Advertising, safe handling of money belonging to others, and record keeping are activities with specific guidelines outlined in Colorado license law which must be adhered to by all real estate licensees.
The exact text of the law in Title 12 of the US Code that implements the intent of RESPA is called:
Regulation X
Which of these conditions are disclosed on the Seller's Property Disclosures form?
Roof problems Working condition of appliances Source of water Legal and zoning issues impacting the property
CERLA (the comprehensive environmental response, compensation, and liability act) was amended by which act?
SARA WHY? When the original act, CERCLA, expired in 1985, The Superfund Amandement and Re-Authorization Act of 1986 (SARA) wa pased. The biggest change involved liability. In simple terms, it allows innocent landowners to be free from legal liability.
Which formula calculates net to seller?
Sales price x (100% - commission rate)
A broker engaged by a landlord owes all of these obligations except for which of the following?
Seeking additional offers to lease the property while the property is leased WHY? The duty to seek rent and terms acceptable to the landlord is owed to the landlord under agency agreement, however the broker shall not be obligated to seek additional offers to lease the property while a property is subject to a lease or letter of intent to lease. Additional duties owed to the landlord include promoting the interests of the landlord with the utmost good faith, loyalty and fidelity, counseling the landlord as to material benefits or risks known to the broker, and accounting for all money and property received in a timely manner.
The prohibited practice of negotiating directly with a consumer who is subject to an unexpired listing contract with another broker is referred to as which of the following?
Sign Crossing WHY? The existence of an unexpired listing contract between a consumer and a broker shall be respected by other real estate brokers. While the commission does allow for the possibility that the consumer initiates contact with other brokers to discuss next steps after the current contract has expired, under no circumstances may a broker pursue a contract with that consumer until the existing contract has expired.
Which type of worker is defined in statute under tax law as an independent contractor and not an employee, examples of which include direct sellers, licensed real estate agents, and certain companion sitters?
Statutory non-employee
What is typically used to prove there are no encroachments on the property?
Survey
In a property management trust account, unless there is a contract outlining otherwise or another party establishes the right to the security deposit, the interest accrued on a security deposit belongs to whom?
Tenant WHY? Security deposits are always refunded to the tenant unless the lessor is able to establish a right to the security deposit or there is an agreement otherwise. The only exception is the property managers of mobile home parks who may keep the interest as compensation.
Employing broker Rodney has several AfBAs. The terms of one of these arrangements have changed. To whom does Rodney need to disclose this change to remain compliant?
The Colorado Division of Real Estate WHY? Rodney is required to disclose AfBAs to the Division of Real Estate via their website when he enters into or changes an AfBA.
In the case of criminal violations by a licensee, which of the following is true?
The Division of Real Estate will report and provide evidence to criminal justice authorities for investigation as authorized by law. WHY? While there is cooperation between the Division of Real Estate and law enforcement agencies, discipline by the Division is never a substitute for criminal liability, nor are legal ramifications necessarily a substitute for disciplinary action against one's real estate license by the Division of Real Estate. Fines collected by the Division are transmitted to the state treasurer for credit to the real estate cash fund.
Which statement is false regarding the Enforcement Section of the Real Estate Commission?
The Real Estate Commission may only investigate complaints against real estate licensees if they are serious in nature. WHY? According to the Division of Real Estate, the commission is compelled to investigate complaints against licensees. Therefore, investigation is not a discretionary action depending on the seriousness of the complaint. Routine and investigative audits into licensee activities do happen at the discretion of the commission, but when a complaint is filed, investigation is compulsory.
Who is responsible for accurate closing statements for a closing conducted by a title company?
The Title Company's closer, the real estate broker, and the broker associate's employing broker. WHY? Regardless of who is hired to conduct the closing proceedings, ensuring the accuracy of closing statements is always the responsibility of the broker and their employing broker if they are an associate broker.
The total collection of rights which may be claimed by private ownership is best described as:
The bundle of rights WHY? The bundle of rights contains all the rights one obtains with the ownership of real property. These include the right to enter, use, lease, sell, give the real estate away or the right to not do any of these things.
The owner's covenants section of the property management agreement between manager Fred Baines and owner Lilian James contains three key pieces of information. First, Fred is named as the person responsible for managing the building. Secondly, Lillian is identified as the property's legal owner. What's the third key piece of information?
The fact that the owner is not facing foreclosure WHY? A covenant is a warranty, assurance, or promise. The owner's covenants section states that the owner actually owns the property, the property is not facing foreclosure, and the property manager is solely responsible for its management.
The state fiscal year falls between the dates
The fiscal year commences on the first day of July and ends with the 30th of June following.
In the metes and bounds system, what are the bounds?
The identifiable lines following features like a river or a road.
Which situation is legal under the Federal Fair Housing Act of 1968?
The insistence of a widowed woman on renting her spare bedroom only to another woman.
What is accretion?
The natural, slow, and almost imperceptible deposit of soil by the water
If a buyer WANTS TO WRITE AN OFFER AND ASKS YOU FOR YOUR HELP BUT DOESN'T WANT TO SIGN AN AGENCY AGREEMENT WITH YOU, WHO DO YOU REPRESENT?
The seller WHY? Without an agency agreement with the buyer, you'd represent the seller.
If a buyer is renovating a property he purchased several months ago and realizes that there is damage on the roof which was not evident at the time of the inspection or disclosed on the disclosure statement, which of the following conditions would MOST apply?
The seller is not responsible for the latent defect. WHY? Latent defects are issues with a property that would not be identified during an inspection. The seller is only responsible if the buyer is aware that the issue exists but does not disclose this on the disclosure statement and the seller can prove such awareness.
______ perform very specific tasks and have limited interaction with other closing parties.
Third-party vendors, such as attorneys
What type of ownership model is used for vacation real estate in which multiple purchasers own allotments of usage, typically in one-week increments, for the same property?
Timeshare WHY? A timeshare is a property with a divided form of ownership or use rights. These properties are typically resort building units, in which multiple parties hold rights to use the property, and each owner of the same accommodation is allotted their period of time. They differ from regular condominiums as they typically are exclusively for vacations.
What's the purpose of the sales contract?
To document the buyer's offer to the seller to purchase the property identified in the agreement WHY? The sales contract documents the buyer's offer to the seller to purchase the property identified in the agreement.
What type of lawsuit could a seller client bring against you for failing to present an offer in a timely manner?
Tortious interference
Because they are bound by law to represent the buyer and seller in the same transaction, but do not have a fiduciary duty, a dual agent is also called a:
Transaction broker
Which of the following contracts would best be described as a contract in which only one party makes a promise to perform an action?
Unilateral contract WHY? A unilateral contract is a contract in which only one party makes a promise to perform an action. An insurance contract or a reward contract are both examples of unilateral contracts. Unilateral contracts appear more often than you may think; one of the most common instances is a reward contract. Imagine you've lost your cat, Coco. You place an advertisement online offering a $250 reward to the person who returns Coco. By providing a reward, you're offering a unilateral contract.
A mortgage company makes a number of loans to be assembled into one package and sold to permanent investors. This process is an example of interim financing to the mortgage company, and is called:
Warehousing WHY? Warehousing refers to the process whereby banks and other lenders make mortgage loans to consumers for the purpose of quickly selling those loans on the secondary market.
What are the three areas of technology where licensees are most exposed to litigation risks?
Websites, social networking, and emails
A title company is permitted to provide closing services only when which of the following is true?
Written instructions are provided by the parties to the transaction. WHY? While brokers are permitted to close their own transactions, title companies are the most common provider of closing services in Colorado. If a title company is engaged to provide the closing services, it is the "Closing Company" and it is the responsibility of the title company to complete the closing instructions provided by the parties in the transaction as required by the Division of Insurance including preparation, delivery and recording of the closing documents and disbursement of funds.
The Rose family owns a home in a semi-rural area which is about five years old. Recently announced plans for a new regional airport will place their home directly in line with a main runway that ends one mile before their home. If the airport is constructed, will this diminish the value of the Rose home?
Yes, because of economic obsolescence WHY? Economic (or External) Obsolescence occurs when factors unrelated to the property itself, and outside of the owner's control, diminish its value. A quick way to judge whether or not a property has become economically obsolete is to analyze whether, under new circumstances, the location would still be chosen as a home site and, if yes, at what value compared with the current property.
Kathryn is acting as a transaction-broker for a seller. She would like to use a Colorado Real Estate Commission-approved form during the transaction. Can she?
Yes, licensees acting as transaction-brokers can use commission-approved forms.
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 only provide a copy if you get permission from Terry and Josie.
An example of economic obsolescence in real estate is
a noisy highway built right next to your home. WHY? Economic obsolescence refers to the loss of property value due to external factors, meaning things off the property affecting the properties value. A new noisy highway would be considered economic obsolescence because it is an external factor. Usually, in these circumstances, homeowners cannot do anything to prevent it.
The agreement to take action over a span of time to eventually fulfill the promises made within a contract is known as:
an executory contract WHY? An executory contract is one that cannot be fulfilled immediately and, instead, is fulfilled through a span of time. An example of this would be a lease contract where a renter agrees to pay monthly rent for a car lease for a period of two years.
adverse possession
is a method of acquiring title to real property by possession for a statutory period under certain conditions, viz: proof of non-permissive use which is actual, open and notorious, exclusive, adverse, and continuous for the statutory period
A lease based on gross income of the lessee is a
percentage lease WHY? A percentage lease is a lease on property, the rental for which is determined by the amount of business done by the lessee; usually a percentage of gross income together with a provision for a minimum rental.
Using a trust typically has advantages and disadvantages. One of the main advantages of Land Trusts are:
that the actual property owner can remain anonymous. WHY? A land trust is a legal agreement in which a property owner transfers the title to a property to a trustee. The property owner is typically the beneficiary and directs the trustee in all matters relating to the management of the property, as outlined in the trust agreement or deed. The property owner also retains all property rights including the freedom to develop, rent and sell the property. One of the main advantages of this trust is that the actual property owner remains anonymous. Land trusts can not only bring some legal protection, but it can also help the property owner negotiate prices if he or she is particularly wealthy and wants to remain anonymous.
An agent may collect a commission for a negotiated sale after the term of the listing contract expired if
the contract contains a protection period clause. WHY? A protection clause, also called a safety clause, in a listing agreement binds the seller to the payment of a commission to the broker if the property is sold within a period of so many days after the expiration of the listing to a person with whom the broker negotiated during the listing period.
Uniform Electronic Transactions Act (UETA/ The National Conference of Commissioners on Uniform State Laws (NCCUSL) enacted the UETA to harmonize state laws regarding the validity of these records and to set more comprehensive rules regarding their use.)
was enacted to give electronic signatures, records, and contracts legal recognition equal to that of paper records and signatures. In effect, as long as a party can prove that an electronic version of a record or signature was the act of the individual, then the electronic version is just as binding as a physical paper version, and may be used for record keeping or audit purposes.
Which of the following is not a standard form?
"Broker Form" WHY? Brokers are not authorized to draft forms for use in real estate transactions but are permitted to complete the blanks on any approved forms. If a custom form is required for a situation that is not adequately covered by Commission Approved Forms, the broker may hire a licensed attorney to draft the document.