Real Estate State and National practice exam
Which of the following statements could indicate a price fixing violation?
"The MLS requires us to have at least 90-day listings."
What should you do if a problem arises that's beyond your expertise that could cause a delay your client's transaction?
Consult with your employing broker
One way licensee can help buyers determine the affordability of a home purchase is to ______________.
Help them estimate closing costs
Charmaine is conducting a pre-listing appointment and makes a note of the 50-year-old velvet wallpaper and shag carpeting in the dining room. This is likely because ________________.
She is making a list of recommended updates for the sellers
Which of the following situations would require an Illinois licensee to make a designated agency disclosure?
Jeff has been assigned to represent the Trethaways in the sale of their home.
Trish is thrilled that her client, Josh, has had his offer accepted on a new home. Who should tell him is responsible for getting an appraisal of the property prior to closing?
Josh
When is a sponsoring broker permitted to disburse escrow funds?
When permitted by the terms of the contract or by mutual written request from both parties
A standard of practice included in Article 10 of the National Association of Realtors Code of Ethics states that Realtors shall not print, display or circulate any statement or _____________ with respect to selling or renting property that indicates any preference, limitations or discrimination based on protected classes.
Advertisement
Which of the following is/are illegal?
Both disparate impact and disparate treatment
Which of the following is NOT a legal way to disburse escrow funds?
Broker Nadia has an unconsummated contract with no escrow-related instructions. She decides to give half of the escrow funds to both parties.
Which of the following situations will necessitate the Illinois required dual agency disclosures?
Colin from Pringle Properties represents both seller clients, the Rosings, and buyer client, Jonathan, in the same transaction.
The formula for net to seller is sales price x (100% - __________________)
Commission rate
What is one practical way that brokers can manage risk when using unlicensed assistants?
Communicate a process for unlicensed assistants to follow if they're asked to perform a task requiring licensure.
A building manager refused to grant an exception to a resident with a physical disability who used a service dog. The resident asked for a reserved parking space closer to his unit for easier access. Is this a violation, and if so what type?
Violates fair housing
Which of the following would be good advice for a licensee to give buyer clients about which property repairs they should ask the sellers to make before closing?
Request that the sellers fix the most important and signifcant things in the inspection report, or ask them for a credit at closing to fix those items yourselves.
Buyers can do any of the following to request repairs, EXCEPT _______________.
Require that the seller complete all of the repairs on the list prior to closing.
Which of these is NOT an example of a group boycott?
Sean and the associated brokers in his firm agree to purchase single supplier so they get a quantity discount.
The market for real estate in Chad's area has experienced a sudden increase in demand, and there aren't enough homes to go around. It seems like a bidding war ensues for every available property. What's the condition of the real estate market in Chad's area?
Seller's market
Lila is helping her client, Jack with determining a reasonable offering price for a townhome he is interested in purchasing. What information can Lila legally provide that help with his decision?
She can provide Jack with information about comparable sales in the area.
Nancy prepared a listing presentation. In it she included a list of needed repairs and updates. One reason for having this information is because ________.
She can show the sellers what they can do to fetch a higher price
What type of distressed property is described when the transaction is initiated by a seller who's facing or is in default and owes more than the property is worth?
Short sale
The loan type and the amount of down payment impact _______.
The closing costs the seller may contribute
All Illinois listing agreements must contain which of these items to be valid, according to the Real Estate License Act of 2000?
The commission the sponsoring broker will receive and the time of payment
What information does the seller net sheet contain?
The expenses a seller will incur for the transaction
Why might a buyer's agent show more properties to a buyer client than to buyer customer?
The agent has greater incentive
Telling a client, "I can only work with you if you agree not to use ABC Title Company" is what type of antitrust violation?
Tie-in arrangement
Short sales are anything but short. That's because the ___________ sets the pace.
Lender
Which of the following is an example of discrimination?
Restricting families with children to a certain area of a building or complex
In a real estate transaction, who decides how much earnest money to offer?
The buyer
According to fair housing laws, the protected class of familial status refers, in part, to those with children, who are defined as anyone under what age?
18
The lead-based paint disclosure form must be filled out for properties built prior to what year?
1978
Which of the following is an example of a tie-in arrangement?
A business requires its clients to also purchase service.
Which of the following is an example of documentation-related issues that can cause a last minute-closing delay?
A client's closing package arrives at the closing agent's office late.
Seller Brianna isn't sure what she needs to write down on her disclosure form. Which of the following items would NOT be considered a material defect that must be disclosed to potential buyers?
A newly replaced water heater
Maggie is showing Glenn's property to her buyer client, Marites. Glenn is not working with a listing agent and is selling the property himself. What should Maggie present to Glenn?
A notice of No Agency Relationship
Which of these is the definition of disparate impact?
A seemingly neutral law or regulation that is discriminatory because it affects members of one group more than another
The seller net sheet is _________________ of closing costs.
An estimate
Phil hired Christina as an unlicensed assistant. Which of the following tasks is part of the closing tasks Christina can perform?
Assemble closing documents
Price levels are an indicator of _________________.
Demand
Broker Beverly is worried about disgruntled clients suing the brokerage due to a dispute over escrow funds. What can she do to prevent possible lawsuits against her?
File an interpleader action
You can't move land, and location plays a huge role in the value of real estate. To which characteristic does this refer?
Immobility
Which of these statements is true of an Illinois exclusive listing agreement?
It must include a clear statement that discriminatory behavior against protected classes under the Illinois Human Rights Act by either the owner or the broker is illegal
The underwriter for Katrina's loan fell behind on transactional duties and caused delays on closing. Due to the delays, the interest rates on Katrina's loan went up to the point that she couldn't qualify for financing anymore. This is an example of how __________ can derail a transaction.
Lender issues
Which type of issue can cause a transaction to fail and is outside of the buyers' and sellers' control?
Lender issues
If Illinois licensee Maya is designated as the agent for seller client Theresa, and assuming all parties consent, what would need to occur in order for a dual agency situation to exist?
Maya would have to be designated as the buyer's agent in the same 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 procured the buyer
Mel's designing a website for his listing: a unique condo in the city. With its three flights of stairs and a double step at the front door, Mel doesn't think the condo is suitable for anyone with physical disabilities. Out of courtesy to potential buyers, he states his thoughts on the website. Is this allowed?
No, because Mel's actions, although well-intentioned, could be considered discriminatory toward a protected class.
When purchasing a property at auction, the successful bidder will likely be required to _____________________ within 24 to 48 hours.
Pay in cash
What's the term for a lender refusing to lend in a specific area, often based on the area's minority make-up?
Redlining
To avoid a conflict of interest situation, what should Illinois licensees do when representing a client in a short sale in which the client asks for advice about how to proceed with the transaction?
Refer the client to a tax advisor, real estate attorney, and /or HUD-approved housing counselor
An exclusive Illinois listing agreement must include ______.
Specific services the listing agent must provide at a minimum
Which of the following options is something that you would only do for a buyer client and ot a buyer customer?
Suggest an earnest money amount based on the practices in your area
Chester has been providing some real estate services for new buyer customer Tom. Which of these is a task that Chester may only perform if he signs an agency agreement with Tom?
Suggest negotiation terms for a listing Tom would like to buy
In Illinois, what's the listing broker's responsibility whom it comes to a property's material defects?
The broker must disclose any known material defects to the buyer
Which of the following is a possible outcome if a brokerage is found guilty of violating antitrust law?
The brokerage may have to undergo court-ordered supervision for up to 10 years
Kathy is going over all of the tasks that need to be completed prior to closing. Who is typically responsible for ordering and reviewing a survey of the property?
The buyer
Prior to closing, who should conduct a final walk-through of the property, to ensure that the property is as stated in the sales contract?
The buyer and buyer's agent
How are accrued real estate taxes that have been assessed but not yet due handled in a real estate transaction?
The tax bill will be prorated to the day of closing
Why should you ask potential buyer clients if they need to sell their home before purchasing a new one?
Their current home may be a potential listing
Which of the following statements is true about Illinois licensees who are representing a party and also have an ownership interest in the property?
They may not act as a dual agent in the transaction
How do response deadlines in an offer or counter offer help facilitate negotiations?
They prevent sellers from sitting on the offer and waiting for something better to come along
Buyer Krista and seller Hershel have very different ideas about the value of Hershel's property and are very far apart on price. However, both parties are interested in making a deal. What should Krista's agent do to help facilitate a successful transaction?
Work with Hershel's agent on getting through the issues and only bringing options to Krista
A buyer is reluctant to ask for repairs and risks the seller accepting a different offer. In what type of market is this concern most valid?
Hot
When advising a seller client about property disclosures in Illinois, which of these statements should a licensee make?
"All material facts that you're aware of related to the physical condition of the property must be disclosed to potential buyers."
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?
"Without a written representation agreement, I don't represent you."
Your seller client has an offer for $300,000. If the agreed-upon commission is 5%, what is net to seller before any other costs are taken into account?
$285,000
Sandy's closing package arrived at the closing agent's office a day later than expected, and it contained errors that needed to be corrected by the lender. This will result in a last minute closing delay due to _____________ issues.
Documentation
What's the purpose of helping buyers estimate closing costs?
Doing so provides information about costs before the buyer receives lending disclosures or the closing statement
Phil is in the middle of an earnest money dispute between Cam and Mitchell. What options does Phil have if he can't obtain a written release of the earnest money from both parties?
File an interpleader action
The type of buyer is new to the process and asks a lot of questions. The buyer may be moving out of a family home or apartment into a small, modest home.
First-time buyer
Licensee Hannah is at her wits' end with her client, Asher. He's volatile, greedy, and extremely competitive, so negotiations with sellers are going horribly. What advice might you give to Hannah to assist her with achieving a successful transaction.
Focus on creating a mutually beneficial deal for both your client and the seller. See if there's any way to create a win-win situation.
Your buyer client wants to make an offer on a house that meets all of his needs, but the list price is a bit outside of his budget. When discussing the offer with the seller's agent, you ask about the seller's goals. This is a good example of _____________.
Focusing on interests, not positions
Anna is helping her investor client make an offer on a property that's in the process of foreclosure. How will she best help her client in this situation?
Follow an instructions for making a bid meticulously and make her offer as clean as possible.
Maura is doing a market analysis for a distressed property. Which of the following properties would make a good comparable?
Foreclosed property
The MLS is a good source for data when researching a subject property. What information will you find there?
How long it took to sell last time?
If you're working with potential buyers who are currently renting, why should you ask when their rental contract is up?
It will help you establish a purchase time frame.
Which of the following is TRUE about discussing or implying a standard commission for the indurstry?
It's an example of price fixing and is an antitrust violation.
Which of the following is true of refusing to buy services from a vendor because of shoddy business practices or pricing?
It's permissible
Fred and Lisa are confused, because their agent, Jolie, has referred to their purchase contract by several different names. Which of the following is NOT another name for a sales contract
Letter of intent
Typical dual agency - as it exist in many other states - allows for two different relationship scenarios that produce dual agency, but Illinois only allows for one. Which of the following scenarios, recognized as dual agency in other states, does not produce dual agency in Illinois?
Licensee Ray represents the buyers in a transaction, and another licensee from his brokerage, Michael, represents the seller. Both parties are represented by the same brokerage, which makes it a dual agency situation.
Which of the following would likely NOT be part of a listing presentation?
Loan documents
Sean and Shrery, an unmarried couple, have three young children. Because of the children, a landlord refuses to show them an apartment in a complex with mostly retired couples that isn't officially designated as senior housing. Is this legal?
No, it is an example of illegal discrimination against families with children.
Real estate licensees are seldom guilty of blatant discrimination, but unintentional discrimination does exist. What's one example of unintentional discrimination?
Not showing homes in neighborhoods where the client may become a victim of racial bias
Familial status includes families with children under age 18 living with parents or a legal custodian, people securing the custody of children, and what other group of people?
Pregnant women
One of the five primary reasons for complaints in a real estate transaction is ________________.
Property disclosures
Real estate that has been foreclosed upon and is owned by the bank is referred to as ______________.
REO
The Millers moved to a small town and were interested in buying a house. At the first meeting with real estate sales professional Nora, she asked them where they went to church. They replied that they were atheists and didn't attend church. Nora, then told them that she didn't know of any listings that met their needs, even though that wasn't true. Nora is discriminating based on ______________.
Religion
Carl is assisting a customer, Vivian, in completing a purchase contract. Vivian asks Carl how she should structure her for the best chance of getting the property. What should Carl do?
Tell Vivian that because he doesn't represent her, he's unable to provide this type of assistance.
Which of these items is licensee Breanna required to advise sellers Rob and Ben about when they ask her to represent them in the sale of their home?
That she will act as their designated agent
Prudence and Roger want to sell their home quickly so they can move closer to their grandkids. The buyers know that there might not be much time before closing for all the repairs to get done. What might be a good option for the buyers regarding their repair requests?
They should ask for a credit at closing to pay for repairs.
From a real estate licensee's standpoint, what's the purpose of qualifying buyers before working with them?
To determine their readiness to purchase and make sure they're not already working with another agent
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
Oliver is a licensee who helps his buyers estimate their closing costs. Oliver is most likely ____________.
Trying to help his buyers determine affordability of a home purchase
Karen and Mandy can't reach an agreement about who gets Mandy's earnest money. What can a sponsoring broker do in this situation?
Turn the funds over to the state treasurer
Jeanine is completing a purchase contract with her clients. They ask her how to take title to the property. If Jeanine advises them on this point, she may be found guilty of ________________.
Unauthorized practice of law
It's impossible to generalize the impact events in other areas have on local real estate values. Which characteristic of the real estate market does this refer to?
Uniqueness
The ___________ of real estate markets makes it impossible to generalize the impact events in other areas will have on real estate values.
Uniqueness
Ana rents a condo in a complex in which children aren't allowed to play outside after dark, with or without their parents. Is this an example of discrimination?
Yes
Are mobile home parks subject to fair housing laws?
Yes
You're working as a buyer's agent for Neil and Sharon, who just found the home of their dreams. However, they're concerned about the condition of the roof and the moisture in the basement, and don't have endless funds to make repairs. When they ask you about adding contingencies to their offer what do you tell them?
You definitely want to make it as easy as possible for the seller to choose your offer but you have to protect your interests.
