Unit 2 Exam - Real Estate

Bethenney is Jason's agent. Jason made an offer on a property and wrote an earnest money check, which he gave to Bethenney. What should Bethenney do with the check? a) Cash the check and give half to her broker. b) Follow brokerage procedure for handling monies entrusted to agents by clients. c) Give it back to Jason to deposit in his bank. d) Go on a shopping spree.

b) Follow brokerage procedure for handling monies entrusted to agents by clients.

What do laws use as their guiding principles? a) Community morals b) Generally accepted ethics c) Laws from other jurisdictions d) Personal morals

b) Generally accepted ethics

Which of the following is considered unauthorized practice of law? a) Explaining a clause in a contract to a client b) Interpreting the legal consequences of a clients actions c) Using existing forms an attorney has reviewed d) Using standard language for addenda

b) Interpreting the legal consequences of a clients actions

Which of the following actions can licensees take related to signs? a) They can only place signs on property they own. b) They can place signs on an owner's property with the owner's written consent. c) They can place signs on properties for which they are the listing agent, with or without the owner's permission. d) They can't place signs anywhere.

b) They can place signs on an owner's property with the owner's written consent.

With a few exceptions, there's usually no external punishment for violating which of the following? a) Ethics b) Laws c) Regulations d) Rules

a) Ethics

What is a licensee's responsibility related to the paperwork in a real estate transaction? a) Make sure all parties have copies of the paperwork and that it's retained for the statutory period. b) Make three copies of all documents. c) Secure paperwork in the broker's vehicle. d) Shred documents once the transaction is complete.

a) Make sure all parties have copies of the paperwork and that it's retained for the statutory period.

As a listing agent, when are you no longer obligated to present offers to your client? a) The sale has closed. b) You are paid. c) You have a signed contract. d) Your client tells you to stop.

a) The sale has closed.

Daniel has several properties listed around town. He receives a call from a prospective buyer who is very interested in one of the properties and wants to schedule a showing. What should Daniel do? a) Assume the buyer understands that Daniel is the seller's agent. b) Disclose his agency relationship with the seller to the prospective buyer. c) Refer any questions about the property to the seller. d) Schedule the showing.

b) Disclose his agency relationship with the seller to the prospective buyer.

Who in a brokerage firm should know the firm's code of ethics? a) Administrative assistants b) Everyone c) Licensees d) Management

b) Everyone

Ricky is working for Matt, a buyer client, who is interested in a property at which the listing agent offers compensation to cooperating agents. The listing agent has offered Ricky or any cooperating agent additional compensation if the transaction closes within 40 days. Is this ethical? a) No, it's never ethical for a licensee to accept compensation from more than one party. b) Yes, but only if all of the involved parties have full knowledge and provide consent. c) Yes, but only if the Matt has full knowledge of the compensation arrangement and provides consent. d) Yes, licensees can receive compensation from multiple parties in the transaction.

b) Yes, but only if all of the involved parties have full knowledge and provide consent.

What type of language should be used to write contracts? a) Boilerplate language b) Legal phrases in Latin where necessary c) Plain language d) Precise real estate jargon

c) Plain language

Which of these is an example of practicing within your area of competence? a) Informing your clients that the odd odor in the property is from an ongoing black mold issue. b) Recommending that your married clients take title to their new property as joint tenants. c) Researching the property tux amount that a elient will pay on the home he's purchasing d) Telling your client that the wood shavings outside the basement window means there are termites in the home.

c) Researching the property tux amount that a elient will pay on the home he's purchasing

Your buyer client Gwen wants to learn as much as she can and asks a lot of questions. Which of the following of Gwen's questions could you answer while staying within your scope of expertise? a) Do the wood shavings outside the basement window mean there are termites in the home? b) Is the mold in the basement the dangerous kind? c) What are the property taxes for this property? d) Will an investment in this property lower my income taxes?

c) What are the property taxes for this property?

Roberto, a licensee, filled in the blanks on a standard form used in his brokerage firm. Is this okay? a) No, because he's not an attorney, he shouldn't prepare contracts. b) No, he should have his client complete any forms. c) Yes, licensees can use standard forms provided by the brokerage or approved by an attorney. d) Yes, real estate licensees may draft contracts and fill in blanks on existing contracts.

c) Yes, licensees can use standard forms provided by the brokerage or approved by an attorney.

In addition to serving as the listing agent for several clients, your own house is also on the market. You receive a call from another licensee who wants to show her buyer client your house. What must you immediately disclose to the buyer's agent and buyer? a) The house may have been an orphanage 80 years ago. b) You'd sell for far lower than the current asking price. c) You own the property. d) Your housemate had swine flu last month.

c) You own the property.

When accepting compensation, which of the following statements is most accurate, according to the NAR Code of Ethics? a) A licensee shall not accept compensation directly from more than one party to a transaction. b) A licensee shall not accept compensation from anyone. c) A licensee shall not accept compensation from more than one parly to a transaction without consent from the client. d) A licensee shall not accept compensation from more than one party to a transaction without the consent of all parties.

d) A licensee shall not accept compensation from more than one party to a transaction without the consent of all parties.

Which statement most accurately describes a licensee's responsibility related to written offers on a listing, according to the NAR Code of Ethics and Standards of Practice? a) A licensee is only required to present formal written offers that are equal to or more than the listing b) A licensee is only required to present formal written offers within a certain range of the listing price of the property. c) All formal written offers received by the licensee must be presented to the owner, unless the owner has accepted a previous offer. d) All formal written offers received by the licensee must be presented to the owner until closing or execution of a lease, unless the client waives this obligation in writing.

d) All formal written offers received by the licensee must be presented to the owner until closing or execution of a lease, unless the client waives this obligation in writing.

Which of the following actions is representative of an agent's due diligence and ethical behavior? a) A buyer client wants to waive an inspection. The agent follows the request without question. b) An agent deposits a buyer client's earnest money check into her personal bank account. c) An agent notices a discrepancy between what the homeowner says and what the property shows, so he ignores it. d) An agent notices a discrepancy between what the homeowner says and what the property shows, so he investigates.

d) An agent notices a discrepancy between what the homeowner says and what the property shows, so he investigates.

Which of these actions violates the NAR Code of Ethics? a) Including the brokerage name and main phone number, in addition to a licensee's own name and phone number, on an advertisement b) Making a reasonable effort to ensure all parties to a written agreement have a copy of the agreement c) Preparing a written agreement that accurately states a purchase price d) Preparing a written agreement that falsely states a purchase price

d) Preparing a written agreement that falsely states a purchase price

The Golden Rule ____. a) Doesn't apply to business situations b) Is exclusive to religious individuals c) Is rarely needed d) Provides a guideline for all personal and professional ethical situations

d) Provides a guideline for all personal and professional ethical situations