Colorado Practical Applications

Which of the following is true of ledgers maintained by a broker? 1. A ledger records in chronological order all money received or disbursed by the broker on behalf of a particular beneficiary of a trust account. 2. A ledger is segregated by property, in the same format as the escrow or trust account journal. 3. A ledger can have a negative cash balance for up to 24 hours, as long as there is a positive balance in the journal. 4. The sum of all ledger balances must at all times agree with the corresponding cash balance in the journal at the end of the month.

1. A ledger records in chronological order all money received or disbursed by the broker on behalf of a particular beneficiary of a trust account. A ledger records in chronological order all money received or disbursed by the broker on behalf of a particular beneficiary of a trust account, segregated by beneficiary, in the same format as the escrow or trust account journal. A ledger cannot be allowed to have a negative cash balance. The sum of all ledger balances must at all times agree with the corresponding cash balance in the journal after each transaction has been posted. Recordkeeping Summary Quiz (942)

Which of the following is an acceptable method of satisfying continuing education requirements? 1. Complete the Annual Commission Update Course for each year since license issuance or the last renewal plus elective coursework, totaling 24 hours 2. Complete the Commission-approved 24-hour Broker Reactivation more than once in a license renewal period. 3. complete the Nation section of the Broker's Exam. 4. complete 24 hours of elective credits.

1. Complete the Annual Commission Update Course for each year since license issuance or the last renewal plus elective coursework, totaling 24 hours To satisfy the continuing education requirement a broker may complete the Annual Commission Update Course for each year since license issuance or the last renewal plus elective coursework, totaling 24 hours; complete the Commission-approved 24-hour Broker Transition course (permitted only once); complete the Commission-approved 24-hour Brokerage Administration course (permitted only once); or re-pass the state part of the licensing exam. Additional Educational Sources Quiz (949)

The selling broker's post-closing responsibilities include which of the following? 1. Deliver the closing file and a commission check to his employing broker 2. Retain copies of the seller's listing agreement and seller's closing statement 3. retain copies of the recorded deed. 4. delivering the earnest money to the seller

1. Deliver the closing file and a commission check to his employing broker The selling broker's post-closing responsibilities include delivering a copy of the closing statement, the closing file and the commission check to the employing broker; and retaining copies of various documents. A selling broker working with a buyer need not retain copies of the seller's listing agreement or the seller's closing statement. Closing the Transaction Quiz (918)

Which of these is NOT one of the four steps to making a business plan? 1. Explore the methods of financing personal promotion 2. Determine one's focus 3. Determine the outcomes one desires 4. Determine how to reach one's desired outcome

1. Explore the methods of financing personal promotion The four steps to making a business plan are analyzing the particular situation, determining one's focus, determining the outcomes one desires, and determining how to reach one's desired outcome. Entering the Field Quiz (251)

Which of the following is true of a listing farm area? 1. It should have clear boundaries and no major streets dividing it up. 2. It should be comprised of homes in a wide range of values, in order to develop a broad market. 3. It need not be near the broker's office or home. 4. It is preferable that there be indications of a lack of recent turnover, as that would mean the area is poised for a spurt in sales activity.

1. It should have clear boundaries and no major streets dividing it up. The listing farm area should be well-defined in terms of its location, with clear boundaries and no major streets dividing it up; be manageable in terms of size; have homes that are relatively close in value; be near the broker's office; have something about which the broker feels a connection; and have indications of turnover. Developing a Market Quiz (55)

Which of the following is true of the location of recorded documents? 1. Liens against real estate and fixture filings are filed with the County Clerk and Recorder where the real property is located. 2. Colorado state tax liens are filed with the Secretary of State's office. 3. Federal tax liens are filed with the Colorado Department of Revenue. 4. Security agreements are filed with the Secretary of State's Office.

1. Liens against real estate and fixture filings are filed with the County Clerk and Recorder where the real property is located. Liens against real estate and fixture filings are filed with the County Clerk and Recorder where the real property is located. Colorado state tax liens are filed with the Colorado Department of Revenue. Liens filed with the Secretary of State's Office include federal tax liens, Colorado Housing and Finance Authority (CHFA) liens, Uniform Commercial Code (UCC) liens, effective financing statements (EFSs), orders of restitution, notices of liens created by operation of law to secure payment of child support, hospital liens, agistor's liens, non-possessory statutorily created agricultural liens, harvester's liens, and stud service liens. Security agreements are not filed. Instead, UCC Financing Statements and Effective Financing Statements are filed with the Secretary of State in order to make public records of liens against particular collateral. The Bumpy Road of Closing Quiz (381)

Which of the following is a form of alternative dispute resolution that does not require the participation or intervention of a third party to resolve a dispute? 1. Negotiation 2. Litigation 3. Mediation 4. Arbitration

1. Negotiation Negotiation differs from mediation and arbitration in that it does not require the participation or intervention of a third party to resolve a dispute. Failed Transactions Quiz (923)

Which of the following does not have to file with the state to form as a business entity? 1. Sole proprietorship 2. Limited liability company 3. Corporation 4. Partnership

1. Sole proprietorship There are no papers to file with the state to create a sole proprietorship. If the firm is not a sole proprietorship, it should maintain all documents filed with the state indicating whether the business has been formed as a corporation, limited liability company, partnership, or limited liability partnership. Recordkeeping Summary Quiz (942)

Which federal law prohibits discrimination against handicapped persons in commercial properties? 1. The Americans with Disabilities Act (ADA) 2. The Civil Rights Act of 1866 3. The Civil Rights Act of 1968 4. The Fair Housing Amendments Act of 1988

1. The Americans with Disabilities Act (ADA) The Americans with Disabilities Act (ADA) prohibits discrimination against handicapped persons in commercial properties. The Civil Rights Act of 1866 applies to commercial property, but only to racial discrimination. The Civil Rights Act of 1968, as amended by the Fair Housing Amendments Act of 1988, applies to handicap, but only in housing. Brokerage Relationships Quiz (66)

With regard to the use of lockboxes, which of the following is true? 1. A selling broker must contact the listing broker before showing a home with a lockbox. 2. A lockbox may be used only if authorized by the seller in the listing agreement. 3. The Commission-approved listing agreement does not allow a seller to place restrictions on the use of the lockbox. 4. Lockboxes present a greater problem on vacant homes than on occupied homes.

2. A lockbox may be used only if authorized by the seller in the listing agreement. The purpose of lockboxes is to allow selling brokers to see the property when the seller is not home, without having to contact the seller and/or his broker. A lockbox can be used only if the seller authorizes it in the listing agreement. A seller may place restrictions on the use of the lockbox (e.g., time of day, clearing with listing agent first, etc.). There are legitimate privacy and security issues involved with the use of lockboxes, if the seller is residing in the property. Lockboxes are not nearly as problematic when the home is vacant. Showing a Property Quiz (61)

Which of the following is true regarding copies of closing statements? 1. An employed broker must deliver a copy of any closing statements he signs to his employing broker within three business days following closing. 2. An employing broker must retain copies of all closing statements approved by the respective buyers or sellers. 3. they must be signed by the employing broker. 4. the employing broker must retain copies for 7 years.

2. An employing broker must retain copies of all closing statements approved by the respective buyers or sellers. An employed broker must deliver a copy of any closing statements he signs to his employing broker immediately following closing. The employing broker must retain copies of all closing statements approved by the respective buyers or sellers. Recordkeeping Summary Quiz (942)

Lenders will generally want to see copies of which of the following before granting loan approval? 1. Federal tax returns for the previous seven years 2. Bank statements for the most recent three months 3. a copy of the buyer's marriage certificate 4. the home inspection report

2. Bank statements for the most recent three months Lenders will generally verify every asset listed and check out any negative credit items. By locating and gathering copies of federal tax returns for the previous two years and copies of bank statements for the most recent three months, and providing them to the lender up front, the buyer can help avoid delays in getting the loan approved. The Bumpy Road of Closing Quiz (381)

Commission regulations regarding continuing education are set out in 1. Commission Rule F. 2. Commission Rule B. 3. Commission Rule E. 4. the license law.

2. Commission Rule B. Commission regulations regarding continuing education are set out in Commission Rule B. Additional Educational Sources Quiz (949)

At the time he signs the Sales Agreement, the seller may elect which of the following as remedies to be available in the event the buyer defaults? 1. Liquidated damages and specific performance 2. Damages or specific performance 3. Liquidated damages and additional damages 4. Liquidated damages and punitive damages

2. Damages or specific performance At the time he signs the Sales Agreement, the seller must elect the remedies he wants available in the event the buyer defaults. His options are: either damages or specific performance; or liquidated damages. He cannot select liquidated damages and any other remedy. Failed Transactions Quiz (923)

Which of the following would not be an item included in the Personal Property category of the sales agreement? 1. Storm windows and storm doors 2. Garage door openers, including remote controls 3. Fireplace inserts, fireplace screens and fireplace grates 4. Heating stoves

2. Garage door openers, including remote controls The Personal Property category of the sales agreement specifies that the following items are included in the purchase price: storm windows and storm doors; window and porch shades, awnings, blinds, screens, window coverings, curtain rods and drapery rods; fireplace inserts, fireplace screens and fireplace grates; heating stoves; storage sheds; and all keys. The garage door opener is considered a fixture, not personal property. Preparing and Presenting an Offer Quiz (379)

What is the meaning of a "contingency" in a sales agreement? 1. It means the agreement is depending on something that has already happened. 2. It is a clause that requires that a certain event occur or condition be met before the contract is fully binding. 3. It means the transaction will not close. 4. It means there are events that will continue after the closing. Contingency means "depending on something not certain". In a sales agreement, a contingency is a clause that requires that a certain event occur or condition be met before the contract is fully binding.

2. It is a clause that requires that a certain event occur or condition be met before the contract is fully binding. Contingency means "depending on something not certain". In a sales agreement, a contingency is a clause that requires that a certain event occur or condition be met before the contract is fully binding. Preparing and Presenting an Offer Quiz (379)

Which of the following statements about the Colorado Real Estate News is FALSE? 1. It contains summaries of disciplinary cases. 2. It is published by the Colorado Association of Realtors®. 3. It provides updates on legal issues. 4. It contains articles about "hot topics."

2. It is published by the Colorado Association of Realtors®. The quarterly Colorado Real Estate News, the official publication of the Colorado Real Estate Commission, provides: updates on legal issues, articles about "hot topics," discussions about financial management, reminders about issues such as license renewal and continuing education requirements, warnings about recurring problems, summaries of disciplinary cases, and statistics. Additional Educational Sources Quiz (949)

Which of the following types of discrimination is covered by the Colorado Fair Housing Act, but not covered by the federal Fair Housing Act? 1. Occupation 2. Marital status 3. Income status 4. Age

2. Marital status The Colorado Fair Housing Act covers commercial property and prohibits discrimination on the basis of marital status. Neither law prohibits discrimination based on age, occupation, or income status. Brokerage Relationships Quiz (66)

Which of the following is a duty of a broker prior to closing? 1. Prepare the deed 2. Track all deadlines 3. Contract with repairers to assure all required repairs are made 4. measuring the square footage of the property

2. Track all deadlines A broker's pre-closing duties include preparing any necessary documents (e.g., addenda regarding renegotiated items, closing instructions, etc.), tracking all deadlines (e.g., loan application and commitment, appraisal, title commitment and objections, inspection objections and resolutions, and seller's property disclosure), tracking and assuring all contingencies are cleared/satisfied (e.g., loan commitment obtained, title commitment obtained, satisfactory appraisals, satisfactory inspection) and obtaining necessary documentation (e.g., signed inspection report), and monitoring whether or not any objections (e.g., title, inspection) are cured within the deadlines. He does not prepare legal documents or contract for work. The Bumpy Road of Closing Quiz (381)

In which document would a broker specifically express his areas of specialty and values? 1. Business plan 2. Vision statement 3. Mission statement 4. Independent contractor agreement A vision statement should include the broker's areas of specialty (e.g., single family residences), office location, geographical area served, target market, values (e.g., caring neighborhood Realtor® involved in the community), and services (e.g., representing buyers and sellers).

2. Vision statement A vision statement should include the broker's areas of specialty (e.g., single family residences), office location, geographical area served, target market, values (e.g., caring neighborhood Realtor® involved in the community), and services (e.g., representing buyers and sellers). Entering the Field Quiz (251)

Which of the following is true regarding escrows in Colorado? 1. A table closing is the same as an escrow. 2. When a closing is delayed, the parties may agree to leave funds and signed documents in escrow until the problem is cleared up. 3. the attorney for the seller is present at the closing. 4. the lender is present at the closing.

2. When a closing is delayed, the parties may agree to leave funds and signed documents in escrow until the problem is cleared up. While real estate closings in Colorado are generally conducted pursuant to the table closing approach, escrows do play some role in Colorado. Occasionally, when circumstances result in a closing being delayed, after closing documents have been signed and funds have been received, the parties may agree to leave the funds and documents in escrow until the problem is cleared up. In other words, the title company sets up an escrow and holds the earnest money, closing fees and loan proceeds, as well as the deed, security instrument, and any other relevant documents, pursuant to the parties' escrow instructions. Closing the Transaction Quiz (918)

In Colorado, the closing agent can make disbursements at closing only after receiving good funds. Good funds include all of the following EXCEPT 1. cash. 2. a check from the broker's general account. 3. a certified bank or cashier's check. 4. money wired to the title company.

2. a check from the broker's general account. The closing agent can make disbursements at closing only after receiving good funds (cash, a certified bank or cashier's check, or money wired to the title company) from all parties who need to pay money to complete the transaction. Closing the Transaction Quiz (918)

A broker may work with both the buyer and seller in the same real estate transaction as any of the following EXCEPT 1. a transaction-broker for both buyer and seller. 2. a limited agent for the buyer and the seller. 3. a single agent for the seller. 4. a single agent for the buyer.

2. a limited agent for the buyer and the seller. A broker may work with both the buyer and seller in the same real estate transaction only as either: a transaction-broker for both buyer and seller; a single agent for the seller; or a single agent for the buyer. Brokerage Relationships Quiz (66)

A reverse directory is a phone book which lists 1. names in alphabetical order. 2. addresses in order. 3. names in order of first and last. 4. names in order from Z to A.

2. addresses in order. A reverse directory is a phone book which lists addresses in order, along with names and phone numbers. Developing a Market Quiz (55)

Which of the following courses covering standard real estate topic areas may be offered for elective continuing education credit without Commission pre-approval? 1. Those developed and offered by national professional trade organizations 2. Those offered by employing brokers to their employed brokers 3. Those offered by lawyers. 4. Those offered in a classroom setting.

1. Those developed and offered by national professional trade organizations Some courses covering the standard real estate topic areas will be accepted for elective continuing education credit without Commission pre-approval if they are: offered by accredited colleges, universities, community or junior colleges, public or parochial schools, government agencies or proprietary real estate schools approved by the Colorado Division of Private Occupational Schools; or developed and offered by national professional trade organizations; or approved by and taken in satisfaction of another occupational licensing authority's education requirements; or in real property law and offered by a provider approved by the Colorado Board of Continuing Legal and Judicial Education. Courses must be pre-approved if they are offered by employing brokers to their employed brokers; or by regional, state or local professional trade organizations/affiliates/chapters that were not developed and offered by a national professional trade organization for its members; or by any provider exempt from Colorado school registration. Additional Educational Sources Quiz (949)

Which of the following is true of Commission-approved forms? 1. Use of these forms is governed by Commission Rule F. 2. Use of forms that are available is optional for brokers. 3. If the Commission has not approved a form to meet a particular circumstance, and other forms are used, they are governed by Rule F. 4. All of the above

1. Use of these forms is governed by Commission Rule F. Use of Commission-approved forms is governed by Commission Rule F. Use of forms that are available is mandatory for brokers. If the Commission has not approved a form to meet a particular circumstance, and other forms are used, they are not governed by Rule F. Brokers may not prepare other, non-approved forms, unless otherwise permitted by law. Preparing and Presenting an Offer Quiz (379)

Floor time is best described as 1. a reactive form of prospecting. 2. a proactive form of prospecting. 3. a regressive form of solicitation. 4. a waste of time, as no one ever walks into an office to list a home.

1. a reactive form of prospecting. Floor time is the scheduled rotation of brokers to respond to inquiries about listed properties from the public, generated by advertisements and signs. It is sometimes described as a reactive form of prospecting, because the broker sits and waits for potential clients to come in or call, rather than actively seeking them out. Floor time provides an opportunity to make an impression upon prospective buyers and sellers, and has often been referred to as "opportunity time." Developing a Market Quiz (55)

If a lawsuit has been filed by a buyer or a seller claiming earnest money, the broker may surrender the contested earnest money into the court through 1. an interpleader. 2. a mediator. 3. a negotiator. 4. an FED.

1. an interpleader. If a lawsuit has been filed by a buyer or a seller, the broker may surrender disputed earnest money into the court through an interpleader. Failed Transactions Quiz (923)

To control potential liability, many attorneys recommend to their clients that transaction records should be 1. destroyed when the statutory period of time for retaining records has expired. 2. maintained as long as the brokerage is in business. 3. distributed to the employed brokers involved in the transaction after four years. 4. sent to the client after three years, to be maintained off site.

1. destroyed when the statutory period of time for retaining records has expired. Many attorneys recommend to their clients that, as a method of controlling potential liability, the records should be destroyed when the statutory period of time for retaining records is expired. The firm's employing broker should obtain the advice of the firm's attorney in this matter, however. Recordkeeping Summary Quiz (942)

If, after listing a property, a transaction-broker determines that in addition to assisting the seller, he will be assisting the buyer in the transaction, he must disclose in writing to the buyer before he performs any services for the buyer, that he will 1. will be acting as an agent for the buyer. 2. be acting as a transaction-broker. 3. will be acting as an agent of the seller. 4. will act as an agent for both buyer and seller.

2. be acting as a transaction-broker. After listing a property, a transaction-broker must advise prospective buyers or their brokers that he is assisting the seller in the capacity of a transaction-broker. If he determines that in addition to assisting the seller, he will also be assisting the buyer in the transaction, he must disclose in writing to the buyer that he will not be acting as an agent for the buyer, and will be acting as a transaction-broker, before he does perform any services for the buyer. The disclosure should include a listing of his general duties and obligations. It is wisest to get both parties to agree to this arrangement in writing. Showing a Property Quiz (61)

The primary value of continued, effective educational and motivational training is that it 1. satisfies the continuing education needs of employed brokers. 2. can help the employing broker reduce turnover. 3. it is required by the Real Estate Commission. 4. it is required by license law.

2. can help the employing broker reduce turnover. Continued, effective educational and motivational training encourages and enables brokers to achieve success and realize satisfaction in their real estate practice. It can also help the employing broker forecast sales and project the company's growth by reducing turnover and stabilizing or increasing the income stream of each licensee. Additional Educational Sources Quiz (949)

In a purchase where there had never been a relationship between the broker and seller, and the broker wishes to purchase the property on his own account, he must 1. use the Commission-approved Licensee Buy-Out Addendum. 2. disclose the fact that he is a licensed broker. 3. handle the purchase through his employing broker as if he were representing a client. 4. use the Commission-approved Contract to Buy-Sell.

2. disclose the fact that he is a licensed broker. A broker is not required to place his personal transactions through his employing broker or use the Commission-approved Licensee Buy-Out Addendum in a straight purchase where there had never been a relationship between the broker and seller, and the broker merely wishes to purchase the property on his own account. However, he remains obligated to disclose the fact that he is a licensed broker and may not violate any applicable rules or regulations. Brokerage Relationships Quiz (66)

With regard to the costs associated with marketing, a new broker will find that 1. all employing brokers pay for fliers. 2. employed brokers may have to pay for their own brochures and postcards. 3. because of the expense, large mailings should be used no more than once a year. 4. the broker's photo in a brochure is costly and intimidating to recipients.

2. employed brokers may have to pay for their own brochures and postcards. With regard to the costs associated with marketing, a new broker will find that their employing broker may or may not pay for fliers, brochures and postcards. Despite the expense, large mailings should be made on a regular basis, such as monthly, if they are used at all. Smaller selected and targeted mailings might be made less frequently. The broker's photo in a brochure is considered worth the expense. Developing a Market Quiz (55)

A broker is required to retain a separate transaction folder 1. only for each transaction that has closed. 2. for each transaction, whether it fails or closes. 3. for possible inspection by a representative of the Commission for a minimum of five years. 4. in the custody of the employed broker involved in the transaction until the sale closes.

2. for each transaction, whether it fails or closes. The broker is expected to retain a separate transaction folder for each transaction that has closed, each open sale, and each failed sale, for possible inspection by a representative of the Commission for a minimum of four years. When not being reviewed or executed, current transaction files should be kept at the employing broker's office in a secure, central location. Recordkeeping Summary Quiz (942)

Brokers are required to retain accounting journals and ledgers and transaction files 1. for three years. 2. for four years. 3. for seven years. 4. until the next Commission audit.

2. for four years. Brokers are required to retain the following records for four years (in order to respond to potential audits): accounting journals and ledgers, escrow bank statements, checks, deposit slips, reconciliations, sales contracts, settlement statements, leases, management agreements, and related transaction files for any party assisted or represented. Recordkeeping Summary Quiz (942)

In disclosing his relationship in a transaction, a seller's agent must provide written disclosure to a buyer that he represents the seller and does not represent the buyer before 1. eliciting or accepting confidential information concerning the buyer's real estate needs, motivation or financial qualifications. 2. making an "open house" showing. 3. engaging in preliminary conversations or "small talk" concerning price range. 4. responding to general factual questions concerning properties which have been advertised for sale.

1. eliciting or accepting confidential information concerning the buyer's real estate needs, motivation or financial qualifications. A seller's agent has a general obligation to advise prospective buyers or their brokers that he is acting as the seller's agent, at the earliest possible opportunity. Furthermore, he must provide written disclosure to a buyer of his seller's agency relationship with the seller before he elicits or accepts confidential information concerning the buyer's real estate needs, motivation or financial qualifications. This disclosure is not required prior to merely making a bona fide "open house" showing, engaging in preliminary conversations or "small talk" concerning price range, discussing location and property styles, or responding to general factual questions from a potential buyer concerning properties which have been advertised for sale. Showing a Property Quiz (61)

With regard to property measurements, a broker who lists residential property 1. is required to measure the square footage of the property himself. 2. is responsible for accurately reporting the source of any stated square footage in a timely manner. 3. is responsible for mismeasurement by others. 4. must have exact measurements, if he performs the measurements.

2. is responsible for accurately reporting the source of any stated square footage in a timely manner. A broker who lists residential property is not required to measure the square footage of the property himself, but is responsible for accurately reporting the source of any stated square footage in a timely manner. Because a broker may not provide information from sources known to be unreliable, he is responsible for noticing indications pointing to obvious mismeasurement by others. If a broker does measure a property, his measurements do not have to be exact, but he must try to measure accurately and calculate competently in a manner that is not misleading; disclose the standard, methodology or manner in which the measurement was taken; and advise the parties that the measurement is for purposes of marketing and is not a measurement for loan, valuation, or any other purpose, and if exact square footage is a concern, the property should be independently measured. Brokerage Relationships Quiz (66)

Loan pre-approval is more difficult to attain than pre-qualification. It 1. indicates the buyer qualifies for a home loan, the maximum amount for which he qualifies, and the programs for which he may qualify. 2. guarantees that the lender will approve the loan once the buyer is ready to make an offer on a specific house. 3. does not include an assessment of the buyer's credit rating or an analysis of the borrower's ability to buy a home. 4. is contingent on a final check of the buyer's income and credit prior to closing and the lender's approval of the house following the title search, appraisal, and, in some cases, a survey.

1. indicates the buyer qualifies for a home loan, the maximum amount for which he qualifies, and the programs for which he may qualify. Loan pre-approval is granted only after a careful review of the prospective buyer's income, expenses and credit report. It indicates the buyer qualifies for a home loan, the maximum amount for which he qualifies, and the programs for which he may qualify. Loan pre-qualification does not include an assessment of the buyer's credit rating or a thorough analysis of his ability to buy a home. Final approval is contingent on a final check of the buyer's income and credit prior to closing and the lender's approval of the house following the title search, appraisal, and, in some cases, a survey. The Bumpy Road of Closing Quiz (381)

A listing broker 1. is always the broker listing the seller's property for sale. 2. is always a seller's agent. 3. cannot be a transaction-broker assisting the seller. 4. may act as a transaction-broker assisting the seller and as an agent of the buyer.

1. is always the broker listing the seller's property for sale. The listing broker is the broker listing the seller's property for sale. He may be a seller's agent or a transaction-broker assisting the seller, with the possibility of also assisting a buyer who is not represented. A broker may not be an agent of one party and a transaction-broker assisting the other party in a transaction. Showing a Property Quiz (61)

One of the most important considerations when pursuing continuing education credits is to assure that the course 1. is approved by the Real Estate Commission. 2. is approved by the employing broker. 3. does not duplicate a topic already covered in another course. 4. is taught in a classroom.

1. is approved by the Real Estate Commission. Perhaps the most important consideration when pursuing continuing education credits is to assure that the Commission has approved the course under consideration. Employing broker approval is not required, and courses may cover the same area as other courses taken. Additional Educational Sources Quiz (949)

Independent contractors can be subjected to all of the following EXCEPT 1. sales quotas. 2. requirements for floor time. 3. required attendance at training sessions and required continuing education courses. 4. required compliance with procedures established in a policies and procedures manual.

1. sales quotas. Independent contractors cannot be subjected to sales quotas, but they can be subjected to requirements for floor time, attendance at training sessions and required continuing education courses, compliance with procedures established in the policies and procedures manual, and compliance with all real estate laws and rules and regulations. Entering the Field Quiz (251)

An employing broker has a responsibility to 1. suggest continuing education programs and courses to employed licensees. 2. provide continuing education to all employed brokers with no more than two years experience. 3. to provide only Commission-approved training to employed brokers. 4. conduct sales and goal setting training for employed brokers.

1. suggest continuing education programs and courses to employed licensees. It is the employing broker's job to suggest continuing education programs and courses to the employed licensee, taking into consideration the licensee's interests, so he makes good use of the time he dedicates to continuing education. It is also his job to provide training, not continuing education, to a new licensee. Additional Educational Sources Quiz (949)

The effect of an escalation clause in an offer is that 1. the final offer may be above market value. 2. if the offer is the only one, it will be at the cap price. 3. if other offers have escalation clauses, all offers must be resubmitted. 4. the offer will not be increased, if based on a comparison of other terms, the offer is better than the others.

1. the final offer may be above market value. An escalation clause in a offer provides that the purchase price will be $X higher than the highest competing offer, not to exceed a cap. The effects of an escalation clause are: the offer will be the highest offer up to the cap amount; the final offer may be above market value; if it is the only offer, it will be at the initial price; if all other offers lack escalation clauses, the offer will be $X above the highest competing offer even if it may have been selected based on a comparison of other terms, such as contingencies; if other offers have escalation clauses, the offer with the highest cap will prevail; and, the seller might use the cap to make a counterproposal at or near the cap price. Preparing and Presenting an Offer Quiz (379)

A customer in a real estate transaction is 1. the party with whom the broker has no brokerage relationship. 2. any party with whom the broker has a brokerage relationship. 3. a party with whom the broker has a transaction-broker relationship. 4. the party who has employed the broker to be his agent.

1. the party with whom the broker has no brokerage relationship. A customer in a real estate transaction is the party with whom the broker has no brokerage relationship. If the broker represents only the seller, it is the buyer. If the broker represents only the buyer, it is the seller. Showing a Property Quiz (61)

If a promissory note is used as earnest money 1. the seller must be informed of its due date in the contract or by a copy of the note attached to the contract. 2. the due date is usually upon closing. 3. it must be held by the seller. 4. it must be deposited in a trust account.

1. the seller must be informed of its due date in the contract or by a copy of the note attached to the contract. If a promissory note is used, the seller must be informed of its due date in the contract or by a copy of the note attached to the contract. Often a promissory note will be due within a specified number of days after acceptance. However, the due date should not be upon closing, as this would make the note uncollectible if the transaction does not close. Failed Transactions Quiz (923)

A closing statement is an accounting of the funds received and disbursed in a real estate transaction. It must include 1. the total purchase price of the property. 2. itemization of all adjustments, money, or things of value received or paid, showing to whom each item is credited and/or to whom each item is debited. 3. the legal description of the property. 4. the address of the listing broker.

1. the total purchase price of the property. A closing statement must include the date of closing; the total purchase price of the property; itemization of all adjustments, money, or things of value received or paid, showing to whom each item is credited and/or to whom each item is debited; the dates of any adjustments (proration), if not the same as the date of the closing; the balances due from the respective parties to the transaction; and the names of the payees, makers, and assignees of all notes paid or made or assumed. Closing the Transaction Quiz (918)

The rule providing that only the first broker to show the property to the buyer was entitled to a commission was the 1. threshold rule. 2. procuring cause rule. 3. abandonment rule. 4. open listing rule.

1. threshold rule. Formerly, many jurisdictions followed a threshold rule. This provided that only the first broker to escort the buyer across the threshold (i.e., who showed the property to the buyer first) was entitled to a commission. Brokerage Relationships Quiz (66)

When the seller gives a buyer a deed to property, 1. the deed becomes valid upon recording. 2. itemization of all adjustments, money, or things of value received or paid, showing to whom each item is credited and/or to whom each item is debited. 3. the deed is void until it is recorded. 4. the buyer can provide actual notice of ownership by recording the deed.

2. itemization of all adjustments, money, or things of value received or paid, showing to whom each item is credited and/or to whom each item is debited. A deed conveys title when delivered to a buyer, even though it is not recorded. The purpose of recording is to protect the buyer against a second sale of the property from the same seller. The first deed recorded will generally prevail over unrecorded deeds and later recorded deeds purporting to transfer the same property from the same seller, for the purpose of establishing ownership. When the deed is recorded, the public is assumed to know about it. This is called constructive notice (not actual notice). Closing the Transaction Quiz (918)

All of the following are primary forms of ADR EXCEPT 1. negotiation. 2. litigation. 3. mediation. 4. arbitration.

2. litigation. The primary forms of Alternative Dispute Resolution (ADR) are: negotiation, mediation and arbitration. These are alternatives to litigation (a lawsuit). Failed Transactions Quiz (923)

For a new broker with few contacts in an area, the best method of finding potential clients is often 1. expired listings. 2. open houses. 3. FSBOs. 4. cold-calling.

2. open houses. For the new broker with limited experience and few contacts in an area, the open house is often the best method of finding potential clients. It allows the broker to meet persons in the market for a property to buy and/or sell, in a less pressured environment than that presented when soliciting FSBOs or expired listing owners. Developing a Market Quiz (55)

Substitution as it relates to the Sales Agreement 1. refers to substitution of buyers. 2. refers to replacing a fixture or personal property included in the sale, with similar items. 3. is a common law concept that allows a seller to replace any personal property included in the sale, with similar items. 4. is a common law concept that allows a seller to replace any fixture included in the sale, with a similar item.

2. refers to replacing a fixture or personal property included in the sale, with similar items. Substitution is replacement of a fixture or personal property with a similar item. Language in the sales agreement for an existing home does not provide for substitution. Preparing and Presenting an Offer Quiz (379)

The best means of discovering an expired listing is to 1. visit properties that have been listed to see if the for sale sign is still up. 2. research the data available in the MLS. 3. call the listing broker. 4. call the seller each week to see if the property is still listed.

2. research the data available in the MLS. The local MLS is the best source for discovering expired listings. It usually allows its members to access a list of expired listings each day, and obtain such important information as the seller's name, contact information, the type of home, the seller's asking price, and any price reductions that have taken place. Developing a Market Quiz (55)

A group of people over which the broker has some influence or in which he carries some weight is called a 1. farm area. 2. sphere of influence. 3. marketing area. 4. prospecting jurisdiction.

2. sphere of influence. A sphere of influence is a group of people over which the broker has some influence or in which he carries some weight. Developing a Market Quiz (55)

The Sales Agreement must clearly show 1. the name of the previous seller. 2. the party who is to hold the earnest money deposit. 3. a copy of the deed to the property. 4. the amount of the annual property taxes.

2. the party who is to hold the earnest money deposit. The Sales Agreement must clearly state the form of the earnest money deposit (e.g., cash, check or promissory note). It provides a space to designate the form of the earnest money. It must also clearly identify the earnest money holder, i.e., the party who is to hold the earnest money deposit. Failed Transactions Quiz (923)

The Commission-approved sales agreement provides that 1. if the buyer does not object to an unsatisfactory title condition revealed by these documents or by his physical inspection of the property by the Off-Record Matters Deadline, he accepts the property subject to any rights under such items. 2. upon receipt of proper notice of the unmerchantability of title or other unsatisfactory title conditions from the buyer, the seller must use reasonable efforts to correct the objectionable items prior to closing, and bear any nominal expense to do so. 3. the seller need not disclose off-record matters. 4. the seller need not correct defects to the title.

2. upon receipt of proper notice of the unmerchantability of title or other unsatisfactory title conditions from the buyer, the seller must use reasonable efforts to correct the objectionable items prior to closing, and bear any nominal expense to do so. If the buyer does not object to an unsatisfactory title condition revealed by these documents or by his physical inspection of the property by the "Off-Record Matters Objection" Deadline (not the "Off-Record Matters" Deadline), he accepts the property subject to any rights under such items. Once the seller has received proper notice of the unmerchantability of title or other unsatisfactory title conditions from the buyer, he must use reasonable efforts to correct the objectionable items prior to closing, and bear any nominal expense to do so. If he fails to correct those items to the buyer's satisfaction by the time of closing, the sales agreement is terminated. However, the buyer can waive his objections by the time of closing. The Bumpy Road of Closing Quiz (381)

Employing brokers are required to provide training and supervision of brokers 1. for as long as they are employed by the employing broker. 2. with less than two years of experience. 3. with less than five years experience. 4. for at least their first six months.

2. with less than two years of experience. Employing brokers are required to provide training and supervision of new brokers (those with less than two years of experience). Entering the Field Quiz (251)

Federal do-not-call restrictions would allow a real estate company to continue to contact the client for up to ___ months after the transaction is completed. 1. 3 2. 12 3. 18 4. 24

3. 18 A real estate company would have an established business relationship with an existing client/customer, and therefore could make calls to such a person. It could continue to contact the client for up to 18 months after the transaction is completed, provided the client does not request that the broker not call. Developing a Market Quiz (55)

Which of the following is one of the principal methods of organizing transaction files and records? 1. File each transaction by last name of the seller 2. File each transaction in sequence of street address 3. Assign a permanent number to the file as an offer is written, whether it fails or closes 4. File each transaction by the last name of the listing or selling broker

3. Assign a permanent number to the file as an offer is written, whether it fails or closes The two principal methods of organizing business files and records, whether by hand or by computer, are: number each file as an offer is written, and do not separate failed transactions from those that close; or use an interim numbering system, and assign a permanent number once it is known whether a transaction has failed or closed. Recordkeeping Summary Quiz (942)

A summary legal proceeding that determines whether the owner is entitled to possession of a particular property is called 1. notice to quit. 2. interpleader. 3. FED. " Forcible Entry and Detainer" 4. ODR.

3. FED. " Forcible Entry and Detainer" Forcible Entry and Detainer (FED) is a summary legal proceeding that determines whether the owner is entitled to possession of a particular property. Failed Transactions Quiz (923)

Which of the following types of courses will qualify for continuing education credit? 1. Sales or marketing meetings conducted in the general course of a real estate brokerage practice 2. Orientation, personal growth, self-improvement, self-promotion or marketing sessions 3. Real estate marketing principles 4. Motivational meetings or seminars

3. Real estate marketing principles The following types of courses will not qualify for continuing education credit: sales or marketing meetings conducted in the general course of a real estate brokerage practice; orientation, personal growth, self-improvement, self-promotion or marketing sessions; motivational meetings or seminars; or examination preparation or exam technique courses. Approved topics include: real estate law, property exchanges, real estate contracts, real estate finance, real estate appraisal, real estate closing, real estate ethics, condominiums and cooperatives, real estate time-sharing, real estate marketing principles, real estate construction, land development, real estate energy concerns, real estate geology, water and waste management, commercial real estate, real estate securities and syndications, property management, real estate computer principles, brokerage administration and management, and agency. Additional Educational Sources Quiz (949)

The effect of a tri-party agreement is that 1. the closing agent unconditionally guarantees the buyer's check. 2. the buyer, seller and lender agree to acceptance of the funds. 3. a financial institution unconditionally guarantees the lender's check. 4. the lender agrees to accept the buyer's personal check.

3. a financial institution unconditionally guarantees the lender's check. A tri-party good funds agreement is between a mortgage company, its warehouse lender and a title company. It allows residential real estate transactions to be closed using mortgage company checks, as the warehouse lender guarantees the mortgage company's check. Preparing and Presenting an Offer Quiz (379)

When it comes to title, a buyer (and his lender) will not require 1. an examination of the title to the property and a report on the state of the title that is as exact as possible. 2. removal of liens, encumbrances or other title defects affecting merchantability that are disclosed by report or otherwise. 3. a list of all the previous owners. 4. assurance that the buyer will not be responsible for title defects not reported.

3. a list of all the previous owners. When it comes to title, a buyer (and his lender) will demand an examination of the title to the property and a report on the state of the title that is as exact as possible; removal of liens, encumbrances or other title defects affecting merchantability that are disclosed by report or otherwise; and assurance that the buyer will not be responsible for title defects not reported. The Bumpy Road of Closing Quiz (381)

Components of a broker's plan of action include all of the following EXCEPT 1. identifying sources of business. 2. identifying tactics to be used to help build his business. 3. analyzing the general status of the local economy. 4. updating and increasing one's education, skills and knowledge.

3. analyzing the general status of the local economy. A plan of action is designed to reach desired outcomes. It involves an overall marketing strategy identifying sources of business and tactics used to help build the business; and personal development (updating and increasing education, skills, knowledge and community involvement, modifying the business plan, and adding or developing materials, systems, or support staff in order to reaching one's potential). Entering the Field Quiz (251)

The Colorado Real Estate Commission 1. has no authority to investigate and discipline a broker for his conduct in a real estate transaction in which he was the seller. 2. has authority to investigate and discipline a broker for his conduct in a real estate transaction, in which he was the seller, but not one in which he was the buyer. 3. could discipline a broker for failing to disclose a known defect in his own property that he is selling. 4. could discipline a broker for refusing to make repairs requested by the purchaser of his home.

3. could discipline a broker for failing to disclose a known defect in his own property that he is selling. In the Colorado Court of Appeals' Seibel decision, the Court ruled that the Colorado Real Estate Commission can investigate and discipline licensees for violations of the rules and regulations regarding conduct relating to their personal involvement in a real estate transaction in which they did not represent anyone but themselves. Matters the Commission might investigate and for which it might administer discipline would include a broker failing to disclose a known defect if he were the seller, or a purchasing broker failing to disclose his license status or providing fraudulent information on a loan application. Brokers do not have to make repairs unless they agreed to do so. Brokerage Relationships Quiz (66)

A holdover provision in a listing entitles a listing broker to his commission if the property is sold 1. anytime after the listing expires to a person with whom he had negotiated during the listing period. 2. during the holdover period to a person with whom he had negotiated during the holdover period. 3. during the holdover period to a person with whom he had negotiated and whose name he submits to the seller, in writing, during the listing period. 4. during the holdover period to a person with whom he had negotiated by another licensed brokerage firm acting under an exclusive listing agreement.

3. during the holdover period to a person with whom he had negotiated and whose name he submits to the seller, in writing, during the listing period. The holdover provision entitles a listing broker to his commission if the property is sold within the holdover period to anyone with whom he had negotiated and whose name he submits to the seller, in writing, during the listing period, or any extension of that period. However, the seller would owe no commission under this provision if a commission is earned by another firm acting under an exclusive agreement entered into during the holdover period. Brokerage Relationships Quiz (66)

The type of insurance that insures a broker against claims for mistakes occurring in the course of his work as a broker is 1. malpractice insurance. 2. general liability insurance. 3. errors and omission insurance. 4. employee dishonesty insurance.

3. errors and omission insurance. An errors and omissions (E&O) policy insures a broker against claims made against him for mistakes occurring in the course of his work as a broker. Entering the Field Quiz (251)

An objective toward which an individual or group directs its efforts defines a 1. vision. 2. mission statement. 3. goal. 4. plan.

3. goal. A goal is an objective toward which an individual or group directs its efforts. Entering the Field Quiz (251)

An employing broker is subject to disciplinary proceedings as a result of unlawful conduct of an employed licensee 1. anytime the licensee was acting as an agent for a client. 2. who was acting as a principal in a private real estate transaction. 3. if the employing broker had been negligent in the supervision of that licensee. 4. if the broker does not use a Commission approved form.

3. if the employing broker had been negligent in the supervision of that licensee. An employing broker is not subject to disciplinary proceedings as a result of the unlawful conduct of an employed licensee, unless the employing broker had actual knowledge of the unlawful conduct or had been negligent in the supervision of that licensee. Brokerage Relationships Quiz (66)

A seller's agent must disclose all adverse material facts actually known by him to a nonrepresented buyer in a transaction. Such adverse material facts would include 1. the presence of sex offenders in the area. 2. noise from neighboring properties or the street. 3. periods of ground water contamination. 4. the death of one or more persons in the property.

3. periods of ground water contamination. A seller's agent must disclose all adverse material facts actually known by him to a nonrepresented buyer in a transaction. Such adverse material facts would include those pertaining to the title of the property or the physical condition of the property, as well as any material defects in the property or environmental hazards (such as periods of ground water contamination) legally required to be disclosed. They would not include psychological factors, such as the presence of sex offenders in the area, noise from neighboring properties or the street, the lack of effectiveness or over-aggressiveness of the homeowners association, the death of one or more persons in the property, the crime rate in the area, or the occurrence of crimes in the property. Showing a Property Quiz (61)

A factor that a seller needs to disclose to a buyer is the 1. over-aggressiveness of the homeowners association. 2. occurrence of crimes in the property. 3. presence of lead based paint. 4. a sex offender living in the area.

3. presence of lead based paint. Psychological factors include the presence of sex offenders in the area, noise from neighboring properties or the street, the lack of effectiveness or over-aggressiveness of the homeowners association, the death of one or more persons in the property, the crime rate in the area, or the occurrence of crimes in the property. They do not affect the title or physical condition of the property and need not be disclosed. Showing a Property Quiz (61)

The satisfactory home inspection report contingency in the Commission-approved sales agreement provides that 1. the sales agreement is contingent on the seller making therefers to replacing a fixture or personal property included in the sale, with similar items repairs cited in an inspection report. 2. the transaction is terminated unless the buyer notifies the seller of his approval of the report in writing by a set date. 3. the buyer can give the seller an opportunity to negotiate a settlement regarding correction of problems within a set time, or the deal is terminated. 4. the transaction is terminated if there are required repairs.

3. the buyer can give the seller an opportunity to negotiate a settlement regarding correction of problems within a set time, or the deal is terminated. The satisfactory home inspection report contingency makes the agreement contingent on the buyer receiving a satisfactory inspection report. It requires the buyer to notify the seller in writing by a set date, or the contingency is waived. The buyer does have the option of giving the seller notice of problems and opportunity to negotiate a settlement regarding correction of problems within a set time, or the transaction is terminated. Preparing and Presenting an Offer Quiz (379)

Generally, a closing is attended by all of the following EXCEPT 1. the buyer and the seller. 2. the closing agent. 3. the lender. 4. the brokers of the buyer and seller.

3. the lender. Generally, the buyer, seller, their respective brokers, and the closing agent will attend the closing. The lender will be available by phone. Closing the Transaction Quiz (918)

All of the following should be kept by the broker EXCEPT 1. correspondence and invoices. 2. records that back up his journal entries. 3. the loan application. 4. the new loan statement.

3. the loan application. A broker is not required to obtain and retain copies of existing public records, title commitments, loan applications or lender-required disclosures. It is advisable for a broker to retain relevant correspondence and invoices and any records that back his journal entries. The Commission has stated that the payoff statement and new loan statement monetarily affect the settlement statement and should be retained by the broker concerned. Recordkeeping Summary Quiz (942)

An independent contractor agreement should address all of the following EXCEPT 1. the obligations of the employing broker and employed broker to each to the other. 2. fee-splitting arrangements. 3. work schedules. 4. any rights of the employed broker to commissions resulting from any existing buyer or seller representation agreements if he leaves the company.

3. work schedules. For tax purposes, the employing broker will require the employed broker to sign an independent contractor agreement. This agreement should address the obligations of each to the other, fee-splitting arrangements, and any rights of the broker to commissions resulting from any existing buyer or seller representation agreements if he leaves the company. The employing broker would establish work schedules for employees, not independent contractors. Entering the Field Quiz (251)

Commission rules require that each licensee complete how many hours of continuing education? 1. Eight hours each year 2. 12 hours each year 3. 24 hours each year 4. 24 hours prior to each three-year license renewal

4. 24 hours prior to each three-year license renewal The rules require that each licensee complete 24 hours of continuing education courses (or re-pass the licensing examination) prior to each three-year license renewal. Additional Educational Sources Quiz (949)

After settlement, a broker must keep copies of which of the following relating to the transaction? 1. Existing public records 2. Title commitments 3. Lender-required disclosures 4. Disclosures of brokerage relationships

4. Disclosures of brokerage relationships Disclosures of brokerage relationships are among the documents that are retained in the transaction file. Brokers are not required to obtain and retain copies of existing public records, title commitments, loan applications, lender-required disclosures, or related affirmations from independent third party closing entities after the settlement date. Recordkeeping Summary Quiz (942)

FSBOs can be a tremendous source of listings. With regard to these properties which of the following is true? 1. Most owners of FSBOs will immediately stop trying to sell their property themselves if they are shown advantages to listing with a broker. 2. About 25% of FSBOs eventually end up listed with brokers. 3. Most FSBO owners would have listed their property if they had known of the services provided by brokers. 4. It is usually quite difficult to convince the FSBO to list with a broker until he has tried to market the property himself.

4. It is usually quite difficult to convince the FSBO to list with a broker until he has tried to market the property himself. FSBOs are a tremendous source of listings. The majority of these properties will eventually be listed with a broker. However, the seller probably has no appreciation for the value of a broker's services, and it is usually quite difficult to convince the FSBO to list with a broker until he has tried to market the property himself. Developing a Market Quiz (55)

With regard to duplicate copies of sales contracts, which of the following is true? 1. A broker must provide duplicate copies of the sales contract to all parties who sign it, within three business days. 2. A duplicate copy can be a legible photocopy or carbon copy, but not a facsimile. 3. A duplicate copy can be an electronic copy only if it contains an original signature. 4. The broker must retain a duplicate copy of the contract in his transaction file for possible future inspection by the Commission.

4. The broker must retain a duplicate copy of the contract in his transaction file for possible future inspection by the Commission. A broker must immediately provide duplicate copies of the sales contract to all parties who sign it. A duplicate copy can be a legible photocopy, carbon copy, or facsimile, or an electronic copy that contains a digital or electronic signature. The broker must retain a duplicate copy of the contract in his transaction file. Preparing and Presenting an Offer Quiz (379)

Which of the following would be true for a broker setting goals? 1. The number of contacts made is not a measurable goal. 2. Group, association, and activity involvement would be part of a plan, but not an actual goal. 3. Personal time for family, relationships and leisure is not material to proper goal-setting. 4. The number of homes shown can be a valid and useful goal.

4. The number of homes shown can be a valid and useful goal. Categories of goals for real estate brokers include such items as number of contacts made; number of listing appointments; number of listings obtained; number of homes shown; number of homes sold; homes bought, and their total value, by represented or assisted buyers; referrals out; income; group, association, and activity involvement; and personal (family, relationships, leisure). Entering the Field Quiz (251)

One of the most prevalent alternatives for a physical layout of a real estate office is 1. a shared desk, with brokers sharing an assigned desk. 2. a standing counter, with work space allocated to a counter along the walls. 3. team desks, with brokers using whatever desk is available when they go to the office. 4. a large, open community area with separate desks. The most prevalent alternatives for a physical layout of a real estate office are small individual or shared offices or closed areas (i.e., cubicles), and the large, open community area with separate desks.

4. a large, open community area with separate desks. The most prevalent alternatives for a physical layout of a real estate office are small individual or shared offices or closed areas (i.e., cubicles), and the large, open community area with separate desks. Entering the Field Quiz (251)

In a real estate transaction 1. a seller's agent may be an agent of the seller and a transaction broker for the buyer 2. a buyer's agent may be an agent of the buyer and a transaction broker for the seller. 3. a transaction-broker is an agent or advocate for the interests of both parties. 4. a transaction-broker may assist one of the parties without being an agent or transaction-broker for the other.

4. a transaction-broker may assist one of the parties without being an agent or transaction-broker for the other. In any real estate transaction, a seller's agent represents only the seller, a buyer's agent represents only the buyer, and a transaction-broker assists one or more parties by acting as an intermediary, partaking in group discussions, negotiation, contract terms, and the closing, without being an agent or advocate for the interests of any party. A broker may not be an agent of one party and a transaction-broker assisting the other party in a transaction. Showing a Property Quiz (61)

All of the following are common law implied new home warranties EXCEPT 1. the home is built in a workmanlike manner. 2. the home is fit for its particular purpose. 3. the home has been built according to local building codes and law. 4. all repair needs are covered for one year.

4. all repair needs are covered for one year. Purchasers of new homes in Colorado are generally protected by the following common law implied warranties: The home has been built according to local building codes and laws, it is fit for its particular purpose (which is a residence), and has been built in a workmanlike manner. There is no one year limit on the warranty, and all repairs would not be covered under the implied warranties. Brokerage Relationships Quiz (66)

The Colorado Real Estate Commission-approved closing instructions form 1. is called Closing Instructions and Settlement Statement. 2. should be completed and signed by the parties when the transaction is sent to closing. 3. is delivered to the closing agent at the time of the closing. 4. appoints a closing agent and outlines responsibility for paying closing fees.

4. appoints a closing agent and outlines responsibility for paying closing fees. Colorado Real Estate Commission-approved closing instructions are in a form entitled Closing Instructions and Earnest Money Receipt. This form should be completed and signed by the parties when a contract is accepted, and then delivered to the closing agent in advance of closing. It appoints a closing agent, outlines responsibility for paying closing fees, and generally authorizes the title company to gather all necessary information to close the transaction; to prepare, deliver and record all necessary documents, receive and disburse funds; and to prepare a closing statement. Closing the Transaction Quiz (918)

The Colorado Real Estate Manual 1. is published quarterly. 2. provides reminders about issues such as license renewal and continuing education requirements. 3. contains summaries of disciplinary cases. 4. contains laws, rules, and Commission position statements.

4. contains laws, rules, and Commission position statements. Colorado Real Estate News is published quarterly and provides reminders about issues such as license renewal and continuing education requirements and summaries of disciplinary cases. The Colorado Real Estate Manual contains laws, rules, Commission position statements, forms and discussions of many issues with which brokers are confronted. Additional Educational Sources Quiz (949)

In filling out a Commission-approved form, advising the parties as to its effect and conveying an offer to the seller, a broker creates 1. an agency relationship with a party. 2. a transaction-broker relationship with a party, if he is not that party's agent. 3. an illegal act by the broker. 4. does not of itself create an agency relationship.

4. does not of itself create an agency relationship. Any broker involved with a transaction may fill out the Commission-approved form, advise the parties as to its effect and convey the offer to the seller. Performing these ministerial acts does not create an agency relationship or transaction-broker relationship with any parties if such a relationship did not otherwise exist, so long as appropriate disclosures are made. However, the broker must advise the parties to the transaction that the form has important legal consequences and that they should consult with legal counsel before signing it. Preparing and Presenting an Offer Quiz (379)

A broker who prospects by mail should 1. mail brochures on a regular basis. 2. mail inexpensive fliers or postcards on an occasional basis. 3. mail to selected geographic areas and then follow up with a visit for maximum impact. 4. follow a mailing with phone calls to persons not on a no-call list.

4. follow a mailing with phone calls to persons not on a no-call list. If the marketing plan is to mail large numbers of brochures, postcards or fliers, the mailing should be on a regular basis; probably once a month. A broker might consider mailing one carefully targeted round of brochures from time to time, but regular mailings should be in the form of inexpensive fliers or postcards. Keeping in mind federal laws regarding no-call lists, the broker should also follow up with a phone call for maximum impact. Developing a Market Quiz (55)

When David applied for a loan to buy his home, he agreed to have private mortgage insurance (PMI) because 1. it is required for all conventional loans. 2. it provides for the insurer to make his mortgage payment for him in the event he is disabled and unable to make the payment. 3. the lender will pay the added cost of the insurance premium. 4. he wanted to get a loan with a high loan-to-value ratio.

4. he wanted to get a loan with a high loan-to-value ratio. Private mortgage insurance (PMI) insurance protects the lender in the event the borrower defaults and the lender has to foreclose. With this insurance a conventional lender can make a higher loan-to-value loan, often up to 95% of a property's appraised value, but the borrower has the added cost of the insurance premium. The Bumpy Road of Closing Quiz (381)

Jeff announced he wanted to move into his new home before the closing, because the lender was unable to get the loan funded by the closing deadline. The listing broker should advise the seller that 1. this would be a good idea because the buyer would pay all of the property expenses and the seller might even make a profit. 2. while not the best arrangement for the seller, it would be a nice gesture to help the buyer. 3. the buyer may be removed without following the eviction process, if there is no written lease. 4. if he does allow an early occupancy, he should have an attorney draft a separate lease agreement to be signed by the buyer.

4. if he does allow an early occupancy, he should have an attorney draft a separate lease agreement to be signed by the buyer. A seller should be advised prior to agreeing to an early occupancy that it is generally not a good idea because the deal might not close and the buyer might have to be evicted. If the seller does allow an early occupancy, he should have an attorney draft a separate lease agreement setting out the specific terms of the early occupancy, including the rent amount, date of occupancy, lease term, termination procedures, and provisions dealing with the failure to close (e.g., the lease will be terminated and the buyer will have ten days to move out). The Bumpy Road of Closing Quiz (381)

A notice to quit is a notice of termination of the lease. Which of the following is true regarding this notice? 1. It can only be given with proof of cause. 2. It must be served on the tenant at least seven days before the end of a tenancy that is for one week or longer but less than one month. 3. it is generally given after an FED. 4. it can be given without proof of cause.

4. it can be given without proof of cause. A notice to quit is a notice of termination of the lease. It can be given without proof of any cause. It must be served on the tenant not less than three days before the end of a tenancy that is for one week or longer but less than one month. Failed Transactions Quiz (923)

A title commitment 1. is a title policy. 2. is a notice that a policy has been issued. 3. should have no exceptions listed. 4. preliminary in nature. A title commitment is not a title policy. The commitment is preliminary in nature and indicates only that the title insurer is willing to issue a policy regarding the subject property, on the stated terms, with the listed exceptions, if the policy is requested, the seller is paid, and the proper documents are recorded. It is not a notice that a policy has been issued.

4. preliminary in nature. A title commitment is not a title policy. The commitment is preliminary in nature and indicates only that the title insurer is willing to issue a policy regarding the subject property, on the stated terms, with the listed exceptions, if the policy is requested, the seller is paid, and the proper documents are recorded. It is not a notice that a policy has been issued. Closing the Transaction Quiz (918)

If brokerage transaction documents are kept on computer disk, backups must be made at least 1. once a month. 2. within 24 hours. 3. within 13 hours. 4. regularly.

4. regularly. If any documents are being kept on computer disk, backups must be made regularly, with a hard copy available to the real estate auditors. Recordkeeping Summary Quiz (942)

At a closing for rental property, 1. deposits, fees and prepaid rents are credited in their entirety to the seller at closing. 2. current rents are prorated, so that the buyer would be credited for the portion of rent attributable to the period before closing. 3. cleaning deposits are credited to the seller. 4. rents collected before closing are attributed to the seller.

4. rents collected before closing are attributed to the seller. For rental property, all deposits, fees and prepaid rents should be credited to the buyer and debited to the seller at closing, in their entirety, while current rents would be prorated, so that the buyer would be credited for the portion of rent attributable to the period after closing. Preparing and Presenting an Offer Quiz (379)

In conducting an open house, the broker should do all of the following EXCEPT 1. prepare a data sheet to present to visitors. 2. check to see that there are no safety hazards. 3. plan how to tour the house. 4. require visitors to sign a guest register book.

4. require visitors to sign a guest register book. In conducting an open house, the broker should prepare a data sheet with key facts about the home to present to visitors; arrive early to inspect the house, turn on the lights, raise shades, open curtains, doors and windows, make sure the rooms are neat and clean, and check to see that there are no safety hazards; plan how to tour the house; and, to the extent possible, greet visitors as they arrive and encourage (not require) them to sign a guest register book. Showing a Property Quiz (61)

On a seller's closing statement, the seller's net proceeds are 1. a credit. 2. calculated before prorating expenses with the buyer. 3. calculated by adding the total of the seller's debits to his total credits. 4. the amount that when paid to the seller, will cause the final balance in his account to be zero.

4. the amount that when paid to the seller, will cause the final balance in his account to be zero. The last item calculated in the closing statement is the seller's net proceeds (or the amount the seller will receive from closing), which is a debit, as it is paid out of his account. It cannot be determined until all debits and all credits are established, and the total of the seller's debits (other than the yet to be determined net proceeds figure) is subtracted from his total credits. Payment of the net proceeds to the seller will cause the final balance in his account to be zero. The Bumpy Road of Closing Quiz (381)

The buyer must bring all of the following to closing EXCEPT 1. photo identification. 2. good funds to pay his closing costs (and down payment, if any). 3. proof of homeowner's insurance (if not previously supplied). 4. the lender's Good Faith Estimate of funds the buyer will need at closing to compare to the actual final costs.

4. the lender's Good Faith Estimate of funds the buyer will need at closing to compare to the actual final costs. The buyer must bring to closing photo identification so documents can be notarized, good funds to pay his closing costs (and down payment, if any), and proof of homeowner's insurance (if not previously supplied). Closing the Transaction Quiz (918)

The Commission-approved sales agreement provides that 1. if the buyer does not submit written notice to the seller of the unmerchantability of title or other unsatisfactory title conditions revealed by the title commitment prior to the Title Deadline, the defects will be waived. 2. the seller is obligated to provide the buyer with any documents relating to matters known to the seller that affect title and are not shown by the public records by the Off-Record Matters Objection Deadline. 3. the title deadline is a flexible date. 4. unless the buyer submits written notice to the seller of objections to the title prior to the Title Objection deadline the defects will be waived.

4. unless the buyer submits written notice to the seller of objections to the title prior to the Title Objection deadline the defects will be waived. The Commission-approved sales agreement provides that unless the buyer submits written notice to the seller of the unmerchantability of title or other unsatisfactory title conditions revealed by the title commitment prior to the "Title Objection" Deadline (not the "Title" Deadline), the defects will be waived. The seller is obligated to provide the buyer with any documents relating to matters known to the seller that affect title and are not shown by the public records (e.g., unrecorded easements, leases, rights of first refusal), by the "Off-Record Matters" Deadline. The buyer needs to respond by the "Off-Record Matters Objection" Deadline. The Bumpy Road of Closing Quiz (381)

Which of the following is true of an employed broker with regard to the closing? 1. He must give a copy of the closing statements generated in any transaction to the employing broker immediately following the closing. 2. He must make a copy of the employing broker's commission check prior to giving it to the employing broker. 3. His duties, obligations and responsibilities of his relationship with a buyer or seller extend to the employing broker, as well as to the company that employs him. 4. When engaged in an in-company transaction, he may disclose his client's confidential information to his supervising broker for the purpose of proper supervision.

1. He must give a copy of the closing statements generated in any transaction to the employing broker immediately following the closing. Employed brokers involved in a closing must provide a copy of the closing statements to their employer immediately following the closing. A designated employed broker's duties, obligations and responsibilities of his relationship with a buyer or seller do not extend to the employing broker, to any other broker employed or engaged by that employing broker who has not been designated, or to the firm, partnership, limited liability company, association, corporation or other entity that employs the broker. When an employed broker is engaged in an in-company transaction, he may disclose his client's confidential information to his supervising/managing broker for the purpose of proper supervision, but the supervising broker may not disclose that information without the client's consent or use that information to the client's detriment. Closing the Transaction Quiz (918)

Which of the following correctly describes the handling of earnest money if the transaction fails to close? 1. If no one is at fault for the failure of a transaction to close, the buyer is entitled to return of his earnest money deposit. 2. If the seller breaches the contract or defaults with respect to a particular term of the contract, the buyer will be entitled to return of his earnest money deposit, but is not entitled to other remedies against the seller. 3. If the buyer breaches or defaults with respect to a particular term of the contract, he is entitled to return of his earnest money deposit, but the seller may have other remedies against him. 4. If the transaction fails to close for any reason, the broker is entitled to reimbursement of expenses from the earnest money deposited.

1. If no one is at fault for the failure of a transaction to close, the buyer is entitled to return of his earnest money deposit. If no one is at fault for the failure of a transaction to close, the buyer is entitled to return of his earnest money deposit. If the seller breaches the contract or defaults with respect to a particular term of the contract, the buyer will be entitled to return of his earnest money deposit, and may be entitled to other remedies against the seller. If the buyer breaches or defaults with respect to a particular term of the contract, he will not be entitled to return of his earnest money deposit, and the seller may have other remedies against him. Failed Transactions Quiz (923)

Which of the following correctly describes an earnest money deposit? 1. It is money the prospective buyer deposits to show his good faith intention to carry out the transaction. 2. It is the buyer's consideration for the contract. 3. It is necessary in order to create a binding contract. 4. A broker cannot submit an offer to a seller that does not include earnest money.

1. It is money the prospective buyer deposits to show his good faith intention to carry out the transaction. Earnest money (also called a binder or good faith deposit) is money the prospective buyer deposits at the time he submits a written offer to demonstrate his good faith intention to carry out the transaction. It is not the buyer's consideration and is not needed in order to create a binding contract. Failed Transactions Quiz (923)

Which of the following is true of curb appeal? 1. It is the impression a home makes when one views its visible exterior from the street. 2. It is the impression of the area surrounding the home as seen from the doorstep. 3. It is usually inaccurate as it is only a quick first impression. 4. It has little affect on a buyer's eventual decision to buy or not buy.

1. It is the impression a home makes when one views its visible exterior from the street. Curb appeal is the impression a home makes when one views its visible exterior from the street. It is usually accurate even though it is only a quick first impression. It often has a great affect on a buyer's eventual decision to buy or not buy. Showing a Property Quiz (61)