Contracts And Regulations - 2
None of the above Explanation A licensee must have an active real estate license in order to collect a commission. It is a violation of real estate license law to negotiate a real estate transaction without an active license.
If a licensee negotiates a sale of real estate on behalf of a seller while her license is inactive, she may receive a commission from: Her employing broker The seller Her principal None of the above
She may have her license transferred without charge to another employing broker Explanation Cancelled is not the same thing as terminated; when a licensee has had his license cancelled because his brokers license has been cancelled, no business may be transacted until the license is active again.
If a licensee's license has been canceled because her employing broker's license was canceled: She may have her license transferred without charge to another employing broker She should complete all unfinished transactions before transferring her license to another broker Her license is not impacted since it was the broker whose license is cancelled She must pass the state exam and then join another employing broker
The brokerage retains the records as the company is responsible for maintenance of records Explanation Employing brokers are often salaried employees, they are not always the owner of a brokerage. Just like any company, if an employee leaves a brokerage s/he does not get to take records. The brokerage has legal responsibility for all transaction records and must keep them for at least 4 years. The only time an employing broker would be responsible for record retention would be if the company is shutting down.
If an employing broker leaves a real estate brokerage, what happens to the transaction records? The brokerage retains the records as the company is responsible for maintenance of records The departing broker is personally responsible for delivering all such records to to his/her new brokerage All funds in escrow must be returned to the rightful parties before being re-deposited with the new brokerage The real estate brokerage can dispose of all records acquired while the former employing broker worked for the company
Any verified written complaint Explanation The commission is required by law to investigate all written complaints that have been verified. They MAY investigate a licensee at any time, for any reason, or for no reason.
In Colorado, which of the following must be investigated by the real estate commission? Any verified written complaint At least five percent of all brokers annually Disputes between brokers regarding commission Any licensee accused of a crime
Home for Sale. Suburban location. Contact Judy, ABC Real Estate 303-555-5555 Explanation An ad that does not indicate that the property is offered by a broker and not an owner, is called a blind ad. Religion and maritial status are protected classes.
Judy Moore is a licensee in the employ of ABC Real Estate; she may advertise her listing as: For sale, 4 bedrooms, 2 baths. Close to Schools. Call Judy 555-6543 Home for Sale. Suburban location. Contact Judy, ABC Real Estate 303-555-5555 Home for Sale. Suburban location. Near Catholic schools. Contact Judy, ABC Real Estate 303-555-5555 For sale, 4 bedrooms, 2 baths. Married Couple Only. Contact Judy, ABC Real Estate 303-555-5555
It is agreed in the purchase contract who shall pay this cost Explanation Buyers and sellers can negotiate the cost of the Title Company's fee for closing. They may not be charged for the preparation of the legal documents.
The Title Company charges a fee to effect the closing on behalf of the buyer and seller. Who bears the cost of this? It is agreed in the purchase contract who shall pay this cost The listing broker must pay since he usually chooses the Title Company It is illegal for the Title Company to charge this fee The seller always pays this fee
0.0825 Explanation $825 X 12 = $9900 (Annual Interest) / $120,000 = .0825 or 8 1/4 %
The lender computed the interest for the previous month on a $120,000 mortgage loan balance at $825. What is the rate of interest? 0.07500000000000001 0.07750000000000001 0.0825 0.085
The name of her employing broker Explanation All advertising must include the employing broker's name.
Tina Dooley, a salesperson, ordered this listing in the real estate section of the local phone directory: Tina Dooley, Real Estate Salesperson, Residential Property My Specialty." What additional information must be included? Her street address Her license number The expiration date of her license The name of her employing broker
Must be reported and remitted to the state treasurer Explanation Must be remitted to state treasurer after five years. These funds do not belong to the Broker.
Unclaimed funds held in escrow after five years: May be used by the broker for the annual office party Must be reported and remitted to the state treasurer Should be invested in real estate investment trusts Should be kept indefinitely
No later than the third business day after he is notified of the acceptance of the contract Explanation A real estate broker must account to the buyer and seller for all earnest money. It must be deposited in a trust account no later than three business days after acceptance of the contract, unless the buyer and seller instruct the broker in writing to do something different.
Under the Real Estate Commission rules, when a listing broker receives an earnest money deposit on a residential sales contract, he must deposit the earnest money in his trust account: No later than the third business day after he is notified of the acceptance of the contract No later than the first working day after receipt of the deposit No later than 48 hours after the receipt of the deposit When he is instructed to do so by the seller
12 hours Explanation Within every three year license renewal period, a licensee must complete 12 hours of electives and 12 hours of mandatory continuing education for their next license renewal. The 12 hours of mandatory CE are completed by taking the 4 hour Annual Commision Update class.
What portion of the 24-hour continuing education requirement is to consist of the mandatory credits developed by the Real Estate Commission? 4 hours 8 hours 12 hours All 24 hours are mandatory subjects
Name of the brokerage firm that holds the associate broker's license Explanation All advertising by an associate broker must include the identity of the brokerage firm that holds the associate's license.
What, if anything, must an associate broker include in his/her web site advertising? Name of the brokerage firm that holds the associate broker's license Names of all licensees in the broker's office which the associate broker works The brokerage firms home office that holds the associate's license There is no need for additional disclosures
The broker and the employing broker have joint responsibility to assure that the real estate commission is notified Explanation The licensee and the employing broker have joint responsibility in notifying the real estate commission.
When a broker terminates his affiliation with an employing broker what must be done? All business cards must be returned to the employing broker The broker's license along with a letter of termination must be sent to the real estate commission The broker must give the employing broker an official letter of termination that he or she can send to the real estate commission The broker and the employing broker have joint responsibility to assure that the real estate commission is notified
The broker must notify the commission in a manner acceptable to the commission, or the brokerage license will become inactive Explanation The broker must notify the commission in a manner acceptable to the commission, or the brokerage license will become inactive. Any licensee who does not notify the Commission of an address change will have their license inactivated. When the licensee is also the mama or poppa bear of the office (the employing broker) the penalty goes up. Since an employing broker with an inactive license cannot have licensees reporting to him/her AND a licensee who is not independent cannot have an active licensee without reporting to an employing broker - the effect is catastrophic. Everybody's license in the office is inactive. Here are the applicable statues: From chapter in real estate manual on License Law § 12-61-109, C.R.S. Change of license status - inactive - cancellation. (1) Immediate notice shall be given in a manner acceptable to the commission by each licensee of any change of business location or employment. A change of business address or employment without notification to the commission shall automatically inactivate the licensee's license. § 12-61-110, C.R.S (5) The suspension, expiration, or revocation of a real estate broker's license shall automatically inactivate every real estate broker's license where the holder of such license is shown in the commission records to be in the employ of the broker whose license has expired or has been suspended or revoked pending notification to the commission by the employed licensee of a change of employment.
When an employing broker changes the primary business address: All of the licenses of employed licensees must be sent to the commission for reissue at the correct address This change will be noted at the next license renewal cycle Each employed licensee must notify the commission of the change The broker must notify the commission in a manner acceptable to the commission, or the brokerage license will become inactive
Affiliates licenses are inactive until they are hired by a new employing broker Explanation If the broker's license is suspended, the licenses of all associate brokers will be placed on inactive status until these persons are "hired" by a new broker.
When the license of the sole proprietor is suspended for two years, what is the effect on the affiliated associate brokers? Affiliates' licenses will also be suspended for a two-year period Affiliates' licenses will be revoked, subject to reinstatement after one year Suspension of the proprietor has no effect on the affiliates' licenses Affiliates licenses are inactive until they are hired by a new employing broker
A valid active Colorado broker's license Explanation The only requirement in order to be the broker of record for a corporation is that one have a valid, active Colorado broker's license, and have fulfilled the necessary requirements to be an Independent Broker.
Which of the following is required for a person to be a broker of record for a corporation? A corporate position as a director with voting rights An executive position with the corporation such as president or chief executive officer A valid active Colorado broker's license More than nominal ownership in the corporation
Distribute factual literature prepared by a licensed associate Explanation An unlicensed assistant is allowed to distribute literature, they can chauffeur buyers to a property with the seller's permission as long as no licensed activity is performed and they may complete but not present market analysis.
Which of the following would be permissible for an unlicensed personal assistant? Distribute factual literature prepared by a licensed associate Complete and present a comparative market analysis Answer questions about the seller's motivations as long as the answers are factual Drive potential buyers to a listing and discuss purchase options
Every active Colorado licensee Explanation Errors and omissions insurance coverage is required for every active Colorado licensee. Inactive licensees are not required to carry this insurance, however, they cannot conduct any real estate activities either
Who of the following is required to obtain errors and omissions professional liability insurance? The employing broker only Every active Colorado licensee Active and inactive Colorado licensees Resident Colorado brokers only
All of the above Explanation A trust account ledger and journal must be kept current at all times and the account must be reconciled monthly with the bank statement.
A broker's record-keeping system for his trust account(s) must include the following: A trust account ledger A trust account journal A monthly bank reconciliation worksheet All of the above
Would include: review of documents in preparation for a closing, assistance in preparing contracts, monitoring of transactions from contracting to closing, attending closings, or making sure an experienced licensee attends the closing, being reasonably available for consultation Explanation Review of all new licensees activities is a requirement of a high level of supervision.
A high level of supervision: Is what an employing broker must provide for all licensed persons Would include: review of documents in preparation for a closing, assistance in preparing contracts, monitoring of transactions from contracting to closing, attending closings, or making sure an experienced licensee attends the closing, being reasonably available for consultation Is an employing broker giving leads to new agents to help them get business Is required to fully understand the Zen of real estate and the psychic Karma of computers as another level in transcendence
The licensee's employing broker only Explanation A licensee can only accept compensation from his employing broker.
A licensee may accept compensation from: The licensee's employing broker only The seller or buyer Any licensed real estate broker Any service provider to the transaction
The name of his/her broker is also in the ad Explanation The name of the agent's broker must also be in the ad.
An agent can advertise a property under his or her name if: He/she is a member of a local real estate board He/she personally listed the property The name of his/her broker is also in the ad He/she personally paid for the ad
A certificate of licensing history from the other state's real estate licensing authority Explanation A certificate of licensing history that indicates the licensee's current status. Any complaints and disciplinary actions taken against the individual must accompany an application for a real estate license in a new state.
An applicant for a Colorado real estate license who has been licensed in any other state must file which of the following proofs of that licensure? Photocopy of her license from that state Letter from the last employing broker A certificate of licensing history from the other state's real estate licensing authority
Name and location of the brokerage company that holds the associate's license Explanation All advertising by an employed licensee must include the identity of the brokerage that holds the associate's license. This also applies to internet advertising.
An associate broker has developed a web site. What must he or she include on the site? Name of the home office of the company that holds the salesperson's license and a list of states in which company is licensed Name and location of the brokerage company that holds the associate's license Names of all licensees in the broker's office and the states in which they are licensed License number of the brokerage and a list of current active licensees
The licensee bears the cost for the preparation of legal documents except those prepared by the Seller's or Buyer's attorney Explanation E-37. No fees to licensee/agent for legal document preparation There is no obligation for a licensee to prepare any legal documents as part of a real estate transaction. However, if a licensee or the licensee's agent (editor's note: the Closing Agent is engaged by a licensee and is thus a licensee's agent) prepares any legal document, the licensee or the licensee's agent may not charge a separate fee for preparation of such documents. A licensee shall not be responsible for fees charged for the preparation of legal documents where they are prepared by an attorney representing the purchaser or seller. Costs of closing not related to preparation of legal documents may be paid by the licensee or by any other person. A broker who closes transactions and charges separately for costs of closing not related to the preparation of legal documents must specify the costs and obtain the written consent of the parties to be charged Reference Commission Rule E-37
As to the preparation of legal documents at closing: The licensee bears the cost for the preparation of all legal documents including those prepared by the Seller's or Buyer's attorney The licensee may charge the Seller or Buyer for the cost of preparation The licensee bears the cost for the preparation of legal documents except those prepared by the Seller's or Buyer's attorney The licensee does not pay for the preparation of legal documents
Broker A Explanation A real estate broker is required to keep records (for the Commission) for 4 years.
Broker A is a sole proprietor. He quits business and goes to work under Broker B. Whose responsibility is it to keep Broker A's previous records? Broker A Broker B Real Estate Commission None of the above
It is a violation of commission regulations to accept the money Explanation Cindy acted improperly by cashing the check. It is a violation of commission regulations to accept the money. She may only be paid by her employing broker.
Cindy is an associate broker who received a thank you letter and nice bonus check from the seller of a house several weeks after the closing. Cindy cashed the check because she felt she earned it. Which of the following is true in this situation? Cindy may accept the bonus check because she is licensed as an associate broker Cindy is allowed to accept the money if 30 days have elapsed since the closing It is a violation of commission regulations to accept the money Cindy may accept the money if her broker permits her to do so
Broker to deposit in his trust fund Explanation All earnest money must be deposited in the employing brokers trust account within three business days after acceptance of the contract, unless the buyer and seller instructed the broker, in writing, to do something different.
Deposit money received by a licensee is turned over to the: Seller of the property Real Estate Commission Broker to deposit in his trust fund Seller's attorney
Negotiable between the broker and the seller or buyer Explanation Commissions are always negotiable between the principal and the agent; meaning between the seller or buyer and the broker.
How are real estate commissions determined in Colorado? Set by the real estate commission Set by law Determined by local brokers Negotiable between the broker and the seller or buyer
The license is placed on inactive status Explanation A real estate license will not be renewed if continuing education requirements are not met; the license would be placed on inactive status.
If a licensee fails to complete the continuing education requirements by the renewal date: The license is placed on inactive status The license is cancelled The license is renewed for one 30-day grace period The Commission will review each case individually
