Maryland state exam practice exam

The amount of earnest money is negotiable between the parties, but it must be considered ______.

"reasonable" The amount of earnest money is negotiable between the parties, but it must be considered "reasonable."

In order to maintain the Guaranty Fund, new Maryland licensees pay a one-time fee of ______ into the fund.

$20

New Maryland licensees pay a fee into the Guaranty Fund to help maintain it. What is the amount of the fee?

$20

Janice is the victim of misrepresentation in the sale of her home. Her listing agent gave her poor advice that cost her $62,000. She has tried to recover the cost through several other means, but to no avail. If she files a claim against the Guaranty Fund, what is the maximum amount she could hope to recoup?

$50,000

When a claimant receives an award from the Guaranty Fund, the maximum amount they can receive is ______ for a single transaction.

$50,000

In Maryland, how many hours of approved real estate courses must an individual complete before taking the real estate salesperson exam?

60

Which of the following is an example of self-dealing?

A licensee purchases a listing through his cousin but does not inform the seller.

Which of these describes self-dealing?

A licensee sells her own property without informing all parties that she's licensed. Self-dealing is personal interest in a transaction that's not disclosed. It is illegal for a licensee to engage in the brokerage activities of selling or buying a property without disclosing a personal interest in the transaction to all parties.

According to the Code of Ethics, which of the following statements is most accurate when accepting compensation?

A licensee shall not accept compensation from more than one party to a transaction without the full knowledge and consent of all parties. -Licensees may only accept compensation from more than one party with the full knowledge and consent of all involved parties. As a reminder, compensation goes through the broker and is not given directly to the licensee by the parties involved.

Which of the following statements is true of a material fact?

A material fact would cause a reasonable person to either act or not act, if that fact were known.

Which of these policies is an example of discrimination based on familial status?

A maximum of two adults and up to three children are allowed in each three-bedroom apartment.

Which of the following is true about positive misrepresentation?

A principal was harmed by the misstatement. There are four elements to positive misrepresentation: a false statement must have been made, the person stating it (e.g., the agent) must have known the statement to be false, and another person (e.g., a principal) must have relied on and been harmed by the misstatement.

What's Puffery?

A statement of opinion or exaggeration that's generally understood not to be a statement of fact

What types of advertising fall under the real estate commission's rules and regulations?

Advertising by any means

Which of the following classes are not protected by federal or Maryland fair housing law, but may be protected by local ordinances in Maryland?

Age and lawful income

Which of these policies is discriminatory?

All residents must show a U.S. birth certificate as part of the application process.

______ presides over Maryland Real Estate Commission hearings.

An administrative law judge

For Sale signs on ground rent properties which show the price of the property must also state which of the following?

Annual ground rent plus the full cost of capitalization If these signs are used, they must show the full cost of capitalization in addition to the annual ground rent.

Which of the following statements about latent defects is true?

Any party to a real estate sales transaction who has knowledge of latent defects must disclose them

Samuel, a newly licensed salesperson, just received his pocket card. When is Samuel required to carry the pocket card with him?

At all times when conducting business

Which action could temporarily stop a foreclosure?

Borrower declaring bankruptcy

Which of the following is/are illegal?

Both disparate impact and disparate treatment

Ruthe lost her job last year, and she's fallen three months behind on the mortgage payments for her Baltimore home. She seeks the services of Chuck, a foreclosure consultant. Chuck charges Ruthe $1,000 up front, then disappears and fails to return Ruthe's calls. PHIFA permits Ruthe to ______.

Bring a private legal action against Chuck to recover up to $3,000, as well as reasonable attorney's fees

Faith has started creating her own advertising, but is looking for some guidance on what is and isn't allowed. She's checked state and federal laws, commission regulations, as well as the National Association of REALTORS® Code of Ethics. Where else can she look for reliable information?

Brokerage policy manual

William is a real estate licensee who's preparing a sale agreement that will include an unusual circumstance. What's the best course of action?

CONSULT AN ATTORNEY

Carmen is a new licensee who wants to drum up some business for herself. There are a lot of high-end homes in her area and she would love to cash a commission check for selling one of them. She sees a few for sale signs and thinks perhaps she could convince the sellers to drop their current agent and allow her to represent them. Which of the following is true?

Carmen may not try to persuade sellers to break the contract they have with another agent.

When licensees/escrow holders illegally use money that they received on behalf of the principals, this is known as ______.

Conversion When licensees/escrow holders illegally use money that they received on behalf of the principals, this is known as conversion, and it is illegal.

Mark is the listing agent for a home owned by the Browns. At the open house, a colleague, Brandon, indicates that he has a buyer for the Browns' home. Mark has had numerous interactions with Brandon on other listings, and found that they don't get along. He really doesn't want to work with him on this deal. In order to behave ethically, what can Mark do?

Cooperate with Brandon because it's in the best interest of his clients.

broker Malcolm submits his client's purchase offer, then goes on vacation. When he returns two weeks later, he learns that a counter-offer was submitted and the response date had expired. His client's offer was terminated because he failed to respond on time. This violation is an example of ______.

Demonstrating untrustworthiness or incompetency to act as a real estate broker

Daniel has several properties listed around town. He receives a call from a prospective buyer who is very interested in one of the properties and wants to schedule a showing. What should Daniel do?

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

When a policy negatively impacts a protected class more than it negatively impacts others, this is called what?

Disparate impact When actions or policies cause greater negative consequences for a protected class than for others, it's called disparate impact.

Don, a Maryland licensee, helped Peggy find a home she loved, but there was a sinkhole in the backyard. The seller's agent, Roger, told Don that he and the seller were aware of the sinkhole and it would be repaired. What is Don's ethical responsibility in this case?

Document the information from Roger that the seller was aware of the sinkhole and would repair it.

What happens to ethical complaints about licensees once they are received by the Department of Labor, Licensing and Regulation?

Each complaint is reviewed to determine whether it falls within the commission's jurisdiction.

Which of the following statements about earnest money is true?

Earnest money must be placed in an escrow account within no more than seven business days after the formation of the contract of sale.

Kirby has a listing agreement with Bob. If Kirby or another agent locates the buyer, Kirby gets his listing commission. However, if Bob locates the buyer, Kirby does not earn a commission. What type of listing agreement do they have?

Exclusive agency This is an example of exclusive agency. The key is that if an agent locates the buyer, a listing commission has been earned.

In Maryland, unless a prior business relationship exists, it is illegal to commercially solicit using what means?

Fax machine

Jennifer is a new licensee in Baltimore City, Maryland. In order to abide by fair housing laws, Jennifer must avoid discriminating against members of which of the following protected classes?

Federal-, Maryland-, and Baltimore City-protected classes

In Maryland, the Protection of Homeowners in Foreclosure Act describes the role of and sets guidelines for the actions of ______.

Foreclosure consultants PHIFA defines the role of foreclosure consultants and details what actions they can and cannot do in practice. Penalties for violating the act can be as much as three years in prison or a $10,000 fine.

Gregory is a salesperson at Gardner Homes. Linda is his sponsoring broker. Which of the following best describes what happens with Gregory's pocket card?

Gregory must carry his pocket card at all times.

Tom is an unlicensed individual helping his sister, Katie, find a new house, in return for a trip to Europe. Which of the following activities can Tom legally perform?

He can search real estate sites and resources to find available homes in the area.

Identify which of these actions is a prohibited activity for a real estate licensee in Maryland.

Increasing the rent and security deposit for a family with seven children.

Which of the following is an unauthorized practice of law?

Interpreting the legal consequences of a client's actions

Isabelle just took on a new listing, in which the owner is selling because a new freeway is being built right behind the house. The owner is concerned about the noise and other activity the freeway will bring, but doesn't want prospective buyers to know this. Which action best demonstrates good faith in this scenario?

Isabelle tells the owner that this is a material fact related to the property that must be disclosed to prospective buyers, or Isabelle will not take the listing.

Janet is a twenty-something salesperson at a small country brokerage. She enjoys her job but longs for the city life. She would like to change brokerages. Which of the following is true?

Janet will need to submit a transfer application to the commission.

In which of these scenarios would the consumer need a real estate license?

Jessie is searching for a new home for a friend moving into town, who will compensate her 2% of the sale price for her time and effort.

Which of the following describes Maryland?

Lien theory state

Linda is the sponsoring broker at Gardner Homes. Which of the following best describes what happens with her license?

Linda displays her license at Gardner Homes.

According to the NAR Code of Ethics, what responsibility do licensees have related to material facts?

Make a reasonable effort to ascertain all material facts concerning each property for which an agency is accepted.

You are the buyer's agent and are meeting with the seller for the first time. You present the seller with the Understanding Whom Real Estate Agents Represent form and explain that you represent the buyer. You then ask the seller to acknowledge receipt of the agency disclosure, but the seller refuses to sign the form. What do you do?

Make note of the seller's refusal on the agency disclosure, being sure to include the date when you presented it to the person.

Single and divorced individuals are protected from housing discrimination under which protected class?

Marital Status

Mark lives in Maryland and purchased property in Pennsylvania. His real estate agent gave him poor advice, which cost him $52,000. Which of the following is true?

Mark cannot file a claim with the Guaranty Fund because the property purchased was in Pennsylvania.

In Maryland, when HUD receives a discrimination complaint, it forwards this complaint to what organization?

Maryland Commission on Civil Rights

Chester is interested in becoming a real estate licensee in Maryland. After completing the requirements for obtaining the license for a real estate salesperson, which agency will administer Chester's license?

Maryland Real Estate Commission

Maryland consumers may file complaints about a licensee with what organization?

Maryland Real Estate Commission

Betsy and Josh want to file a complaint against a real estate licensee whom they feel misrepresented them in the sale of their Maryland home. With what organization can they file a complaint?

Maryland Real estate commission

Mark lives in Maryland and purchased property in Pennsylvania. His real estate agent gave him poor advice, which cost him $52,000. Can Mark file a claim against the Guaranty Fund?

NO the property was purchased in pennsylvania

The Maryland Commission on Civil Rights consists of how many members?

Nine The MCCR consists of nine members and an executive director appointed by the governor.

n which type of listing agreement will a seller contract with multiple agents but only pay commission to the agent who locates a buyer?

Open listing In an open listing arrangement, the seller also reserves the right to find the buyer and pay no commission.

What types of misrepresentation exist?

Positive and unintentional Misrepresentation can be either positive or unintentional.

A Maryland licensee is recommending home inspectors to her buyer clients. What do MREC regulations require her to do when providing her clients with a list of recommended service providers?

Provide the date that she last verified the license status of each service provider

Roger Kelly is signing a listing contract with a client. Which of the following is an acceptable signature on the document?

Roger Kelly"

Which of the following is not only an ethical violation but also a federal crime?

Steering violates federal fair housing laws

______ enforces the Code of Ethics.

The Maryland Real Estate Comission

Which of the following is a true statement about possible penalties imposed by the commission for a violation of the Maryland Code of Ethics?

The commission may reprimand, impose fines, suspend and revoke licenses, but it may not impose prison sentences.

Which of the following is true of the harm caused to a person relying on false information?

The harm can be physical or monetary. The harm caused to someone relying on false information can be physical or monetary.

One element of misrepresentation is that ______.

The person making the false statement knew it was false (or should have known).

Which of these is an example of a material fact?

The seller would not have accepted an offer had he or she known the fact. A material fact would cause a reasonable person to not take an action that would otherwise be taken, or take an action that would otherwise not be taken. So, a seller may not have accepted an offer had he or she known the fact.

What's an agent's responsibility related to home inspections?

To recommend a buyer have a professional inspection performed

A real estate license is required ______.

When performing real estate activities for others, for compensation of any kind

Ricky is working for Matt, a buyer client, who is interested in a property at which the listing agent offers compensation to cooperating agents. The listing agent has offered Ricky or any cooperating agent additional compensation if the transaction closes within 40 days. Is this ethical?

Yes, but only if all of the involved parties have full knowledge and provide consent. Licensees can only accept compensation from more than one party with the full knowledge and consent of all involved parties. That compensation must also go through the brokerage firm.

You're the listing agent for a property where an unfortunate series of deaths took place. Which action best demonstrates good faith related to the disclosure of these events?

You tell prospective buyers the truth about the events when asked.

In order to qualify as one of the four appointed consumer members of the Maryland Real Estate Commission, how many years of experience must you have as a real estate licensee?

Zero Consumer members of the MREC board are not licensees.

Claims against the Guaranty Fund can only be made for ______.

actual monetary damages

______ must abide by the Code of Ethics enforced by the Maryland Real Estate Commission.

all maryland real estate licensees

What's misrepresentation?

an intentional misstatement of fact

You should ______ before you affiliate with a broker.

ask lots of questions

How long must completed real estate forms be kept on file with the broker in Maryland?

at least five years

How do you become a member of the Maryland Real Estate Commission Board?

be appointed by the governor

What must a licensee do when preparing a CMA (or opinion of price) for a consumer?

disclose that it is not an appraisal

In Maryland, how often must a real estate salesperson renew their license?

every two years

Jay has a listing agreement with Maury. Even if Maury finds the buyer during the listing term, Jay has earned his listing commission. What type of listing agreement do they have?

exclusive right to sell provides the most assurance of commission to the listing agent.

How many consumer members must be on the Maryland Real Estate Commission?

four

Members of the Maryland Real Estate Commission serve terms of how many years?

four

Chester is moving on up! He and his wife are ready to sell their condo and purchase a new place. Chester is a real estate licensee, and will list the property himself. What must Chester disclose to prospective buyers?

he owns the property

What group determines if a complaint made to the Maryland Real Estate Commission has merit and should be investigated?

hearing panel

A broker practices dual agency without informed consent. This is ______.

illegal

What type of license would Sarah be eligible for if she is new to real estate and does not yet have a supervising broker lined up?

inactive salesperson license

You're walking through a property with a new seller client. The seller tells you that the property is serviced by the public sewer system, but when walking up the drive you noticed the access hatch for a septic system. What should you do?

inquire about the homeowner's claim to ensure the property really is on public sewer.

A property is listed as having four bedrooms and two-and-a-half bathrooms. However, when showing your buyer clients the property, you only count three bedrooms. As their agent, what should you do as part of your due diligence?

investigate the discrepancy

In Maryland, the agency disclosure notice ______.

is required by law Although required by law, the agency disclosure notice is not a contract, and it does not create a brokerage relationship. The licensee must provide a written disclosure to any party the licensee does not represent in the transaction.

This organization issues and renews real estate licenses in the state of Maryland.

maryland real essays commission

Jim would like to sell his own home. What is the minimum real estate license he must possess?

none

Maryland Real Estate Commission hearings are ______.

public

Hank is a real estate licensee working for an investor. Which of these actions is he prohibited from performing?

recommend a specific investment

To whom do subagents working with buyer customers owe their duties?

the sellers and the sellers agent

Which of the following is true regarding claims made against the Guaranty Fund?

they can only be made for actual monetary damages suffered

What is the purpose of a listing agreement?

to spell out the agreement between the listing broker and the seller

What's the purpose of testing for discrimination?

to uncover hidden discrimination

Lee, a Maryland licensee, has a buyer client who asks for recommendations for home improvement contractors. Lee gives her client a list of recommended contractors, which includes the date that she last checked each contractor's license status on the Maryland Home Improvement Commission's site. How often must Lee check the license status of the providers that she recommends?

yearly

You make a listing presentation to a client, then learn she's meeting with a few more licensees before deciding which licensee gets her listing. You know these competitors. Which action best demonstrates good faith?

you tell the seller you hope she'll decide to work with you.