PA exam

A builder-owner salesperson is employed by a builder-owner of single and multifamily dwellings. Which of the following activities is A Negotiating a mortgage loan for someone buying one of the builder's homes. B Leasing a builder-owned home to a tenant. C Listing a property for sale that is owned by someone who wants purchase one of the builder's homes. D Collecting referral fees from real estate brokers in return for listing leads.

B A builder-owner salesperson is a full-time employee of a builder-owner of single and multifamily dwellings that is only authorized to list for sale, sell, lease, or rent any real estate owned by the builder-owner.

A seller has been awarded a final judgment against her dishonest former agent, and the order directing payment to her out of the real estate recovery fund has been given. The agent has no money or other assets, so which of the following damages can the seller expect to collect from the recovery fund? A The actual damages B Reasonable punitive damages, as determined by the court C Attorney's fees and interest on the judgment D The seller is not entitled to any money from the recovery fund and will have to sue the agent.

A Only ACTUAL damages can be paid from the real estate recovery fund. Punitive damages, attorney's fees, and interest on a judgment are not recoverable from the fund.

A broker wants to open a real estate office in her own home. Is this permissible under Pennsylvania Code? A No, a real estate office may not be located in a private residence. B Yes, provided the office is only open during 'non-standard' business hours and clients are seen by appointment only. C Yes, if the entrance to the office is separate from the entrance to the residence, and if her business' name is be displayed prominently outside the office. D Yes, provided the home is over 4,000 square feet and the office is at least 400 square feet.

C A broker or cemetery broker is permitted to have an office inside his/her own residence as long as that person follows specific regulations: The office must be a specific room, with a separate entrance, privacy, and sign that designates it as a real estate office.

Chris holds a broker's license issued by another state but is moving to Pennsylvania and wants to obtain a Pennsylvania broker's license. Will Chris have to go through the entire prelicensing as a new Pennsylvania broker? A The entire 63 hours may be avoided if Chris has an active license and has passed the LAW portion of the Pennsylvania exam within the past 3 years. B Chris must take 40 hours of Pennsylvania LAW to obtain a broker's license C Chris must take the entire 63 hour salesperson course and have 3 years of experience before applying to become a broker in Pennsylvania D No broker may be licensed in Pennsylvania without first taking the broker's licensing course.

A A broker from another jurisdiction must score a passing grade on the LAW portion of the PA exam within the past 3 years. In addition he or she must have been an active broker in his/her own state during the preceding 5 years.

A broker received an offer of $100,500 on a $105,000 listing. After the seller gave the offer to his attorney to review the broker received another offer on the same listing. This offer was for $99,000. What should the broker do? A He should present the offer immediately. B He should ignore the offer since it was lower than the other offer. C He should present the offer as a back-up. D He should wait until the seller acts upon the original offer.

A A broker is employed as an agent to locate buyer's for the seller's property. He is required to present all offers to the seller as they become available. The seller has the sole right to decide whether an offer is worthy.

A licensee is approached by a landowner wishing to sell a parcel of land. The licensee decides he would like to buy the land himself. Which of the following should the licensee do in this situation? A He should disclose his interest and license status to the seller and discuss terms of the option agreement before and separate from the listing agreement. B he should include language in the listing agreement granting him the option to purchase the land. C He should arrange for the owner to enter an option agreement with a broker-selected straw party so there is no conflict with the owner. D He should get the owner to sign an exclusive right-to-sell, long-term agreement then refuse to aggressively market the land until the option expires.

A A licensee must disclose license status before entering into any agreement with a property owner. It is not lawful to incorporate an option to purchase property in a listing agreement for the property or to conduct business through a straw party.

A licensee's license has been suspended by the Commission after a payment was made from the recovery fund against him. How will the licensee regain his license? A A licensee will remain on suspension until the recovery fund is repaid in full plus an additional 10% interest per year. B A licensee will remain on suspension until the recovery fund is repaid in full. C A licensee will remain on suspension until the recovery fund is repaid in full plus an additional 20% interest per year. D A licensee will remain on suspension until the recovery fund is repaid in full and a period of 12 months has elapsed.

A A licensee will remain on suspension until the recovery fund is repaid in full plus an additional 10% interest per year.

An association that wants to obtain a Pennsylvania broker's license must be sure that what percentage of that association's members who intend to engage in the real estate business) are licensed by the Commission as a salesperson or broker? A 100% B 80% C 75% D 50%

A A partnership, association or corporation that wants to obtain a Pennsylvania broker's license must make sure that each member of the partnership or association, or each officer of the corporation, who intends to engage in the real estate business is licensed by the Commission as a salesperson or broker.

Debbie is submitting her application for licensure to the Commission. Which of the following items, in addition to the applicable fee, must she send with the application? A Any details of a conviction of a felony or misdemeanor, as well as any imposed sentence. B A college transcript C Proof of Pennsylvania residency D A birth certificate

A Any criminal convictions must be disclosed because a license will not be granted without a background check.

A broker with a listing on a property offers to pay a bonus of $350 to any salesperson that sells the property within 30 days. Which of the following statements is TRUE? A The listing broker can only pay a bonus to a salesperson employed by that listing broker. B The seller must directly pay the bonus to the salesperson. C The seller must give written consent for a bonus to be offered. D The listing broker can pay a bonus to any salesperson as long as the salesperson's broker gives consent.

A License law prohibits a listing broker from paying compensation to anyone other than the licensees employed by that broker. Additionally, licensees are prohibited from accepting compensation from anyone other than the licensee's employing broker.

A new real estate licensee owns 8 rental homes that she has listed in the care of a separate real estate company. The company advertise the properties without disclosing that the property's owner is a licensee. Is this legal? A Yes, it is legal because the property is listed with a real estate company, so disclosure regarding her licensed status isn't necessary. B Yes, it is legal because this disclosure does not apply to leased properties. C No, it is not legal, because this disclosure is necessary whenever a licensee leases their own property. D No, it is not legal because this disclosure is necessary in the case of a licensee who leases more than 5 properties at any given time.

A No disclosure is necessary if the property is listed with a separate real estate company.

A licensee is acting as a buyer's agent. Which of the following services which might be provided by other companies, who then pay a referral fee to the agent, are illegal kickbacks? A Title company referral fee B Referral fee to the licensed broker in another state who referred the buyer to this agent's company C Local lender makes a donation to the real estate company's food drive D Home inspection company brings donuts and note pads to the company sales meeting

A No service or company who participates in the closing of property is allowed to pay any fees to an agent for referring to them.

A broker who operates as a sole proprietor wants to have his main office in his home. Which of the following requirements do NOT apply? A The broker may not employ salespeople or associate brokers to work in his home. B The business name of the broker must be prominently displayed outside the office. C The office must be devoted to the real estate business and arranged such that business can be conducted privately. D The entrance to the office must be separate from the entrance to the home.

A Rules governing offices do not prohibit a broker from employing salespeople and associate brokers even when the office is in a private residence. The rules specify that there must be a separate entrance, the business name must be displayed and the office must be conducive to privacy.

A broker agreed to an oral non-exclusive buyer agency agreement. Which of the following statements is TRUE? A The broker was complying with the law, as long as the buyer was provided with a written memorandum stating the terms of the agreement, along with the oral agreement B The broker is permitted to make such an agreement. However, if the other parties to the agreement choose not to pay him, he will have no recourse to collect his fee, unless he has a written agreement. C Oral agreements are against the law and the broker could face disciplinary action and possibly lose his license. D Oral agreements are against the law in Pennsylvania. However, this law is waived in special situations, if the Commissioner reviews the individual case and determines the agreement may be granted a one-time exemption.

A The only way an oral agreement is permitted in open listing agreements or nonexclusive buyer agency agreements is if the seller/buyer or landlord/tenant is provided with a written memorandum stating the terms of the agreement.

For a second time offense of engaging in the real estate business without a license, the maximum fine is how much? A Up to $5,000 and imprisonment for up to 2 years. B $1,500 and imprisonment for 1 year. C 1000 D 3 months imprisonment.

A The penalty for conviction of a second or subsequent offense of conducting real estate business without a license is a fine of not less than $2,000 but not more than $5,000 and imprisonment for not less than 1 year but not more than 2 years or both.

April is thrilled to find out she's passed her licensing exam to be a certified builder-owner salesperson. Now all she needs is a letter attesting to her good reputation for honesty, trustworthiness, integrity, and competence. Which of the following parties must write this letter? A A builder-owner of single and multifamily dwellings who is also her employer. B The chairman of the Association of Pennsylvania Builders and Owners. C A professional who has known April for at least 5 years, such as a doctor, police officer or judge. D A builder-owner of single and multifamily dwellings who does NOT employ her.

A The person must be April's employer who is ALSO a builder-owner of single or multi-family dwellings.

A salesperson has an initial interview with a potential new client over the phone. Even though she did make the required disclosures during this interview, she wasn't able to provide a written disclosure to the client who has asked her to show him a listing that afternoon. When should she provide the client with the written disclosure documents? A At the first person-to-person meeting she has with the client, or at the time that Jane first shows a property to the client providing this is the first face-to-face meeting. B After the client makes an offer on the listing. C After she has shown the client the listing. D She must cancel showing the client the listing and instead schedule a meeting with which to provide him with the documents.

A The salesperson can provide the consumer with the written disclosure at the FIRST person-to-person meeting.

Of the PREC membership, how many are required to be licensed real estate brokers at the time of their appointment? A 5 B 6 C 9 D 11

A Under law, the Commission must include 5 members that are licensed and qualified brokers at the time of appointment.

In which case is the broker's license likely to be suspended or revoked due to the actions of a salesperson working for that broker? A If the broker participates directly with the salesperson in violating license law. B If a salesperson that is employed by the broker violates license law. C Only the licensee found to have actually violated license law can be subject to license suspension or revocation. D If it is determined the broker knew of a violation committed by the salesperson.

D A broker's license can only be suspended or revoked if the broker had knowledge of the salesperson's violation or had reason to suspect the salesperson was violating the law.

A licensee decides to take a 5-year break from selling real estate and does not renew her salesperson's license during that period. Before her license can be reissued what must she do? A Successfully complete her employing broker's training program. B Complete 14 hours of continuing education, with no exam required. C Complete 60 hours of continuing education and pass the license exam. D Submit to and pass the salesperson's license exam.

D A licensee that does not renew their license for 5 years must take and pass the appropriate license exam before the license will be reissued. There are no continuing education or training requirements.

2 weeks before Martin begins his real estate prelicense class, he agrees to help his neighbor Mabel sell her home for a 3% commission. The transaction closes on the day Martin passes the examination but Mabel refuses to pay Martin the commission. Can Martin sue to recover payment? A Yes, because although the statute of fraud forbids recovery on an oral agreement for conveyance of real property, oral commission contracts are excluded in this case. B Yes, because Martin was enrolled in a prelicense course at the time the offer was accepted, so the commission agreement is binding. C No, because Martin did not have a permanent office in which to display his license and therefore cannot collect commissions. D No, because license law prohibits lawsuits to collect commissions unless the injured party was licensed at the time the agreement was reached.

D License law prohibits filing suit or any action claiming compensation for an act that requires a license if the person filing the claim did not have a license at the time of the act.

A broker finds a file from 2 years earlier. It contains the acknowledgement portion of a consumer notice applicable to leases, relating to disclosure summary for the lease of a suburban home. The broker had worked for the homeowners in leasing their home. Under the law, does the broker need to retain these records? A Yes, because all real estate records must be retained for a minimum of 4 years. B Yes, because all real estate records must be retained for a minimum of 5 years. C No, the broker does not need to retain these records, because they aren't directly related to real estate transactions. D No, the broker does not need to retain these records, because they only needed to be retained for 6 months.

D Pennsylvania law requires that most real estate records be retained for 3 years, but there are some exceptions to this rule. One exception is that certain records, including the type mentioned here, need only to be retained for a 6-month period.

A broker who has an agreement with the seller knows that the foundation of the property is cracked and that a previous owner committed suicide in the house. What must the broker disclose to a potential buyer? A Neither fact B Both facts C The suicide but not the cracked foundation. D The cracked foundation but not the suicide.

D The Real Estate Seller Disclosure Act requires that property condition and defects be disclosed to potential buyers. The suicide does not affect the condition of the property so it is not required to be disclosed.

A buyer voices concerns about flooding in the area because of a nearby creek, but the broker brushes off her worries and says he'll "ask around the neighborhood" but assures here there's no risk of flooding. Which of the following is TRUE? A The broker was probably correct in his assessment, and the buyers cannot hold him liable if their home is flooded since he's not an expert in that field. B The broker was probably correct in his assessment, but his real estate firm could be held liable if there is a flood and the buyer's home is damaged. C The broker should not have said what he did because licensees may not offer false assurance about an aspect of a real estate transaction they know is possibly inaccurate, if not completely false. D It is against Section 1.297 of the Pennsylvania Code for a real estate licensee to offer any statement outside of his expertise in real estate transactions. He should have referred this question to a representative of FEMA or local insurance agent. 80%

C A licensee may NOT offer assurance or advice that he would reasonably know is inaccurate or misleading. Since Pennsylvania has more than 50,000 miles of rivers, streams and creeks, so the likelihood of flooding, especially one near a creek is substantial.

A buyer bought a timeshare but after 3 days has had second thoughts and wishes to cancel the purchase. Can they do so? A No, once the buyer has signed the contract it is binding and final. B No, the buyer had until midnight of the following day of the purchase being executed to cancel the purchase, but this opportunity has now elapsed. C Yes, the buyer has until midnight of the 5th day of the purchase being executed to cancel the purchase. D Yes, the buyer may cancel the purchase at any time within the first 3 months.

C A purchaser shall have the right to cancel the purchase of a timeshare until midnight of the 5th day following the date on which the purchaser executed the purchase contract.

How long must a licensee whose license has been revoked wait before reapplying for licensure? A 10 years B 7 years C 5 years D 3 years

C Any licensee whose license is revoked must wait a minimum of 5 years from the date of revocation before reapplying for a license.

Dawn wants to obtain a Pennsylvania campground membership salesperson's license and meets all the requirements except for the onsite training. Which of the following statements is TRUE? A 100 days of onsite training must be completed during a 120-day period within the year prior to the submission of a license application. B 30 days of onsite training must be completed during a 60-day period within 2 years prior to the submission of a license application. C 30 days of onsite training must be completed during a 90-day period within 3 years prior to the submission of a license application. D 60 days of onsite training must be completed during a 90-day period within 5 years prior to the submission of a license application.

C In addition to the 30 days of onsite training to be completed during a 90-day period within 3 years prior to the submission of a license application, the trainee must be actively supervised and trained by a broker.

A seller is required under the sales contract to provide a termite certificate, so she asks her salesperson to order one. The salesperson orders the inspection knowing he will receive a referral fee from the termite company. Is this a violation of license law? A No, as long as the fee is less than $50. B Not, as long as the fees are disclosed to all involved parties. C Yes, the salesperson cannot accept a fee from anyone except their broker. D Yes, because the salesperson can accept special fees from her client - in this case the seller.

C It is a violation of license law for a salesperson to accept fees from anyone except their broker.

An individual found guilty for the first time of engaging in business as a real estate agent without a license can be fined how much? A Not more than $5,000 and imprisonment for as much as 2 years. B Not more than $1,000 and 10 months in jail. C Not more than $500, or imprisonment of not more than 3 months, or both. D As much as $1,000.

C License law provides that a first time offence for engaging in the real estate business without a license is punishable by a fine of as much as $500, imprisonment of up to 3 months, or both. The offense is also subject to criminal prosecution.

A corporation appoints an officer of the company to sell a parcel of corporation-owned property. In relation to that officer, which of the following statements is TRUE? A The officer must be either president or chief executive officer in order to engage in business on behalf of the corporation. B The officer can handle the sale if there is no compensation involved. C The corporation may designate as many as five of its officers to conduct business on its behalf without any license required. D If the officer is not a licensed broker, the officer may not conduct real estate business on the corporation's behalf.

C Officers of a corporation that are conducting real estate business on behalf of the corporation in relation to corporate-owned property are excluded from licensure under license law. The exclusion extends to more than 5 corporation officers or partners.

In Pennsylvania, when does a real estate salesperson's license expire? A Biennially in the month issued B December 31st of the third year of licensure C May 31st of every even-numbered year D 2 years from the date of issuance

C The Commission has established that all broker and salesperson licenses expire the last day of May in even-numbered years and must be renewed on or before June 1st.

A broker is opening her first escrow account, designating herself as trustee of the account. Where must the account be opened? A In the same town as where the brokerage in located B With either Wells Fargo, Bank of America, or Chase C In either a federally-insured depository or bank, or a state-insured depository or bank D In a high-interest offshore account

C The bank or depository chosen for an escrow account can be EITHER federally-insured or state-insured.

A cemetery associate broker, Kayla, is placing her first advertisement for her employing broker, Craig Gray. Which of the following is TRUE regarding this advertisement? A Kayla's name, as it appears on her license, and her business phone number must be included in the ad. Both the name and number must be the same size. B Kayla's name, as it appears on her license, and her business phone number must be included in the ad. Kayla's name must be printed in larger lettering than her phone number in the ad. C Craig's name as it appears on his license, and his business phone number must be included in the ad. Both the name and number must be the same size. D Craig's name as it appears on his license, and his business phone number must be included in the ad. His name must appear in larger lettering than his phone number in the ad.

C The broker's name must always appear in advertisements - whether the broker is a real estate broker or a cemetery broker. The purpose of this is to ensure that the employing broker is supervising his associate brokers and salespeople.

A real estate license is required to do which of the following? A Negotiate leases by employees of a public utility B Sell property while acting as a trustee in a bankruptcy case C Sell time-share interests D Auction real estate at an auction

C The time-share salesperson is required to have a time-share salesperson license. Public utility employees, individuals acting as trustees and auctioneers are exempt.

How are the members of the Pennsylvania Real Estate Commission (PREC) selected? A By public election B By a committee of the Pennsylvania Association of Realtors C Through election by real estate licensees D By appointment by the Governor

D Under Pennsylvania license law, members of the Commission are appointed by the Governor.

A broker representing the seller provides the buyer and buyer's agent with the necessary disclosures regarding the property, as reported to him by seller, who seemed truthful in his disclosures. Immediately after the buyer moves in, it is discovered that there are severe electrical wiring problems with the home. The buyer is understandably upset. Under the law, who should be held responsible? A Under the law, no one will be held liable. B The seller will be held liable. The seller's broker had no reason to doubt their statements and it was not his duty to verify their statements. C The seller's broker will be held liable. Whether or not the sellers knew their disclosures were inaccurate, it is the sole responsibility of a clients' broker to independently verify the accuracy of their statements. D It is the responsibility of the seller, the seller's broker AND his brokerage firm to make sure all disclosures are accurate and verified. Since the disclosures were not accurate in this case, all three parties will be held liable.

B A real estate licensee is not required to conduct an independent inspection of a property, nor is he required to independently verify that his client has given an accurate and complete statement as to the condition of the property.

A broker has been asked by his client to hold her money in escrow for 9 months. Is this legal? A No, it is not legal under the Pennsylvania Code. B Yes, it is, as long as he deposits the money in an interest-bearing account. C Yes, it is, as long as he deposits the money in a non-interest bearing account. D Yes, as long as the broker provides the Commission with written notice of this arrangement.

B Although normally escrow accounts are NON-interest bearing, a broker who expects to hold money in an escrow account for more than 6 months must deposit the money in an interest-bearing account. The broker may not claim the interest on such an account.

A partnership, association or corporation will only be granted a broker's license in Pennsylvania if A every member and officer actively participating in the business has a broker's license. B 1 officer or partner is designated the broker of record. C the business has paid a one-time fee to the recovery fund. D the business files the appropriate paperwork with the Secretary of State.

B An person within a corporation, partnership or association must meet the individual requirements for a broker's license and be named the broker of record for the organization to be issued a broker's license.

An individual applying for a broker's license in Pennsylvania must A be a resident of Pennsylvania. B Be at least 21 years old C have been actively engaged in selling real estate for at least 2 years. D post a performance bond of $10,000.

B Applicants for a broker's license must be at least 21, a high school graduate or equivalent; and have been an active, licensed salesperson for at least 3 years, or have educational or experience qualifications deemed equivalent.

A broker receives an earnest money deposit from the buyer for an offer on a house. What must the broker do with the money? A Open an escrow account designated specifically for this transaction only. B Deposit the money into the brokerage's existing non-interest-bearing escrow account for all such transactions. C Hold the deposit in a safe place at the brokerage office until the offer is finalized. D Deliver the money to the seller's attorney for safekeeping until the closing.

B Earnest money must be deposited into an account for escrow funds; although the account need not separate one client's funds from another client's funds, in no circumstances may the money be commingled with the broker's personal funds.