Real Estate Practice Exam (State)

Lee is wondering if he really need to complete his CE requirements during this licensing cycle. Which of these questions should you ask help him determine if he has to or not?

"Have you held a reciprocal license for less than a year?"

FDIC insurance covers every owner of funds into a trust account, up to _______ each.

$250,000

Cheryl, the aggrieved claimant on a complaint against a licensee, has just won her claim. She demonstrated that the licensee was responsible for her losing $60,000. She also paid for a lawyer, which was another $5,000. With other fees and incidentals, her total damages are $67,000. What is the amount she'll receive?

50,000

Which of the following statements about material facts is true?

A material fact may have more or less effect on a buyer based on the buyer's needs and values.

Which of the following is required in order to conduct real estate activities as a business entity in Alabama?

A qualifying broker and a company licensee for each branch office or location

D'wayne is acting as the buyer's agent for Alabama resident Rocky in a real estate transaction. In this transaction, what is D'wayne's role?

A single agent

Which of the following is true about disciplinary actions in Alabama?

A suspended license can be reinstated once the licensee has completed certain actions.

Buyer Brenda has just met and started talking to licensee Lydia. They haven't signed any brokerage agreements at this point. In what capacity is Brenda acting for Lydia?

A transaction broker

Percy and Jackson have formed a team within their Montgomery real estate brokerage firm. They're drafting some advertisements to help their team. What do they need to keep in mind when designing their marketing materials?

Ads must include the brokerage firm name.

To whom must a licensee, representing a buyer, disclose agency status?

All parties in the transaction

Amy works under the supervision of Corine at Rolling Hills Realty. Which of the following must be true?

Amy could be either a salesperson or a broker.

Jeung gave her agent an earnest money check, and the seller accepted Jeung's offer. What will happen to the check now?

An escrow agent will hold the funds in a trust account until the agreement's terms are satisfied.

The Alabama commission may enforce compliance with the law via the ____ if it believes the license law has been or is about to be violated.

Attorney general

Candi, an Alabama licensee, knows that her seller client's new roof leaks. When speaking about this roof? She only tells potential buyers, "This roof is just a few years old!" What license law violation, if any, has Candi committed?

Behaving in an untrustworthy or dishonest manner

Suzanne received notice that her license may be revoked for ____.

Being convicted of drug possession

Suzanne received notice that her license may be revoked for ___.

Being convicted of drug possession.

Which of the following are considered trust funds?

Cash, checks, and other items of value

Which of the following statements about reactivating your license in Alabama is true?

Complete 15 hours of CE.

Ned represents Sofia in the sale of her townhome. Luciana represents Sofia's buyer, Arturo. What is Luciana's responsibility to Sofia?

Disclose that the buyer will not have the funds for the down payment unless he sells his current home.

Which of the following is a minimum service that an Alabama licensee must provide to her clients?

Disclosing any material facts the license knows about that the client couldn't reasonably ascertain

Woodrow helps his neighbor sell his home by assisting with negotiations. He receives no compensation for his assistance. Based on this one transaction, Woodrow ____.

Doesn't need a real a real estate license

George wants to co-broker a home purchase in Alabama. His state allows this arrangement. Which of the following is a requirement he must meet?

Enter into a written agreement with an Alabama broker.

Bob wants to reinstate his license. Which license must he have to ask the commission to reinstate?

Expired

Isabelle has decided to take her career in a different direction and didn't renew her license when her renewal deadline came around. What is her license status?

Expired

In most stars which of the following situations would most likely be grounds for suspension or revocation of a real estate license? Failure to specify a definite termination date

Failure to specify a definite date in a listing contract

Ned doesn't want the lenders to have his personal information, so he's applying for a home loan under an assumed name. Which type of mortgage fraud scheme is this an example of?

False identity

For which of the following actions can the Alabama Real Estate Commission impose a penalty on licensee Joseph?

Falsely promising his customer that she wouldn't have to pay closing costs

Lisa's commute to her current broker's office is to long, so she found a new broker with whom to affiliate. What must her new broker do?

File a request for the new transfer of her license and assume liability for her actions.

Lisa's commute to her broker's office is to long, so she's found a new broker with whom to affiliate. What must her need broker do?

File a request for the transfer of her license and assume liability for her actions.

Lisa's commute to her current broker's office is too long, so he's found a new broker with whom to affiliate with. What must her new l broker do?

File a request for the transfer of her license and assume liability for her actions.

Should the broker end up in litigation, any trust funds not safely tucked away in a trust account could be____?

Frozen

Alabama broker Harry tells his client, Samantha that the cracks in the foundation of the property she is buying from Bruce are "normal" and "nothing to worry about." Bruce doesn't know Harry has said This. Shortly after Samantha moves in, the basement floods, and after having the foundation examined, she learns it's in terrible condition. Which of the following is true of this situation?

Gary has misrepresented the facts of the property. He can face disciplinary actions form the commission.

Clint has an inactive real estate license. Which of the following is true?

He can keep his license in this status indefinitely as long as he pays his license renewal fees.

Gerome is an Alabama salesperson applying for his broker license. He's moving across the state, and his broker license will be issued to a new brokerage. Which of the following is a true statement?

He can't perform real estate activities until the new qualifying broker receives his broker license.

Gerome is an Alabama salesperson applying for his broker license. He's moving across the state, and his broker license will be issued will be issued to a new brokerage. Which of the following is a true statement?

He can't perform real estate activities until the new qualifying broker receives his broker license.

Agent Jeff has just received an offer for his seller client Maggie. He goes over there he terms of the offer with her and explains some of the contract-specific language means. What else, if anything, does he have to avoid breaking Alabama license law?

He must explain that Maggie will have to pay closing costs.

It's September 5 of a even-numbered year. Tobias hasn't renewed his brokers license yet. Which of the following is true?

He needs to pay a late fee if he renews by September 30

Licensee Flip tried to compel the Browns to accept the buyers offer, saying that he knew that a better offer wouldn't come along. What's Flip's mistake?

He violated Alabama license law.

Hats one form of documentation the commission will accept as proof an applicant's education?

High school diploma/transcripts

Kevin is about to submit his broker's license application. Currently, he works for Gadsden Realty and wants to continue there. Assuming he is successful, what happens next?

His qualifying broker must return this sales person license to the real estate commission.

Holly didn't complete her post-licensing education within six months, so she is now on inactive status. What will it mean for Holly if she doesn't complete the education within one year of her initial licensure date?

Holly's license will lapse

When applying for an Alabama broker license, under what circumstances can a sales person continue to perform real estate activities?

If the broker license will be issued to the same company as the salesperson license.

Georgina is an escrow agent who's holding funds for several transactions. Which of these statements about how she'll disburse these funds is true?

If the transaction doesn't close, Georgina will disburse the earnest money as instructed by the parties or according to state law.

Josef is a salesperson in Alabama. His buyer clients have just given him a check for earnest money. What does should he do with it?

Immediately turn it over to his qualifying broker.

What happens to the company license if the qualifying brokers dies or becomes incapacitated?

It becomes invalid

Valentia is getting ready to renew her real estate license. Beginning on what date can she renew online during the renewal period?

June 15

Sandy is a new licensee. One of her recent clients, Phil, complained that she gave information to her customer that was confidential. Which laws can Sandy check to make sure that she didn't fail in her duties to Phil?

Law of agency

Which of the following is an Alabama broker's responsibility regarding trust funds?

Maintain records of all funds belonging to others for three years.

Which of the following individuals is NOT exempt form taking CE in Alabama?

Mick, a managing broker, has been receiving disability checks for more than a year, due to a bad car crash.

If you, as an Alabama license, make a statement in an ad that you should have known was false, what are you guilty of?

Misrepresentation

If you, as an Alabama licensee l, make a statement in an ad that you should have known was false, what are you guilty of?

Misrepresentation

In advertising, _____ is essentially the same as committing fraud

Misrepresentation

What is the difference between the process of renewing a salesperson's license and renewing a broker's license?

Nothing. The process is the same for both kinds license.

Once handed over, trust funds belong to the ______ until the transaction for which they were designated has been completed, or they're disbursed according to the agreement between the parties.

Party who submitted them

What's one of the steps you need to take of toy choose to affiliate with a different broker?

Pay the required transfer fees.

Sylvia is sitting pretty. She managed to convince the appraiser to appraise the property she recently purchased for more than it was worth, and then she was able to sell the property very quickly. The profit she made from the sale, even after paying off the appraiser, was considerable. Not bad for a few hours' work. Which type of mortgage fraud scheme is this an example of? Inflated appraisal Property flipping Silent second Straw buyers

Property flipping

Trust funds have better protection when deposited into trust accounts because they are ______.

Protected from seizure

How must qualifying broker Rudy ensure that his affiliated licensees understand the rules of agency relationships allowed at their brokerage?

Provide a copy of the brokerages agency disclosure office party policy and explain it to his licensees at least once year.

Daisy holds a real estate license in Mississippi and is looking to obtain a reciprocal license in Alabama. Which of the following is a requirement she must meet?

Provide her licensing to try to commission within 120 days before her reciprocal license is issued.

Which area of real estate law covers what's required of a licensee when performing real estate activities within the state, including license law, continuing education requirements, supervisory requirements, and prohibited conduct?

Real Estate License Law

Non-trust funds, as long as they're not commingled with trust funds, are not bound by _______.

Real estate laws

Which area of real estate law covers the requirements of a license when performing real estate activities within the state, including continuing education requirements, supervisory requirements, and prohibited conduct?

Real estate license law

If the commission finds out that a licensee has committed serious crimes, it will likely___ the individual's license.

Revoke

If the commission finds that a licensee has committed serious crimes, it will likely _____ the individual's license.

Revoke

The months are just flying by, as they seem to do, and Alabama licensee Audrey has yet to complete her annual CE requirement. Assuming this is an even-numbered year, by what date does she need to have her 15 hours of continuing education documented?

September 30

The months are just flying by, as they seem to do, and Alabama licensee Audrey has yet to complete her annual CE requirement. Assuming this is an even-numbered year, by which date does she need to have her 15 hours of continuing education documented?

September 30

Before the commission can convene a hearing, which of the following must it do?

Serve the accused licensee with a copy of the formal complaint

Closing day is finally here! As an Alabama qualifying broker, how much time does Alabama have to disburse all funds held in trust for the transaction?

Seven days

Brynn, a licensee from another state, wants to obtain a reciprocal license in Alabama. Which of the following statements is true?

She must provide her licensing history to the commission within 120 days before the commission issues the license.

Julie is working with a buyer clients and had prepared an estimated closing statement. Which of the following statements are true?

She must provide it when offer is signed.

The commission placed Holly's license on inactive status because she didn't complete the thirty hour pos-licensing education requirement within six months of receiving her temporary Alabama real estate license. What does this mean for her?

She'll need to complete the post-licensing education within on year of receiving her temporary license. In the meantime, she can't practice real estate.

Simone is chatting with Phil, who's about to close on a a house. Simone's become good friends with Phil during the transaction. She's gotten to know him while printing his transaction-related documents and making sure he's signed where he needs to go. The two of them don't have a written agency agreement. In what capacity is Simone acting in this transcript?

She's a transactional broker.

Mavis is a buyer's agent working with Blaine, an unrepresented seller. Mavis's buyer, Cintra, makes an offer on Blaine's property. Mavis assists Blaine with the paperwork. What's Mavis's relationship to the parties?

She's an agent to Cintra, and the seller is her customer.

Shelia was a defendant in a case in which a former client charged her with fraud. Her lawyer just informs her that the case was dismissed. Which of the following is true about the situation?

Sheila must notify AREC of this news within 10 days.

Joel, an aggrieved claimant, wants to make a claim form the Alabama Recovery Fund. He says that his agent, Maria defrauded him. Which of the following does he need to do?

Show that he's not related to Maria.

Letisha feels she's made the wrong decision when she chose to affiliate with her current broker. How long does she need to wait after obtaining her temporary license to affiliate with a different broker?

Six months

Which of the following is true about subagency in Alabama?

Subagents owe their client the same duties that the agent owes that client.

Which of these is a document-related task that's required of a license?

Surrender a document to its rightful owner after the license has possessed it.

Broker Tanner and buyer Sarah are working together to look for a house for her. They don't have a written brokerage agreement. What's their brokerage relationship?

Tanner is acting as a transaction broker.

Which of the following entities created the consumer informational booklet?

The Alabama Real Estate Commission?

Which of the following entities created the consumer booklet?

The Alabama Real Estate Institute

After a few meetings, the Stinsons sign a listing agreement with broker Vera so she can sell their house. The house has already generated interest from a potential buyer named Sergei, who has spoken with Vera about the house's square footage and potential as an investment. Which of the following is true about this situation?

The Stinsons and Vera have an agency agreement.

In Alabama, who prepares the buyer's estimated closing statement?

The buyers agent

In Alabama, which of the following statements is true about an estimated closing statement?

The client must sign it to acknowledge receipt.

In Alabama, which of the following statements is true about an estimated closing statement?

The client must sign it to acknowledge recipient.

The commission is investigating the actions and records of Alabama licensee Thomasina. Which of the following is true?

The commission can investigate without a written complaint.

In Alabama, who generally prepares the seller's estimated closing statement?

The seller'a agent

David is a qualifying broker for Merit Real Estate. He's also agreed to serve ass qualifying broker for First Choice Realty, which is an affiliate company that operates out of the same office. Both have agreed in writing, but what else also needs to happen for this arrangement to be legal in Alabama l?

The written consent must be filed with the commission.

Alabama broker Mandy has presented the Real Estate Brokerage Services Disclosure form to consumer Kyla and asked Kyla to sign it. What's the purpose of Kyla's signature on this form?

To acknowledge that Mandy's presented her with this form.

What's the difference between an inactive license and an expired license?

To keep your license inactive, you must pay the yearly license fee; expired license don't require this.

Adele's been a real estate agent in Alabama for the last three years. She just received a notice from the Alabama Real Estate Commission assessing her $30. What's the assessment for?

To replenish the recovery fund

In Alabama, when must an estimated closing statement must be provided to the seller clients?

When an offer is presented

Adele's not happy with the commission's final decision on her hearing because she believes in the commission is forcing her to sell off many of the assets of her brokerage. "Can it really do that?" Adele wonders. Does she have a reason to file an application for a rehearing?

Yes, because she has reason to believe that the commission acted outside it's legal authority.

Carl is an Alabama salesperson applying for his broker license. Can he continue to perform real estate activities while he waits for his broker license to be issued?

Yes, if the broker license will be issued to the same company as the salesperson license.

Which of the following is a reason why the Alabama Real Estate Commission might impose a disciplinary action against you?

You make false and dishonest promises to customers.

Susie has opted out of opening an escrow account with her mortgage lender, which means she has a lower monthly payment. She still needs to save up, though, to make sure she can pay for taxes and ______.

insurance

In a seller agency relationship, to which party does the licensee owe undivided loyalty?

seller