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Practical Applications- Print
Terms in this set (594)
Loss in value resulting from the properties physical deterioration, external depreciation decrease in price, and functional obsolescence
The appraisal principle that holds that value can increase or decrease based on the expectation of some future Benefits said or detriment produced by the property
An estimate of the quantity, quality, or value of something. The process through which conclusions of property value are obtained also refers to the report that sets forth the process of estimation and conclusion of value
The combining of two or more adjoining lots into one larger track to increase their total value
Brokers price opinion BPO
An opinion of real estate value commissioned by a bank or attorney and provided by a broker
The rate of return a property will produce on the owners investment
The appraisal principle that holds that no physical or economic condition remains constant
Competitive market analysis CMA
A comparison of the prices of recently sold homes that are similar to a listing Sellers home in terms of location, style and amenities
The appraisal principle that states that excess profits generate competition
The appraisal principle that holds that the greater the similarity between properties in the area, the better they will hold their value
The appraisal principle that states that the value of any component of a property is what gives to the value of the whole or what it Absence detracts from that value
The process of estimating the value of a property by adding to the estimated land value the appraisers estimate of the reduction or replacement cost of the building, less depreciation
An appraisal a loss of value in property due to any cause, including physical deterioration, functional obsolescence, external obsolescence
The number of years during which an improvement will add value to the land
Incurable depreciation caused buy factors not on the subject property, such as environmental, social, or economic factors
A loss of value to an improvement to real estate arising from functional problems, often calls by age or poor design
Gross income multiplier GIM
A figure used as a multiplier of the gross annual income of a property to produce an estimate of the property's value
Gross rent multiplier GRM
The figure used as a multiplier of the gross monthly income of a property to produce an estimate of the properties value
Highest and best use
The possible use of a property that will produce the greatest net income and, thereby, develop the highest value
Law of diminishing returns
Law that applies when at the point where additional improvements do not increase income or value
Law of increasing returns
Law that applies as long as money being spent on improvements produces an increase in income or value
The most profitable price property would bring in an arms length transaction under normal conditions on the open market
Net operating income NOI
The income projected for an income producing property after deducting losses for vacancy and collection and operating expenses
A reduction in a property's value resulting from a decline in physical condition can be calls by action of the elements or by ordinary wear and tear
The increase in value or utility resulting from the consolidation assemblage of two or more adjacent lots into one larger lot
An appraisal principle that states that between dissimilar properties the value of the lesser quality property is favorably affected by the presence of the better quality property
The final step in the appraisal process, in which the appraiser combines the estimates of value received from the sales comparison, cost, and income approaches to arrive at a final estimate of market value for the subject property
In appraisal principle that states that between dissimilar properties the value of the better quality property is affected adversely by the presence of the lesser quality property
Replacement cost new
The construction cost at current prices of a property that is not necessarily an exact duplicate of the subject property but serves the same purpose or function as the original
The construction cost at current prices of an exact duplicate of the subject property
Sales comparison approach
The process of estimating the value of a property by examining and comparing actual sales of comparable properties
The actual selling price of the property
An appraisal principle that states that the maximum value of the property tends to be set by the cost of purchasing an equally desirable and valuable substitute property assuming that no costly delay is encountered in making the substitution
Supply and demand
Says the value of a property depends on the number of properties available in the marketplace the supply of the product
Uniform standards of professional appraisal practice USPAP
A set of standards that details information required of in appraisal of residential property. The uniform residential appraisal report is required by many government agencies
Monetary worth based on desirability
The five characteristics of value DUST
Demand, utility, scarcity, transferability
Net operating income
What is the first thing in appraiser does
State the problem
You're holding an open house for another agent. A prospective buyer comes in and asks a bunch of questions. You can't answer some of the questions but tell her you will get back to her. What is your relationship with this individual?
No agency was created
A broker supplies the financing for a project to build condominiums with the stipulation that he has the exclusive right to sell the completed condos. Which of the following BEST describes this relationship?
Agency coupled with an interest
Title insurance protects the buyer against:
All liens of record that are not listed in the schedule of exceptions
Real estate brokers must keep abreast of all of the following except:
changes in criminal laws
A transaction broker must:
not act as an advocate for either party, but must exercise reasonable skill and care
At the time of taking the listing, the broker has the responsibility of:
providing comparable properties and their price
A broker is working with a buyer. The buyer believes there to be a water leak in the home. What should the broker do?
Contact the listing broker and inform her of the problem.
You competed for and won a listing contract, by offering a considerably reduced commission. In order to recoup some of your normal fee, you charge for each contract document that you prepare. Your seller agrees to this arrangement. It is:
The closing instruction form must be used in conjunction with an approved:
listing contract at the time a listing is signed
Prior to closing, it is usually the responsibility of the following person to order the appraisal:
The Exclusive-Right-to-Buy Listing Contract calls for "reasonable efforts to locate property." Which of the following would most likely demonstrate such efforts?
showing the buyer properties that meet the general description of the property as defined in the contract
Procuring cause means:
creating an uninterrupted chain of events that resulted in a closed transaction or sale
An out-of -state investor sells a property in Colorado. The closing entity must withhold up to 2 percent of the
selling price as possible income tax liability
The Closing Instructions form
must be part of every contract
According to statue, "good funds," include a
tellers check from savings and loan
All of the following must be disclosed to a tenant by a property manager EXCEPT:
Disclose the name and address of the landlord
Which of these acts could result in license suspension or revocation?
Conviction of a forgery crime, Accepting compensation from more than one party in a transaction without full disclosure, Advertising in the name of another broker
As per the Contract to Buy/Sell Real Estate Mediation shall terminate in the event the entire dispute is not resolved within how many days of written notice requesting mediation delivered by one party to the other at the party's last known address?
One of the requirements of a valid deed is that the deed be:
signed by the grantor
The Colorado Real Estate Commission was formed to:
protect the public
A loan origination fee appears on a settlement statement as a:
Debit to the buyer
It is illegal for a broker to work with both seller and buyer when:
the seller is not aware of such action, all parties to the transaction are not aware of such action, the agent collects a commission from both buyer and seller without the knowledge and consent of both
When a seller decides to counter an offer presented to him, which is true?
Seller should sign only the counter offer
Regarding delivery of Earnest Money:
If other than at the time of tender of this contract it must be delivered no later than the Alternative Earnest Money Deadline
Which of the following statements is true concerning agency?
Written agreement establishes agency
The Colorado Contract to Buy & Sell states that "time is of essence hereof". This statement means that:
Dates and deadlines will be strictly interpreted
The Colorado Statute of Frauds mandates that
Contracts for the sale of real estate must be in writing
A real estate license, or license for a broker who is working for another broker, may be issued:
To a woman using her birth name
If an employing broker leaves a real estate brokerage, what happens to the transaction records?
the brokerage retains the records as the company is responsibile for maintenance
Before a purchaser is shown homes built prior to 1978:
they are to be given a copy of the EPA booklet "Protect Your Family From Lead In Your Home"
The maximum amount of days that can be specified in the Holdover Period in the Listing Contract is:
negotiable by Seller and Broker
A real estate broker shall NOT engage in any of the following acts:
preparing legal documents as a courtesy for the seller of a for a sale by owner transaction
Employing Broker "reasonable supervision" includes all of the following EXCEPT:
attending first meeting with client
An oral contract for the sale of real estate is:
A note for earnest money:
Must be indicated in the Contract to Buy and Sell
When a broker terminates his affiliation with an employing broker what must be done?
The broker and the employing broker have joint responsibility to assure that the real estate commission is notified.
Any excess funds above those required to pay off encumbrances realized at a foreclosure sale belong to:
The approved Agreement to Amend/Extend contract form is used:
To get mutual agreement of the parties to any change in a deadline
What legal duties does a seller's agent owe to a buyer who does not have agent representation?
Fair and honest dealing and disclosure of material facts about the property
The purpose of Commission Rule F is:
to help brokers conform to the Conway-Bogue Realty vs. the Colorado Bar Association decision
In addition to Federal law the Colorado Fair Housing Act added as a protected class:
Which of the following is the ONLY section which must be a office policy manual?
Brokerage Relationships Offered to Public
A broker must keep which of these funds in his trust account?
Rental monies received
The Seller holds security deposits in the amount of $1,000 from each of six tenants. On the settlement sheet:
Debit Seller & Credit Buyer $6,000
According to Commission Position 31 Acting as a Transaction Broker, you cannot be a Transaction Broker for:
Your brother, Your close friend, Your best client
In terms of the approved Colorado purchase contract who pays the closing costs?
As agreed by the buyer and seller
Which of the following items are signed by the buyer or seller, or lender and not sent to the county for recording?
The promissory note
If a Broker measures a property, (s)he must:
Disclose the method used to determine the measurement
Which of the following is true if a Contract to Buy and Sell form indicates the "Liquidated Damages" choice in case the buyer is in default?
Earnest money and any other payments or things of value received from the buyer will be kept by the seller as seller's sole remedy for buyer's default.
An Employing Broker designates one seller agent and one buyer's agent. The Employing Broker has:
Which of the following is required before an owner of a 35-parcel of undeveloped land may drill a well for water only?
the owner must obtain a well permit from the state engineer
The fee to notarize a Warranty Deed is charged on the settlement statement to:
How is a broker licensed when employed by a broker doing business under a trade name?
under the trade name and the broker's name
Which of the following is true for a person activating an inactive or expired Colorado real estate license?
must satisfy the continuing education requirement before they apply to activate an inactive license or to reinstate an expired license to active status
According to the Rule E-48, brokers are allowed to file a lien, a lis pendens or record a listing contract to secure payment of a commission under what circumstances?
Brokers may never cause the title to become clouded if they are not principals in the transaction.
Following the later of lease termination or surrender and acceptance of the premises, a landlord shall return the full security deposit within what period of time unless the lease agreement specifies a longer period of time:
A written office policy regarding brokerage relationships is a requirement of offices that are staffed by:
one or more agents
The closing entity must withhold from the sellers proceeds up to 2% of:
The selling price as a possible income tax liability if the seller is from out-of-state
A broker MUST supervise independent contractors even if:
they have at least three years experience
they have an independent brokers license, even though a designated broker employs them
the broker is out of town
they have at least three years experience, they have an independent brokers license, even though a designated broker employs them, the broker is out of town
If a client asks whether it would be beneficial to add a second bathroom to increase profit on the sale of the home, what would be the appropriate response?
I would be happy to do some research or analysis and speak to a construction expert on costs to determine if it''s worth it
Broker Betty at an open house meets a young couple looking to purchase their first home. The couple asked if the Broker thought they had enough income to qualify for a loan to purchase the property. Realizing this information is of a confidential nature Broker Betty makes the agency disclosure that her office policy and State statute require. The buyers are very skeptical about making a commitment and have been coached by family members not to sign anything. They refuse to sign the signature block on the Brokerage Disclosure to Buyer form. Betty should:
make a note of the date and time the disclosure was made and reference the fact that the buyers declined to sign the form - then have the discussion.
What must appear in the title of a trust account?
Company name and employing broker's
The commission rule, that requires an employing broker to supervise associate brokers, stipulates:
the broker should exercise reasonable supervision over activities of licensed employees
A broker, acting as a transaction broker, lists a property for $248,500. He finds a prospect who is willing to sign an offer at $247,000, but will pay $248,500 if the owner declines the offer. The broker should:
submit the offer without disclosing the purchaser's position
On a new loan closing, the settlement worksheet entry for a tax reserve indicates that the new lender is
Withholding this amount from loan proceeds to start the escrow account for the next tax payment
A father and son own land as joint tenants. The father conveys one half of his interest to his daughter. Ownership would now be held by:
father, son and daughter as tenants in common
Which of the following is true about licensees filling in blanks on a standard commission-approved form?
This is the practice of law but it is specifically permitted by Colorado law.
A lot with a depth of 80 feet and an area of 4,800 square feet was sold for $350 per front foot. What was the total sales price?
Which of the following actions on the part of a real estate broker could result in revocation of his license?
1. Failing to submit to an owner all formal, written offers for property listed for sale 2. Quoting to prospective buyers, of a property, a price other than the one stipulated by the owner 3.Failure to report material facts
A broker's office must:
Have a physical address where the commission staff can inspect records
Under an Exclusive Buyer Agency Agreement, the broker has what agency relationship to the purchaser?
On what time basis must trust accounts be reconciled:
A broker purchases software for contract printing. If there is an error in the contract wording:
he broker is liable for the contract's accuracy
If the homestead exemption is not waived, the owner is protected:
from any debt
Loan discount points appear on a closing statement as a:
Debit to the buyer or seller
As the buyers agent is filling out a Contract to Buy and Sell, the agent asks the young married buyers how they want to take title. The buyers are not sure. The buyer's agent should
Leave the choice blank and advise the couple to seek legal counsel and inform the agent of their choice later.
True/False - According to Commission Position 40 on Teams, Real estate brokers that function as teams should not advertise teams using the terms "realty", "real estate", "company", "corporation", "corp.", "inc.", "LLC" or other similar language that would indicate a company other than the employing brokerage firm.
If a contract is signed under duress, it is:
True/False - According to Commission Position 38 Disclosure of Affiliated Business Arrangements, a licensee is required to disclose any affiliated business arrangement in which the licensee has a 1% or more interest when an offer to purchase real property is fully executed.
Which would need to be registered with the CREC (Colorado Real Estate Commission) for a subdivision?
A 60 unit co-op building
A house is closed on May 15. HOA dues are $108 per month and are due and payable on the first day of each month. The HOA dues will appear on the closing statement as a:
$59 credit to the seller
In Colorado "good funds" include a
A teller's check from a savings and loan
Earnest money appears on a settlement statement as a:
Credit to the buyer
A Broker Price Opinion (BOP) and Competitive Market Analysis (CMA) are estimates of value created by real estate licensees for marketing purposes. Since they were not prepared by a licensed appraiser, the follow words must appear at their bottom:
This evaluation was prepared by a licensed real estate broker and is not an appraisal. This evaluation cannot be used for the purposes of obtaining financing.
The license laws of Colorado require a licensee to inform the seller that he has a real estate license for all of the following except:
the licensee is buying a time share
To net the owner $90,000 after a 6% commission is paid; the list price would have to be:
Mr. and Mrs. Seller give an exclusive 90-day listing to broker First. The broker shows the property to Mr. and Mrs. Buyer and he reveals their names to the Sellers. The buyers do not make an offer. The listing with broker First expires and the sellers sign a new exclusive right to sell 60 day listing with broker Second. Two weeks later the Buyers decide to purchase the property through broker First. If the Buyers purchase the property, who is entitled to a commission?
Select the correct statement about a lease in Colorado:
Only residential leases have an implied warrant of habitability
The new owner of a house needs hazard coverage for $98,000. The annual premium is $0.44 per $100.00 of the amount insured. The insurance company agreed to make the cost of the policy 2 ½ times the annual rate for a 3 year policy. How much would the monthly insurance payments be to pay for this policy?
A property's gross income is $27,600 and has monthly expenses of $550. It has been valued at $483,000. What is the capitalization rate?
When completing the Exclusive Right to Sell Listing Contract, which monetary encumbrances does the seller list?
All known to the seller
Prorate an annual insurance premium for an assumed loan, which was paid in advance on Jan 1 by the sellers. Closing is Oct 5 and the policy amount was $985. Since the buyer is benefiting from the Seller paying the year in advance, the buyer owes money to the seller. How much?
If a Seller is in default of the terms of the Contract to Buy & Sell:
The buyer may cancel or sue for specific damages
The buyer may cancel or sue for specific damages
Recording fees may appear on a closing statement as a:
Debit to the buyer, Debit to the seller, Credit to the broker
The owner of subsurface mineral rights:
may have the right to enter and use property
The taxes on a house valued at $60,000 are $450.00. The tax ratio is 16%. What are the taxes on the house next door with a market value of $75,000?
The Colorado Contract to Buy & Sell allows the Buyer who cannot get a written loan commitment by the Loan Objection Deadline:
to terminate the contract by written notice and receive earnest money back
Broker Price Opinions (BPO) are created by real estate licensees not appraisers. These "estimates of value" cannot be used:
to obtain financing
Which of the following is required to have a real estate license?
Property manager specializing in handling buildings in commercial districts
In Colorado, all of the following topics are regulated by Real Estate License Law or Real Estate Commission Rules except:
The real estate broker is liable to the buyer if he:
acts in excess of the authority given by his principal
Loan discount points are a percentage of the:
"Liquidated damages" refers to which of the following?
The seller's sole remedy in case of default by purchaser is to keep earnest funds received from purchaser
The Sellers Agent at his option rebated part of his commission back to the Seller. Was this legal?
Yes, as it was part of the negotiated commission in the listing contract
Your client wants a 12% return on their investment, the property they are looking to buy nets $3,000 per month and has annual expenses of $12,000. What should be the most they would pay for the property
Lily listed her house for sale with a broker on February 1st. The listing agreement was to last for five months but in April she decided that the house was no longer for sale. Which of the following statements is true?
Lily has withdrawn the broker's authority to sell the property and may be subject to reimbursing some broker expenses.
The maximum time allowed for the sale of an agricultural property, through the Public Trustee's office after filing of the notice of election and demand (NED) to foreclose is:
What is the status of a broker who moves his office down the street but does not notify the Real Estate Commission?
The broker and all of his agents licenses are inactive
A transaction broker has which of the following duties to a buyer?
To advise the buyer regarding the transaction
As a transaction broker in an exclusive right to sell listing contract, the listing broker must disclose:
Material facts about the property known to the broker
A loan company will provide a loan to Bill and Hillary for 75% of the appraised value of their home. The interest rate is 10.5%. The first monthly interest payment is $820. The bank requires 4 discount points (hint: a discount point is 1% of the loan amount) to obtain this interest rate. How much will the discount points cost?
The Definitions of Working Relationships form has the effect of:
disclosing the different types of relationships that are available
C.C. & R.'s are appurtenances to real property. The harshest consequences results from the violation of which of the following?
A broker acting as a transaction broker for a buyer, with no written agreement needs:
to provide the buyer with a copy of the "Brokerage Disclosure to Buyer" with the broker's signature showing the date it was given to the Buyer.
Broker Bill Butter is working with Buyer Brian Bread and has found a property on which the Buyer wants to place an offer. The property that he likes is owned by Seller Sammy Samuel and listed by Broker Cherry Cleary. The property is located at 2443 E Westgate Ave in Durango, CO. The asking price is $315,000. Buyer Bread offers $299,000 on April 10th and wants all appliances including the washer and dryer included in the sale price, the appliances were excluded in the listing as was the Hot Tub on the patio. The offer is countered by Seller Samuel on the recommendation of his agent Broker Cherry Cleary on April 11th at $309,000 and will include all appliances except the washer and dryer. Buyer Bread accepts this counter offer on April 12th and the closing is scheduled for May 25. An inspection is held on April 16th and Buyer Bread wants some roof shingles repaired and the carpet in the master bedroom to be replaced. Seller Samuel agrees to the shingles being repaired, but will only give a $750 credit at closing to the Buyer Bread to replace the carpet; Buyer Bread accepts. Prior to closing, Buyer Bread requests that the seller allow them to start a kitchen remodel prior to closing. Seller Samuel will not allow this and Buyer Bread gets angry and wants out of the contract.
When Seller Samuel responded to the initial offer from Buyer Bread which of the following forms should have been used?
Broker Bill Butter is working with Buyer Brian Bread and has found a property on which the Buyer wants to place an offer. The property that he likes is owned by Seller Sammy Samuel and listed by Broker Cherry Cleary. The property is located at 2443 E Westgate Ave in Durango, CO. The asking price is $315,000. Buyer Bread offers $299,000 on April 10th and wants all appliances including the washer and dryer included in the sale price, the appliances were excluded in the listing as was the Hot Tub on the patio. The offer is countered by Seller Samuel through and on the recommendation of his agent Broker Cherry Cleary on April 11th at $309,000 and will include all appliances except the washer and dryer. Buyer Bread accepts this counter offer on April 12th and the closing is scheduled for May 25. An inspection is held on April 16th and Buyer Bread wants some roof shingles repaired and the carpet in the master bedroom to be replaced. Seller Samuel agrees to the shingles being repaired, but will only give a $750 credit at closing to the Buyer Bread to replace the carpet; Buyer Bread accepts. Prior to closing, Buyer Bread requests that the seller allow them to start a kitchen remodel prior to closing. Seller Samuel will not allow this and Buyer Bread gets angry and wants out of the contract.
What is the brokerage relationship between Seller Samuel and Broker Cleary?
An encumbrance issued by a court on a property of a defendant in a pending lawsuit for money damages is called an:
Writ of Attachment
If a licensee fails to complete the continuing education requirements by the renewal date:
the license is placed on inactive status
The Colorado approved Agreement to Amend/Extend Contract form should be signed:
Before the sales contract has been fully executed
If mineral rights are not listed in the deed, and not previously transferred, the rights are:
transferred to the grantee
The Interstate Land Sales Full Disclosure Act stipulates that:
it requires developments to be registered if they are selling more than 100 lots or condominiums
Mr. Jones has a property valued at $150,000. The 2003 taxes were 27.65 mills. In 2004 the mill levy was reduced to 25 mills but the assessed value increased 10%. Did the taxes:
If the closing is March 15, and last years taxes of $1127 were not paid; how is this shown on the settlement sheet?
$1127 debit to the seller, credit to the broker
The broker is responsible of making sure that the bill gets paid
A parcel of land was sold for $17,500 which was a 22% profit. What price did the seller originally pay for the property?
$17,500 / 1.22 (122 %) = $14,344.26
Duplex owned by wife and husband. Joint tenancy. Husband dies. Husband had a will and left all assets or to son from previous marriage. What does the son receive?
Son does not get the property
All parties under joint tenancy have a right of survivorship. This means that the wife became the sole owner of the property automatically upon the death of her husband. This right supercedes the will.
A primarily white neighborhood was starting to change over to more racially mixed demographic. An advertisement said "sell now before it's too late". Can the realtor be in trouble for this and if so, under what premise?
Yes, this is blockbusting
When an exclusive right-to-buy contract has been executed, who is obligated to pay the broker working with the buyer?
It is determined by which box is checked in the contract
If the buyer assigns her right to purchase a property pursuant to an exclusive right-to-buy contract to her brother-in-law:
he broker shall still have the right to collect a commission
According to Commission Position 25 on Recording Contracts, should a listing broker decide her Seller client is attempting to cheat her out of a commission, the broker can:
Commence mediation, arbitration or a civil action
Of the following brokerage relationships, which one does not include the duty of advocacy for the principal?
If the buyer and seller have not reached a resolution on inspection issues the contract will terminate:
on the expiration of the resolution deadline.
The Real Estate Commission approved Colorado Power of Attorney form
creates a limited agency agreement
The payoff of an existing loan appears on a closing statement as a:
Debit to the seller
Upon acceptance by the seller of a Purchase and Sale Agreement, the buyer:
has an equitable interest in the property
Broker written provisions inserted into a Commission approved form must:
use a different style font from the pre-printed areas
Acceptance of an offer must be which of the following?
Absolute and unqualified, Expressed or communicated, Within time limits
When a broker presents the Definitions of Working Relationships form to a purchaser:
this is not considered complete disclosure of agency
After the Sellers columns on a Settlement sheet have been subtotaled, to balance the two debit and credit columns, a credit to the Seller and a debit to the broker would represent:
Money owed by the Seller
According to Colorado law, in the absence of a written agreement to the contrary, a real estate broker:
represents neither the buyer nor the seller
The License Buyout Addendum to the Contract to Buy and Sell is required for which of the following situations?
an associate is offering a guaranteed buyout arrangement as an inducement to list with his or her company
A broker enters into an exclusive right-to-buy contract with a purchaser. The purchaser finds a satisfactory property and makes an offer, which is accepted. The listing broker is unavailable during much of the transaction and the selling broker performs several of the listing broker's responsibilities. In gratitude, the seller offers a $500 bonus to the selling broker. When is it acceptable for the broker to receive this money?
With full written disclosure to both parties
Find the annual rate of return percentage on an $88,000 investment if the weekly gross income is $225 and monthly expense is $370
Calculate the annual income which is $225 X 52 = $11,700. Then calculate the annual expenses $370 X 12 = $4,440. Next subtract $4,440 from $11,700 = $7,260 then divide this by $88,000 = 8.25 %
A financing statement and security agreement are used:
when offering personal property as security for a loan
Who is responsible for the cost of Mediation?
Split equally between buyer and seller
A buyer enters into an exclusive right-to-buy contract and subsequently submits an offer on a property that is accepted; if the transaction fails, through no fault of the purchaser:
the buyer is under no obligation to pay his broker a commission
In a new loan closing, sometimes a lender may make some of the payouts, such as recording fees, survey and reserve taxes before the closing. When these amounts are taken out of the loan, the remaining balance is the amount sent to the closing table and is called the Net Loan Proceeds. The Net Loan Proceeds are entered on the settlement worksheet:
As a debit to the broker, single entry
How many days notice does a landlord have to give to evict a tenancy-at-will?
The covenant implied in a lease that ensures that the tenant will not be evicted by someone claiming prior ownership to that of the lessor is the:
covenant of quiet enjoyment
A transaction broker owes a fiduciary responsibility to :
neither the buyer nor the seller
A Buyers right to a specific performance remedy in the event of a Seller default in the Contract to Buy and Sell Real Estate:
Is the default remedy and as such need not be selected
Advocacy of the principal is a benefit of which of the following relationships?
buyer or seller agency
A broker is entitled to pay a commission to:
a licensed broker in another state
Which of the following is contained in the preprinted portion of a purchase and sale contract?
Preowned home warranty information
Broker Baker lists seller Simms home. The listing expires January 15th. During the listing period Broker Baker showed the house to Archie and Edith Bunker. Broker Baker submits their names to Seller Simms, but the Bunkers do not make an offer. On the 25th of January, Seller Simms lists the property with Broker Barker. On, January 30th, the Bunkers make an offer through Broker Baker. Who is entitled to the listing commission?
To assign a contract for the sale of real estate means to:
transfer the rights under the contract
The support staff in an office is available to do all of the following, except?
Be your own personal assistant
Taxes for the current year are usually:
prorated and charged to the seller and credited to the buyer at closing
"MEC" in the Contract to Buy/Sell Real Estate means:
the date upon which both parties have signed the contract.
Someone living in a condominium exclusively owns:
elements inside the condominium - such as carpet
Before choosing a broker, you may:
inquire with the Real Estate Commission about the broker's status -- are there any complaints or past disciplinary actions against him or her?
When using a non approved form to buy and sell real estate who must prepare it
attorney for parties
An ad in the newspaper must appear under the name of:
the broker of record
According to the Exclusive-Right-to-Sell Listing Contract, which of the following is true with regard to fixtures listed on the approved form?
they are included if attached on the date of the listing unless specifically excluded by the seller
A Purchase and Sale Contract may be prepared by:
buyer or seller's attorney
A licensee's sphere of influence includes all of the following except:
residents of a nearby community
F.S.B.O. in real estate means:
for sale by owner
The least expensive way of getting clients is:
holding open houses
Items that should be addressed in the office policy manual include, but are not limited to:
brokerage relationships offered
A broker received an earnest money deposit. Other than depositing it in an escrow account, he may:
do whatever is agreed to by the seller and buyer
A broker may be liable for the unlawful acts or violations of his or her employees except:
their client's lawyers
If a licensee desires to sell his or her own property, as a FSBO, the licensee must:
address the issue of who is to hold the earnest money
The law that requires that any Colorado real estate license applicant:
apply for an associate broker license
The office policy manual establishes the types of brokerage relationships your broker offers. If your seller requests you to offer one that is not offered, you should:
discuss the issue with your broker
Which items, are not considered physically attached to the property and are not included in the sale?
Personal property is not included in the sale of real estate. Draperies do not satisfy the tests of fixtures since they are not permanently attached.
A licensee who wishes to pursue a career in a specialty area of real estate:
does not need any special license for farm-ranch and vacant land sales, property management, as well as commercial and residential real estate.
When starting out as a new broker, you may want to consider which of the following when choosing a broker to work under?
A broker that will provide training and support
As to the preparation of legal documents at closing:
the licensee bears the cost for the preparation of legal documents except those prepared by the Seller''s or Buyer''s attorney
Any special assessment on the property assessed prior to closing is paid by:
is negotiable in the sales contract
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
A $4,000 tax lien is shown on the title work. The contract:
proceeds so long as the lien is paid at or prior to closing
An offer to purchase is given to Broker Mary who has an Exclusive Right To Sell listing agreement with a seller. She..
must disclose all material facts about the property that is know to her
A couple signed a lease on an apartment for a period of 1 year. The lease does NOT contain an automatic renewal clause. The couple plans to move out at the end of the lease rather than renew it. How much notice MUST they give to comply with the lease term?
no notice is required
If a Colorado real estate licensee's license is revoked, his employing broker's license may also be:
not suspended or revoked until a hearing is held
Interest in arrears is charged to the:
An associate broker has developed a web site. What must he or she include on the site?
name and location of the brokerage company that holds the associate's license
Your offer to buy a property for $150,000 is accepted, but unfortunately there is a fire in the kitchen prior to closing. The insurance company estimates about $9,000 to repair and repaint. The repairs will be made in time to meet the closing date.
the buyer must proceed
In Colorado, who of the following is exempt from real estate license law?
Investor who owns 12 investment properties and sells one to an owner-occupant.
An Exclusive Right-to-Sell Listing contract establishes That the broker and the seller will submit to mediation prior to litigation. true or false
If an Asian family is looking for a home, you must assume they would want a home in:
A client is buying an old gas station with the intention of building a flower shop. The lender will likely ask for:
Request if a CERCLA assessment report has been issued in the prior 2 years making the property owner innocent of past environmental liabilities as per the Brownfield Revitalization Act
The reason for requiring an earnest money deposit in a purchase contract is to:
provide proof of the buyer's intent to carry out the contract
The seller agrees to all terms of the offer presented, except that they want 72 hours before possession, not 48 hours as in the offer. Since it is such a small change, they made the change by crossing out the 48 hours and writing in 72 hours and initialing the change. They then signed the contract as accepted. The buyer may, at their discretion:
also initial the change, and the contract is deemed accepted by all parties
you cannot represent one party in the transaction as an agent, and be a transaction broker for the other party in the same transaction. true or false
You submit an offer to the seller. They agree with price, inclusions, everything except the closing date. The proper way to handle this is:
the seller should sign a counterproposal with their preferred date of closing
The seller may terminate a listing because he/she did not like the wording of an advertisement. True or False
If the listing broker is out of town, and you cannot reach them to present an offer:
call the listing broker's office and ask if there is another broker handling the out of town broker's business or ask to speak to the employing broker of that office.
The Real Estate Commission will NOT issue a temporary hardship employing broker license to:
As per the Contract to Buy/Sell Real Estate:
LEGAL FEES, COST AND EXPENSES. Anything to the contrary herein notwithstanding, in the event of any arbitration or litigation relating to this Contract, prior to or after Closing Date (§ x), the arbitrator or court must award to ______________________________, including attorney fees, legal fees and expenses.
the prevailing party all reasonable costs and expense
A buyer submits an offer to purchase to the listing agent. He finds out that more than several offers are coming in for the same property. He can expect that:
all offers will probably be presented at the same time, and the seller will select among them
When setting up a showing, lock box information may be given:
to the buyer's broker, after licensee's information is taken and verified.
You are helping a couple who is not married purchase a home. They look to you when you ask them how they want to take title.
you cannot advise them in this matter -- they must seek legal advice
You meet with a buyer who wants to purchase the home that they are looking at on the spot. You failed to bring along a contract to purchase. Rather than have the buyer lose the property, you can do the following:
ask the buyer to accompany you to your office and have them sign the contract
If a seller prepares a counterproposal, to an offer to buy and it is turned down by the buyer:
the buyer can prepare a counter to the counteroffer
If the specific performance box is checked, and the buyer defaults on the contract:
the seller may keep his earnest money and sue him
If a broker lends money to a client and places it in his trust account:
he may withdraw it only with the consent of his client
If an agent has a listing and transfers companies, does the listing stay with him/her and the new company OR does the listing remain with the original company?
It is the company's listing, the company keeps the listing.
more than one listing contract may be executed for the same time period, for the same property. true or false
The seller agrees to pay $1500 of the buyer's closing costs, this is shown on the settlement sheet as:
debit to the seller, credit to the buyer
As a licensee, are you required to become a member of the MLS?
No, however the MLS is the most used marketing tool for listed properties
To protect your buyers, the seller, and yourself, you should:
walk through the home with your buyers
If at all possible the broker should set up showings for he/she and the buyer:
before heading out for the day, so the time can be well spent
n a new loan closing, sometimes a lender may make some of the payouts, such as recording fees, survey and reserve taxes before the closing. When these amounts are taken out of the loan, the remaining balance is the amount sent to the closing table and is called the Net Loan Proceeds. The Net Loan Proceeds are entered on the settlement worksheet:
As a debit to the broker, single entry
Mediation is for and arbitration is for
informal dispute settlement, formal settlement
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?
In the section on Purchase Price and Terms in a Residential Contract to Buy and Sell, which of the following is true concerning the entry for cash at closing?
It does not include the buyer's closing costs, such as loan fees.
On the Commission-approved purchase and sale agreement involving remedies in the event of a buyer default; if no box is checked what is the default:
the liquidated damages clause is automatically in effect
If an owner refuses to pay a broker an earned commission, the broker may properly seek relief by:
bringing a court action
Which does NOT fall under Rule F?
Contract to Buy/Sell (Commercial)
Contract to Buy/Sell (Land)
Deed of Trust
Correct -> Contract to purchase newly constructed home with warranties.
Out of state seller sold a property for $489,000. The property was highly leveraged resulting in cash proceeds to the seller of $5,500. How much should be withheld subject to the Colorado Department of Revenue Income Tax?
$5500 This question relates to the rules on Colorado withholding taxes. The rule is if the seller has an out-of-state address, the State directs at close a withholding of 2% of the purchase price or the proceeds whichever is less. This is to cover any potential State income tax liability for sellers. Since they live out-of-state, they likely do not file Colorado tax returns. Taking the money gives them a good incentive to file. Keep in mind this is not an actual tax, just a withholding. If the seller files and does not owe taxes, they get the withheld money back. Two percent of the selling price of $489,000 is $9780. Since $9780 is higher than the proceeds of $5,500, the lessor amount of $5,500 will be withheld as the potential tax liability. Also note that this withholding does NOT apply to Colorado residents.
A lender requires the use of a Name Affidavit to identify:
all of the alias' used by the borrowers
The IRS requires which of the following documents to be completed by the seller at the time of closing?
Definition of 'Discount Points'
Discount Points are a form of prepaid interest. A borrower buys a point and in return gets a lower interest rate on the loan. Each discount point generally costs 1% of the total loan amount and depending on the borrower, each point lowers your interest rate by one-eighth to one one-quarter of your interest rate. As the IRS considers discount points to be prepaid interest they are tax deductible in the year in which they were paid.
For example, on a $300,000 loan, each point would cost $3,000. Assuming the interest rate on the mortgage is 5% and each point lowers the interest rate by 0.25%. Buying 2 points will cost $6,000 and will result in an interest rate of 4.50%.
Both lenders and borrowers gain benefits from discount points. Borrowers gain the benefit of lowered interest payments down the road, but the benefit applies only if the borrower plans on holding onto the mortgage long enough to save money from the decreased interest payments. Lenders benefit by receiving cash upfront instead of waiting for money in the form of interest payments over time, which enhances the lenders liquidity situation.
On a practical basis; discount points are most often purchased by sellers as an incentive to prospective buyers. For most sellers, discount points are a cost of selling and thus tax-deductible. Buyers usually do not see enough benefit to purchase discount points. In the earlier example; spending $6,000 to reduce the interest rate to 4.5%, would have reduced the monthly payment by about $90. It would have taken a buyer 67 months to cover the cost of the points.
In Colorado, when must real estate licenses be renewed?
every three years on the anniversary date of first being licensed, or any date mandated by the CREC.
Should a dispute go to court, according to the Contract to Buy and Sell Real Estate:
the court should award court costs to the prevailing party.
Prospective buyers made an offer on a property. The seller did NOT accept, but made a counteroffer. The prospective buyers signed the counteroffer and the real estate agent delivered their acceptance to the seller. In the interim, the same buyers had found another house that they liked better and made an offer on it, which was accepted. Which of the following is TRUE?
Both contracts are valid
A house is closed on October 15. The annual insurance payment is $578 for the fiscal year of July 1 to June 30. The buyers will assume the seller's policy. Since the policy has been paid, how much does the buyer owe the seller at closing?
$578 / 365 = $1.5836 per day. Seller paid for 259 days; he didn't own the policy (Oct. 15 through June 30) 259 x $1.5836 = $410.14
If an offer is given that fulfills all the terms of a contact and the seller rejects that offer - what happens?
The listing broker is entitled to a commission
Standard title insurance charges appear on a closing statement as a
Credit to the broker
What form signed by the buyer and seller instructs and authorizes the title company to prepare all of the closing documents?
The closing instructions
The minimum amount of time you must give a seller to respond to your offer is:
If the Loan Objection Deadline passes and there is no loan commitment by the lender, what happens to the contract if the buyer and seller have not signed an amendment extending the date?
The buyer is in default if he/she does not close
What if anything is required by the broker to be included on his/her Web site.
Name of licensee's brokerage firm
Your buyer is purchasing a town home. He has heard that the community has very restrictive covenants and wants to make sure that his offer is contingent upon his approval of their rules.
f properly prepared, the buy and sell contract gives him the right to review the covenants and terminate, if they are unacceptable.
The contract to purchase addresses the following issues:
pre-owned home warranty programs are available
Exclusive Right-to-Sell contracts list specific services the broker will offer. Those services:
are not limited to those preprinted on the contract
All of the following are true regarding the Exclusive Right-to-Sell listing contract except:
more than one listing contract may be executed for the same time period, for the same property
When must a seller respond to an offer to buy ?
as specified in the offer
If the seller finds out he is not being transferred and defaults on the sales contract:
the buyer can sue him for specific performance and damages
During a showing on a property with a buyer, the broker is called away on a family emergency. In this situation the broker:
arrange another time to meet with the buyers and show them properties
You are a buyer's agent. The buyer is anticipating a large legal settlement that will allow them to purchase home cash. It hasn't come through yet, but is anticipated within the next three months. Your buyer finds a home right away and wants to write an offer. The owners of the property are being transferred, only way their offer will be accepted, and your buyer knows that, is if the closing is within 30 days. They have you write and present an offer for cash, with a 30-day close, knowing that it is highly possible that their funds will not be available at that time. As a buyer's agent:
you must disclose this information to the seller's agent
When an employing broker changes the primary business address,
the broker must notify the commission in a manner acceptable to the commission, or the brokerage license will become inactive.
Title insurance endorsements appear on a closing statement as a:
Credit to the broker
The Title Company or broker, whoever is doing the closing, collects money for title insurance endorsements most typically from the buyer (Debit Buyer) and then places the coresponding amount into the Credit Broker column to ensure a check gets written to the title company for providing the endorsement. Endorsements are generally requirements by the lender for additional converage to be added to the title insurance policy.
A seller listed her home with a broker. After a few months, the seller found a buyer, and the sale closed. The seller was not obligated to pay a commission to the broker. This listing was MOST likely:
exclusive agency listing
A broker representing an owner in a listing contract to sell a parcel of land is a(an)
A broker is a special agent. You are hired to perform only one job, sell the land.
Concerning agency, the following statement is true:
you cannot represent one party in the transaction as an agent, and be a transaction broker for the other party in the same transaction
When making a counter offer by using the approved Counterproposal form - how do you change dates?
Change only the dates that needed to be changed
When is an offer to purchase, considered accepted?
When the buyer's broker is notified, that the offer has been accepted by the seller
Building Ordinances may specify & regulate:
materials used in plumbing
The earnest money check is usually made out to:
the listing broker
A property owner died, having willed his real property to his two daughters. There is still a chance that they could lose the land for a variety of reasons, but it CANNOT be taken through
our offer to buy a property for $150,000 is accepted, but unfortunately there is a fire in the kitchen prior to closing. The insurance company estimates about $9,000 to repair and repaint. The repairs will be made in time to meet the closing date.
the buyer must proceed If the damage is repaired and the cost of the repairs are less than 10% of the cost of the property, then the buyer cannot terminate the contract. If the repairs exceed 10% then the buyer may terminate the contracT.
The Exclusive Brokerage Listing Addendum attached to an Exclusive Right to Sell Agreement
Allows the seller to negotiate a sale and not pay the broker
If the buyer has asked the seller to pay points, the seller needs to understand:
a point is up front money paid to the buyer's lender at closing
When can you talk to a seller about listing his house, if the house is listed with another broker?
Anytime, if the seller approaches you first
The commissioners are selected in the following way:
Appointed by the governor
The "holdover clause" in the Exclusive-Right-To-Sell Listing Contract protects the listing broker's commission for disclosed buyers:
For the period of time specified in the contract, or if the "Shall Not" box is checked until the property is relisted with another broker
If a licensee is also a licensed appraiser, can the licensee offer to appraise a home if they intend to be the listing agent for that same property in the future?
Yes, as long as it is disclosed to all parties
Closing March 15, next payment due April 1. How many months of escrow can lender take for taxes?
What is the status of an employing broker who moves his office down the street but does not notify the Real Estate Commission?
The broker and all of his agents licenses are inactive
According to the Colorado Licensing Law, in order for a non-resident to become a broker:
he must be a broker from his home state and pass Colorado licensing laws, but need not open an office in Colorado
Contract closing date is March 29. Buyer and seller want to close on the 27th. In order to do this, they must:
nothing, this is okay per the original contract
At closing, the earnest money is credited as follows:
Earnest money is credited to the buyer at closing and debited to the broker.
Reserve's are charged to the borrower at closing for:
Correct -> all of the above
In Colorado the minimum time following recording the Notice of Election and Demand before a residential foreclosure sale can be held is:
110 - 125 days
A residential foreclosure sale must be within 110 to 125 days of the recording of the Notice of Election and Demand. For agricultural properties the window is 215-230 days.
To become an employing broker, one must:
take 24 hours Brokerage Administration
Requirements of a real estate applicant:
meet the state requirements for licensing
Being an independent contractor; your earned commissions:
reflect no deductions
When a contract is rejected by the Seller, the seller should:
check the appropiate box and initial on the indicated line
If a broker shows a home for another broker who has it listed and a married couple comes in and he answers all questions the best he can and he promises to find out answers to the ones he doesn't know and get back to them. What type of relationship has been established?
No fiduciary relationship has been established
The lender computed the interest for the previous month on a $120,000 mortgage loan balance at $825. What is the rate of interest?
0.0825 $825 X 12 = $9900 (Annual Interest) / $120,000 = .0825 or 8 1/4 %
The property is leased through September, and the new buyer closes on June 30.
the new buyer must honor all leases
As a licensee you desire to sell your home yourself:
this will be addressed in the office policy manual
Seller does not vacate property on the date stated in the contract. The seller is subject to:
daily dollar amount specified in contract
What is typically not negotiable in the Contract to Buy and Sell Real Estate
When comparing/analyzing CMA, these are the factors that would be NOT be taken into consideration:
A licensee selling his or her own home must do all of the following except:
pay himself a commission
Interest on the loan assumed is shown as:
Credit to the buyer a debit to the seller.
The Seller's Property Disclosure does not require disclosure of which of the following?
The presence of illegal substances on the premises
Regarding the broker/seller relationship under the terms of an Exclusive Right-to-Sell listing contract, which of the following statements are true?
The broker can take the listing without being an agent of the seller
What is the right of rescission?
The right of rescission is a consumer protection law found within the Truth in Lending Act
Truth In Lending Act -- Regulation Z
The Truth in Lending Act (TILA), Title I of the Consumer Credit Protection Act, is aimed at promoting the informed use of consumer credit by requiring disclosures about its terms and costs. In general, this regulation applies to each individual or business that offers or extends credit when the credit is offered or extended to consumers; the credit is subject to a finance charge or is payable by a written agreement in more than four installments; the credit is primarily for personal, family or household purposes; and the loan balance equals or exceeds $25,000.00 or is secured by an interest in real property or a dwelling.
The hold over period may be found in all of the following contracts except?
Residential Contract to Buy and Sell Real Estate
In Colorado, which of the following must be investigated by the real estate commission?
any verified written complaint
Licensees are NOT required to use the Licensee Buyout Addendum to Contract to Buy and Sell under which of the following circumstances?
When an agent decides to purchase a property listed by another broker
The licensee buyout addendum must only be used when the licensee is purchasing his/her own listing.
A is correct. A is the only verbiage listed NOT in the Licensee Buyout Addendum.
What Is a Licensee Buyout Addendum?
A licensee buyout addendum is a form used in certain real estate and property transactions in the state of Colorado. The LBA is used only in the purchase and sale of properties between licensed real estate professionals and their own clients.
A Colorado licensee filling in the blanks in a standard commission approved form:
This is the practice of law, but permitted by Colorado Law. This was one of the outcomes of Conway-Bogue court case in 1957 that allowed the broker to fill in the blanks on standardized forms approved by the Colorado Real Estate Commission
What portion of the 24-hour continuing education requirement is to consist of the mandatory credits developed by the Real Estate Commission?
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.
According to the rules and regulations of the Colorado Real Estate Commission, a broker is REQUIRED to recommend that:
the buyer have title reviewed by legal counsel
A transaction broker relationship may be created by:
Brokerage Disclosure to Buyer
When establishing a relationship with a buyer or seller, the Commission-approved form entitled "Definition of Real Estate Working Relationships:"
may help explain brokerage relationships
The Real Estate Commission requires the use of a Lead-Based Paint Disclosure form on all dwellings permitted prior to:
According to the Licensee Buyout Addendum to the Contract to Buy and Sell, when does responsibility extend beyond the licensee to the brokerage firm?
if the Employing broker signs at the bottom of the addendum
If the managing or employing broker signs the Licensee Buyout Addendum, then the brokerage company is responsible. According to the form, this is the only specification for responsibility
Which of the following requires the use of the Licensee Buyout Addendum to the contract to Buy & Sell?
A broker offers to purchase a property as an inducement for the Owner to purchase another
Rule F-11 specifies certain conditions for the use of the Licensee Buyout addendum. Rule F-11 only applies in one or more of the following instances:
When a licensee enters into a contract to purchase a property: (1) concurrent with the listing of such property; (2) as an inducement or to facilitate the property owner's purchase of another property; or (3) continues to market that property on behalf of the owner under an existing listing contract .
A buyer working with a broker has been unable to reach the broker for two days. Even though the broker gave word to his office that an emergency called him out of town, the buyer could construe this to be:
The lender may require the following items from the purchaser except:
Correct -> there current property taxes
In the Contract to Buy and Sell, what does the statement, "time is of the essence hereof" mean?
All dates and deadlines will be strictly interpreted.
Which is not true regarding the Counterproposal form:
The only changes allowed are purchase price and earnest money
A legal easement can be created by any of the following EXCEPT
merger of the titles
When two titles are emerged it means that two properties have been merged into one. Any easements between the two are extinguished as no longer necessary.
Which of the following is true if a broker negotiates a Success Fee under the Exclusive-Right-to-Buy Contract?
The buyer will indicate who is to pay the fee
The Exclusive Right to Buy agreement is often referred to as the Buyer Agency Agreement. This is the contract used when a buyer wants to engage the services of a buyer's agent. In this agreement, Success Fee is a term used for commission. Since the buyer is engaging the agent, the buyer needs to indicate who is going to pay the agent (buyer or listing broker or seller or anybody but me). The form of this payment needs to be indicated i.e. a percentage of the sale or lease, or an hourly rate, or some other form of compensation. If there is a minimum or maximum amount. If they are paying a retainer. In short, a number of different negotiated items all relating to the commission to be paid.
An Exclusive Agency Addendum to the Exclusive Right-To-Sell Listing Contract
Allows the seller to not pay a commission to the listing broker if the seller should procure a buyer
A buyer's agent should do all of the following except:
reveal the buyer's motivation to the listing agent
A rental agreement for less than how many months does not need to be in writing to be enforceable?
Which of the following is true with regard to the Seller's Property Disclosure form that is mentioned in an Exclusive-Right-to-Sell listing form?
The seller may decline to provide the disclosure but still must disclose latent material defects.
When purchasing a "new home" through a builder, the earnest money should be held in the:
builders escrow account
As per the Contract to Buy/Sell Real Estate:
LEGAL FEES, COST AND EXPENSES. Anything to the contrary herein notwithstanding, in the event of any arbitration or litigation relating to this Contract, prior to or after Closing Date (§ x), the arbitrator or court must award to ______________________________, including attorney fees, legal fees and expenses.
the prevailing party all reasonable costs and expense
On the Commission-approved purchase and sale agreement regarding remedies in the event of a buyer default; if no box is checked what is the default?
the liquidated damages clause is automatically in effect
On the commission approved purchase and sale agreement form; if the specific performance box is not checked the liquidated damages clause is automatically in effect.
Commission Position 6 on the release of earnest money deposits indicates:
if the transaction fails and there is no dispute over who is to receive the earnest money the broker should release the funds immediately
As per the Mediation clause in the Contact to Buy/Sale Real Estate: "The mediation, unless otherwise agreed, will terminate in the event the entire dispute is not resolved within _________ days of the date written notice requesting mediation is delivered by one party to the other at the party's
last known address.
The Certificate of Taxes Due is used to calculate:
the proration of taxes for the final tax agreement
All of the following liens must be satisfied in order to transfer clear title except:
Judgments and tax liens must be satisfied in order to transfer clear title.
f scheduling a closing on the last day of the month, it is wise to:
schedule the closing as soon as possible, as the times fill up fast
During the processing of the loan, it is:
the buyer's responsibility to follow up with the lender
An agent lists a property using the Colorado Exclusive Right to Sell Listing Contract and checked the "Shall Not" box in the Holdover Clause. Just before the listing expired, a buyer views the property. Wanting to retain the rights to this buyer, the listing agent provides the buyer's name in writing to the seller. After the listing expires, the seller lists with another agent and the buyer's agent submits an offer on the property. If accepted, would the old listing agent receive a listing commission?
No, the new listing broker earns the listing side commission Explanation
Only the current listing broker earns the commission. Checking the "shall not" box in the Holdover clause indicated that the provisions of the clause would no longer be in effect should the property be relisted with another agent. When the property was relisted - the old listing agent lost the right to a listing commission for the buyer. If the old listing broker had checked the "shall" box, he/she would have been entitled to a listing commission under the terms of the Holdover clause.
Title insurance companies guarantee against a loss because of defects existing:
at or before the date of the policy
Brokers should be extremely careful when acting as a power of attorney for one of the parties. Which of the following is correct:
a written power of attorney must be recorded in the county in which the real property is located
An offer has been presented to the sellers of a property. The sellers do not want to accept it as it is. They ask their agent to change the terms through a counter proposal. The seller's agent prepares the counter proposal and delivers it to the buyer's agent. The buyers don't want to accept the new terms the seller Is offering. What can be done?
As buyer's agent you would tell them to rewrite the original contract
A purchase contract can only have one counter attached, the buyer can't withdraw a counter, and only sellers can withdraw the counter. They must sign another contract knowing what terms are acceptable.
Which of the following is true with regard to the approved Earnest Money Promissory Note?
must be due early enough to assure good funds for closing
Mr. and Mrs. Snively have a contract to purchase a home for $257,000. A hailstorm damaged the roof to the tune of $27,500 before closing. What remedy does the buyer have?
nively's have an option of whether they will or will not proceed with this contract
Per paragraph 17, all are true. (C-lender wouldn't close and loan of damaged property).
Loan discount fees are paid by:
seller or buyer
Broker Needa leaves for vacation. In his absence, associate Wanna will be handling the escrow accounts. If Wanna errors with the accounting procedures:
The broker is ALWAYS responsible for agents under their license.
Who should attend the inspection?
Buyer, selling agent, and inspector
A owner agrees to lease a property to be used as a casino. State laws prohibit gambling. This contract would be legally defined as
After closing, the purchaser's take possession of the property as stated in the contract. Upon closer examination, the linoleum has a new tear in it. Who is responsible for this repair according to Paragraph 18 of the Contract to Buy and Sell Real Estate?
Who should determine time and location of closing?
It is a point of negotiation in the contract
What is recorded after the sale of a property?
Deed of trust
A transaction broker has a fiduciary responsibility to:
neither the buyer or seller
In a transaction that is subject to a licensee buyout agreement, if the buyer defaults, the seller may:
always sue the buyer for specific performance
"Liquidated damages" is deleted, in a licensee buyout addendum to a contract to buy and sell real estate.
A broker has an Exclusive Right-to-Buy contract with a principal. Who is to be their customer?
Regarding interest earned from rental money received by property managers:
belongs to lessor
An estate from period to period:
doesn't have a specific expiration date
Which of the following forms is not a Colorado Real Estate Commission-approved form?
Residential Lease Agreement
If an offer to buy is withdrawn, the listing broker:
As per the Assignability and Inurement clause in the Contract to Buy/Sell Real Estate:
Checking the "Is" box means the contract is assignable without the seller's prior written consent
In a real estate transaction, a broker should advise the buyer of the:
need for a title search
Of the following; who is responsible for for an accurate and complete closing statement?
real estate broker attending closing
Real estate brokers are required by Rules E-4 and E-5 to provide copies of complete and accurate closing statements to buyers and sellers for any transaction in which the broker
assists or acts in an agency capacity. Although the brokers usually engage a closing company to create the closing statements, they cannot delegate responsibility for the statements being accurate and complete.
With regard to a property in a Home Owners Association, the Contract To Buy & Sell Real Estate provides the Buyer the right to terminate the contract if Buyer does not receive the Association Documents by:
Association Documents Deadline
Title insurance endorsements are provided by the:
Buyer for the protection of the lender
Standard Title insurance is paid for by the seller. Title insurance endorsements by the buyer, in favor of the lender. This is usually called mortgagee insurance, or the mortgagees policy.
What was decided in the Conway-Bogue decision?
Must recommend to client that it is always advisable to have a contract reviewed by an attorney
Real estate agents are practicing law without a license
Must use pre-approved commission forms
Correct -> All of the above
According to the Conway-Bogue decision, it is a required practice for Colorado brokers to:
Use standard and approved forms
A buyer made an offer to purchase a property. The owner responded with a counteroffer. While the buyer was reviewing the counteroffer, the owner received a better offer. The owner can accept the second offer if:
The owner withdraws the counteroffer before it is accepted
How many days after notice of discrimination does someone have to file a complaint under Colorado Fair Housing Laws with the Colorado Civil Rights Commission?
Who of the following is required to obtain errors and omissions professional liability insurance?
every active Colorado licensee
If the purchaser makes an offer to buy conditional on the ability to secure a loan and is unable to, after the buyer has in good faith pursued the loan application, the buyer:
may cancel the contract to purchase
A three-day right of rescission applies to:
Real estate brokers must keep abreast changes in criminal laws. true or false
New home builders:
might use non-commission approved sales contracts
In order to be effective, a Commission-approved Counter Proposal:
must be attached to each copy of the original offer signed by the buyer
The broker must keep funds received on behalf of others in:
an identified trust account separate from the broker's other funds
Just before the close, the buyer noticed a brokern window and a mandoor hanging by one hinge in the detached garage, her inspector had missed these as he considered outbuildings as outside the scope of the inspection. What is the buyer's recourse?
Buyer's responsibility because she had missed the inspection deadline.
The title company may be hired by the listing broker:
to act as scrivener for the transaction
In the case of a listing contract that has been unilaterally canceled by a seller who wishes to list with another broker during the active term of the original listing:
the subsequent broker must explain, prior to taking the listing, the potential liability for the payment of two commissions
The broker does not have the responsibility to:
disclose the buyer's ethnic background
On October 2 a buyer made an offer, which he agreed to keep open for three days. The seller made a counter offer, which the buyer rejected. The seller then accepted the original offer. The status of the original contract is:
A broker received a commission for $20,940 for the sale of a $349,000 house. What was the commission rate?
An owner falls behind on payments. The lender declares the full loan amount due. This is the result of what clause in the promissory note:
Keeping track of earnest money funds received in the course of a transaction is usually:
determined by mutual agreement in accordance with the contract
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?
It is a violation of commission regulations to accept the money.
What happens to the original warranty deed after it has been recorded?
sent to buyer
The following is true of discount points:
a discount is a percentage, of the loan amount, required by the lender to obtain the same yield that could be obtained on loans offering a higher interest rate
Antitrust laws govern that a broker requires all of his brokers to charge 6% commission.
Broker is allowed to facilitate safeguards for seller assisted financing by adherence to the following EXCEPT:
Notify Real Estate Commission of true selling price of home
According to the Contract to Buy and Sell, who pays for the appraisal?
If a member of the public suffers any loss, due to the lack of care or knowledge or skill, which a competent real estate broker should possess, that person can hold the broker liable for such loss through:
disciplinary action before the Real Estate Commission
As per terms of Closing Instructions, a closing company must do all except:
mandatory release of earnest money if buyer fails to close
At the time of harvest, crops that require annual planting are generally considered to be
The Colorado Contract to Buy & Sell establishes a Loan Objection Deadline if the buyer is getting a new loan. What is the effect of the deadline?
If the buyer cannot get a satisfactory loan by that date, the buyer may terminate the contract with written notice to the seller
Time is of the essence means:
the period of performance or acceptance will be enforced strictly
amends the terms and conditions of a proposed contract to buy/sell
If it is the broker's office policy to offer differing splits to various types of cooperating brokers, such as one amount to buyer agents and another to transaction brokers:
it must be clearly disclosed to a seller that such a policy could result in restricting market exposure or cooperation from other brokers
A broker acting as an agent must:
exercising reasonable skill and care, as well as act as an advocate for buyer or seller
FHA loans are available:
for owner-occupied homes
Megan's Law requires:
sex offenders to register with the local police department
If items listed in the Inclusions and Exclusions Section of of the Contract to Buy and Sell Real Estate are not a part of the property, the broker should:
do nothing, if the listing item is not on the property as of the date of the contract, it is not included nor necessary to cross it out
The buyers submitted earnest money of $3,000 under liquidated damages. If the buyers did not show up to the closing, nor did they complete the loan application. The seller may:
Keep the earnest money, there is no recourse in the agreed purchase contract for a suit for damages
A lawsuit for inverse condemnation may be brought by
In Colorado, commissions for real estate transactions are set by:
Each brokerage firm
In order for each beneficiary to be covered in case of bank failure, the broker must:
identify the broker's "escrow or trust" account including licensed name, broker's name, type of account
Which rule-of-thumb is being used to an investor who is told that a house renting for $900 a month should sell for about $90,000?
GRM ( Gross Rent Multiplier)
According to RESPA, lenders must provide to applicants:
maximum amounts that could be collected at time of closing
A house is closed on July 16. The taxes of $546 for the current year have been paid, what is the prorated portion that the buyer owes the seller
Divide the total taxes $546 by 365 (number of days in the year = $1.4959 per day time the number of days from July 16 through Dec 31 remember that the day of closing goes to the buyer, therefore times 169 = $252.81
Which party should create an amend/extend because buyer needs more time for an inspection?
Who is responsible for getting a copy of the contract to the Title Company?
Who is responsible for proofreading the settlement statement before closing?
If the transaction does not close:
the broker may only declare a forfeiture of earnest money upon (written) instruction of the seller
In the Colorado Contract to Buy & Sell encumbrances to be paid by the seller:
Must be paid at or before closing
A contingency clause must state not only the conditional situation or event, but also provide:
time period to remove the contingency or terminate the contract
A competitive market analysis (CMA) is MOST often used for:
setting a listing price
Who is responsible for getting a copy of the contract to the lender?
Which is not required to be in the file for examination during audit?
Who will not have a copy of the listing agreement?
Buyer Stanley hired broker Riley, to represent her through the process of purchasing a newer home. After the offer is written, the broker for Stanley makes a copy of the earnest money check, but does not deliver the copy or the check with the contract
Stanley has made a legal offer and Riley can hold the check without depositing it until the contract is accepted
Agreement to accept facsimile signatures would be found:
in the Contract to Buy and Sell Real Estate
Who is responsible for verifying square footage in home?
An inaccurate county tax certificate failed to indicate the correct taxes due. Additional tax money due would be the responsibility of the:
The borrower has the right to inspect the HUD-1 Settlement Statement:
the business day immediately preceding the day of settlement
The holder of the earnest money must be clearly identified:
in the Contract to Buy and Sell Real Estate
RESPA stipulates that:
A seller cannot require the buyer to use a particular title company
If seller does not relinquish possession as indicated and negotiated in the contract, what remedy does buyer have?
Eviction and a predetermined daily payment until possession is delivered
Who shall request the earnest money to be released, in good funds to the closing clerk, prior to closing?
How would the credit for $750 for carpet replacement be shown on the settlement statement?
As a $750 debit to the seller and a $750 credit to the buyer
How is the purchase price handled on the settlement statement?
Credit seller, debit buyer
A counter offer:
terminates the original offer
will result in a valid contract if accepted by the other party
must be signed by both parties
An offer may be terminated by the seller's broker. true or false
When an existing contract is replaced with a new contract, this is referred to as:
Deposit money received by a licensee is turned over to the:
broker to deposit in his trust fund
After a failed contract, the earnest money should be retained or returned:
as the buyer and seller agree
In an estate for year's leasehold estate, what happens when the original lessor dies?
The lessee's right is unaffected
Security deposits may be retained by the lessor:
if notice is given to the tenant in the lease, rental agreement, or separate written notice
In Colorado, each county requires the "Real Property Transfer Declaration" to be completed at closing and mailed to the county. Which of the following statements are true regarding this document?
It discloses the inclusion of personal property in the transfer
If buyer finds out the property on which they have a contract is in a Special Taxing District:
should give written notice of unsatisfactory conditions to be released from the contract
Where both parties have fulfilled their agreements, the contract is known to be:
A tenancy whereby neither the lessor or the lessee specify a definite starting date or ending date is known as a:
tenancy at will
The Contract to Buy and Sell Real Estate specifies that earnest money should be returned to the buyer if:
the buyer fails to find reasonable financing
If cash is received with an offer:
hold cash until contract has been accepted or withdrawn
Which of the following would an unlicensed personal assistant be permitted to do?
Distribute factual literature prepared by a licensed associate
Federal Truth-in-Lending laws are also known as
In a real estate transaction, a broker should advise the buyer of the
need for a title search
Regarding a dispute over Earnest Money - if no lawsuit is filed, the broker may:
surrender the money to the court in an interpleader action
When a tenant terminates a lease because the landlord has not furnished hot water for two months, it is called what type of eviction.
If a Lead-Based Paint Disclosure form is not executed at the time of the sale of a dwelling built prior to 1978, the purchaser:
is not obligated under the terms of the contract
If an earnest money check does not clear the bank:
disclose to seller, who may elect to void the contract
Broker Bill has several agents in his employ. Agent Smith, an "S-Corporation" himself, has his commission checks written out to his "S-Corporation." Because of this, Broker Bill is:
managing broker over Agent Smith
The maximum amount of time a landlord can specify in a lease that they will hold a security deposit after lease termination is
An employing broker can usually avoid disciplinary action for the improper conduct of one of his employed licensees if:
A broker can never avoid disciplinary action for improper conduct of a licensee. They are always ultimately responsible
The Residential Lease Agreement is not a Colorado Real Estate Commission approved form. true or flase
A property manager must Disclose name and address of the landlord. true or false
A buyer is concerned that new construction a mile away could have a negative environmental impact on the home they are considering purchasing. Can they make the Contract to Buy/Sell contingent on the result of an environmental impact report?
Yes, you can make a contract contigent on anything
Tenant may remove trade fixtures before the lease expires provided:
tenant restores the premises to previous condition
Licensee buyout addendums are to be used when a real estate broker is purchasing:
his or her own listing
All records are required to be kept for:
As per the Exclusive Right to Sell Listing Contract fixtures listed on the aproved form will be included:
If attached on the date of the listing unless specifically excluded by the seller
A minority couple come to an agent looking for a house. The agent knows of properties for which the couple qualify but avoids showing or mentioning these listings. Instead, the agent takes them to only properties in low-priced and integrated neighborhoods. This practice is known as:
According to the Contract to Buy and Sell Real Estate - all prorations are:
final as of the closing date
What is a mandatory recommendation in the Contract to Buy/Sell Real Estate?
Use of Legal and Tax Counsel
If a broker is asked for additional information on working relationships, the broker must provide:
Commission-approved form "Definitions of Real Estate Working Relationships"
The Commission requires a licensee who advertises the square footage of a property to do which of the following:
disclose in writing to the Buyer using the Square Footage Disclosure form the manner in which the square footage was taken
When showing buyers new homes:
you should register your buyers with the builder
Right of rescission is part of:
Truth in Lending Act
All units in a community are being assessed for sidewalk improvements to a road along one side of the community. This is:
A Special Assessment
Traditional splits offered in a real estate office
A broker must offer:
only the relationships he or she chooses to offer
Agency means the broker owes to their clients certain duties. Which of the following is NOT TRUE:
The holdover period in an exclusive right-to-sell listing is freely negotiable, so the seller and broker agreed upon a 60-day holdover period. Who is protected by this provision?
What is the maximum fine that the Real Estate Commission can impose for a violation of commission rules?
If an offer was made on a house in which the buyer intended to be have a a hair salon in the basement, but found out a few days prior to closing that the zoning wouldn't allow it, can they cancel the agreement without penalty?
Yes, but only if they terminate in writing prior to the Record Title Objection Deadline
A licensee should disclose the total proceeds the seller will net from a sale. This estimate should be given:
whenever a listing is taken and an offer is presented
An executory contract is one which:
is yet to be performed
The co-op offered in the MLS is determined by:
the seller and listing broker
When is a broker to open or have access to an escrow account?
When he receives earnest money
Colorado Real Estate Commission Rule E-11 states that all agreements to provide services, for which a license is required, must have:
a definite date for termination
Before making an offer, a licensee should research the market in the area of the desired property. This will help determine:
what other properties have sold for and are listed for in that neighborhood
A buyer's costs in purchasing a home prior to closing will usually include all except:
When a licensee purchases a property utilizing a licensee's buy-out agreement:
a commission may not be collected
A Realtor is:
a licensee that pledges to observe the Code of Ethics and Standards of Practice adopted by NAR
When reconciling a 6 column worksheet for a closing - after totaling up the debits and credits, the closing agent needed to add a $30,000 Debit to the Seller Debit column to make it equal to the Seller Credit column. What does this Seller Debit represent?
A $30,000 check the Seller will receive from this closing
If a buyer will not sign any disclosure form, the licensee should:
note this fact on the form, along with the date and licensee's signature
The Commission's intent in promulgating Rule E-13 (Sign Crossing Rule) was:
to protect the owner from possible claims that two commissions are owed
In order to reinstate a real estate license, that has been expired less than 3 years, a licensee will be required to:
pay reinstatement and activation assessments in addition to the basic renewal fee
A broker may operate from:
the address on the broker's license
The grace period to renew an expired license without penalty is:
Measurements in public records often are not updated for residences. If square footage is a material consideration in making the purchase, such information should be verified by:
When a Seller decides to submit a Counterproposal in response to a Contract to Buy and Sell, the Seller:
Checks the Countered box, initials the original Contract and signs the Counterproposal
By signing an exclusive buyer-agency contract:
the broker is not automatically entitled to a commission
The water bill has been paid in advance by the seller for the month of August. The bill was $35.82. The closing is August 25. The correct entry on the settlement statement would be:
$35.82 / 31 (days in August) x 7 (Buyer owned days in month, including day of closing)= $8.09
Credit Seller $8.09, Debit Buyer $8.09
A seller sends the buyer a counterproposal to his offer. Which best describes the situation?
The buyer is no longer obligated under the original offer
Which of the following is required for a person to be a broker of record for a corporation?
a valid active Colorado broker's license
While showing properties, your buyer points out a house that she wants to see:
pull over and call the listing office to set up the showing ASAP
Which of the following is true when an employing broker changes the primary business address?
the broker must notify the commission in a manner acceptable to the commission or the license will become inactive
When the license of the sole proprietor is suspended for two years, what is the effect on the affiliated associate brokers?
Affiliates licenses are inactive until they are hired by a new employing broker.
How many times can the exclusion on capital gains taxes be claimed?
1 transaction every 24 months
The mediator must be a:
neutral third party able to facilitate the process
When showing properties permitted prior to January 1, 1978:
a lead-based paint disclosure should be displayed along with a pamphlet titled "Protect Your Family from Lead in Your Home"
A broker working as a buyer's agent in a real estate transaction must be available to accompany buyers and show properties at the convenience of the buyer. true or false
Written agency agreements require brokers to disclose their duties and obligations to a party prior to:
showing a home to a buyer
Contract to purchase newly constructed home with warranties do NOT fall under Rule F. true or false
From whom does the licensee receive a commission?
The Real Estate Commission has the authority to:
audit or investigate a licensee and files at any time without advance notice
A house is sold on June 15. The annual taxes in the amount of $850 for the year have not been paid. What does the seller owe the buyer at closing?
Jan. 1 - June 14 = 165 days. $850 / 365 = $2.3288 per day tax liability.165 days x $2.3288 = $384.25
In order for a broker to write an offer for a buyer on a HUD-acquired property, the broker must use a:
HUD sales contract
When viewing the property, the buyer asks if the shelving in the basement is included. The broker is safe to say:
I don't know, but I will find out for you
The rescission provisions of truth-in-lending apply to what type of loan?
A Flood Certificate is required for the purposes of:
verifying for the lender that the property does not lay in a flood zone
The Hackman's home is valued at $650,000. Properties in their area are assessed at 60% of the value, and the local tax rate is $2.85 per one hundred dollars of assessed value. How much are the Hackman's MONTHLY taxes?
$650,000 (value of home) X .60 (Assessment Ratio) = $390,000 (Assessed Value) X .0285 ) tax per $100 of value) = $11,115 (Annual Tax) / 12 (months) = $926.25 (monthly tax amount).
To pre-qualify a buyer, a broker should obtain the following information from the buyer:
buyer's present occupation information (i.e. gross income, how long at present job)
All HUD homes are:
sold as is
A $75,000 loan requires a $1,875 in discount points to be paid by seller and $375 in discount ponits to be paid by the buyer. This is how many total discount points?
$1875 + $375 = $2,250. I / V = R. $2,250 / $75,000 = .03
The amount due to the seller appears on a closing statement as a:
Credit to the broker
Before showing buyers properties, a broker needs to:
disclose the types of brokerage relationships
When a complaint against a licensee results in a possible suspension or revocation, a hearing is required. Which of the following presides over the hearing?
An administrative law judge
If the property does contain lead-based paint, the seller must:
disclose that there is lead-based paint
The authority of the agent to act as the agent's principal is usually given by the terms of the:
The sales contract should list:
items which are included in the contract price
A house is closed on April 15. The property taxes are $960 for the year. They have not been paid. How much does the buyer receive from the seller at closing?
$960 / 365 days = $2.6301 per day the seller owned the property and owes the Buyer for 104 days. $2.6301 x 104 = $273.53
The amount due from the buyer appears on a closing statement as a:
Credit to the buyer
The Colorado Withholding Tax applies only to non-Colorado residents selling property in Colorado. The withholding is:
2% of the purchase price or the net proceeds of the sale whichever is less
Pre-qualifying a buyer helps determine:
the buyer's purchasing power
A broker answered a call. A prospective buyer wants to see the home he drove by over the weekend. Feeling uncomfortable; for safety reasons the broker should:
insist they meet at the office before going out and showing the property
Title insurance fees or premiums are paid:
only once, and the policy continues in force without further payment
A buyer submits an offer contingent upon the successful closing of their present home.
the listing agent should fully disclose all information to the seller
A home inspection may include all of the following except:
Real estate closing fees customarily appear on a settlement statement as a:
Charge that is shared equally by the buyer and seller in the case of a conventional loan
Charge to the seller in the case of a VA loan
Charge that may be shared equally by the buyer and seller in the case of an FHA loan
Commissions earned by a broker in a real estate sales transaction
are determined by agreement of the broker and his or her principal.
If the buyer provides written notice of unsatisfactory conditions:
buyer and seller must agree in writing to a settlement, or the buyer withdraw the objections on or before the resolution deadline or the contract shall terminate
An licensee shows a home and mentions that it has a lovely fireplace in the living room. After buying the home, the buyers and agent discover that the brick fireplace is just a decorative fireplace and is not "wood burning." Which of the following would BEST protect the licensee from financial loss?
Errors and Omissions coverage
The seller agreed to clean and certify the furnace prior to closing.
the seller or listing broker should provide a receipt and certification at closing
In order for the appraiser to obtain access to the property, he or she must first obtain permission from the:
When are faxed signatures acceptable on a Contract to Buy and Sell?
if the parties agree and indicate this choice on the contract form
Title insurance companies guarantee against a loss because of defects existing
at or before the date of the policy
When a licensee wishes to extend the effective period for a listing agreement, which of the following is appropriate?
Agreement to Amend/Extend Contract with a Broker
A final walk-through is:
agreed to by contract
The selling agent observes that the names are misspelled on the warranty deed.
the selling agent should require that the names be corrected
When there is a contingency on the sale of the purchasers property prior to closing, the:
listing agent should advise the seller of potential risks to the contract
A legal exaggeration of a property''s benefits
Colorado licenses must be renewed
Every three years at anniversary of licensing
A contract may be renegotiated after acceptance, if the:
inspection reveals several items that need repair
A home inspection is required by contract on:
a home inspection is not required
A resident Colorado broker's office must:
Have a physical address in Colorado where the commission staff can inspect records
Dates in the contract can do all of the following except:
determine the worthiness of the buyer's financing
The licensee is holding an Exclusive Right to Sell Listing contract, he:
Has permission to work with other sellers
A buyer has a signed Contract to Buy/Sell Real Estate to purchase a property for $200,000. Prior to close, $25,000 worth of damage occured. May he/she terminate the agreement?
Yes, When the damage exceeds 10% of the agreed upon purchase price
The three major evidences of title are:
abstract and opinion, title insurance, Torrens certificate
The purchase contract called for a homeowner's warranty. There are no charges reflecting the homeowner's warranty on the settlement statement, and buyer and selling agent have not said anything about it.
the brokers involved in the transaction are responsible to verify that it is being provided at the time of closing
To comply with the dates in the contract to purchase the listing agent should order the title commitment as soon as all the parties accept the contract. true or false
If the purchase price exceeds the property's appraisal:
the buyer shall have the sole option and election to terminate the contract
When a contingency is tied to a date in the contract, it is the responsibility to follow up on that date.
listing or selling brokers
A licensee, who is guilty of an act that is grounds for disciplinary action, may:
be subject to criminal prosecution
have his/her license suspended or revoked
be subject to civil prosecution
If the appraiser contacts the listing broker and indicates a problem reaching the contract value, the:
listing agent should provide comparables to substantiate the value
Which of the following is not a Commission approved Deed of Trust:
Fixtures listed on the approved Colorado exclusive right to Sell Listing contract will be included
If attached on the date of the listing unless specifically excluded by Seller
A broker who has no written agreement is presumed to be working with a member of the public as a(n)
c. dual agent
d. agent or customer, depending on the written agreement
The contract states that the listing broker controls the time and place of closing. The buyer tells the transaction-broker he is working with that he cannot make it at the time suggested. What should the transaction-broker do?
a. tell him the lender cannot reschedule and talk the buyer into it
b. call the listing broker to see whether it can be changed to a time that is convenient for the buyer
c. tell him he must, the listing broker is in charge of this
d. set up an escrow closing in which the parties are not at the same closing
A broker associate who has been asked to manage a property for a friend would need to
a. have the friend sign an Exclusive Right-to-Lease Contract before the broker associate could set up a trust account
b. open a trust account to keep the funds safe and accounted for
c. have the friend hold all funds and sign all legal documents so the broker could accept a management fee directly from the friend
d. ask the employing broker to sign a management agreement with the friend
Real estate teams with a firm may
a. give the impression that they are an entity separate from the firm when using social media
b. advertise their team's name if the ad also includes the name of the brokerage firm
c. have one team designated to represent both buyers and sellers in the same transaction
d. operate and advertise independent of the brokerage firm
Leasing differs from property management in that leasing is considered
a. an ongoing relationship
b. a one-time activity
c. an activity created only through a property management agreement
d. just collecting and depositing rent checks
For a seller's agent who must treat the buyers as customers, which form would the seller's agent use to create a customer relationship?
a. Exclusive Right-to-Sell Contract
b. Definitions of Working Relationship
c. Brokerage Disclosure to Buyer
d. Brokerage Disclosure to Seller (FSBO)
A written office policy should contain all of the following EXCEPT
a. a statement about the type of brokerage relationships the brokerage will offer
b. tax and insurance payment plans
c. a description of the duties and requirements for broker associates
d. a clear statement of compensation policy
All of the following would be considered ways to gain competency in a new real estate specialty EXCEPT
a. complete at least four transactions until the expertise is obtained
b. complete educational courses in the specialty area
c. work with a mentor who is an expert in the specialty area
d. take a course and then ask another broker familiar with the specialty to assist in the first transaction
In Colorado, a designated broker representing a seller would mean that the brokerage relationship is between the
a. employing broker, broker associate, and the seller
b. designated broker and the seller
c. designated broker and all other brokers within the office
d. employing broker who owns the contract and the seller
The Closing Instructions form
a. is an optional form that determines the commission split between brokers
b. is an agreement between the seller, the buyer, and the title company
c. sets the date, time, and place of closing
d. appoints the listing broker as the closing company in every transaction
Which of the following groups are allowed to open and maintain trust accounts?
a. non-licensed office managers
b. real estate team managers
c. broker associates
d. employing brokers
A contingency in a purchase offer
a. is the same as rejecting an offer
b. must be drafted by an attorney
c. can only be in an addendum
d. should be carefully written to provide for acceptance, waiver, or rejection
An initial meeting and prequalification of a buyer usually helps to determine all of the following about the buyer EXCEPT
b. purchasing power
c. the buyer's needs and wants
d. the total time it will take to find a property
How would a buyer's agent inform the seller of a FSBO of the broker's brokerage relationship with the buyer?
a. before writing the offer
b. at first physical contact with the seller
c. when the agent calls to set the closing
d. by checking the transaction-broker box at the end of the Contract to Buy and Sell
A buyer's broker who is preparing a purchase offer would MOST likely start by
a. calculating his commission split
b. filling out the Dates and Deadlines section with the buyer's preferred dates
c. calling the listing broker and the lender
d. calling the lender only
Which of the following will satisfy an associate broker's continuing education (CE) requirements during a single license-renewal cycle?
a. taking and passing the state portion of the Colorado real estate broker licensing exam
b. completing 20 hours of CE
c. taking and passing the national portion of the Colorado real estate broker licensing exam
d. completing two annual commission updates and a personal marketing course
Before posting ad copy and photos of a property on social media sites and other web sites, a broker should verify all of the following EXCEPT
a. the client has given permission to advertise in the chosen media
b. all wording is clear and accurate
c. some of the photos contain human interest aspects
d. the name of the brokerage firm is listed
If a computer program is used to generate a contract for an offer to purchase
a. all items added to the form must be in a different type style
b. the print must be at least 14-point type
c. the broker's favorite clauses may be preprinted as additional provisions
d. negotiated provisions added to the form must be in the same type as the form
The BEST way to set a listing price with a seller is based on
a. the equity the seller needs for the seller's next purchase
b. the seller's knowledge of recent sales in the neighborhood
c. a thorough market analysis that is shared with the seller
d. the seller's purchase price plus inflation since the seller bought the property
Upon receiving his copy of the title commitment, the broker should
a. prepare a lis pendens
b. give it to his assistant to read and file
c. put it in his file
d. read it immediately to determine whether there are any problems
A broker is MOST likely to receive her commission by using which listing form?
a. Exclusive Right-to-Sell
d. Exclusive Brokerage
All Colorado-approved contracts require the parties to first try to resolve disputes by
a. litigation within 30 days
b. mandatory binding arbitration
c. mandatory nonbinding mediation
d. mediation with a binding decision
To be in compliance with Conway-Bogue, a Colorado broker must do all the following EXCEPT
a. use only standard or approved documents unless an attorney prepares them for a party to the transaction
b. give a written disclosure before accepting any confidential information
c. not charge a separate fee for completing legal documents
d. have a connection to the transaction
All of the following are protected under federal fair housing laws EXCEPT
d. familial status
The type, frequency, and quality of training offered by the first company that new licensees work for
a. is typically not offered to independent contractors
b. is often irrelevant to their ultimate success
c. must be geared toward technical subjects such as license law
d. should help them gain competency in their field
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