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Chapter 1 Test
Terms in this set (50)
XYZ wishes to advertise a property that has been listed by John Smith, a salesperson who goes by the name of Jake. The salesperson wants his name to be included in the ads so the public can call him. What must be included in the ad?
The nick name of the salesperson if it is listed on his license as well as the brokerage name as it is listed on the license.
What type of discipline can the Commission use for an unlicensed person acting as a real estate licensee?
Fines up to $2,000 to $5,000.
The Seller Disclosure Act requires a seller give disclosure to a buyer in all the following except:
If the property is a commercial property
The Pennsylvania State Real Estate Commission is composed of eleven members who are appointed by the governor and approved by the Senate. What is its primary purpose?
To protect the public
How long must a broker retain the acknowledgement portion of the consumer disclosure if the transaction is not completed?
A dual agency agreement most nearly means:
The seller and buyer have both signed a written disclosure for equal representation.
The Bureau of Professional and Occupational Affairs is a part of the Pennsylvania state government, serving under the Department of State. The Commissioner of Professional and Occupational Affairs is a member of the State Real Estate Commission. The Bureau provides all except which of the following for the SREC?
The bureau provides an annual budget to be submitted to the legislature for the SREC.
Who handles the complaint investigation for the Commission?
The bureau of enforcement and investigation.
Ted is a broker who is a property management broker. He receives the monthly rent from the tenant and puts the monthly rent money in his escrow account along with the security deposit money. The Commission charges Ted with a license law violation. What is the problem?
A property management broker must have a rental management account where rent is deposited.
Which of the following does not need to be disclosed to a prospective buyer at the initial interview?
A statement of the flat fee that the broker charges for a commission.
Susie is a real estate salesperson, licensed in Pennsylvania. She is a top producer and likes to maintain her independence. She sets up her office in her home, independent of the broker. She maintains her own telephone, secretary, administrative assistant and cell phone. She communicates with her broker once a week or he comes to see her at her home office. Is this an acceptable situation?
No, because Susie is not under the direct supervision of the broker.
The buyer, seller and broker all agree that the buyer's money will be placed in an interest-bearing account because the buyer is buying a commercial property that is scheduled to be rezoned in six months. The purchase price of the commercial property is $1.5 million so the interest for six months will be important at 8% interest. The parties agree that the broker is to receive the interest on the interest-bearing escrow account because he will be handling all the paperwork. Is this acceptable?
The Commission forbids the broker from taking the interest on an interest-bearing account unless the broker is a lessor.
Susie Salesperson works for broker Bill at XYZ Realty. Susie places the following ad in the local paper, " Beautiful four bedroom home, scenic view, easy terms of financing, available now. Call Susie on her cell phone at 426-667-8900." Is this a satisfactory advertisement?
No, the name of the brokerage company must always been included in the advertisement, as well as the broker's phone when a salesperson uses her phone.
All of the following are requirements of an escrow account except:The date that the commission check was written.
The date that the commission check was written.
The seller was very happy with his salesperson that after the sale was completed, the seller sent the salesperson a check which was not part of the commission check. His broker did not know anything about it. Which of the following is true?
The salesperson can only receive a commission check from his broker so the salesperson should consult with the broker to see what can be done.
A new salesperson wants to make an impression on the neighborhood so he places lots of for sale signs on homeowner's yards. When he does this, it causes the homeowner and prospective buyers to call the new agent for information. Is this a legitimate business practice?
No, every "for sale" sign must first have a written consent of the owner of the property.
The Low Country Cemetery Company sells its own property and other property as burial plots to customers in Pennsylvania. The company actively advertises in the newspaper and holds public information meetings. This is a for-profit company. What does this describe?
This is a cemetery company selling burial plots to the public. It should be registered with the Commission.
A time-share salesperson is required to complete 30 hours of instruction in a Time Shares Sales class before he can be licensed. Which of the following is not an area of study for a time share salesperson's license?
The bank where Broker Bill has his escrow account calls for Bill to be the trustee and sends him monthly reports so that he can reconcile the books. The bank requires a 48 hour notice for withdrawal of funds and no service charge. Is this bank acceptable to the Commission?
No, the broker must have a bank which allows for withdrawal of funds without previous notice.
What is the obligation of a broker when he is representing a seller in selling the seller's property in terms of the Seller Disclosure Act?
The broker has the obligation to advise the seller about the Seller Disclosure Act.
Jack has committed several violations of the Act and has been found guilty. His license has been suspended. What must Jack do?
Jack must return his license to the SREC
A sales contract is an important legal document between the seller and the buyer. According to Pennsylvania Real Estate Law, what does NOT need to be included in the sales contract?
The commission of the broker
The Commission has the responsibility to regulate and discipline the activity of real estate licensees. Who of the following is subject to regulation by the SREC?
A time-share sales person
The purpose of a comparative market analysis is?
To provide probable range of price to list the house.
The seller and the prospective buyer got into an argument about a swing set before closing and the buyer refused to close on the transaction. The seller claimed the earnest money in the trust account was his and the buyer said it was his. The seller is out of the country for six weeks so the broker cannot reach him. What should the broker do?
The broker should notify the parties as soon as he can reach the seller and after 30 days notice to the parties, turn the matter over to the court for interpleading.
Ken represented John in the sale of a home. The sale went well and it closed on time. Later, John discovered that Ken had told the buyer that John was willing to take a lower price than was specified on the listing agreement. Ken had also told the buyer a specific price, lower than the listed price, make an offer to John. Does John have probable grounds for a lawsuit?
Ken the agent violated the law of agency
The agency relationship which calls for limited confidentiality is which type of relationship?
A transaction licensee
What does a salesperson do if she wishes to change employment brokers?
She notifies the Commission in writing no later than ten days after the intended date of change and returns her license.
Pennsylvania law requires that the seller must disclose material facts to the buyer. When must this be done?
Prior to the time the sales contract is written
Internet advertisement is an important part of the real estate business in the 21st century. The broker must do all of the following to do internet advertising EXCEPT:
The advertisement must contain the phone number including area code.
When a financing contingency clause is included in a sales contract all of the following are included except:
the buyers credit rating
The broker of MNO Realty also owns General Title Company. He would like all of his transactions to close at his title company, but does not require this of all of his clients. Is this acceptable under Pennsylvania law?
Yes, as long as the broker discloses to all parties that he owns the title company, and advises buyers that there are other options, in writing before closing.
Justin is an unlicensed person and he has been appointed a trustee of a special needs trust for his nephew. The trust will be funded by the sale of the property of his brother. Justin lists and sells the property then puts the money into the trust. What best describes the situation?
Justin is acting as a trustee and as such, does not need a real estate license
Joe received a DUI violation while partying last Christmas and he was found guilty by the court. His real estate license is due to be renewed in May of next year. Will Joe have to do anything about his conviction?
Yes Joe needs to disclose to the commission about his violation.
When a broker is designated as a seller's agent, all of the following are true EXCEPT:
The broker must not reveal any material defects about the property
What is an acknowledgement?
It is a signature by a consumer who is recognizing the importance of a written disclosure notice.
A broker wants to sell his own home. What must he do in order to go about this?
Disclose he is a real estate license holder to potential buyers.
Katherine is a salesperson with ABC Realty. She is selling her own home but she is listing it with the broker so it can be sold with the MLS. Is this acceptable?
Yes, Katherine can list and sell her own home through the broker.
Pete is a sole proprietor broker and has six salespeople who he employs. On June 9th, Pete is killed in a car accident. Tom is one of the salespeople and his listing is set to close on June 20th. What will happen to the proposed closing?
The estate will notify the Commission within 15 days of death and tell the Commission that a new termination broker has been found. The closing will continue.
When a sole proprietor broker dies, his estate must notify the Commission within 15 days of the death to tell the Commission of another licensed broker who will serve as a termination broker. Which of the following statements is NOT true?
New licenses may be hired to help with the transitions.
What is the purpose of Estimated Cost and Return Disclosure Statement prepared by the broker for the buyer?
It is so a buyer will have a reasonably accurate expectation of costs prepared by a person having knowledge of, and expertise in, real estate sales.
When handling money as a cemetery broker, when is a transaction considered closed on cemetery property?
When buyer received copy of agreement of sale.
A salesperson does all of the following EXCEPT:
Retains records of transactions for 3 years.
What is the maximum compensation that can be paid from the Real Estate Recovery Fund per licensee that was found guilty?
When a transaction is co-brokered, who assumes the duty and responsibility for the escrow?
The broker, the seller and the buyer all agree that the broker does not need to hold escrow money for the buyer in his escrow account. The money instead is given to the seller who is supposed to credit the money to the buyer's account. All parties to the contract agree to this arrangement. When the transaction closes, the seller will not give credit to the buyer and the buyer files a complaint against the broker with the Commission. Why does the buyer think he can do this?
The buyer can charge the seller based on the standard that no broker can relieve himself of escrow responsibility whether the buyer and seller sign or not.
The broker has a seller's agency relationship. Who is the principal in this transaction?
The SREC is investigating a claim by a buyer that he had not been given the proper disclosure before purchasing a home. The broker has paperwork dating back three years after the closing of the transaction, Is the broker protected?
Yes, because the broker had the records dating three years after the close of the transaction.
The ad reads: Home for Sale; Three bedrooms, 2 baths, great location, easy access to schools. Call 467-458-9783. The prospective buyer calls and discovers that the phone number listed is a real estate brokerage company. Is this an acceptable advertisement?
This ad is deceptive advertising since every brokerage ad is required to have the business name of the broker.
To advertise a market share in a local newspaper, what must a broker do?
He must advertise the municipality that the market comprises.
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