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30 Cards in this Set
- Front
- Back
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Under an installment land contract, title to the land is held by: the broker the seller the buyer in escrow |
A: the seller The seller (vendor) retains legal title until the debt is paid in full; the buyer (vendee) has equitable title. |
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Broker K arrives to present an offer to Mrs. G, an invalid, and finds her son and his wife also present. Both individuals persistently urge Mrs. G to accept the offer on her home, though it is much lower than the price she was asking. If Mrs. G signs the offer, she may later claim: that Broker K should not have brought her a low offer that she was under undo duress from her son and daughter-in-law and that the agreement is voidable that Broker K defrauded her by allowing her son and daughter-in-law to see the agreement that her son and his wife have usurped her consumer protection rights |
A: that she was under undo duress from her son and daughter-in-law and that the agreement is voidable Because she is an invalid, and her son and daughter-in-law persisted in their efforts to have Mrs. G sign the terms of the contract. (Under duress) |
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In a sales transaction commissions that are earned by the broker Based on a schedule established by the real estate commission May be deducted from earnest money and claimed by the broker as soon as the buyer and sell execute the buy & sell agreement Are determined by agreement of the broker and principal may be shared with and unlicensed person, provided that such person aided the broker in bringing the buyer and the seller together |
A: Are determined by agreement of the broker and principal All commissions are always negotiable between the principal and the broker, may not be shared with an unlicensed person. |
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Which of the following is required to have a real estate license? Resident manager of an apartment building Property manager specializing in handling buildings in commercial districts A salesperson who works in a builder’s model homes An appraiser |
A: Property manager specializing in handling buildings in commercial districts A licensee is someone who offers real estate services to the public. A resident manager of an apartment building, who is employed by the owner and does not negotiate leases, does not need a real estate license as he/she is considered to be an extension of the owner and is not offering his/her services to the public. Salespersons working for a home builder or any developer, although they are often not salaried and work for commission, are specifically excluded from needing a real estate license by State law. An appraiser needs an appraisers license - not a real estate license. A property managers managing multiple properties, owned by different owners, is clearly offering his/her services to the public and requires a real estate license. |
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At the time of closing, the warranty deed is: given to the grantee delivered to the grantee (Buyer) at the closing then recorded at the County by the title company given to the lender until all payments on the loan have been made brought in by the seller and endorsed over to the buyer |
A: delivered to the grantee (Buyer) at the closing then recorded at the County by the title company At a closing, the deed is signed by the grantor, given to the grantee (delivery) then the title company takes the deed from the grantee(acceptance) and mails it to the county for recording. The county returns the original deed to the grantee after it has been recorded. Title passes at the moment of delivery and acceptance. |
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Tom and Wendy agree that Tom will buy Wendy’s farm for $400,000 cash, with the sale to take place in three months. This an example of what type of a contract? Bilateral, express, executed Bilateral, express, executory Unilateral, express, executory Unilateral, implied, executed |
A: Bilateral, express, executory The contract is "bilateral" because the promise goes both ways i.e Tom will get the farm and Wendy will get the money, "express" because it is agreed to by both parties and not implied by one, and "executory" because it is in the process of being executed and not complete. |
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The Real Estate Commission must investigate: Any licensee accused of a crime Disputes between brokers Any verified written complaint At least 5% of all brokers each year |
A: Any verified written complaint The operative word here is MUST. Colorado law requires investigation of all verified, written complaints. A licensee convicted of a crime may be investigated if the crime involved real estate activities.Also, a licensee may be investigated for any reason, or no reason. |
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Which of the following is not essential to a valid real estate sales contract? Offer and acceptance Notarization Consideration Description of the property |
A: Notarization In many states, a real estate contract does not have to be notarized to be valid. |
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A broker, Fred Wilcox, is selling a home to Alice Quincy. He tells her the foundation is “solid as a rock,” when he knows for a fact that it is slowly sinking into the swampy ground on which it was built. Licensee Wilcox, may be subject to: having his license revoked criminal action civil action all of the above |
A: all of the above Not only is Broker Wilcox in violation of the Real Estate License Law, he is breaking civil and criminal law. |
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Is it acceptable for a broker to accept a referral fee from a mortgage lender or mortgage broker? No, it is never permissible. Yes, but only with the permission of the broker's principal or if the broker is not receiving a commission from the same transaction? Yes, but only if the broker will not be receiving a commission for the same transaction. Yes, this practice is a good way to enhance the licensee's income. |
A: No, it is never permissible. It is not permissible for a licensed agent to RECEIVE a referral fee from any service provider to a transaction such as the Title Company, Lender or Appraiser. This would violate federal RESPA rules. It is considered a conflict of interest. |
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Buyer Jones makes a full price offer to purchase, to seller Smith, who rejects the offer outright. What recourse does Jones have? Sue Smith for damages Sue Smith for specific performance Sue for damages and specific performance Buyer Jones cannot sue |
A: Buyer Jones cannot sue Since Smith refused the offer, there was no contract created and Jones has no legal complaint. At this point Smith is not obligated to sell his property. However, if the property was listed with a broker, the latter could successfully sue for his full commission. |
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The Colorado law that requires real estate contracts to be in writing is called the: statute of estoppel statute of descent and distribution statute of frauds statute of limitations |
A: statute of frauds It is the statue of frauds that requires all contracts to be in writing. |
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If an employing broker loses their license, what are the consequences for the employed agents? Continue working as usual Step in and take over the leadership role The broker may give the agents licenses to another broker of his choice Commissions or fees earned before the suspension, revocation, expiration, or transfer to inactive license, may still be received |
A: Commissions or fees earned before the suspension, revocation, expiration, or transfer to inactive license, may still be received If your broker loses their license you must find another broker to work under in order to sell real estate. |
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When the license of an employing broker is suspended or revoked, his/hers licensees must: transfer existing contracts to a new employer continue listing and selling pending an appeal stop listing and selling obtain an independent broker’s license |
A: stop listing and selling A licensee must be affiliated with an approved active broker to practice real estate. They will need to be hired by another Broker. |
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Which statement is false about unlicensed assistants? An unlicensed assistant may be paid a commission by a licensee, based on the success of the transaction The broker may allow the assistant to chauffeur and show a listed property An assistant does not need a license Unlicensed assistants may prepare a market analysis on behalf of the broker |
A: An unlicensed assistant may be paid a commission by a licensee, based on the success of the transaction Note that this question is looking for which answer is "false" not "true". An unlicenced assistant may show a property as long as they do nothing that requires a license. But s/he may not be paid on a commission basis or on the success of a transaction as only a licensed individual may be paid a commission. |
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Which of the following is the best explanation of specific performance? The date set for closing at which all parties involved, or their attorneys, must be present and must sign and deliver all documents necessary to close the transaction The right of either party to cancel the contract, provided legal notice is given A legal procedure or action brought by either buyer or seller to enforce the terms of a contract An executed contract in which all elements of the contract must be specifically fulfilled |
A: A legal procedure or action brought by either buyer or seller to enforce the terms of a contract Specific performance is the legal action brought against the party in default of a contract, to require them to keep the terms of the contract. |
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The term “rescind” means: change cancel substitute subordinate |
A: cancel Rescind means that the contract is canceled and everyone returns to their original positions. |
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A void contract is one that is: not in writing not legally enforceable rescindable by agreement amortized |
A: not legally enforceable A void contract, also known as a void agreement, is not actually a contract. A void contract cannot be enforced by law. Void contracts are different from voidable contracts, which are contracts that may be (but not necessarily will be) nullified. An agreement to carry out an illegal act is an example of a void contract or void agreement. For example, a contract between drug dealers and buyers is a void contract simply because the terms of the contract are illegal. In such a case, neither party can go to court to enforce the contract. A void contract is void ab initio, i e from the beginning while a voidable contract can be voidable by one or all of the parties. A voidable contract, unlike a void contract, is a valid contract. At most, one party to the contract is bound. The unbound party may repudiate the contract, at which time the contract is void. An option to purchase is a voidable contract as the holder (buyer) of the option can choose to execute or not execute the agreement whereas the seller of the option is bound to its terms. Another way to look at it is: an agreement which is enforceable by law at the option of one or more parties but not at the option of the other or others is a Voidable Contract. A contract can become voidable when the consent of one or more of the parties to a contract is obtained by coercion, undue influence, misrepresentation or fraud an agreement which is enforceable by law at the option of one or more parties but not at the option of the other or others is a voidable contract. This is the reason a contract with a minor is a voidable contract by the minor or a minor's legal representatives (the minor by him/herself does not have legal capacity to enter a contract) and not a void contract. |
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All but which of the following are essential elements in the formation of a contract? Offer Acceptance Consideration Performance |
A: Performance To be valid, a contract must have offer and acceptance, and good or valuable consideration. |
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May a broker accept a referral fee from a title insurance company or representative? No, it is never permissible to accept such a fee. Yes, but only with the permission of the broker's principal or if the broker is not receiving a commission from the same transaction. Yes, this practice is a good way to enhance licensee income. Yes, but only if the broker will not receiving a commission for the same transaction? |
A: No, it is never permissible to accept such a fee. It is not permissible for a licensed agent to RECEIVE a referral fee from any service provider to a transaction such as the Title Company, Lender or Appraiser. This would violate federal RESPA rules as it is considered a conflict of interest. |
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Several weeks after a closing, an associate broker received a thank you letter and a nice bonus check from the seller of the house. The associate broker cashed the check because he felt it was earned. In this situation, which of the following is true? The associate broker may accept the bonus because he is licensed as an associate broker. The broker is allowed to accept money if more than 30 days have elapsed since the closing. The associate broker may accept the money if his broker permits him to do so It is a violation of commission regulations to accept the money. |
A: It is a violation of commission regulations to accept the money. It is a violation of commission regulations to accept the money. The bonus should be given to the managing broker who could then cash it and pay the associate. In Colo., associate brokers may only receive money from their broker. |
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A building sold for $180,000. The buyer put up 10% cash and obtained a loan for the balance. The lending institution charged a 1% loan origination fee. What was the total amount the buyer used for this purchase? 19620 19800 1620 18000 |
A: 19620 $180,000 X .9 = $162,000 X .01 = $1,620 + $18,000 = $19,620 The loan origination fee is a lender charge for the purpose of securing a new loan |
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An offer may be withdrawn by the offeror any time until: The offeror has been notified that the offer has been accepted and signed The closing date The deed is recorded The offer is signed by the person accepting the offer |
A: The offeror has been notified that the offer has been accepted and signed Until the offeror is notified of its acceptance by the person recieving the offer, the offer can be withdrawn. It is not enough for the person receiving an offer just to sign it. S/he must notify the offeror that it has been accepted and signed. |
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Which of the following is correct with regard to an office for a resident Colorado licensee? It must be a virtual office doing business by phone and using a post office box mailing address. It must be in a commercial office building to comply with zoning. It must have a physical address in Colorado where the commission staff can inspect records. |
A: It must have a physical address in Colorado where the commission staff can inspect records. C-2. Resident broker required to have office; exceptions. Every resident Colorado real estate broker shall maintain and supervise a brokerage practice available to the public, except those brokers registered in the Commission office as in the employ of another broker or those brokers registered as inactive. Editor Note: Please note that the above statute refers to "resident" brokers. Colorado brokers not redident in the State are not required to have a physical location in the State. |
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A bilateral contract is one in which: only one of the parties is bound to act the promise of one party is given in exchange for the promise of the other party a restriction is placed, by one party, to limit the actuarial performance by the other party something is to be done by one party only |
A: the promise of one party is given in exchange for the promise of the other party A bilateral agreement requires each of the parties to do something for the other. |
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The license laws of Colorado require a licensee to inform the seller that he has a real estate license if: the licensee is buying a home in which he will live the licensee is buying property for investment the licensee is selling a property which he owns all of the above |
A: all of the above An active licensee must disclose in both advertising and the contract that he is licensed. An inactive licensee must disclose in the contract that he is licensed. |
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Consideration is an essential element of valid contracts. Consideration may be: a promise the giving up of some legal right labor all of the above |
A: all of the above Virtually anything of value may be “consideration.” |
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If a contract is signed under duress, it is: Bleached Discharged Voidable Void |
A: Voidable If not voided within a reasonable period of time it is considered an accepted contract. And only the party who signed under duress can void the contract. |
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The seller at closing refuses to pay the broker. What should the broker do? Refuse to close the deal File a complaint with the Real Estate Commission Close the transaction, then sue for the commission Keep the earnest money as commission |
A: Close the transaction, then sue for the commission The broker is not allowed to delay the transfer of the property |
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Earnest money checks received by a broker in connection with a real estate purchase contract must be: placed in brokers escrow account within 3 business days of acceptance of the contract. identified as a check in the purchase contract payable to the listing broker placed in the brokers operating account then transferred to the escrow account when the contract is accepted. |
A: placed in brokers escrow account within 3 business days of acceptance of the contract. The money must be placed in an escrow account within three business days of acceptance of the contract. |
