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30 Cards in this Set
- Front
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Which of the following relationships is NOT acceptable for a broker in a single transaction? agent for the seller with a buyer as an unrepresented customers agent for the buyer and transaction-broker for the seller transaction-broker for the seller and transaction-broker for the buyer |
A: agent for the buyer and transaction-broker for the seller An agent's duties conflict with a transaction-broker's duties, thus the license law specifically prohibits representing one party as agent and the other party as transaction-broker in the same transaction. Think of the agent as being a coach and a transaction broker as being a referee. You cannot be an advocate (coach) for one party in a transaction and declare yourself to be a neutral party (referee) for the other. |
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For a deed to be valid in Colorado, which of the following must be true concerning the grantor's signature? It must be signed by the grantee It must be recorded The grantor’s signature is required |
A: The grantor’s signature is required For a deed to be valid the grantor signature is required. Although it is recommended that a deed be recorded, in Colorado it is not required. The grantee protects his interest in the property by recording it - making the ownership transfer a matter of public record. Acknowledgement is also recommended, and usually required for it to be recorded. Required is: the signature of the grantor, words of conveyance (granting clause), that it be in writing, that the grantee is named, consideration (payment), a description of the ownership interests being conveyed, a legal desciption, delivery of the deed and acceptance by the grantee. |
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You are holding a rental deposit on behalf of an owner and tenant. The owner requests that his rental deposit be sent to him: send it immediately by certified mail it cannot be turned over to the owner of the property send it to the owner after notifying the tenants by certified mail send it to the tenant first and have him send it directly to the owner |
A: send it to the owner after notifying the tenants by certified mail Rental deposit money may not be removed from a trust account until the tenants have been notified of the withdraw and disposition of money. Tenants ALWAYS have a right to know who is holding their money, and how to contact that person. |
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A broker who enters into an agency relationship with a seller owes a fiduciary obligation to the seller. To the purchaser he owes: duty of fairness and good faith nothing, as the seller is the principal and the one paying the commission an obligation to provide only answers to questions asked by the purchaser an obligation to provide only answers to questions directly relevant to the sales price and the physical condition of the property |
A: duty of fairness and good faith To the purchaser, a broker owes a duty of fairness and good faith, an obligation to answer questions honestly and to disclose hidden defects known to the broker. Note: A fiduciary relationship is created when a principal signs a listing or buyer's agency agreement with a Listing Agent or Buyers Agent. Note: a Transaction Broker as a neutral party is not a fiduciary relationship (the T broker owes no loyalty, only Care, Obedience, Accounting and Disclosure of non-confidential items and material facts). In real estate transactions, only the Sellers or Buyer's agency relationships are fiduciary relationships. This relationship implies a position of trust or confidence, wherein one person is usually entrusted to hold or manage property or money for another. In a fiduciary relationship, one person, in a position of vulnerability, justifiably vests confidence, good faith, reliance and trust in another whose aid, advice or protection is sought in some matter. In such a relation good conscience requires the fiduciary to act at all times for the sole benefit and interest of the one who trusts. |
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Which one of the following lists an unacceptable combination of relationships for a single broker on a particular transaction? Transaction broker for the buyer and agent for the seller Agent for the seller and the buyer is a customer without an agent Exclusive transaction broker for the buyer and seller Agent for the buyer and seller is a customer without an agent |
A: Transaction broker for the buyer and agent for the seller It is not allowable to be a transaction broker for one party and have agency with the other party in the same transaction. |
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A broker may advertise a property for sale only if the broker: personally listed the property uses the name of the employing broker in the ad personally pays for the ad is a member of the local real estate board |
A: uses the name of the employing broker in the ad Blind ads are not legal. |
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A general power of attorney is terminated upon: the death of the agent the death of the principal the agent’s express renunciation all of the above |
A: all of the above A general power of attorney creates an agency relationship, which can be terminated the same way as other agency relationships. |
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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: buy the property himself at $248,500 submit the $247,000, but disclose that the buyer may pay more submit the offer without disclosing the purchaser’s position refuse to submit the $247,000 |
A: submit the offer without disclosing the purchaser’s position A transaction broker may not disclose confidential information. |
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In order to be the broker of record for a corporation, a person must hold more than a nominal ownership in the corporation. an executive position as president or chief executive officer. a valid active Colorado broker’s license. a position as a director with voting rights. |
A: a valid active Colorado broker’s license. In order to be the broker of record for a corporation, a person must hold a valid active Colorado broker’s license. |
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How many single-family residences can a broker manage without having to open a trust account only for rents and deposits (separate from his sales trust accounts)? Up to seven Anytime he manages property he must open a separate trust account 10 or more Unlimited |
A: Up to seven Money belonging to others must always be placed in a trust account. If a broker manages less than 7 properties, he may use his sales escrow account to deposit property management funds. He does not have to open a special property management trust account until he manages more than 6 properties. |
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An agreement appointing an agent in Colorado in a real estate transaction: Contain a holdover clause Must be in writing Be recorded in the county seat Use the approved Exclusive Right to Sell form |
A: Must be in writing Colorado state laws dictate that all contracts must be in writing |
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If a broker holds a purchase option as well as the listing and decides to exercise his option, he must: reveal in writing to the owner that he may make a profit obtain the written consent of the owner disclose to his seller that he is dealing as a principal, not as an agent all of the above |
A: all of the above All of the above are correct. |
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As agent for a principal, a real estate broker can: guarantee a prospective buyer that the principal will accept any offer that meets the terms of listing contract solicit an offer to purchase from a prospective buyer change the terms of the listing contract advise the prospective buyer of the best way to take title to the property |
A: solicit an offer to purchase from a prospective buyer A broker who acts in excess of his authority may be liable to his principal. |
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To renew an active Colorado real estate license, the licensee must complete 8 hours of mandatory continuing education within the last three years. 24 hours of continuing education plus successful completion of the Colorado portion of the state licensing examination. 24 hours of approved continuing education or successful completion of the Colorado portion of the state licensing examination. 24 hours of additional education from any source. |
A: 24 hours of approved continuing education or successful completion of the Colorado portion of the state licensing examination. The licensee must complete 24 hours of approved continuing education during the three year license period. Twelve of those hours must consist of taking 4 hour Annual Commission Update Course each year. CE requirements are listed in Commission Rule B-2 below: B-2. Methods of completing continuing education. Licensed brokers must satisfy the continuing education requirement before they apply to renew an active license, activate an inactive license or to reinstate an expired license to active status. Licensed brokers may satisfy the entire continuing education requirement through one of the following options: a) Complete the twelve hours required bysection 12-61-110.5 (1) (c), C.R.S., and required by this rule in annual 4-hour increments developed by the Commission, otherwise referred to as the “Annual Commission Update Course.” Licensees who choose this option must complete an additional 12 hours of elective credit hours to meet the 24-hour total continuing education requirement during the license period in subject areas listed in section 12-61-110.5(3), C.R.S. Please note that a licensee may not take the same version of the Annual Commission Update Course more than once. If a licensed broker takes more than 12 hours of the Annual Commission Update Course during a license period, the licensee will receive elective credit hours for any additional hours. b) Completing the Commission-approved 24-hour “Broker Reactivation Course.” This option is available to licensees under one of the following conditions: (1) Licensee is currently active and did not use the Broker Reactivation Course to satisfy the Rule B-2(a) requirements in the previous license year (2) Licensee is inactive or expired for up to thirty-six months prior to active status and unable to comply with the education requirements listed in Rule B-2(a). c) Pass the Colorado state portion of the licensing exam. d) Completing 72 total hours of pre-licensure education concerning the understanding and preparation of Colorado real estate contracts (48 hours) and real estate closings (24 hours). The courses and course providers are required to comply with the requirements as described at section 12-61-103(4)(a), C.R.S. Any inactive or expired licensees who cannot meet the education requirements listed in Section 4(a), (b), or (c) must comply with the education requirements found in Section 4(d) before activation or reinstatement of the license. |
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Which of the following correctly describes how an independent broker may work according to Colorado law? may work independently without the supervision of another broker may only work independently, not in the employ of another broker may work in the employ of another broker, work independently, or hire and supervise no more than five other licensees may act as a broker for a corporate brokerage as long as there is a qualified employing broker available for supervision and training of associated licensees |
A: may work independently without the supervision of another broker In Colorado, an independent broker is precisely that. He or she may work independently without the supervision of another broker. |
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Which of the following can terminate an agency relationship? Mutual rescission Incapacity of either party Expiration of subject matter All of the above |
A: All of the above An agency relationship may be terminated by mutual agreement; revocation by principal; renunciation by agent; expiration of its term; extinction of its subject matter; death or incapacity of either principal or agent. |
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Sam is an associate broker who wishes to purchase investment property. What must Sam do when the property is not listed with any broker? disclose to the seller that he has a license and inform his broker of the transaction use a special sales agreement executed by a neutral attorney have his broker list the property so that the commission can be properly handled list the property himself so he can get a commission on the purchase |
A: disclose to the seller that he has a license and inform his broker of the transaction Sam must disclose that he has a real estate license and he should tell his employing broker since the broker needs to know what is going on as he has potential responsibility in all of Sam's real estate transactions. |
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An agent has a brokerage relationship with both the Buyer and the Seller in a single transaction. The brokerage relationship must be: Dual agency Single agency Transaction broker Customer |
A: Transaction broker It is illegal to have agency with one party and be a transaction broker to the other party; dual agency is illegal in Colorado |
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H, a broker, started a chain of events that resulted in the sale of a property.. This is referred to as a: proceed order procuring cause private offering pro forma |
A: procuring cause Only in an exclusive right to sell listing is a broker exempt from the requirement of being the procuring cause of sale. |
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An apartment owner signed an agency agreement with a broker to collect the rents on his apartments. All rents were due on the first of the month. On July 1, the broker had collected all of the rents, except from one tenant. On July 2, the owner died. The broker called the remaining tenant on July 3, but the tenant refused to pay the rent to the broker, saying that the death of the owner had revoked the broker’s right to collect. The tenant: was right could not refuse as the broker’s authority continued until the appointment of an executor or administrator could not refuse, because rent was due on July 1 has to pay the rent until notified by the owner or his representative not to |
A: was right The death of either the agent or the principal cancels any agency agreement. Since the owner died on July 2, the agency between the owner and the broker ceased, and the broker is no longer permitted to act on the behalf of the deceased. This does not mean that the rent is not due to the heirs of the deceased, it means the broker cannot collect it on behalf of the estate. |
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A broker is showing a property in which a heinous crime was committed. The broker is aware of the circumstances surrounding the crime as a result of media attention. As a transaction broker working with a buyer, he is obligated to: make no disclosure regarding psychologically impacted properties disclose every fact he knows about the property disclose the information only if the suspect has not been apprehended make a written request to the seller asking for permission to disclose |
A: make no disclosure regarding psychologically impacted properties In Colorado psychologically impacting events may not be disclosed. |
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When terminating an affiliation with his or her employing broker, what procedures must a broker follow? return his or her license along with a letter of termination to the real estate commission give the broker an official letter of termination that can be sent to the real estate commission the broker has a joint responsibility with the employing broker to notify the commission return all customer cards to the employing broker |
A: the broker has a joint responsibility with the employing broker to notify the commission When a broker decides to terminate an affiliation, both the employed licensee and the employing broker have a joint responsibility to ensure that the commission is notified in any change of employment status. |
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Under "vicarious liability" in Colorado: The principal is liable only for acts of the agents that the principal has approved, directed or ratified. The principal is liable for any acts performed by their agent as long as the acts are within the scope of the agency. The licensee is solely responsible for his/her own actions. The licensee is liable for the acts of the seller that the licensee has approved, directed or ratified. |
A: The principal is liable only for acts of the agents that the principal has approved, directed or ratified. vicarious liability. a principal’s liability for an agent’s acts performed within the scope of the agency; specifically excluded by Colorado statute from a principal’s liability unless the act or omission was approved, directed or ratified. |
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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 all of the above |
A: all of the above Lack of disclosure is illegal. |
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Broker Jones negotiates the sale of a house for $195,000. The agreement recites a deposit of $2,500. Jones receives $1,500 cash and a $1,000 note. The buyer seeks FHA financing. Jones certifies to the lending institution that he has received a $2,500 cash deposit from the buyer. Under these circumstances: Jones is guilty of a criminal act Jones’ license can be revoked Jones is guilty of a criminal act and his license can be revoked Jones is not guilty of a criminal act but his license can be revoked |
A: Jones is guilty of a criminal act and his license can be revoked This is fraud and the Real Estate Commission could revoke the broker’s license after a hearing. |
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An attorney-in-fact, executing the powers given him under the provisions of a power of attorney, has the right to do all of the following except: sign his principal’s name collect money for his principal encumber the principal’s property, with the attorney-in-fact as the beneficiary, without the knowledge of the principal change the date of possession with the agreement of the other party |
A: encumber the principal’s property, with the attorney-in-fact as the beneficiary, without the knowledge of the principal Such action would constitute a breach of fiduciary relationship between principal and attorney-in-fact. |
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An appropriate duty for an agent but not a transaction broker would be: Presenting all offers in a timely manner Counseling as to material benefits and risks Exercising reasonable skill and care Accounting in a timely manner for money and property |
A: Counseling as to material benefits and risks All of the others are an obligation of both an agent and a transaction broker. |
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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? Transaction Broker Seller Agency Buyer Agency Cannot determine from scenario |
A: Seller Agency b. Broker Cleary advised Seller Samuel as to the counter offer. Only a broker fiduciary relationship such as Buyer or Seller Agency can act as an advocate and coach a client on a transaction. Transaction Brokers have a non-fiduciary working relationship and as such cannot advocate on behalf of a client. |
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A listing contract in which the broker’s commission is contingent upon the broker’s producing a buyer, before the property is sold by the owner or another broker is a(n): open listing net listing option listing exclusive right-to-sell listing |
A: open listing Only an open listing can be given to more than one broker. |
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Broker Mary Andrews took a listing and later discovered that her client had previously been declared incompetent by a court of law. The listing is now: Is binding, since the broker was acting as the owner’s agent in good faith Is void Is the basis for the recovery of a commission if the broker produces a buyer Is voidable |
A: Is void Incompetent persons cannot enter into a contract. |
