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30 Cards in this Set
- Front
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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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A broker who is guilty of an act, that is grounds for disciplinary action, may: be subject to a criminal prosecution have their license suspended or revoked be subject to a civil action all of the above |
A: all of the above A licensee may be subject to criminal prosecution and/or have their license revoked or suspended. |
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According to the Statute of Frauds - a real estate sales contract is not effective unless it is signed by: the buyer the seller either the buyer or the seller |
A: the seller Although Colorado’s statute of frauds only provides that the seller must sign the real estate contract, the obvious best practice is for both parties to sign. Statute of Frauds. To prevent fraud through perjury, the law requires that the parties’ agreement evidencing their mutual assent must be in writing in certain cases. As to real estate, the Colorado law provides: Every contract for the leasing for a longer period than one year, or for the sale of any lands or any interest in lands, is void, unless the contract, or some note or memorandum thereof, expressing the consideration is in writing, and subscribed by the party by whom the lease or sale is to be made. (C.R.S. 38-10-108) In Colorado, real estate contracts not signed by the seller are void, not voidable. Colorado differs from most other states that provide that “the party to be charged” (in a lawsuit by the other party) must have signed the contract. Other agreements that are declared void by law are (C.R.S. 38-10-112): (i) Every agreement that by the terms is not to be performed within one year from the making thereof; (ii) Every special promise to answer for the debt, default, or miscarriage of another person; (iii) Every agreement, promise, or undertaking made upon consideration of marriage, except mutual promises to marry. Generally, the statute of frauds provides that no civil action can be brought to enforce a contract unless there is some writing signed by the party to be charged (in civil action to enforce the contract). The writing does not have to be the “perfect” contract but it does have to be sufficient to allow a court to determine that the parties intended to sell the property. Such things as (1) the identity of the parties, (2) subject matter, (3) terms and conditions, (4) recital of consideration and (5) signatures of the parties are necessary. Although Colorado’s statute of frauds only provides that the seller must sign the real estate contract, the obvious best practice is for both parties to sign. Some states have statutes of fraud provisions in their real estate license laws. These laws provide that a real estate licensee shall not be entitled to a commission unless there is a written employment agreement between the licensee and the buyer or seller. Although the Colorado license law does not have such a statute of frauds |
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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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Chuck is a licensee who has listed the Carson's' home as a seller's agent and it is now under contract. The Carson's ask Chuck to also work with them to find and purchase a new home. What will be Chuck's role in the purchase transaction? he may be either an agent or transaction-broker depending on the mutual agreement he does not have to decide until the Carson's decide what home they want he will be agent for the seller of their next home and must disclose that he will continue to be their agent for all transactions with them |
A: he may be either an agent or transaction-broker depending on the mutual agreement In this other transaction, the Carson's may hire Chuck as either an agent or a transaction broker; this is not related to the previous relationship. Chuck must be aware that the Carson's may expect "agency" service even if the agreement is for transaction-broker representation. |
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An option: requires the buyer to complete a purchase keeps an offer open for a specified time gives buyer an easement on the property makes seller liable for a commission to broker if buyer does not exercise option |
A: keeps an offer open for a specified time An option is a unilateral contract, in essence an offer to make an offer. |
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In Colorado, a real estate transaction is closed in escrow when: the buyer's loan cannot be funded at the time of closing the buyers and sellers cannot be at the closing at the same time there is some problem that occurs, and the closing has to be delayed while in process all of the above |
A: all of the above Because Colorado is not an escrow state, usually transactions are finalized at the closing table. We do close in escrow when certain situations occur: the buyer’s loan cannot fund, all parties cannot sign the documents simultaneously, or some problem arises and we have to delay closing. |
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A resident Colorado broker’s office must be “open to the public” during normal business hours. Be a virtual office doing business by phone and using a post office box mailing address. Have a physical address in Colorado where the commission staff can inspect records. Be in a commercial office building to comply with zoning |
A: 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 resident in the State are not required to have a physical location in the State. |
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When you, as a licensee, are selling your own property: you are required to list it with another broker you must inform all prospective purchasers that you are the owner as well as a licensee you are required to list it at or under the market price you are not allowed to list your own property |
A: you must inform all prospective purchasers that you are the owner as well as a licensee A licensed salesperson must inform all prospective purchasers that he is a licensee. |
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In the Colorado Brokerage Relationship law, the seller's agent may not disclose which of the following to the buyer? All adverse material facts about the title to the property All adverse material facts about the property All of the environmental hazards effecting the property All adverse psychological impacts or stigmas about the property |
A: All adverse psychological impacts or stigmas about the property A stigmatized property (A property where some event has occurred or continues to occur) should not be disclosed to the buyer |
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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 is required by law to leave her house on the market until June. Lily has withdrawn the broker's authority to sell the property and may be subject to reimbursing some broker expenses. Lily has cancelled the agreement and there are no penalties. The real estate commission will decide if Lily' s action was justified. |
A: Lily has withdrawn the broker's authority to sell the property and may be subject to reimbursing some broker expenses. Lily may cancel the agreement but she may be responsible for some expenses. The real estate commission will not be involved. |
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If an owner takes property off the market for a definite period of time, for consideration; and grants the right to purchase the property within that period at a stated price, this is called: an option a contract of sales the right of first refusal none of the above |
A: an option An option is a contract to enter into a contract. |
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A broker may not lawfully collect a commission from both buyer and seller without: notifying both of this fact after the sale is closed having them both sign a sales contract an exclusive listing agreement prior knowledge and consent of both parties |
A: prior knowledge and consent of both parties Dual agency is not illegal in some states, it is illegal in Colo., however, lack of disclosure of dual agency is illegal. |
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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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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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Every real estate sales contract must contain all of the following except: signatures of the parties bound by the contract consideration offer and acceptance a notary acknowledgment |
A: a notary acknowledgment There must be offer and acceptance and signatures of the parties bound by the contract. It also must contain consideration, however, real estate sales contracts do not have to be notarized to be valid. |
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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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Which of the following gives best evidence of a buyer’s intention to carry out the terms of a real estate sales contract? The signing of the buy and sell contract Agreement to seek mortgage financing The earnest money deposit The provision that “time is of the essence” |
A: The earnest money deposit The earnest money acts as a “good faith” deposit. |
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Broker Green sold a home and the buyer gave him a $5,000 check as deposit. Green did the improper thing when he: endorsed it over to the seller upon financial acceptance of the offer held the check until all financing was completed in escrow cashed the check and gave the money to the seller when his acceptance was communicated to the buyer all of the above |
A: all of the above Unless otherwise agreed by the buyer and seller, the earnest money must be deposited in the brokers trust account. |
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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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To assign a contract for the sale of real estate means to: file a contract with a county recorder transfer the rights under the contract have the buyer assign the contract to a relative all of the above |
A: transfer the rights under the contract An assignment of a contract transfers the rights to purchase the property from the assignor to the assignee. |
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Real estate sales contracts are “express” in that: agreement is evidenced by acts and conduct the parties to the contract declare terms, conditions and their intent in writing a promise is exchanged for a condition an act is exchanged for a promise |
A: the parties to the contract declare terms, conditions and their intent in writing The terms are specific and the contract is in writing. |
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The law requiring real estate contracts to be in writing to be enforceable is called the statute of frauds Torrens statute. statute of limitations. statue of torts. |
A: statute of frauds The statute of frauds requires contracts to be in writing. |
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A buyer makes an earnest money deposit of $2,000 on a $175,000 property and then withdraws the offer before the seller accepts it. The broker should dispose of the buyer’s earnest money by: turning it over to the seller deducting the agree-upon commission and delivering the balance to the seller returning it all to the buyer depositing it in his or her special bank account |
A: returning it all to the buyer The earnest money should be returned to the buyer, as the buyer has the right to cancel prior to notification that the offer has been accepted. |
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An option is a contract that: Transfers title when signed Does not set the sale price Specifies a time limit in which to buy or lease a piece of property Is a bilateral executory agreement |
A: Specifies a time limit in which to buy or lease a piece of property An option gives a specific time for the buyer or seller to exercise a specific action |
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A developer is selling several parcels of property that have been developed. The developer wants to have his attorney prepare a sales contract that refers to the legal description and stipulates the warranties the developer is making. Which of the following is true? The developer cannot do this, as he must use only the commission proved forms The developer's warranties cannot be included within the body of the contract The developer can hire an attorney to prepare his own contracts and include warranties and other information The developer can hire a broker to prepare the contracts |
A: The developer can hire an attorney to prepare his own contracts and include warranties and other information The developer can include his warranties and information since he is having his attorney draw up the sales contracts. Builders are not require to use state forms. |
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The law requires that every contract include: offer and acceptance consideration competent parties all of the above |
A: all of the above Every contract must have an offer and acceptance, competant parties, and consideration. |
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A breach of contract is a refusal or failure to comply with the terms of the agreement. In Colorado if the seller breaches the contract, the buyer may: sue the seller for specific performance rescind and split the earnest money with the broker sue the seller for liquidated damages all of the above |
A: sue the seller for specific performance The buyer may always sue the seller for specific performance or damages, or both, regardless of the type of contract used. The buyer is entitled to terminate the contract and have his earnest money returned if he chooses not to sue. |
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The Real Estate Commission may issue a temporary "hardship" license when the employing broker of a corporate brokerage is unable to continue in that role. This "hardship" license may be issued to: A member of the board of directors A person who has a sufficient ownership in the corporation An officer or director with a broker's license from another state A Colorado licensee approved by the corporate board of directors |
A: A Colorado licensee approved by the corporate board of directors Every company must have an employing broker at all times. If something should happen to an employing broker, such as leaving the company, the real estate commission can issue a “hardship” license to someone else to act as the interim employing broker while the company settles on a permanent employing broker. The only rule for the “hardship” employing broker is that he/she must have an active Colorado license. |
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When changing from an active to an inactive or unlicensed agent, how much time does the Commission allow for ceasing any and all activity? Immediately 24 hours 12 hours 48 hours |
A: Immediately To have an active license the licensee must be in compliance with the licensing laws, otherwise any and all activity must stop immediately. |
