Unit 1 Quiz

Question 0

A salesperson with ABC Realty is working as a facilitator with a buyer. The buyer would like the salesperson to show him a property listed by ABC Realty. Which of the following statements if TRUE?
A. The salesperson can show the property as a facilitator.
B. The buyer can only view the property through another company.
C. The salesperson must represent the seller.
D. The salesperson must represent the buyer.

Answer 0

C. The salesperson must represent the seller.

In the event a facilitator broker or salesperson working with a buyer shows a property listed by the facilitator broker or salesperson, then the facilitator broker or salesperson must act as a seller’s broker.

Question 1

A listing broker must give a buyer an agency disclosure.
A. verbally, at first substantive contact
B. before closing
C. in writing, at first substantive contact
D. prior to writing a purchase agreement

Answer 1

C. in writing, at first substantive contact

At the first substantive contact, a real estate broker or salesperson shall provide an agency disclosure form to a consumer of a residential real property transaction. Incidental meetings are not substantive, but a one-on-one conversation certainly is.

Question 2

Which state agency regulates real estate licensees?
A. Attorney General
B. Department of Labor and Industry
C. Minnesota Association of REALTORS
D. Department of Commerce

Answer 2

D. Department of Commerce

The Department of Commerce promulgates license law and oversees regulation of licensees.

Question 3

Which of the following would NOT need a real estate license when helping another sell real estate for a fee?
A. A licensed practicing attorney
B. A trustee selling property for a trust
C. An employee selling the employer’s residential apartment building
D. A daughter selling her father’s home

Answer 3

A. A licensed practicing attorney

A licensed attorney is exempt from the licensing requirement. Only court-appointed trustees, such as bankruptcy trustees, are exempt. Employees, such as caretakers, are only exempt when leasing rental units in residential bulidings.

Question 4

ABC Realty has relocated their office to a different suite in the same office bilding.  ABC must notify the Commissioner of Commerce within
A. 72 hours
B. 3 business days
C. 10 days
D. 21 days

Answer 4

C. 10 days

Notice in writing shall be given to the Commissioner by a licensee of any change of information, including but not limited to personal name, trade name, address, or business location, not later than 10 days after the change.

Question 5

A prospective licensee passed the salesperson examination April 4.  The prospective licenses must complete the remaining requirements and apply for her license by:
A. April 3 of the following year
B. April 4 of the following year
C. June 30 of the following year
D. July 1 of the following year

Answer 5

B. April 4 of the following year

Salespersons must complete all requirements and apply within 1 year of successfully completing the exam

Question 6

A client sued a real estate salesperson. On January 12, the court issued a final judgement against the salesperson to pay the client $100,000.  After paying the client $65,000, the salesperson declared bankruptcy and has no remaining assets.  To receive imbursement from the real estate education, research, and recovery fund (REERRF), the client must apply:
A. within 10 days
B. within 3 business days
C. by June 30
D. by January 12 of the following year

Answer 6

D. by January 12 of the following year

In order to collect from REERRF, the application must be filed no more than 1 year after 1 year after the judgement becomes final.

Question 7

Minnesota license law contains special provisions for loan brokers. Which of the following is NOT a requirement for loan brokers?
A. Provide an agency disclosure form
B. Hold a real estate broker’s license
C. Allow clients a 3-day recession period
D. Deposit fees into escrow within 48 hours

Answer 7

A. Provide an agency disclosure form

The agency disclosure form is only required in residential real estate transactions. Loan brokers provide financing solutions for non-residential real estate.

Question 8

A salesperson has a home listed. A brooker has a client who wants to write an offer using a promissory note as earnest money, and asks the salesperson if that would be okay. Which of the following is TRUE?
A. The salesperson must have her brokers permission to receive a non-depositable item
B. The salesperson must have the seller’s permission to accept the offer.
C. The broker must establish an escrow at a title company
D. The seller and the buyer must sign an escrow agreement

Answer 8

B. The salesperson must have the seller’s permission to accept the offer.

The seller must authorize an agent to inform others that a non-depositable item would be acceptable as earnest money; authorization would be in the listing agreement.

Question 9

Brokers owe fiduciary obligations to
A. the parties who employ them
B. The parties who pay them
C. the salespeople who bring the listings
D. all parties in the transaction

Answer 9

A. the parties who employ them

Fiduciary obligations are owed to the party who employes the broker, not the party who pays the broker.

Question 10

Who renews the salesperson's license?
A. The salesperson
B. The Commissioner of Commerce
C. The primary broker
D. The branch manager

Answer 10

C. The primary broker

The primary broker must renew the licenses of all qualified salespeople.

Question 11

Which of the following would be required to hold a real estate license when working for another and for a fee?
A. A mobile home broker who sells mobile homes not attached to land
B. Someone who will manage 3 properties that she owns
C. An auctioneer working for an attorney
D. A commercial loan broker

Answer 11

D. A commercial loan broker

Commercial loan brokers must have a real estate license. A cemetery owner, someone who will manage 3 owned properties, and an auctioneer working for an attorney are all exempt from holding a real estate license.

Question 12

A licensee and his sister have formed a corporation to invest in real estate. The licensee must disclose
A. that he is licensed
B. the maximum amount they are willing to pay
C. the percentage of ownership vested in the licensee
D. the corporation’s desired capitalization rate

Answer 12

A. that he is licensed

Licensees must disclose licensed status when buying, selling or advertising licensee’s own property and deposit funds in a trust account.

Question 13

A licensed real estate broker must retain copies of listings, purchase agreements, and trust account records for a minimum of
A. 3 years
B. 5 years
C. 6 years
D. 10 years

Answer 13

C. 6 years

A boker’s responsibilities include keeping transaction records for 6 years.

Question 14

An individual must obtain a real estate license if the individual buys or sells in \_\_\_\_\_\_\_ or more transactions during any 12-month period of time without a licensee representing the individual.
A. 4
B. 5
C. 10
D. 25

Answer 14

B. 5

Individuals are allowed 4 transactions within a 12-month period. Five or more transactions in a 12-month period Five or more transactions in a 12-month period require the individual to either be represented by a real estate agent or obtain a real estate license.

Question 15

Builders who sell no more than \_\_\_\_\_\_ units per year and NOT required to have a real estate license.
A. 20
B. 25
C. 40
D. 50

Answer 15

B. 25

Builders who sell no more than 25 units per year are not required to have a real estate license. However, builders do need to have a license to sell more than 25 units. Most builders obtain a limited broker’s license to fulfill this requirement.

Question 16

For an officer of a real estate company to take an active role in managing sales people and employees, the officer must
A. register all real estate transactions with the Commissioner
B. have a salesperson’s license
C. have a broker’s license
D. have a limited broker’s license

Answer 16

C. have a broker’s license

A corporation, partnership, or limited liability company applying for a license must have at least 1 officer or partner individually licensed to act as broker on behalf of the business.

Question 17

The maximum that may be recovered from the real estate education, research, and recovery fund in any on transaction is:
A. $25,000
B. $150,000
C. $250,000
D. $350,000

Answer 17

B. $150,000

One claimant cannot be paid more than $150,000 out of th efund for a claim based on a single real estate transaction (no matter how much the licensee actually owes the claimant).

Question 18

A person who violates a provision of the Standard of Conduct law may face all of the following EXCEPT:
A. temporary suspension of license
B. prosecution for a felony
C. prosecution for a gross misdemeanor
D. permanent revocation of license

Answer 18

B. prosecution for a felony

A violation is not a felony offense. Violation might include the following: gross misdemeanor, civil fines not to exceed $10,000 per violation, denial of licensure (initial application or renewal), license suspension or temporary suspension during investigation, license revocation, and censure.

Question 19

Which of the following would require disclosure as a material fact?
A. The selller HIV or AIDS
B. The property was the site of a suicide
C. The property next door is a community-based residential facility.
D. The property was used as a methamphetamine laboratory

Answer 19

D. The property was used as a methamphetamine laboratory

By law, it is not a material fact that the property is or was occupied by on diagnosed with HIV or AIDS; was the site of a suicide, accidental death, natural death, or perceived paranormal activity; or is located in a neighborhood containing any adult family home, community-based residential facility, or nursing home.

Question 20

When a real estate licensee receives earnest money from a prospective buyer, the earnest money must be deposited in the listing broker's trust account no later than the \_\_\_\_\_\_\_ business day after receipt by listing broker.
A. second
B. third
C. fourth
D. fifth

Answer 20

B. third

When a real estate licensee receives an earnest money deposit from a prospective buyer, it must be deposited in the listing broker’s trust account no later than the third business day after receipt by the listing broker.

Question 21

Which of the following would NOT be required to be in writing and signed by the real estate agent?
A. Property disclosure statement
B. Dual agency disclosure in the purchase agreement
C. Facilitator services agreement
D. Dual agency disclosure in the listing

Answer 21

B. Dual agency disclosure in the purchase agreement

The dual agency disclosure in the purchase agreement is signed by the buyer and the seller, not the agent.

Question 22

A salesperson or a broker performing servicese for a seller but NOT representing the seller is a 
A. seller's broker
B. buyer's broker
C. dual agent
D. facilitator

Answer 22

D. facilitator

A facilitator is a licensee providing services but not serving in a fiduciary capacity.

Question 23

Unless otherwise agreed to in writing, a commercial property manager must deposit rents and security deposits into the:
A. property manager's trust account
B. owner's private account
C. property manager's business account
D. owner's business account

Answer 23

A. property manager’s trust account

Rents collected on behalf of clients are trust funds. Without a written agreement with specific instructions, trust funds must be deposited in the broker/manager’s trust account.

Question 24

Brokers are required to provide their employees and salespersons
A. a workspace
B. business phone answering
C. adequate supervision
D. approved forms

Answer 24

C. adequate supervision

Brokers are required to provide adequate supervision of all employees and salespersons. The broker may or may not provide other items needed in the business.