Unit 1

Question 1

Colorado Real Estate Commission (CREC)

Answer 1

• commission has five members (3 RE agents and 2 members of the public)
• commission members serve 3 years term and meet bi-monthly

Question 2

Devision of Real Estate

Answer 2

licensing, regulation and enforcement agency

Question 3

CREC enforcement

Answer 3

CREC has power to investigate any licensee’s RE activities.

Question 4

Errors & Omissions Insurance

Answer 4

• it’s required to practice RE business
• renew by December 31 every year
• exceptions:
  1. inactive brokers
  2. attorney licensees maintaining malpractice insurance

Question 5

Change of Status

Answer 5

• notify CREC immediately of change in business location or employment
• license automatically inactivated if CREC not notified

Question 6

License renewal

Answer 6

• on anniversary date every three years
• 24h continuing education (CE) in three years period
• 12h of annual update course (4h each year)
• 12h of CE on other subjects in three years

Question 7

Affiliated Business Arraignments

Answer 7

• Associate
• Settlement service is any service connected with RE transaction/closing (loan origination, title, insurance, inspections…)
• Licensees MUST disclose any affiliated business arrangement to the clients IN WRITING

Question 8

Not entitled to commission for Title Objections

Answer 8

“No real estate agent or broker is entitled to a commission when a proposed purchaser fails or refuses to complete his contract of purchase because of defects in the title of the owner, unless such owner, within a reasonable time, has said defects corrected by legal proceedings or otherwise.”

Question 9

When owner must perfect title

Answer 9

The owner shall not be required to begin legal or other proceedings for the correction of such title, until such agent or broker secures from the proposed purchaser an enforceable contract in writing, binding him to complete the purchase whenever the defects in the title are corrected.

Question 10

Referrals Fees

Answer 10

SIGN CROSSING (test)

• An actual introduction of business has been made;
• A contractual referral fee relationship exists; or
• A contractual cooperative brokerage relationship exists.
• No person shall interfere with the brokerage relationship of a licensee - sign crossing?!?!?!

Question 11

Customer

Answer 11

“Customer” means a party to a real estate transaction with whom the broker has no brokerage relationship because such party has not engaged or employed a broker.”

Question 12

Designated broker

Answer 12

“Designated broker” means an employing broker or employed broker who is designated in writing by an employing broker to serve as a single agent or transaction-broker for a seller, landlord, buyer, or tenant in a real estate trans“action.

“Designated broker” does not include a real estate brokerage firm that consists of only one licensed natural person.”

Question 13

Dual agent

Answer 13

“Dual agent” means a broker who, with the written informed consent of all parties to a contemplated real estate transaction, is engaged as a limited agent for both the seller and buyer or both the landlord and tenant.”

DUAL AGENT IS ILLEGAL IN CO

Question 14

Subagent

Answer 14

“Subagent” means a broker engaged to act for another broker in performing brokerage tasks for a principal. The subagent owes the same obligations and responsibilities to the principal as does the principal’s broker.”

SUBAGENT IS ILLEGAL IN CO

Question 15

Transaction-broker

Answer 15

“Transaction-broker” means a broker who assists one or more parties throughout a contemplated real estate transaction with communication, interposition, advisement, negotiation, contract terms, and the closing of such real estate transaction without being an agent or advocate for the interests of any party to such transaction.

• Facilitates the transaction with both principals
• Not an agent for either