WA Broker's License Mock Exam #1

Question 1

1. A home inspection revealed that black mold is present in a home. What should the buyer’s agent tell the buyer?

Answer 1

To seek expert advice.

Explanation: A buyer’s agent typically does not have expertise in environmentlally hazards. The proper step, for matters in a transaction outside the agent’s expertiese is to advise the principal to seek expert advice. In this case, that would be a mold remediation specialist.

Question 2

2. A seller wants to net $60,000 from a transaction, but will have to pay off a mortgage and other fees, at a total cost of $181,800. The seller will also need to pay 7% commission. What will the property need to sell for?

Answer 2

$260,000

Explanation: Start by adding the desired net and the other costs, including the mortgage ($60,000 + $181,800 = $241,800). Subtract the commisssion percentage from 100% (100% - 7% = 93%), and then divide the total by the percentage ($241,800 / .093 = $260,000).

Since the agent bases her commission on the total selling price, you can’t simply add 7% of the costs and profit to the selling price or you won’t quite have her full commission. You need a price that the agent can take 7% of and still satisfy the seller’s goals. A fuller explanation is found in the section on the seller’s net problems in ch 18 of Fundamentals.

Question 3

3. A buyer asks the buyer’s agent to write an offer on terms that don’t match the listing agreement. The buyer’s agent refuses to write the offer and then, in writing, unilaterallly terminates the agency relationship with the buyer. Which is true?

Answer 3

Buyer’s agent is permitted to unilaterally terminate the agency relationship.

Explanation: An agent may unilaterally renounce an agency relationship. Termination of the agency may involve a breach of contract; if so, the agent could be liable to the princial for damages resulting from the breach. However, breach of contract, isn’t in itself grounds for disciplinaary action. Failure to present an offer is grounds for disciplinary action; but here, since the agent didn’t write the offer, no offer exists yet. (An agent is free to renounce rather than help the principal do someitng pointless or unwise.)

Question 4

4. Closing is set for August 1. The seller has already paid the property taxes for the year, totaling $6,000. How much of the amount is the buyer’s responsibility?

Answer 4

$2,500

Explanation: Since the buyer is taking title on August 1, she’s responsibe for the property taxes for the remaining five months of the year (August, September, October, November, and December). Divide the annual taxes by 12 to find the monthly amount: $6,000 / 12 = $500. Multiply the figure by 5 to determine the buyer’s share of the taxes: 5 x $500 = $2,500. (Generally, the state will tell you when to treat all months as equal, but here the even set of dollar amounts in the answers lets you know that.)

Question 5

5. The IRS issues rules that determine when a real estate agent is an employee and when he is an independent contractor. Which of teh following statements on that topic is FALSE?

Answer 5

The brokerage may require an independent contractor to have a cell phone.

Explanation: One of the key differences between employees and independendt contractors is the level of supervison; an independt contractor uses his judgement how to perform a task, while an employee receives spectific instructions on how to accomplish each task. An instruction to carry a cell phone or other equipment doesn’t particularly suggest an independent contractor relationship, making B the only possibly answer. As a practical point, virtually all agents carry cell phones now whether instructed to do so or not.

Question 6

6. A tenant has already paid his $1,200 rent for the month for a single-family property. The property’s owner sells it to a new buyer, with closing occuring on the 15th of June. The parties decide the seller is entitled to rent for the closing date. On the settlement statement, the prorated rent will appear as a:

Answer 6

$600 debit for the seller and a $600 credit for the buyer

Explanation: The rent has already been paid to the seller, so the seller will need to give some of that rent to the buyer. The buyer’s prorated share will be a debit for the seller and a credit for the buyer on the settlement statement. The seller’s share is for the 1st through the 15th (15 days), and the buyer’s share is for the 16th through the 30th (also 15 days), so that $1,200 can be divided in half. The settlement statement will show a $600 debit for the seller and a $600 credit for the buyer.

Question 7

7. Mineral rights associated with real property are always:

Answer 7

separable and divisiable

Explanation: Mineral rights may be sold separately from the land. However, they are appurtenant to the land and will be conveyed with the land unless there is an agreement otherwise.

Question 8

8. John, Kevin, and Lyle own a property as tenants in common, but only Kevin and Lyle live on the property. John would like to sell the property for redevelopment, but Kevin and Lyle refuse. What is John’s best option?

Answer 8

Obtain court order to sell the property.

Explanation: When co-owners can’t agree on whether to sell or how to divide their property, one or more of them may file a partition aciton to terminate the coownership. If ther isn’t a feasible way to physically divide the property, the court will order that the property be sold and the sale proceeds be divided between the former co-owners.

Question 9

9. W, age 17, enters into an installment contract to purahcase a five-year-old car from S, an adult. From a legal point of view, the contract is:

Answer 9

voidable by W only

Explanation: The contract is voidable by the minor, but not by the other party.

Question 10

10. An investor wants to invest $250,000 in the development of a strip mall by taking out a loan secured by a residential property that he owns. Will the Truth in Lending Act apply to this transaction?

Answer 10

No, because this is a commercial transaction

Explanation: The Truth in Lending Act covers consumer loans–loans used for personal, family, or household purposes. Since this borrower is going to use the proceeds to develop a business property, TILA does not apply, even if the loan is secured by owner-occupied residential property. (By contrast, if the proceeds of a loan against real property are used to send a child to college, for example, then TILA would apply.)

Question 11

11. While preparing a competitive market analysis, an agent finds four comparables to choose from. Comparable 1 sold for $180,000 13 months ago under normal conditions. Comparable 2 sold for $190,000 14 months ago under normal conditions. Comparable 3 sold for $175,000 10 months ago as a foreclosure. Comparable 4 sold for $180,000 16 months ago as a foreclosure. The agent shoud use:

Answer 11

None, because they are all older than nine months

Explanation: Ideally, comparable sales should have occured within the past six months. A sale older than six months can be used if there’s no choice adjustments for inflation are made. Comparables must have sold under similar conditions, which rules out answers A, B, and C since those are include at least one foreclosure. This leaves D as the best answer The agent should try to cast a wider net for comparables, even if that means using houses that need more adjustments for features or are located farther away.

Question 12

12. An invetor rents a property to a tenant. For tax purposes, depreciation on the property is based on:

Answer 12

price, plus capial improvements, minus land value

Explanation: Adjusted basis is calculated by stating with intial basis (the cost of obtaining the property), adding capital expenditures, and then subtracting depreciation deductions. The value of the land must also be subtracted from what is depreciable; land does not wear out, so depreciation doesn’t apply.

Question 13

13. Property managment for residential property is different from commerical property, in that a manager would be more concerned about:

Answer 13

future space needs of a commercial tenant than of a residential tenant

Explanation: A commercial tenant may need to expand into remodeled adjacent units, if is operations grow, so a property manager will want to consider that possibiity when helping a commercial tenant find the right space. However, this is not usally a concern for residiential tenants. By contrast, a written lease, a security deposit, and a check of credit scores are all common in both commercial and residential leases.

Question 14

14. What part of the land is removed, but generally the boundaries of a proeprty stay the same, it is known as:

Answer 14

avulsion

Explanation: A commercial tenant may need to expand inot remodeled adjacent units, if its operations grow, so a property manager will want to consider that possibility when helping a commercial tenant find the right space. However, this is ot usually a concern for residiential tenants. By contrast, a written lease, a security deposit, and a check of credit scores are all common in both commercial and residential leases.

Question 15

15. An apartment buidling is right where a new city park is going to be built. The city condemns it. Can the city terminate the leases of the buiding’s tenants?

Answer 15

Yes, if notice is provided to the tenats, and they recieve relocation assistance.

Explanation: According to the Uniform Relocation Act, tenants whose leases terminate because of the condemnation of their residince are entitled to at least 90 days’s notice and assistance with relocatoin, including payment of moving expenses. (A residential tenant is not to have a compensable interest in the property. The tenant does not have an ownership interest, and from an apprisal perspective a residential leashehold interest is unlikely to have any financial value.)

Question 16

16. An offer is dated June 4. The offer is accepted on June 7. The buyers are approved for a loan and satisfy the financing contingency on June 9. The transaction closes on June 28. The date of the contract is:

Answer 16

June 7

Explanation: The date of which acceptance occurs is considered to be the date of the contract. In this case, that would be June 7.

Question 17

17. A couple with children would like be buy a house that was built in 1950. The home wa recently remodeled, with completely new paint and plumbing. In this situation, what does the agent always have to do?

Answer 17

Make sure the buyers receive a pamphlet on lead-based paoin

Explanation: A seller of a house built before 1978 must always give buyers a copy of a pamphlet on lead-based paint prepared by the Environmenatl Propetection Agency. If (but only if) the property has been inspected for lead-based paint, the seller must also give a copy of the inspection report. The agent must make sure that the seller takes these steps.

Question 18

18. A buyers’ purchase and sale agreement contained a financing contingency. The buyers applied for a loan with a local lender, who verbally informed them that their loan applicaiton was denied. The buyer’s agent should:

Answer 18

tell the buyers about their right to recieve the denial in writing

Explanation: Under the Fair Creidt Reporting Act, when a lender takes an adverse action on the baisis of a credit report, the applicant or borrower must receive written notice of that action. The consumer should also be notified of which consumer reporting agency provided that information, so that the consume can verify and, if necesary, contest that information.

Question 19

19. A former mansion has been divided into three apartments. The best approach to finding the property’s value is:

Answer 19

income

Explanation: The income approach is appropriate for properties that are oreineted toward generating income for the property’s owner. That would be true even if the property originally was intended as a single-family residence.

Question 20

20. A residential property manager should inform prospective tenants about:

Answer 20

the planned removal fo a swimming pool

Explanation: A property manager should inform tenants about the property’s amenities; however, he shouldn’t misrepresent the amenities (for instance, if a pool were about to be removed, he would want to let a prospective tenant know that before the tenant signs the lease). Antidiscrimination laws would prohibit a manager from letting a prospective tenant know about an alcoholic resident (which would be descrimianaiton on the basis of disability) or the race of the other tenants, and while he could legally tell the prospective tenant about the property appraised value, that’s likely to be of little interest to a tenant.

Question 21

21. A rural lot runs 500 feet east/west along its northern boundary, and 600 feet east/west along its southern boundary. Its eastern boundary runs 200 feet due north/south, while its western boundary runs 224 feet in a diagonal northeast/southwest direction. The cost of the land is $6 per square foot. What is the cost of this lot?

Answer 21

$660,000

Explanation: It’s best to diagram this type of problem to solve it. Once you draw it, you would then break it down into a triangle at left and a rectangle at right. The rectangle at right is 500 feet in length and 200 feet in height (500 feeet x 200 square feet). The trianagle on the left side is 200 feet in height and 100 feet at its base (200 feet x 100 feet x 1/2 = 10,000 square feet). You can ignore the 224 foot diagonal side, which does not factor into your calculations (remember, the formula for a trianagle area is 1/2 X Base X Height; the hypotenuse or diagnoal is not part of teh equation.) Add the two components together (100,000 square feet + 10,000 square feet) and then multiply by the cost per square foot (110,000 square feet x $6 per square foot = $660,000) to find its price. (see diagram)

Question 22

22. What information does an appraiser need in order to calculate a capitalizaiton rate?

Answer 22

Value and net income

Explanation: In order to calculated a property’s value, an approasier using the income approach would need to know the property’s net income and capitaliaiton rate. So conversely, if the appriaser wanted to find the capitalization rate, he would need to know the property’s value and net income.

Question 23

23. To avoid tenant problems, a landlord is best off using a standardized lease form that includes:

Answer 23

specifice rules and regulations

Explanation: Including the rules that govern the tenancy in the lease itself helps prevent disputes between landlord and tenant.

Question 24

24. Rudiger purchase a home for $200,000 and recieves an 80% loan from his bank. He has to pay three discount points to recieve the loan. He is also responsible for a 1% origination fee and a $300 appraisal. The seller paid a 6% commission to the listing brokerage. What is the amount of the discount point that he paid?

Answer 24

$4,800

Explanation: To calculate the discount points, first find the loan amont ($200,000 x .8 = $160,000). Then multiply that by the percentage of the loan represented by discount points ($160,000 x .03 = $4,800). Since the question only specified discount points, you would not include the origination fee in your calculaitons (and you certianinly wouldn’t need to know the cost of the appraisal or the commission).

Question 25

25. A buyer purchases a rental home tha is fully furnished. The document used to transfer title to the furniture is a:

Answer 25

bill of sale Explanation: Deeds transfer title to real estate; a bill of sale is generally needed to transfer title to personal property.

Question 26

26. Ben recies a life estate in a property, with his nephew Will designated as the remainederman. When Ben dies, what kind of interest does Will receive?

Answer 26

Fee simple estate Explanation: The interest that passes to a disignated person upon the death of the life tenant (or other measuring life) is fee simple estate. Will has remainder interst only up until the moment Ben dies. Once Ben is dead, Will's interest immediately becomes a fee simple interest.

Question 27

27. A movie theater was built ten years ago. If the neighborhood is now zoned entirely residential, the movie theater:

Answer 27

will be allowed to continue since it was built before the new zoning law went into effect Explanation: The movie theater is an example of noncorming use, a use that was legal before a new zoning law went into effect but doesn't comply with the new requirements. Nonconforming uses are generally allowed to continue.

Question 28

28. In a bilateral contract:

Answer 28

two parites have exchanged promises, and both parites are obligated to perform Explanation: In a bilateral contract, two parties have exchanged promises and both parties are obligated to perform.

Question 29

29. Gerald engages a licensee to list his property and find a buyer for it. In this context, the licensee is acting as a:

Answer 29

special agent Explanation: When a licensee represents a seller in a specifice transaction, and is authorized to perform typical duties associated with listing a property, she acts as a special agent.

Question 30

30. A licensee locates what seems like a ready, willing and able buyer. However, the deal falls through at closing because the buyer can't obtain necessary financing. At the same time, though, the seller turns out to be unable to provide marketable title. Does the seller still owe a commission to the listing agent in this case?

Answer 30

No, because there was not ready, willing, and able buyer Explanation: The most important rule in determining whether a seller is obligated to pay a commission is whether a ready, willing and able buyer was found during the listing period. That would take precedence over the seller's failure to provide marketable title. A buyer who does not have he financial ability to complete the purchase does not qualify as "able".

Question 31

31. A mortgage often includes a clause requiring the lender's consent before another borrower may assume the mortgage. the cluase is called a/an:

Answer 31

alienation clause (due-on-sale clause) Explantion: An alienation clause (or due-on-sale clause) prevents assumption without the lender's consent by stipulating that the loan balance is due and payable in full if the property is sold.

Question 32

32. A small house is situated on a large lot in the mixed-use neighbohorhood. The city decides that the area will, in the future, be zoned commercial. What will most likely happen to the property's value?

Answer 32

It will increase, in anticpation of the changing uses Explanation: Under the principle of anticipation, a property's value is based on expectations of what will happn to the property in the futre. Generally commercial land is worth more than residential land. A small house on a large lot would be viewed as a tear down.

Question 33

33. The Real Estate Settlement Procedures Act (RESPA) applies to:

Answer 33

residential first mortgages Explanation: RESPA applies to mortgages secured by dwelling with up to four units. It does not apply to commercial transactions or seller financing. (A contract for deed, which is the same thing as a land contract, can only be used in a seller-financed transaction.)

Question 34

34. A homeowner bought his home for $150,000. Ten years later, he refinanced his mortgage and borrowerd $100,000. Which of the folowing is true for this type of property?

Answer 34

Interest on loans such as this one for the purchase or refinance of principal residence is deductible. Explanation: For a principal residence, intereset on a purchase or refinance loan of only $100,000 would be fully deductible. Which tax bracket the borrower is in would not impact that deductibility.

Question 35

35. Under Title VIII of the Civil Rights Act of 1968, certain transactions are exempt. Which one of the situations below would be exempted and not a violation of the act?

Answer 35

An unlisted home that is for sale by owner, where the only advertising is a sign in front of the property that reads simply "For Sale" and the owner owns only one other home. Explanation: The federal Fair Housing act (Title VIII of the Civil Rights Act of 1968) does not apply to the sale or renatl of a single-family home by its owner, provided that the owner doesn't own more than three such homes, no real estaet agent is used, and no discriminatory adveritsing is used.

Question 36

36. Price fixing (including setting commission rates in a community) is prohibited by the:

Answer 36

Sherman Antitrust Act and state anitrust laws Explanation: The Sherman Antiturst Act and sate antitrust laws prohibit price fixing, group boycotts, market allocatoin, and tie-in arrangements.

Question 37

37. A metes and bounds description reads as follows: "Start at the intersection fo Route 120 and Wells Lane. Proceed due south 1,815 feet, then due east 1,200 feet. Proceed due north 1,815 feet, then return west to point of beginning." How many acres is this property?

Answer 37

50 Explanation: It may help to sketch the property being described; once you do, you will notice that is is rectuangular, and you can simply use the Area = Length X Width formula. Mulitply the length and width to find that is is 2,178,000 square feet (1,815 fb x 2,178,000 sq ft) Convert this amount to acreage by dividing by 43,560 (2,178,000 / 43,650 = 50 acres). (43,560 is the number of square feet in an acre.)

Question 38

38. Erin entered into a lease that begins on February 1 and is set to end on January 31 three years later. The leasehold is a/an:

Answer 38

estate for years Explanation: An estate for years begins on a certain date and ends on a certain date

Question 39

39. Which of teh following is true about surveys?

Answer 39

They reveal encourachments not of public record Explanation: To determine whether there are encroachments against a property, it may be necesary to identify the precise location of the property's boundaries, and that's done through a survey. That's why a title insurance company may have survey performed as part of the process of issusing an extended converage title insurance policy. While there are arguments for other answers to this question, this course and the state exam basically concern buying and selling homes; form that perpective, the most common reason for a survey is to check for encoachments.

Question 40

40. Allen begins providing construction services on May 2 and records a construction lien on May 5. Bart begins providing servics on May 3 and records a construction lien on May 4. On May 10, a judgment lien against the property is recorded. The property's owner also receives notice on May 10 that he is in arrears on his property tax payments. Which lien has lien priority?

Answer 40

tax lien Explanation: Property tax liens priority over other liens, including construction liens. The priority of the construction liens would be based on the date that each claimant first supplied labor or materials for the project; but the tax lien priority over both constructoin liens. Note that property tax liens attach automatically when the taxes are levied.

Question 41

41. Which of the following is true about a bulding designated a historical landmark?

Answer 41

It may not be willfully destroyed without a permit Explanation: Historical preservation ordiances may proptect existing buildings of historical vlaue, and prohibit their destruction or modification without approval from an appropriate local authority.

Question 42

42. A real estaet agent shows a lsiting to two different buyers. One buyer decides in teh early mornign to make an offer on the proety for less than the listed price. The agent wirtes up the offer and plans to meet with the seller later in the day. The other buyer then contacts the agent and says that she'd lie to me a full price offer. What should the agent do?

Answer 42

Present both offers to the selelr at teh same time.

Question 43

43. To be valid, a listing agreement may be signed by:

Answer 43

an attorney in fact Explanation: A listing agreement needs to be signed both by the listing agent, on the listing firm's behalf, and by the seller. An attorney in fact, someone the seller has appointed in a power of attorney and granted the authority to convey the property, may sign the listing agreement on the seller's behalf.

Question 44

44. An apartment building was built in 1960. An apartment is being rented to a couple with no children. Which of the following is true?

Answer 44

The teneants should sign the lead-based paint disclosure and receive a pamphlet on lead-based paint. Explanation: A landlord must disclose the location of any known lead-based pain, provide a copy of any report concerning lead-base pain if the property has been inspected, and give tenants a copy of the lead-based pain pamphlet. Tenants do not receive the ten-day period in which to have the home tested for lead based paint that buyers do.

Question 45

45. A buyer's agent has repeatedly seen sales collapse at teh last mintue becuase the buyers wern't able to obtain financing. How could he best limit this in the future?

Answer 45

Require prospects to be approved first Explanation: Getting preapproved for a loan before beginning the house hunting process is now standard procedure; this way, the buyer knows in advance the maximum amount he can count on from the bank.

Question 46

46. A federal law requies lenders to give booklet about shopping or a home loan to all prospective borrowers within three business days of laon application. What law is this?

Answer 46

RESPA Explanation: The TILA-RESPA Integrated Disclosures Rule requires among other things, that lenders give prospective borrowers a copy of a booklet about closing costs and the home buying process entitled "THe Home Loan Toolkit"

Question 47

47. A property manager of a ten-unit building shows an apartment to a woman uses a wheelchair. The woman says tha she would need to make some modificiations, such as adding grab bars in teh shower and removing some carpeting in the bedroom. The landlord:

Answer 47

must allow the tenant to make the modificiations at her own expense, but can requires her to resore the property at the end of the lease. Explanation: The Fair Housing Act says that a disabled tenant may make reasonable modifications toa leased property at her own expense. The tenant can be required to restore the premises at teh end of the tenancy.

Question 48

48. A warehouse is listed at 60 feet long by 90 feet wide, with 15-foot ceilings. The building rents for the five cents per cubic food per month. What is the amount of the monthly rental payment?

Answer 48

$4,050 Explanation: First, calculate the buidling's volume (60 x 90 x 15 = 81,000 cubic feet). Multiply that by the monthy rent rate to find the amount of the monthly payment (81,000 x $0.05 = $4,050).

Question 49

49. Chin, a home seller, is talking to his real estate agent. He mentions that he rents the backup generator; it doesn't belong to him. The generator would be considered:

Answer 49

personal property Explanation: The generator is personal property of the company that owns it. While it might remain on the property after possession of the property changes hands, it still belongs to the rental company and they could reclaim it according to the terms of their contract.

Question 50

50. Carl is housebound and never goes outside. Neighbor Salvador plants a vegetable garden on a corner of Carl's property that is not visible from the main house. After the required period of time, Salvador claims a perspecriptive easement over the portion fo Carl's land. The easment is:

Answer 50

valid, because the use was open, and Carl's knowledge, of the use isn't considered Explanation: A presciptive easement requires a use that is open and notorious, which means that it must be obvious enough to put the landowner on notice that someone else is using his land. Someone establishing an easement by prescription is not expected to find out whether the true owner is living on the property, what his limitiation are, or whether he is acually aware of the prescriptive use. The rule only requires actions that would be enough to put the typical owner on notice that his property interest is threatened.

Question 51

51. To be enforeceable, a contract for the sale of real estate must be in writing an signed by the parties. This is true beause of which law?

Answer 51

Statute of Frauds Explanation: The statute of frauds requries certain contracts, including nearly all real estate contracts, to be in writing.

Question 52

52. Buyer Boy and Seller Sam decide to wait until Sam's listing agreement with XYZ Real Estate Agency has expired, to avoid paying a commission. Does the firm (and, by extension, the individual listing agent) have any legal recourse?

Answer 52

No, the listing agent has no further recourse Explanation: If a listing agreement does not include an extender clause (a safety clause), the listing agent has not recourse against a buyer and seller who avoid paing a commission by waiting to close until after the lsiting has expired. For this reason, most listing agreement forms have an extender clause. (Note: this question doesn't involve the license law, so it's a national question and not about Washington law or practice. While the question might be considered tricky, if you face a question like this on the state exam you should assume there is no extender cluase since the question doesn't mention one.)

Question 53

53. A mortgage that uses both real and personal property to secure teh borrower's debt is a:

Answer 53

package mortgage Explanation: A package mortgage includes both real and personal property as collateral.

Question 54

54. When a borrower makes payments of a fully amortized loan, her debt service payments will cover:

Answer 54

both principal and interest on the loan Explanation: A fully amortized loan is repaid through regular payments that include both a portion of the principal and interest. The final payment will pay off the principal balance, leaving no need for a balloon payment. (Most home purchase loans and budget mortgages, which include taxes and insurance in each payment, but the is not a characteristic of all fully amortized loans. Note also that the question refers to debt service payments only.)

Question 55

55. An appraiser is trying to estimate depreciation when valuing an older residential rental property, but is finding it difficult because no comparables have sold recently. However, the appraiser can find sufficient data on renatl rates in the same market, and a capitalization rate can be supported. Which approach to value should the appraiser use?

Answer 55

Income Explanation: If comparable sales aren't available and the accrued depreciation is difficult to estimate (which is generally true for older properties), but the data necessary to use the income approach are availalble, then it's appropriate to use the income approach.

Question 56

56. The protected class of familial status" in the federal Fair Housing Act refers to the presence of:

Answer 56

children's under the age of 18 living on the property Explanation: Discrimination base on familial status refers to discriminaiton against somoen because a child (a person under 18 years old) is or will be living on the property. In addition to parents, this rule protects legal guarians, pregnant women, and people in the process of obtaining custody of a child.

Question 57

57. A type of lease that allows the lessor to share in the increasing sales generated by a retail property is a/an:

Answer 57

percentage lease Explanation: Percentage leases are frequently used in shopping centers and with other real properties. They enable the landlord to share in the tenant's profits as part of the rent.

Question 58

58. An investor would liked to invest in real estate, but without being involved in managmenet or subjecting himself to any personal libaility. He should invest in a :

Answer 58

limited partnership Explanation: In a limitted partnership, the limitted partners are not personally liable for the partnershp's debts and obligations. Limited partners are commonly passive investors who aren't directly involved in managing the business.

Question 59

59. A legal actoin brought in court to compel a party to fulfill the terms of a contract because the land is unique and money damages would not adequately compensate teh party victimized by a breach is called a/an:

Answer 59

suit for specific performance Explanation: The legal premise that no two properties are alike is the basis for a suit for specific performance, which asks the court to order the breaching party to actually perform the contract as agreed (deliver the deed to the buyer), rather than simply pay money damages.

Question 60

60. Under which of the following circumstances would a listing be terminated?

Answer 60

Seller dies Explanation: According to agency law, if either the principal (in this case the seller) or the agent dies, the agency is terminated. However, the agent in a real estate agency relationship is the real estate firm, not the individiual who took the listing; so the listing is still in effect even if the individual real estate dies or moves to another firm.

Question 61

61. Which of the following persons be eligibile to receive a VA loan?

Answer 61

A verteran or a decease veteran's unremarried surving spouse. Explanation: A veteran's surving spouse may be eligible for a VA loan if he or she has not remarried and the veteran was killed in action or died of service-related injuries.

Question 62

62. A prospective tenant asks a liencee to show him only properties that do not allow childrent. How should the licensee respond?

Answer 62

Say that only bona fide retirement communities may exclude children. Explanation: The Fair Housing Act forbids "adults only" apartment complexes. There is, however, an exemption for properties that qualifiy as "housing for older persons," such as those intended for and solely occupied by persons 62 or older.

Question 63

63. A property's net operating income is $12,000 per year. If an investor wants a 12% rate of return, how much is the propety worth to him?

Answer 63

$100,000 Explanation: Use the capitalization formulat (Income / Capitalization Rate = Value) to find the property's value: $12,000 net income / .12 rate of return = $100,000 value

Question 64

64. The best description of the boundary lines for a property found in a subdivision would be found on:

Answer 64

A plat map Explanation: Subdivided property is usually described in deeds and purchases and sale agreements by references to a map of the subdivision and a particular lot. The map known as a plat map, decribes the boundaries of the lot and is prepared by a surveyor.

Question 65

65. A homeowner has an upaid hospital bill for $20,000. The hospital files suit and wins a judgment for the full amount. Is the homeowner's home (which he owns free and clear) at risk?

Answer 65

Yes, but he may be partly or fully protected by state homestead laws Explanation: Homestead laws are state-level laws that give limited protection against foreclosure judement liens. Generally, foreclosures is not allowed unless the net value of the property exceeds the homestead exemption amount.

Question 66

66. Which of the following best describes the difference between building codes and zoning regulations?

Answer 66

Building codes affect improvements on the property; zoning regulations control the use of real property. Explanation: Building codes protect the public from unsafe or unworkmanlike conditions, through the buildling permit system. Zoning regulations, by contrast, regulate the use or properies, dividing communities into zones for specific types of uses. Both are enforced at the city or county level.

Question 67

67. An independent contractor relationship between a real estate brokerage firm and a licensee requires that the:

Answer 67

brokerage and licensee must enter into a written agreement Explanation: The Internal Revenue Service will consider a real estate licensee an independent contractor only if the brokerage firm and the licensee have written contract saying that the licensee will not be treated as an employee for federal tax purposes. In addition, substantially all of the licensee's compensation must be based on commission rather than hours worked.

Question 68

68. An advertisement for a house includes only the following phrase about financing: "Assume the owner's original loan with only a $1,000 downpayment!" What is wrong with the advertisement?

Answer 68

It doesn't also include the loan's annual percentage rate and other financing terms Explanation: Under the True in Lending Act, if an advertisement contains a triggering term, such as the downpayment amount or percentage, then it must also disclose other information concerning the loan. This includes the loan's APR and the number, timing, and amount of the payments.

Question 69

69. Jesse, Kim, and Diane own a home together as joint tenants. If Jesse dies, her property interest:

Answer 69

will be automatically transferred (conveyed) to Kim and Diane Explanation: Joint tenancy includes the right of survivorship, which means that upon the death of the joint tenant, title passes immediately to the remaining joint tenant(s). The property interest is not subject to probate; the transfer of the title is automatic.

Question 70

70. A seller's agent knows that the seller intentially failed to disclose statement that the basement leaks during heavy rains. The seller's agent must:

Answer 70

inform the prospective buyer that there is misrepresented information on the disclosure form Explanation: A real estaet agent as the duty to disclose known material facts to the parties in a transaction, even when the agent's principal would prefer not to have the information disclosed. A leaking basement is a latent defect and certainly qualifies as a material fact.

Question 71

71. Which of the following is most likely to be considered a fixture?

Answer 71

Plumbing Explanation: Plumbing is permantenly attached to the real property and would be difficult to remove without dismantling large parts of the building. It is therfore liekly to meet any fixture test.

Question 72

72. A life estate will last until:

Answer 72

The death of the recipient Explanation: A life estate lasts until the death of the measuring life. In most cases, the life tenant, (in other other words, the recipient of the life estate) is also the measuring life, and therefore the life estate ends upon the life tenant's death, so that's the best answer here.

Question 73

73. The deed that states there is a conveyance of interest, if any, is the:

Answer 73

quitclaim deed Explanation: When signing a quitclaim deed, the grantor is saying, "I hereby quitclaim, remise, and release whatever interest I have in the property, if any."

Question 74

74. A judgement lien:

Answer 74

when paid off, a satisfication of judgement should be recorded in order to clear the record. Explanation: When a judement lien has been paid off, it is advisable for the judgement debtor to record a document known as a satisfaction of judgement so that there is a constructive notice that the lien has been released.

Question 75

75. The police powers of the government include:

Answer 75

building codes and zoning regulations Explanation: The government's police power is its authority to adopt laws that are necessary for the protection of the public's health, safety, morals, and general welfare. Land use laws such as buidling codes and zoning regulations are based on teh police power.

Question 76

76. The term "meeting of the minds" is associated with:

Answer 76

offer and acceptance Explanation: "A meeting of the minds" means that he parties have reached an agreement: they've mutally consented to the terms of the contract through the process of offer and acceptance.

Question 77

77. Exaggeration about a property's positive characteristics would be considered:

Answer 77

puffing Explanation: Puffing is a term for sales patter that emphasizes desireable aspects of a property, but merely contains opinion not factural statements, and doesn't rise to the level of misrepresentation.

Question 78

78. The seller listed the property for $95,000. Assuming that their listing agreement is typical, the broker would NOT be entitled to a commission if the seller:

Answer 78

rejected a $90,000 offer from a finacially qualified buyer. Explanation: If an offer meets the seller's terms in the listing agreement (in this case, a price of $95,000) and the buyer is finanically able to buy, the broker is entitled to a commission whether teh seller accepts the offer or not. Conversely, a broker isn't entitled to a commission if the seller rejects an offer that doesn't meet the terms in the listing agreement.

Question 79

79. A contract specifies that "time is of the essence" This means that:

Answer 79

all contractual duties must be fulfilled on or before the date set forth in the contract Explanation: A time is of the essence clause means that all parties to the conract are legally required to meet all deadlines set in the agreement. Failure to meet any deadline by either party is a breach of contract.

Question 80

Usury laws fix which of the following?

Answer 80

Maximum interest rates Explanation: State usury laws set maximum interest rates for certain types of loans.

Question 81

81. For which of the following people would an adjustable-rate loan not be a good idea?

Answer 81

A person about to retire Explanation: Adjustable-rate mortages run the risk of the interest rate going up in the future, so they may not be a good choice for someone who will be on a fixed income. By contrast, someone whose income is expected to grow would be better positioned to handle an interest rate increase.

Question 82

82. An appraiser needs to be state-certified to perform which of the following appraisals?

Answer 82

Appraisal related to an FHA loan Explanation: To be on the roster of appraisers eigilbie to appraise properties associated with FHA loans, an appraiser must be state-certified. More genreally, federally related loans must involve an appraiser who is either state-certified or state-licensed (this requirement may not apply if the loan is under $250,000, however).

Question 83

83. On a settlement statement, an earnest money deposit that will be held by the brokerage firm until closing is a:

Answer 83

credit to the buyer Explanation: The earnest money has already been paid and will be applied to the purchase price at closing, so it appears on the settlement statement as a credit for the buyer.

Question 84

84. A licensee hears that a religious group will be opening a commune in a neighborhood. He begins contacting neighbors and telling them about this, encouraging them to list their properties with him before property values decline. This is:

Answer 84

blocking busting Explanation: Blockbusing occurs when a licensee tries to induce homeowners to tlist their properties by prediciting that persons from a protected class (usually on the basis of race, but also potentially on the basis of religion) will be moving into the neighborhood and that there will be undesiriable consequences.

Question 85

85. An investor is interested in purchasing a mult-family dwelling. He would most likely wnat to look for a:

Answer 85

property where the rents are similar to comparable properties in the same area Explanation: A key area of inquiry for an investor's market analysis is the rents charged by comparable properties. Investors want to buy properties tha compete effectively with other properties in the same market. A rent-property, a property with a high vacany rate, or a property with a low rate of return for some other reason would probably not be a desirable.

Question 86

86. Zoning requirements state that a lot must be a least four tiems the size of the buidling located on the lot. An architect draws up plans for building that is 20,000 square feet. At least how many acres does the lot need to be?

Answer 86

2 Explanation: Multiply the building size by four to find the minimum square footabe of the lot (20,000 square feet x 4 = 80,000 square feet). There are 43,560 square feet per acre, so in order to exceed the required 80,000 square feet, you would need to two-acre lot (43,560 square feet x 2 = 87,120 square feet).

Question 87

87. Tests to distinguish a fixture from personal propety include all the following, EXCEPT:

Answer 87

cost of the item Explanation: In the absence of a written agreement, courts apply a series of tests to classify the item in dispute, including (1) the method of attachment; (2) the intention of the annexor; (3) adaptation of the item to the realty (adpatability); and (4) the relationship of the parties in the dispute.

Question 88

88. A primary advantage of owning a property is severalty is:

Answer 88

flexibility Explanation: Property owned by only one person ("in severalty") gives that owner more flexibilty to use or dispose of the property than she would have if she shared ownership. By definition, ownership in seveveralty doesn't involve joint occupancy or shared risk. And properties held in fee simple are generally inheritable whether there's only one owner or more than one.

Question 89

89. All of the following and requirements for a valid deed, except:

Answer 89

acknowledgement Explanation: Acknowledgement is not a requirement for a valid deed. Acknolwedgement is necessary for the deed to be recorded, but a deed that is not recorded may still be valid.

Question 90

90. A homeowner has been sharing with a freindly neighbor that use of a driveway that crosses both their properties. However, the neighbor is about to move out, and the remaining homeowner would like to make sure that she can continue to use the driveway even if the new neighbor is not amenable to that. The homeowner should request a/an

Answer 90

easement Explanation: An easement will give the homeowner the right to sue part of the neighnor's property for ingree and egree.

Question 91

91. A local ordinace state that no sign can extend more than two feet above the roofline. The Morgans want to put a sign on their roof, but the sign is six feet high. To install their sign legally, the Morgans must apply to a:

Answer 91

variance Explanation: A variance will enable the Morgans to make a minor deviation from zoning requirements. It will be allowed only if the Morgans face undue hardhsip because of the zoning law, and if the vairance will not change the neighborhood's essential character.

Question 92

92. A property is listed for $275,000. The buyers offer $265,000, and insist that the gourmet six-burner stove remain with the property. When the signed offer is presented to the sellers, the sellers accept the price, but want to take the stove with them. They cross out the item about the stove, sign the form, and return it to the buyers. Under these circumstances:

Answer 92

the original offer is terminated, and the sellers have made a counteroffer Explanation: Even through the sellers accepted the price change, they still changed the terms of the offer by altering the part about the stove. This had the effect of terminating the offer and creating a counteroffer. The selelrs, in essence, become the new offerors.

Question 93

93. A seller's agent, upon meeting with a prospective buyer, become concerned that the buery is unlikely to be finanically qualified. The agent should:

Answer 93

relay those concerns to the seller woh will decide Explanation: A seller's agent has the duty to provide all written offers to the seller for consideration, regardless of the terms of the offer of any of the agent's misgivings about the buyers. The best practice would be simply to set the seller know about the agent's concerns and allow the seller to decide.

Question 94

94. Net listings are strongly discouraged becasue they are liekly to be unfair to the:

Answer 94

seller Explanation; Net listings, where seller agents agrees to a certain amount and the listing broker receives any surplus beyond that, are likely to be unfair to uniformed sellers. The broker could end up earning a far larger commission than a typical percentage-based commission broker would charge (while performing no extra work to justify the higher amount).

Question 95

95. A purchase and sale agreement is for $150,000 with 80% financing, closing in 30 dsays with possession at closing, and rent provision for posession after closing. This is an emaploy of a/an:

Answer 95

contract with contingencies Explanation: This is question tha is best answered by the process of eleimiantion. Answer A is too vague to be a good answer. There is no mention of the counteroffer so C doesn't apply. Nor does D since a purchase and sale agreement is a bilateral contract, not a unilateral contract. Therefore, you can conclude that B is correct and financing is a contingency here.

Question 96

96. A promissory note that is secured by a mortgage is:

Answer 96

primary evidence of the debt Explanation: The note is evidence of the debt; the mortgage is security for the debt.

Question 97

97. Which of the following is an advantage using private mortgage insurance, from a borrower's perspective?

Answer 97

It allows for smaller downpayment Explanation: Private mortgage insurance allows a borrower to buy a house with a relatively lower downpayment, which is an advantage. Without private mortgage insurance protecting the lender against a borrower's default, the lender would probably require a lower LTV (and therefore a larger downpayment).

Question 98

98. The market price of a propety would be best defined as:

Answer 98

The amount paid to obtain the property Explantion: Market price is simply the price that someone paid in an actual transactoin--it's not an estimate of value.

Question 99

99. Bronson agreed to sell his house to the Hatchers. Closing is scheduled for May 15. Bronson already paid the taxes for the entire year, but the Hatchers are assuming responsibility for the taxes as of the closing date. The settlement will prorate that taxes as a:

Answer 99

debit to the buyer, and credit to the seller Explanation: The seller has prepaid the taxes for the entire year, so he will be credited for the amount after closing. In turn, the Hatchers will be debited for the same amount.

Question 100

100. An agent shows his customer, who is Asian-American, homes only in a neighborhoods that are predominanatly Asian-American. This is called:

Answer 100

steering Explanation: Steering is the practice of guiding prospective buyers or renters twoard or away from certain neighborhoods based on national orgin, race, or an of the other protected categories, in violation of fair housing laws.

Question 101

101. A property manager will be paid 3% of a propety's annual rental income. The rent paid is $24,000 base rent; $12,000 percentage rent; $8,000 maintenance taxes, and insurance (triple net). The commission amount that hte manager will receive is:

Answer 101

$1,080 Explanation: In a triple net lease, the tenant pays operating expenses (maintance costs, taxes, and insurance) in addition to base rent and in some cases, percentage rent. First, calculate the rent paid each year: $24,000 base rent + $12,000 percentage rent = $36,000. Then calculate the commission amount: .03 x $36,000 = $1,080 (Expenses probably wouldn't be considered part of the rent when calculating a commission.)

Question 102

102. A borrower is purchasing a $300,000 home. She will be using a loan with an LTV or 80%. She will also be paying 3 discount points. What is the total amount of cash that she will need to bring to closing?

Answer 102

$67,200 Explanation: There are two components that you'll need to calculate. First, calculate the size of the loan: $300,000 x .8 = $240,000. She'll need to bring $60,000 to cove the downpayment ($300,000 - $240,000 = $60,000). Second, calculate the amount of the discount points, using the loan amount and not the purchase price ($240,000 x .03 = $7,200). Add the two together for the total amont of cash needed ($60,000 + $7,200 = $67,200)

Question 103

103. A rectangle parcel of land, starting from the point of beginning, measures 180 feet north, then 90 feet east, then 180 feet south. What is the length and direction of the last side?

Answer 103

90 feet west Explanation: To return to the point of beginning in the rectangle parcel, the final side of the parcel would be 90 feet in a westerly direction. (It may help sketch the parcel. The missing side would be on the bottom of the rectangle, across from the first 90-foot-long side.)

Question 104

104. A seller finds that he cannot provide maretable title because of a cloud on the title. To clear the title, he should file a/an:

Answer 104

quiet title action Explanation: A quiet title action is a lawsuit that is used to remove clouds from title to real property, by settling questions about the property's ownership or the legitimacy of other claims against it. (A quitclaim deed will also clear a cloud, but that requires the cooperation fo whoever would need to sign the deed. Thus, a quite title action is a better answer for this question.)

Question 105

105. Which of the following actions by a developer would require a zoning variance or a rezone, because it would result in a more intensive use of the land?

Answer 105

Increase in number of lots per acre Explanation: D is the only possible answer. An increased number of lots per acre would be more intensive use than before and since devlopers tend to build to the zoning limit, an increase in the number of lots per acre would likely require either a variance or a rezone.

Question 106

106. Unless the purchase agreement or other contract states differently, an earnest money check given to real estate licensee shall be made out to the:

Answer 106

licensee's firm, as licensed Explanation: The question and answer correctly state the law; however, it is common practice for the ubyer to name an escrow agent in the offer and make out the check to that company.

Question 107

107. If a real estate agent is sending out emails offering his services, the federal CAN-SPAM Act requires the agent to:

Answer 107

tell recipients how to opt out of recieiving future emails Explanation: The CAN-SPAM Act is a federal law that places limits on unsolicited emails. One requirement is that an email must give information on how recipients can avoid receiving further emails.

Question 108

108. To be entitled to sue for a commission, a person must be able to prove that at the time the real estate activities were performed, she:

Answer 108

was licensed Explanation: A person must have been validly licensed at the time she engaged in the real estate activities for which a commission is claimed.

Question 109

109. It is not necessary to complete 30 hours of continuing educaiton in order to renew a/an:

Answer 109

inactive license

Question 110

110. If a designated broker wishes to terminate an affliated licensee, or an affliated licensee wants t terminate emplyment with a brokerage, which of the following statements is true?

Answer 110

Either party may act unilaterally to end the relationship Explanation: Either a designated broker or an affliated licensee may act unilateraly in order to terminate their empoyment relationship.

Question 111

111. A licensee, with permission from his designated broker, sets up his own subsection S corporation, which he calls M Team. He then rents a billborad and advertisinges a listing on it, using only the M team name. Is this legal?

Answer 111

No, because ads must give name of the firm Explanation: Under Washington'rea real estate license law, every advertisement prlaced by a licensee on behalf of others must contain the name of the real estate firm as licensed. This is true even if a licensee conducts his own operatoins under a separately named business entity.

Question 112

112. In Washington, a person licensed to act on behalf of a real estate brokerage is called a/an:

Answer 112

affiliated licensee

Question 113

113. When a license is terminated, the date of termination is the:

Answer 113

postmark date or the date the license is hand-delivered to the Department of Licensing Explanation: The termination date is the postmark date or the date the license is hand-delivered to the Department of Licensing. (Practically speaking, mailing or hand delivery and not necesarily used any more, as the termination process can be handled entirely online.)

Question 114

114. J is selling real estate without a license. J is guilty of a:

Answer 114

gross misdemeanor Explanation: Selling real estate without a license is a gross misdeameanor, which in terms of seriousness is somewhere between a misdemeanor and a felony.

Question 115

115. A real estate agent sold a home for $275,000. Prior to closing, the agent's license was revoked on grounds of moral turpitude. With respect to his eligibilty for the commission, which of the following statements is true?

Answer 115

He is eligible for the commission because he was duly licensed when the sale was made Explanation: The commission is earned when the sale is made, not when it is paid (at closing). The agent's license was revoked after the sale was made, so the agent was eligible for a commission when the services were provided and it sill entitled to collect it.

Question 116

116. S's license is temporarily suspended by the Director for a violation of teh license law. S is fined $500. The money collected as a result of the fine is:

Answer 116

deposited in the real estate education account, to be used solely for education for the benefit of licensees Explanation: Fines are deposited in the educatoin and used for the eucation of licensees.

Question 117

117. An affliliated licensee owns a wholly owned S corporation, the A Team. He instructs an escrow agent to issue a commission check directly to the A Team. How has he violated the real estaet license law?

Answer 117

Commissions can be paid to licenses only via their firm Explanation: A licensee may be paid a commission only by the realy estate firm he is afflilated with. An affiliated licensee cannot recieve comepensatoin directly from a client or a custormer, or from another licensee, another real estate firm, or another other business entity.

Question 118

118. The selling agent must NOT accept a promissiory note as an earnest money deposit:

Answer 118

unless the purchase and sale agreemetn discloses that the deposit is a note Explanation: When preparing the buyer's offer to purchase the selling agent must disclose on the purchase and saleagreement form that the deposit is in the form of a promissory note (orany other form tha t is not the equivalent of cash). The seller can then take this into account in deciding whether or not to acept the buyer's offer.

Question 119

119. Q falls behind on his child support payments. The matter is forwarded to the Director of the Department of Licensing. What action is availalble to the Director? She can:

Answer 119

suspend Q's license Explanation: The Director can suspend Q's license until satisfactory arrangements are made to corrct the deliquency.

Question 120

120. Pamela would like to get a Washington broker's license. Which requirements must she meet?

Answer 120

Complete a course in Fundamentals Explanation: One requirement for a broker's license in Washington is completion of a course in Fundamentals. No college is required, Washington residency is not required, and the applicant must be at least 18 (not 21).

Question 121

121. A licensee would not be discipled for:

Answer 121

offereing to advertise a property, for a fee, for a "For Sale by Owner" seller Explanation: It's legal for a real estate licensee to solicit business from a "For Sale Onwer' seller. If the FSBO seller agrees that the licensee will help sell the propety by advertising it on the MLS and elsewhere, in exhange for a fee, then tehe seller and licensee would simply enter into a listing agreement. (In addition, the other three options can be discarded via process of elimination. Undisclosed receipt of compensation from both parties, failure to supervise employees, and blind ads are all illegal.)

Question 122

122. A real esate license is needed for all of the individuals, except:

Answer 122

home inspector Explanation: A home inspector is not directly involved in representing others in the process of buying, selling, leasing, or advertising real property, so an inspector does not need a real estate license.

Question 123

123. A which of the following is not a requiement for a broker's license in the state of Washington?

Answer 123

College diploma Explanation: A college diploma is not a requirement for a broker's license.

Question 124

124. Under the Uniform Regulation of Business and Professions Act (URBPA), which of the following actions by a licensee would constitute unprofessional conduct?

Answer 124

Failure to provide a buyer with a completed property disclosure form Explanation: Depending on the circumstances, failure to privide a property disclosure form in a transaction where one is required could be considered incompeteince, negligence, malpractice or misprepresentation. In any case, it violates the Uniform Regulation of Business and Professions Act. An adverstiement must include the firm's name as licensed, but not the name of the firm's designated borker or the telephone number.

Question 125

125. Which of the following people does NOT need a real estate license?

Answer 125

A building contractor Explanation: A building contractor is often involved in selling homes he has built and owns himself. As long as he is acting in this capacity, he doesn not have to have a real estate license. Note that while an unlicensed person may act as a greeter an open house, she can't host or conduct tours or even answer questions except to reiterate basic facts about the property from a form prepared by the agent.

Question 126

126. At what minimum point an inactive licensee take a 30 clock-hour course in order to reactiveate her license?

Answer 126

3 years Explanation: A licensee must take a 30 clock-hour continuing educaiton course in roder to reactiveate a license that has been inactive for more than three years.

Question 127

127. Under Washington license law, a licensee's license may be suspended if she hasn't:

Answer 127

made timely payments on a federally guaranteed educational loan Explanatio: Washington law permits the Directoro f the Department of LIcensing to suspend the license of any licensee who is not in compliance with payment requirementes for a guaranteed student loan.

Question 128

128. A licensee writes a succesful transaction while working for Designated Broker X. Before the transaction closes, though, the licensee starts working for Disgnated Broker B. How is the licensee's commission handled?

Answer 128

Designated Broker X may pay the commission to Designated Broker B, who will pay the licensee. Explanation: A licensee can accept compensation only from the designated broker for whom she currently works. So if a licensee moves from one firm to another with a transaction pending, and the licensee's original forim owes the ex-agent a commission, then the licensee's new designated broker would accept the compensation from teh old designated broker and then pay the licensee.

Question 129

129. Under Washington's real estate agency law, an agency relationship begins when a:

Answer 129

licensee undertakes to provide real estate broekrage services to a principal.

Question 130

130. An INternet website operated by a licensee displays the proeprties he has listed. The site must givethe

Answer 130

brokerage's licensed name Explanation: A licensee should fully disclose his licensed status in all Internet communications. This includes providing the name of his brokerage firm as registered with the Department of Licensing. The city of andstate where the firm's office is located is also required, but its the physcial location - a specific address is not. Addresses of listed properties and an email address for the firm are also not required.

Question 131

131. Which of teh folliwng would NOT be grounds for disciplinary action against a licensee?

Answer 131

An agent gives a copy of the sales agreement to the purchaser when it has been signed only by the offeror. Explanation: The purchaser is usually the same peron as the offereor. Giving a copy of the purchase and sale agreement form to the purchase when only she has signed it is something the agent MUST do. The license law requires it. The same rule also applies when th seller is the offeror and the purchaseser is the offeree (which happens if the seller makes a counteroffer). Each party is entitled to recieve a copy of an offer or a counteroffer after signing it, before the other party signs it.

Question 132

132. The Real Estate Commission does all of the following except:

Answer 132

set real estate transaction fees Explanation: The Commission does not set transaction fees. Fees are set by agreement between the agent and principal in each transation.

Question 133

133. To be eligible to take the real estate broker's exam, an applicant must have:

Answer 133

completed a 60 clock-hour course in Real Estate Fundamentals and 30 clock hours in Real Estate Practices Explanation: An applicant for the broker's exam must have completed a 60 clock-hour course in Real Estate

Question 134

134. A property manager handling a vacant building faills, for several months, to keep out vagrants who damage the property. Who is liable?

Answer 134

The property manager as well as the disignated broker (for failing to properly supervise the licensee) Explanation: Generally, property managers must be licensed (as opposed to people who simply collect rent and sign leases and perform basic mainentance). In addition, the answer options strongly suggest that this is a licensee working for a brokerage. The property manager's designated broker may also be liable for failing to supervise the property manager adequately.

Question 135

135. Real estate transaction records should be kept for a minimum of:

Answer 135

3 years Explanation: Transaction records should be kept for at least three years after the transaction closes.

Question 136

136. A seller obtained listing presentations from three different agents. The first one proposed a price of $700,000. The second one proposed a price of $800,000. The third agent didn't perform a CMA and simply set the price at $900,000. The property eventually sold for $720,000. The third agent's actions are a good example of:

Answer 136

negligence Explanation: An agent's failure to properly perform a competitive market analysis, if it were to rise to the level of a license law violation, would most likely fall within the category of negilgence; it's not a false statement (a misrepresentation), but it does suggest a failure to use the level of care expected of a reasonable real estate agent.

Question 137

137. A unlicensed assistant will be compensated when a transaction closes. Is this permissible?

Answer 137

No, because an unlicensed assistant's compensation may not be contingent on sales being completed. Explanation: Unlicensed assistants may seek to arrange appointments with prospective clients, as long as the assistant's compensation is not based on whether the firm is eventually compensated.

Question 138

138. J passes the license exam on March 20. How much time does J have to apply for his license, before being required to retake the license examination?

Answer 138

12 months Explanation: J has 12 months. If the licensee fee is not paid and the license placed on an active or inactive status within that time, the applicant will have to retake the exam and meet any additional licensing requirmentments that have been adopted in the interim.

Question 139

139. In Licensee D works out of a home office, for how long is she required to maintain records of closed transactions?

Answer 139

Affliated licensees are not required to maintain records of closed transactions Explanation: Real estate firms (as opposed to its individual affliated licensees) must maintain records of closed transactions for at least three years. The firm is responsible for the custody and accuracy of the required records, and they should be kept at a main office or branch office. The term "home office" doesn't refer to a brokerage office; even if the firm had its offical office in a home, it would be called the firm office not a home office, at least in the formal vocabulary of license law questions.

Question 140

140. If, at the conclusion of a disciplinary hearing, the Director rules against a licensee and revokes her license, the licensee can appeal to the:

Answer 140

superior court Explanation: The licensee has 30 days to appeal to superior court