CCR 2 Flashcards
1
Q
According to the Contract to Buy and Sell, what recourse does a buyer have if the association documents are not acceptable?
a. Provide notice requiring seller to deliver revised documents.
b. Deliver a Notice to Terminate form by the appropriate deadline.
c. Seek resolution which must be completed by the Resolution Deadline.
d. Accept title but not subject to the objectional association documents.
A
B
2
Q
If the title policy is not delivered to the buyer at closing:
a. buyer should refuse to close unless the title policy is issued immediately.
b. title company has the responsibility to ensure delivery as soon as practicable.
c. seller’s broker has the responsibility to ensure delivery as soon as practicable.
d. seller has the responsibility to ensure delivery as soon as practicable.
A
D
3
Q
If a buyer notifies the seller in writing of a termination under the New Loan Terms provision, what happens to the earnest money?
a. The buyer and seller will mediate any disagreement about earnest money.
b. The broker must hold the earnest money until she gets mutual agreement to return it to the buyer.
c. As the buyer could not get a loan, the money goes to the seller.
d. The earnest money must be returned to the buyer immediately
A
D
4
Q
After closing, a managing broker should pay commissions due to company associates:
a. immediately from the escrow account so that the ledger can be closed.
b. from the escrow account at the end of the next accounting period.
c. from the company operating funds.
d. After withholding independent contractor taxes and contributions.
A
C
5
Q
A seller has received an inspection objection from the buyer but refuses to correct any items.
a. Seller is required to make all requested repairs before the resolution deadline.
b. Buyer must fulfill the obligations of the contract regardless of seller’s refusal.
c. Seller should wait to determine of any of the repair items are required by the lender.
d. The contract will terminate unless the buyer withdraws the objection prior to the resolution deadline.
A
D
6
Q
If the broker has an interest-bearing trust account, the interest:
a. will belong to the seller.
b. belongs to the broker.
c. may accrue to a nonprofit affordable housing fund.
d. may be applied to closing costs.
A
C
7
Q
What is the listing broker’s responsibility regarding an earnest money promissory note?
a. Deliver the note to the seller until it is redeemed.
b. Sue for payment if the buyer does not redeem the note when due.
c. Hold the note until closing, when it is redeemed.
d. Hold the note and notify the seller if the note is not redeemed on time.
A
D
8
Q
Under an Exclusive Right to Sell Listing Contract, the listing agent:
a. agrees to work exclusively with the seller and no others at the same time in the same area.
b. cannot work with buyers who may be interested in the seller’s property.
c. must sell the property to comply with the listing agreement.
d. has permission to work with other sellers at the same time.
A
D
9
Q
In a transaction with a listing broker and a broker acting as a buyer’s agent, who normally holds the earnest money?
a. The listing broker.
b. The buyer’s broker.
c. It must be held in a neutral account.
d. The brokers establish a joint escrow account.
A
A
10
Q
When a broker and a buyer enter into an Exclusive Right to Buy contract, the:
a. buyer may have similar agreements with many brokers.
b. broker must be a buyer’s agent.
c. broker promises to work with only one buyer at a time.
d. buyer is bound to work with one broker only during the term of the contract.
A
D
11
Q
In the Exclusive Right to Buy Contract agreement, regarding the commission:
a. the buyer agent’s commission should equal the commission paid to the listing agent.
b. the buyer’s broker might share in the listing broker’s fee paid by the seller.
c. the broker can force the seller to pay by including such language in the offer.
d. The buyer must pay the broker’s commission as payment determines the agency relationship.
A
B
12
Q
After signing the Exclusive Right to Sell Contract, the listing broker must also disclose:
a. the broker obligations to the seller.
b. the amount and source of listing commission to any buyer.
c. to all prospective buyers the listing broker’s relationship to the seller.
d. all material defects, known or unknown.
A
C
13
Q
The Exclusive Brokerage Listing Addendum:
a. removes the seller’s vicarious liability for the broker’s actions.
b. allows the seller to sell to anyone after the listing period has expired without paying a commission.
c. allows the seller to negotiate a sale and not pay the broker.
d. eliminates the broker’s confidentiality obligations.
A
c
14
Q
According to statute, “good funds” includes:
a. checks drawn from the buyer that will clear the bank.
b. title insurance corporate checks.
c. teller’s checks from a savings and loan institution.
d. checks drawn on the broker’s escrow account.
A
C
15
Q
If a buyer and seller have a disagreement over the earnest money, the earnest money holder may:
a. hold the money in the escrow account until the parties come to an agreement.
b. immediately issue a check to the seller.
c. interplead the money so the court may award expenses to the broker.
d. divide the money equally between the buyer and seller.
A
a
16
Q
A broker keeps one or more trust accounts in order to:
a. separate funds belonging to others from brokerage operating funds.
b. ensure that he is receiving the proper interest on these funds.
c. make internal bookkeeping easier.
d. keep money from each sale separate from all other transactions.
A
a
17
Q
If property taxes are to be paid in one installment, when must the payment be made to avoid interest and penalties?
a. First of May
b. Middle of June
c. End of February
d. End of April
A
D
18
Q
A contract has terminated due to an unresolved appraisal objection. The parties want to continue working toward resolution and closing. How should they proceed?
a. Complete and sign an Agreement to Revive Contract.
b. Complete and sign an Agreement to Amend/Extend Contract.
c. Complete and sign a new Contract to Buy and Sell
d. No action is required beyond resolving the objection.
A
A
19
Q
A broker secures a listing under an Exclusive Right to Sell listing agreement. The broker then shows the property to a prospective buyer and provides the buyer’s name to the seller in writing. After the listing expires, the seller signs another Exclusive Right to Sell agreement with a new broker which terminates the holdover period. The buyer returns to the original listing broker ready to prepare an offer on the property. If they buy the property, who is legally entitled to the commission?
a. The original listing broker because the offer was made within the holdover period.
b. The original listing broker because she is the procuring cause of the sale.
c. The new listing broker is entitled to the listing portion of the commission only.
d. The new listing broker is entitled to the whole commission but may agree to pay a co-op commission to the selling broker.
A
D
20
Q
The buyer and seller are in dispute about the earnest money. According to the Contract to Buy and Sell, the earnest money holder:
a. may release the earnest money to an attorney for one of the parties.
b. may hold the earnest money until written mutual instructions are provided.
c. should request arbitration approved by the Real Estate Commission.
d. must interplead earnest money into a court of competent jurisdiction.
A
B
21
Q
How is the broker compensation determined under the Exclusive Right to Sell Listing Contract?
a. Commission is determined by the broker.
b. Compensation is determined by the seller.
c. The commission is a standard fee established by area brokers.
d. The commission is established by the Real Estate Commission for particular geographic areas.
A
A
22
Q
When an Earnest Money Promissory Note is used for the earnest money deposit, which additional condition is required?
a. The buyer must provide financial statements as qualification.
b. The note must be identified in the sales contract including due date of the note.
c. The note must be held by the selling broker until it is honored.
d. The listing broker will sue the buyer if the note is not honored.
A
B
23
Q
An in-company transaction is not one in which a broker:
a. is working with both parties to the transaction.
b. is an agent for the seller, and the buyer is a customer.
c. has an agency listing, and the cooperating broker is a transaction broker.
d. is an agent for the buyer with no working relationship with the seller.
A
C
24
Q
Under what circumstances may a licensee accept a referral fee from a mortgage lender for referring a buyer they are working with?
a. Referral fees may never be paid nor accepted by any licensee.
b. When the broker has prior written consent from the buyer and seller.
c. So long as there is no agency relationship with the buyer.
d. If the referral fee is shared with the buyer.
A
B
25
The approved Earnest Money Promissory Note:
a. should not be used because earnest money should always be “in good funds”.
b. must be due early enough to assure good funds at closing.
c. should be accompanied by any of the three deed of trust forms.
d. allows the seller to sue for the earnest money in the event the transaction fails to close due to the seller’s negligence.
B
26
Which of the following requires the use of the Licensee Buyout Addendum to the Contract to Buy and Sell?
a. A listing broker offers to purchase a property immediately after the listing expires.
b. A broker is offering a guarantee buyout arrangement as an inducement to list with his or her company.
c. An associate in the listing brokerage company wishes to purchase a property listed by another associate.
d. A broker wishes to acquire a property he or she has listed to use as an investment.
B
27
When is the listing company responsible for a guaranteed buyout agreement under the Licensee Buyout Addendum to the Contract to Buy and Sell?
a. If the employing broker signs at the bottom of the addendum.
b. When the buyout date arrives.
c. Only if the listing broker is unable to perform the buyout.
d. When the buyout is for the personal use of the managing broker.
A
28
Which of the following is appropriate when the licensee wants to extend the effective period of a listing agreement?
a. Alter the date on the original listing agreement and have both seller and broker initial the change.
b. Extension letter prepared on company letterhead and signed by the seller.
c. Listing Contract Amend/Extend.
d. Agreement to amend/extend contract.
C
29
Which of the following is a proper method for two or more owners of a single property to hold title in Colorado?
a. Tenancy in severalty.
b. Joint tenancy with rights of survivorship.
c. Tenancy by the entirety.
d. Community property.
B
30
Who is exempt from real estate license law?
a. An attorney who is collecting a commission for helping market a property.
b. An inactive licensee assisting a friend in filling out a purchase offer.
c. An investor who owns more than three investment properties and sells one to an owner-occupant.
d. A rights-of-way specialist accepting a commission referral for finding investment property for a friend.
C
31
According to the Contract to Buy and Sell section dealing with Association Governing Documents:
a. if unsatisfactory, seller has until the Title Objection Deadline to correct the deficiency.
b. seller shall provide the documents at the buyer’s expense.
c. seller has 14 days to provide the documents.
d. buyer may terminate by written notice.
D
32
Which best describes the term “prior appropriation”?
a. The state owns all water in Colorado.
b. First in time, first in right.
c. A lower beneficial user has priority.
d. Restricts the number of well permits in tributary waters.
B
33
An unlicensed office manager may:
a. prepare documents for a client.
b. deliver financial documents requiring signatures.
c. assist in negotiations.
d. discuss the terms of a listing agreement.
B
34
An earnest money promissory note should:
a. be prepared by an attorney for the seller/lender.
b. be prepared and signed in at least three original copies.
c. be due before closing to comply with the good funds law.
d. bear interest at market rates from the date of acceptance.
C
34
The Certificate of Taxes:
a. is issued if taxes are delinquent.
b. allows a lender to collect tax escrows.
c. is assurance from the county of the taxes due.
d. is required by the IRS.
C
34
The real estate commission must investigate:
a. all complaints.
b. any licensee accused of a crime.
c. t least five percent of all brokers each year.
d. disputes between brokers regarding commission splits.
A
34
The licensee is responsible for delivering closing documents to the employing broker:
a. at the time of closing.
b. at least two days before closing.
c. prior to closing.
d. immediately after closing.
D
35
A licensee is working with a buyer in a transaction on another broker’s listing. What must the licensee do with the personal check the buyers use as an earnest money deposit?
a. Keep the earnest money in a safe deposit box until the licensee learns if the offer was accepted.
b. Make a copy for the licensee’s broker and turn it over to the listing broker.
c. Deposit the earnest money in the licensee’s escrow account until closing.
d. Wait until the offer is accepted, then give it to the licensee’s broker for deposit.
B
36
A broker associate has developed a web site. What, if anything, must be included?
a. The name of the brokerage company that holds the associate’s license.
b. The name of the home office of the company that holds the associate’s license and a list of states in which the company is licensed.
c. The names of all licensees in the broker’s office and the states in which they are licensed.
d. There are no additional disclosures required.
A
36
Listings based on a “net price” are:
a. permissible with approval from the commission.
b. illegal in Colorado at all times.
c. legal in Colorado so long as the seller agrees.
d. More profitable because there is no maximum commission.
C
37
A broker associate wants to purchase a property for investment. The property is not listed with any broker. The associate broker must:
a. list the property so that he or she can get a commission on the purchase.
b. have his or her broker list the property so that the commission can be handled properly.
c. use a special sales agreement drawn up by a neutral attorney.
d. disclose to the seller that he or she has a license and inform his or her broker of the transaction.
D
38
A broker’s office must:
a. be open to the public during normal business hours.
b. be a virtual office doing business by phone and using a post office box mailing address.
c. have a physical location where the commission can inspect records.
d. be in a commercial office building to comply with commission rules.
C
39
Regarding blank “fill-ins” in a commission approved form, this:
a. is the practice of law and must be done by an attorney.
b. is not the practice of law.
c. must be completed using preapproved standard clauses.
d. is the practice of law specifically permitted in Colorado.
D
40
In the Exclusive Right-to-Sell listing contract the broker is never obligated to perform which of the following duties?
a. Present all offers to the seller in a timely manner.
b. Inform the seller about any potential risks of a transaction.
c. Work with the seller to find an offer for a price that the seller wants.
d. Verify the accuracy of the seller’s statements about the properties condition.
D
41
An offer is received on a seller’s property. The seller makes a counteroffer and later that day gets an offer from a second buyer. The seller would like to accept the second offer. What should the seller do?
a. Withdraw the counteroffer before it is accepted and accept the new offer.
b. Accept the new offer and hope the counteroffer is rejected.
c. Nothing, until the counteroffer is accepted, rejected or countered.
d. Seller must sell the house to the original buyer.
A
42
Based on the Exclusive Right to Sell Listing Contract with the box “Transaction Broker” checked, the listing broker must disclose to any potential buyer:
a. facts about the seller actually known by the broker.
b. material facts about the property actually known by the broker.
c. all facts about the transaction actually known by the broker.
d. the motivations of the seller, if requested by the buyer.
b
42
The acronym, “MEC” as used in the Contract to Buy and Sell means the:
a. Latest date upon which both parties have signed.
b. Latest date that the contract can be accepted.
c. Date that the earnest money must be deposited.
d. Due date for buyer’s loan commitment.
A
43
A buyer and seller agree to write two contracts: a lower actual purchase price because the seller is under pressure to sell quickly, and a higher contract to submit to the lender to allow the buyer to get a larger loan. This arrangement is:
a. fine as the parties have agreed and directed the broker as such and the loan can only be made if the property appraises at the higher value.
b. fraudulent.
c. risky but acceptable because the lender has the right to appraise and inspect the property.
d. acceptable for conventional loans but not for VA or FHA loans.
B
44
A seller’s agent must provide the seller copies of all EXCEPT:
a. Contract to Buy and Sell.
b. abstract or title commitment.
c. signed listing agreement.
d. Closing statement.
B
45
Under a landmark Colorado case law, brokers are permitted the “limited practice of law” under all the following conditions EXCEPT:
a. Brokers are connected to the transaction.
b. Brokers use standard forms.
c. Brokers must disclose to both parties.
d. Brokers never charge a separate fee.
C
46
According to the Exclusive Right to Sell Listing Contract, fixtures listed on the approved form will be included:
a. unless they are crossed out on the form.
b. if on the property at the time of the listing.
c. if attached on the date of the listing unless specifically excluded by the seller.
d. in every instance.
C
47
When a seller receives an offer from a buyer, the seller may properly respond by:
a. writing “rejected” at the top and signing at the bottom.
b. signing and submitting a counteroffer.
c. instructing her broker to call the buyer with a counteroffer.
d. instructing her broker to call the buyer with her acceptance.
B
48
When a broker signs the Broker Acknowledgements at the end of the Residential Contract to Buy and Sell, the broker:
a. becomes a party to the contract and agrees to the terms of the contract.
b. assures the right to a commission.
c. acknowledges receipt of the earnest money deposit.
d. confirms the commission split with cooperating brokers.
C
49
The seller agrees to replace the furnace prior to closing. The furnace is replaced, and the deal closes, but the seller failed to pay the contractor. The contractor files a mechanics lien. Who is responsible to pay the lien?
a. Buyer
b. Seller
c. Buyer and seller
d. Title company
B
50
he Colorado Real Estate Commission requires that all addenda that a broker wants added to a Contract to Buy and Sell be:
a. approved by the Real Estate Commission.
b. added to additional provisions.
c. prepared by an attorney.
d. prepared by the Broker.
C
51
What are the notice requirements to terminate a month-to-month rental agreement?
a. No notice is required
b. 3 days
c. 21 days
d. 30 days
C
52
What disclosure is required when a buyer’s agent approaches a for-sale-by-owner on behalf of his buyer client?
a. No disclosure is required as the seller has elected to be unrepresented.
b. None, so long as the broker attempts to list the property prior to submitting the buyer’s offer.
c. Disclosure of the broker’s working relationship with the buyer.
d. Disclosure of the buyer’s financial ability to complete the transaction.
C
53
When an employing broker changes the primary business address:
a. the change will be noted at the next license renewal cycle.
b. each licensee must notify the Commission.
c. only the employed licensees must notify the Commission.
d. only the employing broker must notify the Commission.
D
54
When must Colorado licenses be renewed?
a. Each year at the anniversary of licensing.
b. Every three years on the anniversary of licensing.
c. Every three years on December 31st of the third year.
d. Every three years if the licensee passes the state examination.
C
55
A person maintaining an inactive Colorado real estate license:
a. must complete the usual continuing education and pay the renewal fees when due.
b. may perform no more than five brokerage activities in any one year.
c. must complete continuing education for the current renewal cycle before activating the license.
d. must maintain errors and omissions insurance at all times.
C
56
If a buyer is in default and the seller’s remedy is specific performance:
a. the specific performance box must be checked.
b. the buyer may treat the contract as terminated.
c. liquidated damages are the seller’s sole remedy.
d. seller waives additional damages.
A
57
Errors and omissions liability insurance is required for:
a. every active Colorado licensee.
b. active and inactive Colorado licensee.
c. the employing broker only.
d. resident Colorado brokers only.
A
58
When a broker establishes an account to hold money belonging to others, which of the following is correct?
a. All checks, deposit slips, and bank statements must include the words “escrow” or “trust” as part of the account name.
b. The names of all authorized signers must be on the checks.
c. The account cannot be in the same bank as the broker’s personal checking account.
d. An individual account is required for each transaction.
A
59
A past client contacts a broker indicating their friend is interested in purchasing a property. The past client believes the broker would pay for this lead and requests such payment. The broker may pay the past client:
a. under no circumstances as this payment is prohibited by RESPA.
b. out of the brokers commission if the friend closes on a property.
c. only if the payment is not contingent upon a closing.
d. without any concern as referral fees are allowed.
C
60
A seller listed his house for sale with a broker on April 1st. The listing agreement was to last for five months. In June, the seller decided that he no longer was interested in selling. Which of the following is true?
a. The seller has effectively canceled the listing agreement, and there are no penalties.
b. The seller has withdrawn the broker’s authority to sell the property and may be subject to reimbursing some broker expenses.
c. The seller is required by law to leave his house on the market until the original listing agreement expires.
d. The real estate commission will decide if the seller’s action is justifiable.
B
61
A Colorado broker associate may collect compensation from:
a. either a buyer or a seller.
b. his or her employing broker.
c. any party to the transaction or the party’s representative, by agreement.
d. a licensed real estate broker only.
B
62
What are the procedures that a broker associate must follow when the associate decides to terminate his or her affiliation with an employing broker?
a. Give the broker an official letter of termination that will then be forwarded to the real estate commission.
b. Return all customer cards, company stationary, and agency agreements to the employing broker.
c. Return his or her license, along with a letter of termination, to the real estate commission.
d. The associate has a joint responsibility with the employing broker to assure that the commission is notified.
D
63
Commissions earned by a broker in a real estate transaction:
a. are determined by agreement between the broker and the principal.
b. may be shared with an unlicensed person, provided that such person aided in the broker in bringing the buyer and seller together.
c. may be deducted from the earnest money deposit and claimed by the broker as soon as the buyer and seller execute the purchase and sales agreement.
d. are based on a schedule of commission established by the real estate commission.
A
64
All earnest money received by a broker on behalf of his or her principal must be deposited in an escrow or trust account no later than:
a. three days of receiving the offer.
b. one day after MEC.
c. three business days after receipt.
d. five business days after MEC.
C
65
A broker received an earnest money deposit from a buyer. Under Colorado law, the broker should:
a. open a special, separate account that will contain the funds for this transaction and no others.
b. deposit the money in an existing escrow account in which all earnest monies received must be held.
c. immediately deposit the earnest money in the broker’s personal interest-bearing checking or savings account.
d. hold the earnest money in a secure location in the broker’s office until the closing.
B
66
Broker A received a buyer’s earnest money check for $10,000 and immediately cashed the check. At closing, the broker delivered a check drawn on the broker’s operating account for $10,400, representing the original earnest money plus interest. The broker:
a. should have deposited the money into a special non-interest-bearing account.
b. did nothing wrong but was not required to return the interest.
c. is guilty of comingling unless written permission was obtained.
d. should have deposited the money in an escrow or trust account.
D
67
Four years ago, a brutal murder was committed in a condominium unit. The unit was then sold to an elderly man who later contracted the AIDS virus during a blood transfusion and died. As the agent for the man’s estate, what are the disclosure requirements to prospective purchasers of the condo?
a. Disclosure of both the murder and AIDS-related death is required.
b. Disclosure of either event is specifically prohibited by law.
c. Colorado Stigmatized Property Disclosure Law will relieve the agent of any liability for nondisclosure of either event.
d. Disclosure of the AIDS-related death is required; disclosure of the murder is not required.
C
68
In Colorado, a developer must register with the real estate commission for which of the following projects?
a. Mini-warehouse development over one hundred units.
b. Condominium office park with 40 warehouse units for sale.
c. Subdivision of 100 acres into 10 sites for residential use.
d. Conversion of an apartment building into 25 residential condominiums.
D
69
An owner of a 20-acre parcel of land wishes to sell ten acres and retain ten acres for her own use. Which statement is true for this owner?
a. As the private owner, there are no restrictions or registration requirements.
b. The owner is not required to register with the real estate commission but must meet local and state requirements for this subdivision.
c. A private owner may not sell only part of a single parcel; only a registered sub divider may divide land.
d. The private owner must comply with federal land sales rules.
B
70
Which of the following is required when a broker takes a listing?
a. A commission rate expressed as a percentage of sales price.
b. A signature of the employing broker.
c. A release signed and attached to the current listing from any previous broker.
d. A definite date of termination.
D
71
A deed of trust to the public trustee may be foreclosed by which of the following methods?
a. Public sale by the courts.
b. Public sale by the holder of the debt.
c. Private sale by the office of the public trustee.
d. Public sale by the office of the public trustee.
D
72
An associate broker may hold a concurrent license with more than one employing broker under which of the following circumstances?
a. Under no circumstances.
b. With permission of his or her managing broker.
c. With the written consent of the brokers being represented.
d. With the permission of the real estate commission.
A
73
Several weeks after a closing, an associate broker received a thank you letter and a nice bonus check from his client, the seller. The associate cashed the check. In this situation, which of the following is true?
a. The associate may accept the bonus as he is a licensed broker associate.
b. The associate is allowed to accept money if more than 30 days have passed since the closing.
c. The associate may accept the money.
d. It is a violation of commission regulations to accept this money.
D
74
When a sole proprietor has his or her license suspended for two years, what effect does this have on the associate brokers affiliated with the sole proprietor?
a. The associate’s licenses will be revoked, subject to reinstatement after one year.
b. The associate’s licenses will also be suspended for a two-year period.
c. Suspension has no effect on the associate’s licenses.
d. Associate’s licenses will be inactive until after the associates are hired by a new employing broker.
D
75
How long must an independent broker retain transaction records?
a. Independent brokers who work alone are not required to retain records.
b. Transaction records must be kept until the transaction is closed.
c. Transaction records must be maintained for a minimum of four years.
d. Independent brokers submit records to the real estate commission for safekeeping.
C
76
The Licensee Buy-Out Addendum is to be used when a licensee is:
a. guaranteeing to purchase a listing if it does not sell.
b. selling property to a relative who has a real estate license.
c. listing property personally owned by the licensee.
d. buying property for personal use.
A
77
Another associate in your office has an agency listing. A buyer calls while you are on phone duty. You describe the other associate’s listing and agree to meet the buyer there to view it. When the buyer arrives, you should:
a. show the listing. The relationship will automatically be transaction-broker, and disclosure is not required.
b. disclose that your brokerage is transaction-broker and get the buyer’s signature the required form. You may not show the property without the signature.
c. disclose the brokerage relationship in writing. If they decline to sign the disclosure, annotate the form and go ahead and show the property.
d. disclose the brokerage relationship orally. No written disclosure is required since transaction-broker is the default relationship.
C
78
As the buyer’s agent is filling out a Contract to Buy and Sell, the agent asks the young married buyers how they want to take title. The buyers are not sure. The agent should:
a. advise them to take title as joint tenants since that is appropriate for a married couple.
b. leave the choice blank since the title insurance company will know what is required.
c. advise the couple to seek legal counsel and inform the agent of their choice.
d. explain the differences in the various modes and suggest the one that the licensee knows to be correct.
C
79
What form allows buyers to sue for specific performance?
a. Vacant land forms.
b. Single family forms.
c. All approved purchase forms.
d. Non-commission approved forms.
C
80
When the Counterproposal form is used, the person making the counterproposal would:
a. start with a new contract.
b. sign only the counterproposal.
c. sign the contract and initial the counterproposal.
d. sign the original offer and the counterproposal.
B
81
The type of deed to be delivered at closing is determined by:
a. negotiations between informed parties.
b. statute which requires General Warranty deeds.
c. pre-printed language in the CBS contract.
d. the title company who is responsible for the deed.
A
82
When completing the Exclusive Right to Sell listing agreement, which monetary encumbrances does the seller list?
a. All encumbrances to be assumed by a buyer.
b. All encumbrances the seller will not pay off.
c. Only encumbrances of public record.
d. All encumbrances known to the seller.
D
83
The Contract to Buy and Sell Real Estate agreement indicates the seller shall provide the Seller’s Property Disclosure form. The seller:
a. is required by law to provide this form to every buyer.
b. may refuse to provide the disclosure and avoid disclosure of material defects.
c. may check the “As Is” box, making the buyer responsible to find any defects.
d. may decline to provide the disclosure but must still disclose adverse material defects.
D
84
The “holdover” clause in the Exclusive Right to Sell Listing Contract protects the broker’s commission for certain disclosed buyers:
a. for up to six months after the listing expires.
b. even if the seller lists the property with another broker after expiration.
c. unless the seller lists the property with another broker and checks “shall not”.
d. only during the term of the listing and any extensions.
C
85
In Colorado, personal property taxes apply to:
a. personal property used in business, such as office furniture or copy machines.
b. personal property attached to real property as fixtures and transferred in a sale.
c. the sale of a new personal property.
d. personal property, such as a refrigerator, included in a residential sale.
A
86
Based on the language of the Exclusive Right to Sell Listing Contract, what happens if a defaulting buyer forfeits the earnest money?
a. Either the funds are shared, or all earnest money is given to the seller.
b. The broker receives the funds to offset marketing expenses.
c. The seller is always entitled to keep all forfeited funds.
d. The broker and seller submit the funds to mediation.
A
87
Which of the following is NOT true relating to the Colorado Fair Housing Act?
a. Both commercial and residential properties are covered.
b. Marital status is a protected class.
c. A person cannot be discriminated against because of age.
d. Courts may levy fines for any violations of the law.
C
88
A broker must keep transaction records:
a. until the brokerage goes out of business.
b. and so must the associate involved with the transaction.
c. in the office for up to 7 years, then in the state archive.
d. readily accessible for four years.
D
89
An out of state seller’s property sold for $400,000. Unfortunately, the property was heavily mortgaged, and the seller only realized $5,500 after all costs and expenses were paid. How much would be withheld from the seller at closing?
a. 2%
b. $8,000
c. $5,500
d. zero
C
90
If an earnest money check is not honored by the buyer’s bank, the broker should:
a. deposit it again to see if it will clear the second time.
b. file notice under Colorado’s bad check law for treble damages.
c. notify the buyer’s broker that the contract is canceled due to the buyer’s default.
d. notify the seller and ask what they wish to do next.
D
91
The listing contract is preserved in whose transaction files?
a. Selling broker only
b. Listing broker only
c. Both listing and selling brokers
d. Title company, listing broker, and selling broker
B
92
A broker’s trust account at a solvent credit union:
a. does not offer the proper insurance protection to the account beneficiaries.
b. is allowable if it is established in accordance to commission rules.
c. pays a higher rate of interest to the broker than commercial bank accounts.
d. has the required federal deposit insurance from the FDIC.
B
93
When is it acceptable for a broker to pay a referral fee to an unlicensed person?
a. Only licensees may receive referral fees.
b. If the unlicensed person qualifies one party to the transaction.
c. So long as the unlicensed person does nothing that requires a license.
d. Only if the unlicensed person is a party to the transaction.
C
94
Which of the following statement does NOT apply to the use of computer-generated forms?
a. A statement of Commission approval must appear on the first page.
b. Real Estate Commission approved language must be reproduced exactly.
c. The software program must have the capability to prevent alterations.
d. Generic blank spaces may be completed by the broker prior to negotiations.
D
95
May a broker accept a referral fee from a title company or representative?
a. This practice is a good way to enhance the licensee’s income.
b. It is never permissible to accept such a fee.
c. Only if the broker will not be receiving a commission for the transaction.
d. With the permission from both parties to the transaction.
B
96
When must a listing broker disclose to the buyer the broker’s working relationship with the seller?
a. In writing at the time the contract to buy and sell is signed.
b. Orally before writing the contract and in writing before closing.
c. In writing before any conversation or discussion.
d. In writing before providing specific real estate services.
D
97
If a buyer’s agent approaches a For Sale by Owner, when must the agent disclose the agency relationship?
a. Orally at the first contact and in writing at the first physical meeting.
b. When taking the one-party listing on the property.
c. Orally unless the buyer wants to submit an offer, then in writing with the offer.
d. Disclosure is unnecessary because, the sellers chose to represent themselves.
A
98
The licensee has an Exclusive Right to Sell listing with a seller as a transaction-broker. The licensee must disclose his relationship to the buyer:
a. never, since state law makes the licensee the buyer’s transaction-broker by default.
b. in writing that the licensee represents the seller exclusively and that the buyer will have no working relationship with the licensee’s company.
c. in writing that the licensee works with the seller as a transaction-broker and may owe the same duties to the buyer in a purchase transaction.
d. after the potential buyer has seen the property.
C
99
The Contract to Buy and Sell states that “time is of the essence”. This statement means:
a. everything in the contract must be complete within specific time periods, or it will be void.
b. all dates and deadlines must be performed within a reasonable margin of the stated time or date.
c. everything not done by closing will be waived.
d. dates and deadlines will be strictly enforced.
D
100
If no box is checked in the seller’s remedy section of the Contract to Buy and Sell (Residential), in the event of buyer default, the:
a. earnest money will be retained by the seller as the seller’s only remedy.
b. seller may keep the earnest money and sue for damages.
c. buyer may cure the default by offering money.
d. seller may sue to force the buyer to perform the contract.
A
101
If a dispute over the Residential Contract to Buy and Sell goes to court, the contract indicates that court costs and legal fees shall be:
a. awarded to the broker.
b. awarded to the losing party.
c. split between the parties.
d. awarded to the prevailing party.
D
102
In the event of a dispute between the parties under a Contract to Buy and Sell, the parties:
a. must mediate in good faith to seek a settlement for up to 30 days.
b. may immediately decide to mediate or seek arbitration or litigation.
c. must accept the solution presented by the qualified mediator chosen by the parties.
d. must submit the dispute to arbitration if mediation is unsuccessful.
A
103
When are facsimile signatures acceptable in a Contract to Buy and Sell?
a. Always, by rule of the Real Estate Commission.
b. Unless the parties indicate otherwise on the contract.
c. Only during negotiation and not at closing.
d. In no case are facsimile signatures acceptable.
B
104
Various provisions of the Contract to Buy and Sell require notification to one of the parties regarding events or objections. According to the wording of the form, notice:
a. must be given directly to the party and not his or her broker.
b. to the party must be by “normal” channels of communication.
c. is effective when received by either the party or their broker.
d. is effective only when received by the party.
C
105
Within which time-period must the public trustee hold a foreclosure sale under a Colorado deed of trust arrangement?
a. 110 to 125 days following the lender’s notice of default and request for sale.
b. Whenever the court schedule permits the case to be heard.
c. Not more than 90 days following the first instance of defaulted payments.
d. Not more than six months after the lender notifies the borrower of default.
A
106
In the event the seller and broker have a dispute about the Exclusive Right to Sell Listing Agreement, which of the following is true?
a. Both agree to submit to arbitration with the local Realtor® Association.
b. Both agree to submit the matter to binding mediation.
c. Both agree to mediation before proceeding to arbitration or litigation.
d. The matter must be resolved by a real estate commission hearing
C
107
A tenant provides proper notice and vacates a condominium. The landlord discovers substantial damage to the unit. Which of the following is a proper action by the landlord?
a. Notify the tenant that his damage deposit is forfeited within 60 days.
b. Keep the damage deposit without notice, since the damage is obviously more than the deposit.
c. Itemize the damage in writing and return any excess deposit within one month.
d. Return the deposit immediately and bill the tenant for the repairs once completed.
C
108
An owner of a 35-acre parcel of undeveloped land may drill a well for water only:
a. after purchasing the water rights.
b. after obtaining a well permit from the state engineer.
c. without any permit since the 35-acre site is entitled to an exempt well.
d. if there is a stream on the property that may be diverted.
B
109
A real estate broker has identified a property that is ideal for a fast food outlet. He asks four friends to contribute funds to the purchase and gains partial ownership interest for himself. The broker will manage the property and negotiate the lease for the fast food company. In this arrangement, the broker:
a. is not entitled to any commission on the purchase, since the broker will be an owner.
b. will have no liability in the deal since he will not contribute money.
c. must comply with state and federal securities laws in arranging this investment group.
d. can keep both the sales commission and the lease commission without specifically telling the others about the amounts involved.
C
110
When a broker negotiates a Success Fee under the Exclusive Right to Buy Contract, which is true?
a. If the broker cannot get the fee from the listing broker or seller, the buyer is under no obligation to pay.
b. The listing broker must pay the negotiated fee at closing.
c. The broker may be directed to seek payment from any or all of several sources.
d. The buyer will pay the fee at closing.
C
111
The Inclusions section of the Residential Contract to Buy and Sell calls for inclusion of all of the following except:
a. window coverings on the property on the date of the sales contract.
b. leased security systems.
c. fireplace screens and grates.
d. parking and storage facilities as described in a condominium community.
B
112
After a public auction foreclosure sale for deed of trust default, the borrower may redeem the property any time up to:
a. 3 years.
b. 75 days.
c. Never.
d. Anytime.
C
113
What is required of the seller if they are providing evidence of title with an abstract?
a. The abstract must be updated.
b. The abstract must be delivered as soon as practicable after closing.
c. The buyer must accept the abstract as evidence of title.
d. The seller must pay for the legal opinion.
A
114
The Residential Contract to Buy and Sell provides an opportunity for the parties to specify that the title insurance policy provided to the buyer will have extended coverage. If the box is checked to provide this coverage:
a. the buyer must pay any additional premium for this extra protection.
b. the title insurance company may require a survey or improvement location certificate, which would increase costs to both the buyer and seller.
c. any additional premium may be paid by the buyer or seller.
d. the title company will pay to remove any defects in the title before closing.
C
115
During a walk-through inspection, the day before closing, the buyers see the carpeting is in much worse condition than they thought. They sent an objection to the sellers requiring replacement of the carpet. Under the Residential Contract to Buy and sell:
a. the walk-through clause does not allow this option.
b. as the purpose of the walk-through inspection is to verify condition, this objection is allowed.
c. the buyers may object even though the Objection Deadline has passed as the contract states; “in the condition as of the date of this contract”.
d. the sellers will have a reasonable time following closing to replace the carpet or funds may be deposited in an escrow account to pay for the carpet replacement at the buyer’s leisure.
A
116
The Residential Contract to Buy and Sell establishes a New Loan Availability Deadline if the buyer is obtaining financing. What is the impact of this deadline?
a. If the buyer cannot get a written loan commitment, the contract terminates on that date.
b. The contract is contingent on the funding of the new loan at closing.
c. If the buyer cannot obtain a satisfactory loan by that date, the buyer may terminate the contract.
d. The buyer must provide a written loan commitment to the seller by that date or is in default.
C
117
Some properties may be subject to taxes from a special tax district. If buyers determine that the property is within a special tax district, they may:
a. terminate the contract by written notice to the seller.
b. demand that the seller pay the indebtedness to such a district.
c. petition to be excluded from the district.
d. terminate the contract by the Off-Record Matters termination date.
A
118
If a buyer is assuming a loan and the existing loan balance turns out to be less than the assumption balance provided by the seller, the Residential Contract to Buy and Sell provides that:
a. the buyer may terminate the contract by written notice if the difference causes the buyer’s cash at closing to increase by a stated amount.
b. the seller must reduce the price of the property to compensate for the difference.
c. depending on which box is checked, the buyer may terminate the contract, or the seller could reduce the price to make up the difference.
d. the contract is automatically terminated by the seller’s misrepresentation.
A
119
A dishwasher is a fixture in the kitchen of a property that is under contract. The Seller’s Property Disclosure indicates the appliances “In Working Condition”. Under the Residential Contract to Buy and Sell, if the dishwasher fails before closing, the seller:
a. must replace the dishwasher with a new one of similar capacity.
b. is not responsible since he or she could not have known it would fail.
c. must offer the buyer a credit at closing for the price of a new appliance.
d. may replace the dishwasher with a used dishwasher of similar age, size, and quality or an equivalent credit.
D
120
According to the Exclusive Right to Buy Contract, who is responsible with regard to registered sex offenders under Megan’s Law?
a. Brokers must disclose the presence of any known registered sex offenders.
b. Buyers must obtain this information from local law enforcement officials.
c. Sellers will be required to disclose any sex offenders in the neighborhood.
d. Sex offenders’ privacy rights are protected by state and federal law.
B
121
The property will be sold with a seller carry second mortgage. The seller wants to check the buyer’s credit. The seller would NOT be allowed to do which of the following?
a. Verify buyer’s employment.
b. Verify the new senior loan.
c. Release buyer’s information to protect the seller’s interest.
d. Disclose buyer’s credit score to other creditors.
D
122
The Residential Contract to Buy and Sell includes a provision about lead-based paint disclosure. According to this provision, if the building permit for a residential improvement on the property was issued prior to January 1, 1978:
a. the broker is responsible to disclose the age of the property.
b. disclosure is required only if the sellers are aware of lead-based paint on the property.
c. the seller and broker must make disclosure on or before the deadline.
d. seller and broker must make disclosure prior to closing.
C
123
If a buyer were to receive a property inspection report on the day after the Inspection Objection Deadline but the report contains several serious matters, the buyer:
a. may still object because they did not have the report until after the deadline.
b. is in default for missing the deadline, and the seller may terminate the contract.
c. missed the opportunity to object based on inspection issues and the contract is still in force.
d. can compel the seller to correct these serious defects before closing.
C
124
The Residential Contract to Buy and Sell contains a section regarding Association Documents. This section refers to documents for:
a. multifamily housing, such as condominiums and townhomes that have common recreational amenities.
b. all communities.
c. communities covered by special taxing districts.
d. any community subject to mandatory assessments for maintenance of common elements.
D
125
Brokers working for buyers under the Exclusive Right to Buy Contract may:
a. also receive compensation from lenders and other service providers without disclosure to the buyer.
b. also seek a nonrefundable retainer fee, which must be credited toward any Success Fee earned.
c. negotiate an hourly fee to be paid in addition to any other compensation agreed.
d. require the listing broker to adjust their offered split to match the buyer’s broker’s negotiated fee.
C
126
The Property Disclosure and Inspection provision of the Residential Contract to Buy and Sell calls for the seller to provide a Seller’s Property Disclosure form based on the:
a. results of a professional property inspection.
b. seller’s current actual knowledge.
c. advice of the listing agent regarding the condition of the property.
d. seller’s opinion of condition at the time of the contract.
b
127
In the Purchase Price and Terms section of the Residential Contract to Buy and Sell, the entry for cash at closing:
a. represents the total amount the buyer is expected to bring to closing.
b. does not include buyer’s loan costs.
c. should match the Loan Estimate provided with the Closing Disclosure form.
d. represents the approximate amount the seller will receive at closing.
B
128
The Appraisal Deadline and the Appraisal Objection Deadline of the Contract to Buy and Sell (Residential):
a. must be added to the Dates and Deadlines section or the contract is improperly completed.
b. allow the buyer to terminate the contract if an acceptable loan cannot be obtained.
c. are presumed to occur after New Loan Termination Deadline.
d. do not apply to FHA or VA financing.
D
129
The inspection provision of the Contract to Buy and Sell allows the buyer to terminate the contract:
a. only if a licensed inspector determines that there are material problems with the property.
b. only after delivery in writing to the seller the unsatisfactory conditions.
c. if the property is unsatisfactory in the buyer’s sole subjective discretion.
d. immediately if the seller refuses to correct the material defects.
C
130
In Colorado, water rights are:
a. real property rights that automatically transfer with the land.
b. personal property rights that may be sold and transferred by bill of sale.
c. personal property rights permanently affixed to the land.
d. real property rights which are not appurtenant to the land.
D
131
After a foreclosure sale, the lender receives the:
a. entire proceeds from the sale, including any excess above the debt.
b. proceeds of the sale up to the outstanding debt plus court and collection costs.
c. uncollected loan balance only.
d. property since it was the collateral for the loan.
B
132
An out-of-state seller sells a property in Colorado. The closing company must withhold up to 2 percent of the:
a. selling price as possible income tax liability.
b. selling price as a state transfer tax.
c. net proceeds of the sale as sales tax.
d. net proceeds of the sale as possible income tax liability.
A
133
The buyer has required extended coverage title insurance in the contract. The title company, however, does not agree to delete and insure over unrecorded easements. Which of the following would be a likely remedy?
a. The buyer may terminate the contract.
b. The seller may terminate the contract.
c. The title company must comply with the contract.
d. The seller must insure over the easements as required by the contract.
A
134
Under the Colorado Fair Housing Act, a landlord may refuse to rent a(n):
a. apartment to a single mother because the landlord is concerned about supervision of the children.
b. apartment to four students because she is concerned about parties.
c. commercial space for use as a studio for Native American art because the studio would “attract the wrong element”.
d. unit adjacent to a pool to a family with young children because of the danger but might offer the family a unit further away from the pool.
B
135
Colorado tributary water rights and well permits are administered by the:
a. State engineer.
b. Colorado Ground Water Commission.
c. Colorado Supreme Court.
d. Colorado Legislature.
A
136
How long must the supervising broker maintain “failed” transaction files?
a. 2 years
b. 3 years
c. 4 years
d. There are no record keeping requirement for “failed” transactions.
C
137
Which would NOT fall within the scope of Commission Rule Chapter 7?
a. Contracts for new home purchases.
b. Commercial contracts.
c. Installment land contract.
d. Deed of trust.
A
138
Wrongful withholding of a security deposit leaves the broker liable for:
a. All unpaid rent and expenses.
b. Treble the amount wrongfully withheld.
c. Actual and punitive damages.
d. Actual damages plus tenant’s legal fees.
B
139
The seller learns that the offer is from a buyer with kids. The seller tells the broker that he only wants to sell to buyers with no kids. What can the listing broker do?
a. Follow the seller’s instructions.
b. Advertise the home as “Ideal for Singles”.
c. Refer the seller to a firm that specializes in sales to singles.
d. File a fair housing complaint and claim the commission as damages.
D
140
A developer subdivides his land, surveys the lots and the City Council approves the plat. What must be done before any lots can be sold?
a. Record the plat
b. Install the infrastructure
c. Seek approval of the standard sales contract
d. Register as a subdivider with the Division of Real Estate.
D
