Ch 1 - Licensing Laws

Question 1

• A person or legal entity authorized to operate independently in conducting a real estate brokerage business
• A business licensed to conduct real estate brokerage

Answer 1

Broker

Question 2

• A competent and disinterested person who is authorized to act in another person‘s place

Answer 2

Attorneys in fact

Question 3

A notice of consent or consent to suits and services

Answer 3

Consent notice

Question 4

A person just entering the real estate business and who may not operate independently and must be under the direct supervision of a licensed broker

Answer 4

Salesperson

Question 5

A broker who manages an office

Answer 5

Managing Broker

Question 6

A regulatory legal entity formed to regulate licensees and to protect the public

Answer 6

Real estate board

Question 7

The practice of mutual exchanges of privileges

Answer 7

Reciprocity

Question 8

A warning or proviso of specific stipulations, conditions, or limitations

Answer 8

Caveat

Question 9

True or false:

The salesperson must work under the broker as an independent contractor

Answer 9

False - they could be an employer

Question 10

True or false:

The real estate board is a body of law and has unlimited powers

Answer 10

False - The real estate board has limited powers

Question 11

True or false:

A salesperson may not operate independently and must be under the direct supervision of a licensed broker

Answer 11

True

Question 12

True or false:

All licenses are under the direct control of the broker and are posted in a conspicuous location in a firm’s main office

Answer 12

True

Question 13

True or false:

A salesperson can except compensation from anyone

Answer 13

False - salesperson cannot accept compensation for the vast majority of transactions from anyone other than his or her broker

Question 14

True or false:

States that observe partial reciprocity don’t require the individual to take the state law portion of the real estate exam

Answer 14

False - they do require the individual to take the state law portion of the licensing exam

Question 15

True or false:

Most states requires that those engaged in representing others in real estate transactions for compensation are licensed

Answer 15

True

Question 16

True or false:

Virginia requires appraisers and mortgage bankers to also hold a real estate license

Answer 16

False - Virginia does not

Question 17

Is the real estate sales associate and employee of the broker or an independent contractor?

Answer 17

Could be either

Question 18

What are the two classes of licenses?

Answer 18

Broker and salesperson

Question 19

In Virginia, each place of business at each branch office must be supervised by a…

Answer 19

Supervising broker

Question 20

What do the below have in common:

• property owners acting on their own behalf
• attorneys only if conducting real estate transactions as part of their duties for a client
• officials appointed by the courts
• Government employees dealing in real estate for government agencies
• Attorneys in fact holding a valid power of attorney from an owner may facilitate the transaction

Answer 20

All can sell real estate without licensure

Question 21

What is the role of a managing broker?

Answer 21

Serves to boost the morale or output of the office; serves as a liaison to the community, provides educational information and ensures agents are aware of any industry developments

Question 22

What is the most important control mechanism held by the real estate board?

Answer 22

The ability to deny licenses and to suspend or revoke licenses

Question 23

Where do all means of compensation to salespeople and associate brokers come from?

Answer 23

A principal broker or sole proprietor

Question 24

True or false:

The IRS cannot treat real estate sales associates as independent contractors unless these three requirements are fulfilled:

1. Associate must be licensed as a real estate agent
2. Almost all (90%) of the associates payment for services as a real estate agent must be directly related to sales and not to hours worked
3. A written agreement must exist between the associate and the broker stating that the associate will be treated as an independent contractor for tax purposes

Answer 24

True