REE Principles In-Course Q's

Question 1

What economic factors affect the real estate market as well as other goods and services?

Answer 1

Supply and demand
Pricing
Costs incurred in bringing the properties to market
Value aspects of desire, usefulness, scarcity and ability to pay

Question 2

How are properties affected by the local economy?

Answer 2

If the economy picks up, sales increase. If it slows, sales decrease.

Question 3

Other than residential list three kinds of property in the real estate market.

Answer 3

Any three of these six: industrial, commercial, agricultural, special purpose, recreational, investment

Question 4

Jim has decided that he will learn all he can about the new subdivisions at the west end of town. Jim has decided to specialize in what area of real estate?

Answer 4

Geography

Question 5

From whom may a salesperson receive compensation for performed activities?

Answer 5

ONLY from the employing broker

Question 6

What is the major difference between an employee and an independent contractor?

Answer 6

The issue of control - A broker can control the what and the how of an employee. A broker can control the what, but not the how of an independent contractor.

Question 7

What kinds of insurance do brokers normally require of their employees?

Answer 7

High limits of automobile insurance with the broker named as an insured.

Question 8

What should a licensee’s written employment agreement contain?

Answer 8

Each person’s responsibilities to the other
The broker’s supervision
The licensee’s duties
The licensee’s compensation program

Question 9

Give an example of a specific short-term goal.

Answer 9

Anything specific and measurable such as:
I will schedule 2 practice listing presentations with an experienced co-worker next week.
I will attend the 2-hour seminar about using e-mail that the local board is sponsoring on Friday morning.

Question 10

What do you need to remember about making phone calls to potential clients?

Answer 10

Check into and follow the National Do Not Call guidelines.

Question 11

What is meant by the term “sphere of influence”?

Answer 11

What are members of NAR required to do?

Question 12

Why is it important for licensees to understand the Americans with Disabilities Act?

Answer 12

Brokers must evaluate whether they need to make physical changes to their office space to comply with the law.
Licensees should inform their commercial and investor clients of the need to have their leases professionally evaluated and their offices inspected for compliance.

Question 13

Alex Jones owns a duplex and lives in one unit. He refuses to rent the other unit to families with children. What would you say about Alex’s actions?

Answer 13

Alex is within the guidelines of the Fair Housing Act since he is the owner of a dwelling that has fewer than four units, one of which is owner-occupied.

Question 14

If a person feels like he or she has been discriminated against, how long does that person have to file a complaint?

Answer 14

With HUD - within one year of the alleged act.

In state or federal court - within two years of the alleged act.

Question 15

Salesperson Sally tells her senior citizen buyers that the home they want to view is located in a neighborhood with several small children and loud teenagers. She tells them they would not be comfortable in this home and she shows them a list of homes in other neighborhoods she thinks would be more appropriate. What would you say about Sally’s behavior?

Answer 15

Sally is guilty of steering, which is prohibited by Fair Housing laws.

Question 16

Which California fair housing law(s) apply to financial institutions?

Answer 16

Both the Unruh Civil Rights Act and the Holden Act.

Question 17

Define panic selling.

Answer 17

Panic selling is soliciting a listing or inducing someone to sell by telling him or her that persons of a certain protected class are moving into the neighborhood.

Question 18

Broker Sam receives a deposit check from a client, along with the purchase contract. How long does he have to deposit it into his trust account?

Answer 18

Sam has three business days to deposit the check, unless the buyer authorizes him to hold the uncashed check until the offer is accepted.

Question 19

How much of his own money can broker Jake keep in a trust account and not be considered guilty of commingling?

Answer 19

Up to $200 to use for service fees on the account

Question 20

When is an agency relationship created?

Answer 20

An agency relationship is created when a person (the principal) delegates to another person (an agent) the right to act on his or her behalf in business transactions with third parties.

Question 21

What exception exists to the duty of obedience when working with a client?

Answer 21

An agent is not bound by the duty of if the principal’s directions are not legal.

Question 22

An agent’s fiduciary responsibilities to a client usually end when the transaction closes. This is not true of which duty?

Answer 22

Confidentiality. This duty extends beyond the termination of the relationship. No personal information gained during the term of the agreement can ever be disclosed to another party except the broker.

Question 23

Amanda calls broker Tim to schedule a showing of one of his listings. Amanda loves the home and wants to make an offer. What should Tim do next?

Answer 23

Tim must disclose to Amanda his agency relationship with the seller and get her written permission for a dual agency arrangement. He must also inform the seller of his agency relationship with Amanda and get the seller’s written permission for the dual agency arrangement. If both parties agree to dual agency, they can proceed. If not, Amanda will have to find other representation.