Section #1: SC Real Estate License Law

Question 1

The purpose of the SC license law is to:

a. Determine the amount of commission an agent can charge a seller.
b. define disclosure requirements concerning material defects in the property.
c. set regulations governing broker’s authority to interpret the terms of a contract
d. protect the public when involved in a real estate transaction.

Answer 1

d. protect the public when involved in a real estate transaction.

Question 2

Of the 10 members of the Real Estate Commission:

a. eight are in the real estate business and two are from the general public.
b. seven are in the real estate business and three are from the general public.
c. three members are appointed by the governor of SC
d. there are two members from each congressional district.

Answer 2

a. eight are in the real estate business and two are from the general public.

Question 3

Activities requiring a real estate license include all of the following EXCEPT:

a. collecting rents for personally owned property.
b. negotiating a lease between two parties.
c. offering advisory services to property owners.
d. soliciting a referral.

Answer 3

a. collecting rents for personally owned property.

Question 4

If a person conducts real estate activity requiring a license but is, in fact, unlicensed, he/she can be subject to:

a. criminal punishment and fines up to $5,000.
b. civil penalties only.
c. fines up to $500 plus six months in jail.
d. punitive damages.

Answer 4

c. fines up to $500 plus six months in jail.

Question 5

An attorney can:

a. practice real estate without a license if liquidating an estate of the client.
b. engage in the daily practice of real estate brokerage without a real estate license. c. be a service provider in a transaction without disclosing fees.
d. represent others in the sale of their property without a written agreement.

Answer 5

a. practice real estate without a license if liquidating an estate of the client.

Question 6

Jane is planning to apply for an initial real estate license. She has taken the required 90 hours of education, has taken the examination, and has completed the application form. What is Jane missing?

a. Three references.
b. A supervising BIC.
c. College education.
d. 30 additional hours.

Answer 6

b. A supervising BIC.

Question 7

In order for an inactive property management license to remain valid:

a. continuing education must be completed.
b. the PMIC must submit the required fees.
c. the license must be renewed.
d. it cannot be valid as it is on inactive status.

Answer 7

c. the license must be renewed.

Question 8

Jane was able to obtain her initial real estate license, but she violated license law. Both her license and her broker’s license were revoked as a result of the violation. The revocation took place on Jan. 8, 2017. What is the earliest date Jane can reapply for licensure?

a. Feb. 1, 2018.
b. July 1, 2017.
c. June 30, 2017.
d. Jan. 8, 2020.

Answer 8

d. Jan. 8, 2020.

Question 9

During the time of revocation, Jane’s mother decided to market her property. Having real estate expertise, Jane told her mother that she would market the property to the public and negotiate with any buyers who were interested at a rate of 2 percent of the sales price. In this situation:

a. Jane can receive the fee as she is the personal representative of her mother.
b. Jane can receive the fee as she is trained in real estate.
c. Jane cannot receive the fee without disclosing her relationship with her mother.
d. Jane cannot receive the fee or market the property on her mother’s behalf.

Answer 9

d. Jane cannot receive the fee or market the property on her mother’s behalf.

Question 10

A broker must provide proof of having met continuing education requirements at the end of each two-year renewal period. The continuing education requirements for brokers are:

a. 10 hours every year, four of which must be in the mandated core course.
b. 10 hours every year, four of which must be on legal issues.
c. 4 hours every year, two of which must be on legal issues.
d. 10 hours every two years, four of which must be in the mandated core course.

Answer 10

d. 10 hours every two years, four of which must be in the mandated core course.

Question 11

A BIC must provide proof of continuing education credit at the end of each two-year renewal period. The continuing education requirements for a BIC are:

a. 10 hours every two years, of which four are in the mandated core course.
b. 10 hours every two years, of which four are in the mandated core course and four
are in the mandatory BIC course.
c. 10 hours every year, four of which must in the mandated core course.
d. 10 hours every year, four of which must be on legal issues.

Answer 11

b. 10 hours every two years, of which four are in the mandated core course and four are in the mandatory BIC course.

Question 12

If a licensee violates the law, the penalties invoked by the Real Estate Commission could include:

a. imprisonment up to six months.
b. fines up to $5,000 per offense.
c. fines up to $500 per offense.
d. fines up to $1,000 and imprisonment for six months.

Answer 12

b. fines up to $5,000 per offense.

Question 13

The relationship between the broker-in-charge of the real estate company and the affiliated licensee is:

a. employee and independent contractor.
b. employee or independent contractor and principal.
c. employee and agent.
d. customer and client.

Answer 13

b. employee or independent contractor and principal.

Question 14

All of the following are duties of the broker-in-charge/property manager-in-charge of a company EXCEPT:

a. reviewing and approving the forms used by associated licensees.
b. establishing a written office policy on brokerage relationships and fair housing.
c. maintaining trust accounts.
d. being available to the public between 8 a.m. to 8 p.m. daily.

Answer 14

d. being available to the public between 8 a.m. to 8 p.m. daily.

Question 15

Fees for services in a real estate transaction are:

a. paid to the brokerage
b. paid to the licensee
c. payable to either brokerage or licensee as negotiated in an agreement
d. payable to the owner of the property

Answer 15

a. paid to the brokerage

Question 16

If a licensee receives a bonus for doing a great job in a real estate transaction:

a. the bonus may be kept personally by the licensee if disclosed to the client.
b. the bonus must be turned over to the BIC.
c. he/she may deposit the bonus into a personal account as long as he/she discloses
this to the BIC.
d. a licensee or the BIC may not keep the bonus, as a bonus is illegal in South Carolina.

Answer 16

b. the bonus must be turned over to the BIC.

Question 17

Trust funds involved in the sale of real estate must be:

a. deposited within 48 hours of receipt of the offer, whether cash or personal check.
b. deposited within 48 hours of receipt of the offer, if cash.
c. deposited within 48 hours of acceptance of the offer, if cash.
d. deposited immediately upon receipt, if cash.

Answer 17

b. deposited within 48 hours of receipt of the offer, if cash.

Question 18

The buyers and sellers cannot agree to the disposition of the trust funds involved in a real estate sales transaction that did not close. Which of the following apply to the disbursement of those funds?

a. The broker can interpret the contract and release the funds.
b. The closing attorney can interpret the contract and order release of the funds.
c. A court of law can interpret the contract and order the release of the funds.
d. The buyer and seller can agree verbally to the disposition of the funds.

Answer 18

c. A court of law can interpret the contract and order the release of the funds.

Question 19

A broker who used trust funds for a purpose other than the intent for which they were received from the consumer would be found guilty of:

a. commingling of funds.
b. diversion of funds.
c. misappropriation of funds.
d. conversion of funds.

Answer 19

d. conversion of funds.

Question 20

A licensee must remit any trust funds to the BIC/PMIC:

a. immediately upon receipt, if cash.
b. by the next business day, whether cash or check.
c. within 48 hours of receipt, if cash.
d. within 48 hours of acceptance of a sales contract or lease agreement.

Answer 20

b. by the next business day, whether cash or check.

Question 21

A BIC has been notified that the buyer has decided to walk away from the transaction over the inspection results. The seller states that he is willing to perform under the contract and make repairs to the systems of the property. The buyer still does not want to remain in the contract. In this case, the BIC is allowed to:

a. interpret the contract and disburse the earnest money deposit.
b. render the funds to the seller as stated in the contract.
c. file an interpleader action to have a court determine the disbursement.
d. remit the disputed funds to the Office of the Treasurer of SC.

Answer 21

c. file an interpleader action to have a court determine the disbursement.

Question 22

Ellen placed her license on inactive status because she no longer wanted to be a member of MLS and pay dues. Though she did not actively practice real estate sales, she continued to place referrals with her former BIC and received a flat fee for any buyers or sellers who she referred if they became clients. In this case:

a. Ellen is not in violation of the law as she has a license to practice real estate.
b. Ellen’s former BIC is not in violation of the law as he is not paying Ellen to practice real estate.
c. Ellen is in violation of the law as she is receiving fees while her license is inactive.
d. Ellen is in violation of the law for receiving a flat fee rather than a percentage fee.

Answer 22

c. Ellen is in violation of the law as she is receiving fees while her license is inactive.

Question 23

Lola is the PMIC for several large apartment complexes across South Carolina and has an unlicensed apartment manager in each location. Lola’s responsibilities include all of the following EXCEPT:

a. adequately supervising the managers.
b. being available to the managers and the tenants.
c. making sure that the rents are placed in the trust account.
d. relinquishing control of the trust account to the site managers.

Answer 23

d. relinquishing control of the trust account to the site managers.

Question 24

Everett has had his salesperson’s license for one year and now wants to move on to upgrade to a broker’s license. In order to do so, he must:

a. wait two more years before taking his broker licensing course.
b. wait two more years before applying for his broker’s license.
c. have closed at least 25 transactions in his first three years of licensure.
d. have the permission of his current BIC.

Answer 24

b. wait two more years before applying for his broker’s license.

Question 25

All of the following are types of activities requiring a license EXCEPT:

a. soliciting a referral for a finder’s fee.
b. consulting with consumers on how to price property.
c. negotiating a lease.
d. selling property that is personally owned.

Answer 25

d. selling property that is personally owned.

Question 26

A forester is selling property where the value of the property is incidental to the value of the timber. In this instance:

a. the forester does not need a real estate license.
b. the forester needs a real estate license.
c. the forester is acting as a real estate agent.
d. the forester is acting as a BIC.

Answer 26

a. the forester does not need a real estate license.

Question 27

An attorney is liquidating property that has been held in a trust. In this case:

a. the attorney needs a real estate license.
b. the attorney does not need a real estate license.
c. the attorney can be punished by the Real Estate Commission.
d. the attorney is outside the scope of his/her authority.

Answer 27

b. the attorney does not need a real estate license.

Question 28

The SC Real Estate Commission is empowered to do all the following EXCEPT:

a. put forth legislation.
b. discipline licensees.
c. hear complaints from the public regarding real estate issues.
d. hear complaints from licensees regarding compensation issues.

Answer 28

d. hear complaints from licensees regarding compensation issues.

Question 29

A salesperson receives an offer from a buyer customer. The customer has a personal check attached as an earnest money deposit. In this case:

a. the licensee has 48 hours to deposit the check.
b. the licensee has 48 hours to deposit the check after the offer is accepted.
c. the licensee has 48 hours to get the check to the BIC.
d. the licensee has to give the check to the BIC by the next business day, even if the offer has not been accepted and is still in negotiations.

Answer 29

d. the licensee has to give the check to the BIC by the next business day, even if the offer has not been accepted and is still in negotiations.

Question 30

The PMIC is on vacation for two weeks and has asked an unlicensed administrative worker to handle the office while she is away. A consumer comes to the office to complain about the terms of the lease she negotiated four months ago. In this instance:

a. the administrative person may discuss and explain the lease terms to the consumer.
b. the administrative person may enter into another lease with the consumer on behalf of the PMIC.
c. the administrative person can void the first lease due to the fact that the consumer did not understand the terms.
d. the administrative person can do nothing but tell the PMIC of the issue and wait for the PMIC to return to handle the problem with the consumer.

Answer 30

d. the administrative person can do nothing but tell the PMIC of the issue and wait for the PMIC to return to handle the problem with the consumer.