Section #2: Regulations Governing Real Estate Practice in SC

Question 1

The listing agreement for the sale of the property is:

a. between the licensee and the property owner.
b. between the brokerage firm and the property owner.
c. between the licensee and the brokerage.
d. between the property owner and the property manager.

Answer 1

b. between the brokerage firm and the property owner.

Question 2

All of the following are true EXCEPT:

a. a licensee may be affiliated with more than one BIC/PMIC at the same time.

b. a BIC/PMIC may supervise more than one location if approved by the Real Estate
Commission.

c. a BIC/PMIC may maintain one or more branch offices under the same name.

d. an affiliated licensee may act as BIC/PMIC for up to six months after the death of
the BIC/PMIC.

Answer 2

a. a licensee may be affiliated with more than one BIC/PMIC at the same time.

Question 3

The friend of a licensee wants to purchase property and is looking for advice and counsel and is willing to pay a consulting fee. In this case:

a. the licensee may advise the friend on the real estate purchase as long as the licensed status is disclosed.
b. the brokerage must enter into a written agreement for representation of the buyer before the licensee gives advice to the friend.
c. the friend must be referred to someone outside the licensee’s brokerage if the friend becomes interested in one of the company’s listed properties.
d. the licensee may advise his/her friend on the basis of an oral arrangement for fees only if the transaction closes.

Answer 3

b. the brokerage must enter into a written agreement for representation of the buyer before the licensee gives advice to the friend.

Question 4

The BIC/PMIC must maintain written copies of all records for:
a. three years.

b. one year.
c. five years.
d. forever.

Answer 4

c. five years.

Question 5

If a licensed agent is also the owner of the property, the agent must:

a. refer the listing to another brokerage.
b. also represent the buyer in the transaction.
c. allow others in outside agencies to represent the brokerage and the client.
d. disclose the licensed status in writing to all potential purchasers.

Answer 5

d. disclose the licensed status in writing to all potential purchasers.

Question 6

If a licensee receives an offer on a property, he/she must:

a. present an offer at any price to the seller unless the property is already under contract for purchase.
b. present any offer to the seller, whether or not the property is under contract for purchase.
c. only present offers that are at list price or higher in accordance with the seller’s written instructions.
d. present any offer at any price within a maximum time frame of 72 hours of receipt.

Answer 6

b. present any offer to the seller, whether or not the property is under contract for purchase.

Question 7

Anna, the listing agent, and Martha, another licensed agent, are having a dispute about who will get the “selling side” of the commission, as both showed the property to the buyer. In this instance:

a. Martha can automatically receive the fee if she proves she showed the property to the buyer before Anna.
b. Anna is due one-half the listing fee under common law.

c. Anna cannot create a delay in the closing of the property based on this commission
issue.

d. Martha can delay the closing of the property based on this commission issue.

Answer 7

c. Anna cannot create a delay in the closing of the property based on this commission
issue.

Question 8

Jane has erected a sign on her newly listed property. The sign must contain:

a. the full name of the brokerage.
b. Jane’s name and address.
c. the owner’s name.
d. the company’s BIC’s name.

Answer 8

a. the full name of the brokerage.

Question 9

Jane has a problem with the size of the lot of a property she recently listed. She incorrectly stated that the property was 1.5 acres without having seen a survey, and she made no effort to confirm the size of the property. Jane could potentially be found guilty of:

a. hiding a latent defect from the purchaser.
b. breach of the duty of disclosure to her buyer client.
c. misrepresentation of property condition to the purchaser.
d. not properly preparing a survey.

Answer 9

c. misrepresentation of property condition to the purchaser.

Question 10

Jane was asked about the potential future value of the property. Her statement to the buyer was: “Don’t worry. You’ll never lose a dime out here. These properties always appreciate.” Jane could potentially be disciplined for:

a. failing to disclose material defects in property.
b. making a dual set of contracts.
c. puffing in her marketing efforts.
d. guaranteeing future profits.

Answer 10

d. guaranteeing future profits.

Question 11

Juanita has a transaction in which she represents both the buyer and seller as clients. She is receiving a portion of the fee for listing the property, and the buyer client is also paying the balance of the buyer-agency fee. In this case:

a. she must disclose the two fees to both clients in writing.
b. her BIC must return any fees paid by the buyer to the seller.

c. the brokerage cannot receive fees from two parties in the transaction because it is
in dual agency.

d. she must remit the listing fee to the brokerage, but she is free to retain the overage
paid by the buyer.

Answer 11

a. she must disclose the two fees to both clients in writing.

Question 12

A friend of Sam’s wants to solicit and send potential clients to Sam for a flat fee if any referrals close a real estate transaction. In this situation:

a. Sam’s friend can receive the fee if Sam does not involve the brokerage’s fees.

b. Sam’s friend must have a real estate license in order to solicit a buyer for a property
for a fee.

c. Sam can pay his friend the fee as long as it is not based on a percentage of the sales
price.

d. Sam can share his fee with his friend as long as it is allowed through his broker’s
office policy.

Answer 12

b. Sam’s friend must have a real estate license in order to solicit a buyer for a property
for a fee.

Question 13

If a licensee violates the license law:

a. his/her license may be revoked.
b. the licensee may be publicly reprimanded.
c. his/her license may be suspended.
d. any or all of the above.

Answer 13

d. any or all of the above.

Question 14

All of the following could be considered to be material facts regarding a particular property EXCEPT:

a. seller’s motivation and bottom-line price.
b. leak in the roof of the property.
c. size of the property.
d. zoning of the property.

Answer 14

a. seller’s motivation and bottom-line price.

Question 15

If a licensee is found guilty of license law violation and wants to appeal, it is heard by:

a. circuit court judge.
b. administrative law judge.
c. jury of peers.
d. superior court judge.

Answer 15

b. administrative law judge.

Question 16

Joe had a drug charge proven against him more than five years ago but has always maintained his innocence. He does not feel it necessary to alert the Real Estate Commission and misrepresents the fact on his licensure application. In this situation:

a. the commission has no cause against Joe as he repaid his debt to society and has a good credit history.
b. the commission can revoke Joe’s license due to misrepresentation of a material fact on the application.
c. the commission cannot hold this against Joe as it happened more than five years ago.
d. Joe can never be licensed as he has a prior conviction.

Answer 16

b. the commission can revoke Joe’s license due to misrepresentation of a material fact on the application.

Question 17

Jane and her friend are on a cruise for three days during peak real estate season. A potential purchaser of one of her listings wants to see the property this weekend. In this case, Jane’s unlicensed assistant may:

a. show the property and negotiate an offer from the buyer.
b. show the property and discuss the buyer’s financing capabilities.

c. call other potential purchasers to solicit their offers as this would be in the seller’s
best interest.

d. arrange for a licensed agent to show and negotiate the offer on Jane’s behalf with
Jane’s broker’s permission.

Answer 17

d. arrange for a licensed agent to show and negotiate the offer on Jane’s behalf with
Jane’s broker’s permission.

Question 18

A property was said to have had a gruesome death on the premises. In this instance:

a. the fact does not have to be disclosed unless directly asked.
b. the fact must be disclosed because it is material.
c. the fact cannot be disclosed under any circumstances.
d. the fact must be disclosed as it may affect the potential safety of the purchasers.

Answer 18

a. the fact does not have to be disclosed unless directly asked.

Question 19

Jane was asked by the mortgage company to “redo” the sales contract on a property by raising the price and showing the purchaser making a nonrefundable down payment to the seller. Though this was not the situation, Jane complied with the loan officer’s request. In this situation:

a. Jane could be found guilty of violating federal law.
b. Jane could be found guilty of making a dual set of contracts.

c. Jane cannot be found guilty as she was following the instructions of the lender who
would be making the loan.

d. Both a. and b.

Answer 19

d. Both a. and b.

Question 20

Writing a bad check in a real estate transaction:

a. is not a license law violation if the licensee makes the check good.
b. means that the broker has commingled funds.
c. is a violation of license law.
d. is not a license law violation if the amount is subtracted from the licensee’s commission.

Answer 20

c. is a violation of license law.

Question 21

Jim’s seller client is the bank, which has taken title to the property through foreclosure. Jim has presented many offers, with one being accepted by the bank. In this situation:

a. Jim is not required to present any further offers.
b. Jim must continue to present all written offers until closing.
c. Jim can tell any future buyers that the property is already sold.
d. Jim can refuse to present any further offers that are lower than the accepted offer.

Answer 21

b. Jim must continue to present all written offers until closing.

Question 22

Darlene is advertising her personal home for sale. What statement must be in all of her advertising?

a. That she will not take backup offers.
b. That she will not take less than list price.
c. That she has a real estate license.
d. That she is motivated to sell.

Answer 22

c. That she has a real estate license.

Question 23

David is the BIC of Hometown Real Estate, specializing in property management. He decides that he wants to engage in real estate sales as well. In this instance:

a. David can enter into listing agreements with sellers under his current license.
b. David must revoke his property management license in order to sell property.
c. David may have a property manager’s license and a salesperson’s license at the same time.
d. David must either be all sales or all property management and cannot do both from the same real estate firm.

Answer 23

a. David can enter into listing agreements with sellers under his current license.

Question 24

Julia is advertising trying to get buyer clients. Her ad:

a. must list her BIC’s name and phone number.
b. must have her name and phone number.
c. must have the office address.
d. must have the company name.

Answer 24

d. must have the company name.

Question 25

Ernie has been found guilty of practicing real estate without a license due to his engaging in property management. In this case:

a. Ernie can be fined up to $5,000.
b. Ernie can be fined $500 and be found guilty of a misdemeanor.
c. Ernie has committed a felony.
d. Ernie can never hold a property manager’s license in the future.

Answer 25

b. Ernie can be fined $500 and be found guilty of a misdemeanor.

Question 26

Justin works on a sales team as a buyer agent. He has no interaction with his BIC and relies completely on the team leader for direction. In this case:

a. Justin’s team leader will accept responsibility for Justin’s actions.
b. Justin’s BIC could be sanctioned for lack of supervision.
c. Justin’s team leader could be found guilty of subordination.
d. Justin has done nothing wrong.

Answer 26

b. Justin’s BIC could be sanctioned for lack of supervision.

Question 27

Grace thought that the entire property she sold to the investor was zoned for commercial development but actually a portion of the property was zoned agricultural. In this case:

a. Grace can be found guilty of misrepresentation, though it was innocent on her part.
b. Grace can be found guilty of fraud.
c. Grace cannot be disciplined by the Real Estate Commission since she thought her statement regarding zoning was true.
d. Grace can be made to pay the difference between the value of agricultural property and commercial property as part of her discipline from the Real Estate Commission.

Answer 27

a. Grace can be found guilty of misrepresentation, though it was innocent on her part.

Question 28

A seller told the listing agent that he had received a letter from the zoning board that the property next door was being rezoned industrial. Faced with living in a residential area that was going to be impacted by the rezoning, the seller asked the listing agent to keep that information confidential. The listing agent asked him to put it in writing that he wanted these facts to remain confidential. In this case:

a. the listing agent acted correctly since the seller put the request in writing.
b. the listing agent acted correctly because potential rezonings do not have to be disclosed.
c. the listing agent acted incorrectly because this could be seen as a material adverse fact.
d. the listing agent acted incorrectly when she disclosed the fact anyway.

Answer 28

c. the listing agent acted incorrectly because this could be seen as a material adverse fact.

Question 29

Jane is working as a transaction broker providing customer service to the buyer. She has knowledge of a material adverse fact about the property. The buyer is unaware of the fact. In this case:

a. Jane can only tell the buyer the fact with the seller’s permission.
b. Jane can only tell the buyer the fact with the listing agent’s permission.
c. Jane can only tell the buyer the fact if the buyer asks directly.
d. Jane must tell the buyer the fact, even though the buyer is only a customer.

Answer 29

d. Jane must tell the buyer the fact, even though the buyer is only a customer.

Question 30

Ellen had a complaint made against her regarding trust funds and failure to disclose her brokerage relationship and was found guilty. In this case, Ellen:

a. can appeal to an Administrative Law Judge.
b. can take the complainant to court for fraud.
c. can take the appeal to a criminal court.
d. can do nothing but pay the fine and get the reprimand.

Answer 30

a. can appeal to an Administrative Law Judge.