unit 5 real estate practice

Question 1

an employing broker would be commingling trust funds if the employing broker deposited monies and rents received from a client’s various properties in the same trust account

Answer 1

false

commingling would be if all trust funds are deposited in the same trust account

Question 2

the purpose of the americans with disabilities act (ADA) is to ensure equal access to public accommodations for disabled people

Answer 2

true

Question 3

under an exclusive agency listing, the broker is entitled to receive a commission, regardless of who sells the property

Answer 3

false
this type of listing puts the seller and the broker in competition. if the seller finds a buyer, there is no commission paid to the listing brokerage. however, all brokerages must go through the listing office, not directly to the seller. if another brokerage has a buyer, the seller pays as promised in the listing.

Question 4

the four risk management evaluation points are as follows: avoid, control, defer, and ignor

Answer 4

false
for risk management to be effective, the four evaluation points are taken into account. they are as follows: avoid, control, transfer, retain (ACTR)

Question 5

E & O insurance that is held by the brokerage firm will cover all errors and acts of negligence by all salespeople.

Answer 5

false

this will not cover criminal acts, fraud, and violations of civil rights and antitrust

Question 6

duress, fraud, minors, and misrepresentation make contracts voidable

Answer 6

true

Question 7

professional liability insurance for real estate professionals is known as a surety bond

Answer 7

false

the most common (and in some states, mandatory) insurance for a real estate entity is errors and omissions insurance.

Question 8

if a seller misrepresents a material fact about the property, from the buyer’s point of view, the contract is unenforceable

Answer 8

true

Question 9

a property management company has installed fire doors and ceiling sprinklers. this is an example of control

Answer 9

true

Question 10

earnest money is deposited into the operations account

Answer 10

false
a trust account that is specifically used for earnest monies is also known as an escrow account. usually, the closing office holds the escrow funds