3 final study

What should you avoid when canvassing?
A- Saturdays
B- Arriving at meal time
C- Houses with FSBO signs
D- Presenting a sales pitch

B- Arriving at meal time

Which record-keeping mechanism records the money received or disbursed on behalf of a beneficiary?
A- Ledger
B- Journal
C- Bank reconciliation
D- Closing statement

A- Ledger

Which of the following is not a "standard exception" in a title commitment?
A- Mineral rights exception
B- Parties in possession
C- Easements not shown by the public records
D- Survey exception

B- Parties in possession

Mary submits a signed offer to John to purchase his house. Mary's offer includes the purchase of 2 garage door openers. John only has 1 opener, so he makes the change and signs the contract. Nothing else is changed. What is the status of the contract?
A-

C- John has presented Mary with a counteroffer.

What type of economic market allows numerous players to access expanding assets?
A- Flat
B- Reset
C- Bust
D- Boom

D- Boom

The competitive market analysis is based upon which appraisal approach?
A- Income approach
B- Cost approach
C- Sales comparison approach
D- Market value approach

C- Sales comparison approach

A commercial broker attempting to accommodate a tenant's downsizing objectives would likely undertake which of the following?
A- A loan workout
B- A lease buyout
C- A broker's opinion of value
D- A highest and best use analysis

D- A highest and best use analysis

Mary is a buyer and has a contingency in her contract with John that she must sell her house in order to purchase John's house. What is the result if Mary never lists her house for sale?
A- The contract terminates because the contingency failed.
B- Mary i

D- Mary has breached the contract and John gets to keep the earnest money deposit.

Which of the following is NOT an advantage to owning farmland?
A- Unfavorable Diversification
B- Capital Appreciation
C- Inflation Hedge
D- Favorable Diversification

A- Unfavorable Diversification

Which would be the best appraisal approach for appraising a recently constructed home?
A- Income approach
B- Cost approach
C- Sales comparison approach
D- Market value approach

B- Cost approach

Most people who buy farms as an investment..?
A- live on the property.
B- sell the property within 1 year.
C- lease their property to professional farmers.
D- are required to post a land use bond for 2 years

C- lease their property to professional farmers.

Which of the following factors most likely has the greatest influence on the value of a home?
A- Location
B- Property condition
C- Improvements
D- Supply and demand

D- Supply and demand

Which of the following is forbidden by the FTC?
A- Calling a person who asked for information from you four months ago
B- Calling a party who has a property for sale by owner and you represent the buyer
C- Calling a home to conduct a survey
D- Calling a h

A- Calling a person who asked for information from you four months ago

Should a broker encourage a buyer to have an attorney review the offer before it is submitted?
A- No, it is only an offer and not a binding contract.
B- No, it will only delay the negotiations.
C- Yes, the offer creates a binding contract.
D- Yes, the off

C- Yes, the offer creates a binding contract.

When would a "metes and bound" legal description most likely be used?
A- For a home in a subdivision
B- In a rural county
C- In an urban area
D- It is no longer used

B- In a rural county

When does title pass to the buyer?
A- When the seller executes the deed
B- When the deed is recorded
C- At closing of the loan
D- When the deed is delivered

B- When the deed is recorded

Under Colorado Law, which of the following is not true?
A- A broker must either be an agent or a transaction-broker.
B- If an agency is created, there must be a written agreement between the broker and the party.
C- A transaction-brokerage relationship ca

C- A transaction-brokerage relationship can only be created by written agreement

What kind of commission plan limits the amount of revenue a licensee can receive from a split commission?
A- The graduated split plan
B- The rolled back graduated split
C- The capped graduated split
D- The 100 percent commission

C- The capped graduated split

What is "floor time"?
A- Time overseeing an open house
B- Time spent prospecting
C- Time when agents take inquiries not directed at a specific broker
D- Time spent preparing the daily activities

C- Time when agents take inquiries not directed at a specific broker

Which of the following statements is true about arbitration?
A- It is always binding.
B- The decision cannot be overturned or vacated.
C- The arbitrator does not have to follow the Rules of Evidence.
D- The award must provide a basis for the decision.

D- The award must provide a basis for the decision.

Bob is acting as escrow agent when the buyer and seller get into a dispute over the return of the earnest money. Bob immediately interpleads the funds into the registry of the court. Has Bob acted properly?
A- Yes, Bob is not required to wait when there i

A- Yes, Bob is not required to wait when there is a dispute

With what kind of lease does the owner pay all of the operating expenses?
A- Gross
B- Triple net
C- Pass through
D- Net

A- Gross

What is the standard term for a management agreement?
A- One year
B- Three years
C- Five years
D- No standard term

D- No standard term

Bob Broker is the listing agent for Sam Seller. Bob receives a lowball offer from a buyer and decides to wait a few days to see if he gets a better offer. Has Bob acted properly?
A- Yes, Bob has a fiduciary duty to the seller to protect the seller's inter

C- No, Bob must present the offer as soon as possible.

Which of the following is not required to satisfy the statute of frauds?
A- Parties names
B- Signed by both parties
C- Description of property
D- Consideration of no less than 5% of purchase price

D- Consideration of no less than 5% of purchase price

What do we call a real estate broker who manages properties for one owner or several owners?
A- Resident manager
B- Individual property manager
C- Individual building manager
D- Real estate asset manager

B- Individual property manager

What economic trend is indicated by the ratio between the available square feet of office space in a market and its total square feet?
A- Vacancy rate
B- Construction volume
C- Transaction volume
D- Transaction sizes

A- Vacancy rate

Joe Broker has a brokerage agreement with a landlord to find a tenant for landlord's property. Joe shows a prospective tenant landlord's property but also shows the tenant a property across the street. Has Joe acted properly?
A- No, because Joe has a duty

C- Yes, Joe is not prohibited from showing the tenant other properties

Before a broker begins work as a buyer's agent, which of the following is the required course of action?
A- The broker should have the buyer execute the Exclusive Right-to-Buy Contract and check the transaction-brokerage box.
B- The broker must have the b

D- The broker should have the buyer execute the Exclusive Right-to-Buy Contract and check the "Agency" box.

What is the main reason people try to sell their own houses?
A- To avoid paying a commission
B- Mistrust of real estate agents
C- To control when appointments are set
D- To avoid bad experiences with brokers

A- To avoid paying a commission

What is the objective in creating an advertisement?
A- Creating an image of professionalism
B- Differentiating your product
C- Grabbing the attention of the viewer
D- Making sure you have identified the target market

C- Grabbing the attention of the viewer

What does "indemnification" mean?
A- Hold harmless
B- Pay the costs for
C- Assume liability of
D- Litigation

C- Assume liability of

What must a tenant do if he or she wants to sublet the apartment?
A- Take the landlord to court.
B- Break the lease so the new tenant can sign a new one.
C- Get the landlord's permission.
D- Sublet but don't tell the landlord

C- Get the landlord's permission.

When a tenant agrees to pay all taxes, insurance, maintenance and repairs that tenant has what kind of lease?
A- Gross
B- Periodic
C- Net
D- Graduated

C- Net

What does an "Extended Policy" of title insurance do that a Standard Policy does not?
A- Covers items that do not appear in the public record
B- Extends the dates of coverage
C- Increases the insurance limits
D- Extends coverage to more than one insured

A- Covers items that do not appear in the public record

What is the most important distinction between a single agency and a transaction-broker?
A- The amount of the commission
B- The disclosures required for each
C- The financial requirements for each
D- The fiduciary responsibilities of single agency

D- The fiduciary responsibilities of single agency

Which of the following is the highest priority lien?
A- Real estate taxes
B- First mortgage
C- Mechanic's lien
D- Line of credit

A- Real estate taxes

The BLM...?
A- can offer lands currently under lease or lands where mineral ownership is state-owned.
B- cannot offer lands currently off lease or lands where mineral ownership is unknown.
C- cannot offer lands currently under lease or lands where mineral

C- cannot offer lands currently under lease or lands where mineral ownership is not federally-owned.

Which of the following is NOT a type of commercial lease?
A- Gross
B- Net
C- Proprietary
D- Percentage

C- Proprietary

Which element of the business plan defines the purpose of your business?
A- The mission statement
B- The marketing plan
C- The structure section
D- The financial projections

A- The mission statement

If a broker urges an owner to sell because persons of a protected class are moving into the neighborhood, what is the broker guilty of?
A- Redlining
B- Steering
C- Blockbusting
D- Overreaching

C- Blockbusting

Which type of listing agreement gives the broker the greatest assurance of getting a commission?
A- Exclusive Right-to Sell
B- Exclusive agency
C- Open listing
D- Net listing

A- Exclusive Right-to Sell

When calculating the amount a buyer can afford to borrow, what percentage of GMI is allowed for debt?
A- 28%
B- 36%
C- 40%
D- 25%

B- 36%

A lessee may transfer a lease by...?
A- assignment or sublease, without BLM approval.
B- a lease writ.
C- completing Form 78-16A.
D- assignment or sublease, with BLM approval.

D- assignment or sublease, with BLM approval.

According to the Commission, what must a broker do when a seller refuses to allow a lockbox to be placed on the property?
A- The broker must explain the consequences to the seller.
B- The broker cannot take the listing.
C- The broker must get the seller t

A- The broker must explain the consequences to the seller.

Which of the following is not required for unsolicited email?
A- An opt-out mechanism
B- A reply
C- Putting "advertisement" in the header
D- Your logo

C- Putting "advertisement" in the header

Which of the following mortgage loan items would NOT typically fall under origination charges?
A- Points
B- Application Fee
C- Underwriting Fee
D- Title Insurance

D- Title Insurance

Bob Broker represents the buyer in a transaction. The buyer gives Bob an earnest money check when the buyer makes an offer. Negotiations continue for a week until the contract is signed. Bob does not deliver the check to the escrow agent until the contrac

B- No, Bob should have delivered the check within three days of receiving it from the Buyer

What happens on an insurance claim where a homeowner does not have a coinsurance clause?
A- The owner may make a claim for the full replacement cost.
B- The loss will be settled for actual cash value.
C- The owner pays 20% of the loss.
D- The insurance co

C- The owner pays 20% of the loss.

What is the job of an underwriter?
A- To prepare the loan documents for closing
B- To write the insurance for the property
C- To accept the loan application and verify that all information has been provided
D- To assess the data to determine whether the l

D- To assess the data to determine whether the loan should be made

Why is it important to treat an offer as if it were a contract?
A- Because if the seller signs the offer it becomes a binding contract
B- Because if the seller signs the offer, it become more difficult for the buyer to negotiate changes
C- Because it forc

A- Because if the seller signs the offer it becomes a binding contract

Brokers who earn a split of the commission are called what?
A- Listing brokers
B- Selling brokers
C- Transaction-brokers
D- Cooperating brokers

D- Cooperating brokers

Bob Broker is acting as the escrow agent in a transaction and is holding the earnest money deposit. The seller defaults and Bob, who is owed a portion of the commission under the listing agreement, deducts the amount owed prior to returning the money to t

D- No, Bob must collect from the seller

RESPA applies to purchases...?
A- of farm lands.
B- of commercial buildings.
C- of residential property that is, one-to-four family homes, cooperatives and condominiums
D- investment property.

C- of residential property that is, one-to-four family homes, cooperatives and condominiums

If the seller owes $40,000 on a loan with an interest rate of 6% on June 1st, and the closing takes place on June 15, what will the prorated interest be for June using the 365 day method? Day of closing belongs to the seller.
A- $98.63
B- $197.26
C- $6.58

D- $92.05

Which pages of the Closing Disclosure will look the same regardless of the loan type the consumer is getting?
A- Pages 1 and 5
B- Pages 2 and 3
C- Pages 2 and 4
D- Pages 3 and 5

B- Pages 2 and 3

Based on current IRS rules, a broker must complete a Form 1099-MISC on a independent contractor that exceeds?
A- $600 in earnings in one year.
B- $750 in earnings in one year.
C- $1000 in earnings in one year.
D- $1600 in earnings in one year.

A- $600 in earnings in one year.

In economic jargon, the median multiple measures the ratio of the median house price to the...?
A- annual interest rate.
B- standard market rate index.
C- monthly arrears payment for household expenses.
D- median annual household income.

D- median annual household income.

The total monthly payment of a mortgage should not exceed what percentage of a buyer's gross monthly income?
A- 33%
B- 25%
C- 40%
D- 28%

D- 28%

An economist by the name of Homer Hoyt discovered that real estate prices seemed to ebb and flow on an 18-year cycle. This theory is known as...?
A- "The Homer Cycle."
B- "The Great 18-Year Real Estate Cycle."
C- "Housing Bubble Theory."
D- "Ebb and Flow

B- "The Great 18-Year Real Estate Cycle.

Which of the following items would not be found on the Loan Estimate?
A- APR
B- Final closing costs
C- Monthly loan payment including interest
D- TIP

B- Final closing costs

Which commission plan is most difficult for a new broker?
A- The graduated split plan
B- The rolled back graduated split
C- The capped graduated split
D- The 100 percent commission

D- The 100 percent commission

Which of these usually contributes to the property manager's fee?
A- Rebates from suppliers
B- Percentage of rental income
C- A percentage of fees paid to outside workers
D- Capital improvement fund

B- Percentage of rental income

When someone calls to inquire about a broker's listing, what is the most important thing for the broker to do?
A- Present the facts about the property.
B- Get an appointment with the caller.
C- Prequalify the caller.
D- Find out where the caller saw the l

C- Prequalify the caller.

What is a common measure used to assess the relative valuation of equities?
A- The cost-to-share ratio
B- The price-to-earnings ratio
C- The market-run-ratio
D- Rate-to-income ratio

B- The price-to-earnings ratio

What purpose does the Closing Instructions Form serve?
A- It is signed at closing by the closing agent to verify that the funds have been properly disbursed.
B- It is signed by the closing agent and sent to the lender to verify that the loan documents hav

C- It is prepared by the broker when a contract is being negotiated to serve as escrow instructions to the closing company.

Which of the following does not influence the market value of a property?
A- Contiguity
B- Conformity
C- Contribution
D- Competition

C- Contribution

If a contract has been executed, and the parties need to change the closing date, what must the broker do?
A- Use the Agreement to Amend/Extend Contract form to change the dates.
B- Have the parties change the date on the contract and initial it.
C- Conta

A- Use the Agreement to Amend/Extend Contract form to change the dates.

What is a "tie-down"?
A- A suggestion that the buyer make an offer
B- A request that the seller finalize a price
C- A statement that elicits a positive response
D- A negotiation resulting in a contract

C- A statement that elicits a positive response

What is the "holdover period" in a listing agreement?
A- It is when a seller will not vacate a property.
B- It is when a seller refuses to re-list the house after the listing expires.
C- It is the period after a listing expires that the broker may still e

C- It is the period after a listing expires that the broker may still entitled to a commission.

If you pay $15,000 in interest every year at 6% interest, what is your loan amount?
A- $90,000.00
B- $135,000.00
C- $400,000.00
D- $250,000.00

D- $250,000.00

What should a broker do if a seller refuses to fill out a Seller's Property Disclosure Form?
A- Refuse to take the listing.
B- Fill out the form on the Seller's behalf.
C- Nothing, the disclosure can be covered in the Contract; the Contract controls anywa

A- Refuse to take the listing.

Which of the following would not help raise a person's credit score?
A- Paying bills on time
B- Reducing the number of credit cards
C- Shopping for the best possible loan
D- Reducing the credit limits on credit cards

D- Reducing the credit limits on credit cards

If a property is surrounded by properties with higher values, its value will tend to rise. This called the principle of...?
A- progression.
B- regression.
C- substitution.
D- advanced value based on placement.

A- progression.

Which of the following is a true statement with regard to terminated relationships?
A- The commissions on the transaction will be paid to the listing broker
B- The terminating party must give the other party 30 days notice
C- After termination the broker

...

When selecting comparable properties for a CMA, which of the following would not be included?
A- Homes that have sold on the same block in the last five years
B- Homes whose listings are currently active and have similar features
C- Homes whose listings h

C- Homes whose listings have expired

What does "fair market value" mean?
A- The home's assessed value according to the property appraiser
B- The price of the property paid by the owner when the house was purchased
C- The price of the offer made by the buyer
D- The price the home should bring

D- The price the home should bring in an open and competitive market

Bob Broker represents Sam Seller. Bob presents Sam with an offer that is fair and reasonable. While Sam is considering that offer, another offer comes in that is lower than the first. Should Bob present it or wait to see if Sam accepts the first?
A- Bob s

C- Bob must present the second offer regardless of its price.

What is the proper way to deal with a request by a buyer to move in a week prior to closing?
A- Prepare a lease for that week.
B- Contact an attorney to prepare a lease.
C- Early possession is not permitted in Colorado.
D- Use the form Early Possession Le

B- Contact an attorney to prepare a lease.

What happens to the contract if the FHA appraisal comes back for less than the purchase price?
A- The buyer may terminate the contract.
B- The buyer may continue with the contract.
C- The buyer may either terminate or continue.
D- The contract automatical

C- The buyer may either terminate or continue.

What should you avoid when canvassing?
A- Saturdays
B- Arriving at meal time
C- Houses with FSBO signs
D- Presenting a sales pitch

B- Arriving at meal time

Which record-keeping mechanism records the money received or disbursed on behalf of a beneficiary?
A- Ledger
B- Journal
C- Bank reconciliation
D- Closing statement

A- Ledger

Which of the following is not a "standard exception" in a title commitment?
A- Mineral rights exception
B- Parties in possession
C- Easements not shown by the public records
D- Survey exception

B- Parties in possession

Mary submits a signed offer to John to purchase his house. Mary's offer includes the purchase of 2 garage door openers. John only has 1 opener, so he makes the change and signs the contract. Nothing else is changed. What is the status of the contract?
A-

C- John has presented Mary with a counteroffer.

What type of economic market allows numerous players to access expanding assets?
A- Flat
B- Reset
C- Bust
D- Boom

D- Boom

The competitive market analysis is based upon which appraisal approach?
A- Income approach
B- Cost approach
C- Sales comparison approach
D- Market value approach

C- Sales comparison approach

A commercial broker attempting to accommodate a tenant's downsizing objectives would likely undertake which of the following?
A- A loan workout
B- A lease buyout
C- A broker's opinion of value
D- A highest and best use analysis

D- A highest and best use analysis

Mary is a buyer and has a contingency in her contract with John that she must sell her house in order to purchase John's house. What is the result if Mary never lists her house for sale?
A- The contract terminates because the contingency failed.
B- Mary i

D- Mary has breached the contract and John gets to keep the earnest money deposit.

Which of the following is NOT an advantage to owning farmland?
A- Unfavorable Diversification
B- Capital Appreciation
C- Inflation Hedge
D- Favorable Diversification

A- Unfavorable Diversification

Which would be the best appraisal approach for appraising a recently constructed home?
A- Income approach
B- Cost approach
C- Sales comparison approach
D- Market value approach

B- Cost approach

Most people who buy farms as an investment..?
A- live on the property.
B- sell the property within 1 year.
C- lease their property to professional farmers.
D- are required to post a land use bond for 2 years

C- lease their property to professional farmers.

Which of the following factors most likely has the greatest influence on the value of a home?
A- Location
B- Property condition
C- Improvements
D- Supply and demand

D- Supply and demand

Which of the following is forbidden by the FTC?
A- Calling a person who asked for information from you four months ago
B- Calling a party who has a property for sale by owner and you represent the buyer
C- Calling a home to conduct a survey
D- Calling a h

A- Calling a person who asked for information from you four months ago

Should a broker encourage a buyer to have an attorney review the offer before it is submitted?
A- No, it is only an offer and not a binding contract.
B- No, it will only delay the negotiations.
C- Yes, the offer creates a binding contract.
D- Yes, the off

C- Yes, the offer creates a binding contract.

When would a "metes and bound" legal description most likely be used?
A- For a home in a subdivision
B- In a rural county
C- In an urban area
D- It is no longer used

B- In a rural county

When does title pass to the buyer?
A- When the seller executes the deed
B- When the deed is recorded
C- At closing of the loan
D- When the deed is delivered

B- When the deed is recorded

Under Colorado Law, which of the following is not true?
A- A broker must either be an agent or a transaction-broker.
B- If an agency is created, there must be a written agreement between the broker and the party.
C- A transaction-brokerage relationship ca

C- A transaction-brokerage relationship can only be created by written agreement

What kind of commission plan limits the amount of revenue a licensee can receive from a split commission?
A- The graduated split plan
B- The rolled back graduated split
C- The capped graduated split
D- The 100 percent commission

C- The capped graduated split

What is "floor time"?
A- Time overseeing an open house
B- Time spent prospecting
C- Time when agents take inquiries not directed at a specific broker
D- Time spent preparing the daily activities

C- Time when agents take inquiries not directed at a specific broker

Which of the following statements is true about arbitration?
A- It is always binding.
B- The decision cannot be overturned or vacated.
C- The arbitrator does not have to follow the Rules of Evidence.
D- The award must provide a basis for the decision.

D- The award must provide a basis for the decision.

Bob is acting as escrow agent when the buyer and seller get into a dispute over the return of the earnest money. Bob immediately interpleads the funds into the registry of the court. Has Bob acted properly?
A- Yes, Bob is not required to wait when there i

A- Yes, Bob is not required to wait when there is a dispute

With what kind of lease does the owner pay all of the operating expenses?
A- Gross
B- Triple net
C- Pass through
D- Net

A- Gross

What is the standard term for a management agreement?
A- One year
B- Three years
C- Five years
D- No standard term

D- No standard term

Bob Broker is the listing agent for Sam Seller. Bob receives a lowball offer from a buyer and decides to wait a few days to see if he gets a better offer. Has Bob acted properly?
A- Yes, Bob has a fiduciary duty to the seller to protect the seller's inter

C- No, Bob must present the offer as soon as possible.

Which of the following is not required to satisfy the statute of frauds?
A- Parties names
B- Signed by both parties
C- Description of property
D- Consideration of no less than 5% of purchase price

D- Consideration of no less than 5% of purchase price

What do we call a real estate broker who manages properties for one owner or several owners?
A- Resident manager
B- Individual property manager
C- Individual building manager
D- Real estate asset manager

B- Individual property manager

What economic trend is indicated by the ratio between the available square feet of office space in a market and its total square feet?
A- Vacancy rate
B- Construction volume
C- Transaction volume
D- Transaction sizes

A- Vacancy rate

Joe Broker has a brokerage agreement with a landlord to find a tenant for landlord's property. Joe shows a prospective tenant landlord's property but also shows the tenant a property across the street. Has Joe acted properly?
A- No, because Joe has a duty

C- Yes, Joe is not prohibited from showing the tenant other properties

Before a broker begins work as a buyer's agent, which of the following is the required course of action?
A- The broker should have the buyer execute the Exclusive Right-to-Buy Contract and check the transaction-brokerage box.
B- The broker must have the b

D- The broker should have the buyer execute the Exclusive Right-to-Buy Contract and check the "Agency" box.

What is the main reason people try to sell their own houses?
A- To avoid paying a commission
B- Mistrust of real estate agents
C- To control when appointments are set
D- To avoid bad experiences with brokers

A- To avoid paying a commission

What is the objective in creating an advertisement?
A- Creating an image of professionalism
B- Differentiating your product
C- Grabbing the attention of the viewer
D- Making sure you have identified the target market

C- Grabbing the attention of the viewer

What does "indemnification" mean?
A- Hold harmless
B- Pay the costs for
C- Assume liability of
D- Litigation

C- Assume liability of

What must a tenant do if he or she wants to sublet the apartment?
A- Take the landlord to court.
B- Break the lease so the new tenant can sign a new one.
C- Get the landlord's permission.
D- Sublet but don't tell the landlord

C- Get the landlord's permission.

When a tenant agrees to pay all taxes, insurance, maintenance and repairs that tenant has what kind of lease?
A- Gross
B- Periodic
C- Net
D- Graduated

C- Net

What does an "Extended Policy" of title insurance do that a Standard Policy does not?
A- Covers items that do not appear in the public record
B- Extends the dates of coverage
C- Increases the insurance limits
D- Extends coverage to more than one insured

A- Covers items that do not appear in the public record

What is the most important distinction between a single agency and a transaction-broker?
A- The amount of the commission
B- The disclosures required for each
C- The financial requirements for each
D- The fiduciary responsibilities of single agency

D- The fiduciary responsibilities of single agency

Which of the following is the highest priority lien?
A- Real estate taxes
B- First mortgage
C- Mechanic's lien
D- Line of credit

A- Real estate taxes

The BLM...?
A- can offer lands currently under lease or lands where mineral ownership is state-owned.
B- cannot offer lands currently off lease or lands where mineral ownership is unknown.
C- cannot offer lands currently under lease or lands where mineral

C- cannot offer lands currently under lease or lands where mineral ownership is not federally-owned.

Which of the following is NOT a type of commercial lease?
A- Gross
B- Net
C- Proprietary
D- Percentage

C- Proprietary

Which element of the business plan defines the purpose of your business?
A- The mission statement
B- The marketing plan
C- The structure section
D- The financial projections

A- The mission statement

If a broker urges an owner to sell because persons of a protected class are moving into the neighborhood, what is the broker guilty of?
A- Redlining
B- Steering
C- Blockbusting
D- Overreaching

C- Blockbusting

Which type of listing agreement gives the broker the greatest assurance of getting a commission?
A- Exclusive Right-to Sell
B- Exclusive agency
C- Open listing
D- Net listing

A- Exclusive Right-to Sell

When calculating the amount a buyer can afford to borrow, what percentage of GMI is allowed for debt?
A- 28%
B- 36%
C- 40%
D- 25%

B- 36%

A lessee may transfer a lease by...?
A- assignment or sublease, without BLM approval.
B- a lease writ.
C- completing Form 78-16A.
D- assignment or sublease, with BLM approval.

D- assignment or sublease, with BLM approval.

According to the Commission, what must a broker do when a seller refuses to allow a lockbox to be placed on the property?
A- The broker must explain the consequences to the seller.
B- The broker cannot take the listing.
C- The broker must get the seller t

A- The broker must explain the consequences to the seller.

Which of the following is not required for unsolicited email?
A- An opt-out mechanism
B- A reply
C- Putting "advertisement" in the header
D- Your logo

C- Putting "advertisement" in the header

Which of the following mortgage loan items would NOT typically fall under origination charges?
A- Points
B- Application Fee
C- Underwriting Fee
D- Title Insurance

D- Title Insurance

Bob Broker represents the buyer in a transaction. The buyer gives Bob an earnest money check when the buyer makes an offer. Negotiations continue for a week until the contract is signed. Bob does not deliver the check to the escrow agent until the contrac

B- No, Bob should have delivered the check within three days of receiving it from the Buyer

What happens on an insurance claim where a homeowner does not have a coinsurance clause?
A- The owner may make a claim for the full replacement cost.
B- The loss will be settled for actual cash value.
C- The owner pays 20% of the loss.
D- The insurance co

C- The owner pays 20% of the loss.

What is the job of an underwriter?
A- To prepare the loan documents for closing
B- To write the insurance for the property
C- To accept the loan application and verify that all information has been provided
D- To assess the data to determine whether the l

D- To assess the data to determine whether the loan should be made

Why is it important to treat an offer as if it were a contract?
A- Because if the seller signs the offer it becomes a binding contract
B- Because if the seller signs the offer, it become more difficult for the buyer to negotiate changes
C- Because it forc

A- Because if the seller signs the offer it becomes a binding contract

Brokers who earn a split of the commission are called what?
A- Listing brokers
B- Selling brokers
C- Transaction-brokers
D- Cooperating brokers

D- Cooperating brokers

Bob Broker is acting as the escrow agent in a transaction and is holding the earnest money deposit. The seller defaults and Bob, who is owed a portion of the commission under the listing agreement, deducts the amount owed prior to returning the money to t

D- No, Bob must collect from the seller

RESPA applies to purchases...?
A- of farm lands.
B- of commercial buildings.
C- of residential property that is, one-to-four family homes, cooperatives and condominiums
D- investment property.

C- of residential property that is, one-to-four family homes, cooperatives and condominiums

If the seller owes $40,000 on a loan with an interest rate of 6% on June 1st, and the closing takes place on June 15, what will the prorated interest be for June using the 365 day method? Day of closing belongs to the seller.
A- $98.63
B- $197.26
C- $6.58

D- $92.05

Which pages of the Closing Disclosure will look the same regardless of the loan type the consumer is getting?
A- Pages 1 and 5
B- Pages 2 and 3
C- Pages 2 and 4
D- Pages 3 and 5

B- Pages 2 and 3

Based on current IRS rules, a broker must complete a Form 1099-MISC on a independent contractor that exceeds?
A- $600 in earnings in one year.
B- $750 in earnings in one year.
C- $1000 in earnings in one year.
D- $1600 in earnings in one year.

A- $600 in earnings in one year.

In economic jargon, the median multiple measures the ratio of the median house price to the...?
A- annual interest rate.
B- standard market rate index.
C- monthly arrears payment for household expenses.
D- median annual household income.

D- median annual household income.

The total monthly payment of a mortgage should not exceed what percentage of a buyer's gross monthly income?
A- 33%
B- 25%
C- 40%
D- 28%

D- 28%

An economist by the name of Homer Hoyt discovered that real estate prices seemed to ebb and flow on an 18-year cycle. This theory is known as...?
A- "The Homer Cycle."
B- "The Great 18-Year Real Estate Cycle."
C- "Housing Bubble Theory."
D- "Ebb and Flow

B- "The Great 18-Year Real Estate Cycle.

Which of the following items would not be found on the Loan Estimate?
A- APR
B- Final closing costs
C- Monthly loan payment including interest
D- TIP

B- Final closing costs

Which commission plan is most difficult for a new broker?
A- The graduated split plan
B- The rolled back graduated split
C- The capped graduated split
D- The 100 percent commission

D- The 100 percent commission

Which of these usually contributes to the property manager's fee?
A- Rebates from suppliers
B- Percentage of rental income
C- A percentage of fees paid to outside workers
D- Capital improvement fund

B- Percentage of rental income

When someone calls to inquire about a broker's listing, what is the most important thing for the broker to do?
A- Present the facts about the property.
B- Get an appointment with the caller.
C- Prequalify the caller.
D- Find out where the caller saw the l

C- Prequalify the caller.

What is a common measure used to assess the relative valuation of equities?
A- The cost-to-share ratio
B- The price-to-earnings ratio
C- The market-run-ratio
D- Rate-to-income ratio

B- The price-to-earnings ratio

What purpose does the Closing Instructions Form serve?
A- It is signed at closing by the closing agent to verify that the funds have been properly disbursed.
B- It is signed by the closing agent and sent to the lender to verify that the loan documents hav

C- It is prepared by the broker when a contract is being negotiated to serve as escrow instructions to the closing company.

Which of the following does not influence the market value of a property?
A- Contiguity
B- Conformity
C- Contribution
D- Competition

C- Contribution

If a contract has been executed, and the parties need to change the closing date, what must the broker do?
A- Use the Agreement to Amend/Extend Contract form to change the dates.
B- Have the parties change the date on the contract and initial it.
C- Conta

A- Use the Agreement to Amend/Extend Contract form to change the dates.

What is a "tie-down"?
A- A suggestion that the buyer make an offer
B- A request that the seller finalize a price
C- A statement that elicits a positive response
D- A negotiation resulting in a contract

C- A statement that elicits a positive response

What is the "holdover period" in a listing agreement?
A- It is when a seller will not vacate a property.
B- It is when a seller refuses to re-list the house after the listing expires.
C- It is the period after a listing expires that the broker may still e

C- It is the period after a listing expires that the broker may still entitled to a commission.

If you pay $15,000 in interest every year at 6% interest, what is your loan amount?
A- $90,000.00
B- $135,000.00
C- $400,000.00
D- $250,000.00

D- $250,000.00

What should a broker do if a seller refuses to fill out a Seller's Property Disclosure Form?
A- Refuse to take the listing.
B- Fill out the form on the Seller's behalf.
C- Nothing, the disclosure can be covered in the Contract; the Contract controls anywa

A- Refuse to take the listing.

Which of the following would not help raise a person's credit score?
A- Paying bills on time
B- Reducing the number of credit cards
C- Shopping for the best possible loan
D- Reducing the credit limits on credit cards

D- Reducing the credit limits on credit cards

If a property is surrounded by properties with higher values, its value will tend to rise. This called the principle of...?
A- progression.
B- regression.
C- substitution.
D- advanced value based on placement.

A- progression.

Which of the following is a true statement with regard to terminated relationships?
A- The commissions on the transaction will be paid to the listing broker
B- The terminating party must give the other party 30 days notice
C- After termination the broker

...

When selecting comparable properties for a CMA, which of the following would not be included?
A- Homes that have sold on the same block in the last five years
B- Homes whose listings are currently active and have similar features
C- Homes whose listings h

C- Homes whose listings have expired

What does "fair market value" mean?
A- The home's assessed value according to the property appraiser
B- The price of the property paid by the owner when the house was purchased
C- The price of the offer made by the buyer
D- The price the home should bring

D- The price the home should bring in an open and competitive market

Bob Broker represents Sam Seller. Bob presents Sam with an offer that is fair and reasonable. While Sam is considering that offer, another offer comes in that is lower than the first. Should Bob present it or wait to see if Sam accepts the first?
A- Bob s

C- Bob must present the second offer regardless of its price.

What is the proper way to deal with a request by a buyer to move in a week prior to closing?
A- Prepare a lease for that week.
B- Contact an attorney to prepare a lease.
C- Early possession is not permitted in Colorado.
D- Use the form Early Possession Le

B- Contact an attorney to prepare a lease.

What happens to the contract if the FHA appraisal comes back for less than the purchase price?
A- The buyer may terminate the contract.
B- The buyer may continue with the contract.
C- The buyer may either terminate or continue.
D- The contract automatical

C- The buyer may either terminate or continue.