Real Estate Practice, Seventh Edition Quizzes

1 Quizzes 645 Real Estate Practice, Seventh Edition QuizzesInstructions: Quizzes are open book. All answers are True/False or Multiple Choice. Answer key is located on Page 657. Quiz 1 Chapters 1-6, Pages 1-52 ____ 1. When testing the conduct of an agent while engaged in real Estate related activities, the independent contractor (IC) provision in the broker-agent employment agreement cannot and does not change the sales agent s classification as: a. an agent of the client. b. an agent of the broker. c. Both a and b. d. Neither a nor b. ____ 2. An outside salesperson is defined as a person who regularly works: a. more than half of their time away from their place of employment. b. less than half of their time away from their place of employment. c. Both a and b. d. Neither a nor b. ____ 3. An agent needs to collect income data during an interview with a prospective broker, including: a. the number of sales the agent is likely to close during their first year.

2 B. the share of the gross broker fees the agent will receive under the fee-sharing schedule offered by the broker. c. Both a and b. d. Neither a nor b. ____ 4. The best time for a sales agent to renegotiate their share of broker fees is: a. at the height of a booming market. b. during the slowdown following the boom. c. just prior to an upswing in sales. d. None of the above. ____ 5. To keep claims from clients and others under control, a broker needs to maintain a: a. multiple listing service (MLS). b. risk reduction program. c. low turnover rate. d. All of the above. ____ 6. Agents are required to be members of the trade association that owns a multiple listing service (MLS) to post listings and access the MLS database. ____ 7. A _____ relationship is created between a seller and a buyer s agent when the seller pays the buyer s agent s fee. a. subagency b. dual agency c. Both a and b. d. Neither a nor b. ____ 8. When a dual agency is established on a one-to-four unit residential sales transaction, the dual agent may pass on any pricing information from the buyer to the seller without the buyer s prior Real Estate Practice, Seventh Edition ____ 9.

3 A broker must disclose to their seller the existence of an indirect interest one of the broker s agents holds in the property. ___ 10. A Compensation Disclosure form is used to inform sellers/buyers of the broker s ownership interest in an affiliated 2 Chapters 7-10, Pages 53-96 ____ 1. The content of the Agency Law Disclosure form is not dictated by statute. ____ 2. An Agency Law Disclosure form needs to be presented to all parties by an agent when listing, selling, buying or leasing for a term greater than one year: a. commercial property. b. mobilehomes. c. Both a and b. d. Neither a nor b. ____ 3. A separate agency confirmation provision is not mandated for inclusion in purchase agreement forms. ____ 4. An open listing does not need to contain an expiration date. ____ 5. A seller s broker needs to disclose to the seller the broker fee they will receive on a net listing: a. before the close of escrow. b. before the seller signs the listing agreement.

4 C. before the seller accepts a buyer s offer. d. None of the above. ____ 6. A broker is prohibited from including an advance fee provision in a guaranteed sale listing. ____ 7. An exclusive right-to-sell listing agreement entitles a broker to collect a fee when they locate a ready, willing and able buyer and submit the buyer s full listing offer to the seller. ____ 8. A client s oral promise to pay a broker fee entitles the broker to enforce collection of the fee. ____ 9. The diligent effort of a broker under an exclusive listing includes: a. analyzing the property. b. marketing the property. c. Both a and b. d. Neither a nor b. ___ 10. A right-to-buy listing supersedes a replacement property provision in an exclusive right-to-sell 3 Chapters 11-17, Pages 97-160 ____ 1. A broker will be paid a full listing fee on the further leasing of the listed property without the broker s consent when a(n) _____ is included in the listing agreement.

5 A. withdrawal-from-sale clause b. termination-of-agency clause c. exclusive right-to-sell clause d. None of the 647 ____ 2. A broker can require a seller to relist with them if the seller decides to sell within the cancellation period. ____ 3. The safety clause period commences on: a. the expiration of a listing agreement by its own terms. b. a seller s termination of the agency before the listing period expires. c. a seller s withdrawal of the property from the market before the listing period expires. d. Any of the above. ____ 4. A properly worded and perfected safety clause is enforceable: a. only when a seller relists with the original agent. b. only in a seller s listing. c. even when a seller relists with another broker. d. None of the above. ____ 5. The price agreed to in a purchase agreement is based on the property conditions as disclosed. ____ 6. A broker needs to keep all advance cost accounting records for at least: a. one year.

6 B. three years. c. five years. d. ten years. ____ 7. Placing a For Sale sign _____ is a misdemeanor public nuisance. a. on private property with the owner s permission b. on public property with the city s permission c. Both a and b. d. Neither a nor b. ____ 8. Special agency duties owed to a buyer by a broker arise when the broker enters into an exclusive right-to-buy listing agreement with the buyer. ____ 9. The exclusive right-to-buy listing agreement is the agent s offer to render services for a fixed period of time. ____ 10. A cooperating broker is used as the title for: a. the exclusive agent of the seller. b. the subagent of the seller. c. the exclusive agent of the buyer. d. None of the 4 Chapters 18-23, Pages 161-226 ____ 1. Broker fee provisions in a purchase agreement are to be placed: a. above the buyer s signature. b. within the four corners of the contract. c. Both a and b. d. Neither a nor b. ____ 2. Brokers become third party beneficiaries when both seller and buyer enter into an agreement with a provision calling for the payment of broker Real Estate Practice, Seventh Edition ____ 3.

7 When a buyer has orally agreed to pay a broker fee and the seller knowingly interferes by inducing the buyer to breach their promise to pay, the seller owes the broker the promised fee. ____ 4. The best protection a broker has against the alteration of broker fee instructions is to dictate that escrow prepare unilateral fee instructions. ____ 5. A bona fide employee finder of a broker may not be compensated for referrals under the Real Estate Settlement Procedures Act (RESPA). ____ 6. Records of an agent s activities on behalf of a buyer during the listing period need to be retained by: a. the agent. b. the buyer s broker. c. the buyer. d. the seller s broker. ____ 7. A seller s agent does not have a duty to investigate the accuracy of any information provided by the seller before passing it on to a prospective buyer. ____ 8. A seller s agent s visual inspection of a one-to-four unit residential property needs to include defects: a. known to the seller s agent. b.

8 Readily observable by the seller s agent. c. Both a and b. d. Neither a nor b. ____ 9. A seller s agent s opinion given to a buyer becomes a statement of fact due to their fiduciary relationship with the buyer. ____ 10. An inexperienced seller can rely on an agent s opinion as a positive statement of truth when the agent holds themselves out to be specially qualified in the subject 5 Chapters 24-27, Pages 227-258 ____ 1. The use of an as-is clause in a purchase agreement to make the buyer waive delivery of a Transfer Disclosure Statement (TDS) is void as it is against public policy. ____ 2. A buyer has _____ from the close of escrow to recover losses caused by the negligent failure of the seller s agent to disclose a property s observable and known material defects. a. one month b. six months c. one year d. two years ____ 3. A seller s agent is exempt from conducting a visual inspection of a one-to-four unit residential property when the seller is exempt from using the Transfer Disclosure Statement (TDS).

9 ____ 4. An automatic reverse safety device is required for all automatic garage doors installed after: a. January 1, 1990. b. January 1, 1991. c. January 1, 1992. d. January 1, 649 ____ 5. A separate form is required to be filled out if the water heater is marked as being in compliance on a TDS form. ____ 6. The use of a home inspection report (HIR) does not relieve a seller s agent of their duty to visually inspect the property. ____ 7. If a buyer discovers an error in an HIR which affects the property s value or desirability, they have _____ after the date of the inspection to file a legal action to recover money losses. a. one year b. three years c. four years d. five years ___ 8. A home inspector may not pay a referral fee to a licensee for the referral of any home inspection business. ___ 9. When a seller has refused to authorize the preparation of an HIR prior to entering into a purchase agreement, the buyer is advised to order one: a.

10 On entering into a purchase agreement. b. after the expiration of any contingent cancellation period. c. after escrow has closed. d. on opening escrow. ___ 10. A buyer is able to enforce a reduction of the purchase price before closing for defects undisclosed to the buyer if the purchase agreement contains a price adjustment 6 Chapters 28-31, Pages 259-302 ____ 1. A Natural Hazard Disclosure (NHD) needs to disclose whether the listed property is located within _____ of a proposed airport when the NHD is prepared by an NHD expert. a. one mile b. two miles c. three miles d. None of the above. ____ 2. A flood zone designated with the letter(s) ___ is subject to mandatory flood insurance requirements. a. A b. V c. Both a and b. d. Neither a nor b. ____ 3. An NHD requires a seller and the seller s agent to disclose to a buyer whether they have any knowledge that the property is in an earthquake fault zone. ____ 4. Section I items on a Structural Pest Control report (SPC) are conditions which will likely lead to infestation.