Download COLORADO REAL ESTATE EXAM LATEST VERSION REAL QUESTIONS AND CORRECT ANSWERS ALREADY GRA and more Exams Real Estate Management in PDF only on Docsity!
COLORADO REAL ESTATE EXAM
LATEST VERSION REAL QUESTIONS
AND CORRECT ANSWERS ALREADY
GRADED A+ GUARANTEE PASS 2025
Tenancy at will - CORRECT ANSWER A tenancy at will is a property tenure that can be terminated at any time by either the tenant or the owner (landlord). It exists without a contract or lease, and is unspecific in duration or the exchange of payment. A tenancy at will arrangement is desirable to tenants and owners wishing to have the flexibility to change rental situations easily and without breaking a contract. Tenancy at will: minimum three-day notice to terminate The amount due from the buyer appears on a closing statement as a: - CORRECT ANSWER The amount due from the buyer appears on a closing statement as a credit to the buyer. This is a receipt for the money that the buyer has already paid. Remember that the closing is over! In the Colorado Contract to Buy & Sell establishes a Loan Objection Deadline; if the buyer is getting a new loan. What is the effect of the deadline? - CORRECT ANSWER A buyer has until the Loan Objection Deadline to provide written notice s/he cannot get a commitment for a satisfactory loan and wants to terminate the contract. If s/he does provide such notice, the earnest money is refunded to the buyer. If the buyer does not provide such
notice, the contract continues, but the buyer's earnest money becomes nonrefundable should s/he not receive a loan. The amount due to the seller appears on a closing statement as a
- CORRECT ANSWER This answer pertains to the bottom of the settlement sheet when the columns are reconciled. Once you have applied all credit and debits, you total up all columns to the bottom.. If the Seller's debit column is less than the Seller's Credit column, it means the Seller is getting money back. If for example, the debit column totals $60,000 and the Credit column totals $100,000; you would add $40,000 to the Debit column making both columns equal to $100.000. Unfortunately, you are not done yet. You have added $40,000 to the Seller's Debit column. For every Debit there must be a Credit. Where does this corresponding Credit go? To the Broker Credit column. The rescission provisions of truth-in-lending apply to what type of loan? - CORRECT ANSWER A home equity loan has a three day right of recission or a re-finance. In order for a broker to write an offer for a buyer on a HUDacquired property, the broker must use a: - CORRECT ANSWER Offers must be submitted on HUD Standard Retail Sales Contract. All HUD homes are: - CORRECT ANSWER Sold as is, but you can still have an inspection At or before the signing of a contract for sale, every condominium unit buyer must be provided by the seller with: - CORRECT ANSWER A copy of the amendments to the condominium
warranty deed, not the buyer. The charge is debit seller. On the settlement sheet do not confuse "recording" the deed with "notarizing" the deed. Recording the deed is "debit buyer" as it is considered in the buyers best interest to have the deed recorded into the public record. The Real Estate Commission has the authority to: - CORRECT ANSWER audit or investigate a licensee and files at any time without advance notice The seller agrees to pay $1500 of the buyer's closing costs, this is shown on the settlement sheet as: - CORRECT ANSWER Debit Seller/Credit Buyer. This gets the dollars into the Buyer's side. The Buyers is then debited for his/her share of the Closing Costs. The Buyer's individual closing cost charges will each be a debit to the Buyer and a credit to the Broker (this deposits the money into the Trust Account for the Broker/Closing Agent to actually pay the vendor who is owed the Closing Costs). As a licensee you desire to sell your home yourself: - CORRECT ANSWER It is recommended that the office policy manual address the purchase and sale of a licensee's property. A Colorado broker with residence out of state accepts an earnest money deposit on a property located in Colorado. He needs to: - CORRECT ANSWER open an escrow account in a Colorado bank The property is leased through September, and the new buyer closes on June 30. - CORRECT ANSWER All existing lease remain in effect even though the property has been sold.
On contracts to purchase land, crops that are growing in the field:
- CORRECT ANSWER Crops that are fruits of industry, they require cultivation, can always be a negotiable item, fruits of nature usually go with the land. At closing, the earnest money is credited as follows: - CORRECT ANSWER Earnest money is credited to the buyer at closing and debited to the broker. Licensee Buyout Addendum: - CORRECT ANSWER Seller acknowledges that following Closing, the Property may be held by Buyer for a period of time or may be resold immediately, and any profit or loss shall be solely that of Buyer. Seller further acknowledges that there is a chance for profit to Buyer and that certain expenses may accrue to Buyer. Such expenses include costs and expenses of Closing, holding, and reselling the Property. In any event, after Closing, Buyer will absorb the loss or receive the profit from any sale and ownership of the Property. Contract closing date is March 29. Buyer and seller want to close on the 27th. In order to do this, they must: - CORRECT ANSWER As long as both parties to the contract agree and the date is being moved up, there is no need to do and amend and extend contract. Single Licensing - CORRECT ANSWER As of January 1, 1997 only real estate broker's license will be issued. Salesperson licensed under the old law will eventually need to upgrade to a broker. You are allowed to hold real estate licenses from several states, you are allowed to hold different state licenses i.e. appraiser, insurance, real estate broker.
(Submitted Prospect). Provided, however, Seller ___ Will __Will Not owe the commission to Brokerage Firm under this if a commission is earned by another licensed real estate brokerage firm acting pursuant to an exclusive agreement entered into during the Holdover Period and a Sale or Lease to a Submitted Prospect is consummated. If no box is checked in this then Seller does not owe the commission to Brokerage Firm. When a licensee purchases a property utilizing a licensee's buyout agreement: - CORRECT ANSWER Under the licensee buyout agreement a licensee will not collect a commission. In the Contract to Buy/Sell Real Estate (AKA the purchase contract), who is responsible for the cost of the appraisal? - CORRECT ANSWER Who pays what in the purchase contract is always a matter of negotiation. Although there are traditions that we follow, such as the Seller paying for Title Insurance, this is custom and not law. Neither the Real Estate Commission or State Statutes will tell a Buyer or Seller what they must pay. That is between the buyer and the seller. Which of the following is required for a person to be a broker of record for a corporation? - CORRECT ANSWER The only requirement in order to be the broker of record for a corporation is that one have a valid, active Colorado broker's license, and have fulfilled the necessary requirements to be an Independent Broker. When reconciling a 6 column worksheet for a closing - after totaling up the debits and credits, the closing agent needed to add a $30,000 Debit to the Seller Debit column to make it equal to the Seller Credit column. What does this Seller Debit represent? - CORRECT ANSWER A $30,000 check the Seller will receive
from this closing. This DEBIT represents the Seller's proceeds from the sale (what they are getting). A rental agreement for less than how many months does not need to be in writing to be enforceable? - CORRECT ANSWER The Statute of Frauds is the law that governs whether or not a real estate contract of any kind must be in writing. Although it is never advisable to enter into a real estate lease agreement with an oral contract, the law does specify that it is is enforceable if the agreement is for less than 12 months. Having said this, be aware that real estate brokers are also bound by real estate commission rules and as such are required to use commission approved forms, therefore we do not have the authority to comsumate an oral lease. The buyer and seller can, their attorneys can, the licensee cannot. A broker must offer: - CORRECT ANSWER A broker must offer only the relationships he or she chooses to offer. A broker who does not have any employed licensees must: - CORRECT ANSWER maintain an office policy on brokerage relationships Every office must maintain an office policy and available for review. Right of rescission is part of: - CORRECT ANSWER The right of rescission is a consumer protection law found within the Truth in Lending Act. The Truth in Lending Act (TILA), Title I of the Consumer Credit Protection Act, is aimed at promoting the informed use of consumer credit by requiring disclosures about its terms and costs. In general, this regulation applies to each individual or business that offers or extends credit when the credit is offered or extended to consumers; the credit is subject to a finance charge or is payable by a written agreement in more than
Commission-approved form entitled "Definition of Real Estate Working Relationships:" - CORRECT ANSWER The definition of Real Estate Brokerage relationships may help explain but is not proper disclosure. A growing crop, also known as emblements, is regarded as: - CORRECT ANSWER property of the tenant farmer. Emblements are regarded as personal property even before harvest; thus a tenant has the right to take the annual crop resulting from his or her labor. When showing buyers new homes: - CORRECT ANSWER When showing buyers new homes the broker should register the buyers with the builder. Failure to do so may result in the agent not receiving a commission. The grace period to renew an expired license without penalty is: - CORRECT ANSWER Licensees have a 31 day grace period from the expiration date of their license to complete the renewal process. For example, a license which expires on 12/31/2011 will have a grace period extending until 01/31/2012 to complete the renewal process and pay the required fee. The division does recommend completing the renewal process as soon as possible to avoid last minute issues which may prevent your renewal. A transaction broker relationship may be created by: - CORRECT ANSWER Brokerage Disclosure to Buyer. Seller and Buyer Agency relationships must be in writing. In the absence of a written agreement the default non-agency relationship is a transaction broker. However, prior to performing a licensed activity such as eliciting or receiving confidential information, the Broker must at a minimum disclose this status using an approved disclosure form
When a broker terminates his affiliation with an employing broker what must be done? - CORRECT ANSWER The licensee and the employing broker have joint responsibility in notifying the real estate commission. Interest on the loan assumed is shown as: - CORRECT ANSWER Credit to the buyer a debit to the seller. After the Sellers columns on a Settlement sheet have been subtotaled, to balance the two debit and credit columns, a credit to the Seller and a debit to the broker would represent: - CORRECT ANSWER Money owed by the seller. When the Sellers credit column is less than the debit column you need to add a credit to make them both equal. This means the credit column (containing the sale price) is less than the debits (containing amoung items - money owed on the property). This Seller is "upside-down." This credit ends up representing money the Seller must bring to the Closing and give to the Broker to pay off debts. (A Broker Debit is a deposit into the escrow account and a check that has to be written). A broker supplies the financing for a project to build condominiums with the stipulation that he has the exclusive right to sell the completed condos. Which of the following BEST describes this relationship? - CORRECT ANSWER Agency coupled with an interest. Not only does the agent have an agency relationship with the client, the agent also has a financial interest. Seller is giving the buyer a contingency but doesn't want to be stopped from selling forever. The seller should consider -
When should the listing agent order the title commitment? - CORRECT ANSWER the listing agent should order the title commitment as soon as all the parties accept the contract. Dates are very important. Title commitments must be ordered in a timely fashion, in order to meet the required contract dates. Title insurance fees or premiums are paid: - CORRECT ANSWER only once, and the policy continues in force without further payment. Unlike other insurance, title insurance is paid only once and the policy continues in force without further payment. As per the Mediation clause in the Contact to Buy/Sale Real Estate: "The mediation, unless otherwise agreed, will terminate in the event the entire dispute is not resolved within _________ days of the date written notice requesting mediation is delivered by one party to the other at the party's last known address. - CORRECT ANSWER 30 days If the appraiser contacts the listing broker and indicates a problem reaching the contract value, the: - CORRECT ANSWER listing agent should provide comparables to substantiate the value. The listing broker has a responsibility to the seller to substantiate the value. A buyer is concerned that new construction a mile away could have a negative environmental impact on the home they are considering purchasing. Can they make the Contract to Buy/Sell contingent on the result of an environmental impact report? - CORRECT ANSWER Yes, you can make a contract contigent on anything
This is a matter of negotiation between the buyer and seller. The law has no jurisdiction on matters of negotiation between a buyer and seller. If an offer was made on a house in which the buyer intended to be have a a hair salon in the basement, but found out a few days prior to closing that the zoning wouldn't allow it, can they cancel the agreement without penalty? - CORRECT ANSWER Zoning is a matter of Title. Buyers have the right to terminate the contact without penalty if any aspect of Title is unsatisfactory to them. However, they must due so in writing prior to either the OffRecord Title Objection Deadline or the Record Title Objection Deadline. Title insurance companies guarantee against a loss because of defects existing: - CORRECT ANSWER at or before the date of the policy. Defects, which come into existence subsequent to the date of insurance of the title policy, are not covered. Mr. and Mrs. Snively have a contract to purchase a home for $257,000. A hailstorm damaged the roof to the tune of $27, before closing. What remedy does the buyer have? - CORRECT ANSWER Snively's have an option of whether they will or will not proceed with this contract. C-lender wouldn't close and loan of damaged property). Form 1099-S shall be given to any seller of a transaction to: - CORRECT ANSWER This is to report any capital gains income to the federal government, But remember the exclusion. How is the purchase price handled on the settlement statement? - CORRECT ANSWER Charge the buyer, credit the seller.
Who shall request the earnest money to be released, in good funds to the closing clerk, prior to closing? - CORRECT ANSWER Listing agent generally requests it from the broker at least 24 hours before closing. An offer has been presented to the sellers of a property. The sellers do not want to accept it as it is. They ask their agent to change the terms through a counter proposal. The seller's agent prepares the counter proposal and delivers it to the buyer's agent. The buyers don't want to accept the new terms the seller Is offering. What can be done? - CORRECT ANSWER As buyer's agent you would tell them to rewrite the original contract. A purchase contract can only have one counter attached, the buyer can't withdraw a counter, and only sellers can withdraw the counter. They must sign another contract knowing what terms are acceptable. An Environmental Impact Statement (EIS) - CORRECT ANSWER An Environmental Impact Statement (EIS) is a document prepared to describe the effects for proposed activities on the environment. "Environment," in this case, is defined as the natural and physical environment and the relationship of people with that environment. This means that the "environment" considered in an EIS includes land, water, air, structures, living organisms, environmental values at the site, and the social, cultural, and economic aspects. An "impact" is a change in consequence that results from an activity. Impacts can be positive or negative or both. An EIS describes impacts, as well as ways to "mitigate" impacts. To "mitigate" means to lessen or remove negative impacts. Commission approved Deed of Trust: - CORRECT ANSWER
The differences are principally what happens to the loan when the property is sold. "Due on Transfer - Strict" means the entire loan balance becomes due on sale. "Due on Transfer - Creditworthy" means the loan is assumable with lender approval. "Assumable - Not due on transfer" means the loan is assumable with no additional approvals required to another owner. An owner has refinanced his primary residence and decided to take cash out of the loan to buy a fixer-upper. If the closing is scheduled for today (Monday) on the primary residence, How early can the owner close on the fixer upper? - CORRECT ANSWER Since the right of rescission is 3 days, he will not get the check until 3 business days after the closing which would be Friday. "Right of rescission" gives borrowers the ability to cancel their a loan for a certain period of time, no questions asked. The right of rescission does not apply to business loans or first loans on real estate. A 3 day right of rescission does apply to home refinancing and home equity loans. Which of the following is true if a broker negotiates a Success Fee under the Exclusive-Right-to-Buy Contract? - CORRECT ANSWER The buyer will indicate who is to pay the fee. The Exclusive Right to Buy agreement is often referred to as the Buyer Agency Agreement. This is the contract used when a buyer wants to engage the services of a buyer's agent. In this agreement, Success Fee is a term used for commission. Since the buyer is engaging the agent, the buyer needs to indicate who is going to pay the agent (buyer or listing broker or seller or anybody but me). The form of this payment needs to be indicated i.e. a percentage of the sale or lease, or an hourly rate, or some other form of compensation. If there is a minimum or maximum amount. If they are paying a retainer. In short, a number of different negotiated items all relating to the commission to be paid.
Tenancy from Period to Period - CORRECT ANSWER A tenancy from period to period is an estate that exists when the tenancy is for a definite initial time, but is automatically renewable unless terminated by the lessor or lessee with prior notice that the tenancy is to be ended. These estates, which are also called periodic tenancies, are of indefinite duration since they can be renewed indefinitely. A tenancy from period to period may be from year to year, month to month, week to week or even day to day, and renews for a like period of time. For example, a month to month periodic tenancy is renewable in one-month periods until it is terminated at the end of a month through proper notice by either party Tenancy at Will - CORRECT ANSWER A tenancy at will, or an estate at will, exists at the pleasure of both the lessor and the lessee. This type of tenancy can be terminated at any time "at the will" of either the owner or the tenant. A tenancy at will lease agreement might contain language that expresses that the lease may be terminated instantly when notice is given. In practice, a tenant is generally entitled to a reasonable amount of time in which to vacate the property. Landlords may prefer a tenancy at will when a property is for sale and any tenants would have to vacate quickly. Tenants may favor a tenancy at will if they plan on renting only for a short period of time; for example, prior to moving or while waiting to move into a new home. Tenancy at Sufference - CORRECT ANSWER A tenancy at sufferance is the lowest form of estate known to law. Also called an estate at sufferance, it exists indirectly as the result of circumstance, and is never deliberately created. This type of tenancy arises when a person goes into possession of land in a lawful manner, but remains on the property without any right to do so, and without the owner's consent. The only difference between
a tenant at sufferance and a trespasser is that the tenant at sufferance had at one time a right to be on the property, but has stayed beyond the terms of the previous agreement. For example, a tenant who remains after a one-year lease has terminated, without consent or recognition from the owner, becomes a tenant at sufferance. The tenant can be evicted at any time without notice. A purchaser is required to fill out a W-9 form at closing so that: - CORRECT ANSWER A transaction broker relationship may be created by: - CORRECT ANSWER Brokerage Disclosure to Buyer. Buyer and Seller Agency relationships must be in writing.In the absence of a written agreement the default non-agency relationship is a transaction broker. However, prior to performing a licensed activity such as eliciting or receiving confidential information, the Broker must at a minimum disclose this status using an approved disclosure form. An applicant for a Colorado real estate license who has been licensed in any other state must file which of the following proofs of that licensure? - CORRECT ANSWER A certificate of licensing history from the other state's real estate licensing authority. A certificate of licensing history that indicates the licensee's current status. Any complaints and disciplinary actions taken against the individual must accompany an application for a real estate license in a new state. A buyer submits an offer contingent upon the successful closing of their present home. - CORRECT ANSWER The listing agent has the responsibility to verify as much information as possible on behalf of their principal.
