PENNSYLVANIA REAL ESTATE ACTUAL TEST PAPER
ANSWERS AND QUESTIONS SET A+
✔✔comparative market analysis (CMA) - ✔✔A written analysis, opinion, or conclusion
by a contracted buyer's agent, transaction licensee, or an actual or potential seller's
agent relating to the probable price of a specified piece of real estate. A CMA is a
comparison of the prices of recently sold homes that are similar to a listing seller's home
in terms of location, style, and amenities. Also sometimes called a competitive market
analysis, it is not an appraisal.
✔✔net listing - ✔✔A listing based on the net price the seller will receive if the property is
sold. Under a net listing the broker can offer the property for sale at the highest price
obtainable to increase the commission. This type of listing is illegal in many states.
✔✔open listing - ✔✔A listing contract under which the broker's commission is
contingent on the broker's producing a ready, willing, and able buyer before the property
is sold by the seller or another broker.
✔✔exclusive right-to-sell listing - ✔✔A listing contract under which the owner appoints a
real estate broker as his or her exclusive agent for a designated period of time, to sell
the property on the owner's stated terms, and agrees to pay the broker a commission
when the property is sold, whether by the broker, the owner, or another broker.
✔✔redlining - ✔✔The illegal practice of a lending institution denying loans or restricting
their numbers for certain areas of a community
✔✔disparate impact - ✔✔The effect of an action that results in people in the protected
classes being treated differently than others.
✔✔steering - ✔✔The illegal practice of channeling home seekers to particular areas to
maintain the homogeneity of an area or to change the character of an area in order to
create a speculative situation
,✔✔blockbusting - ✔✔The illegal practice of attempting, for profit, to induce homeowners
to sell their properties by making representations about the entry or prospective entry of
persons in the protected classes into the neighborhood. Also known as panic selling.
✔✔Pennsylvania Human Relations Act (PHRA) - ✔✔The state law that prohibits
discrimination in the sale or rental of real estate, both housing and commercial
properties, on the basis of race, color, religion, ancestry, national origin, sex, familial
status, handicap or disability, or use of guide or support animal due to a handicap or
disability.
✔✔Americans with Disabilities Act(ADA) - ✔✔A federal law passed in 1990 to open
doors, both figuratively and literally, for people with disabilities to become part of the
economic and social mainstream of society. The law mandates equal access to
employment and goods and services. Title I prohibits discriminatory employment
practices. Title III requires anyone providing goods and services to the public to make
them accessible by removing architectural and communications barriers and, if that is
not readily achievable, to provide reasonable accommodations to people with
disabilities.
✔✔Equal Credit Opportunity Act (ECOA) - ✔✔The federal law that prohibits
discrimination in the extension of credit because of race, color, religion, national origin,
sex, age, or marital status.
✔✔Fair Housing Act - ✔✔The federal law that prohibits discrimination in housing based
on race, color, religion, sex, handicap, familial status, and national origin.
✔✔Civil Rights Act of 1866 - ✔✔An act that prohibits racial discrimination in the sale
and rental of housing
✔✔code of ethics - ✔✔A written system of standards for ethical conduct.
✔✔ethics - ✔✔The system of moral principles and rules that becomes the standards for
professional conduct.
✔✔transaction licensee - ✔✔A licensee who provides services to a consumer without
an agency relationship.
✔✔initial interview - ✔✔The first contact between a licensee and a consumer of real
estate-related services where a substantive discussion about real estate occurs.
Pennsylvania law contemplates that this will be the first face-to-face meeting. However,
because in today's practice, substantive conversations could evolve by telephone or e-
mail, licensees are required to provide a disclosure statement to ensure that a
consumer is aware that personal information should not be divulged to a licensee who is
not, and may not become, the consumer's agent.
, ✔✔consumer notice - ✔✔A specific form adopted by the Real Estate Commission in
Pennsylvania to disclose information about permitted business relationships and
specific agency procedures in real estate transactions. This notice must be presented at
an initial interview to any consumer of real estate services.
✔✔designated agent - ✔✔One or more licensees designated by the employing broker
to act exclusively as agent(s) on behalf of the principal to the exclusion of all other
licensees within the broker's employ.
✔✔dual agency - ✔✔Representing both parties to a transaction. This is unethical unless
both parties agree to it, and it is illegal in many states.
✔✔subagent - ✔✔One who is employed by a person already acting as an agent.
Typically a reference to a salesperson licensed under a broker (agent) who is employed
under the terms of a listing agreement.
✔✔subagency - ✔✔An agency relationship in which the broker-agent appoints other
brokers as subagents to help perform client-based functions on behalf of the principal.
The subagent assumes the same fiduciary responsibilities as the agent. In
Pennsylvania, the principal must authorize the broker to engage subagents
✔✔buyer agent - ✔✔A licensee who has entered into an agency relationship with a
consumer buyer of real estate, as defined in Pennsylvania license law. This relationship
is normally established by a buyer agency agreement
✔✔listing broker - ✔✔The broker in a multiple-listing situation from whose office a listing
agreement is initiated.
✔✔seller agent - ✔✔Any licensee who has entered into an agency relationship with a
seller of real estate.
✔✔single agency - ✔✔The broker acts as the agent of one principal, either the
seller/landlord or the buyer/tenant, in a transaction. The broker may practice exclusive
single agency or may represent sellers and buyers, but never both in a transaction.
✔✔agency coupled with an interest - ✔✔An agency relationship in which the agent is
given an estate or interest in the subject of the agency (the property).
✔✔implied agency - ✔✔An agency that arises by conduct or inference from other acts
or circumstances, often creating an agency relationship when none was intended.
✔✔fiduciary - ✔✔One in whom trust and confidence is placed under the common-law of
agency; usually a reference to a broker employed under the terms of a listing contract or
buyer agency agreement.
ANSWERS AND QUESTIONS SET A+
✔✔comparative market analysis (CMA) - ✔✔A written analysis, opinion, or conclusion
by a contracted buyer's agent, transaction licensee, or an actual or potential seller's
agent relating to the probable price of a specified piece of real estate. A CMA is a
comparison of the prices of recently sold homes that are similar to a listing seller's home
in terms of location, style, and amenities. Also sometimes called a competitive market
analysis, it is not an appraisal.
✔✔net listing - ✔✔A listing based on the net price the seller will receive if the property is
sold. Under a net listing the broker can offer the property for sale at the highest price
obtainable to increase the commission. This type of listing is illegal in many states.
✔✔open listing - ✔✔A listing contract under which the broker's commission is
contingent on the broker's producing a ready, willing, and able buyer before the property
is sold by the seller or another broker.
✔✔exclusive right-to-sell listing - ✔✔A listing contract under which the owner appoints a
real estate broker as his or her exclusive agent for a designated period of time, to sell
the property on the owner's stated terms, and agrees to pay the broker a commission
when the property is sold, whether by the broker, the owner, or another broker.
✔✔redlining - ✔✔The illegal practice of a lending institution denying loans or restricting
their numbers for certain areas of a community
✔✔disparate impact - ✔✔The effect of an action that results in people in the protected
classes being treated differently than others.
✔✔steering - ✔✔The illegal practice of channeling home seekers to particular areas to
maintain the homogeneity of an area or to change the character of an area in order to
create a speculative situation
,✔✔blockbusting - ✔✔The illegal practice of attempting, for profit, to induce homeowners
to sell their properties by making representations about the entry or prospective entry of
persons in the protected classes into the neighborhood. Also known as panic selling.
✔✔Pennsylvania Human Relations Act (PHRA) - ✔✔The state law that prohibits
discrimination in the sale or rental of real estate, both housing and commercial
properties, on the basis of race, color, religion, ancestry, national origin, sex, familial
status, handicap or disability, or use of guide or support animal due to a handicap or
disability.
✔✔Americans with Disabilities Act(ADA) - ✔✔A federal law passed in 1990 to open
doors, both figuratively and literally, for people with disabilities to become part of the
economic and social mainstream of society. The law mandates equal access to
employment and goods and services. Title I prohibits discriminatory employment
practices. Title III requires anyone providing goods and services to the public to make
them accessible by removing architectural and communications barriers and, if that is
not readily achievable, to provide reasonable accommodations to people with
disabilities.
✔✔Equal Credit Opportunity Act (ECOA) - ✔✔The federal law that prohibits
discrimination in the extension of credit because of race, color, religion, national origin,
sex, age, or marital status.
✔✔Fair Housing Act - ✔✔The federal law that prohibits discrimination in housing based
on race, color, religion, sex, handicap, familial status, and national origin.
✔✔Civil Rights Act of 1866 - ✔✔An act that prohibits racial discrimination in the sale
and rental of housing
✔✔code of ethics - ✔✔A written system of standards for ethical conduct.
✔✔ethics - ✔✔The system of moral principles and rules that becomes the standards for
professional conduct.
✔✔transaction licensee - ✔✔A licensee who provides services to a consumer without
an agency relationship.
✔✔initial interview - ✔✔The first contact between a licensee and a consumer of real
estate-related services where a substantive discussion about real estate occurs.
Pennsylvania law contemplates that this will be the first face-to-face meeting. However,
because in today's practice, substantive conversations could evolve by telephone or e-
mail, licensees are required to provide a disclosure statement to ensure that a
consumer is aware that personal information should not be divulged to a licensee who is
not, and may not become, the consumer's agent.
, ✔✔consumer notice - ✔✔A specific form adopted by the Real Estate Commission in
Pennsylvania to disclose information about permitted business relationships and
specific agency procedures in real estate transactions. This notice must be presented at
an initial interview to any consumer of real estate services.
✔✔designated agent - ✔✔One or more licensees designated by the employing broker
to act exclusively as agent(s) on behalf of the principal to the exclusion of all other
licensees within the broker's employ.
✔✔dual agency - ✔✔Representing both parties to a transaction. This is unethical unless
both parties agree to it, and it is illegal in many states.
✔✔subagent - ✔✔One who is employed by a person already acting as an agent.
Typically a reference to a salesperson licensed under a broker (agent) who is employed
under the terms of a listing agreement.
✔✔subagency - ✔✔An agency relationship in which the broker-agent appoints other
brokers as subagents to help perform client-based functions on behalf of the principal.
The subagent assumes the same fiduciary responsibilities as the agent. In
Pennsylvania, the principal must authorize the broker to engage subagents
✔✔buyer agent - ✔✔A licensee who has entered into an agency relationship with a
consumer buyer of real estate, as defined in Pennsylvania license law. This relationship
is normally established by a buyer agency agreement
✔✔listing broker - ✔✔The broker in a multiple-listing situation from whose office a listing
agreement is initiated.
✔✔seller agent - ✔✔Any licensee who has entered into an agency relationship with a
seller of real estate.
✔✔single agency - ✔✔The broker acts as the agent of one principal, either the
seller/landlord or the buyer/tenant, in a transaction. The broker may practice exclusive
single agency or may represent sellers and buyers, but never both in a transaction.
✔✔agency coupled with an interest - ✔✔An agency relationship in which the agent is
given an estate or interest in the subject of the agency (the property).
✔✔implied agency - ✔✔An agency that arises by conduct or inference from other acts
or circumstances, often creating an agency relationship when none was intended.
✔✔fiduciary - ✔✔One in whom trust and confidence is placed under the common-law of
agency; usually a reference to a broker employed under the terms of a listing contract or
buyer agency agreement.
