, Question 1
A Washington listing broker represents a seller but also shows the property to a
buyer who is not represented. Under Washington's agency disclosure rules,
when must the broker provide the buyer with the pamphlet 'The Law of Real
Estate Agency'?
A. At the first substantive contact with the buyer.
B. Only after the buyer makes a written offer.
C. Within three business days of the first showing.
D. Before the buyer signs any agency agreement.
Correct Answer: A - At the first substantive contact with the
buyer.
RATIONALE
RCW 18.86.030 requires a broker to provide the agency pamphlet to a
prospective buyer at the earliest possible opportunity, typically at first
substantive contact, to ensure informed consent regarding agency
relationships. Options B and D are too late, and C imposes a
non-statutory deadline.
Question 2
A seller of a Washington residential property completes the Seller Disclosure
Statement but marks 'Unknown' for the roof condition. After closing, the buyer
discovers active leaks. Which legal standard governs the seller's liability?
A. The seller is automatically liable because 'Unknown' is not a permitted
response.
B. The seller may be liable if they had actual knowledge of the defect and
failed to disclose it.
C. The seller is immune from liability because the buyer had an
inspection contingency.
D. The seller is liable only if the buyer can prove intentional
misrepresentation.
Page 2
,Correct Answer: B - The seller may be liable if they had actual
knowledge of the defect and failed to disclose it.
RATIONALE
Under RCW 64.06.020, a seller must disclose known material defects;
marking 'Unknown' does not shield a seller who actually knew of the
defect. The seller's liability hinges on actual knowledge, not merely
the form's completeness. Inspection contingencies do not waive the
statutory duty.
Question 3
A Washington real estate firm wants to offer property management services.
Under the state's licensing law, which activity requires a real estate broker's
license?
A. Advertising vacant units for rent.
B. Collecting rent and negotiating leases on behalf of the owner.
C. Providing janitorial services for a residential building.
D. Conducting a routine inspection of a rental unit.
Correct Answer: B - Collecting rent and negotiating leases on
behalf of the owner.
RATIONALE
RCW 18.85.011 defines a real estate broker as one who, for
compensation, negotiates leases or collects rent on behalf of another.
Advertising and inspections are not licensed activities unless tied to
brokerage. Janitorial services are unrelated to real estate brokerage.
Question 4
A Washington buyer signs a purchase and sale agreement with a financing
contingency. The buyer's lender denies the loan, but the buyer could have
obtained financing from another lender. Under Washington case law, can the
buyer recover earnest money?
Page 3
, A. Yes, because the financing contingency is triggered by any loan denial.
B. Yes, if the buyer acted in good faith and diligently pursued financing.
C. No, because the buyer failed to secure financing from any source.
D. No, unless the seller agrees to release the earnest money.
Correct Answer: B - Yes, if the buyer acted in good faith and
diligently pursued financing.
RATIONALE
Washington follows the implied duty of good faith and diligent efforts
in satisfying contingencies. If the buyer acted in good faith but was
denied by one lender, they may still recover earnest money despite
other potential lenders. The key is the buyer's reasonable efforts, not
absolute success.
Question 5
A Washington mortgage broker receives a fee from a lender for referring a
borrower. Under RESPA, what is the required disclosure?
A. The fee must be disclosed on the Good Faith Estimate and HUD-1.
B. The fee is prohibited unless it is for services actually rendered.
C. The fee must be disclosed only if it exceeds $500.
D. The fee is permitted if the borrower provides written consent.
Correct Answer: B - The fee is prohibited unless it is for services
actually rendered.
RATIONALE
RESPA Section 8 prohibits fees for referral of settlement service
business unless the fee is for goods or services actually provided.
Disclosure alone does not cure a prohibited referral fee. The amount
and borrower consent are irrelevant to the prohibition.
Page 4
A Washington listing broker represents a seller but also shows the property to a
buyer who is not represented. Under Washington's agency disclosure rules,
when must the broker provide the buyer with the pamphlet 'The Law of Real
Estate Agency'?
A. At the first substantive contact with the buyer.
B. Only after the buyer makes a written offer.
C. Within three business days of the first showing.
D. Before the buyer signs any agency agreement.
Correct Answer: A - At the first substantive contact with the
buyer.
RATIONALE
RCW 18.86.030 requires a broker to provide the agency pamphlet to a
prospective buyer at the earliest possible opportunity, typically at first
substantive contact, to ensure informed consent regarding agency
relationships. Options B and D are too late, and C imposes a
non-statutory deadline.
Question 2
A seller of a Washington residential property completes the Seller Disclosure
Statement but marks 'Unknown' for the roof condition. After closing, the buyer
discovers active leaks. Which legal standard governs the seller's liability?
A. The seller is automatically liable because 'Unknown' is not a permitted
response.
B. The seller may be liable if they had actual knowledge of the defect and
failed to disclose it.
C. The seller is immune from liability because the buyer had an
inspection contingency.
D. The seller is liable only if the buyer can prove intentional
misrepresentation.
Page 2
,Correct Answer: B - The seller may be liable if they had actual
knowledge of the defect and failed to disclose it.
RATIONALE
Under RCW 64.06.020, a seller must disclose known material defects;
marking 'Unknown' does not shield a seller who actually knew of the
defect. The seller's liability hinges on actual knowledge, not merely
the form's completeness. Inspection contingencies do not waive the
statutory duty.
Question 3
A Washington real estate firm wants to offer property management services.
Under the state's licensing law, which activity requires a real estate broker's
license?
A. Advertising vacant units for rent.
B. Collecting rent and negotiating leases on behalf of the owner.
C. Providing janitorial services for a residential building.
D. Conducting a routine inspection of a rental unit.
Correct Answer: B - Collecting rent and negotiating leases on
behalf of the owner.
RATIONALE
RCW 18.85.011 defines a real estate broker as one who, for
compensation, negotiates leases or collects rent on behalf of another.
Advertising and inspections are not licensed activities unless tied to
brokerage. Janitorial services are unrelated to real estate brokerage.
Question 4
A Washington buyer signs a purchase and sale agreement with a financing
contingency. The buyer's lender denies the loan, but the buyer could have
obtained financing from another lender. Under Washington case law, can the
buyer recover earnest money?
Page 3
, A. Yes, because the financing contingency is triggered by any loan denial.
B. Yes, if the buyer acted in good faith and diligently pursued financing.
C. No, because the buyer failed to secure financing from any source.
D. No, unless the seller agrees to release the earnest money.
Correct Answer: B - Yes, if the buyer acted in good faith and
diligently pursued financing.
RATIONALE
Washington follows the implied duty of good faith and diligent efforts
in satisfying contingencies. If the buyer acted in good faith but was
denied by one lender, they may still recover earnest money despite
other potential lenders. The key is the buyer's reasonable efforts, not
absolute success.
Question 5
A Washington mortgage broker receives a fee from a lender for referring a
borrower. Under RESPA, what is the required disclosure?
A. The fee must be disclosed on the Good Faith Estimate and HUD-1.
B. The fee is prohibited unless it is for services actually rendered.
C. The fee must be disclosed only if it exceeds $500.
D. The fee is permitted if the borrower provides written consent.
Correct Answer: B - The fee is prohibited unless it is for services
actually rendered.
RATIONALE
RESPA Section 8 prohibits fees for referral of settlement service
business unless the fee is for goods or services actually provided.
Disclosure alone does not cure a prohibited referral fee. The amount
and borrower consent are irrelevant to the prohibition.
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