COLORADO State Exam Questions and Answers Already Passed

COLORADO State Exam Questions and Answers Already Passed In Colorado, which of the following individuals is exempt from real estate license law? 1 An investor who owns multiple investment properties and sells 1 to an owner-occupant. 2 A right-of-way specialist who finds investment acreage for a friend and subsequently accepts a commission referral. 3 An attorney who assists in marketing a property and collects a 5% commission. 4 An inactive licensee who assists a friend with a purchase offer. 1. investor who owns multiple investment props and sells 1 to an owner-occupant Private owners are not subject to real estate license laws When the employing broker of a corporate brokerage is suddenly unable to continue in that position, to whom may the Commission issue a temporary "hardship" license? 1 A person with sufficient ownership interest in the corporation. 2 A Colorado licensee approved by the corporate board of directors. 3 A member of the board of directors. 4 An officer or director with a broker's license from another state. A temporary hardship license for a corporate brokerage can only be issued to a broker or associate broker licensed in Colorado. The requirements for ownership and director status are waived. Which of the following is TRUE for a person maintaining an inactive Colorado real estate license? 1 They must maintain errors and omissions insurance. 2 They must pay regular renewal fees, but are not required to take continuing education courses while holding this license status. 3 They must complete the usual continuing education and pay the renewal fees when due. 4 They may perform no more than 5 brokerage activities in any 1 year. 2. An inactive licensee does not need continuing education while on inactive status. Renewal of the license requires payment of the normal renewal fee. Inactive licensees do not need errors and omissions insurance and may not perform any brokerage functions. There is not a continuing education requirement to reinstate an inactive license. An associate broker ordered the following listing in the real estate section of the local phone directory: "Laura Casey, Real Estate associate broker , Residential Property My Specialty." What additional information must be included? 1 Her website and email address 2 Her license number 3 The expiration date of her license 4 The name of her employing broker 4. employing broker all ADS must include employing brokers name A broker has created a website advertising the broker's office. What additional information should be included on the site? 1 Names of active licensees, addresses and phone numbers. 2 License number of the brokerage and a list of current active licensees. 3 No additional disclosures are needed. 4 Name and address of the home office and states in which the brokerage holds licenses. 3. no other disclosures The same rules for advertising apply to internet ads. Since the brokerage has been identified, no other information is required. An associate broker has developed a website. What must she include on the site? 1 Name of the home office of the company that holds the associate's license and a list of states in which company is licensed. 2 Name and location of the brokerage company that holds the associate's license. 3 Names of all licensees in the broker's office and the states in which they are licensed. 4 License number of the brokerage and a list of current active licensees. 2. name and location of brokerage company All advertising by an employed licensee must include the identity of the brokerage that holds the associate's license. This also applies to internet advertising. Under Colorado law, which of the following statements about Home Service Warranty Contracts is FALSE? 1 The contract must set forth the duration of the contract. 2 The contract must list all the items that are excluded from coverage. 3 The contract must be transferable. 4 The contract must set forth the procedures for making a claim. 3. contract must be transferable Frequently purchasers of pre-owned homes will negotiate to have a home warranty service included in the contract. Colorado has passed a law governing the practice. The law prohibits any company that sells, offers to sell or affects the issuance of a preowned home warranty service contract to require a home buyer or seller to purchase a pre-owned home warranty service contract. However, the contract is not transferable. home service warranty TRUE 1 The contract must set forth the duration of the contract. 2 - The contract must list all the items that are excluded from coverage. 3- The contract must set forth the procedures for making a claim. When must all earnest money received on behalf of a principal be deposited in an escrow or trust account by the broker? 1 Within 3 days of obtaining all signatures for the contract. 2 No later than the 2nd business day following receipt. 3 Within 5 banking days of receiving all signatures for the contract. 4 Within 8 days of receiving the offer 1. within 3 days of obtaining sigs The listing broker is required to deposit the money in the broker's trust account in a recognized depository no later than 3 business days following the day on which the broker receives notice of contract acceptance. Which of the following should a broker do after receiving an earnest money deposit from a buyer? 1 Hold the earnest money deposit in a secure place in the broker's real estate office until the offer is accepted. 2 Immediately deposit the earnest money in the broker's personal interest-bearing account. 3 Deposit the money in an existing, special non-interest-bearing escrow account in which all earnest money received from buyers is held. 4 Open a special, separate escrow account that will contain funds for this transaction only, separate from funds received in another transaction. 1. hold earnest money in secure place in broker's office until offer is accepted When the earnest money is received but before the offer has been accepted, the earnest money should be held in a secure place in the broker's real estate office. After the offer is accepted, it must be deposited in an escrow account. earnest money Earnest money must be deposited in a proper escrow account and may not be commingled with personal funds. Any interest earned must be paid according to an agreement with the parties or may be paid to an authorized housing opportunity fund. A broker manages 3 properties for the same owner. When 1 property needed repairs, there was not enough money in the management account to cover the cost and the broker used excess funds from the emergency account and later replaced them with a check from the owner. Which of the following is TRUE? 1 The broker is in violation of regulations for improperly handling escrow funds. 2 The broker must use personal funds for repairs if there are insufficient funds in the management account. 3 The broker acted properly by safeguarding the client's interest. 4 The broker's action was proper because the management account balance was insufficient. The broker is in violation of regulations for improper commingling of funds. Using funds from the emergency account was actually using another client's funds for repair. A broker would also not be expected to use personal funds in this situation. identifies persons NOT needing a real estate license, including: 1. Any person or legal entity acting on its own behalf as a principal. (This includes regularly salaried employees and officers of corporations.) 2. An uncompensated attorney-in-fact appointed under a recorded power of attorney. 3. Public official performing official duties. 4. Trustee, administrator, executor, guardian, etc., performing authorized duties. 5. A person or legal entity dealing in oil and gas or other mineral leases or certain rights-of-way. 6. A regularly-salaried on-site manager of an apartment or condominium building or complex. 7. An attorney-at-law, but only when representing clients in the practice of law. 8. A real estate broker licensed in another state who co-brokers a transaction with a Colorado broker. Purpose of reconciliation = To make sure that the loan proceeds/disbursement schedule is accuratete 1. Prepare the Settlement Statements accurately. 2. Reconcile the Loan Statements with the Settlement Statements in a reconciliation statement. 3. Retain a copy of the reconciliation statement in the transaction file so it is available for audit. 4 Deliver a duplicate of the original of any instrument, except deeds, notes and trust deeds or mortgages prepared by and for the benefit of third party lenders, to all parties executing those instruments, when the instruments have been prepared by the broker, the employed licensee, or the closing entity and relates to the employment or engagement of the broker or pertains to the consummation of the leasing, purchase, sale or exchange of real property in which the broker may participate as a broker. closing with lender Closing with LENDER looks different than with broker ==The disbursements are deducted from the gross loan amount to reach the "net loan proceeds" amount. Community Bank will issue a check for the net loan proceeds to the Buyer, the Smiths, and the Smiths will endorse the check to the title company or attorney handling the closing. cooperating broker A cooperating broker has the same requirements for retaining copies as the broker preparing the instruments, except a cooperating broker who is not a party to the listing contract does not need to retain a copy of the listing contract or the seller's settlement statement. A broker does not have to keep copies of: 1. existing public records 2. title commitments 3. loan applications 4. lender required disclosures related affirmations from 5. independent third party closing entities