CE Shop (Alabama) Final Exam Review Questions with Verified Answers

Jeung gave her agent an earnest money check, and the seller accepted Jeung's offer. What will happen to the check now? - ANSWERSAn escrow agent will hold the funds in a trust account until the agreement's terms are satisfied. Cheryl, the aggrieved claimant on a complaint against a licensee, has just won her claim. She demonstrated that the licensee was responsible for her losing $60,000. She also paid for a lawyer, which was another $5,000. With other fees and incidentals, her total damages are $67,000. What is the amount she'll receive? - ANSWERS$25,000 Jerrold reviews the floor plan of the Knoxville house he's going to sell. It's 3,800 square feet. In his advertising, he bumps that number up to 4,000 square feet to better justify its asking price. What has Jerrold done? - ANSWERSIntentional misrepresentation Which of the following best describes an inactive license? - ANSWERSThis license status means that you've paid your license fee but haven't completed your CE requirements. If you, as an Alabama licensee, make a statement in an ad that you should have known was false, what are you guilty of? - ANSWERSMisrepresentation Which of the following is a minimum service that an Alabama licensee must provide to her clients? - ANSWERSDisclosing any material facts the licensee knows about that the client couldn't reasonably ascertain Alabama broker Jim is acting as a limited consensual dual agent for seller Christine and buyer Blake. Which of the following is required for Jim to act in this capacity? - ANSWERSHe must get the written, informed, advance consent before entering into the relationship. What action may licensees take if they're unhappy with the commission's final decision on their hearing? - ANSWERSThey may request a rehearing. The funds placed in trust accounts are insured by the ______. - ANSWERSFDIC When it comes to earnest money, which one of the following statements is true? - ANSWERSEarnest money must be placed in a trust account. D'Wayne is acting as the buyer's agent for Alabama resident Rocky in a real estate transaction. In this transaction, what is D'Wayne's role? - ANSWERSA single agent Julie is working with buyer clients and has prepared an estimated closing statement. Which of the following statements is true? - ANSWERSShe must provide it when an offer is signed. Should the broker end up in litigation, any trust funds not safely tucked away in a trust account could be ______. - ANSWERSFrozen Which one of the following is a true statement regarding the termination of qualifying broker status in Alabama? - ANSWERSQualifying brokers have to notify their brokerage and the commission in writing if they wish to terminate their status. For how long must an Alabama licensee retain transaction file records after the date of the transaction? - ANSWERSThree years Which of the following statements about escrow accounts is correct? - ANSWERSEscrow accounts are managed by escrow agents, and are used to hold funds belonging to others, such as earnest money deposits. Which entity administers and enforces Alabama's residential and commercial laws for activities that require a license? - ANSWERSAlabama Real Estate Commission Susie has opted out of opening an escrow account with her mortgage lender, which means she has a lower monthly payment. She still needs to save up, though, to make sure she can pay for taxes and ______. - ANSWERSInsurance What's one of the steps you need to take if you choose to affiliate with a different broker? - ANSWERSNotify the commission by certified or registered mail. Maria is the buyer's agent, and Julia is the seller's agent in a real estate transaction in Alabama. Jack is Maria's qualifying broker. Julia works for Kyle's firm. From whom can Julia accept compensation? - ANSWERSKyle Which area of real estate law governs the use of contracts, explains the elements required to make a contract valid, and describes what happens if a breach of contract should occur? - ANSWERSContract law To whom must a licensee, representing a buyer, disclose agency status? - ANSWERSAll parties in the transaction Of the following, which one could be considered a real estate violation? - ANSWERSMandy didn't disclose to potential buyers that she was showing her own listing, or that she represents the sellers. A licensee has several tasks to perform for seller clients. What's one of those tasks? - ANSWERSCommunicate all offers and counter-offers to the sellers. Closing day is finally here! As an Alabama qualifying broker, how much time does Amanda have to disburse all funds held in trust for the transaction? - ANSWERSSeven days Which of the following individuals is NOT exempt from taking CE in Alabama? - ANSWERSMick, a managing broker, has been receiving disability checks for more than a year, due to a bad car crash. Which of the following agents does NOT need to present the Real Estate Brokerage Services Disclosure form to the consumer? - ANSWERSIn his capacity as a property manager, Chad meets with the DeLucas, who want to rent a unit in that property. RECAD was designed to do all of the following EXCEPT which of these? - ANSWERSSpecify best practices for choosing a real estate agent What's the maximum fine the Alabama Real Estate Commission can impose on a licensee? - ANSWERS$2,500 Which of the following is NOT required in Alabama purchase contracts? - ANSWERSThe names of all involved agents' managing brokers Brynn, a licensee from another state, wants to obtain a reciprocal license in Alabama. Which of the following statements is true? - ANSWERSShe must provide her licensing history to the commission within 120 days before the commission issues the license. LuAnn is selling some property, and she wants broker Richard to represent her. He explains that she needs to sign a brokerage agreement, and she asks, "What does it mean when I sign this?" What's the best answer Richard can give? - ANSWERS"It means that you understand and accept the conditions of our agency relationship." David is a qualifying broker for Merit Real Estate. He's also agreed to serve as qualifying broker for First Choice Realty, which is an affiliate company that operates out of the same office. Both companies have agreed in writing, but what else needs to happen in order for this arrangement to be legal in Alabama? - ANSWERSThe written consent must be filed with the commission.