MN Real Estate Express Final Exam Questions With Correct Answers

A broker receives an earnest money deposit from the buyer for an offer on a house. What must the broker do with the money? - Answer Deposit the money into the brokerage's existing non-interest-bearing escrow account for all such transactions. A buyer offers a stock certificate worth $12,000 in lieu of cash earnest money to the broker acting as the seller's agent. Can the broker accept the certificate? - Answer Yes, assuming the seller accepts the stock certificate. The stock certificate is deposited immediately with an escrow agent, whose authority is evidenced by a written agreement executed by the offeror and the escrow agent. A consumer has filed a complaint with the Commissioner against a licensee for an alleged act of discrimination. What is the Commissioner's course of action? - Answer The Commissioner may refer the discrimination case to a local Commission, who in turn may make the appropriate disciplinary action. A licensed salesperson in Nebraska wishes to acquire a Minnesota license. What must they do to obtain a Minnesota salesperson's license? - Answer Applicants with active licenses in reciprocal states must submit a letter of certification to the Minnesota Department of Commerce providing proof of the active salesperson's license. A licensee's license has been suspended by the Commission after a payment was made from the Recovery Fund against him. How will the licensee regain his license? - Answer A licensee will remain on suspension until the Recovery Fund is repaid in full plus 10% interest per year, twice the amount paid from the Fund on the licensee's account, and the licensee has obtained a surety bond issued by an insurer authorized to transact business in Minnesota in the amount of $40,000. A salesperson has a transaction in progress when she is recruited to work for another firm. The sale goes through and she asks her previous broker for her share of the commission. Is she entitled? - Answer No, she is only entitled to commissions earned while still employed by her former broker. A salesperson has an initial interview with a potential new client over the phone, at which point did she make the required disclosures during this interview. Which is TRUE? - Answer The salesperson must provide the consumer with an agency disclosure form at the FIRST substantive (person-to-person) meeting. A salesperson receives deposit money from a buyer-client. What must the salesperson do with the money? - Answer Turn over all deposit money or other money received to the employing broker immediately. A secretary at a real estate office takes a call from a broker from another brokerage seeking information on a current listing. There are no licensed agents at the office at the time of the call. What action may the secretary legally take? - Answer Take the broker's name and number for a licensee to return the call A seller has been awarded a final judgment against her dishonest former agent, and the order directing payment to her out of the Recovery Fund has been given. The agent has no money or other assets, so which of the following damages can the seller expect to collect from the Fund? - Answer Only ACTUAL damages can be paid from the Recovery Fund. Punitive damages, attorney's fees, and interest on a judgment are not recoverable from the fund. Alice has passed her broker's exam and wants to establish her own small brokerage. What is the first step she must take before becoming an active real estate broker in this manner? - Answer Alice must apply for a business entity license from the Department of Commerce. Anna is a salesperson who is unable to collect a commission from her broker. What recourse does she have? - Answer Anna may file a civil lawsuit. Barry, a broker, is under investigation by the Commissioner following a complaint from a former client. Fearing he might be found guilty, Barry gives the Commissioner false information to try and cover his tracks. What can the Commissioner do under these circumstances? - Answer The Commissioner may deny, suspend, or revoke the broker's license if he has provided false information. David is a real estate salesperson who has just moved from St. Paul to Duluth. What information must David provide to the Commissioner within 10 days of his moving? - Answer His new residential address and residential telephone number (if applicable). Eva, a licensed real estate salesperson, accepted a deposit check from a buyer late on Friday evening. So that the check would not be lost, she deposited it into her personal bank account. Is this illegal? - Answer Yes, it is against Minnesota real estate statutes to do so. For how many years must applicants for a broker's license have held an active real estate salesperson's license to be eligible for the broker's license? - Answer 3 years Fran is a licensee taking an offer to purchase from a buyer with a $1,000 earnest money deposit. Which of the following accurately describes what Fran should do with the offer and the earnest money? - Answer Fran should communicate the offer to the listing agent, and submit the earnest money with the offer for deposit by the listing broker after acceptance. How can a real estate company be seen to be in compliance with the affirmative action requirements of the Human Rights Law in the eyes of the Commissioner? - Answer Provide the Commissioner with an affirmative action plan approved by a local human rights agency. A new real estate licensee owns 8 rental homes that she has listed in the care of a separate real estate company. The company advertise the properties without disclosing that the property's owner is a licensee. Is this legal? - Answer Yes, it is legal because the property is listed with a real estate company, so disclosure regarding her licensed status isn't necessary. A seller is aware that an above normal indoor concentration of radon was measured on their property, but fails to disclose this. What, if anything, will the seller be liable for? - Answer The seller is liable to the buyer under the Minnesota Radon Awareness Act. Danny sold his property to Roger but didn't mention an old well in the far reaches of an overgrown field. 3 years later Roger discovers the well. Which is TRUE? - Answer Danny is liable for the cost of sealing the well and any fees for collection of this cost. A seller who fails to disclose the existence or known status of a well at the time of sale is liable to the buyer for costs relating to sealing of the well and attorney fees for collection of costs from the seller. This action must be taken within 6 years after the date the buyer closed the purchase of the property. Diane bought a property from Tom. Tom never disclosed the presence of radon and 18 months later Diane became ill as a result. What, if anything, can Diane do? - Answer Diane may bring a civil action and recover damages against Tom. A buyer who is injured by a violation of the Radon Awareness Act may bring a civil action and recover damages and other equitable relief as determined by the court. Such action must be commenced within 2 years of closing on the property. For which of the following IS a seller disclosure required? - Answer The transfer of interest in residential real estate between buyer and seller. Seller disclosure requirements do NOT apply to: - Answer real property that is not residential real property; a transfer to a government or governmental agency; a transfer by foreclosure; a transfer made to a spouse, parent, grandparent, child, or grandchild of the seller; a transfer to a tenant who is in possession of the residential real property. Greg is visiting open houses and runs across a nice looking home for sale. Can the listing agent show Greg the home? - Answer Yes, as long as the listing agent gives Greg an agency disclosure notice which states he represents the seller. A salesperson must provide prospective buyers - Answer agency disclosure agreements which state he or she represents the seller. Jim is selling his home. The retaining wall at the back of the property has begun to deteriorate but Jim is not aware of the condition. How should Jim respond to questions on the property disclosure statement regarding his retaining wall? - Answer Jim should disclose that he has no knowledge of any damages. Karen saw a small office building listed with the agency she works for and she wants to purchase the building as an investment. What must Karen do prior to the purchase of the property? - Answer Karen must inform the owner in writing that she is a licensed real estate agent even before she makes an offer. Can a person who has made use of a property for over 17 years acquire ownership rights through adverse possession if the property is Torrens title? - Answer No, once a property is registered as Torrens title, it is not possible for anyone to gain possession through adverse possession. How long does adverse possession take place in MN? - Answer after 15 years Donny and Marie are a married couple who own their homestead. Marie signs a conveyance of the homestead but Donny does not. Is the conveyance valid? - Answer No. If the owner is married, no conveyance of the homestead shall be valid without the signatures of both spouses. Harry has been leasing land from Sally for 7 years. The lease is up for renewal and they agree on a new 2-year lease. Because they have known each other and trust each other they make a verbal lease agreement. Which is TRUE? - Answer Because the lease contract is for more than 1 year, it is void in verbal form and must be in writing. Torrens Title - Answer A system of registering ownership in which the court keeps the record of title and issues certificates of title. Mary and Lisa own adjacent tracts of land. Both wish to register their land under Torrens title. Can they make a single application together or must they make separate, individual applications? - Answer Owners of separate tracts of land may join in a single application to register the title to their individual tracts. The application must list separately each individual owner's information. The process is known as "Adjacent land; common title defect."