CO State Exam REVISED ACTUAL Exam
Questions and CORRECT Answers
Legal documents required to transfer property at closing include the deed, bill of sale,
promissory note, and deed of trust. What's the Colorado Real Estate Commission's position
regarding payment for preparation of these documents?
a. Brokers may charge clients a nominal fee for preparing these documents.
b. Closing agents may charge clients a nominal fee for preparing these documents.
c. Neither the broker nor the closing agent may charge a fee to clients for the preparing these
documents.
d. These documents must be prepared by an attorney, with the cost borne by the buyer or seller. -
CORRECT ANSWER - c. Neither the broker nor the closing agent may charge a fee to
clients for the preparing these documents.
Rule 6.14.B. prohibits licensees from charging clients for preparing these documents. CP-7 states
that brokers are responsible for the cost of preparing these documents. Closing agents may
charge brokers a nominal fee for legal document preparation.
The Colorado Real Estate Commission is NOT required to investigate which of these situations?
a. It comes to CREC's attention that Don is practicing real estate without a license.
b. Licensee Darma submits a complaint against her employing broker to CREC, claiming he isn't
available to help when she needs it, resulting in a "sale fail" for her client.
c. Licensee Mark believes licensee Ben is marketing property unethically, and submits his
complaint to the Colorado Association of REALTORS®.
d. Mercy submits a complaint to CREC about licensee Fred, claiming he didn't disclose a
personal interest in the property she purchased. - CORRECT ANSWER - c. Licensee Mark
believes licensee Ben is marketing property unethically, and submits his complaint to the
Colorado Association of REALTORS®.
CREC is obligated to investigate complaints it receives from the public. Investigations may also
be initiated by the commission, but complaints about ethics submitted to NAR or a local chapter
aren't CREC's responsibility.
,Karla is furious at her real estate agent, Yolanda, who Karla feels is responsible for the sale of
her home falling through at the last moment. She files a complaint against Yolanda with the
Colorado Real Estate Commission. What happens next?
a. CREC will notify both Yolanda and her employing broker (if she's employed) of the
complaint, and give them 30 days to find a resolution with Karla.
b. CREC will set up a mediation between Karla and Yolanda, and will notify them both of the
time and date.
c. Karla will have to wait 10 to 12 business days to hear back from the commission and find out
if they'll investigate her complaint.
d. Yolanda will receive a letter of admonishment from CREC, and must attend the next scheduled
CREC meeting to state her case related to the complaint. - CORRECT ANSWER - c. Karla
will have to wait 10 to 12 business days to hear back from the commission and find out if they'll
investigate her complaint.
Complainants should find out about the status of their complaints within 10 to 12 business days.
If CREC decides to investigate, it will send Yolanda a request for a written response to the
complaint.
If you're looking for guidance on a particular real estate related law, where would the best place
be to look for more information?
a. Broker blogs
b. Commission rules
c. State congressional records
d. The annotated statutes - CORRECT ANSWER - b. Commission rules
Marvin is a transaction broker for a tenant. As part of the terms of the Colorado Exclusive Tenant
Listing Contract, which of the following duties must he perform?
a. Account in a timely manner for all money and property received as part of the transaction.
b. Based on information known to the broker, counsel the tenant as to any material benefits or
risks associated with the transaction.
c. Promote the tenant's interest with the utmost good faith, loyalty, and fidelity.
d. Seek a price and terms that are acceptable to the tenant. - CORRECT ANSWER - a.
Account in a timely manner for all money and property received as part of the transaction.
,As part of their uniform duties, both tenant's agents and transaction-brokers have a duty to
account in a timely manner for all money and property they receive. A tenant's agent must
perform the three additional duties presented here.
Why is a Notice of Cancellation submitted along with an offer to purchase a Colorado property
that is in foreclosure?
a. To give notice of the seller's right to cancel the purchase contract.
b. To give notice that the homeowner may stop the foreclosure.
c. To give notice that the loan will be paid in full when the transaction closes.
d. To protect the broker and brokerage from liability if the buyer changes his mind. - CORRECT
ANSWER - a. To give notice of the seller's right to cancel the purchase contract.
The Notice of Cancellation is intended to give the seller the right to cancel the purchase contract
within a certain timeframe, indicated by the dates entered on the form. It's also the form the seller
will use to cancel if so desired.
In Colorado, if your property taxes for the year are more than $25 and you elect to pay them in
one payment, when is that one payment due?
a. April 30
b. August 1
c. February 15
d. June 15 - CORRECT ANSWER - a. April 30
In Colorado, property tax amounts greater than $25 may be paid in one payment due April 30. It
may also be paid in two payments, the first of which is due by the last day of February, and the
second of which is due by June 15.
Which form should accompany the completed Colorado contract form when offering to buy a
property that is in foreclosure?
a. Foreclosure Act Addendum
, b. Homeowner Cancellation Notice (Principal Language)
c. Homeowner Warning Notice
d. Notice of Cancellation - CORRECT ANSWER - c. Homeowner Warning Notice
The Homeowner Warning Notice is a required attachment to the Contract to Buy and Sell
(Colorado Foreclosure Protection Act) which notifies the seller of a three-day right to cancel.
A Colorado buyer reviews the seller's counteroffer and agrees provided the closing date is
changed. What is the BEST course of action to respond?
a. The buyer's agent should complete a new CBS that reflects the seller's counterproposal but
changes the closing date to reflect buyer's proposed date.
b. The buyer's agent should verbally ask the seller's agent to send over a new CBS.
c. The buyer should return the Counterproposal form back to the seller and ask them to complete
a new Counterproposal with the closing change.
d. The buyer should sign the seller's Counterproposal form and include a separate signed
amendment with the change to the closing date. - CORRECT ANSWER - a. The buyer's
agent should complete a new CBS that reflects the seller's counterproposal but changes the
closing date to reflect buyer's proposed date.
Although you could complete a new Counterproposal form to counter the seller's counter offer,
this might get confusing. It's a better practice to complete a new CBS that reflects all the terms
previously agreed to, plus the change the client wants.
Which clause prevents buyers or tenants from reaching an agreement with a seller or landlord on
a property and then discarding their brokers so that neither party has to pay a broker
commission?
a. Habendum
b. Holdover Period (Broker Protection)
c. Seisin (Buyer Fraud Cease and Desist)
d. "Weasel" Prevention - CORRECT ANSWER - b. Holdover Period (Broker Protection)
Questions and CORRECT Answers
Legal documents required to transfer property at closing include the deed, bill of sale,
promissory note, and deed of trust. What's the Colorado Real Estate Commission's position
regarding payment for preparation of these documents?
a. Brokers may charge clients a nominal fee for preparing these documents.
b. Closing agents may charge clients a nominal fee for preparing these documents.
c. Neither the broker nor the closing agent may charge a fee to clients for the preparing these
documents.
d. These documents must be prepared by an attorney, with the cost borne by the buyer or seller. -
CORRECT ANSWER - c. Neither the broker nor the closing agent may charge a fee to
clients for the preparing these documents.
Rule 6.14.B. prohibits licensees from charging clients for preparing these documents. CP-7 states
that brokers are responsible for the cost of preparing these documents. Closing agents may
charge brokers a nominal fee for legal document preparation.
The Colorado Real Estate Commission is NOT required to investigate which of these situations?
a. It comes to CREC's attention that Don is practicing real estate without a license.
b. Licensee Darma submits a complaint against her employing broker to CREC, claiming he isn't
available to help when she needs it, resulting in a "sale fail" for her client.
c. Licensee Mark believes licensee Ben is marketing property unethically, and submits his
complaint to the Colorado Association of REALTORS®.
d. Mercy submits a complaint to CREC about licensee Fred, claiming he didn't disclose a
personal interest in the property she purchased. - CORRECT ANSWER - c. Licensee Mark
believes licensee Ben is marketing property unethically, and submits his complaint to the
Colorado Association of REALTORS®.
CREC is obligated to investigate complaints it receives from the public. Investigations may also
be initiated by the commission, but complaints about ethics submitted to NAR or a local chapter
aren't CREC's responsibility.
,Karla is furious at her real estate agent, Yolanda, who Karla feels is responsible for the sale of
her home falling through at the last moment. She files a complaint against Yolanda with the
Colorado Real Estate Commission. What happens next?
a. CREC will notify both Yolanda and her employing broker (if she's employed) of the
complaint, and give them 30 days to find a resolution with Karla.
b. CREC will set up a mediation between Karla and Yolanda, and will notify them both of the
time and date.
c. Karla will have to wait 10 to 12 business days to hear back from the commission and find out
if they'll investigate her complaint.
d. Yolanda will receive a letter of admonishment from CREC, and must attend the next scheduled
CREC meeting to state her case related to the complaint. - CORRECT ANSWER - c. Karla
will have to wait 10 to 12 business days to hear back from the commission and find out if they'll
investigate her complaint.
Complainants should find out about the status of their complaints within 10 to 12 business days.
If CREC decides to investigate, it will send Yolanda a request for a written response to the
complaint.
If you're looking for guidance on a particular real estate related law, where would the best place
be to look for more information?
a. Broker blogs
b. Commission rules
c. State congressional records
d. The annotated statutes - CORRECT ANSWER - b. Commission rules
Marvin is a transaction broker for a tenant. As part of the terms of the Colorado Exclusive Tenant
Listing Contract, which of the following duties must he perform?
a. Account in a timely manner for all money and property received as part of the transaction.
b. Based on information known to the broker, counsel the tenant as to any material benefits or
risks associated with the transaction.
c. Promote the tenant's interest with the utmost good faith, loyalty, and fidelity.
d. Seek a price and terms that are acceptable to the tenant. - CORRECT ANSWER - a.
Account in a timely manner for all money and property received as part of the transaction.
,As part of their uniform duties, both tenant's agents and transaction-brokers have a duty to
account in a timely manner for all money and property they receive. A tenant's agent must
perform the three additional duties presented here.
Why is a Notice of Cancellation submitted along with an offer to purchase a Colorado property
that is in foreclosure?
a. To give notice of the seller's right to cancel the purchase contract.
b. To give notice that the homeowner may stop the foreclosure.
c. To give notice that the loan will be paid in full when the transaction closes.
d. To protect the broker and brokerage from liability if the buyer changes his mind. - CORRECT
ANSWER - a. To give notice of the seller's right to cancel the purchase contract.
The Notice of Cancellation is intended to give the seller the right to cancel the purchase contract
within a certain timeframe, indicated by the dates entered on the form. It's also the form the seller
will use to cancel if so desired.
In Colorado, if your property taxes for the year are more than $25 and you elect to pay them in
one payment, when is that one payment due?
a. April 30
b. August 1
c. February 15
d. June 15 - CORRECT ANSWER - a. April 30
In Colorado, property tax amounts greater than $25 may be paid in one payment due April 30. It
may also be paid in two payments, the first of which is due by the last day of February, and the
second of which is due by June 15.
Which form should accompany the completed Colorado contract form when offering to buy a
property that is in foreclosure?
a. Foreclosure Act Addendum
, b. Homeowner Cancellation Notice (Principal Language)
c. Homeowner Warning Notice
d. Notice of Cancellation - CORRECT ANSWER - c. Homeowner Warning Notice
The Homeowner Warning Notice is a required attachment to the Contract to Buy and Sell
(Colorado Foreclosure Protection Act) which notifies the seller of a three-day right to cancel.
A Colorado buyer reviews the seller's counteroffer and agrees provided the closing date is
changed. What is the BEST course of action to respond?
a. The buyer's agent should complete a new CBS that reflects the seller's counterproposal but
changes the closing date to reflect buyer's proposed date.
b. The buyer's agent should verbally ask the seller's agent to send over a new CBS.
c. The buyer should return the Counterproposal form back to the seller and ask them to complete
a new Counterproposal with the closing change.
d. The buyer should sign the seller's Counterproposal form and include a separate signed
amendment with the change to the closing date. - CORRECT ANSWER - a. The buyer's
agent should complete a new CBS that reflects the seller's counterproposal but changes the
closing date to reflect buyer's proposed date.
Although you could complete a new Counterproposal form to counter the seller's counter offer,
this might get confusing. It's a better practice to complete a new CBS that reflects all the terms
previously agreed to, plus the change the client wants.
Which clause prevents buyers or tenants from reaching an agreement with a seller or landlord on
a property and then discarding their brokers so that neither party has to pay a broker
commission?
a. Habendum
b. Holdover Period (Broker Protection)
c. Seisin (Buyer Fraud Cease and Desist)
d. "Weasel" Prevention - CORRECT ANSWER - b. Holdover Period (Broker Protection)
