, Question 1
A Washington real estate firm's designated broker implements a policy
requiring all affiliated licensees to represent only buyers and to disclose this in
writing at first contact. A licensee under this policy shows a listing to a
prospective buyer but fails to provide the written disclosure until after the
buyer submits an offer. Under Washington's agency disclosure requirements,
what is the legal consequence?
A. The licensee has violated the disclosure timing requirement, and the
buyer may rescind the offer without penalty.
B. The designated broker's policy is permissible, but the licensee's delay
in disclosure constitutes a violation subject to disciplinary action.
C. The licensee's failure is excused because the buyer was not harmed and
the disclosure was eventually provided.
D. The firm's policy is invalid because Washington law requires all firms
to offer both buyer and seller agency.
Correct Answer: B - The designated broker's policy is
permissible, but the licensee's delay in disclosure constitutes a
violation subject to disciplinary action.
RATIONALE
Washington law (RCW 18.86.030) requires the agency disclosure to
be provided at the first substantive contact, not after an offer. The
designated broker may set a policy limiting representation, but the
licensee's delayed disclosure violates the timing requirement and can
lead to disciplinary action by the DOL. Option A is incorrect because
rescission is not an automatic remedy under the statute; Option C is
wrong because harm is not an element for the violation; Option D is
false as firms are not required to offer both types of agency.
Page 2
, Question 2
A seller lists a property with a broker for $500,000. The listing agreement
includes a clause allowing the broker to accept a full-price offer from a buyer
who is not ready, willing, and able to complete the purchase. The broker
procures such an offer, but the seller refuses to sell. In Washington, is the
broker entitled to a commission?
A. Yes, because the broker produced an offer at the listed price.
B. No, because the buyer was not ready, willing, and able to perform.
C. Yes, if the broker acted in good faith and the seller's refusal was
unreasonable.
D. No, unless the listing agreement specifically defines ready, willing,
and able.
Correct Answer: B - No, because the buyer was not ready, willing,
and able to perform.
RATIONALE
In Washington, a broker earns a commission when they produce a
buyer who is ready, willing, and able to purchase on the seller's terms.
If the buyer is not ready, willing, and able, the broker has not fulfilled
the condition, and no commission is owed. The clause mentioned does
not change this fundamental requirement; it might even reinforce it by
highlighting the need for a ready, willing, and able buyer. Options A
and C are incorrect because mere production of an offer or good faith
does not suffice; Option D is wrong because the legal standard exists
regardless of specific definition in the agreement.
Question 3
A Washington lender offers a 30-year fixed-rate mortgage with an interest rate
of 6.5% and 2 discount points. The borrower pays the points upfront. Which
statement accurately describes the effect of the points on the loan's annual
percentage rate (APR)?
A. The APR will be lower than the nominal interest rate because points
Page 3
, reduce the effective cost of borrowing.
B. The APR will be higher than the nominal interest rate because points
increase the effective cost of borrowing.
C. The APR will equal the nominal interest rate because points are a
one-time fee, not interest.
D. The APR will be unaffected because points are paid to the lender, not
a third party.
Correct Answer: B - The APR will be higher than the nominal
interest rate because points increase the effective cost of
borrowing.
RATIONALE
Discount points are prepaid interest, which increase the lender's yield
and the effective cost of borrowing. Under the Truth in Lending Act,
the APR includes points and therefore exceeds the nominal interest
rate when points are charged. Options A and C are incorrect because
points raise the APR; Option D is wrong because points are included
in the APR calculation regardless of recipient.
Question 4
A developer owns a 10-acre parcel in unincorporated King County zoned RA-5
(one dwelling unit per 5 acres). The developer wants to build a 20-unit
townhome project. Which of the following strategies would most likely allow
the project to proceed under Washington's Growth Management Act (GMA)?
A. Apply for a variance to the zoning code based on the project's
affordable housing component.
B. Seek a rezone of the parcel to a higher density designation through the
county's comprehensive plan amendment process.
C. Argue that the GMA preempts local zoning and allows higher density
near urban growth areas.
D. Request a conditional use permit to allow a planned unit development
(PUD) at higher density.
Page 4
A Washington real estate firm's designated broker implements a policy
requiring all affiliated licensees to represent only buyers and to disclose this in
writing at first contact. A licensee under this policy shows a listing to a
prospective buyer but fails to provide the written disclosure until after the
buyer submits an offer. Under Washington's agency disclosure requirements,
what is the legal consequence?
A. The licensee has violated the disclosure timing requirement, and the
buyer may rescind the offer without penalty.
B. The designated broker's policy is permissible, but the licensee's delay
in disclosure constitutes a violation subject to disciplinary action.
C. The licensee's failure is excused because the buyer was not harmed and
the disclosure was eventually provided.
D. The firm's policy is invalid because Washington law requires all firms
to offer both buyer and seller agency.
Correct Answer: B - The designated broker's policy is
permissible, but the licensee's delay in disclosure constitutes a
violation subject to disciplinary action.
RATIONALE
Washington law (RCW 18.86.030) requires the agency disclosure to
be provided at the first substantive contact, not after an offer. The
designated broker may set a policy limiting representation, but the
licensee's delayed disclosure violates the timing requirement and can
lead to disciplinary action by the DOL. Option A is incorrect because
rescission is not an automatic remedy under the statute; Option C is
wrong because harm is not an element for the violation; Option D is
false as firms are not required to offer both types of agency.
Page 2
, Question 2
A seller lists a property with a broker for $500,000. The listing agreement
includes a clause allowing the broker to accept a full-price offer from a buyer
who is not ready, willing, and able to complete the purchase. The broker
procures such an offer, but the seller refuses to sell. In Washington, is the
broker entitled to a commission?
A. Yes, because the broker produced an offer at the listed price.
B. No, because the buyer was not ready, willing, and able to perform.
C. Yes, if the broker acted in good faith and the seller's refusal was
unreasonable.
D. No, unless the listing agreement specifically defines ready, willing,
and able.
Correct Answer: B - No, because the buyer was not ready, willing,
and able to perform.
RATIONALE
In Washington, a broker earns a commission when they produce a
buyer who is ready, willing, and able to purchase on the seller's terms.
If the buyer is not ready, willing, and able, the broker has not fulfilled
the condition, and no commission is owed. The clause mentioned does
not change this fundamental requirement; it might even reinforce it by
highlighting the need for a ready, willing, and able buyer. Options A
and C are incorrect because mere production of an offer or good faith
does not suffice; Option D is wrong because the legal standard exists
regardless of specific definition in the agreement.
Question 3
A Washington lender offers a 30-year fixed-rate mortgage with an interest rate
of 6.5% and 2 discount points. The borrower pays the points upfront. Which
statement accurately describes the effect of the points on the loan's annual
percentage rate (APR)?
A. The APR will be lower than the nominal interest rate because points
Page 3
, reduce the effective cost of borrowing.
B. The APR will be higher than the nominal interest rate because points
increase the effective cost of borrowing.
C. The APR will equal the nominal interest rate because points are a
one-time fee, not interest.
D. The APR will be unaffected because points are paid to the lender, not
a third party.
Correct Answer: B - The APR will be higher than the nominal
interest rate because points increase the effective cost of
borrowing.
RATIONALE
Discount points are prepaid interest, which increase the lender's yield
and the effective cost of borrowing. Under the Truth in Lending Act,
the APR includes points and therefore exceeds the nominal interest
rate when points are charged. Options A and C are incorrect because
points raise the APR; Option D is wrong because points are included
in the APR calculation regardless of recipient.
Question 4
A developer owns a 10-acre parcel in unincorporated King County zoned RA-5
(one dwelling unit per 5 acres). The developer wants to build a 20-unit
townhome project. Which of the following strategies would most likely allow
the project to proceed under Washington's Growth Management Act (GMA)?
A. Apply for a variance to the zoning code based on the project's
affordable housing component.
B. Seek a rezone of the parcel to a higher density designation through the
county's comprehensive plan amendment process.
C. Argue that the GMA preempts local zoning and allows higher density
near urban growth areas.
D. Request a conditional use permit to allow a planned unit development
(PUD) at higher density.
Page 4
