BSRV4601 Fundamentals of Real Estate: Exam 3 - Questions
with Correct Answers
100 questions
1. The independent government agency that regulates the New Zealand real estate profession is
the:
A. Commerce Commission
B. Land Information New Zealand
C. Real Estate Institute of New Zealand
D. Real Estate Authority (Te Mana Papawhenua)
Correct Answer: D. Real Estate Authority (Te Mana Papawhenua)
Rationale: The REA licenses and handles complaints.
2. A Complaints Assessment Committee may decide to:
A. Take no further action, find unsatisfactory conduct, or refer a misconduct charge to the Tribunal
B. Imprison a licensee
C. Transfer land
D. Set the sale price
Correct Answer: A. Take no further action, find unsatisfactory conduct, or refer a misconduct
charge to the Tribunal
Rationale: Range of outcomes.
3. Which is NOT a function of the REA?
A. Registering land titles
B. Issuing licences
C. Handling complaints
D. Educating consumers
Correct Answer: A. Registering land titles
Rationale: LINZ registers titles.
4. Complaints about licensees are first considered by:
A. A Complaints Assessment Committee
B. The High Court
C. The Commerce Commission
D. LINZ
Correct Answer: A. A Complaints Assessment Committee
Rationale: CACs are established by the REA.
5. A licensed salesperson must:
A. Operate their own trust account
B. Work without supervision
C. Be properly supervised by an agent or branch manager
D. Hold an agent's licence
Correct Answer: C. Be properly supervised by an agent or branch manager
Rationale: Salespersons work under supervision.
,6. A key purpose of the Real Estate Agents Act 2008 is to:
A. Set house prices
B. Register land titles
C. Collect rates
D. Promote and protect the interests of consumers buying and selling real estate
Correct Answer: D. Promote and protect the interests of consumers buying and selling real
estate
Rationale: Consumer protection and public confidence in the industry.
7. A key consumer protection feature of the regime is that clients' deposit money is:
A. Paid directly to the salesperson
B. Held in a trust account
C. Kept by the buyer
D. Paid to REINZ
Correct Answer: B. Held in a trust account
Rationale: Trust account protections.
8. The REA provides consumer information through:
A. Newspaper advertisements only
B. Land titles
C. Bank statements
D. Its settled.govt.nz website and approved guides
Correct Answer: D. Its settled.govt.nz website and approved guides
Rationale: settled.govt.nz helps buyers and sellers.
9. A licensee is not required to discover hidden defects, but must:
A. Repair all defects
B. Hide defects if the vendor asks
C. Disclose known defects to a customer
D. Disclose only to the vendor
Correct Answer: C. Disclose known defects to a customer
Rationale: Known defects must be disclosed.
10. A licensee must not disclose the details of one buyer's offer to another buyer because:
A. It speeds the sale
B. It is required
C. It would be unfair and breach confidentiality
D. It increases price legally
Correct Answer: C. It would be unfair and breach confidentiality
Rationale: Fairness.
11. A conflict of interest arises when:
A. A licensee's personal interests conflict with duties to the client
B. A buyer makes an offer
C. A property is listed
D. A title is searched
Correct Answer: A. A licensee's personal interests conflict with duties to the client
Rationale: Must be disclosed and managed.
, 12. Accounting for money received on behalf of the client is part of the duty to:
A. Advertise
B. Discriminate
C. Withhold
D. Account
Correct Answer: D. Account
Rationale: Proper handling of funds.
13. Disclosing a vendor's lowest acceptable price to buyers without authority would breach:
A. No rule
B. The duty of confidentiality and loyalty to the client
C. The Building Act
D. The Unit Titles Act
Correct Answer: B. The duty of confidentiality and loyalty to the client
Rationale: Undermines client interests.
14. A licensee must not engage in conduct likely to:
A. Sell a property quickly
B. Increase competition
C. Gain a listing
D. Bring the industry into disrepute
Correct Answer: D. Bring the industry into disrepute
Rationale: Professional standards.
15. A licensee must not engage in conduct that would reasonably be regarded by agents of good
standing as:
A. Efficient
B. Disgraceful
C. Successful
D. Creative
Correct Answer: B. Disgraceful
Rationale: Misconduct test.
16. A licensee must not represent that a property has a code compliance certificate when:
A. The LIM confirms it
B. The council issued it
C. The vendor produced it
D. They have not verified it or know it does not
Correct Answer: D. They have not verified it or know it does not
Rationale: Verification.
17. If a licensee buys a client's property without required consent and valuation, the licensee
may:
A. Have to account to the client for any profit and face disciplinary action
B. Keep any profit freely
C. Be rewarded
D. Avoid consequences
Correct Answer: A. Have to account to the client for any profit and face disciplinary action
Rationale: Strong consumer protection.
with Correct Answers
100 questions
1. The independent government agency that regulates the New Zealand real estate profession is
the:
A. Commerce Commission
B. Land Information New Zealand
C. Real Estate Institute of New Zealand
D. Real Estate Authority (Te Mana Papawhenua)
Correct Answer: D. Real Estate Authority (Te Mana Papawhenua)
Rationale: The REA licenses and handles complaints.
2. A Complaints Assessment Committee may decide to:
A. Take no further action, find unsatisfactory conduct, or refer a misconduct charge to the Tribunal
B. Imprison a licensee
C. Transfer land
D. Set the sale price
Correct Answer: A. Take no further action, find unsatisfactory conduct, or refer a misconduct
charge to the Tribunal
Rationale: Range of outcomes.
3. Which is NOT a function of the REA?
A. Registering land titles
B. Issuing licences
C. Handling complaints
D. Educating consumers
Correct Answer: A. Registering land titles
Rationale: LINZ registers titles.
4. Complaints about licensees are first considered by:
A. A Complaints Assessment Committee
B. The High Court
C. The Commerce Commission
D. LINZ
Correct Answer: A. A Complaints Assessment Committee
Rationale: CACs are established by the REA.
5. A licensed salesperson must:
A. Operate their own trust account
B. Work without supervision
C. Be properly supervised by an agent or branch manager
D. Hold an agent's licence
Correct Answer: C. Be properly supervised by an agent or branch manager
Rationale: Salespersons work under supervision.
,6. A key purpose of the Real Estate Agents Act 2008 is to:
A. Set house prices
B. Register land titles
C. Collect rates
D. Promote and protect the interests of consumers buying and selling real estate
Correct Answer: D. Promote and protect the interests of consumers buying and selling real
estate
Rationale: Consumer protection and public confidence in the industry.
7. A key consumer protection feature of the regime is that clients' deposit money is:
A. Paid directly to the salesperson
B. Held in a trust account
C. Kept by the buyer
D. Paid to REINZ
Correct Answer: B. Held in a trust account
Rationale: Trust account protections.
8. The REA provides consumer information through:
A. Newspaper advertisements only
B. Land titles
C. Bank statements
D. Its settled.govt.nz website and approved guides
Correct Answer: D. Its settled.govt.nz website and approved guides
Rationale: settled.govt.nz helps buyers and sellers.
9. A licensee is not required to discover hidden defects, but must:
A. Repair all defects
B. Hide defects if the vendor asks
C. Disclose known defects to a customer
D. Disclose only to the vendor
Correct Answer: C. Disclose known defects to a customer
Rationale: Known defects must be disclosed.
10. A licensee must not disclose the details of one buyer's offer to another buyer because:
A. It speeds the sale
B. It is required
C. It would be unfair and breach confidentiality
D. It increases price legally
Correct Answer: C. It would be unfair and breach confidentiality
Rationale: Fairness.
11. A conflict of interest arises when:
A. A licensee's personal interests conflict with duties to the client
B. A buyer makes an offer
C. A property is listed
D. A title is searched
Correct Answer: A. A licensee's personal interests conflict with duties to the client
Rationale: Must be disclosed and managed.
, 12. Accounting for money received on behalf of the client is part of the duty to:
A. Advertise
B. Discriminate
C. Withhold
D. Account
Correct Answer: D. Account
Rationale: Proper handling of funds.
13. Disclosing a vendor's lowest acceptable price to buyers without authority would breach:
A. No rule
B. The duty of confidentiality and loyalty to the client
C. The Building Act
D. The Unit Titles Act
Correct Answer: B. The duty of confidentiality and loyalty to the client
Rationale: Undermines client interests.
14. A licensee must not engage in conduct likely to:
A. Sell a property quickly
B. Increase competition
C. Gain a listing
D. Bring the industry into disrepute
Correct Answer: D. Bring the industry into disrepute
Rationale: Professional standards.
15. A licensee must not engage in conduct that would reasonably be regarded by agents of good
standing as:
A. Efficient
B. Disgraceful
C. Successful
D. Creative
Correct Answer: B. Disgraceful
Rationale: Misconduct test.
16. A licensee must not represent that a property has a code compliance certificate when:
A. The LIM confirms it
B. The council issued it
C. The vendor produced it
D. They have not verified it or know it does not
Correct Answer: D. They have not verified it or know it does not
Rationale: Verification.
17. If a licensee buys a client's property without required consent and valuation, the licensee
may:
A. Have to account to the client for any profit and face disciplinary action
B. Keep any profit freely
C. Be rewarded
D. Avoid consequences
Correct Answer: A. Have to account to the client for any profit and face disciplinary action
Rationale: Strong consumer protection.
