BSRV4601 Fundamentals of Real Estate: Midterm Exam (Units
1-7) - Questions with Correct Answers
100 questions
1. Which statement about the REA and REINZ is correct?
A. The REA regulates; REINZ is a voluntary industry body
B. REINZ regulates; the REA is voluntary
C. Both are courts
D. Both register titles
Correct Answer: A. The REA regulates; REINZ is a voluntary industry body
Rationale: Distinct roles.
2. A branch manager is responsible for:
A. Owning all property sold
B. Registering titles
C. Managing a branch office and supervising salespersons
D. Valuing land
Correct Answer: C. Managing a branch office and supervising salespersons
Rationale: Supervisory role.
3. A licensee who receives a complaint should first:
A. Ignore it
B. Delete records
C. Threaten legal action
D. Follow the agency's in-house complaints process and inform the complainant they can complain
to the REA
Correct Answer: D. Follow the agency's in-house complaints process and inform the
complainant they can complain to the REA
Rationale: Agencies must have complaints procedures.
4. Licensees working in rural or commercial real estate:
A. Are exempt
B. Need no licence
C. Are still subject to the Act and rules
D. Only follow REINZ guidelines
Correct Answer: C. Are still subject to the Act and rules
Rationale: Applies across sectors.
5. The three classes of licence under the Real Estate Agents Act 2008 are:
A. Broker, dealer and agent
B. Agent, branch manager and salesperson
C. Agent, valuer and conveyancer
D. Salesperson, auctioneer and manager
Correct Answer: B. Agent, branch manager and salesperson
Rationale: Each has different responsibilities.
,6. If a member of the public is unhappy with a licensee, they may complain to the REA:
A. Only through REINZ
B. Directly, even without first using the agency's process
C. Only through the courts
D. Never
Correct Answer: B. Directly, even without first using the agency's process
Rationale: Agencies' process is encouraged but not mandatory first.
7. Licensees must have their licence number:
A. Kept secret
B. Only on the trust account
C. Only on titles
D. Available and disclosed as required in dealings and advertising
Correct Answer: D. Available and disclosed as required in dealings and advertising
Rationale: Identification.
8. Real estate agency work does NOT include:
A. Listing a home for sale
B. Negotiating a sale for a vendor
C. A lawyer doing conveyancing work in the course of legal practice
D. Marketing a property for reward
Correct Answer: C. A lawyer doing conveyancing work in the course of legal practice
Rationale: Certain professionals are exempt.
9. Real estate licensees must hold a qualification such as:
A. A law degree
B. A valuation diploma
C. The New Zealand Certificate in Real Estate (Salesperson) (Level 4)
D. No qualification
Correct Answer: C. The New Zealand Certificate in Real Estate (Salesperson) (Level 4)
Rationale: Entry requirement for salespersons.
10. If a licensee's conduct may also be a criminal offence, the REA:
A. Must ignore it
B. Can imprison the licensee
C. May refer the matter to other agencies such as the police
D. Can cancel the sale automatically
Correct Answer: C. May refer the matter to other agencies such as the police
Rationale: Separate jurisdictions.
11. Charges of misconduct against a licensee are heard by the:
A. Disputes Tribunal
B. Real Estate Agents Disciplinary Tribunal
C. Tenancy Tribunal
D. M■ori Land Court
Correct Answer: B. Real Estate Agents Disciplinary Tribunal
Rationale: The Tribunal hears serious matters.
, 12. A person who is an undischarged bankrupt applying for a licence:
A. Is automatically licensed
B. May be refused because they may not be a fit and proper person
C. Must be licensed as an agent
D. Needs only a reference
Correct Answer: B. May be refused because they may not be a fit and proper person
Rationale: Fit and proper person test.
13. An agent's trust account records are subject to:
A. Audit requirements
B. No oversight
C. Only the vendor's review
D. LINZ approval
Correct Answer: A. Audit requirements
Rationale: Protects client money.
14. A licensee who also works as a mortgage adviser must:
A. Hide the second role
B. Manage and disclose any conflicts of interest
C. Charge double fees without disclosure
D. Stop being licensed
Correct Answer: B. Manage and disclose any conflicts of interest
Rationale: Conflict management.
15. Proper supervision of salespersons is intended to ensure:
A. Agency work is done competently and in line with the Act and rules
B. Higher commissions
C. Faster settlements only
D. Fewer listings
Correct Answer: A. Agency work is done competently and in line with the Act and rules
Rationale: Consumer protection.
16. When a vendor wants to withdraw from a signed unconditional agreement, the licensee
should:
A. Tear up the agreement
B. Advise the vendor to seek legal advice
C. Tell the buyer to forget it
D. Return the deposit without authority
Correct Answer: B. Advise the vendor to seek legal advice
Rationale: Legal issue.
17. In a multi-offer situation, a licensee should:
A. Disclose each buyer's price to the others
B. Accept the first offer automatically
C. Follow a fair process and tell all buyers involved that it is a multi-offer
D. Favour friends
Correct Answer: C. Follow a fair process and tell all buyers involved that it is a multi-offer
Rationale: Fair dealing in multi-offers.
1-7) - Questions with Correct Answers
100 questions
1. Which statement about the REA and REINZ is correct?
A. The REA regulates; REINZ is a voluntary industry body
B. REINZ regulates; the REA is voluntary
C. Both are courts
D. Both register titles
Correct Answer: A. The REA regulates; REINZ is a voluntary industry body
Rationale: Distinct roles.
2. A branch manager is responsible for:
A. Owning all property sold
B. Registering titles
C. Managing a branch office and supervising salespersons
D. Valuing land
Correct Answer: C. Managing a branch office and supervising salespersons
Rationale: Supervisory role.
3. A licensee who receives a complaint should first:
A. Ignore it
B. Delete records
C. Threaten legal action
D. Follow the agency's in-house complaints process and inform the complainant they can complain
to the REA
Correct Answer: D. Follow the agency's in-house complaints process and inform the
complainant they can complain to the REA
Rationale: Agencies must have complaints procedures.
4. Licensees working in rural or commercial real estate:
A. Are exempt
B. Need no licence
C. Are still subject to the Act and rules
D. Only follow REINZ guidelines
Correct Answer: C. Are still subject to the Act and rules
Rationale: Applies across sectors.
5. The three classes of licence under the Real Estate Agents Act 2008 are:
A. Broker, dealer and agent
B. Agent, branch manager and salesperson
C. Agent, valuer and conveyancer
D. Salesperson, auctioneer and manager
Correct Answer: B. Agent, branch manager and salesperson
Rationale: Each has different responsibilities.
,6. If a member of the public is unhappy with a licensee, they may complain to the REA:
A. Only through REINZ
B. Directly, even without first using the agency's process
C. Only through the courts
D. Never
Correct Answer: B. Directly, even without first using the agency's process
Rationale: Agencies' process is encouraged but not mandatory first.
7. Licensees must have their licence number:
A. Kept secret
B. Only on the trust account
C. Only on titles
D. Available and disclosed as required in dealings and advertising
Correct Answer: D. Available and disclosed as required in dealings and advertising
Rationale: Identification.
8. Real estate agency work does NOT include:
A. Listing a home for sale
B. Negotiating a sale for a vendor
C. A lawyer doing conveyancing work in the course of legal practice
D. Marketing a property for reward
Correct Answer: C. A lawyer doing conveyancing work in the course of legal practice
Rationale: Certain professionals are exempt.
9. Real estate licensees must hold a qualification such as:
A. A law degree
B. A valuation diploma
C. The New Zealand Certificate in Real Estate (Salesperson) (Level 4)
D. No qualification
Correct Answer: C. The New Zealand Certificate in Real Estate (Salesperson) (Level 4)
Rationale: Entry requirement for salespersons.
10. If a licensee's conduct may also be a criminal offence, the REA:
A. Must ignore it
B. Can imprison the licensee
C. May refer the matter to other agencies such as the police
D. Can cancel the sale automatically
Correct Answer: C. May refer the matter to other agencies such as the police
Rationale: Separate jurisdictions.
11. Charges of misconduct against a licensee are heard by the:
A. Disputes Tribunal
B. Real Estate Agents Disciplinary Tribunal
C. Tenancy Tribunal
D. M■ori Land Court
Correct Answer: B. Real Estate Agents Disciplinary Tribunal
Rationale: The Tribunal hears serious matters.
, 12. A person who is an undischarged bankrupt applying for a licence:
A. Is automatically licensed
B. May be refused because they may not be a fit and proper person
C. Must be licensed as an agent
D. Needs only a reference
Correct Answer: B. May be refused because they may not be a fit and proper person
Rationale: Fit and proper person test.
13. An agent's trust account records are subject to:
A. Audit requirements
B. No oversight
C. Only the vendor's review
D. LINZ approval
Correct Answer: A. Audit requirements
Rationale: Protects client money.
14. A licensee who also works as a mortgage adviser must:
A. Hide the second role
B. Manage and disclose any conflicts of interest
C. Charge double fees without disclosure
D. Stop being licensed
Correct Answer: B. Manage and disclose any conflicts of interest
Rationale: Conflict management.
15. Proper supervision of salespersons is intended to ensure:
A. Agency work is done competently and in line with the Act and rules
B. Higher commissions
C. Faster settlements only
D. Fewer listings
Correct Answer: A. Agency work is done competently and in line with the Act and rules
Rationale: Consumer protection.
16. When a vendor wants to withdraw from a signed unconditional agreement, the licensee
should:
A. Tear up the agreement
B. Advise the vendor to seek legal advice
C. Tell the buyer to forget it
D. Return the deposit without authority
Correct Answer: B. Advise the vendor to seek legal advice
Rationale: Legal issue.
17. In a multi-offer situation, a licensee should:
A. Disclose each buyer's price to the others
B. Accept the first offer automatically
C. Follow a fair process and tell all buyers involved that it is a multi-offer
D. Favour friends
Correct Answer: C. Follow a fair process and tell all buyers involved that it is a multi-offer
Rationale: Fair dealing in multi-offers.
