1
Colibri Real Estate Final Exam Study Review
Questions with Answers (100% Correct
Answers)
Joe Alpha of ABC Real Estate Corp. has been very successful in buying houses,
fixing them up, and reselling them. He put an advertisement in the local
newspaper seeking investors to help him purchase property and pay for
renovations, promising an excellent return on investment when the properties
sold. Do you think that Joe needs a securities broker-dealer license? Answer:
No
Ellie is very regimented. She likes to be in the office by 8 a.m. and be home by
5:30 p.m. She likes that same precision in her monthly budget—she wants to
know what's coming in and how much she can expect to put into her IRA. She
is a good candidate for a career in real estate sales. Answer: False
Phil, a real estate licensee, considers going to work for JJ Realty. Broker Jana
James offers him a 60%-40% split on commission. If JJ Realty takes in $5,000
total commission on Phil's first sale, what is Phil's split? Answer: $3,000
A real estate licensee is more likely to be an employee of his broker. Answer:
False
If a broker supervises the real estate activities of an associated licensee, that
licensee CANNOT be considered an independent contractor. Answer: False
A real estate licensee who is an independent contractor is paid based on
successful real estate transactions, not on hours worked. Answer: True
Generically speaking, a person who, for a fee, sells, lists, leases, exchanges,
negotiates, or otherwise deals in the real estate of others or represents publicly
that they do so. Answer: Broker
A business that serves as an intermediary between buyers and sellers and/or
lessees and lessors of real estate. Answer: Brokerage
,2
Insurance that protects real estate licensees from liability due to mistakes or
negligence. It does not cover claims related to fraud or discrimination. Answer:
Errors and Omissions Insurance (E&O)
Under common law, a person who contracts to do a job for another but
maintains control over how the task will be carried out, rather than following
detailed instructions. Answer: Independent Contractor
A person licensed under state law to practice real estate. Answer: Licensee
Any real estate licensee who is a member of the National Association of
REALTORS® (NAR) and his or her affiliated state/local boards. Only
members may use the term REALTOR® as it's a registered trademark of NAR.
Answer: REALTOR®
Generically speaking, a real estate licensee agent who is associated with a
broker and as such may perform most of the acts a broker can on behalf of the
broker. Also called Sales Associate. Answer: Salesperson
A real estate licensee who is treated as an independent contractor for tax
purposes when specified conditions are met: proper licensing; compensation
based on sales; and services performed under a written contract. Answer:
Statutory Nonemployee
In which field do the majority of new licensees begin their work? Answer:
Residential Sales
Which is NOT an advantage to a career in real estate sales? Answer: the option
to double commission percentages during slow months
Licensee Louie has worked for Rick, the broker at ABC Realty, for 20 years.
Louie has been accused of negligence for not disclosing a material fact to a
buyer. Which statement is TRUE? Answer: Rick can be held liable for Louie's
misconduct.
At the end of the year, what tax form will an independent contractor receive to
document their income? Answer: 1099-MISC
,3
Who could a real estate licensee represent in a real estate transaction? Select all
correct responses. Answer: Buyers
Landlords
Sellers
Tenants
All are correct
Steven just successfully finished his required real estate prelicensing course.
Which statement is TRUE? Answer: Once he joins the NAR, he can call
himself a REALTOR®.
In order to be considered an independent contractor, a licensee's compensation
must be Answer: based on sales produced, not hours worked.
For a real estate licensee, which is NOT a characteristic that indicates they are
an independent contractor? Answer: The licensee must be paid for hours spent
in the brokerage office.
What are the tasks for which a property manager is typically responsible? Select
all correct responses. Answer: Collecting Rents
Leasing Units
Maintaining Tenant Relationships
Managing the Maintenance and Repair of the Building
All are correct
The theory of supply and demand states that when supply exceeds demand,
prices will fall. Answer: True
, 4
Real estate cycles tend to lag somewhat behind general business cycles in
response to supply and demand. Answer: True
As the supply of homes in the area rises, what would you expect to happen to
home prices in the short term? Answer: Home prices will fall slightly from their
high points.
When Widget moves out, what type of market is Big City likely to experience?
Answer: Buyer's Market
Cost inflation can affect new home prices as builders pass along their higher
costs for labor and materials. Answer: True
Higher taxes tend to encourage spending and investing. Answer: False
P-E-G-S Answer: Physical
Economic
Government
Social
A situation in the housing market when there are many homes available for
sale, but few buyers. Answer: Buyer's Market
The interest rate that people or businesses must pay to use another's money for
their own purposes. Answer: Cost of Money
The main business or industry in an area that supports and sustains the
community. Answer: Economic Base
An increase in the cost of goods or services or too many people wanting too
few goods. Answer: Inflation
A characteristic of real property; each piece of land, each building, and each
house is a unique piece of real estate. Also called Uniqueness or Heterogeneity.
Answer: Non-Homogeneity
Colibri Real Estate Final Exam Study Review
Questions with Answers (100% Correct
Answers)
Joe Alpha of ABC Real Estate Corp. has been very successful in buying houses,
fixing them up, and reselling them. He put an advertisement in the local
newspaper seeking investors to help him purchase property and pay for
renovations, promising an excellent return on investment when the properties
sold. Do you think that Joe needs a securities broker-dealer license? Answer:
No
Ellie is very regimented. She likes to be in the office by 8 a.m. and be home by
5:30 p.m. She likes that same precision in her monthly budget—she wants to
know what's coming in and how much she can expect to put into her IRA. She
is a good candidate for a career in real estate sales. Answer: False
Phil, a real estate licensee, considers going to work for JJ Realty. Broker Jana
James offers him a 60%-40% split on commission. If JJ Realty takes in $5,000
total commission on Phil's first sale, what is Phil's split? Answer: $3,000
A real estate licensee is more likely to be an employee of his broker. Answer:
False
If a broker supervises the real estate activities of an associated licensee, that
licensee CANNOT be considered an independent contractor. Answer: False
A real estate licensee who is an independent contractor is paid based on
successful real estate transactions, not on hours worked. Answer: True
Generically speaking, a person who, for a fee, sells, lists, leases, exchanges,
negotiates, or otherwise deals in the real estate of others or represents publicly
that they do so. Answer: Broker
A business that serves as an intermediary between buyers and sellers and/or
lessees and lessors of real estate. Answer: Brokerage
,2
Insurance that protects real estate licensees from liability due to mistakes or
negligence. It does not cover claims related to fraud or discrimination. Answer:
Errors and Omissions Insurance (E&O)
Under common law, a person who contracts to do a job for another but
maintains control over how the task will be carried out, rather than following
detailed instructions. Answer: Independent Contractor
A person licensed under state law to practice real estate. Answer: Licensee
Any real estate licensee who is a member of the National Association of
REALTORS® (NAR) and his or her affiliated state/local boards. Only
members may use the term REALTOR® as it's a registered trademark of NAR.
Answer: REALTOR®
Generically speaking, a real estate licensee agent who is associated with a
broker and as such may perform most of the acts a broker can on behalf of the
broker. Also called Sales Associate. Answer: Salesperson
A real estate licensee who is treated as an independent contractor for tax
purposes when specified conditions are met: proper licensing; compensation
based on sales; and services performed under a written contract. Answer:
Statutory Nonemployee
In which field do the majority of new licensees begin their work? Answer:
Residential Sales
Which is NOT an advantage to a career in real estate sales? Answer: the option
to double commission percentages during slow months
Licensee Louie has worked for Rick, the broker at ABC Realty, for 20 years.
Louie has been accused of negligence for not disclosing a material fact to a
buyer. Which statement is TRUE? Answer: Rick can be held liable for Louie's
misconduct.
At the end of the year, what tax form will an independent contractor receive to
document their income? Answer: 1099-MISC
,3
Who could a real estate licensee represent in a real estate transaction? Select all
correct responses. Answer: Buyers
Landlords
Sellers
Tenants
All are correct
Steven just successfully finished his required real estate prelicensing course.
Which statement is TRUE? Answer: Once he joins the NAR, he can call
himself a REALTOR®.
In order to be considered an independent contractor, a licensee's compensation
must be Answer: based on sales produced, not hours worked.
For a real estate licensee, which is NOT a characteristic that indicates they are
an independent contractor? Answer: The licensee must be paid for hours spent
in the brokerage office.
What are the tasks for which a property manager is typically responsible? Select
all correct responses. Answer: Collecting Rents
Leasing Units
Maintaining Tenant Relationships
Managing the Maintenance and Repair of the Building
All are correct
The theory of supply and demand states that when supply exceeds demand,
prices will fall. Answer: True
, 4
Real estate cycles tend to lag somewhat behind general business cycles in
response to supply and demand. Answer: True
As the supply of homes in the area rises, what would you expect to happen to
home prices in the short term? Answer: Home prices will fall slightly from their
high points.
When Widget moves out, what type of market is Big City likely to experience?
Answer: Buyer's Market
Cost inflation can affect new home prices as builders pass along their higher
costs for labor and materials. Answer: True
Higher taxes tend to encourage spending and investing. Answer: False
P-E-G-S Answer: Physical
Economic
Government
Social
A situation in the housing market when there are many homes available for
sale, but few buyers. Answer: Buyer's Market
The interest rate that people or businesses must pay to use another's money for
their own purposes. Answer: Cost of Money
The main business or industry in an area that supports and sustains the
community. Answer: Economic Base
An increase in the cost of goods or services or too many people wanting too
few goods. Answer: Inflation
A characteristic of real property; each piece of land, each building, and each
house is a unique piece of real estate. Also called Uniqueness or Heterogeneity.
Answer: Non-Homogeneity
