When holding an open house for a seller, a prospective buyer shows real interest and asks detailed questions of the broker

Colorado Contracts and Regulations

1. When holding an open house for a seller, a prospective buyer shows real interest and asks detailed questions of the broker. The first question the broker should ask is:

A. Have you ever purchased a home before?

B. Will you have to sell another home in order to purchase this one?

C. Do you have a written, unexpired contract that grants to another licensee an exclusive right-to-buy?

D. What would it take to get you to make an offer on this home today?

2. If a licensee desires to reinstate an expired real estate broker license 18 months after expiration, the cost of the reinstated license will be:

A. the regular license fee plus a 25% penalty.

B. the regular fee plus a penalty equal to the regular 3 yr. license renewal fee.

C. the regular license fee.

D. a license cannot be reinstated that long after expiration.

3.A licensee who intends to purchase one of his own listings must:

A. continue to serve the seller-owner under the terms of the listing agreement.

B. renounce any right to a commission on the sale.

C. add the cost of his own commission to the purchase price.

D. the Commission to place his license on inactive status.

4.When a promissory note is received as earnest money, the seller must be informed by identifying the note in the contract and _____ .

A. attaching a “Disclosure of Promissory Note” to the contract.

B. recording the note in the county office.

C. giving the seller a post-dated check drawn on the buyer's account.

D. stating the due date in the contract or attaching a copy of the note.

5. In order for a broker to operate as a seller's limited agent, _____ .

A. the seller must check the transaction brokerage box on the Exclusive B. right to Sell form.

B. the broker must sign as a principal on the Exclusive Right to Sell form.

C.the seller must check the seller agency box on the Exclusive Right to Sell form.

D.the seller must give verbal permission to the broker to so act.

6.In Colorado, a broker must retain transaction records for Commission inspection for:

A.36 months.

B.48 months.

C.60 months.

D.72 months.

7.The commission-approved Square Footage Disclosure is used to:

A. show the square footage the broker obtained when measuring the house.

B. prove that the square footage measurement is accurate.

C. state that real estate agents do not measure square footage.

D. disclose the source, date, and standards used for any square footage represented.

8.Failure by either party to pay “cash at closing” at the time of closing under a Contract to Buy and Sell Real Estate shall:

A. render that party in default.

B. delay closing until the funds are available.

C. be prima facie evidence of broker’s failure to properly anticipate problems in the transaction.

D. automatically trigger the mediation clause of the contract.

9.The listing period on a commercial property listing agreement:

A. must have a definite termination date.

B. be stated as “until sold.”

C. is not required (space may be left blank).

D. is set by state law.

10. Errors and Omissions insurance is:

required for every individual and entity licensee in the state.

optional for new licensees in the first year of their original license.

unnecessary in Colorado because of the commission's self-insurance program.

unnecessary and redundant in Colorado because of the Real Estate Recovery Fund.

10.Errors and Omissions insurance is:

A.required for every individual and entity licensee in the state.

B. optional for new licensees in the first year of their original license.

C. unnecessary in Colorado because of the commission's self-insurance program.

D. unnecessary and redundant in Colorado because of the Real Estate Recovery Fund.

11.Under the inspection resolution deadline clause in the Contract to Buy and Sell Real Estate, the contract terminates if the parties cannot agree in writing to settle the buyer’s objections:

A. immediately.

B..on or before the inspection resolution deadline.

C.on the day both parties receive the inspection report.

D.one day following seller receipt of buyer’s notice to terminate.

12.If the Colorado Real Estate Commission takes disciplinary action that is confirmed by an administrative law judge in a public hearing, a broker has how many days to file written objections to that disciplinary action before it becomes final?

A.10 days

B.20 days

C.30 days

D.60 days

13.Failure of an employing broker to renew his or her individual broker license prior to expiration:

A. has no effect on employed licensees.

B.automatically inactivates every employed broker’s license and creates a gap in everyone’s E&O coverage.

C. automatically generates a fine against every employed broker.

D. requires a $200 renewal penalty plus $10 for every licensee employed.

14.Of the following, which information should NOT be divulged in the presence of other brokers in the same office?

A buyer’s inability to qualify for a mortgage loan

B. seller couple’s decision to file for divorce

C. The list price of the property

D. That the basement leaks only during heavy rains

15.If a seller's broker rebates a portion of earned commission to his or her seller client, _____ .

A.it is NOT a violation of the license law.

B.it is always a violation of the license law.

C,it violates the license law unless the buyer gives permission.

D.it violates the license law unless an equal rebate is given to the buyer.

16.According to the Contract to Buy and Sell Real Estate, personal property is conveyed by the:

A.financing statement.

B.bill of sale or other applicable legal instrument.

C.deed of trust.

D.chattels security agreement.

17. The requirement for electronic or paperless transactions is that they must be:

A.generated on computers using Windows® operating systems.

B.maintained on computers that are networked if more than one PC is in an office.

C.backed up daily with backups stored off-site.

D.in a format that can be legibly printed on Commission request.

18.Under an Exclusive Right-to-Sell Listing Contract, if a seller is contacted directly by a prospective buyer or buyer’s agent, the seller is obligated to:

A.schedule a showing, but not discuss any confidential information.

B.refer the buyer or agent to the listing broker.

C.immediately avoid any form of communication with prospective buyer or agent.

D.answer questions as thoroughly as possible and report the contact to the listing broker.

19.The purpose of the Colorado license law is to:

A.create fees and charges for real estate transactions.

B.protect the public.

C.insure coordination among lending, appraising, and brokerage industries.

D.control real estate transactions.

20.Notification to the Colorado Real Estate Commission of termination of employment between an employing broker and an associate is the responsibility of the:

A.both the employing broker and the associate.

B.the employing broker alone.

C.the terminating associate alone.

D.the brokerage firm's registered owner alone.

21 of 100Under the Commission-approved Exclusive Right to Sell contract, the seller promises to:

A.pay the broker a commission even if no buyer is procured.

B.accept any reasonable offer.

C.pay a commission to any cooperating brokers who bring in qualified buyers.

D.conduct all sale-related negotiations through the broker.

22. The Contract to Buy and Sell Real Estate allows the buyer to do a walk-through of the property:

A.with three days' notice at any time before the inspection deadline.

B.without notice 24 hours before closing.

C.without notice at any time.

D.prior to closing with reasonable notice.

23. Which of the following is NOT good funds that may be used to pay cash due at closing in a Colorado real estate transaction?

A. A personal check drawn on a bank in the same city as the closing.

B. A cashier’s check from an out-of-state bank.

C. Electronic funds transfer.

D. An out-of-state teller’s check.

24. The Commission-approved Exclusive Right to Sell Listing Agreement contains all of the following EXCEPT:

A. inclusions and exclusions.

B .a section requiring entry into the MLS.

C. seller’s name, property address and legal description.

D. price and terms.

25. If earnest money will be held by a title insurance company under a Contract to Buy and Sell Real Estate, the closing instructions for the transaction must be signed and delivered to the title company:

A. before the offer is presented to the seller.

B. not later than the title objection deadline.

C. at or before delivery of the earnest money to the title company.

D. with the inspection report.

26.When brokering properties for a lending institution or government agency that uses its own listing contracts, a Colorado licensee must _____ .

A.have the client sign a backup listing contract that complies with Colorado standards.

B.refuse to sign the listing form and proceed without a signed contract.

C,prepare and provide an addendum disclosing brokerage duties to the seller.

D.decline to use the agency's listing contract and refuse the assignment.

27.When an employed broker signs a settlement statement, _____ .

A. the statement is invalidated.

B. the employing broker is relieved of any supervisory responsibility.

C. the employing broker must be present at the closing.

D. the statement must be delivered to the employing broker immediately after closing.

28.With respect to designated brokerage, an employing broker in a firm with only two associates is allowed to:

A. choose not to appoint any designated brokers for a transaction.

B. appoint only one designated broker per client.

C. appoint him- or herself as a designated broker.

D. appoint designated brokers only in cases where there is an agency agreement.

29.The Colorado Real Estate Commission requires subdivision registration for all of the following EXCEPT:

A. residential time-shares.

B. residential apartment-to-condominium conversions.

C .bulk land sales between developers.

D. properties subdivided into 20 or more residential lots.

30. The practice of designated brokerage does NOT apply to real estate firms:

A.with only one licensed natural person.

B.located in rural areas.

C.licensed as limited liability companies (LLC).

D.with more than 50 licensees.

31. The Commission has the power to:

A.National fair Housing Laws

B.incarcerate licensees who violate the broker section of the license law.

C.subpoena witnesses to attend hearings.

D.issue restraining orders against licensees.

32.To what does the phrase "vacated streets and alleys" refer in the Contract to Buy and Sell Real Estate?

A.Land that was taken under eminent domain laws.

B.A neighborhood that is in a state of decline

C.Platting that was never built or that was abandoned, now affixed to the subject property

D.Land that the seller must vacate before transferring the subject property

33.Property taxes are known as ________________ taxes

A.Flat

B.percentage

C.ad valorem

D.adjudicated

34. If a Contract to Buy and Sell Real Estate fails and the parties dispute the disposition of the earnest money held by a Colorado broker, the broker's options include all of the following EXCEPT:

A.await the resolution of the issue via mediation.

B.“interplead” the disputed funds to the courts.

C.notify the parties that earnest money will be returned to buyer if broker is not advised of a lawsuit filing within 120 days.

D.decide who is most entitled to the money and disburse it accordingly.

35. Which of the following cases is one where the broker has NOT earned a commission, according to the Exclusive Right to Sell contract?

A. A buyer makes a full-price offer during the automatic 30-day extension period.

B. A person with whom the broker negotiated during the listing period, but whose name was not submitted to the seller, buys the property during the holding period.

C .A broker other than the listing broker finds a ready, willing and able buyer during the listing period.

D. Another brokerage firm, acting under an exclusive agreement entered into during the holdover period, effects a sale, but the "Shall owe a commission" box was checked on the original exclusive agreement.

36. person who is paid to sell a business opportunity in Colorado will be considered a broker requiring a license if the sale includes:

A.corporate stock.

B. an interest in real estate.

C. business inventory.

D. chattels.

37. The Colorado “Brokerage Disclosure to Seller (FSBO)” is designed to:

A.notify a “For Sale By Owner” seller of a broker's relationship with a buyer.

B.take the place of an agreement to guarantee payment of commissions to brokers.

C.disclose the seller’s willingness to work with the buyer.

D.obtain an open listing agreement from the seller.

38. The Mediation section in the Contract to Buy and Sell Real Estate establishes that:

A.the disputing parties must agree in writing before any solution is binding.

B.the decision of the mediator is final and binding on the disputants.

C.mediation is an option only up until the time of the closing.

D. the party on the losing end of the mediator's decision has to pay the costs of the mediation.

39. When a real estate broker is a party to any criminal or civil lawsuit involving the sale of a property in which the broker acted for either party, the broker must:

A.refrain from conducting any activities requiring a license.

B.upon request, supply the Commission a copy of the initiating complaint and the answer filed.

C.put his or her license on inactive status pending the outcome of the lawsuit.

D.refrain from any communications involving the details of the lawsuit until it is settled.

40.Which of the following, if any, is exempt from the Colorado Real Estate License Law?

A. An option dealer

B . A person offering only leasing services

C. An out-of-state broker acting without a co-broker in Colorado

D. An entity or person acting on its own behalf as a principal

41.The Contract to Buy and Sell Real Estate requires the buyer to:

A. tender the earnest money deposit along with the contract unless an alternative earnest money deadline has been agreed upon.

B. provide a copy of an earnest money check or promissory note along with the contract.

C. tender the earnest money deposit within three days of signing the contract.

D. tender the earnest money deposit and wait for the check to clear before submitting the contract to the seller.

42.Absent a written Commission-approved employment agreement with the “Agent” box checked, Colorado real estate license law presumes a licensee is acting in a transaction as a _____ .

A.designated agent.

B.single agent.

C.sub-agent.

D.transaction-broker.

43.Funds belonging to others received pursuant to a property management agreement or lease must be deposited in an escrow account not later than:

A. the close of business on the day of receipt.

B. 5 calendar days following receipt.

C.5 business days following receipt.

D. 1 business day following receipt.

44.If an employing broker elects to offer “agency” as the only form of brokerage relationship with the public, a prospective client who inquires about transaction-brokerage status must be:

A. given the Commission-approved Definitions of Working Relationships form.

B. referred to another brokerage firm.

C. accommodated as an exception to the policy.

D. referred to the employing broker.

45.Which of the following does NOT need a Colorado real estate broker's license to assist in a real estate transaction?

A. A person who receives a fee for selling option contracts for another person

B. A salaried person who manages several apartment complexes for a single owner

C. A person receiving advanced fees for referring prospective tenants to available rental properties

D. A public trustee conducting a foreclosure sale

46.Colorado law requires an employing broker to:

A. appoint, in writing, a designated broker for every side of every transaction.

B. act as the designated broker for every side in every transaction.

C. appoint a designated broker for a buyer in a transaction only if the buyer has no other representation.

D. allow the parties to a transaction to choose who they will have as their designated agents.

47.The Definitions of Working Relationships form is:

A. optional in any given transaction.

B. required if a prospect inquires about brokerage relationships not offered by the firm’s written office policy.

C. used only for “agency” brokerage relationships.

D. used only for “transaction-broker” brokerage relationships.

48. The Licensee Buy-out Addendum to the Contract to Buy and Sell Real Estate:

A. allows the seller to pay an amount to the listing broker to get out of the listing contract.

allows the seller to pay an amount to the buyer in place of making required repairs to the seller's house.

allows the buyer to pay an amount to the seller to get out of the purchase contract.

assures an owner that the broker will buy the owner's house if it fails to sell through the broker's efforts.

49. Information on all registered well permits contain:

A.allowable uses of the well

B. the original permit application

C. any available well construction and pump installation records

D. each of the above

50.Which of the following is NOT an “agency duty” required of agents over and above those “uniform duties” required of transaction brokers?

A.Counseling the client as to benefits or risks in the transaction

B.Seeking a price acceptable to the client

C.Fiduciary duties

D.Marketing the property more aggressively, including via Internet

51. Errors and omissions insurance policies issued by the state-endorsed vendor in Colorado are renewed:

A. concurrently with each license renewal.

B.annually as of the anniversary date of original issuance.

C.annually as of January 1.

D.biannually as of January 1.

52.Which of the following is the first step in a foreclosure in Colorado?

A.The lender files a notice of election and demand for sale with the public trustee.

B.The public trustee mails a combined notice to everyone on the lender's mailing list.

C.A court order authorizes the foreclosure.

D.the public trustee publishes a notice of the foreclosure in a general circulation newspaper.

53.According to the Closing Instructions that are provided to the title company along with the Contract to Buy and Sell Real Estate, a title insurance company is relieved from any further duty, responsibility or liability in connection with a failed closing:

A. returning all documents, monies and things of value to the depositing party.

B. destroying all transaction specific documents, monies and things of value.

C. storing all documents, monies and things of value in its archive for 7 years.

D. returning all documents, monies, and things of value to the listing broker.

54.When the holder of the debt on a property files a notice of intent to foreclose, who has the responsibility of advertising the foreclosure?

A. The holder of the debt

B. Any registered lienholder

C. The foreclosed owner

D. The public trustee

56.Which of the following would be considered acceptable as the "good funds" that must be produced at a closing in Colorado?

A. Personal IOU

B. Promissory note

C. Cashier's check

D. Personal check

57.Errors and omissions insurance does NOT:

A. require annual proof of insurance to the Commission.

B. provide any coverage for property transactions over $400,000 in value.

C. cover multiple claims against an individual licensee within the same policy period.

D. cover any fraudulent acts by a licensee.

58. If a change needs to be made in a listing during the listing term, such as changing the listing price, the broker should:

A. wait for the original listing to expire and then ask for a new agreement.

B. cancel the original listing and negotiate a new agreement.

C. use the "Agreement to Amend/Extend Contract with Broker" form.

D. write the changes directly on the original contract.

59.A Colorado real estate broker who does not maintain escrow accounts, but places funds of others solely with title insurance companies:

A.is violating the license law.

B.has direct control over access to the funds.

C.is relieved of responsibility for the money.

must have closing instructions signed by the buyer and seller and title company before turning over the earnest money.

60. Colorado escrow accounts must be in an FDIC-insured Colorado depository. Which of the following “fiduciary elements” is not a requirement for an escrow account?

A. in the name of the licensed individual broker or if an entity, in the name of the employing broker and the entity

B.List all employed brokers as authorized to make withdrawals

C.Be labeled by the type of funds held in the account

D.Be the responsibility of the employing broker

61.A licensee with an inactive Colorado broker license sells a neighbor’s house as a favor. The broker’s commission is the responsibility of:

a. the employing broker.

B. the neighbor seller.

C. the buyer.

D. nobody.

62.The Colorado Real Estate Recovery fund:

A. is no longer open to new claims.

B. ceased to exist after 2004.

C. will consider all claims against licensees based on fraud or negligence.

D. has a claim limit of $250,00 per transaction.

63. Colorado’s Fair Housing Act adds four (4) protected classes to the Federal Fair Housing act. Which is NOT a Colorado added protected class?

A. Creed

B. Ancestry

C .Marital status

D. Age

64.The Colorado Real Estate Commission may NOT do which of the following?

A. Suspend a license

B. Impose a $2500 fine per violation of licensing law

C. Impose a 30-day jail sentence

D. Revoke a license

65.The Colorado Real Estate Commission may NOT do which of the following?

A. Suspend a license

B.Impose a $2500 fine per violation of licensing law

Impose a 30-day jail sentence

Revoke a license

66.By default, a designated broker in Colorado is:

a single agent.

a listing agent.

a seller's or buyer's agent.

a transaction broker.

66.When listing residential property, a licensee must _____ .

A. accurately represent the source of any square footage measurement used.

B. personally measure the square footage of the living area in the home.

C. disclose that the licensee is not a registered home inspector.

D. use the square footage as shown in the county assessor’s tax records.

67.According to Colorado’s landlord-tenant law, a warrant of habitability:

A.exists only on new construction for up to one year.

B. exists on rental property unless any r

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