California “Management and Supervision” Questions only (no answers)
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1) Conflicts arise when:
A. An agent is related to the inspector
B. An agent is a friend of the client’s mortgage broker
C. An agent is also acting as a principal in a transaction
D. All of the above
California Management and Supervision
2) Communications with the public must be addressed in your policy. You keep a Do Not Call List updated for all agents to use. Equally important for your agents to continually update is:
A. A database of their clients
B. Authorizations from their clients to communicate
C. Knowledge of MLS changes in their area
D. A good criss-cross website of their communities
3) All of these items belong in a broker’s policy manual, except:
A. Antitrust
B. Conflict of Interest
C. Licensed and Unlicensed Assistants
D. Board Policies
4) Agents who manage property may use Facebook or other social media to screen prospective tenants. Is this best practice?
A. Yes, it provides a lot more information and helps with decision-making
B. No, because people do not present a true picture of themselves on social media
C. No, because it may lead to discrimination
D. Yes, because it may give insight to the tenant’s lifestyle
5) NAR Code of Ethics says that REALTORS® shall cooperate with other brokers except when cooperation is not in the client’s best interest. This obligates brokers to:
A. Share commissions or fees
B. Compensate another broker
C. Both A and B
D. None of the above
6) Your office seems more casual than you remember, and you are beginning to hear off-color jokes. Some agents send suggestive emails. What should you do?
A. Wait and see, this might be a stress response
B. Make it clear that this behaviour will not be tolerated
C. Find the ringleaders and immediately fire them
D. Show a video on proper office attire
7) A good way to communicate office policy on dual v.s. in-house designee agency is:
A. Have the administrative staff inform new agents
B. Agent-to-agent training
C. Thoroughly explain it in your policy manual, with diagrams
D. Send the agent to the local board
8) Agents may advertise using a fictitious name if:
A. They have management approval
B. They hold a license bearing that name
C. Local laws permit
D. Their name is part of the fictitious name
9) Agents from many companies come through your office, and they enjoy the camaraderie and stories. As the managing broker, what liability concerns might you have?
A. Gossip could destroy good working relationships
B. Loose talk could cause antitrust violations
C. Agents might be recruited away from the firm
D. Agents might steal from your office
10) Your agent has just sold a pre-WWII home to a young couple with a baby. He has given them a copy of the lead based paint brochure and the disclosure. What do you tell him?
A. “Good job!”
B. “You should never sell a home built before 1978 to a young couple”
C. “Don’t let the baby chew on the woodwork”
D. “You need to discuss the RRP Rule with them”
11) Red Flag Rules fall under the:
A. Federal Trade Commission (FTC)
B. Real Estate Settlement Procedures Act (RESPA)
C. Environmental Protection Agency (EPA)
D. Federal Housing Administration (FHA)
12) You are a buyer’s agent in a lucrative transaction. Today, you learn that the loan officer for the buyer is your Aunt Mae’s new husband, Bob. What do you do?
A. You ignore this fact, you have not spoken to Mae in ages
B. You tell the buyer that Bob is your uncle and remove yourself, if buyer chooses
C. You disclose in writing that Bob is your uncle and remove yourself, if buyer chooses
D. Both B and C
13) Qualifications to be a managing broker include:
A. At least 2 years experience as a full-time salesperson in the last 5 years
B. License must not be restricted
C. No history of disbarment
D. All of the above
14) The FTC defines “Identity Theft” as:
A. Use of a social security card or number of another
B. Attempts to use credit card information
C. Fraud using the identifying information of another person without authority
D. All of the above
15) Agent Paula works with Amala, an unlicensed assistant on her team. Amala receives a call from a consumer, asking for information regarding one of Paula’s listings. Amala can:
A. Describe the property and amenities to the consumer, and ask if it might be of interest to her
B. Offer to email the property brochure and MLS sheet that Paula prepared
C. Take her information and have Paula contact her
D. Both B and C
16) Your agent, Polly Wally, is writing up an offer, and wants to include clauses that are not in the preprinted contract form, nor in your policy manual. Polly has been an agent for two years, so it is acceptable for her to do this. True or False?
A. True: Polly knows what she is doing, you can trust her experience
B. False: Polly should call you for advice or the client should consult an attorney
17) Your office seems more casual than you remember, and you are beginning to hear off-color jokes. Some agents send suggestive emails. What should you do?
A. Wait and see, this might be a stress response
B. Make it clear that this behaviour will not be tolerated
C. Find the ringleaders and immediately fire them
D. Show a video on proper office attire
18) NAR Code of Ethics says that REALTORS® shall cooperate with other brokers except when cooperation is not in the client’s best interest. This obligates brokers to:
A. Share commissions or fees
B. Compensate another broker
C. Both A and B
D. None of the above
19) To show your company’s compliance efforts in fair housing, you should:
A. Display the logo in all advertisements and on your signage
B. Have an annual fair housing training program
C. Both A and B
D. Neither A nor B
20) For property owners who manage their own buildings, the State Department of Real Estate (DRE) requires:
A. Documentation of experience/training in the field
B. Passing a state licensing exam (in addition to a broker’s license)
C. Continuing education training
D. All of the above
21) Examples of inducements for the placement of trust account business include:
A. Receiving/requesting payment for or assistance with business expenses
B. Benefits in pricing or fees for the maintenance of a compensating balance account
C. Receiving/requesting expenditures for food, beverages, and entertainment
D. Both A and B
22) The “clock” for you to deposit the earnest money received by salespersons starts:
A. The moment that the salesperson accepts the check
B. As soon as the salesperson gives the check to the administrative staff
C. One day after the salesperson receives the check
D. Both B and C
23) For property owners who manage their own buildings, the state Department of Real Estate (DRE) requires:
A. Documentation of experience/ training in the field
B. Passing a state licensing exam (in addition to a broker’s license)
C. Continuing education training
D. None of the above
24) In handling trust funds, any benefit to the broker:
A. May be kept, with agreement of the client
B. Must be passed to the client
C. May be split with the client, with written agreement
D. All of the above
25) The broker should provide options to the owner of escrow funds, including all of the following except:
A. Neutral escrow depository
B. The hands of the broker’s principal
C. The broker’s personal account
D. A trust account maintained by the broker in a bank
26) Problems with trust accounts arise from:
A. Lack of basic bookkeeping or accounting skills
B. Failure of proper supervision
C. Broker and accountant disagreements
D. Both A and B
27) Trust funds may be cash or non-cash items, payable to a seller or broker, for the benefit of the:
A. Buyer or seller
B. Broker
C. Escrow/title company
D. All of the above
28) Broker Madeleine has never been good at math, especially accounting. What can she do to ensure trust fund accounting compliance?
A. She must do this herself, there are no excuses
B. Madeleine can hire accountants to do the work
C. Both B and D
D. She can have properly trained staff conduct this function, with her supervision
29) Non-trust funds include all of the following except:
A. Real estate commissions
B. Rents and deposits
C. General business operating funds
D. Earnest money checks
30) Commingling occurs when:
A. There is an underage in the balance in the account
B. Personal or company funds are deposited into the trust fund bank account
C. The client’s two escrow deposits are mixed up
D. Two brokers share an account
31) Useful procedures in record keeping of a trust fund include:
A. Record transactions daily and in the separate beneficiary records
B. Reconcile the records monthly to ascertain that transactions are properly recorded
C. Both A and B
D. None of the above
32) In handling trust funds, any benefit to the broker:
A. May be kept, with agreement of the client
B. Must be passed to the client
C. May be split with the client, with written agreement
D. All of the above
33) Trust account record keeping must show proof of deposit, including all of the following except:
A. Date received
B. From whom received
C. Date deposited in the account
D. Time of day received
34) Broker Sasha received an earnest money check from an agent, and deposited it immediately. Later, she looked at the deposit slip and discovered that it was for the wrong account, her personal account. Is this a trust account violation?
A. No, because it was an honest mistake
B. Yes, because the check was deposited into her personal account
C. No, because she had no other funds in her personal account at the time
D. Both B and C
35) Withdrawals may be made from the trust account only upon the signature of the broker or:
A. A salesperson licensed to the broker
B. A licensed broker with a written agreement with the employing broker
C. An unlicensed employee with fidelity bond coverage equal to the maximum amount of trust funds
D. All of the above
36) If you are going to maintain a trust account, it must be all of the following except:
A. Designated as a trust account
B. In a bank or recognized depository in California
C. In an interest bearing account
D. In the name of the broker as trustee
37) Commingling occurs when:
A. Personal or company funds are deposited into the trust fund bank account
B. Trust funds are deposited into the licensee’s general or personal bank account rather than into the trust fund account.
C. Neither a nor b
D. Both A and B
38) To avoid a trust fund discrepancy:
A. Deposit funds ASAP that are not forwarded to escrow or owners
B. Keep supporting records for any disbursement
C. Disburse funds only when a negative balance will not result
D. All of the above
39) Sherry Berry accepts an earnest money check from a buyer at 11 AM on Sunday (the contract specifies that the earnest money will be deposited within four business days of acceptance). She is going on vacation, and places the check on the desk of Manny, the admin, on Tuesday morning. Manny is ill, and does not come to the office, so he does not discover and deposit the check until Friday. Is this a trust violation?
A. No, because it was unavoidable
B. Yes, because the contract terms for earnest money were not fulfilled
C. No, because Sherry brought in the check on Monday.
D. No, because Manny did not discover the check until Friday
40) Trust account records must include all of the following except:
A. All receipts and disbursements, with pertinent details
B. The balance of the trust fund account, based on recorded transactions
C. The broker’s signature stamp on the checks
D. The balance of the trust fund account, based on recorded transactions
41) For trust fund record keeping purposes, two reconciliations are made at the end of each month. These are:
A. The bank account record with the bank statement
B. The bank statement with the broker’s personal account
C. The bank account record with the separate beneficiary or transaction records
D. Both A and C
42) A buyer may give earnest money in cash. True or False?
A. True: Earnest money may be cash or non-cash
B. False: Earnest money must be in check or money order
43) A broker must ensure that:
A. Personal or general operating funds are not commingled with trust funds
B. Trust fund balances equal liability to all owners of the funds
C. Records are in acceptable form, current, complete and accurate
D. All of the above
44) As part of a broker’s inspection and reporting system, you should retain copies of the following for three years:
A. All listings and documents for any transaction
B. Deposit receipts and cancelled checks
C. Trust account records
D. All of the above
45) Jan is a top producing agent who likes to have her clients work with a title company near her office. Naomi owns the title company and sends out a marketing piece monthly with Jan’s logo to Jan’s database, which has proven to bring in a lot of business for Jan. Is there a violation of RESPA here, and if so, by whom?
A. Yes, Jan is violating RESPA
B. Yes, Naomi is violating RESPA
C. No, neither is in violation
D. Yes, both are in violation
46) Net listings:
A. Can lead to a breach of the agent’s fiduciary obligations
B. Should be used only with highly sophisticated or independently represented clients
C. Should involve full disclosure of all of the conflicts involved.
D. All of the above
47) In a personal transaction, it is good practice to:
A. Ensure that your office remains uninvolved
B. Have a company sign on the listing
C. Place the property in MLS under your company’s name
D. Advertise with your firm’s logo
48) Which of the following questions should be included as part of the standard questions about income and financial resources?
A. What is your price range?
B. Do you wish to rent or buy?
C. Do you have a location preference?
D. All of the above
49) If agents use a fictitious business name, they must:
A. Advertise the name in 13pt font
B. Register it as a DBA in the county
C. Hold a license bearing that name
D. None of the above
50) The DRE recommends that, when employing a restricted real estate licensee, you should:
A. Fully read and understand the circumstances that led to the license restriction
B. Increase observation and control in those areas that are closely related to the behaviors that caused the restriction
C. Realize that the restricted license is a probationary license and monitor the licensee’s activities with that mindset
D. All of the above
51) The two major sources of antitrust law violations are:
A. Price fixing and steering
B. Steering and redlining
C. Boycotting and price fixing
D. None of the above
52) SB 146 provides that when a “team name” is used in marketing materials/signage, it must:
A. Include the “team name” and the name and license number of at least one licensed member of the team
B. A and C
C. Not contain terms that imply they are independent of the responsible broker
D. The team’s identity only
53) Unlicensed assistants may:
A. Advertise a real estate broker or salesperson
B. Call a database to solicit for a specific property
C. Provide a data sheet with information on on a property prepared by the broker
D. Show property
54) As part of a broker’s inspection and reporting system, you should retain copies of the following for three years:
A. All listings and documents for any transaction
B. Deposit receipts and cancelled checks
C. Trust account records
D. All of the above
55) Based on California fair housing laws, the following individuals are protected:
A. A newly divorced white male with full custody of his two children
B. A 25 year-old Muslim man
C. A 60 year-old gay woman
D. All of the above
56) Unlicensed assistants may:
A. Advertise a real estate broker or salesperson
B. Call a database to solicit for a specific property
C. Provide a data sheet with information on on a property prepared by the broker
D. Show property
57) Your agent provided the EPA pamphlet on lead based paint and the seller’s LBP disclosure to her clients in their purchase of a 70-year old house. Did she fulfill her obligation to the buyer?
A. Yes, they signed the disclosure, so her obligation is met
B. Yes, because they read the pamphlet and discussed it with her
C. No, because she did not inform them of the RRP rule
D. Both A and B
58) You must retain and store copies of all listings, deposit receipts, canceled checks, trust records, and other documents executed by you or obtained by you in connection with any transaction for which a real estate broker license is required. This can be electronically maintained if:
A. Documents are non-erasable and do not allow changes
B. The original record copied was made by you or broker’s employees at or near the time of the event in the record
C. Both A and B
D. None of the above
59) Some examples of boycotting include:
A. Establishing a certain title company to use
B. Establishing certain mortgage brokers to use
C. Not showing listings from certain companies
D. All of the above
60) A reliable indexing system provides:
A. Ready access to a desired document or record
B. Control of the process to ensure quality of imaged documents or records
C. Neither A nor B
D. Both A and B
61) The DRE recommends that, when employing a restricted real estate licensee, you should:
A. Fully read and understand the circumstances that led to the license restriction
B. Increase observation and control in those areas that are closely related to the behaviors that caused the restriction
C. Realize that the restricted license is a probationary license and monitor the licensee’s activities with that mindset
D. All of the above
62) The practice of inducing, or attempting to induce for profit, any person to sell or rent any dwelling by conveying to that person that a neighborhood is undergoing, or about to undergo, a change in the number of persons of a protected class is known as:
A. Steering
B. Blockbusting
C. Puffing
D. Redlining
63) Your agent, Johnny C Lately, is overdue on his license renewal by two days, and you just confirmed with him that he sent it in. Johnny has a closing today. May he sit in on the closing? Can you pay his commission?
A. He can sit in on the closing, but you cannot pay commission
B. He cannot sit in on the closing, but you may pay him
C. He can go to closing and be paid
D. None of the above
64) Red flag behaviors include all of the following except:
A. Applicant is difficult and/or abusive
B. Applicant is not what they represent.
C. Applicant supplies required documentation
D. Applicant fills out the application completely; or continuously change the answers.
65) Carolyn is a seasoned agent who wants to manage property for a client. Carolyn must have:
A. Documentation of experience/training in the field
B. Passed a state licensing exam
C. Taken continuing education training
D. All of the above
66) Most housing is covered under the Act, both private and public. There are certain exemptions, however. These include which of the following?
A. Single-family housing sold or rented without the use of a broker
B. Owner-occupied housing with no more than four units
C. Housing operated by organizations and private clubs that limit occupancy to members
D. All of the above
67) According to the text, the key to getting each agent to strictly follow fair housing rules is to employ:
A. Agents with strong ethics
B. Office managers who strictly enforce rules
C. Consistent policies and training
D. A real estate attorney
68) Mary referred a client to Stan, who runs a local bank and loan company. Stan came over the next day with lunch and a gold monogrammed pen (valued at $50) to thank her for her business. Is this a violation of RESPA?
A. No, Stan was just saying thank you for Mary’s business
B. Yes, agents may not receive kickbacks for referring business
C. No, because Mary disclosed this gift in writing to her client
D. A and C
69C) Callie placed the trust account business for her brokerage with Stan’s bank. Stan values her business, and offers Callie a break on the usual fees for maintaining this account. May Callie accept Stan’s offer?
A. Yes, as long as they both disclose it
B. Yes, but Callie should check with her attorney
C. No, this is an inducement
D. Both A and B
70) Donald, Tim’s team coordinator, is studying to get his salesperson’s license. Just before the exam, he gets a call from Tim’s client, Mary, who needs a brochure for her newly listed house. Tim is out of town and Mary is irritated, so Donald reworks a brochure that Tim made for another listing, and emails it to Mary to make copies. May Donald do this?
A. Yes, because he simply copied a Tim’s brochure and made changes
B. Yes, because Donald left a message for Tim to inform him
C. No, because Tim did not give permission
D. No, because he is not licensed
71) Leonard has a 6-plex apartment house and interviews prospective tenants. Angelique, in her application, discloses her ten week old English Shepherd puppy, who assists her with her disability. Leonard is okay with this, as long as Angelique is okay with a $100 extra deposit for damage. May Leonard charge this fee?
A. No, this violates fair housing law
B. Yes, it is a fair request, animals do damage
C. Yes, if it is refundable
D. No, he may only charge up to $50 deposit
72C) Cass’ office administrator mishandled the trust fund, and there is a shortage. Who will be liable for this?
A. The administrator who mishandled the funds
B. Cass, because she is the supervisor
C. Both A and B
D. None of the above
73) Casey’s office is being remodelled, and the contractor’s helper burned a box of files from the basement. The files were for relocation clients’ transactions, one year ago, and included trust account records for the transactions, as well as contracts. Casey’s chief administrator has electronic files for all of the transactions, will Casey be in compliance with the law?
A. Yes, if the documents were copied shortly after the transactions (in WORM form)
B. No, you must keep physical files for three years
C. Yes, if a reliable indexing system makes documents easy to find
D. A and C
74) For an owner of a single-family house to be exempt when selling without the use of a broker and when the owner does not live in the house themselves, the exemption will be granted:
A. To one such sale within a 24-month period
B. For 7 sales only
C. For owners renovate
D. To one such sale every 5 years
75) Federal fair housing laws prohibit specific actions based on:
A. Race, color, national origin, religion, sex, familial status, or handicap
B. Race, color, occupation, religion, sex, familial status, or handicap
C. Race, color, national origin, religion, sex, handicap, or mental capacity
D. Race, color, national origin, religion, exercise, familial status, or handicap
76) Which question should NOT be included as part of the standard questions about income and financial resources?
A. What is your price range?
B. Do you wish to rent or buy?
C. Do you have a preference for the ethnic makeup of the neighborhood?
D. Do you have a location preference?
77) Saul is excited to have three new agents on board. What is the procedure Saul should follow when notifying the DRE about his new licensees?
A. Saul should email the Secretary of the DRE as soon as possible
B. Saul should have his new licensees contact the Commissioner within ten days
C. Both A and B
D. Saul should notify the commissioner within five days
78) Kurt allows his agents to be property managers, so good practice for him and the office would be:
A. To have a second set of policies for supervising property management
B. To ensure that his agents have periodic fair housing training, focusing on rental properties
C. To ensure that agents are properly trained and licensed, and take continuing education
D. All of the above
79) Blake, after much consideration, fired his agent, Danielle. What must Blake do to notify the Commissioner?
A. Call the Commissioner’s office immediately
B. Fill out and mail the form RE214 within ten days
C. Have Danielle mail a form to the Commissioner’s office within five days
D. Both B and C
80) Thad manages Tamara, a restricted licensee who is engaging in the same activities that caused her current status. Thad should:
A. Ignore it and give Tamara time to make changes
B. Tell Tamara that he will give her one more chance
C. Offer to reward good behavior
D. Report the violation
81C) Keesha’s agents are grumbling because the admins call them each time a form is missing or incomplete in their transactions. The admins are contacting them consistently because:
A. Keesha is not properly supervising the admins
B. Keesha has a responsibility to monitor the contract forms
C. Keesha has delegated part of her responsibility to the admin staff
D. B and C
82) In the case of an advance fee agreement, the broker deposits the fee:
A. With an out of state banker
B. In an interest bearing account in the name of all parties
C. In the broker’s trust account
D. All of the above
83) Noah is a salesperson whose team is affiliated with Morgan’s Realty. His team sign reads: Noah’s Realty Company. It lists only Noah’s name and phone number on the sign. How should Broker Morgan handle this?
A. Ignore it, this is the top producing team in this part of the country
B. Insist that Noah comply with SB 146 and advertise in compliance with the law
C. Insist that all marketing signage, materials, and websites be reviewed by the marketing division before use
D. B and C
84) Employing a Restricted Licensee mandates that the broker:
A. Carefully review all transaction documents that the licensee prepares
B. Exercise close supervision over their licensed activities
C. Immediately notify the Real Estate Commissioner in writing of any violations
D. All of the above
85) Isaac and Chris are discussing a transaction that has gone terribly wrong in the office cafeteria. You:
A. Let them both blow off steam and speak with them when they cool off
B. Invite them both into your office immediately to discuss confidentiality
C. Remind them of their signed policy manual
D. B and C
86) An “agency relationship” refers to the relationship created between a real estate firm (that is the real estate broker by the real estate salesperson) and a ___________.
A. Buyer
B. Seller
C. Tenant or landlord
D. All of the above
87) Your agent, Luis, and Joshua (owner of a local title company) have been brainstorming ideas for new business. They have decided to co-brand their marketing and split the cost to mail and email a larger database. Is this a violation of RESPA?
A. Yes, Luis is violating RESPA
B. Yes, Joshua is violating RESPA
C. Neither is violating RESPA
D. Both are violating RESPA
88) One of your office teams is working on a new marketing campaign in which they have a photo of themselves with a diverse group of people, including most of the protected classes. They ask for your opinion. You suggest that:
A. They do a market test first
B. It appears to show diverse faces
C. They run the ad past the marketing division to ensure compliance with all laws and team requirements
D. None of the above
89) After reasonable notice, the documents that shall be made available for audit, examination, inspection, and copying by a department representative are:
A. Books
B. Accounts
C. Records
D. All of the above
90) Records copied and stored shall be retained for ___ years pursuant to Section 10148 of the Code:
A. 3
B. 5
C. 7
D. 10
91) Where may the broker’s records be stored?
A. You must retain copies of documents at the broker’s place of business
B. You must retain copies of documents at a location other than the broker’s place of business
C. You may retain copies of such documents at a location other than the broker’s place of business
D. You may retain copies of such documents at a location other than the broker’s place of business only after three years
92) Non-trust funds include (cash or non-cash):
A. Real estate commissions, rents, deposits
B. Disbursements related to broker-owned real estate
C. General operating funds needed to continue a brokerage business
D. All of the above
93) If a broker maintains an out-of-state trust account, it must be:
A. Insured by FDIC
B. Supervised by lenders’ staff
C. Used to service the type of service loans in B&P Code 10145(a)
D. A and C
94) In a staff meeting, Sonny’s administrative staff tells him that they are concerned about agents leaving personal computers on near large windows. They say that the file cabinets are not being locked at night. These are are issues that should be addressed in the:
A. VAMA
B. GNMA
C. Red Flag Rule
D. RESPA
95) The FTC dictates what a Red Flag Policy should look like. True or False?
A. True: There are specific criteria
B. False: It only identifies required components
96) Prohibited actions under fair housing laws would include which of the following?
A. Evicting tenants because they are members of a protected class
B. Evicting tenants because they have guests who are members of a protected class
C. Imposing different rental charges because the tenants are members of a protected class
D. All of the above
97) If a real estate agent has an agency relationship with a seller who refuses to sell to a protected class after receiving a fair offer, the broker should advise the agent to:
A. Respect the seller’s wishes
B. Tell the seller to ask for more money
C. Record the events and discontinue the agency relationship
D. None of the above
98) Celia gave her seller, Rosa, the Real Estate Transfer Disclosure Statement (TDS) to sign. Rosa asked what it was for, and why she needed to fill it out. You advise Celia to tell Rosa:
A. She can refuse if she wants to
B. It is Rosa’s obligation as a seller to disclose all material defects to the buyer
C. If it is not filled out, the buyer cannot sue her
D. She can have her husband fill it out and not sign it
99) Red Flag Procedures recommend that a property manager:
A. Always take identification to prevent identity theft
B. Insist that the ID match the person and not be expired
C. Treat all applicants the same
D. All of the above
100) Policy that will ensure good recordkeeping and reporting for your agents, while complying with fair housing law, includes:
A. Keeping lists of properties shown to the client
B. Keeping lists of properties offered to client
C. Covering the same points during all listing presentations
D. All of the above
101) If agents maintain a website with IDX feed:
A. You should choose the provider
B. Your policies should meet or exceed those of the MLS
C. Both A and B
D. None of the above
102) Section 1099 of the Civil Code mandates that the seller’s agent shall deliver to the buyer: pest inspection report, certification and notice of work completed, or:
A. Transferor has given written directions to another real estate broker to deliver
B. Transferee has a new inspection on the property
C. Agent shall advise the transferee in writing of the transferee’s rights
D. A and C
103) Procedures for agents who are transferring to another company should include:
A. How much notice must they give
B. What files can they take, or copy
C. What listings will they take
D. All of the above
104) Your policy should state whether you will allow the use of:
A. Alcohol
B. Tobacco
C. Medical marijuana
D. All of the above
105C) A group of agents celebrated a good year with lunch at a famous local restaurant. One of the agents was angry at losing a listing to a limited service company. She proceeded to make derogatory comments, saying that no one should work with that company. If this happens, you should advise your agents:
A. To remain silent, and do not get involved 3x #8
B. To get up and state that you want it on record that you are not a party to this conversation
C. Call your broker
D. None of the above
106) Carly is the seller’s agent for Nathan. Within a day of listing his home, Carly tells you that she would really like to purchase this home for herself. You advise Carly to:
A. Go ahead and work it out privately, and take the listing out of MLS
B. Work through the brokerage and make the offer
C. Scrupulously inform Nathan of the conflicts of interest, recommending that they obtain independent professional advice before proceeding
D. None of the above
107) To maintain a trust account, it must be:
A. Designated as a trust account in the name of the broker as trustee
B. In a bank or recognized depository in California
C. For which prior written notice can, by law or regulation, be required by the financial institution as a condition to withdrawal
D. All of the above
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108) Document Retention and Storage Policies should include:
A. A system in place for you and staff to monitor all contract forms
B. Three years retention of copies of all documents for transactions requiring a broker’s license
C. Books, accounts, and records made available for audit by the DRE
D. All of the above
109) The FTC considers the following to be identifying information:
A. Name
B. Driver’s License Number
C. Employer or Taxpayer identification Number
D. All of the above
110) A licensed broker must retain for three years, all of the following except:
A. Deposit receipts
B. Trust account records
C. Marketing flyers
D. Cancelled checks
111) Unidentified disbursements:
A. Should be noted in the records
B. Usually occur at the end of the month
C. Are okay if you make up the difference
D. Will cause a shortage
112) If a DRE audit discloses a trust account shortage:
A. Deposit personal funds to correct the shortage
B. It may be an employee error
C. Your license may be revoked
D. You should have it examined
113) You should reconcile the records for your trust fund account to ascertain that transactions are properly recorded on both the bank account record and the applicable subsidiary records:
A. Weekly
B. Monthly
C. Quarterly
D. Yearly
114) To ensure confidentiality of clients’ sensitive information, do NOT:
A. Encourage conversations on sensitive info around the office
B. Ensure that staff controls the privacy of contract files and other sensitive information
C. Ensure that sensitive discussions are done in a private conference room
D. Encrypt and password-protect sensitive information
115) The Fair Housing Act does have some exemptions, such as:
A. Single-family housing when sold/rented without the use of a broker
B. Owner-occupied housing with no more than four units
C. Housing operated by organizations/private clubs that limit occupancy to members
D. All of the above
116) Solicitation materials intended to be the first point of contact with consumers, where a licensee must disclose a license identification number, include all of the following except:
A. Business cards
B. Websites
C. Agency disclosure
D. Brochures
117) You can ensure compliance with RESPA if your policy includes all of the following except:
A. A clear statement that your company will do business within the law in case any issue ever arises
B. A statement that your salespersons will disclose business relationships they have with any company that could create a RESPA violation
C. A statement that your salespersons will disclose any kickbacks in writing
D. A and B
118) The Red Flag Rule:
A. Is a provision under RESPA
B. Is a good security requirement
C. Was established to prevent identity theft
D. B and C
119) Devin, a home inspector, will present a 3-hour class on structural issues for Sally’s real estate office. This is not an inducement because:
A. No CE is being offered
B. The agents are not paying for the class
C. The class will include agents from other companies
D. None of the above
120) The two types of accounting methods used for Trust Funds are:
A. Columnar records that follow generally accepted accounting principles
B. Non-columnar records that follow generally accepted accounting principles
C. Both A and B
D. None of the above
121) Trust funds must be placed, within three days, into:
A. A neutral depository, the hands of the owner, or the broker’s trust account
B. The broker’s trust account, an out of state account, or the owner’s hands
C. Both A and B
D. Neither A nor B
122) For a corporation to collect advance fees:
A. None of the above
B. Both A and B
C. The advance fee agreement must be in contract form
D. It must first be licensed by DRE
123) The use of options, net listings, and guaranteed sales:
A. Is illegal in California
B. Is unethical
C. Is neither illegal nor unethical in California
D. A and B
124) A reliable indexing system for electronic storage of documents:
A. Gives ready access to a documents or records
B. Controls the process to ensure quality
C. Provides a date ordered arrangement to assure a quick search time
D. All of the above
125) In rental properties, if you perform credit checks of potential tenants:
A. You must approve the tenants
B. You must do this for all applicants
C. Both A and B
D. None of the above
126) Use different provisions in leases or contracts of sale:
A. With rental charges
B. With terms of a lease
C. Never
D. None of the above
127) The Texas Department of Housing and Community Affairs case is important because:
A. It cited disparate impact in housing cases
B. It was unique to Texas
C. It is irreversible
D. None of the above
128) Brokers should check the license status of their agents:
A. Every four years, when they expire
B. Every two years, in case a license is suspended
C. Periodically
D. There is no need to check license status
129) The following are true about restricted licenses:
A. Restricted licensees may not list or sell property
B. The broker must carefully review all transaction documents of the restricted licensee
C. The employing broker certifies that he or she will immediately notify the Real Estate Commissioner in writing of any violations
D. Both B and C
130) A restricted license is:
A. A probationary license
B. A suspended license
C. Both A and B
D. None of the above
131) Carl is a broker who loves the teams in his office. He allows the team leaders to develop their own policies, and reviews them. Then, when there is a problem, the team leaders handle it. This means that:
A. Carl is a very good manager
B. Carl has forgotten his statutory obligation to supervise all agents
C. Carl has delegated some of his duties to team leaders
D. None of the above
132) Kenneth deposited an earnest money check into his broker’s personal account by mistake, late on Friday.
A. Kenneth can tell his broker after the weekend
B. Kenneth’s broker could have his license revoked
C. Kenneth’s broker could have his license suspended
D. None of the above
133) Kelly, a new administrative assistant, prefers to record the transactions for the trust fund once a week, rather than daily. You advise her that:
A. As long as it gets done, no problem
B. Daily recording of transactions is best practice, please do that
C. Both A and B
D. None of the above
134) Deborah is an unlicensed administrative assistant to the broker. Can she make a withdrawal from the broker’s trust account?
A. No, the broker must make the withdrawal
B. Yes, because Deborah has fidelity bond coverage equal to the maximum amount of the funds
C. Yes, because she has the broker’s permission
D. None of the above
135) Your client’s offer was accepted, and she needs a home inspector. She decides to hire your brother.
A. This is not a conflict of interest, as you did not recommend him
B. This is a conflict of interest, you need to disclose it in writing and possibly remove yourself from the transaction
C. Both A and B
D. None of the above
136) Your unlicensed assistant may:
A. Unlock a door for an inspector
B. Give out a brochure that you prepared
C. Show a property when you are running late
D. Both A and B
137C) Non-trust funds (all except):
A. May be general operating funds for a brokerage
B. May include rents and deposits
C. Use the same account as trust funds
D. May not be commingled with trust funds
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