Exam (elaborations)
ALABAMA REAL ESTATE EXAM
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ALABAMA REAL ESTATE EXAM
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ALABAMA REAL ESTATE EXAMBob's broker license was issued in January of 2016. When does he have to be finished
with his post-license coursework? - answer- Broker licenses do not require completion
of post-license courses.
In addition to meeting the general requirements for obtaining a broker license, an
applicant is required to - answer- have held an active salesperson license for 24 of the
past 36 months.
Who is responsible for applying for a company license? - answer- The company's
qualifying broker
If a qualifying broker operates from a home office - answer- he must have a sign that
identifies the space as a real estate office.
The FDIC protects bank account funds by - answer- insuring each client's funds up to
$250,000.
Checks used as earnest money must be deposited into a trust account - answer- when
the offer becomes a contract.
To whom does the licensee owe the duty to accept and present offers? - answer- Both
of the above (client & consumer)
To whom does the licensee owe the duty to put the individual's best interest ahead of
the interests of others in the transaction? - answer- The client
Broker Sue has just told a potential buyer that the property Sue has listed is a waterfront
lot. In reality, the water is 1 block away but can be seen from an upstairs window. What
has Sue done wrong? - answer- She has misrepresented the property.
Brokers sometimes face lawsuits by dissatisfied clients and/or consumers. For what
offense do brokers face lawsuits most often? - answer- Misrepresentation
When a licensee does not disclose significant property defects out of ignorance, the
licensee has committed - answer- Negligent misrepresentation
Alabama uses the rule of caveat emptor in the sale of - answer- used residential
property.
Based on Alabama license law, AREC expects listing agents to offer which of the
following services when accepting listings? - answer- Present written offers
,Joe has a client who wants $250,000 for her property. Joe has agreed that any amount
he gets over the $250,000 will be his commission for the sale. What violation has Joe
committed? - answer- He has entered into a net listing agreement.
Sarah's seller has already signed a purchase agreement with a buyer. Sarah then
convinces her seller to withdraw his agreement to the purchase price and substitute a
higher selling price so Sarah can receive a higher commission. What violation has
Sarah committed? - answer- She has induced her client to break a contract.
Carl has received an offer for his client's property. Carl thinks the offer is too low, so he
doesn't present it to his client. What violation has Carl committed? - answer- Failure to
fulfill obligations to transaction parties
Pam has published the following advertisement: Cute 1-bedroom condo for sale in
newly renovated building. Contact Pam at 555-1212 for details. What violation has Pam
committed? - answer- She has failed to list the name of the real estate company she
works for and to identify herself as a licensee.
Which of the following is NOT a violation of Alabama license law? - answer- Charley
places for sale signs on the street corners nearest to the property he is selling.
Which of the following is a violation of Alabama license law? - answer- Al's check to the
AREC bounced.
Ed lists a property for $310,000 with a 6% commission rate. Because Ed plans to have
his wife conduct the open house and show the property, he agrees to split the
commission with her. He will pay her the commission himself. What violation has Ed
committed? - answer- We don't know which violation Ed has committed because we
don't know if his wife is licensed or not.
Connie has received an offer on a home her client is selling. Connie's client counter
offers, and then so does the buyer. The process goes back and forth four times until
both the seller and the buyer are happy with the agreement. Connie then prepares an
estimated closing statement for her seller. Has Connie violated any laws? - answer-
Yes, she waited too long to present the estimated closing statement.
Which of the following violations could result in criminal charges? - answer- Offering
lottery inducements
Which of the following violations could also result in criminal charges? - answer- Writing
an NSF check to the AREC
Which of the following professionals involved in the real estate business are most
concerned about managing real estate for clients? - answer- Property managers
Real estate can be defined as - answer- land and everything permanently attached to it.
, Broker Bob received cash from a client as earnest money on a property. Bob hung onto
the cash until the offer became a contract and then deposited the money into his
personal account. What did Bob do wrong in handling the cash? - answer- He didn't
deposit the cash immediately.
Trust funds must be disbursed within ____ of the transaction's closing. - answer- 7 days
What is commingling? - answer- A client's funds and a broker's funds being deposited
into the same trust account
An accounting document currently used to show final costs of transferring property
ownership is called - answer- an estimated closing statement.
TRID requires a Loan Estimate to be provided to borrowers - answer- within 3 business
days of loan application.
_______ requires that property buyers be informed about closing costs. - answer-
RESPA
An individual who is provided brokerage services by a licensee without signing an
agency agreement is a(n) - answer- customer.
RECAD was enacted by - answer- Alabama Legislature.
When must a broker provide the non-agency disclosure form to a consumer? - answer-
Before confidential information is exchanged
RECAD requires qualifying brokers to maintain an office policy that sets - answer- the
brokerage services the company will offer.
An agency relationship is not assumed, implied, or created until - answer- the licensee
and the consumer enter into a written agreement.
In which brokerage relationship does the broker work with both parties in the same
transaction without becoming an agent? - answer- Transaction brokerage
In which brokerage relationship does the agent represent only one client in a
transaction? - answer- Single agency
Which brokerage relationship is illegal in many states but is legal in Alabama? - answer-
Limited consensual dual agency
Which of the following is included in the bundle of rights inherent in ownership? -
answer- To possess
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