Chapter 12- Book Quiz (Plus)

At what time should the real estate licensee present the consumer notice to the prospective buyer?

• When they get together to discuss the buyer’s needs and financial ability.

• When the buyer, who is driving by a licensees listing, calls to ask what the price is.

• During a busy open house with at least four couples milling around.

• When the buyer calls on a newspaper ad.

Answer explanation

The answer is when they get together to discuss the buyer's need and financial ability. Licensees should present the Consumer Notice to all consumers at the first contact where a substantive discussion about real estate occurs. In situations named, it would be when the licensee and the buyer sit down to seriously discuss their needs and financial abilities. (p. 199)

Real estate licensees may do ALL of the following EXCEPT

• provide inaccurate information.

• provide the listed price to a buyer who calls in.

• provide sources where the buyer can find additional information.

• display a For Sale sign with written permission of the seller.

Answer explanation

The answer is provide inaccurate information. Licensees may not give assurances or advice in a real estate transaction that they know is incorrect, inaccurate, or improbable. (p. 200-201)

A broker must keep records for all real estate transactions

• for at least three years following the date of consummation or termination.

• for at least one year following the closing date.

• for at least three years following the listing date.

• indefinitely.

Answer explanation

The answer is three years following the date of consummation or termination. Records of real estate transaction must be retained for three years following the consummation or termination of the transaction. (p. 197)

The Real Estate Commission may take disciplinary action against a licensee for all of the following EXCEPT

• Violating the real estate licensing and registration act.

• Violating the Pennsylvania human relations act.

• Violating blue-sky laws.

• Violating the rules and regulations.

Answer explanation

The answer is violating blue sky-laws. Violation of blue-sky laws would result in prosecution by federal and state authorities but not The State Real Estate Commission. The State Real Estate Commission has jurisdiction over violations of the RELRA and its Rules and Regulations, which includes section 604 of the rules of for violations of the Pennsylvania Humane Relations Act. (p. 182)

When advertising a property for sale, the broker must include which of the following in the advertisement?

• Listing price

• Broker’s business name

• Broker’s address

• Legal description of property

Answer explanation

The answer is broker’s business name. The Commission's Rules and Regulations require the broker’s business name to be included exactly as it appears on the license. Bline ads are expressly prohibited. (p. 201)

Which of the following is NOT calls for disciplinary action against a licensee?

• Payment of a commission by a licensed broker to another licensed broker.

• Failure to provide the client with a copy of the listing contract at the time it is signed.

• Placing a For Sale sign on a property without written permission of the owner.

• Accepting a listing with the understanding that illegal discrimination will be exercised in the sale of the property.

Answer explanation

The answer is payment of a commission by a licensed broker to another licensed broker. A broker is permitted to pay a commission to another licensed broker. Prohibitions in section 604 of the Commission's Rules and Regulations include failing to provide a consumer with a copy of contracts at the time of execution, erecting For Sale or For Rent signs without written consent, and accepting listings with the understanding that illegal discrimination will be practiced. (p. 184)

A licensed salesperson may do which of the following?

• Leave the employment of one broker and become associated with another broker without reporting the change to the Commission.

• Sell the salesperson’s own property without telling a buyer that she is licensed.

• Place an advertisement using only the salesperson’s name and phone number.

• Sell condominiums.

Answer explanation

The answer is sell condominiums. A licensed salesperson is authorized to handle the sale of condominium interests on behalf of the employing broker. (p. 188)

What is the best definition of a broker of record?

• A broker who is permitted to sell dwellings only for the builder-owner.

• A broker who oversees the activities of a cemetery broker.

• A broker who is employed by another broker.

• A broker who is the licensee responsible for the activities in a real estate corporation.

Answer explanation

The answer is A broker who is the licensee responsible for the activities in a real estate corporation. The broker of record is the individual broker responsible for the licensed real estate activities of a partnership, association, or corporation licensed as broker. (p. 188)

Which of the following is true regarding the laws for escrow accounts?

• Rents the broker collects must be deposited into the broker's escrow account.

• The salesperson must deposit escrow funds as soon as they are received.

• The buyer and the seller can agree in writing that the escrow money will not be deposited until the agreement of sale is accepted.

• Escrow funds must be deposited in an interest bearing account.

Answer explanation

The answer is the buyer and the seller can agree in writing that the escrow money will not be deposited to the agreement of sale is accepted. The Commission's Rules and Regulations provide that a broker negotiating an agreement of sale may, with the written consent of both the buyer and seller, refrained from depositing earnest money into the escrow account until the agreement is signed by both parties. (p. 197)

Which statement regarding the Pennsylvania Real Estate Commission is false?

• The Commission makes and enforces the rules by which real estate licensees must abide.

• Examinations that must be taken by applicants for real estate licensing are administered by an independent testing company rather than by the Commission.

• Members of the Commission are selected by the state Association of Realtors.

• The Commission must submit annual reports to legislative committees in the state Senate and House of Representatives.

Answer explanation

The answer is members of the Commission are selected by The State Association of Realtors. Members of The Real Estate Commission are appointed by the governor, not The State Association of Realtors. The Commission prescribes subjects for testing, but the department contracts with a professional testing service to write an administer exams. The Commission also promulgates the Rules and Regulations and reports to legislative committees. (p. 182-183)