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REAL ESTATE LICENSE FINAL EXAM (200+ QUESTIONS &
CORRECT ANSWERS) WELL VERIFIED
What action should the seller take when an offer is rejected? Make a formal counter offer. Complete a contract rider. Complete an addendum.
Note the rejection on the offer. - CORRECT ANSWER >>> Note the rejection on the offer.
Which of the following requires a written contract? The purchase of a TV for $378. A real estate lease for a term less than one year A real estate lease for a term longer than one year
A potential buyer visiting an open house showing - CORRECT ANSWER >>> A real estate
lease for a term longer than one year What is the Statute of Frauds? A law that makes fraudulent behavior a felony The part of the Real Estate License Act that describes prohibited conduct A federal law that has no application in Tennessee real estate regulation
A legal doctrine that requires certain contracts to be in writing - CORRECT ANSWER >>> A
legal doctrine that requires certain contracts to be in writing
Preparing which of the following documents would expose a real estate licensee to a charge of practicing law without a license? A listing agreement A sworn statement A deed
An escrow receipt - CORRECT ANSWER >>> A deed
What is the preferred method of listing the location of a property? By legal description By mailing address By subdivision plot number
By Post Office box number - CORRECT ANSWER >>> By legal description
Which of the following makes a contract voidable? Good faith Legal act Voluntary Act
Fraud - CORRECT ANSWER >>> Fraud
Which legal action asks the courts to disperse escrow funds?
Move the funds to a non-escrow account to lessen the fiduciary responsibility. - CORRECT
ANSWER >>> Ask a court to "interplead" the funds.
An affiliate broker receives a check for earnest money from a purchaser. How soon must she turn it over to her broker? At any time before closing By the end of the week in which it was received At any time before another offer is received
Immediately on receiving it - CORRECT ANSWER >>> Immediately on receiving it
When can a broker deposit his own funds into an escrow account? To balance the account To maintain the account To deposit large sums of personal checks
To allow for special interest rates - CORRECT ANSWER >>> To maintain the account
Which best defines dual agent? The seller is not represented by the buyer's agent. The buyer's agent represents only the buyer. The listing broker represents the buyer.
The listing broker represents both the seller and the buyer. - CORRECT ANSWER >>> The
listing broker represents both the seller and the buyer.
When must a broker disclose to another licensee that he represents the buyer in a transaction? When he brings the buyer to the seller's property for the first time On initial contact At any time after the buyer signs the exclusive representation agreement
The broker may do so only if the representation agreement does not have a loyalty clause -
CORRECT ANSWER >>> On initial contact
When might an owner who lists with a broker be liable for the broker's misrepresentations? When the owner knew the broker was misrepresenting When the broker committed the misrepresentations before the listing agreement could be finalized When the owner failed to give the broker clear instructions about avoiding misrepresentation
When the misrepresentations made the owner's property more attractive to buyers -
CORRECT ANSWER >>> When the owner knew the broker was misrepresenting
Which agency relationship is the most difficult to maintain? Single Agency Designated Agency Dual Agency
Facilitator Relationship - CORRECT ANSWER >>> Dual Agency
Which of the following agency relationships are not permitted in Tennessee?
agency by default.
designated agency. - CORRECT ANSWER >>> designated agency.
Agent Jim is working without a written agreement with buyer Al. This type of relationship is known as judiciary. single agent. double agent.
facilitator. - CORRECT ANSWER >>> facilitator.
When is a seller required to give a written property disclosure or disclaimer to a buyer? At the time of first showing the property Before any offers have been made At closing
Before acceptance of a purchase contract - CORRECT ANSWER >>> Before acceptance of a
purchase contract The licensee may be subject to legal action for: failure to disclose adverse facts not reported in inspection reports. failure to disclose adverse facts of which the seller had actual knowledge. failure to disclose adverse facts of which the licensee had NO actual knowledge. failure to
disclose adverse facts of which the licensee had actual knowledge. - CORRECT
ANSWER >>> failure to disclose adverse facts of which the licensee had actual knowledge.
Which of the following is a duty a licensee owes the party he represents as agent in a property sale? Put the client's best interests above those of all others, including the public. Conceal all known and unknown adverse facts unless instructed by the client to reveal them. Obey the client's instructions, no matter what.
Obey all legal instructions within the scope of the agreement. -^ CORRECT ANSWER^ >>> Obey
all legal instructions within the scope of the agreement. In a designated agency situation, the managing broker is considered to be a dual agent. is not considered to be a dual agent.
has less managing broker's responsibilities. has diminished contractual rights. - CORRECT
ANSWER >>> is not considered to be a dual agent.
There is no agency relationship unless there is a licensed broker and an affiliate broker. a listing agreement. a power of attorney. a written
bilateral agreement. - CORRECT ANSWER >>> a written bilateral agreement.
Under what circumstances may a seller give the buyer a disclaimer statement rather than a disclosure statement?
Agent Bill frequently allow months to pass before depositing escrow monies. He is in violation of the Escrow Account Fund Act. Real Estate Reporting Act. Real Estate Licensing Act.
Real Estate Deposit Act. - CORRECT ANSWER >>> Real Estate Licensing Act.
How long does one have to file a complaint with the Commission about a licensee's misleading advertising behavior? Up until the expiration date of his or her license As long as it takes to gather necessary documentation Two years from the person's discovery of the violation
The period of time up until the licensee is charged in a court action -^ CORRECT ANSWER
>>> Two years from the person's discovery of the violation
A broker who wants to buy a house for himself risks creating a conflict of interest unless he requests a temporary downgrade of his license. he hires another broker to represent him.
he fully discloses his interest to the seller. he offers the full asking price. - CORRECT
ANSWER >>> he fully discloses his interest to the seller.
Which of the following actions guard against creating a conflict of interest? Selling from one's own account Dual Agency
Net Listings
Signed Disclosures - CORRECT ANSWER >>> Signed Disclosures
Which of the following acts would probably constitute an illegal act of discrimination? Assisting a person who does not understand English to read a property description Refusing to show a listing to a person because of that person's religion Informing a church group that there is a former church property for sale
Refusing to follow a seller's instructions to show her house only to African American buyers -
CORRECT ANSWER >>> Refusing to show a listing to a person because of that person's
religion After a consumer has filed a written complaint to the Commission alleging that a licensee has violated the License Act, the next step in the process will most likely be what? The Commission will investigate. The Commission will suspend the licensee's license. A court will issue a cease and desist order.
The complainant will be called to appear in person before the Commission. - CORRECT
ANSWER >>> The Commission will investigate.
The Commission may revoke a license if it finds the licensee has been inactive for more than six months.
Purchaser obtains a right to sell lease rights. Purchaser obtains the right to use only one site location.
Purchaser obtains points for cash awards. - CORRECT ANSWER >>> Purchaser obtains a
recurring right to occupy accommodations in more than one site. Which of the following is NOT a specialty within the control of the Commission? Rentals Time Shares Property Management
Rehabbing - CORRECT ANSWER >>> Rehabbing
A landlord may re-take a leased apartment if the tenant is absent but fully paid up for six months. the tenant has been absent for thirty days and has missed a rent payment.
the tenant disputes a rent escalation. the owner directs him to do so. - CORRECT ANSWER
>>> the tenant has been absent for thirty days and has missed a rent payment.
The managing agent of a time-share project must be a resident of a unit in the project. a licensed real estate firm or bonded agent. an employee who is not a family member of the owner. an experienced property
manager. - CORRECT ANSWER >>> a licensed real
estate firm or bonded agent. How often must a rental location agent verify that her advertised properties are still available? Every time a prospective tenant calls about an advertised property Every time the ad is about to expire Every day
Once a week - CORRECT ANSWER >>> Every day
The Time Share public offering statement must include plat map. description of liens.
titles to unit. cash out value. - CORRECT ANSWER
>>> description of liens.
Mary develops and mails marketing materials for Southern Air Time-Shares. Her job would be described as a acquisition agent. marketing agent. mailing agent.
publication agent. - CORRECT ANSWER >>> acquisition agent.
A licensee may participate in a time-share transaction only if he or she has a special time-share license. the time-share project does not have its own principal broker. his or her firm is affiliated with a registered time-share project. the time-
Which of the following is an example of a discriminatory practice? Interfering with a person who is trying to discriminate in providing services Willfully preventing an employee from complying with an order from the Human Rights Commission Complying with a provision of the Human Rights Act in spite of a direct order from one's employer to ignore it
Offering service to customers who speak a certain language -^ CORRECT ANSWER
>>> Willfully preventing an employee from complying with an order from the Human Rights
Commission From whom must a permit be obtained before the operation of a privately owned sewage system? Department of Wastewater Division of Clean Water Protection Division of Groundwater Protection
Department of Agriculture - CORRECT ANSWER >>> Division of Groundwater Protection
Which of the following activities is included in the definition of "residential real estate-related transaction" for the purposes of anti-discrimination legislation in the Tennessee law? Appraising residential real estate Developing subdivisions Leasing office space
Performing repairs for a home seller - CORRECT ANSWER >>> Appraising residential real
estate
What is the penalty for a first-time discriminatory housing practice offense? $10, $15, $25,
$50,000 - CORRECT ANSWER >>> $10,
What is the penalty for three or more violations of discriminatory housing practices? $10, $15, $25,
$50,000 - CORRECT ANSWER >>> $50,
Which agency oversees radon inspections? No agency has authority The Tennessee Department of Air Quality The Tennessee Department of Environment and Conservation
EPA - CORRECT ANSWER >>> No agency has authority
How long does a person have to file a discrimination complaint? Thirty days from the discovery of the alleged violation
A dog kennel - CORRECT ANSWER >>> A private sewage system
Which agency approves septic tank installations? The Tennessee Department of Soil & Health The Tennessee Department of Health The Tennessee Department of Environment and Conservation
The Tennessee Department of Waste Management - CORRECT ANSWER >>> The Tennessee
Department of Environment and Conservation Who enforces violations of Tennessee fair housing law? The Tennessee Fair Housing Board The Tennessee Real Estate Commission The Tennessee Human Rights Commission
The Tennessee Attorney General - CORRECT ANSWER >>> The Tennessee Human Rights
Commission An affiliate broker associated with Rainbow Realty decides to purchase one of the company's listed properties and submits an offer to purchase. The agent did not disclose to the seller that she/he is an agent with Rainbow Realty. This agent may be charged with which of the following license law violations? Undisclosed dual contracts. Undisclosed dual listings. Undisclosed agent interest.
Undisclosed commingling. - CORRECT ANSWER >>> Undisclosed agent interest.
Which of the following is legal advertising on a sign? "For sale, 555-1224," on a building owned and listed by a broker. "For rent by owner/agent, 555-1234," on a building owned, but not listed, by a broker. For sale by owner, 555-1234, "on a building owned and listed by a broker.
For sale, call ABC Realty," on a building owned and listed by a broker. -^ CORRECT ANSWER
>>> "For rent by owner/agent, 555-1234," on a building owned, but not listed, by a broker.
Which of the following is a true statement about an affiliate broker who violates the Tennessee Real Estate License Law? The agent could be charged with a Class B felony. The agent may not be subject to criminal prosecution under the general laws of the state. The agent may not incur civil liability under the general laws of the state. The agent could have his license revoked for violation of the law. Violation of TREC rules is a
Class B Misdemeanor. - CORRECT ANSWER >>> The agent could have his license revoked for
violation of the law. Violation of TREC rules is a Class B Misdemeanor. Joan is an affiliate broker. Her managing broker Dan also works 9:00 a.m. to 4:00 p.m. at a grocery store. The affiliate broker: should stay in contact with her managing broker several times a week. cannot work for Dan as an affiliate broker. will be supervised when Dan is in the office. will need to handle all the
closing paperwork for Dan. - CORRECT ANSWER >>> cannot work for Dan as an affiliate
broker.
