2024 Texas Jurisprudence Psychologist Exam New Latest Version Updated Exam, Exams of Business networking

Download 2024 Texas Jurisprudence Psychologist Exam New Latest Version Updated Exam and more Exams Business networking in PDF only on Docsity! 2024 Texas SEA Real Estate Brokerage Exam New Best Studying Guide with All Questions from Actual Past exam and 100% Correct Answers Which of the following is an element of a valid real estate contract? --------- Correct Answer ---------- Consent A broker's expectation that helping each licensee grow as a real estate professional will add to the brokerage's bottom line is exhibiting a ______ philosophy. ---------- Correct Answer ---------- Development Which of the following statements is true regarding licensees who work at a limited function referral organization? ---------- Correct Answer ---------- The licensees don't do any active selling. A giant local brokerage has offered to buy Dalia's brokerage and make her the primary broker of its new branch office. What kind of growth is this? --------- Correct Answer ------ ---- Inorganic growth occurs through the acquisition or merger of companies. When licensees are _________, you can't require them to keep specific office hours, even when you provide them space in a physical office. --------- Correct Answer ---------- Independent contractors Gloria has an option to purchase the cottage she leases from her landlord. She can exercise the option within the next two years. To gain that right, Gloria paid the landlord $5,000. This is called ______. --------- Correct Answer ---------- An option fee Regina is a supervising broker who owns her own brokerage. She has two associate brokers and two licensees who all work as independent contractors. She also has an unlicensed assistant on payroll as an employee. Which of the following is true regarding Regina's liability? --------- Correct Answer ---------- Regina is liable for all members of her firms' actions. What is a SWOT analysis useful for determining? --------- Correct Answer ---------- the strengths, weaknesses, opportunities, and threats facing a business SWOT: self-evaluation technique to determine Strengths, Weaknesses, Opportunities, and Threats If a state has incorporation and tax laws that attract corporations, what are these considered to be in a market analysis? --------- Correct Answer --------- benefit Which of the following brokerage values is most important to a licensee who wants to thrive at that brokerage? --------- Correct Answer --------- Values that match the licensee's values Which of the following actions, when performed by a Texas licensee, violates the Canons of Professional Ethics and Conduct - Integrity? --------- Correct Answer --------- Preparing a written agreement that falsely states a purchase price What's the difference between your brokerage's brand identity and its image? --------- Correct Answer --------- Your brand identity is how you visually express what your firm is; your image is how the marketplace perceives you. In the hiring process, which step narrows the field by identifying those applicants who don't meet the requirements of the position? --------- Correct Answer --------- prescreening What legal concept relates to a broker's responsibility for licensee misconduct? --------- Correct Answer --------- vicarious liability Broker Kay is the anti-hoarder; she hates all forms of clutter, especially paperwork. She'd love to shred every bit of paperwork the second a transaction closes, and decides to write her brokerage policy to state that all transaction paperwork must be shredded within one month of the transaction's closing. Is this okay? --------- Correct Answer ------- -- No. Kay must obey the recordkeeping requirements established by state laws and regulations. Which of the following describes the process of making a copy of a website for the purpose of obtaining money or data from unsuspecting users? --------- Correct Answer -- ------- cloning Workplace fraud includes which of the following? --------- Correct Answer --------- Working with a vendor to falsely increase invoice costs, and splitting the difference Working with a vendor to falsely increase invoice costs, and splitting the difference ------ --- Correct Answer --------- Promptly investigate the comments. Rick's a supervising broker. One of his experienced licensees, Katrina, accidentally committed a licensing violation by not providing a required disclosure. Who's responsible? --------- Correct Answer --------- both Rick and Katrina Which statement describes a code of ethics? --------- Correct Answer --------- Guidelines for conduct Which of the following business planning tools provides alternative ideas, options, strategies, and resources in case unforeseen conditions arise? --------- Correct Answer - -------- contingency plan A ______ is a type of real estate brokerage that's usually run as a subsidiary to a full- service brokerage. --------- Correct Answer ---------- Limited function referral organization (LFRO) If a developer wishes to make FHA loans available to future buyers, what must she keep in mind when working on a development? --------- Correct Answer ---------- Building codes and standards Shane was disappointed when he discovered that Bruce earned more than he did. They had both been with the company the same amount of time. Bruce just happened to have higher sales figures. Shane's company likely practices the ______ philosophy of compensation. --------- Correct Answer ---------- Performance In the 1950 case involving the District of Columbia's Washington Board of REALTORS® in which the National Association of REALTORS® became involved, the board required that brokers should maintain the standard rates of commission adopted by the board, and no business should be solicited at lower rates. No member may charge less than this rate when involved in the sale, exchange, lease, or management of real property in the District of Columbia. What were the parties guilty of? --------- Correct Answer ---------- Price Fixing This was a violation of the Sherman Antitrust Act and was an example of a price fixing antitrust violation. Brandon is the listing agent for Jane's property. After a couple of weeks on the market, two formal written offers come through. One is for well below the listing price, and another is a bit closer, but still under the list price. What should Brandon do with the offers? --------- Correct Answer ---------- Present both offers to Jane. To be effective, the wording of a brokerage's code of ethics must be ______. --------- Correct Answer ---------- Specific A licensee with particular expertise can be asked to ______ as a form of professional development. --------- Correct Answer ---------- Train other licensees Which one of the following options describes a budget deficit? --------- Correct Answer -- -------- Overall, you've spent more than you've earned. What's the minimum number of business days prior to closing that lenders have to provide borrowers with the Closing Disclosure form? --------- Correct Answer ---------- Three Economic indicators that you should evaluate to determine market health include GDP, CPI, CCI, and __________. --------- Correct Answer ---------- MARTS: Survey of all retail and food service sales Four key economic indicators include the gross domestic product, the consumer price index, the consumer confidence index, and retail and food service sales. Byron is an environmental engineer working for Smith Environmental Services, Inc. He's currently working on a site assessment for an old hospital. Byron just sent soil and water samples to the lab that Smith uses for all of its testing. Which phase of the assessment process is Byron currently in? --------- Correct Answer ---------- Phase II encompasses testing in order to verify site contamination. A person who facilitates the paperwork, but doesn't actually represent either party to the transaction, may be a ______. --------- Correct Answer ---------- Transactional broker What is the difference between a merger and an acquisition? --------- Correct Answer ---- ------ A merger is when two companies join together. An acquisition is when one company purchases another company. Which of the following statements in a financing portfolio is most likely to receive a positive response from your lender or investors? -Our cash flow was sufficient every month last year. -Profits increased from $189,000 in 2018 to $287,000 in 2019. -We had a decent profit over the past three years. -We need financing to support our expansion. --------- Correct Answer ---------- Profits increased from $189,000 in 2018 to $287,000 in 2019. Which of the following types of fraud is more common to the real estate industry than to other industries? --------- Correct Answer ---------- Mortgage fraud What does the Federal Trade Commission consider to be an unfair ad? --------- Correct Answer ---------- Any ad or business practice that causes or is likely to cause injury is considered an unfair ad, according to the FTC's Unfairness Policy Statement. Which of the following describes the purpose of a formal chain of command? --------- Correct Answer ---------- Establishes a reporting structure A formal chain of command provides a decision-making process, establishes a reporting structure, and organizes responsibilities. Which technological tool is becoming obsolete? --------- Correct Answer ---------- Fax machines A ______ is a budget prepared by a department that's been given the responsibility of generating enough income to cover an allocated portion of the firm's budget and make a profit. --------- Correct Answer ---------- Profit center budget Why is it important to evaluate the cultural makeup of your market area? --------- Correct Answer ---------- So you can work to solve problems that culturally diverse populations may face. In risk analysis, what does severity of impact mean? --------- Correct Answer ---------- The level of damage the firm could incur Severity of impact refers to the potential level of damage for any occurrence of a risk. It may be measured by cost or by other criteria. What's one plausible way to manage risk in your real estate business? --------- Correct Answer ---------- Purchase errors and omissions insurance. Stuff happens. That's why you need errors and omissions insurance to help manage risk. How is organic growth defined? --------- Correct Answer ---------- The growth of a business through the gradual adoption of new services and increases in market share Alison has written the mission and vision statements for her brokerage, Honesty Homes. Armed with those and the situational analysis data, she's ready to begin forming business objectives. Starting out, her brokerage will be small, with only three licensees and a part-time administrative assistant. How many objectives would be reasonable to start off with? --------- Correct Answer ---------- Two An escrow officer is an example of which type of agent? --------- Correct Answer ---------- A limited agent Mick owns his own brokerage firm, but no longer practices real estate. He prefers to manage the business's day-to-day operations. What type of broker-owner is he? --------- Correct Answer ---------- Managing Even though the Federal Trade Commission is concerned with all ad claims, what sort of ads would most likely concern the commission? --------- Correct Answer ---------- The FTC is concerned with all ad claims, but it's most concerned by any ad that makes a health or safety claim or any claim that is difficult for the consumer to evaluate. Broker Bea is a managing broker who has 10 independent contractors and two employees working for her. Based on this information, does the Occupational Safety and Health Act apply to her brokerage? --------- Correct Answer ---------- Yes. These laws apply to any business with at least one employee. The Occupational Safety and Health Act doesn't cover independent contractors. However, these laws do apply to any business that has even one employee. A ______ would fulfill an assigned role within the brokerage by supervising licensees and staff. --------- Correct Answer ---------- Manager Everything in your office is potentially at risk from thieves and other criminals. Because of this, what should you never do? --------- Correct Answer ---------- Leave clients unattended in the office. Carmen's original one-year commercial lease has ended, and now, with her landlord's permission, she has gone into a month-to-month lease situation. What type of clause was in the original lease agreement that enabled this situation to occur? --------- Correct Answer --------- Automatic renewal What's the best definition of a direct expense? --------- Correct Answer --------- An expense that wouldn't exist if no sale had been made What feature of a computer system enables teleconferencing? --------- Correct Answer -- ------- Networking The Texas Deceptive Trade Practices-Consumer Protection Act (DTPA) protects consumers against real estate licensees who ______. --------- Correct Answer --------- Use lies, misrepresentations, fraud, or other deceptive practices or acts to advertise or sell real estate Who has the most valuable information about your firm's operations to assist in identifying potential risk? --------- Correct Answer --------- You and your staff Dominic works for Omen Brokerage. He's responsible for supervising the activities of licensees and unlicensed employees at the office. In which staffing category does his position fall? --------- Correct Answer --------- Manager Janine took a photograph of a lovely, sweeping estate and, with the approval of her broker, wants to use the photo as her logo. Which of the following would a graphic artist indicate is the primary concern? --------- Correct Answer --------- The complexity of the image Which of the following is a true statement about a brokerage's building safety? --------- Correct Answer --------- Tall hedges near the entrance pose a problem. Which of these is an action a broker should take after a sales meeting? --------- Correct Answer --------- Send out a recap of the key points from the meeting to all associates Minimum wage requirements for employees are established in the federal ______. ------ --- Correct Answer --------- Fair Labor Standards Act (FLSA) Which of the following economic indicators most closely relates to consumer confidence? --------- Correct Answer --------- CCI Which is most closely related to the dramatic increase in the number of touches you must have in order to be remembered by your target audience? --------- Correct Answer --------- The general bombardment of messages everyone receives daily Sam and Monique knew that the old industrial site that they purchased needed some environmental cleanup, but they don't have the cash and put cleanup on hold. The EPA hired its own crew to deal with groundwater issues because of industrial solvents and billed Sam and Monique $164,000 when the job was complete. If Sam and Monique don't pay the bill, which one of the following could happen? --------- Correct Answer ------ --- The EPA can seek damages in court for up to three times the actual cleanup costs. When a sales contract doesn't cover the terms needed by the parties, which of the following actions is a licensee allowed to take? --------- Correct Answer --------- Add a standard addendum using standard language. Five competing brokerage firms in the same area agreed to cooperate in setting a standard commission rate for the area. This makes them guilty of a per se antitrust violation. What is a per se antitrust violation? --------- Correct Answer --------- No intent needs to be proven Rich is a sole proprietor who has no staff. If he grows his business to a four-agent firm, which of the following can he expect? --------- Correct Answer --------- Increased revenue Which of the following is an industry trend that a brokerage should track? --------- Correct Answer --------- Average days on market Marsha is reviewing a market analysis to help her determine the location of her new brokerage office. What data should she look for? --------- Correct Answer --------- What current tenants pay for rent and utilities What is the purpose of strategic business planning --------- Correct Answer --------- To help reach the business goal by determining the method by which the goal can be achieved Lena's buyer client Mindy is making an offer on Joe's house. Which party decides how much earnest money to offer? --------- Correct Answer --------- Mindy There are three methods of dispute resolution: ______, arbitration, and litigation. --------- Correct Answer --------- Mediation Rochelle's firm is concerned about its licensees being attacked during showings. Which of the following is the mostly likely source of risk? --------- Correct Answer --------- Safety When working with new licensees, what's the main advantage of having a physical office space? --------- Correct Answer --------- You can spend more time with employees. Rita, the owner of Advantage Realty, wants her brokerage to give clients an impression of a boutique agency where salespeople work as a smoothly functioning unit to achieve clients' goals. What is her best strategy for achieving this? --------- Correct Answer ------- -- Maintain a small staff of carefully chosen licensees who can work together successfully. Reese and his staff have developed an engaging, action-oriented listing presentation to present to potential sellers. Which component in the marketing model does the listing presentation represent? --------- Correct Answer --------- Communicating Sari, a licensee for Tynan Realty, is placing a listing ad in the Presbyterian Outlook. Is this a potential fair housing violation? --------- Correct Answer --------- Yes, unless she also places the ad in publications that reach a broader market. Which of the following describes a benefit of a long-range plan? --------- Correct Answer --------- It provides a strategic method for accomplishing set business goals. What's a downside for a brokerage that opts for a national affiliation? --------- Correct Answer --------- Less decision-making authority James is placing a listing ad for a soon-to-be-built expensive home in a gated community. He includes the words "exclusive" and "ultra-conservative community" in his ad. Is James in danger of violating fair housing law? --------- Correct Answer --------- Yes, because it implies that the listing is suitable only for a particular type of buyer. Why are managers at a brokerage usually salaried employees? --------- Correct Answer --------- Because their activities support the work of others rather than generating revenue directly Vince's job at the brokerage is to greet customers and clients who walk in, answer the phone, and direct people to an agent. In which staffing category does his position fall? -- ------- Correct Answer --------- Clerical/administrative Jill is selling her property and hired David as her agent. David brings another client, Kirk, to see the property, which Kirk is interested in purchasing. What kind of agent is David acting as in this scenario? --------- Correct Answer --------- a dual agent Learning how to create ______ is an essential skill for licensees as part of business planning. --------- Correct Answer --------- Goals and benchmarks Why should a business evaluate its competition? --------- Correct Answer --------- To understand its strengths and weaknesses A ____ breaks a more general budget line item into details, making it easier to use in guiding business operations. --------- Correct Answer --------- Variable expense budget What impact do marketing efforts have on sales? --------- Correct Answer --------- indirect Samantha is a numbers person, and she's determined that for every 100 sales contracts her licensees write, 12% will have some sort of error. Relating this to risk analysis, what does this number represent? --------- Correct Answer --------- Likelihood of occurrence market indicators --------- Correct Answer --------- price levels, vacancy rates, new building permits, inventory turnover rates, and sales volume. CERCLA --------- Correct Answer --------- established in 1980 as a Superfund to respond to spills that may endanger the public health or the environment, and to clean up abandoned or uncontrolled hazardous waste sites. The economic value of a piece of land with an endangered species present is less than it would be otherwise because it reduces the amount of land that can be used or developed. --------- Correct Answer --------- There are three levels of liability under CERCLA: --------- Correct Answer --------- strict (owner is liable), joint and several (each responsible party is liable), and retroactive (current/prior owners are liable). If those who are responsible for contamination refuse to pay for a site's clean-up, the EPA can hire its own contractors, then seek damages in court for up to three times the actual clean-up costs. --------- Correct Answer --------- The presence of wetlands on a site may increase or decrease the appraised value of the land, depending on the circumstances and the intended use of the site. --------- Correct Answer --------- Under CERCLA, landowners can be held responsible for the clean-up costs of hazardous waste, even if they did not cause the waste. --------- Correct Answer --------- market segments --------- Correct Answer --------- Locations, cultures, generations, professions, alternative markets, property types, or even lifestyle choices Due to increasing numbers of foreign-born resident workers and other immigrants, the need for businesses to be multi-culturally savvy and employ staff who are familiar with the customs, languages, and needs of today's diverse society has increased. --------- Correct Answer --------- The competition's affiliations, office locations, marketing strategies, consumer services, and recruiting strategies should all be studied and improved on where possible to differentiate your business. --------- Correct Answer --------- A properly performed SWOT analysis is a great way to evaluate your business's current position, abilities, and needs. --------- Correct Answer --------- Licensees can use the results of a SWOT analysis to build on their strengths, learn new insights into their business, and as a tool to grow their business. --------- Correct Answer --------- SWOT --------- Correct Answer --------- strengths, weaknesses, opportunities, and threats. It's a common tool businesses use to develop their strategies. opportunities --------- Correct Answer --------- external facts or situations that you may use as a guide to achieve your goals. It takes research and experience to recognize the potential around you. Business plan --------- Correct Answer --------- sets the foundation for your business and is the basis for objectives, goals, strategies, and tactics. All decisions must be aligned with the business plan to ensure the company remains on course. builds credibility with people outside of the company who will use your business plan to determine whether or not they'll do business with you. starts with a mission and vision, which set the foundation for all of the other elements of the business plan. long-range plan --------- Correct Answer --------- is there to remind you of your end goal and the strategic route to get there. Long-range plans typically range three to five years. review on a regular basis, perhaps quarterly, in order to update it according to current business settings and projections. vision statement --------- Correct Answer --------- focuses on the future (what the company's future results, achievements, and successes will be) and includes a clear picture of outcomes you expect to achieve using clear, unambiguous terms. mission statement --------- Correct Answer --------- focuses on the present and provides a clear picture of your brokerage's purpose (i.e., it's "why"), including what it stands for and how desired outcomes will be achieved. business objectives --------- Correct Answer --------- align with the mission and state what the company will focus on to fulfill its mission, and to set the priorities during the plan's defined timeframe. SMART --------- Correct Answer --------- specific, measurable, attainable, realistic, and timely. contingency --------- Correct Answer --------- future occurrence that can't be predicted with certainty. A contingency plan provides alternative ideas, options, strategies, and resources for when unanticipated events or situations occur. Business Plan Components --------- Correct Answer --------- executive summary, market analysis, company description, mission statement, description of products and services, goals, objectives, strategies, financial plan, and appendix. executive summary --------- Correct Answer --------- the plan's synopsis, covering company history, financial information, activities, market position, distinguishing features and services, and a convincing argument for the plan to be put into action. tactical planning --------- Correct Answer --------- the way in which a company and its personnel will go about achieving the strategies tied into the company's goals to help it reach its objectives. long-range plan use --------- Correct Answer --------- used to determine your company's work plan for the year. Long-range goals can be divided into annual goals to accomplish throughout the timespan of the long-range plan. basis for the company's business plan each year. Owners and the managers can use the business plan throughout the year to monitor the company's progress. A limited liability company (LLC) --------- Correct Answer --------- combines the benefits of pass-through profit and loss with a legal shield for the owners from personal liability. franchises --------- Correct Answer --------- offer immediate structure, brand recognition, training, and ongoing support for the price of start-up fees and ongoing payments. sole proprietors --------- Correct Answer --------- personally bear the responsibility for liability, failure, and taxes of their business. corporations --------- Correct Answer --------- considered separate entities for legal purposes, whereas partnerships are not. Corporations shield owners from personal liability. In an affiliated business arrangement (AfBA) --------- Correct Answer --------- separate real estate related companies have an arrangement to refer and/or share business with one another. affiliation --------- Correct Answer --------- allows new business owners to capitalize on a known brand. The trade-off is that the broker has less decision-making authority. Business life cycle --------- Correct Answer --------- birth, growth, midlife, maturity, decline, and death. birth stage --------- Correct Answer --------- characterized by a small scope of work, a tight budget, and an efficient operating structure. growth stage --------- Correct Answer --------- the most energetic time of an organization's life, characterized by an expanding customer base, increasing revenue, and increasing competition. should contain the conditions under which the lease can be terminated, the names and signatures of all parties, and any additional information based on negotiations and specific situations. tax clause --------- Correct Answer --------- stipulates that the tenant is responsible for paying any increase in taxes over the base year's taxes, in addition to the base rent. A "services included" clause --------- Correct Answer --------- stipulates that the tenant will be provided with specific services for an additional rental fee. A sublease/assignment clause --------- Correct Answer --------- notifies the tenant whether or not sublease or assignment is permitted, and under what circumstances it is permitted. Determine the prevailing market rental rate for commercial space and review recent leases at similar buildings for a good indication of what you might be able to negotiate. - -------- Correct Answer --------- ADA --------- Correct Answer --------- require communication accommodations be made for those who don't speak English and those who are hearing impaired. Three key areas of system maintenance --------- Correct Answer --------- software updates, antivirus scans, and software/utility scans. Hardware --------- Correct Answer --------- refers to the physical elements of a computer system; software refers to programs or applications that tell the hardware how to perform tasks. The current ratio and quick ratio demonstrates the firm's ability to meet its current liabilities. The debt-to-worth ratio shows how much the firm relies on debt for operations. --------- Correct Answer --------- Assets are items that are owned, liabilities are amounts owed, and net worth is the ownership position in the firm. --------- Correct Answer --------- The balance sheet --------- Correct Answer --------- also known as the statement of financial position, is a summary of assets, liabilities, and net worth. The cash flow statement --------- Correct Answer --------- helps match income to expenses in any given month, indicating whether additional cash will be needed. includes forecasted information about revenue and expenses gleaned from previous financial statements and knowledge of specific upcoming financial events. funding proposal --------- Correct Answer --------- should include information about your firm, the industry, your market, the skills and character of your principals, your specific business operations, and how this will be a profitable venture for your lender or investors. budget deficit --------- Correct Answer --------- means that you've overspent your overall budget. budget overrun --------- Correct Answer --------- means you've overspent one or more expense line items. The general operating budget --------- Correct Answer --------- management tool that establishes spending and income goals for the upcoming year. gross income --------- Correct Answer --------- includes income from operations. This doesn't include loans or investments. Profit center, variable expense, and monthly operating budgets carry much more detail, and allow departments to use budget figures to guide operations. A variable expense budget breaks high-level budget figures from the general operating budget into more detailed categories and amounts. --------- Correct Answer --------- Appreciation amount = original value x appreciation rate --------- Correct Answer --------- Use this formula when interest is calculated for a full year: total x rate = interest. --------- Correct Answer --------- To figure out the monthly interest, use this formula: interest amount = (loan balance x interest rate) / (number of payments annually). --------- Correct Answer --------- The four components of the marketing model --------- Correct Answer --------- creating, communicating, delivering, and exchanging, emphasizing what marketing people do. marketing plan --------- Correct Answer --------- should include a situation analysis, target market, goals and objectives, strategies and tactics, budget breakdown and a measurement method billboards --------- Correct Answer --------- may be the medium best suited for marketing an upcoming development that's mixed use in an urban environment. Television ads and apparel with the brokerage's logo --------- Correct Answer --------- may be mediums best suited for establishing name recognition. Social media --------- Correct Answer --------- may be best suited for the demographic that uses it most, which trends toward a younger demographic. However, all demographics use social media. A licensee who purposefully or accidentally violates the laws in the future could be subject to a fine of up to $43,792 per day, per ad. --------- Correct Answer --------- The Texas Deceptive Trade Practices—Consumer Protection Act . --------- Correct Answer --------- protects consumers against real estate licensees who use false, misleading, or deceptive actions or practices in the advertising properties for sale or lease cease and desist order --------- Correct Answer --------- requires its recipient to substantiate any claims in future ads. Future advertisements will be under extreme scrutiny. Autocratic management --------- Correct Answer --------- most often seen in professions where a variance from the ordered path would cause harm, such as in the military. Laissez-faire management --------- Correct Answer --------- is hands-off. It's best used when employees have been on the job for a while and know the processes to follow without the need for monitoring. Participatory management style --------- Correct Answer --------- invites participation and provides transparency. Coercive and dictatorial management styles --------- Correct Answer --------- similar in their demand for action. They're effective in crises and when an employee or a group needs brought into line. The IRS classifies workers into four categories for tax purposes. Real estate professionals are classified as statutory nonemployees for federal income tax purposes, as long as they meet the three tests that define this category. --------- Correct Answer --- ------ The Fair Labor Standards Act (FLSA) explains the complicated rules regarding classification of employees as exempt or nonexempt. --------- Correct Answer --------- A Limited Function Referral Organization (LFRO) --------- Correct Answer --------- usually operated as a subsidiary of a full-service brokerage. It uses licensed agents to gather referrals and feed them to the associated full-service brokerage. Factors to consider when deciding how many licensees to take on at a brokerage -------- - Correct Answer --------- desired market share, the level of supervision that will be given, the cost to the brokerage of each licensee, and client perception. The Equal Employment Opportunity Commission (EEOC) --------- Correct Answer -------- - enforces laws related to fairness and discrimination in the workplace. Risk management techniques to avoid violating antitrust law --------- Correct Answer ----- ---- include internal training programs, policies and procedures, discussing antitrust scenarios at staff meetings, and reporting and swiftly dealing with antitrust violations. The canon of discriminatory practices --------- Correct Answer --------- includes AIDS, and HIV-related illnesses in the disability category. prohibits making and responding to inquiries or making disclosures which indicate a preference or limitation based race, color, religion, sex, national origin, ancestry, familial status, or disability. The canon of fidelity requires that licensees put their client's interests ahead of their own, disclose --------- Correct Answer --------- requires that licensees put their client's interests ahead of their own, disclose personal interest in any transaction, and all compensation. The Canons of Professional Ethics and Conduct --------- Correct Answer --------- divided into five sections: fidelity, integrity, competency, Consumer Information Form 1-1, and discriminatory practices. Per se violation --------- Correct Answer --------- is one in which guilt is established on the face of the circumstances. No evidence is required and no justification is allowed. antitrust violations --------- Correct Answer --------- include price fixing, group boycotts, market allocation agreements, and tie-in arrangements. may be heard by administrative law judges, court of appeals, or the Supreme Court. sherman act --------- Correct Answer --------- prohibits competitors from creating agreements that would stifle competition, like price fixing or monopolies. clayton act --------- Correct Answer --------- aids competition by preventing restrictive mergers or acquisitions. Although the DOJ and FTC both regulate antitrust activities, the FTC concentrates on consumer-centric industries such as healthcare, professional services (such as real estate), food, energy and high tech industries. --------- Correct Answer --------- consent order --------- Correct Answer --------- is used to obtain voluntary compliance from the violator to stop their antitrust activity. If that doesn't work, further action may be taken. Common license law violations --------- Correct Answer --------- include acting without a license, demonstrating untrustworthiness, a lack of competency, dishonesty, and falsifying paperwork. Implied agency --------- Correct Answer --------- created by the actions of the parties, and it's to be avoided. ratification --------- Correct Answer --------- acceptance after the fact, either through signing paperwork or through the parties' actions. express agency --------- Correct Answer --------- an agency relationship that's clearly understood and agreed to by the parties. fiduciary duties --------- Correct Answer --------- OLD CAR: obedience, loyalty, disclosure, confidentiality, accountability, and reasonable skill and care. Estoppel --------- Correct Answer --------- is prevention of a legal claim. If you acted one way, you may be stopped from making a contradictory legal claim. Executory contract --------- Correct Answer --------- has terms that are yet to be completed. An executed contract is complete; parties have met all terms or have agreed to partial performance. contracts --------- Correct Answer --------- may be valid, enforceable, void, voidable, express, or implied. unilateral contract --------- Correct Answer --------- obligates only one party to act. A bilateral contract obligates two parties to act. statutute of frauds --------- Correct Answer --------- requires that real estate contracts be in writing, but licensed professionals must take care to not imply (based on their actions or behaviors) that an agency relationship exists. listing agreements --------- Correct Answer --------- can be cancelled before their termination date only with the mutual agreement of the listing agent and the seller. option contract --------- Correct Answer --------- an offer to purchase a specific piece of real estate, but without the obligation to buy it. Before the optionee exercises an option to buy, the option is a unilateral contract because only the optionor is required to execute it. After the optionee exercises the option, the contract becomes binding on both parties. --------- Correct Answer --------- listing agreement types --------- Correct Answer --------- exclusive right to sell/exclusive right to rent, exclusive agency listing, and open listing. exclusive right to sell --------- Correct Answer --------- most licensee's preferred type of listing agreement because it provides the most protection of their commission and allows the listing agent to provide the highest level of service. listing agreements --------- Correct Answer --------- must have a beginning and ending date, must account for how the commission is to be paid, and must include the list price and the seller's permission for marketing the property (e.g., signage, MLS, lockbox). lease agreements --------- Correct Answer --------- carry with them the same licensee duties and responsibilities as sales contracts. They also carry the same requirements as far as preparation, disclosure, and retention. It's fine for licensees to add addenda to a contract if the contract doesn't cover the terms needed by the parties; however, licensees should use standard addenda and standard language. --------- Correct Answer --------- The law requires two specific forms—the Loan Estimate and Closing Disclosure—to be used for all residential closings. These forms allow borrowers to understand the loans they are offered so they can make good decisions about them. --------- Correct Answer - -------- loan estimate --------- Correct Answer --------- issued three days after loan application, permits borrowers to compare loan terms between various lenders and loan programs. provides buyers with the costs they are likely to pay at settlement and discloses the mortgage loan specifics, such as its key features, costs, and risks. closing disclosure --------- Correct Answer --------- provided at least three business days before closing, details the buyer's closing costs, as well as other loan terms, such as the projected monthly payment. Brokerage firms are responsible for ADA requirements related to accessibility of their own services and offices. --------- Correct Answer --------- Workers who are eligible for overtime pay are said to be ______. --------- Correct Answer --------- non-exempt Broker Stephen is excited to move his growing brokerage into the most visible corner lot on fashionable Main Street. A lighted billboard with the brokerage's brand beams from the rooftop. What's the most primary purpose for the office? --------- Correct Answer ----- ---- To promote the brokerage's image Amanda wants to know how long, on average, homes are staying on the market before they sell. What market indicator can give her this information? --------- Correct Answer -- ------- Inventory rates What is market share? --------- Correct Answer --------- A firm's percentage of the overall market sales for a given market Fictitious business names alleviate some name selection concerns but raise other issues. Which of the following might be a concern with a fictitious business name? ------- -- Correct Answer --------- It must be registered with the state. Which economic indicator, used to represent inflation, is best defined as a measurement of average prices consumers paid for goods and services in a given month? --------- Correct Answer --------- consumer price index Both flat-fee and unbundled services require that clients be knowledgeable about the transaction process (if the transaction is to be successful). Because of this, experienced sellers may benefit the most from these types of services. --------- Correct Answer -------- - Tristan refused to let Marla list his property on the MLS, even though Marla told him that more exposure to the property would generate more potential buyers. Which two fiduciary duties are at odds in this situation? --------- Correct Answer --------- Reasonable skill and care and obedience escrow officer --------- Correct Answer --------- is a limited agent because the role is limited to assisting the parties with the closing , but not providing advice to either party. How is a brokerage checklist commonly used? --------- Correct Answer --------- It provides steps that both new and experienced agents can follow A broker is training all affiliated licensees on a recent change in fair housing laws. Why should she deliver the training to new licensees separately from experienced salespeople? --------- Correct Answer --------- To prevent new people from getting lost in details they don't understand, and to save experienced people from sitting through explanations they don't need Which one of these examples creates vicarious liability for the brokerage? --------- Correct Answer --------- The brokerage's licensee neglects to provide required disclosures to a client. What can you learn from figuring out the market share of your target market? --------- Correct Answer --------- You can figure out how big of a player the competitors are in your market. Which of the following must be included in a buyer agency agreement? --------- Correct Answer --------- The licensee's duties and responsibilities to the buyer According to the NAR Code of Ethics, what responsibility do licensees have related to material facts? --------- Correct Answer --------- Make a reasonable effort to ascertain all material facts concerning each property for which an agency is accepted. What is the primary purpose of your firm's logo? --------- Correct Answer --------- Immediate recognition Marissa wants to be sure her listings are available to buyers' brokers, so she puts the alarm code in the MLS listing, but only in the remarks that can be read by other licensees. Do you see an issue with this? --------- Correct Answer --------- Yes, because the printed copy of the agent-only remarks could fall into the wrong hands. Which of the following is true about the order in which photographs should appear in the MLS and on other sites? --------- Correct Answer --------- Show pictures in order, as if giving a tour of the property. Which of the following would be helpful in preparing a financial forecast for next year? -- ------- Correct Answer --------- Income statements Which of the following best describes a broker's supervisory requirements? --------- Correct Answer --------- Varied On a scale of 1 to 3, with 3 being high, TLC Realty has assigned a level 3 to likelihood of occurrence and a level 3 to severity of impact for a specific risk. What is its risk exposure? Is this a high, medium, or low level of risk? --------- Correct Answer --------- 9, high The Canons of Professional Ethics and Conduct are divided into five sections: fidelity, integrity, competency, consumer information, and ______. --------- Correct Answer ------- -- Discriminatory practices Which special lease clause stipulates increased rental rates at specific times during the lease term, or requires tenants to pay a proportionate amount of the overall increased utility expense, in addition to their base rent? --------- Correct Answer --------- Escalation Which of the following individuals would be a competent party to a contract? --------- Correct Answer --------- Graciella, a 28-year-old unemployed parolee Which of the following is a characteristic of a formal organization? --------- Correct Answer --------- follows the rules Which of the following is the most appropriate office configuration decision? --------- Correct Answer --------- Match the configuration with business needs. Some MLS systems now allow licensees to include a building's LEED certification level. This is an example of a response to which current trend? --------- Correct Answer --------- sustainability A ______ is a budget prepared by a department that's been given the responsibility of generating enough income to cover an allocated portion of the firm's budget and make a profit. --------- Correct Answer --------- profit center budget Broker Matt is evaluating the hardware and software needs of his new brokerage. Which of the following statements regarding hardware and software considerations is true? --------- Correct Answer --------- The software will determine the performance requirements of the hardware. Danny is willing to take on some risk with his new brokerage, but he wants the support and brand recognition of an established company. Why type of brokerage is Danny considering? --------- Correct Answer --------- He purchased a franchise How does the Foreign Investment in Real Estate Property Tax Act (FIRPTA) affect real estate? --------- Correct Answer --------- It requires foreign persons to pay a capital gains sales tax on the sale of their U.S. property. Which legislative act describes the rules that employers must follow when paying workers for overtime? --------- Correct Answer --------- Fair Labor Standards Act (FLSA) A ______ is a type of real estate brokerage that's usually run as a subsidiary to a full- service brokerage. --------- Correct Answer --------- Limited function referral organization (LFRO) Which of the following represents a reason for maintaining complete transaction files? -- ------- Correct Answer --------- Files can be used for operations analysis. A thorough understanding of the ______, regulatory, and business environments is needed to fully analyze the market. --------- Correct Answer --------- Economic Monty is advertising a number of listings in the local newspaper and includes the fair housing logo in the ad. What else is required? --------- Correct Answer --------- The verbiage, "Equal Opportunity Housing" Cynthia loves her apartment and would like to have the option to buy it once her lease is up. Who is the best person to help Cynthia prepare a lease option? --------- Correct Answer --------- Cynthia loves her apartment and would like to have the option to buy it once her lease is up. Who is the best person to help Cynthia prepare a lease option? Which of the following is true about the security of your clients' information? --------- Correct Answer --------- Client data can be compromised if the brokerage's computer system is compromised. James is an unlicensed assistant at Franklin Brokerage and is paid a monthly salary. According to labor standards he is classified as a(n) ______ employee. --------- Correct Answer --------- Exempt alternative services and lower costs to consumers had this result, making it an antitrust violation. --------- Correct Answer --------- reduced competition Which type of partner shares full personal liability for the partnership's debts and obligations? --------- Correct Answer --------- general When a brokerage's licensees tend to transfer to new brokers within a few months of being accepted, the problem is likely ______. --------- Correct Answer --------- The firm's hiring strategy Which of the following is one of the key decisions a brokerage makes when deciding how to staff the sales force? --------- Correct Answer --------- The number of licensees to use Which of the following components will appear on the cash flow statement but not on the income statement? --------- Correct Answer --------- loan proceeds Good record retention is one way to ______ risk. --------- Correct Answer --------- manage Inaccurate buyer qualification processes may contribute to rocky conditions on the way to closing. Which of the following is another external factor that may delay or endanger the closing? --------- Correct Answer --------- Cumbersome closing regulations or settlement procedures. How might a company help its non-English-speaking agents from another country succeed in its U. S. offices? --------- Correct Answer --------- By providing English as a second language (ESL) classes and tutors Which of the following questions is an example of a behavioral interview question? ------ --- Correct Answer --------- "What would you do if you found out your buyer client lied on her loan application?" Tim is thinking of opening his office down the same street as one of his competitors who has a lot of name recognition. As a newcomer on the scene, what will be Tim's top consideration if he decides to be so close to this highly visible competitor? --------- Correct Answer --------- how much promotional marketing is required What must a licensee do regarding property the licensee holds directly or indirectly if it becomes the subject of a real estate transaction? --------- Correct Answer --------- Disclose the interest to all parties to the transaction. Market analysis for business planning purposes should include an evaluation of the _____, regulatory, and business environment. --------- Correct Answer --------- economic Most business plans include a synopsis of the plan as a whole, designed to be read by shareholders, lenders, and other third parties with an interest in learning about the organization. What is this synopsis called? --------- Correct Answer --------- executive summary What should be kept in mind when offering personal guarantees in commercial lease negotiation? --------- Correct Answer --------- use caution The cash flow statement most closely resembles the ______. --------- Correct Answer --- ------ income statement Sam chose a beautifully preserved Victorian house for her brokerage office. After signing the lease, she realized that it would cost a fortune to make the space completely ADA-compliant. What does the ADA say about situations like this? --------- Correct Answer --------- Some buildings are exempt from strict compliance due to the prohibitive cost of retrofitting. Which of the following demonstrates a scarcity mentality? --------- Correct Answer -------- - Stealing clients from the competition The 1970 case against Prince George's County Board of REALTORS® found that the board was refusing to work with members who didn't follow certain suggestions. What is this an example of? --------- Correct Answer --------- group boycotting This management style is often used in high-risk professions, such as the military and emergency operations. --------- Correct Answer --------- autocratic Which of these would be an advantage for the broker of hiring licensees as salaried employees, rather than as independent contractors on a commission-based compensation plan? --------- Correct Answer --------- Sales agents will probably make fewer errors as a result of more broker control and supervision. Which one of the following actions would be considered a real estate violation? --------- Correct Answer --------- Hailey ran out of copies of the brokerage engagement form, so she drafted a copy on a blank sheet of paper. Which of the following steps is first in the hiring process? --------- Correct Answer --------- recruiting Rachel is subject to court-ordered supervision due to an antitrust violation. This oversight may continue for as long as ______. --------- Correct Answer --------- 10 years Donald has a new listing for the house next door to his. He's never had problems with these neighbors and hopes to keep it this way by making sure the "right" people move in. He doesn't show the property to any prospective buyers with children. These actions soon bring complaints of a fair housing violation. What effect does this have on Robert (Donald's sponsoring broker)? ---------- Correct Answer ---------- Robert is liable for Donald's actions and could be sanctioned along with Donald as a result of Donald's fair housing violation. The 1970 case against Prince George's County Board of REALTORS® found that the board was suggesting commission rates and publishing schedules of commission rates. What type of antitrust violation was this? ---------- Correct Answer ---------- Price fixing How would a business owner best demonstrate an abundance mentality in the market? ---------- Correct Answer ---------- By building relationships with competitors and the community Brandon wants to find out how many rental units are unoccupied in his area. Which market indicator provides this information? ---------- Correct Answer ---------- Vacancy rates Jorge works at a firm where elected officers govern the affairs of the organization, while a licensed broker, Shonda, is directly responsible for the real estate transactions. The officers and Shonda are responsible to a large number of stockholders. What type of legal structure is this? ---------- Correct Answer ---------- Corporation Corporation ---------- Correct Answer ---------- New listing Which of the following statements regarding buyer and seller agency is true? ---------- Correct Answer ---------- A seller's agent represents the seller, while the buyer's agent represents the buyer. Carlos is preparing a sales contract for his buyer, and is recommending very tight deadlines for all negotiations, contingencies, and other due dates. What should Carlos and his client consider before finalizing these deadlines? ---------- Correct Answer -------- -- Whether the deadlines are realistic What does LEED certification indicate? ---------- Correct Answer ---------- The degree of building eco-friendliness What impact do marketing efforts have on sales? ---------- Correct Answer ---------- Indirect Matt is an unlicensed personal assistant. He may ______. ---------- Correct Answer ------ ---- Place advertising approved by the broker Which of the following is a direct expense? ---------- Correct Answer ---------- Paid commissions When is an agency disclosure form required? ---------- Correct Answer ---------- Any time real estate matters are discussed between an agent and a consumer If one or more licensees in a firm have unusually high DOM, terminated listings, delayed closings, and marked disparities between listing and selling price, what steps can the firm take to correct these issues? ---------- Correct Answer ---------- Perform a review of training and operations processes. ABC Brokerage has developed a(n) ______ that leans toward a production philosophy, since employees and independent contractors receive pay raises related to productivity. ---------- Correct Answer ---------- Compensation plan Which of the following is a common concern that buyers express about their real estate licensee? ---------- Correct Answer ---------- Failing to communicate information about the transaction's progress What's a best practice for supervising remote licensees? ---------- Correct Answer -------- -- Provide proper training in office policies and procedures. Alison has set the goals for her new brokerage, and now she's ready to figure out the strategies. She's met with her mentor, James, so he can provide some guidance on strategy. James starts by explaining the purpose of strategy. Assuming James is an expert on the subject, which of the following statements would he make about the purpose of strategy? ---------- Correct Answer ---------- The purpose of a strategy is to support and help reach a goal by determining the method by which the goal can be achieved. Julie wants to go into business and wants to make money immediately. Which of the following options would suit her best? ---------- Correct Answer ---------- Purchase an existing business. What's horizontal expansion of a business? ---------- Correct Answer ---------- The growth of a business through existing services and methods, or ones similar to them, over a larger market area Even though the Federal Trade Commission is concerned with all ad claims, what sort of ads would most likely concern the commission? ---------- Correct Answer ---------- Any ad that makes a health or safety claim or any claim that's difficult for the consumer to evaluate A market analysis of the economic, _______, and competitive business environments should all be part of planning a new business. ---------- Correct Answer ---------- Regulatory Through an interpreter on the phone, Mei Ling requests an appointment with broker Amanda. The interpreter tells Amanda that Mei Ling will attend the meeting alone. Amanda doesn't speak Chinese. What should Amanda do? ---------- Correct Answer ----- ----- Arrange for an interpreter to attend the meeting. There are several things that a business planning document should include. For one, it should describe what your business does, its position in the marketplace, what distinguishes it from competitors, and the markets it serves. Which of the following standard sections of a planning document includes this information? ---------- Correct Answer ---------- Company description Jill is selling her property and hired David as her agent. David brings another client, Kirk, to see the property, which Kirk is interested in purchasing. What kind of agent is David acting as in this scenario? ---------- Correct Answer ---------- A dual agent Jeremy is evaluating a new business opportunity for his brokerage. He should ______. - --------- Correct Answer ---------- Analyze market trends A ______ is an obligation to pay someone an amount that's due. ---------- Correct Answer ---------- Liability Which of the following is true about the security of your clients' information? ---------- Correct Answer ---------- Client data can be compromised if the brokerage's computer system is compromised. ABC's market had a total of 150 sales last year. ABC had 15 sales in the same time period. What is ABC's market share? ---------- Correct Answer ---------- 10% Joan is trying to determine the amount of space she needs for her brokerage. Most of her licensees are rarely in the office .Which site selection considerations are most important for her needs? ---------- Correct Answer ---------- Who uses the office Which of the following statements best describes what you should do when considering economic growth policies if you plan to open a brokerage in a community? ---------- Correct Answer ---------- Weigh the costs and benefits of policies that affect economic growth and development. Which of the following could be an example of your brand statement? ---------- Correct Answer ---------- "We're here when you need us." What is a target market? ---------- Correct Answer ---------- Your selected consumer base