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TEXAS REAL ESTATE BROKERAGE SAE FINAL EXAM AND PRACTICE EXAM NEWEST 2024 ACTUAL EXAM 450 QUESTIONS AND CORRECT DETAILED ANSWERS (VERIFIED ANSWERS) |ALREADY GRADED A+
Typology: Exams
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Alison, an aspiring business owner, and her team have done all the upfront work and now they are ready to draft the official planning document for Honesty Homes. She knows that the document will be unique to her business, but there are certain components that are standard and must be included. Which of the following is a standard component of a business plan document? - ...ANSWER...executive summary Which of the following statements regarding employment-at- will is true? - ...ANSWER...Employment-at-will is a doctrine that's used in all states, but each state may apply it differently. Under which types of agency agreement may a buyer and agent operate? - ...ANSWER...Open, exclusive right to represent, and exclusive agency Darius reviews the items on his sales meeting agenda. He wants to make sure that his associates see the meeting as time well spent, so he checks that all agenda items ______. - ...ANSWER...Will help his licensees perform better or more easily
Which step of the hiring process allows the broker to evaluate a small number of the most competitive candidates? - ...ANSWER...interviewing Charlotte is a supervising broker who has two employees, as well as 15 licensees who are affiliated with her as independent contractors. To which of these people is she legally required to give an annual performance review? - ...ANSWER...none of them Business goals should be attainable. What does this mean in terms of SMART goals? - ...ANSWER...Challenging yet realistic and based on actual data. A ______ is an obligation to pay someone an amount that's due. - ...ANSWER...liability 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? - ...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? - ...ANSWER...consumer price index 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? - ...ANSWER...Reasonable skill and care and obedience
escrow officer - ...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? - ...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? - ...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? - ...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? - ...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? - ...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? - ...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? - ...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? - ...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? - ...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? - ...ANSWER...Income statements Which of the following best describes a broker's supervisory requirements? - ...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? - ...ANSWER...9, high The Canons of Professional Ethics and Conduct are divided into five sections: fidelity, integrity, competency, consumer information, and ______. - ...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? - ...ANSWER...Escalation Which of the following individuals would be a competent party to a contract? - ...ANSWER...Graciella, a 28-year-old unemployed parolee Which of the following is a characteristic of a formal organization? - ...ANSWER...follows the rules Which of the following is the most appropriate office configuration decision? - ...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? - ...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. - ...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? - ...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? - ...ANSWER...He purchased a franchise How does the Foreign Investment in Real Estate Property Tax Act (FIRPTA) affect real estate? - ...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? - ...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. - ...ANSWER...Limited function referral organization (LFRO) Which of the following represents a reason for maintaining complete transaction files? - ...ANSWER...Files can be used for operations analysis. A thorough understanding of the ______, regulatory, and business environments is needed to fully analyze the market. - ...ANSWER...Economic A fixed expense ______. - ...ANSWER...Isn't impacted by sales Which of the following acts protects Texas consumers against real estate licensees who use false, misleading, or deceptive actions or practices in the advertising, offering for sale,
selling, or leasing of personal property or real property? - ...ANSWER...DTPA Why should a business owner evaluate the competition's affiliations? - ...ANSWER...To determine what help or hindrance the association provides A small brokerage isn't required to comply with anti- discrimination laws enforced by the Equal Employment Opportunity Commission, but it still has strict policies in its brokerage manual regarding discriminatory behavior at the brokerage. Why? - ...ANSWER...Because other state and federal laws, beyond those enforced by the EEOC, can put the brokerage in legal trouble if discrimination occurs there The Occupational Safety and Health Act primarily addresses the rights of which classification of employees? - ...ANSWER...Employees You're a broker, and lately you've noticed that three of your licensees seem to be constantly sniping at each other. It's affecting everyone at the brokerage. What should you do? - ...ANSWER...Talk to them each individually to clarify the situation. Which of these scenarios would best be solved with short- term financing? - ...ANSWER...Your forecast shows that you won't be able to fully fund operations in February and March, but the rest of the year looks great. Under what conditions can a licensee contact sellers who are under an exclusive listing agreement with another agent? - ...ANSWER...Only to arrange a showing to a buyer
Because there's likely to be some ______ when companies merge, the transition plan should address retraining and retaining over dismissal and should be established before the merger occurs. - ...ANSWER...Redundancy 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? - ...ANSWER...Automatic renewal What's the best definition of a direct expense? - ...ANSWER...An expense that wouldn't exist if no sale had been made What feature of a computer system enables teleconferencing?
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? - ...ANSWER...The complexity of the image Which of the following is a true statement about a brokerage's building safety? - ...ANSWER...Tall hedges near the entrance pose a problem. Which of these is an action a broker should take after a sales meeting? - ...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 ______. - ...ANSWER...Fair Labor Standards Act (FLSA) Which of the following economic indicators most closely relates to consumer confidence? - ...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? - ...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? - ...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? - ...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? - ...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? - ...ANSWER...Increased revenue Which of the following is an industry trend that a brokerage should track? - ...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? - ...ANSWER...What current tenants pay for rent and utilities What is the purpose of strategic business planning - ...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? - ...ANSWER...Mindy There are three methods of dispute resolution: ______, arbitration, and litigation. - ...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? - ...ANSWER...Safety When working with new licensees, what's the main advantage of having a physical office space? - ...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? - ...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? - ...ANSWER...Communicating Sari, a licensee for Tynan Realty, is placing a listing ad in the Presbyterian Outlook. Is this a potential fair housing violation? - ...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? - ...ANSWER...It provides a strategic method for accomplishing set business goals. What's a downside for a brokerage that opts for a national affiliation? - ...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? - ...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?
Why should a business evaluate its competition? - ...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. - ...ANSWER...Variable expense budget What impact do marketing efforts have on sales? - ...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? - ...ANSWER...Likelihood of occurrence Which option is of the most concern to licensees and advertising when it comes to the Federal Trade Commission?
Which of these is an advantage of external recruiting for management positions? - ...ANSWER...It avoids the distraction of individuals within the firm competing for the same position. Which of the following is considered a key factor in driving the real estate market? - ...ANSWER...The economy Matt is an unlicensed personal assistant. He may ______. - ...ANSWER...Place advertising approved by the broker Most brokerage managers are ______. - ...ANSWER...salaried Why do most people move? - ...ANSWER...Change in employment Select the risk that is more industry-specific rather than general in nature. - ...ANSWER...Violation of fiduciary duties The responsibilities of a broker-owner - ...ANSWER...managing and training people, ensuring licensees maintain their licensure and don't violate any laws or regulations, and ensuring the company's profitability. The rewards of being a broker-owner - ...ANSWER...ownership control of the firm, equity in the company, and sharing associated licensees' commissions. Current trends in real estate - ...ANSWER...greener homes, mixed-use developments, increased density, and senior housing. new business models, reliance on technology, and niche marketing.
Job growth for real estate licensees is predicted to increase by six percent between 2016 and 2026, which is about the average for most careers. - ...ANSWER... Geographic expansion - ...ANSWER...widening exposure through networks or listing services, or physically opening a new office location. Horizontal expansion methods - ...ANSWER...widen the audience for services already provided, and may include geographic, sector, or service expansion. Sector expansion - ...ANSWER...expanding offerings to more additional areas of real estate (e.g., commercial, farming, etc.). General Agent - ...ANSWER...One who is authorized by a principal to represent the principal in a specific range of matters. ex. property manager special agent - ...ANSWER...real estate. This means the scope of the authority is restricted to the property transaction. limited agent - ...ANSWER...An example of a limited agent is an escrow officer, who has limited agency representation with the party. non-agent - ...ANSWER...A non-agent is a transaction broker or facilitator. No agency relationship exists. Vertical expansion - ...ANSWER...expanding your brokerage's current operations to encompass complementary services.
often riskier than horizontal growth because it may require expertise that the business doesn't already possess. organic growth - ...ANSWER...continuing growth of a business through the gradual adoption of new services and increases in market share. inorganic growth - ...ANSWER...is the rapid growth of a business through the acquisition of or merger with another company. Organic and inorganic growth can both be achieved through horizontal or vertical expansion methods. - ...ANSWER... Brokers can best recognize business opportunities after analyzing market data, studying the competition, and evaluating their organization's strengths. - ...ANSWER... Market analysis - ...ANSWER...evaluating local market conditions and indicators, the competition, the regulatory environment, and the demographic market and its needs. economic indicators - ...ANSWER...the housing market, GDP, CPI, CCI, and retail and food service sales (MARTS). market indicators - ...ANSWER...price levels, vacancy rates, new building permits, inventory turnover rates, and sales volume. CERCLA - ...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. - ...ANSWER... There are three levels of liability under CERCLA: - ...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. - ...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. - ...ANSWER... Under CERCLA, landowners can be held responsible for the clean-up costs of hazardous waste, even if they did not cause the waste. - ...ANSWER... market segments - ...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. - ...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. - ...ANSWER... A properly performed SWOT analysis is a great way to evaluate your business's current position, abilities, and needs.
starts with a mission and vision, which set the foundation for all of the other elements of the business plan. long-range plan - ...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 - ...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 - ...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 - ...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 - ...ANSWER...specific, measurable, attainable, realistic, and timely. contingency - ...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 - ...ANSWER...executive summary, market analysis, company description, mission statement, description of products and services, goals, objectives, strategies, financial plan, and appendix. executive summary - ...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 - ...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 - ...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) - ...ANSWER...combines the benefits of pass-through profit and loss with a legal shield for the owners from personal liability. franchises - ...ANSWER...offer immediate structure, brand recognition, training, and ongoing support for the price of start-up fees and ongoing payments. sole proprietors - ...ANSWER...personally bear the responsibility for liability, failure, and taxes of their business.
corporations - ...ANSWER...considered separate entities for legal purposes, whereas partnerships are not. Corporations shield owners from personal liability. In an affiliated business arrangement (AfBA) - ...ANSWER...separate real estate related companies have an arrangement to refer and/or share business with one another. affiliation - ...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 - ...ANSWER...birth, growth, midlife, maturity, decline, and death. birth stage - ...ANSWER...characterized by a small scope of work, a tight budget, and an efficient operating structure. growth stage - ...ANSWER...the most energetic time of an organization's life, characterized by an expanding customer base, increasing revenue, and increasing competition. merger - ...ANSWER...is the joining of two companies. Generally, when a merger occurs, the two companies form a third company that blends aspects of both. When scouting for a business to acquire or merge with, four factors include a business's motivation to sell or merge, reputation, value (ROI), and culture. - ...ANSWER... Operating structure and work structure - ...ANSWER...are synonymous. The complexity of an organization's work
structure depends on the size of the business and the number of roles or hand-offs. Establishing a work structure requires determining what work needs to be done, organizing tasks and assigning them to work groups, identifying job functions, determining skills and responsibilities for job functions, and hiring or assigning. - ...ANSWER... One- to 10-agent brokerages are small, centrally managed firms where the broker-owner is responsible for managing all work groups. - ...ANSWER... In decentralized organizations - ...ANSWER...departments with fewer layers of management at the top. centralized organizations\ - ...ANSWER...operations are highly controlled at the top and authority flows vertically. centralized structure - ...ANSWER...works best for smaller organizations. A decentralized structure works well for larger organizations and allows business unit autonomy. Benefits of acquisitions and mergers - ...ANSWER...access to new markets, increased cash flow, new skilled employees, and more physical resources. acquisitions - ...ANSWER...the purchase of one company by another. When an acquisition occurs, the acquiring company absorbs the acquired company.
downsides to acquisitions and mergers - ...ANSWER...image issues, brand confusion, assumption of debt, and corporate culture conflicts. Three types of authority function at various levels within an organization - ...ANSWER...line, staff, and functional. An organization's formal chain of command - ...ANSWER...organizes responsibilities, establishes a reporting structure, and provides an orderly decision-making process. line authority - ...ANSWER...given to those with direct responsibility for achieving the company's goals and objectives; staff authority: given to those who assist line authority; functional authority: granted to staff to perform a specific task. informal organization - ...ANSWER...primarily social, formed collectively, based on personal relationships, fluid, adaptable, and held together by trust between members. Market Analysis - ...ANSWER...can help inform office logistics because it reveals who your customers are, where they're located, and what services they want. Competitive Analysis - ...ANSWER...reveals information about the location, visibility, business practices, and market reach of your competitors. principal working quarters - ...ANSWER...should equal 100 square feet per staff member. Needs will vary based on how
the floor plan is configured and how many specialty areas and amenities there are. The ADA requires business owners to make changes to physical office space to reasonably accommodate those with disabilities, including employees. Accommodations apply to accessing services as well as the ability to access physical places of business. - ...ANSWER... commercial leases - ...ANSWER...gross, net, and percentage. net lease - ...ANSWER...the tenant pays some or all of the nets separately. With a triple net lease the tenant pays taxes, insurance, and maintenance in addition to the rent. With a single or double net lease, the tenant pays one or two of these expenses. percentage lease - ...ANSWER...tenant pays a base rent, plus a percentage of gross sales. These are most frequently seen in retail businesses. gross lease - ...ANSWER...the landlord pays all expenses related to the property. These are passed on to the tenants in their rent payments. renewal of commercial leases - ...ANSWER...the landlord pays all expenses related to the property. These are passed on to the tenants in their rent payments. commercial leases - ...ANSWER...should contain these components: the address of the property; the lease agreement start and end dates; the monthly rent and deposit amounts; and the purpose for which the space is being rented.
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 - ...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 - ...ANSWER...stipulates that the tenant will be provided with specific services for an additional rental fee. A sublease/assignment clause - ...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. - ...ANSWER... ADA - ...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 - ...ANSWER...software updates, antivirus scans, and software/utility scans.