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Post License Exam With Verified Questions
Latest 2025 and Correct Answers
Acronym for Prospecting Methods - correct answer>>FOLC FOLC stands for - correct answer>>F - Farming, FSBO, Floor, Duty, Foreclosures O - Open House L - Listings C - Canvassing FSBO websites - correct answer>>landvoice.com realtytrac.com Who established the Do Not Call Registry? - correct answer>>Federal Trade Commission (FTC) How many years does a number stay on the DNCR? - correct answer>>5 years Possibly penalty for violating DNCR? - correct answer>>up to $11, New licensees should include how many homes in their first farm? - correct answer>> 100 - 250 what is an up call - correct answer>>when an individual calls in to someone on floor duty and specifically asks for someone else by name. Why is MLS a good prospecting tool? - correct answer>>Lets you know if an area is being farmed or not and is a good source for internet leads. Most competitive niche market: - correct answer>>Expired listings Most popular way to find expired listings is by? - correct answer>>Using MLS. Listings expire every day so it can be used daily. The advantages of starting out with a mailer when trying to win an expired listing is - correct answer>>1. It breaks the ice with the prospect before more direct contact takes place
- they give you time and space to address the concerns of these particular owners, build up their confidence that a solution is possible and explain why you are most qualified person to deliver the services.
6 goals of follow-up communications with expired listing prospects: - correct answer>>1. Build up confidence in the owner
- Avoid negativity and blame towards owner and initial salesperson.
- Before you start providing solutions, invite owners to tell you why they think the house didn't sell.
- Invites them to disclose factors of any past offers and why they were rejected.
- Illistrates your successin helping other expired listings sell.
- Outliines your plan step-by step to help their property sell. Tailor your solutions to the six factos of "why homes dont sell"
- Send hand-written thank you letter after each personal visit despite the outcome. What is the 7th prospecting technique? - correct answer>>Canvassing What prospecting technique does not have to be in the confines of your farm? - correct answer>>Canvassing and cold-calling What is canvassing? - correct answer>>Soliciting new business via mail, phone calls, or visits. Licensees should hold open houses in order to: a) prospect for new clients and customers as well as help their sellers come in contact with a larger number of potential buyers. b) simplify the selling process by soliciting both the business of potential buyers of that property and the owner. c) save time as this function can be delegated to an assistant. d) save money as an open requires little advertising effort. - correct answer>> The four main benefits of holding an open house include all of the following, except: buyers are given an extended period of time to look over and ask questions about a property. sellers are given access to a larger pool of buyers without holding multiple appointments. licensees have a greater chance to be of service to their clients. sellers are given an extended period of time to look over and ask questions about a property. - correct answer>> A good rule to follow is to always try to transform your cold canvassing efforts into: a) referrals. b) FSBOs.
To recap, the court rulings of the 1977 and 1980 cases have left us with this significant takeaway: Buyers can't successfully sue sellers of pre-owned homes and/or their licensees unless they can prove that: - correct answer>>- The property has a severe problem which threatens (or will threaten) the buyer's health or safety;
- The previous owner and/or licensee were aware of this damage before the transaction was completed;
- The defect isn't one that is reasonably apparent to the buyer either by inspecting the property and/or through questions to the owner and/or agent; and
- The property wasn't sold "as is." What is "material fact"? - correct answer>>Material facts must also be accurately represented. These facts are anything "that would be a significant factor to a reasonable and prudent person in making a decision to purchase." Besides conditions that affect the property, these items can include but aren't limited to: School district information; Zoning laws; Safety (police and fire department services); and/or Property tax issues. Remember, licensees always have the duty to answer truthfully and accurately to any direct question-whether buyer or seller poses it and despite which party they're serving- concerning these facts. What are the 5 W's and 1 H in defining the dynamics of the real estate profession? - correct answer>>Who are licensees and whom do they serve? What are the relationships between and the responsibilities of licensees to consumers? Why are licensees' skills and knowledge necessary, valuable and sought after? When, where and how are licensees' services performed? What is RECAD? - correct answer>>Under Alabama's 1995 Real Estate Consumers Agency and Disclosure (RECAD) Act, the AREC was required to publish a real estate brokerage services disclosure form which summarizes these different relationships to the public. AREC also created a RECAD Consumer Information Booklet, which further details the different representation options available through a broker. Furthermore, under the same law, licensees are required to present the disclosure form to consumers-buyers and sellers alike-at the earliest possible time. When should RECAD disclosure form be presented to consumers-buyers and sellers? - correct answer>>at the earliest possible time.
Explain the relationship between licensee and agent: - correct answer>>While all agents are licensees in every transaction; Licensees aren't always acting in an agent's role every time they help a buyer or seller. When agency has been established, those whom licensees serve are called clients (principals); and When no agency exists, those being served are known as customers. What are the 3 types of partnerships that exist between licensees and the public both agency and non-agency? - correct answer>>Transaction brokerage Single agency Limited consensual dual agency The RECAD law - AREC 790-X-3.13 states that licensees are required to: - correct answer>>provide the Real Estate Brokerage Services Disclosure form to the consumer as soon as possible for his or her signature. Consumers are not required by law to sign the form, although the licensee should encourage that it be signed. If the consumer declines
.. ., the licensee shall make a note to this effect on the form." 8 steps for presenting RECAD Consumer Agency Disclosure Form. - correct answer>>1. Obtain the disclosure document and consumer guide from your broker.
- Sign and date the form before your initial meeting with your buyer or seller.
- Wait for a verbal cue from your prospect. Opening questions initiated by the buyer or seller are the best ways for you to bring up RECAD.
- If he or she seems receptive, give your prospect the guide and disclosure form at the first meeting.
- Explain that the form is not a contract, but is for informational purposes only.
- Briefly summarize the advantages and disadvantages of each real estate relationship outlined in the document (detailed toward chapter-end).
- Give the prospect sufficient time to look over the information and ask you questions.
- Finally, once signed (or if refused, with your note on the form explaining this), make two copies: one for the prospect's records and one for your broker's. The universal responsibilities you owe every client OR customer as summarized by AL license law 34- 27 - 84: - correct answer>>1. To provide brokerage services to all parties to the transaction honestly and in good faith;
- To exercise reasonable skill and care in providing brokerage services to all parties;
- To keep confidential any information given to the licensee in confidence, or any information obtained by the licensee that the licensee knows a reasonable individual would want to keep confidential, unless the disclosure of this information is required by
In the role of the buyer's agent, you'll obviously be negotiating the sale from the other side of the table. Most of these consumers will either be first-time home buyers or those who are relocating from out of town. In addition to the 6 duties to clients enumerated in section 34- 27 - 84, a licensee shall provide all of the following services to client - correct answer>>Loyally represent the best interests of the client by placing the interests of the client ahead of the interests of any other party, unless loyalty to a client violates the duties of the licensee to other parties under... 34- 27 - 84 or is otherwise prohibited by law. Disclose to the client all information known by the licensee that is material to the transaction and not discoverable by the client through reasonable investigation and observation, except for confidential information as provided in 34- 27 - 84 [(3)(a)]. A licensee shall not have affirmative duty to discover the information. Fulfill any obligation required by the agency agreement, and any lawful instructions of the client that are within the scope of the agency agreement, that are not inconsistent with other duties as enumerated in this article." limited consensual dual agency - correct answer>>In this relationship, the same real estate firm is used to represent both the buyer and seller in the same transaction. This can happen in one of two ways, when: One licensee is the agent for both parties; or Two or more salespersons from the same broker each represent a different client in the deal. By signing a limited consensual dual agency contract, how will the agreement affect other agency contracts currently in place? - correct answer>>dual agency won't void their rights under any other contracts already in place, namely single agency (paragraph 7). However, if there is a disagreement between the two documents, dual agency supersedes any prior contract. Why is limited consensual dual agency like having the best and worst of single agency and transaction brokerage? - correct answer>>The worst rears its head in regards to conflicts of interest as described above. But Alabama law §34- 27 - 85 is pretty clear about how licensees should handle these potential roadblocks: "A broker who represents more than one client in a real estate transaction owes the duties as specified in subsection (a) to each client, except where the duties to one client will violate the fiduciary duties [trust and confidence] of the licensee to other clients." Let's say that you're acting as the only agent under a limited consensual dual agency agreement. Your buyer tells you what his or her highest offering price will be. Do you
have the obligation to tell the seller since you're his or her advocate as well? - correct answer>>We told you that if a seller's agent came by that information under single agency that he or she would have the duty to report it to the owner. In this case, however, you don't have that duty, because sharing the buyer's information with the seller would "violate the fiduciary duties [trust and confidence]... the licensee [owes the] other client" (§34- 27 - 85). Similarly, if your owner reveals confidential information to you that could benefit your buyer, you still have to remain silent. Although this may seem to be a serious disadvantage, remember that is why a dual agency agreement form is signed in the first place. Both clients know what they're getting into ahead of time. TEST QUESTION: What does the RECAD booklet describe? a) Representation options available through a broker b) Commission rates typical for various broker services c) The Alabama Code of Ethics d) The Consumers' Bill of Rights - correct answer>>a) representation options through a broker Best agency relationship for working with family members? - correct answer>>single- agency What does gazing upwards indicate? - correct answer>>trying to recollect facts what does fingers in a triangular pose represent? - correct answer>>superiority or judgement What does leaning forward mean? - correct answer>>They are attentive and listening Effective listening skills include: - correct answer>>- Dont interrupt buyer unless absolutely necessary.
- Concentrate on what the buyer is saying.
- Keep opinion to self unless directly asked for it.
- Pay attention to buyer's non-verbals as indication to keep talking, stop talking or ask clarifying question
- Display nonverbals to indicate that your listening to the buyer Buyer Category 1: - correct answer>>is for those who are available only that day, week or weekend to look at properties because they live out of town;
Toxic mold. General Home inspection items include: - correct answer>>HVAC (heating, ventilation and air conditioning); Roof; and Electrical. Successful Licensee-Buyer VERBAL conversation goals: - correct answer>>The goals of your conversation are to:
- Relay information.
- Ask and invite questions.
- Assess your buyer's needs. Speak everyday language. Strike a healthy balance between talking and listening. Have buyers assess their needsby asking questions. Be as concise as possible. Illustrate your real estate accomplishments. Successful Licensee-Buyer NONVERBAL conversation goals: - correct answer>>Give a confident handshake. Use direct eye contact. Refrain from crossing your legs or arms. Display interest by slightly leaning towards the person while she is speaking. Successful Licensee-Buyer LISTENING goals: - correct answer>>Keep your opinion to yourself unless directly asked. Pay attention to the buyer's nonverbals. Display nonverbal and verbal statements to indicate that you're listening. If having a phone conversation with the buyer, take notes. Client/Customer Categories: - correct answer>>Category 1 - available only that day, week or weekend to look at properties because they live out of town; Category 2 - want to purchase within the next 60 days or less; Category 3 - will be buying in the next 2-6 months; Category 4 - aren't planning on doing so until six months to a year. Home buying process: - correct answer>>Identify your buyer's situation. Categorize the individual. Bring up and explain Alabama's RECAD Act. Prepare the necessary paperwork.
Once the buyer is ready, have him sign the agreement. Make three copies: one for your broker and two for the customer/client's personal records. Explain the difference between getting pre-qualified and pre-approved for mortgages. Provide an overview of inspections. Cover home warranties, surveys and title insurance. Explain about the different pre-closing and closing steps. When is the best time to educate a buyer client or customer about mortgage and financing options? - correct answer>>Before beginning to show properties to the consumer The Truth in Lending (TIL) law was implemented by the - correct answer>>Federal Reserve Board's Regulation Z What is the main purpose of the Truth in Lending Law? - correct answer>>The main purpose of this legislation is DISCLOSURE, not to set up minimum and maximum rates or charges. Since the federal law was established, many states have founded their own truth in lending policies as well to further ensure honesty in all consumer credit dealings. TIL and Regulation Z does not apply to what type of Real Estate? - correct answer>>Business, commercial and agricultural real estate transactions. Personal property transactions that meet the following qualifications are the only ones that require the level of disclosure to consumers mandated by TIL and Regulation Z: - correct answer>>Personal property transactions under $25,000; Agreements (including mortgages) which are secured by real or personal property regardless of the amount; However, the property being used as collateral for the mortgage MUST be the principal dwelling of the consumer; and The transaction must also involve a finance charge or be payable in more than four installments. What is PMI? - correct answer>>Private Mortgage Insurance. PMI is insurance sought by these institutions to protect their interests in case buyers fail to pay back their loans. Lenders then pass on the extra costs they incur from PMI to the borrowers. This results in higher monthly payments on their mortgages than those that don't include this insurance.
What is the typical ARM Mortgage cap to recommend? - correct answer>>steer your buyers toward ARMs with caps of no more than two percent each year and six percent over the life of the loan. That way, if the borrower had a two percent annual cap, his or her rate could only increase to seven percent that first year, not 11, despite the margin and activity of the prime index. Payment Factors for mortgages are based on: - correct answer>>loan's interest rate and annual term. VA Loans: - correct answer>>The first agency helps qualified veterans of the U.S. Armed Forces obtain housing through a government-sponsored mortgage assistance program known as Veterans Administration (VA) or GI Loans. This program- established under the 1944 Serviceman's Readjustment Act-aids military personnel in receiving partially guaranteed loans for buying or building property or refinancing existing home loans. The statute also applies to widow and widowers of veterans who died while serving their country or from service-related causes, as long as the surviving spouses don't remarry. Federal Housing Administration - correct answer>>founded in 1934 by the National Housing Act-is responsible for setting fair housing standards and a home financing system by insuring mortgages and credit. This agency was the federal government's way to help stabilize the enormous housing crisis that resulted from the Great Depression. What Act established VA Loans and in what year? - correct answer>>1944 Serviceman's Readjustment Act. Who is eligible for VA loans? - correct answer>>Veterans who served at least 181 days of active duty between Sept. 16, 1940, and Sept. 7, 1981. Ninety days of that time must have taken place during designated wartime periods; Enlisted personnel who joined the military after Sept. 7, 1980, and commissioned officers after Oct. 16, 1981, who have completed two years of active service. Some active duty members with less than two years of service may also qualify for this assistance after 181 days as long as they're still active; Military reserve or National Guard members with six years of service; Honorably discharged from service if no longer active (with some exceptions); OR The unmarried surviving spouses of service men and women who died during wartime or service-related causes. Children and other close relatives are not eligible. The FHA was created by: - correct answer>>the 1934 National Housing Act to stabilize the residential real estate market after the Depression.
The FHA offers two types of adjustable rate programs: - correct answer>>Regular one- year ARM and Hybrid adjustable rate. What are the FHA mortgage Caps? - correct answer>>1% per year and 5% lifetime What is the FHA Required Disclosure Statement? - correct answer>>The administration's disclosure statement must be presented to the borrower by the lender before the mortgage is entered into. The statement will detail what the highest interest rate could be according to the loan's individual cap and margin terms. Drawbacks of FHA ARM loans - correct answer>>Buyers seeking these ARMS must pay an upfront mortgage insurance premium equal to 1.5 percent of the amount borrowed (with exceptions). A second disadvantage is that the FHA sets a maximum amount that may be financed depending on the cost of living in a local region. But what criteria do your customers and clients have to meet in order to be eligible for a mortgage? How are those criteria established? The main equations lenders are concerned with are: - correct answer>>The buyer's housing debt-to-income ratio (housing ratio); The buyer's total debt-to-income ratio (debt ratio); and The property's loan-to-value ratio. The housing ratio: Divide the PITI payment by the buyer's monthly income; The debt percentage: Divide the total monthly payments (PITI plus all others listed) by the income; and The loan-to-value ratio: Divide the loan amount by the sale price. Fannie Mae and Freddie Mac stipulate that a buyers housing expense cant be more than what percentage of income? What about debt? - correct answer>>Housing expense can't be more than 28 percent of his or her income; and Total debt can't exceed 36 percent of the buyer's income. FHA stipulates that a buyers housing expense cant be more than what percentage of income? What about debt? - correct answer>>The housing expense limit is 31 percent; while The total debt limit is 43 percent. What is a possible disadvantage of using an online mortgage wizard to calculate mortgage payments for a customer or client?
The VA loan program was established by the: National Housing Act Serviceman's Readjustment Act Federal Housing Administration Department of Housing and Urban Development - correct answer>>Serviceman's Readjustment Act By law, the financial index used to calculate the rate for an adjustable rate mortgage must be: verifiable by a mortgage underwriter. based on the prime lending rate. based on Treasury Bill averages. independent of the lender's control. - correct answer>>independent of the lender's control. Under a formal FHA loan assumption: an individual acquires the title of a property that already has a mortgage and agrees to be liable for its remaining payments. the original mortgagor is still liable for the debt in case of default or delinquency. the original mortgage is paid off and a new mortgage is issued. all liens against the property are extinguished. - correct answer>>an individual acquires the title of a property that already has a mortgage and agrees to be liable for its remaining payments. A fundamental difference between a pre-qualification and a pre-approval of a potential borrower is: pre-qualification includes a loan commitment. pre-qualification is based on interviewing the loan applicant.
pre-approval is based solely on the loan applicant's answers to written questions. pre-approval includes income and credit verification. - correct answer>>pre-approval includes income and credit verification. Lenders must automatically remove private mortgage insurance from mortgage payments when the borrower achieves an equity position of: 20% of the currently appraised market value of the mortgaged property 20% of the original loan amount 22% of the currently appraised market value of the mortgaged property 22% of the value of the mortgaged property at the time the mortgage was undertaken - correct answer>>22% of the value of the mortgaged property at the time the mortgage was undertaken What percentage of all lawsuits against real estate professionals deal with disappointed buyers? - correct answer>>2/ Radon - correct answer>>Linked to lung cancer. a class A carcinogen linked to lung cancer deaths. This carcinogen is a naturally occurring gas without color and odor, and it is created when natural radioactive minerals in the ground decay. Radon is found throughout the United States and can seep into homes and buildings through cracks and openings in the foundation, basement or plumbing. Asbestos - correct answer>>Like lead-based paint, asbestos-a rock mineral fiber- was also once widely used in the residential housing market to create appliances, floor tiles, roofing, siding, walls and pipes. EPA studies, however, found that prolonged exposure to these fibers increases the risk of developing stomach and lung cancer. Underground Storage Tanks - correct answer>>Unlike our previous three environmental tests, the detection of these devices is easier to notice since most of them have above ground air vents. The reason why underground storage tanks are potentially risky is because after 15 to 20 years, a good number of them-up to 40% in fact-start leaking. Because this is another material fact which affects "health or safety," the presence and age of such a device on the property must be revealed to purchasers, if known. But the discovery of an unknown tank falls on your client/customer's shoulders since the air vent is a visible indicator.
close. The report must be issued by a licensed pest control company and is paid for by the home owner (around $100). Under the Residential Lead-Based Paint Hazard Reduction Act of 1992, owners of properties built prior to 1978 must: personally test for and remove any areas they suspect contain lead-based paint. notify the Environmental Protection Agency of the potential lead hazard. provide buyers with a credit toward lead paint abatement. inform buyers of any previous lead tests and suspicions of existing lead-based paint. - correct answer>>inform buyers of any previous lead tests and suspicions of existing lead-based paint. What is a warranty? - correct answer>>A warranty is a promise that certain stated facts are true. Those that apply to real estate testify to the "good working order" of certain aspects of the property. The time frame and what is covered by the warranty vary from purchase agreement to purchase agreement and therefore must be clearly enumerated in the final contract. Are warranties transferable? - correct answer>>Not typically. The majority of warranties don't "go with the land," but rather the sales agreement, and therefore aren't transferable to subsequent owners of the residence. And, unless specifically stated in the contract, after the transaction is complete, future problems will land on the purchaser's shoulders, not the seller's or builder's. 1975 Magnusen-Moss Warranty Act - correct answer>>This legislation-regulated by the Federal Trade Commission-mandates full and fair disclosure on any product warranty in the residence. While Magnusen-Moss doesn't require all consumer products to have warranties, it does say that any existing ones must meet its disclosure stipulations. Items covered by this law include water heaters, furnaces, air conditioning units, washers and dryers. Types of Covenants - correct answer>>Covenant against encumbrances (that no impediments exist outside of those enumerated in the deed); Covenant against grantor's acts (that the grantor will perform further acts reasonably necessary to correct any defects in the title or in the deed instrument);
Covenant of quiet enjoyment (that no one has superior or paramount title to that of the grantor, assuring the buyer of peaceful possession without fear of being ousted by a person with a superior claim to the property); and Covenant of seisin (that the grantor has the exact estate in the quality which is being conveyed: "I own and I have the right to sell it"). Pre-closing and closing steps: - correct answer>>Buyer purchase agreements; Estimated closing statements; Price negotiation; Offers and counteroffers; Actual closing statements; and Closing the deal. Covenant against encumbrances - correct answer>>(that no impediments exist outside of those enumerated in the deed); Covenant against grantor's acts - correct answer>>(that the grantor will perform further acts reasonably necessary to correct any defects in the title or in the deed instrument Covenant of quiet enjoyment - correct answer>>(that no one has superior or paramount title to that of the grantor, assuring the buyer of peaceful possession without fear of being ousted by a person with a superior claim to the property) Covenant of seisin - correct answer>>(that the grantor has the exact estate in the quality which is being conveyed: "I own and I have the right to sell it"). Difference between special and warranty deeds: - correct answer>>With a special warranty deed, the seller (grantor) can only be held liable for problems arising with the title while it was in his/her possession. This is the preffered deed for sellers. The General Warranty Deed is the highest protection, gauranteeing that a good marketable title is being conveyed to the purchaser. The general warranty deed is an expample of a warranty that goes with the land. Survey - correct answer>>A survey is the process which measures and determines any or all of the following aspects of a property: Land and lot lines, Boundaries, Home position and dimensions and, Any existing: Encroachments (when some aspect of a property crosses into another's);
