Download Minnesota Real Estate Licensing Exam Prep: Questions and Answers and more Exams Real Estate Management in PDF only on Docsity!
Real Estate-Minnesota Unit 1 Questions
and Answers Already Passed
When must a real estate salesperson or broker provide an "agency disclosure form?" ✔✔At the
FIRST substantive contact with the residential buyer or seller.
What is the "Agency Relationships in Real Estate Transactions" document? ✔✔This is ONLY a
disclosure form and explains what duties an agent owes the potential client in regards to what relationship they form.
(NOT a contract. There is a provision for the client to sign acknowledging the receipt of the disclosure document)
What are the 4 types of agency relationships? ✔✔1. Representing the Seller (As the broker or
salesperson)
- Representing the Buyer (As the broker or salesperson)
- Dual Agency (Representing both buyer and seller as the broker or salesperson)
- Facilitator (Does not represent anyone BUT offers services)
How can a real estate agent or broker become a dual agent? ✔✔1. Buyer or seller being
represented by the agent must give consent and both agent and client sign a "Representation Agreement."
- Once an agent has found both a buyer and a seller to represent then both clients MUST give consent to be represented by the same agent/broker and SIGN in the disclosure of dual agency in the "Purchase Agreement."
(Note: The agent does NOT sign the purchase agreement, ONLY the buyer and the seller)
When an agent or broker becomes a dual agent, how many times does the agent sign their name and how many times does the buyer and seller sign their names for the representation to be legal
and accurate? ✔✔Agent/Broker signs 2 times. (The Agent Relationships in Real Estate
Transactions Form and the Buyer/Seller Representation Form)
Buyer/Seller sings 3 times. (The Agent Relationships in Real Estate Transactions Form, the Buyer/Seller Representation Form, and the Purchase Agreement Form)
In the state of MN this clause can be enforced up to but no longer than 6 months for residential and 2 years for commercial/business properties.
Who can produce a BPO? What does BPO stand for and what is it? ✔✔A licensed salesperson, broker, or appraiser can produce a BPO.
BPO stands for Broker's Price Opinion.
BPO is an opinion on the value of a property and is NOT an appraisal.
Who regulates, administers the law, as well as issue real estate licenses in the state of MN?
Under which state statute are real estate licenses regulated under? ✔✔The Department of Commerce regulates, administers, and issue's real estate licenses.
Under the Legislation of Chapter 82 of Minnesota State Statute.
Who must have a real estate license? ✔✔Anyone who, "For another and a fee," lists, sells,
exchanges, manages, buys, rents, auctions, or negotiates options of real estate/business opportunity must have a license.
Who can deal in real estate WITHOUT a real estate license? ✔✔1. Attorneys
- Court-Appointed People (Executors, administrators, etc)
- Cemetery owners selling burial plots
- Employees of a residential building owner (Caretakers, custodians, janitors)
- Public Officers performing official duties
- Auctioneers under supervision of attorney's or brokers
- Those who sell franchises
- Sale of manufactured or mobile homes that are NOT attached to the land.
(Important ones to know are #1, 2, 3, 4, 6)
Residential mortgage loan originators (MLOs) do what and must be registered with who? ✔✔MLOs negotiate loans for residential real estate.
Must be registered with the NMLS (Nationwide Mortgage Licensing System)
- Commercial loan brokers negotiate loans secured by mortgage or contract for deeds on non- residential real estate. Commercial loan brokers must be what?
- Fees received prior to loan funding must be deposited in an ESCROW account within how many hours after receipt?
A rental agent acting as a real estate salesperson (placing renters for another and a fee) must have what kind of license? ✔✔Those who deal in rental services and provide those services must have
a "BROKER'S license"
A rental agent must have a "Real Estate License"
Per TRID (TILA-RESPA Integrated Disclosure), regarding Closing agents and and settlement agents the closing disclosure (CD) must be disclosed at least how many days before settlement?
✔✔At least 3 business days before settlement.
After completion of real estate licensing course and passing the real estate exam application for
the actual real estate license must be applied within how long to be valid? ✔✔1 year
To become a broker what experience and education is needed? ✔✔Requires being a real estate
salesperson for 3 or more of the last 5 years before the time of application.
Education requirement is an extra 30 hour broker's course with a state license exam.
Who holds the real estate salesperson's license? ✔✔The primary broker holds the salesperson's
license.
Upon the death of the primary broker what sort of process is permitted/allowed to resolve the
issue? ✔✔A temporary 45 day broker permit is issued to a qualified salesperson within the brokerage firm.
If a broker's license is suspended or revoked then what happens to the licensed salespeople under that broker? ✔✔The license that those salespeople have will be ineffective and they would not
be able to deal in real estate.
How can a corporation, partnership, or LLC deal in real estate? ✔✔Must have at least one person
in the entity who holds an officer or partner level be licensed as a BROKER and they will be deemed as the "primary broker/principal broker."
All real estate licenses expire when? ✔✔June 30th at the end of each 24 month license period.
Who renews an eligible real estate salesperson's license? ✔✔The primary broker
- Suspension or revocation of license in any state
- Civil judgement involving fraud, misrepresentation, conversion of funds
- Gross misdemeanor
- Criminal felony/offense (charges, conviction, plea of no-contest)
Civil fines do not exceed $______________ per violation that a real estate salesperson made regarding the penalties for violating MN state license law. ✔✔$10,
Brokerage and Broker's must provide adequate supervision to all of those employed with them and must retain a copy of all listings, deposit receipts, cancelled checks, and trust account records for how long? ✔✔For at least 6 years (72 months)
A brokerage is required to maintain an interest bearing demand account for the deposit of trust funds. What sorts of accounts can they be?
Interest earned in these trust accounts are paid to who? ✔✔They can be either a checking or savings account with any of the following:
-Bank
-Trust company
-Savings/loan association
-Credit Union
-MN industrial loan/thrift company
Interest earned in these accounts are paid to the MN Housing Trust Fund
What types of deposits are made in trust accounts? ✔✔1. Down Payments
- Earnest Money
- Rents for Clients
- Tax/Insurance Escrow Payments
- Damage Deposits
(Note: At least know #2, 3, 5)
When must earnest money be deposited in the listing broker's trust account? ✔✔By the THIRD business day after receipt, unless both parties stated and agreed otherwise.
(This process usually only happens after an offer has been accepted starting the phase of an executory contract)
Should a seller withhold information and fail to disclose some material fact on the condition of the real property they would be held liable by the prospective buyer who can bring a civil action
in court within how long after closing? ✔✔2 Years
If a salesperson's buyer/seller representation agreement with an individual is expired how long does that salesperson have to submit a protective list to the buyer/seller? What is a protective
list? ✔✔They have 72 Hours after expiration
A protective list is a list of people that an agent has brought to a showing of a house that did not buy or sell when under the care of the agent but was sold/bought AFTER the agents care by one of those people.
-This lets the agent gain commission for that sale due to the broker protection/override clause in the agreement.
A claim was made against a real estate agent and they are sued and brought to court. The judgement against them was $1,000,000 however the real estate agent does not have the money to compensate the victim. The victim can apply for the Real Estate Education, Research, and Recovery Fund (REERRF) to recover the amount of money are owed, however if they are not given fair compensation or do not like the compensation they received from the REERRF then they can sue the REERRF as well. If they sue and win then the REERRF can compensate the
victim up to $__________ per transaction and $________________ maximum per licensee regardless of the number of claims. ✔✔$150,000 per transaction for the victim
$250,000 total per licensee
(This means that should a person sue a real estate agent and gets money but it is not enough to compensate, they can go to the REERRF, but if the REERRF does not give enough payout they can sue the REERRF for more money. The REERRF will only pay up to $150,000 per each claim against them and will only pay up to $250,000 per licensee that was charged against them. So if 20 people sue a licensee and the licensee owes $1,000,000 the licensee does not have that much money. All 20 people apply for the REERRF but the REERRF will not pay $1,000,000. It will only pay $250,000 for charges per that 1 licensee and so $250,000 will be split between the 20 people who applied)
Regarding a licensee who was sued against and had the REERRF pay a compensation on their behalf, the licensee's license will be suspended. How can that person un-suspend their license?
✔✔1. Must repay twice the amount of money back to the REERRF that was paid on their behalf
- 12% interest + $40,000 bond.
- Reapply for license within 1 year after final judgement against the licensee.
