Topics CRES Final Test with Complete Solutions | Exams Advanced Education

Topics CRES Final Test with Complete

Solutions

A BPO (Broker Price Opinion) is an estimate of value most often requested by a lending

institution of a real estate broker to determine the value of a foreclosed property. Can a

BPO be used for financing? - ANSWER-No

There are four facts you need to know about BPO's for the State test: 1) BPO stands for

"Broker Price Opinion" 2) They are "estimates of value" NOT an appraisal. Only

licensed appraisers can prepare appraisals. 3) They can be used only for marketing

purposes (valuing a property for sale), NOT for financing (valuing a property for a loan)

4) Whenever you create a BPO (for a bank) or a CMA ("Competitive Market Analysis"

for a client), you need to include these words in the report "This evaluation was

prepared by a licensed real estate broker and is not an appraisal. This evaluation

cannot be used for the purposes of obtaining financing."

A broker acting as a transaction broker for a buyer, with no written agreement needs: -

ANSWER-to provide the buyer with a copy of the "Brokerage Disclosure to Buyer" with

the broker's signature showing the date it was given to the Buyer.

A broker allowed her license to expire and renewed it 32 days after the expiration date.

What does she need to do to reinstate her license? - ANSWER-Pay the renewal fee,

and pay half the renewal fee for it being over 30 days

A Broker Price Opinion (BOP) and Competitive Market Analysis (CMA) are estimates of

value created by real estate licensees for marketing purposes. Since they were not

prepared by a licensed appraiser, the follow words must appear at their bottom: -

ANSWER-This evaluation was prepared by a licensed real estate broker and is not an

appraisal. This evaluation cannot be used for the purposes of obtaining financing.

A buyer and seller have written two contracts for one property: a higher contract to

submit for a larger loan request and another with a lower actual purchase price because

they know the seller is anxious to sell quickly. Which correctly describes this

arrangement? - ANSWER-Fraudulent dual contracting

A buyer employed a broker through a sales associate. Which of the following would not

terminate the buyer agency? - ANSWER-Death of the sales associate

A buyer is assuming a loan and the loan balance has turned out to be less than the

assumption balance provided by the seller. How would this be handled according to the

Residential Contract to Buy and Sell ? - ANSWER-The buyer may terminate the

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Topics CRES Final Test with Complete

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A BPO (Broker Price Opinion) is an estimate of value most often requested by a lending institution of a real estate broker to determine the value of a foreclosed property. Can a BPO be used for financing? - ANSWER-No There are four facts you need to know about BPO's for the State test: 1) BPO stands for "Broker Price Opinion" 2) They are "estimates of value" NOT an appraisal. Only licensed appraisers can prepare appraisals. 3) They can be used only for marketing purposes (valuing a property for sale), NOT for financing (valuing a property for a loan)

Whenever you create a BPO (for a bank) or a CMA ("Competitive Market Analysis" for a client), you need to include these words in the report "This evaluation was prepared by a licensed real estate broker and is not an appraisal. This evaluation cannot be used for the purposes of obtaining financing." A broker acting as a transaction broker for a buyer, with no written agreement needs: - ANSWER-to provide the buyer with a copy of the "Brokerage Disclosure to Buyer" with the broker's signature showing the date it was given to the Buyer. A broker allowed her license to expire and renewed it 32 days after the expiration date. What does she need to do to reinstate her license? - ANSWER-Pay the renewal fee, and pay half the renewal fee for it being over 30 days A Broker Price Opinion (BOP) and Competitive Market Analysis (CMA) are estimates of value created by real estate licensees for marketing purposes. Since they were not prepared by a licensed appraiser, the follow words must appear at their bottom: - ANSWER-This evaluation was prepared by a licensed real estate broker and is not an appraisal. This evaluation cannot be used for the purposes of obtaining financing. A buyer and seller have written two contracts for one property: a higher contract to submit for a larger loan request and another with a lower actual purchase price because they know the seller is anxious to sell quickly. Which correctly describes this arrangement? - ANSWER-Fraudulent dual contracting A buyer employed a broker through a sales associate. Which of the following would not terminate the buyer agency? - ANSWER-Death of the sales associate A buyer is assuming a loan and the loan balance has turned out to be less than the assumption balance provided by the seller. How would this be handled according to the Residential Contract to Buy and Sell? - ANSWER-The buyer may terminate the

contract by written notice if the difference causes the buyer's cash at closing to increase by a stated amount. A buyer is concerned that new construction a mile away could have a negative environmental impact on the home they are considering purchasing. Can they make the Contract to Buy/Sell contingent on the result of an environmental impact report? - ANSWER-Yes, you can make a contract contingent on anything A contract was terminated when the buyer and seller were unable to resolve inspection issues. The buyer had included the buyer's inspection report as part of the inspection notice, which included information about a number of small material items. The seller of the property has what if any obligation for disclosing the issues noted in the report? - ANSWER-An obligation to fully disclose all material items the buyer found which the seller now has knowledge of A Corporation, LLC, Partnership must have E&O insurance for entity and employing broker ? - ANSWER-True A counterproposal: - ANSWER-amends the terms and conditions of a proposed contract to buy/sell A deed of trust held by someone other than the public trustee is NOT: - ANSWER- Notice that a legal action is pending that may effect ownership A designated broker's responsibilities are delegated by: - ANSWER-written statement by Managing Broker A home closes for $365,000 how much would you pay the county clerk and public trustee? - ANSWER-$36. A landlord can evict a delinquent tenant by: - ANSWER-bringing a court action A landowner has two interested parties, which of the following strategies would give the landowner the best return. Lease to a rancher who wants to graze horses Lease to an oil company who wants to drill for oil Lease to only one or the other Lease to both - ANSWER-Lease to both A property manager may refuse to lease to: - ANSWER-A person addicted to or using illegal drugs

An Employing Broker designates one seller agent and one buyer's agent. The Employing Broker has: - ANSWER-No agency An Exclusive Agency Addendum to the Exclusive Right-To-Sell Listing Contract: - ANSWER-Allows the seller to not pay a commission to the listing broker if the seller should procure a buyer An licensee who represents both parties in a transaction but is not an advocate of either one, is a: - ANSWER-transaction broker An Open Listing, an Exclusive Brokerage listing and an Exclusive Right-To-Sell listing all require: - ANSWER-A definite termination date An unlicensed personal assistant may: - ANSWER-conduct an open house Any excess funds above those required to pay off encumbrances realized at a foreclosure sale belong to: - ANSWER-The mortgagor Beatrice a listing agent who has received two similar offers to purchase. She has made an appointment with the sellers to present the offers, but meanwhile another offer comes in from an associate in the same company. In this situation, which should Beatrice present? - ANSWER-all three offers for simultaneous review Broker Price Opinions (BPO) are created by real estate licensees not appraisers. These "estimates of value" cannot be used: - ANSWER-to set a listing price Brokers should provide safeguards on seller-assisted down payments on: - ANSWER- Residential transactions Can a broker in Colorado give a finders fee to an out-of-state broker? - ANSWER-Yes, if the out-of-state broker resides and maintains an office in the other state Duplex owned by wife and husband. Joint tenancy. Husband dies. Husband had a will and left all assets or to son from previous marriage. What does the son receive - ANSWER-Son does not get the property The Licensee Buyout Addendum informs the Seller of all EXCEPT: - ANSWER-Seller is responsible for marketing and closing expenses The maximum amount of days that can be specified in the Holdover Period in the Listing Contract is: - ANSWER-negotiable by Seller and Broker The maximum time allowed for the sale of an agricultural property, through the Public Trustee's office after filing of the notice of election and demand (NED) to foreclose is: Residential? - ANSWER-230 days

For residential properties, the public trustee schedules the sale 110-125 days ( 215- days for agricultural) after the initial foreclosure action was recorded. The notice of sale is published in a local newspaper for 5 weeks. The public trustee also mails a copy of the notice to the borrower. The owner of subsurface mineral rights: - ANSWER- The Real Estate Commission approved Colorado Power of Attorney form - ANSWER- creates a limited agency agreement The Real Estate Commission may NOT issue a temporary license to prevent hardship to a: - ANSWER-Sole proprietor The Seller holds security deposits in the amount of $1,000 from each of six tenants. On the settlement sheet: - ANSWER-Debit Seller & Credit Buyer $6, The title company may be hired by the listing broker: - ANSWER-to act as scrivener for the transaction Unless the lease states otherwise, how long does a property manager have to return a security deposit after a lease has expired? - ANSWER-30 days/one month Water Rights: Who owns the water rights to a property? - ANSWER-The recorded owner of the water rights, not necessarily the owner of the property What does not need to be placed into an escrow account? - ANSWER-withholding taxes What is considered a proper response by the seller when he or she receives an offer from a buyer - ANSWER-checking an appropriate box, initialing the form, and submitting a counterproposal What is the debit/credit entry when a buyer assumes a loan from the seller? - ANSWER-debit seller, credit buyer What is the effect of a Loan Objection Deadline when specified in an approved Residential Contract to Buy and Sell? - ANSWER-If the buyer cannot get a satisfactory written loan commitment by that date, the buyer may terminate the contract upon written notice to the seller. What is typically not negotiable in the Contract to Buy and Sell Real Estate - ANSWER- Mediation fee What must appear in the title of a trust account? - ANSWER-Company name and employing broker's name

If an offer was made on a house in which the buyer intended to have a hair salon in the basement, but found out a few days prior to closing that the zoning wouldn't allow it, can they cancel the agreement without penalty? - ANSWER-Yes, but only if they terminate in writing prior to the Record Title Objection Deadline If an owner wants to make a single full payment for property taxes, what is the latest date by which this payment can be made? - ANSWER-April 30 If any of the title documents are not delivered to the buyer on or before the date specified in the contract. The contract can be: - ANSWER-Terminated, If the sellers or sellers representatives miss this date then the buyer may terminate the contract and recieve his/hers earnest money back. If items listed in the Inclusions and Exclusions Section of of the Contract to Buy and Sell Real Estate are not a part of the property, the broker should: - ANSWER-do nothing, if the listing item is not on the property as of the date of the contract, it is not included nor necessary to cross it out If mineral rights are not listed in the deed, and not previously transferred, the rights are:

ANSWER-transferred to the grantee If the homestead exemption is not waived, the owner is protected: - ANSWER-from any debt If your Contract to Buy and Sell does not need the Seller or Private Financing Section, you as broker may do all of the following except: - ANSWER-remove the section in its entirety as it is not applicable In the Contract to Buy and Sell, what does the statement, "time is of the essence hereof" mean? - ANSWER-All dates and deadlines will be strictly interpreted. John Bargas of Buywell Realty wants to place a listing in the phone book. At a minimum he must list: - ANSWER-John Bargas, Buywell Realty June is a listing broker in Colorado. When and how must she disclose to a potential buyer that she has a working relationship with the seller? - ANSWER-in writing, before providing specific real estate services Licensee gets asked by out-of-state party to manage 15 rental units. Broker should: - ANSWER-inform employing broker to create Property Management Contract and set up proper escrow account Section 12-61-103 (10) requires all

business to be conducted only in the licensed name of the employing broker. Within a brokerage, only the employing broker or an attorney for the brokerage can create contracts from scratch. Mineral rights: If property is attached with mineral rights, you may be obligated to: - ANSWER-allow them to enter an use your property to gain access to the minerals Of the following; who is responsible for for an accurate and complete closing statement?

ANSWER-real estate broker attending closing On a new loan closing, the settlement worksheet entry for a tax reserve indicates that the new lender is - ANSWER-Withholding this amount from loan proceeds to start the escrow account for the next tax payment On what time basis must trust accounts be reconciled: - ANSWER-monthly Out of state seller sold a property for $489,000. The property was highly leveraged resulting in cash proceeds to the seller of $5,500. How much should be withheld subject to the Colorado Department of Revenue Income Tax? - ANSWER-$ lower number of the 2 Property taxes become a lien on January 1 for the previous year. When may taxes be paid without receiving a penalty: - ANSWER-The first half payment by the last day of February, the second half payment no later than June 15 Provisions of the Colorado Common Interest Ownership Act: - ANSWER-establishes the right of an HOA to place a lien on a property for unpaid HOA dues and assessments Publishing a foreclosure notice of sale in a newspaper is the duty of the: - ANSWER- Public Trustee Recording Fee of Warranty Deed most typically would appear on the settlement statement as: - ANSWER- Regarding the Colorado Homestead Exemption, as indicated in the approved deed of trust forms, the buyer agrees that: - ANSWER-the trustor waives the right to the homestead exemption Rule E-35 of the Colorado Real Estate Commission requires brokers: - ANSWER- Select the correct statement about a lease in Colorado: - ANSWER-Every lease contains an implied warrant of habitability and quiet enjoyment Stan is a real estate broker in Colorado. He has identified a property for a fast food outlet and has asked four friends to contribute money to the purchase and gain partial ownership. Stan will manage the property and negotiate the lease for the fast food

When using a Counterproposal form, the client submiting the counterproposal would: - ANSWER-sign only the counterproposal Which class is protected under under Colorado Fair Housing and not the Federal Fair Housing? - ANSWER-National Origin Which is not true regarding the Counterproposal form: - ANSWER-The only changes allowed are purchase price and earnest money Which of the following is correct according to the Colorado Real Estate Commission Position Statement regarding Rule F? - ANSWER-Brokers may not add exculpatory language limiting their liability to any contract to which they are not a party such as the Contract to Buy and Sell. Which of the following is true for a person activating an inactive or expired Colorado real estate license? - ANSWER-must satisfy the continuing education requirement before they apply to activate an inactive license or to reinstate an expired license to active status Which of the following is true if a buyer receives a property inspection report indicating several apparently serious problems on the day after the Inspection Objection Deadline? - ANSWER-The buyer missed the opportunity to object based on inspection issues, and the contract is still in force. Which of the following is true when a broker signs the Broker Acknowledgments at the end of the Residential Contract to Buy and Sell? - ANSWER-The broker acknowledges receipt of the earnest money deposit. Which of the following requires the use of the Licensee Buyout Addendum to the contract to Buy & Sell? - ANSWER-A broker is offering a guarantee as an inducement to list with his company Which of the following would MOST require a broker recommendation that his or her buyer further investigate water rights: - ANSWER-Commercial buyer wanting a farm with irrigation canals Who pays the Colorado Use Tax on the transfer of furniture, personal property, equipment: - ANSWER-Buyer You have a listing with a couple who hold title in joint tenancy. A broker brings you an offer and the couple indicates that they will probably accept the offer, but they want to think it over for a few hours. During those few hours they are involved in a traffic accident and one of them is killed. What would be the status of the listing? - ANSWER- The listing agreement is enforceable against the surviving spouse.

If the listing agreement has been signed by both spouses and one spouse dies, the listing agreement is still enforceable against the surviving spouse

Topics CRES Final Test with Complete Solutions, Exams of Advanced Education

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Topics CRES Final Test with Complete

Solutions