Chapter 19—Licensing Laws and Professional Affiliation
MULTIPLE CHOICE
1. The first state to legislate licensing requirements for real estate agents was
a.
Texas.
b.
Rhode Island.
c.
California.
d.
New York.
2. The basic intent for real estate license laws and regulations was to
a.
help brokers settle their disputes.
b.
protect the public.
c.
protect the broker
d.
control the real estate market.
3. Who, of the following would be required to have a real estate license?
a.
A secretary who answers the phone in a real estate office
b.
An attorney who specializes in real estate law
c.
An escrow officer
d.
A person who solicits buyers and sellers for a broker
4. In the following examples, who needs a real estate license?
a.
Trustees selling foreclosed property for a lender
b.
Government employees finding tenants for government properties
c.
An attorney at law selling his clients property to settle an estate
d.
A nonexempt person dealing in real property for others for compensation
5. In which states are licensing examinations required for a real estate license?
a.
Only the western states
b.
All but the New England states
c.
All but Texas, Hawaii and Alaska
d.
Every state
6. A nonexempt person who sells real estate for others
a.
must always be licensed.
b.
need not be licensed if there is no listing agreement..
c.
must be a licensed broker.
d.
can sell real estate to people in other states.
7. Who can sell real property WITHOUT a license?
a.
Anyone, as long as they only sell one property per year
b.
An attorney, acting within his duties as an attorney
c.
Anyone, as long as they do not sell more than $100,000 worth of property in any one year
d.
A judge who is helping out a friend
8. In most states, a person is exempt from licensure as a real estate agent when performing which of the
following activities, even if receiving a fee?
a.
Renting resort condominiums for the owner as a commissioned rental agent
b.
Negotiating an exchange of properties where no cash changes hands
c.
Selling real property as an executor of an estate
d.
Dealing in land options
9. Since real estate agents will be handling other people’s money, some states will examine licensee’s
a.
bank account.
b.
credit history.
c.
age.
d.
financial statement.
10. A real estate broker differs from a real estate salesperson under the law in that the
a.
broker is liable for the acts of the salesperson.
b.
salesperson may take a listing with him when he changes brokers.
c.
law recognizes no differences.
d.
salesperson is responsible for the acts of the broker.
11. Over time, states have established licensing requirements dealing with all EXCEPT
a.
minimum age.
b.
education.
c.
residency.
d.
Intelligence Quotient (IQ).
12. When moving to a new state, a licensed real estate agent in one state can presume his license status in
the former state will be given credit in his new state of residence
a.
always.
b.
sometimes.
c.
never.
d.
when moving to Texas only.
13. Which of the following is responsible for processing license applications, issuing real estate licenses,
and collecting license fees?
a.
State legislature
b.
Federal Department of Real Estate Licenses
c.
Attorney General
d.
State Real Estate Commission or Department
14. Real estate commissions or departments act to protect the public by regulation and education. The
following would be the usual activity of these organizations EXCEPT
a.
requiring a specific number of answers on a real estate license exam.
b.
requiring all licensees to be reexamined every two years.
c.
holding public hearings in response to complaints of improper actions of licensees.
d.
requiring a licensee to post a bond or contribute to a recovery fund.
15. Real estate commissions typically do all of the following EXCEPT
a.
review license exam answers.
b.
hold hearings in response to complaints of improper actions of licensees.
c.
enact new real estate legislation or amend existing legislation.
d.
determine the number and location of exam testing sites.
16. A real estate broker’s or salesperson’s license would most likely be revoked for
a.
failure to pay REALTORS® dues.
b.
misrepresentations.
c.
failure to practice real estate.
d.
failing to split a commission with an unlicensed individual.
17. A state-run program where real estate license fees are used, in part, to pay uncollected judgements
against licensees is a
a.
bonding program.
b.
recovery fund.
c.
multiple listing service.
d.
equalization fund.
18. A residential real estate salesperson can usually expect from his or her principal broker all of the
following EXCEPT
a.
supervision, training and advice.
b.
signs, advertising, office space and supplies.
c.
payment of dues to the local REALTORS® Association.
d.
access to multiple listing services.
19. A typical broker-salesperson employment contract should include all of the following EXCEPT
a.
sales commission splits and earned bonuses.
b.
services to be supplied by the broker.
c.
tax withholding requirements.
d.
employment status.
20. When a broker joins a franchise organization, the financial arrangements usually include
a.
a salary paid to the broker.
b.
a percentage of income paid to the franchiser.
c.
free jackets to the sales associates.
d.
salary to the agents.
21. The National Association of REALTORS® has sponsored many groups to further enhance the
industry; they include all of the following EXCEPT
a.
Society of Industrial REALTORS®.
b.
Farm and Land Institute.
c.
Society of Real Estate Appraisers.
d.
Institute of Real Estate Management.
22. The term “REALTOR®” is synonymous with
a.
real estate broker.
b.
real estate license.
c.
a member of NAR.
d.
a real estate company.
23. Pat has a license and contractual rights to sell real estate in a typical state. This licensee may be
presumed to be all of the following EXCEPT
a.
an agent or subagent.
b.
a licensee.
c.
a broker or salesperson.
d.
a REALTOR®.
24. When a broker fell on hard times, he stopped paying his dues to NAR for two years. He still uses the
REALTOR® designation in his advertising and on his business cards. Which of the following is true?
a.
NAR can do nothing
b.
The broker can be sued by NAR
c.
The broker can be disciplined by the Real Estate Commission
d.
The broker is a member for life, so he is free to use the REALTOR® designation
25. Which of the following is a copyrighted term owned by NAR?
a.
Realty
b.
Realtist
c.
REALTOR®
d.
Narob
26. Which of the following may conduct a real estate brokerage business without a proper license?
a.
Members of the state bar
b.
Attorneys-in-fact
c.
Both a and b
d.
Neither a nor b
27. A person who sells real estate for others
a.
must be licensed in order to collect compensation.
b.
need not be licensed if no compensation is involved.
c.
both a and b.
d.
neither a nor b.
28. Which of the following could be licensed as a real estate broker?
a.
A corporation
b.
A partnership
c.
An actual person
d.
Any of the above
29. Which of the following is NOT a real estate license category?
a.
Salesperson
b.
Broker
c.
Attorney-in-fact
d.
Both a and c
30. A real estate listing is a contract between
a.
the owner and the listing broker.
b.
the owner, the broker, and the listing salesperson.
c.
the owner and the listing salesperson.
d.
the broker and the listing salesperson.
TRUE/FALSE
1. A listing is a contract between a property owner and the salesperson taking the listing.
2. The sales associate, affiliated with a broker, who brings about a sale is paid by the title company.
3. A duly qualified person who has passed the real estate license exam and joined a brokerage firm is
most properly referred to as a licensee.
4. The ultimate responsibility for a mistake in a document prepared by a real estate salesperson rests
equally upon the salesperson and the employing broker.
5. Continuing education requirements exist for the purpose of requiring licensees to stay up-to-date in
their field.
6. Typically there is no specific educational requirement for obtaining a salesperson license.
7. Brokers who wish to operate outside their home state will usually be required to file a notice of
consent with the secretary of state in each state in which they wish to operate.
8. Real estate brokers may operate a business as a sole proprietorship under their own name only.
9. For a corporation to be granted a license as a real estate broker, all officers must be licensed as real
estate brokers.
10. In most states, a branch office maintained by a licensed brokerage firm must secure a branch office
license in the firm’s name.
11. In most states, members of the real estate commission are full-time employees appointed by the
governor.
12. Real estate salespeople may reasonably be expected to work for a salary.
13. The term REALTOR® applies to any licensed real estate salesperson.
14. Any person who earns a real estate commission and is not licensed is guilty of breaking the law.
15. Executors of estates are specifically exempt from holding a real estate license.
16. A license may be revoked upon proof of violation of fair housing laws.
17. Property owners who want to sell their home are interested in how much it will cost to sell it.
18. A recovery fund is a state-operated fund that can be tapped to pay real estate brokers who have claims
against other brokers.
19. When the property being sold is an investment contract in real estate rather than real estate itself, the
broker may be required to have a securities license in addition to a real estate license.
20. The GRI designation is offered by the state real estate commissions.
COMPLETION
1. A ____________________ is a person or legal entity license to act independently in conducting a real
estate brokerage business.
2. A(n) ____________________ contractor is one who contracts to do work according to their own
methods and is responsible to his employer only for the results of that work.
3. The party holding a franchise such as a franchised brokerage office is called a
____________________.
4. A real estate ____________________ is a state board that advises and sets policies regarding real
estate licensees and transaction procedures.
5. The broker in charge of an office is called the ____________________ broker.
6. A ____________________ license is required of a real estate broker in order to conduct negotiations
within another state.
7. To recall and make void is to ____________________.
8. To temporarily make ineffective is to ____________________.
9. Interpretations of various articles of the REALTORS® Code of Ethics is known as the
____________________ of Practice.
10. A designation awarded for completion of real estate courses sponsored by Boards of REALTORS® is
the GRI or Graduate of the REALTORS® ____________________.
MATCHING
Choose the one most appropriate answer for each.
a.
broker
k.
real estate commission
b.
continuing education
l.
real estate salesperson
c.
employment contract
m.
REALTOR®
d.
fictitious business name
n.
REALTOR-Associate®
e.
franchisee
o.
realty board
f.
independent contractor
p.
recovery fund
g.
licensee
q.
revoke
h.
nonresident license
r.
sales associate
i.
notice of consent
s.
securities license
j.
principal broker
t.
suspend
1. one who holds a license
2. a person who is licensed to bring about real estate transaction for a fee, but who do so only in the
employment of a real estate broker
3. a registered trademark owned by the National Association of REALTORS® for exclusive use by its
members
4. broker in charge of an office
5. a business operated under any name other than the owner’s name
6. an independent agent who negotiates transactions for a fee
7. to temporarily make ineffective
8. to recall and make void
9. a local trade organization for real estate licensees and other persons allied with the real estate industry
10. a state-operated fund that can be tapped to pay for uncollectible judgments against real estate licensees
11. a salesperson or broker employed by a broker
12. a state board that advises and sets policies regarding real estate licensees and real estate transaction
procedures
13. one who uses his own methods and is responsible only as to results
14. a requirement for license renewal in many states, its purpose is to help licensees keep up to date in real
estate
15. required of a real estate broker in order to conduct negotiations within another state
16. permits the secretary of state to receive legal summonses on behalf of a nonresident broker
17. required when selling an investment contract
18. formalizes the working arrangement between the broker and his salespersons
19. the party holding a franchise such as a franchised brokerage office
20. membership designation for salespersons and broker licensees working for REALTORS®