Colorado Real Estate Practices Quiz

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Questions and Answers

What action should the holder of earnest money take in the case of a dispute?

Seek arbitration between the parties.
Divide the money equally between the parties.
Put the money in a trust until the parties decide.
Interplead the earnest money to a title company representing the broker. (correct)

Under what circumstance is a Licensee Buy-Out Addendum necessary?

When the purchase is concurrent with listing another property. (correct)
When the licensee purchases for personal use.
When the licensee aids in a homeowner's next property purchase.
When continuing to market the property under an existing contract.

Which of the following actions is explicitly prohibited for real estate brokers?

Offering to sell time-shares without a license.
Advising clients on investment options in property.
Auctioning real estate without proper authorization.
Offering to prepare legal documents as a courtesy. (correct)

What is the appropriate course of action for a broker who owns an interest in a title company when recommending it?

Full disclosure of interest in the title company. (C) Signup and view all the answers

What essential information must an independent broker's written office policy include?

The relationships offered to the public by such broker. (D) Signup and view all the answers

Which situation does NOT require the Colorado Real Estate Commission to investigate a written complaint?

Failure to disclose damages in property. (C) Signup and view all the answers

Who bears responsibility for the accuracy of documents if a buyer's agent is absent at closing?

The employing broker and the buyer's agent. (A) Signup and view all the answers

What should a broker do if their client asks for title company recommendations while they have an interest?

Supply a list of options and identify their own company clearly. (D) Signup and view all the answers

Flashcards

Earnest Money Dispute Resolution

The earnest money holder must file an interpleader action with a title company to resolve disputes between the parties.

Licensee Buy-Out Addendum NOT Required

A licensee buy-out addendum is NOT required when a licensee purchases property for personal use or future resale, even if they're listing the property.

Prohibited Broker Activities

A real estate broker is prohibited from engaging in activities such as auctioning real estate, dealing in options, acting as an "option dealer," and selling time-shares.

Broker's Interest in Title Company

When a broker owns interest in a title company, they must fully disclose this interest to their client and recommend other title companies as well.