Chapter 2 - Real Estate Commission Rules and Regulations

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1

Brokers additional place of business

Branch office

2

Copy of a real Estate Contract with original Signatures

Duplicate Original

3

Least severe discipline by the Real Estate Commission

Probation

4

Mixing brokers money with that of others

Commingling

5

Cancellation of Real Estate License

Revocation

6

Place for Money belonging to clients and customers

Escrow Account

7

Awareness of Wrongdoing with no attempts to stop it

Guilty Knowledge

8

Temporary Lifting of a real estate license

Suspension

9

Another name for Escrow account

Trust Account

10

Form Sellers must sign for an office exclusive listing

Waiver of Broker Cooperation

11

A licensed salesperson is allowed to

A. keep earnest money deposits in a special escrow account

B. leave one broker and affiliate with another.

C. keep a license without a sponsoring broker

D. work for two brokers if each is informed and consents.

B. leave one broker and affiliate with another.

12

Under some circumstances, a real estate office may be in the home of:

A. broker

B. a sales person

C. a broker sales person

D. no one

A. broker

13

Broker Waldo Rodriguez wants to open a branch office in a new shopping mall in the next town. The office can be supervised by

A. a salesperson with at least 2 years experience

B. Broker Rodriduez by phone each day

C. friendly broker in the next town

D. Broker sales person

D. Broker sales person

14

Salesperson Stan Clemenzio accepts an earnest money deposit and turns it over to his broker Roberta Lee. Roberta must

A. Open a separate bank account for the deposit

B. Keep it in the account used for Stan's transaction

C. Promptly deposit it into the office business account and keep a careful record so that it wont get confused with Roberta funds.

D. deposit it within five days in a trust account

D. deposit it within five days in a trust account

15

An escrow account may be opened in

A. any authorized NJ financial institution

B. a NJ stockbrokers office.

C. a Texas bank that offers high interest.

D. any of the above

any authorized NJ financial institution

16

A broker must keep copies of
A. contracts for 6 years

B. documents for 7 years

C. financial transactions only

D. leases for at least one year after they expire

A. contracts for 6 years

17

Every Person who signs a contract is entitled to receive a duplicate original. When are they entitled to receive it. A. Immediately

B. within 3 days

C. within a week

D. within 10 days

A. Immediately

18

Every sales contract prepared by a broker must contain a notice that

A. the brokers commission rates do not exceed community standards.

B. the buyer may not purchase insurance from the same company that sold the property.

C. earnest money will be deposited in a trust account

D. the buyer and seller may seek attorney review within 3 business days.

D. the buyer and seller may seek attorney review within 3 business days.

19

Even when the broker is the sellers agent, buyers are entitled to.

A. preferential treatment

B. first loyality

C. fair dealings

D. negotiated fees.

C. fair dealings

20

For a license law violation, the real estate commission could fine a licensee as much as

A. 10k

B. 20K

C. 35k

D. 50k

D. 50k

21

The commission will rule that someone could never again get a license after how many violations.

A. 1

B. 2

C. 3

D. 4

C. 3

22

Salesperson Joe Kentry is indicted for possession of a controlled substance with intent to sell and is out on bail until the trial. The real estate commission may

A. revoke his license

B. suspend his license

C. fine him 1k

D. not take any action

B. suspend his license

23

The real estate commission must give a licensee how much notice before a hearing is held on a possible violation

A. no notice

B. one week

C. 10 days

D. 30 days

C. 10 days

24

Sun City realty hold a door prize drawing at a weekend open house it runs. this practice

A violates the commission rules

B. is acceptable because it is in the sellers best interest

C. is acceptable only if it is offered at every listed house

D. can offer only prizes worth less than $25.00

A violates the commission rules

25

Donna White, a broker, is offering her mother's house for sale and will charge no commission. Should she reveal that she is a licensed agent?

A. no because she is acting in a private capacity.

B. Yes, but not until after the purchaser signs an offer.

C. No, because no fee will be paid.

D. Yes, as soon she meets a prospective buyer

D. Yes, as soon she meets a prospective buyer

26

Which statement about broker run advertisements in newspapers is correct?

A. the ad must specify the complete address of the property.

B. If the broker does not use a qualifying word or words for attainable financing in an ad, he or she must keep a record of the validity of the financing for six months.

C. If a broker mentions being a member of an MLS in any ad, he runs, the full name of the MLS must be spelled out with the exceptions.

D. Advertising offering free appraisals is prohibited although CMAs are permitted.

D. Advertising offering free appraisals is prohibited although CMAs are permitted.

27

The "reasonable effort" licensees are required to make to determine all material information about a properties physical condition could normally include all of the following except

A. asking the seller about the property condition

B. performing a visual inspection.

C. Asking the sellers agent about the property's condition.

D. contracting with a professional to perform an in depth inspection of the property prior to entering into any agency agreement with the seller

D. contracting with a professional to perform an in depth inspection of the property prior to entering into any agency agreement with the seller

28

A NJ licensee is permitted to represent both parties to a transaction if he or she obtains

a. written consent of the seller and at least the informed oral, consent of the buyer

b. informed written consent of the seller, buyer, and any other agent involved

c.consent whether written or oral of either party transaction

d. permission of the nj real estate commission rate it is referred to

b. informed written consent of the seller, buyer, and any other agent involved

29

any agreement between competing offices to establish standard commission rates is referred to as:

A. a preliminary marketing contract

b. price gouging

c. illegal price fixing

d. legal industry practice under NJ law

c. illegal price fixing

30

A salesperson working for broker betty barrett was disciplined for pursuing a flagrant and continued course of misrepresentations, making false promises and failing to pay over money belonging to others. in this case, bettys license;

a. will automatically be supended, b/c betty is responsible for the acts of all sales persons in her office

b. will not be suspended b/c the salesperson, not betty, was disciplined for wrongdoing.

c. will be suspended or revoked only if betty knew about the sales persons activities and did nothing about it

d. will be suspended, but the licenses of any other salesperson in her brokerage will not be affected

c. will be suspended or revoked only if betty knew about the sales persons activities and did nothing about it

31

Rebate of part of a commission may be paid to a

a. seller only

b. buyer only

C. home inspector

d. seller or buyer

b. buyer only

32

A sales person may not do these 3 things:

accept any form of compensation except from his or her supervising broker, maintain an escrow account or hold funds belonging to others, work for more than one NJ broker at a time

33

If a broker has an office in its own home it must _____________

have a separate area with its own entrance visible from the street. It can never be in the home of the broker associate. The brokers NAME and the words LICENSED REAL ESTATE BROKER must be displayed on the exterior. The license of the broker and those of any associates should be displayed in the main office. Must be under full time super vision of broker

34

Each branch office must be under direct supervision of ...............

A BROKER or broker saleperson and must have a duplicate license. all names of all licensees and the branch office supervisor must be recorded with the Commission and prominently displayed in the branch office with the office license. No branch office can be in the home of the a salesperson.

35

Trust account is AKA

escrow account.

36

A trust account must be, and must have -

authorized financial institutation in NJ - the name of the financial institution and the account number must be reported to commission both at license application and renewal.

37

Brokers are requires to deposit funds in trust account __________ which means -

promptly, commission defines as 5 business days. sales persons should immediately give it to brokers.

38

Mixing funds wit money in the trust account is called -

commingling

39

When a client places advance fees of more than ____________ with a broker, to assist with advertising costs - the broker must give client an account of how the money is being spent within __________ days.

$25, 90.

40

In accordance with the federal law, any cash deposit of _____________ must be reported to the ISR.

$10,000

41

Every broker must keep records of trust account activity for ___________

6 years.

42

Commissions are negotiable between ________________

client and broker

43

Licensees can prepare sales contracts for ____________

1-4 family homes, and single building lots.

44

The sale of a rental of commercial or industrial property or business is accomplished on a ____________

letter of intent.

45

What is a letter of intent?

generally non binding document that references what the parties plan to do, note that some provisions can be binding.

46

The commission requires that all sales contracts prepared by licensees contain _____________, giving a buyer and seller the right to consult an attorney, who may disapprove a contract within 3 business days, after delivered and signed contracts to both parties

Attorney Review Clause

47

All written offers must be delivered to seller within ________________

24 hours

48

The broker must keep copies of unaccepted offers to purchase for _________________ from the date of initial offer. All copies of contract of sale must be kept for ____________, same with expenses of the brokerage.

6 months , 6 years.

49

Anytime a seller directs a broker not to cooperate, the licensee must have the seller sign ________________________

Waiver of Broker cooperation

50

Licensees in NJ can act as a ________________, without creating an agency relationship with any of the parties to a transaction.

transaction broker.

51

before a salesperson can work for a broker, a written broker-salesperson independent contractor agreement must be drawn to include -

compensation rate paid to the salesperson - starting salary, and commission split, a broker promise to turn over monies due to the salesperson within TEN DAYS after commission is received, the rate of compensation to be paid the salesperson for trtansaction that close after the sales person leaves the firm, a provision that any future changes to the contract will be binding only if in writing and signed by both parties.

52

The NJ real estate commission has regulations regarding and advertisement offering to sell, buy, exchange or rent property. this is indended to

let the public know exactly who they are dealing with.

53

All advertisements must include

brokers business name, followed by a term such as a realtors realist, real estate broker, or real estate agency. the licensees name must appear exactly as it is on the license with the exception of a middle initial.

54

all ads that include a salespersons name must also include

the name of the real estate company in larger type or more prominent, the salespersons full first and last name must be used. a nickname may also be used. a webpage must include the phone number, and a link for website.

55

all ads must also specify the properties

municipality. "the vinicity of" is prohibited. MLS must be spelled out as well.

56

Any ad that refers to home warranty must state __________

whether inspection is required. if warranty is mandatory, and whether the purchaser is responsible for payment of fees in connection with the warranty. An ad offering rebate to the purchasher

57

in 2009 legislature passed an act allowing real estate broker to provide a purchasers of real estate with a portion of the brokers commission in the form of a ______________

rebate

58

A sales person may no do these 3 things -

accept any form of compensation from his or her supervising broker, maintain an escrow account or hold fund belonging to others, work for more than one NJ broker at a time.

59

IF the office of a broker is in the brokers own home it must....

have a separate area with its own entrance visible to from the street. It can never be in the home of a broker associate.

60

What must be displayed on the outside of a brokers office if it is in the home -

brokers name and "licensed real estate broker"

The license of the broker and those of any associates should be prominently displayed in main office.

61

Each branch office must be under the direct supervision of _________

broker or broker salesperson and must have a duplicate license.

62

Can the branch office be in the home of a broker or sales person?

no

63

What must be on the on the escrow account?

name of financial institution and the account number and it must be reported to the commission at the license application and the time of renewal.

64

How soon are brokers required to deposit funds? How soon should salesperson give money to broker.

promptly, which commission defines as within 5 business days. / Immediately

65

Leaving such money in the escrow account for more than ________ days is considered Commingling.

5

66

When a client places advanced fees of more than $_________ with the broker, to assist with advertising costs, the broker must give client an account of how money is spent within _____________ days.

$25/90 days

67

In accordance with the Federal Law, any cash deposit of $____________ or more, must be reported to the IRS.

$10,000

68

Every broker must keep records of account activity for ___________ years.

6.

69

Licensees can prepare sales contracts only for

1-4 family homes, and single building lots.

70

The sale or rental of commercial or industrial properties is accomplished on a ___________

Letter of Intent.

71

What is a letter of intent?

A letter of intent is generally a non binding document that references what the parties plan to do, note that some provision could be binding.

72

The commission requires that all sales contracts prepared by licensees contain _____________

Attorney review clause

73

What does the Attorney review clause provide?

It gives the buyer and seller the right to consult an attorney, who may disapprove a contract within 3 business days after delivery of a signed contract of both parties.

74

How soon does all written offers have to be forwarded to the seller?

24 hours

75

The broker must keep copies of all unaccepted offers to purchase for _____________ from the date of the initial offer.

6 months

76

All copies of contracts of sale and listing agreements must be kept for __________

6 years.

77

Bills from brokerage services , records showing payment to sales personals and brokers, cancelled checks and deposit slips from the brokers business account must be kept for

6 years

78

What is a transactional broker?

Licensee in NJ has the option of functioning as this, without creating agency relationship with any of the parties to a transaction.

79

A written Broker sales person independent contractor agreement includes:

the compensation rate paid to the salesperson/a broker promise to turn over monies due the sale sales person within 10 days after commission, or as soon as the check as cleared/the rate of compensation to be paid the salesperson for transactions that close after the sales person leaves the brokers firm/a provision that any future changes to the contract will be binding only in writing signed by both parties

80

If a salesperson leaves a company, the broker must make a complete written account of all monies due due within _____________ of termination

30 days.

81

All advertising ads must indicate -

the brokers business name, followed by a term such as realtor, relatist, real estate broker, or real estate agency. the licensee name must appear exactly as it is on the license with the expection of any middle name or initial, which need not be used. A nick name may be added. An individual sales persons web page must display the phone number of the brokerage office or clearly indicate a link to the brokers webpage.

82

if an ad includes a licensee's home phone number, it must be identified as residential or home and must also include what?

the office number

83

All ads must specify the properties what in the ad or at the head of the column?

municipal location,

84

What ad exceptions do not require MLS to be spelled out?

for sale signs, business cards, and spot ads (20 lines or fewer)

85

any ad that refers to a home warranty - must state -

whether inspection is required, if the warranty is mandatory, and whether the purchaser is responsible for the payment of fees in connection with the warranty.

86

Any ad that offers rebate, must disclose -

the buyers obligation to pay any applicable taxes and advise the purchaser to consult a tax professional.

87

all loan terms must contact the words -

to a qualified buyer

88

No ad or sign may indicate that the property is sold until

sale has closed and title is transferred.

89

in 2009, the Legislature passed a law allowing real estate brokers to provide purchaser of real estate with a portion of the brokers commission in the form of

a rebate

90

rebate can only be paid to

the purchaser

91

The comission may investigate complaints against action of licenses in what 3 ways -

* Place a license on probation, * suspend a license (suspension) *revoke a license (revocation)

92

Before revoking a license, the commission gives the licensee at least ______________ advance notice of hearing

10 days.

93

Gulilty Knowlege

sales person knew what was going on and did not attempt to stop it.

94

When a brokers license is suspended or revokes what happens to the sales persons?

it is suspended until the end of the current license period. but they can affiliate with another broker and can obtain a reissue of license at no charge.

95

The commission can promply revoke the license of anyone convicted of

robbery, theft - suspension for anyone awaiting trial for murder, kidnapping, robbery and criminal conspiracy

96

License Act mentions the following offenses are subject to displinary action

making false promises, acting for more than one party without knowlege, mispresentation, failure to account for or pay money to others, failure to provide contract to client, using lotter contenst game prrize, to promote sale