Colorado State Real Estate Practice Exam

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• What is the primary incentive for the state to withhold taxes from out-of-state sellers?
• Who is responsible for paying the Colorado Use Tax on the transfer of furniture and personal property?
• At closing, who is credited with the earnest money?
• If a buyer discovers zoning restrictions before closing, what can they do?
• Under what conditions may a Colorado broker pay a referral fee to an out-of-state broker?
• What must happen before a property manager can transfer a security deposit to the owner?
• When closing a new loan, what does the settlement worksheet entry for a tax reserve indicate?
• What is the significance of a tax reserve in loan closing?
• How long does a person have to file a complaint of discrimination under Colorado Fair Housing laws?
• In real estate terminology, what does 'proration' generally refer to?
• In which scenario is the buyer allowed to terminate the contract according to the assumptions of loan balance?
• What type of relationship can a transaction broker relationship create?
• What is indicated by "Due on Transfer - Strict" in a Deed of Trust?
• What is a tenancy at will?
• Which payment schedule is not permitted for property taxes according to Colorado law?
• In Colorado, which individuals are considered authorities at conducting real estate transactions?
• How is mined copper treated legally after it's been removed from the ground?
• What records must a broker maintain regarding deposits into escrow accounts?
• Which document provides security for the benefits of title insurance?
• What is the legal requirement regarding complaints made to the Colorado Real Estate Commission?
• What is required for a valid easement to be created?
• Which party is responsible for the cost of recording a deed?
• In a net loan proceeds settlement sheet, how is the net loan amount presented?
• What is required of a real estate licensee when advertising services?
• What is the term for the commission negotiated under an Exclusive-Right-to-Buy Contract?
• Under whose name must advertisements in the newspaper appear?
• What is a primary advantage for a new broker concerning commission structures?
• What is a necessary action for the owner of a property who wishes to drill a well according to state regulations?
• What is referred to as the economic life of a property?
• According to the Contract to Buy and Sell, who is typically responsible for paying for the appraisal?
• A rental agreement for less than how many months is considered enforceable without being in writing?
• Which amendment supports the constitutionality of the 42nd U.S. Code, Section 1982 regarding racial discrimination?
• If a buyer and seller want to move the closing date up, what is required?
• If a buyer has a $169,000 second home and sells it for $154,000, what is the tax implication of this sale?
• Which statement about the Counterproposal form is true?
• Who has the responsibility to verify information on behalf of the principal when a buyer submits an offer contingent on selling their home?
• What must the sellers do if they do not fill out the Seller's Property Disclosure form?
• How can a buyer ensure they will get their earnest money back?
• What is the purpose of an Environmental Impact Statement (EIS)?
• To be designated as a broker for a corporation operating in multiple states, what is a requirement?
• What happens if a date is left blank in a counterproposal form?
• An associate broker may create an agency agreement with a buyer or seller using which of the following?
• How does the lessee's situation change when the original lessor dies in a tenancy at will?
• In contracts to purchase land, which type of crops are negotiable items?
• Which of the following acts is prohibited for a real estate broker in Colorado?
• What is inverse condemnation?
• When making a counter offer using the approved Counterproposal form, how should dates be changed?
• How much should be charged to the seller for interest proration when the seller owned the property for 10 days in July?
• In a cash purchase of property, what would be the total cash used by the buyer when the earnest money is included?
• To whom is earnest money held on behalf of according to the Contract to Buy and Sell Real Estate?
• When a broker terminates his affiliation with an employing broker, what must occur?
• In a periodic tenancy, how is the duration typically defined?
• What is the withholding amount for an out-of-state seller for a property sold for $489,000?
• How is interest on an assumed loan recorded in a settlement?
• If the mill levy is reduced but the assessed value increases, what is the effect on the total taxes owed?
• What happens in a tenancy at sufferance?
• What must be included in an escrow account when it is opened by a broker?
• What must happen when the Listing Broker changes their relationship from agent to Transaction Broker?
• What happens if a buyer assuming a loan finds the loan balance is less than expected according to the Residential Contract to Buy and Sell?
• Which information is NOT required about a deposit into an escrow account?
• A legal easement can be created by any of the following EXCEPT:
• What is necessary to drill a well for water on a 35-acre parcel of undeveloped land in Colorado?
• What does the term 'earnest money' refer to in real estate transactions?
• In terms of Colorado real estate contracts, what is one requirement for the approval of contracts?
• Which authority is mandated to investigate written complaints against licensees in Colorado?
• Which type of subdivision must be registered with the Colorado Real Estate Commission?
• What is the primary purpose of Form 1099-S?
• What is the implication of having an oral lease agreement in real estate?
• What must John Bargas of Buywell Realty list in the phone book?
• When assuming an existing loan balance, how is interest calculated for proration at closing?
• Who is typically responsible for the cost of the appraisal in a Contract to Buy/Sell Real Estate?
• In a closing statement, if the seller's debit column is less than the credit column, what does this indicate?
• Which of the following is not considered evidence of merchantability of title?
• What must a broker obtain to charge for closing costs not related to legal documents?
• What is an exemption from the Subdivision Developer's Act?
• In what scenario can buyers potentially lose everything in an installment land contract?
• What type of information is the brokerage required to include on their website according to advertising regulations?
• What does the Commission-approved form titled "Definition of Real Estate Working Relationships" provide?
• In a closing transaction worksheet, what does a $30,000 Seller Debit represent?
• Which class is specifically protected under Colorado Fair Housing laws but not under Federal Fair Housing laws?
• What is a commercial lease terminated by?
• What happens if a Purchase and Sale contract lacks a legal property description?
• What impact does the homestead exemption have on a head of family householder in Colorado?
• What must occur when an earnest money dispute arises and both parties cannot agree on its release?
• What should a broker ensure when providing a referral fee?
• What is the best practice for a licensee who wants to sell their own property?
• Why might a homeowner owe more money after losing their home to foreclosure, despite having leftover funds?
• What is the primary requirement for an individual to serve as a broker of record for a corporation?
• What is one action a transaction broker may NOT take without ending their obligations?
• What is the classification of a loan that requires interest payments only until maturity?
• What is the condition of all HUD homes upon sale?
• Under what conditions can a broker pay a referral fee to a person without a Colorado real estate license?
• What are the duties that a principal owes to an agent?
• What happens to the earnest money if a buyer terminates the contract under the Loan Objection Deadline?
• If prior year taxes of $1,854 are owed by the seller, what impact does this have during closing?
• When might a lien be placed on a property after foreclosure?
• When is it appropriate for a broker to disclose conflicts of interest?
• What should be done if the Dates and Deadlines Table is not applicable in a counterproposal?
• For how long must trust account records be maintained?
• What does the covenant of quiet enjoyment promise a property owner?
• When should a listing agent ideally order the title commitment?
• A broker who supplies financing for a condominium project with exclusive selling rights represents what type of relationship?
• If a buyer puts 10% down on a building sold at $180,000 and is charged a 1% loan origination fee, what is the total amount used for the purchase?
• What default relationship exists if no written agreement is made between a broker and a buyer?
• What is the grace period for renewing an expired license without penalty?
• If a private owner sells half of their 20-acre parcel, what is true regarding registration with the real estate commission?
• When calculating interest proration, what is typically NOT considered?
• What must occur before you can assist a friend in preparing real estate documents?
• What is essential for a closing statement to reflect accurate financial transactions?
• Who presides over a hearing when a complaint against a licensee leads to possible suspension or revocation?
• What is the minimum notice period required for terminating a tenancy at will?
• Who is the trustor in a Deed of Trust?
• Who is typically debited for closing costs on behalf of the buyer?
• When an existing contract is replaced with a new one, this process is called what?
• A brokerage firm managing more than seven single-family residences is required to maintain how many trust accounts?
• On the settlement sheet for a closing where prior year taxes were unpaid, how is this typically presented?
• Which of the following is NOT a consideration in an Environmental Impact Statement?
• What happens to existing leases when a property is sold?
• How should the purchase price be handled on the settlement statement?
• What must a broker do when rebating commission to a buyer at closing?
• If a broker lends money to a client, how must that money be handled?
• If a purchase agreement states to release earnest money after the inspection date, but the seller wants it released early, what should the broker do?
• If a seller agrees to pay a portion of the buyer's closing costs, how is it recorded on the settlement sheet?
• What type of loan does the rescission provision of truth-in-lending apply to?
• What documentation is necessary for an earnest money deposit?
• What is required for documentation of disbursements from trust accounts?
• What does title insurance guarantee against?
• Who typically is responsible for providing a copy of the contract to the Title Company?
• How should loan interest be prorated when closing on May 14, assuming a balance of $65,325 and an 8% annual interest rate?
• If a broker has a listing agreement and a buyer wants to purchase that listing, what is a potential conflict of interest?
• Which of the following does NOT fall under Rule F regarding contracts in Colorado?
• What must a broker do if their client wants to purchase a property they have listed?
• Which of the following does NOT need to be placed into an escrow account?
• If a Colorado broker residing out of state accepts an earnest money deposit, what must they do?
• How is a transaction broker relationship typically created?
• If a landlord does not refund a security deposit within the specified time frame after a tenant surrenders the property, what can the landlord be liable for?
• What must accompany an application for a real estate license in a new state for applicants previously licensed elsewhere?
• What should a seller consider when accepting a buyer's contingency?
• What does "Assumable - Not due on transfer" mean?
• What happens if a buyer terminates a contract due to unsatisfactory title?
• Can a licensee who is also a licensed appraiser offer to appraise a home if they plan to be the listing agent for that property?
• What does the buyer agree to regarding the homestead exemption in the approved Deed of Trust forms?
• In a joint tenancy, what occurs if one owner dies before a listing is accepted?
• Which two names must appear in the title of a trust account?
• What is the term used for when a buyer and seller write two contracts for one property with different amounts?
• What is the legal process a landlord must use to evict a delinquent tenant?
• After closing on a property, what responsibilities might the buyer have according to the Licensee Buyout Addendum?
• What type of tenancy has no definite starting or ending date specified?
• What is the duration of the right of rescission applicable to second mortgages?
• What is a carry back loan?
• What is the cost of pouring a 6-foot wide sidewalk on a corner lot if the sidewalk costs $0.68 per sq. ft.?
• What is the primary benefit of a tenancy at will for tenants?
• When can a broker withdraw money they placed in their trust account for a client?
• What is required from a purchaser at closing to facilitate the transaction process?
• What may occur if a real estate licensee receives a serious complaint?
• What can an unlicensed secretary for a property manager legally do?
• Who is a deceased person who dies testate able to devise property to?
• What is required from the broker in all advertising for real estate?
• In a real estate transaction where a property sold for $115,000 and $15,000 was provided as earnest money, what additional cost does the buyer incur when charged a loan fee of 2%?
• Where should earnest money be held when purchasing a new home through a builder?
• In real estate, what describes a title?
• What responsibility does a listing broker have when there are concerns about appraised value?
• If an appraisal comes in lower than the offered price, what action can the buyer take regarding an FHA loan?
• If sellers propose a counter proposal that buyers reject, what can the buyers do?
• In contract interpretation, what does a court generally consider regarding documents?
• Is it legal for a seller's agent to rebate part of their commission back to the seller?
• What must be included on a broker's website according to commission rules?
• If items listed in the Inclusions and Exclusions Section are not a part of the property, what should the broker do?
• If Richard and Jan Minard are in default on their installment land contract, which of the following is NOT true?
• What must be communicated for an acceptance of an offer to be valid?
• In what scenario does a seller owe a commission under the Holdover Period?
• In an Exclusive Right-to-Buy contract, who is considered the principal?
• What does a credit to the seller and a debit to the broker represent after subtotaling the seller's columns on a settlement sheet?
• What does a broker need to practice in a state where they are not licensed?
• What happens after a buyer completes payments under an Installment Land Contract?
• Which regulation specifies the conditions under which a broker can cooperate with out-of-state brokers?
• Which parties retain legal title during an installment land contract?
• If a client submits a counterproposal, how should they sign the documents?
• Upon receiving a complaint, what must a licensee do according to the Commission?
• What should a broker do if an out-of-state party requests management of rental units?
• What does the right of rescission allow a borrower to do?
• What should a broker do when showing buyers new homes?
• Which tenancy is characterized as automatically terminating at a specified end date?
• A growing crop, also known as emblements, is regarded as what type of property?
• What typically characterizes a lease for a tenancy for years?
• When can property taxes be paid without incurring a penalty?
• How long must transaction and trust account records be kept according to the Real Estate License Law?
• Which type of contract does NOT fall under Rule F?
• Which of the following statements is true regarding 'Tenancy of Years' leases?
• What is required of brokers regarding signed closing documents after a client's closing?
• Which tenancy is also called an estate for years?
• How is the amount due from the buyer represented on a closing statement?
• What is the primary risk associated with a tenancy at sufferance?
• What information is NOT required in the trust account journal documentation?
• What is a primary advantage of FHA financing for buyers?
• Which fee is typically split equally by both parties in case of mediation during a real estate transaction?
• For what purpose might a landlord ask a potential tenant about their drug use?
• What is the typical duration for a term loan?
• What must a property manager do with a security deposit in the absence of specific language in the Property Management Agreement?
• How are real estate closing fees typically represented on a settlement statement in Colorado?
• What must an applicant for a Colorado real estate license demonstrate if they were previously licensed in another state?
• What is the minimum requirement for a broker to disclose their relationship status before performing a licensed activity?
• When closing on March 15, how many months of escrow can a lender take for taxes?
• How is total annual interest calculated on a loan?
• When is the date of closing for an installment land contract determined?
• What defines a tenancy at will?
• What is the required action for dispute resolution in a Contract to Buy and Sell?
• What is the typical scope of powers granted by a Colorado statutory power of attorney for property?
• What are the remaining funds sent to the closing table after deductions from a loan called?
• What characterizes a tenancy from period to period?
• On the settlement statement, who signs the Warranty Deed?
• What authority does the Real Estate Commission have regarding licensees?
• What does the earnest money become if a buyer fails to provide notice by the Loan Objection Deadline?
• Can a buyer make their Contract to Buy/Sell contingent on an environmental impact report?
• A deed of trust held by someone other than the public trustee is not what?
• What type of loan does NOT require regular principal payments until the loan's maturity?
• What happens to the licenses of associate brokers if the sole proprietor's license is suspended for two years?
• What happens to any profit or loss from a property held after closing according to the Licensee Buyout Addendum?
• Who bears the cost for the preparation of legal documents at closing according to real estate laws?
• What does an Installment Land Contract entail for the buyer?
• What is required for an Earnest Money Promissory Note?
• How must provisions inserted into blanks of approved real estate contracts appear?
• If a client is countering the price and other terms in a contract, which form should they use?
• What is the maximum interest a Seller can charge on a carry back loan in Colorado?
• What is the main role of the listing agent in the transaction process?
• What might a new broker prefer regarding commission splits when starting out?
• When is a second mortgage exempt from rescission?
• What happens when a licensee purchases a property using a licensee buyout agreement?
• What consumer protection law includes the right of rescission?
• What must a broker acting as a transaction broker provide to a buyer with no written agreement?
• How often can the exclusion on capital gains taxes be claimed?
• How long does a property manager in Colorado have to return a security deposit after a lease has expired?
• On the settlement statement, who is charged for notarizing a warranty deed?
• Who requests the earnest money release prior to closing?
• What is a characteristic of a Single Party listing?
• According to amendments to the Civil Rights Act of 1968, who pays for modifications to a rental unit needed for accessibility?
• Who cannot prepare an addendum to the Contract to Buy and Sell Real Estate?
• Which of the following is NOT an obligation of a transaction broker?
• What happens to mineral rights not specifically mentioned in a Deed or the Contract to Buy and Sell?
• How is the payoff of an existing loan typically represented on a closing statement?
• What must the listing agent verify when a buyer submits a contingent offer?
• How much notice must a couple give to comply with their lease that has no automatic renewal?
• What is the maximum length of a Holdover Period in a Listing Contract?
• If the homestead exemption is not waived, how much protection does an owner receive from debt in Colorado?
• How should the Buyer's Loan Processing Fee for a VA loan be shown on a settlement sheet?
• In a joint tenancy situation, if one spouse dies and leaves all assets to a child from a previous marriage, what happens to the property?
• Can a real estate agent provide advice on tax and title matters for a property?
• If an Employing Broker designates one seller agent and one buyer's agent, what is the status of agency?
• What is the minimum time frame for a residential foreclosure sale after recording the Notice of Election and Demand in Colorado?
• What happens if the buyer does not provide notice by the Loan Objection Deadline?
• What should you tell sellers who are reluctant to fill out a Seller's Property Disclosure form?
• What action is illegal for someone who is not a licensed real estate agent?
• According to the Mediation clause, how long does mediation last before it can terminate?
• If the licensee prepares any legal document for a client, what is true regarding additional fees?
• What form must a broker use to submit an offer on HUD-acquired property?
• How long does the borrower typically have to wait before closing on a fixer-upper after refinancing their primary residence?
• Which type of contracts can be used to create an offer to purchase real estate?
• When Brian sells his second home for a loss, how will this affect his tax return?
• What is the main obligation of the listing agreement once signed by both spouses in a joint tenancy?
• What responsibility does a tenant have when making modifications for their disability?
• What is a promissory note that requires interest payments only called?
• Who is responsible for prosecuting the practice of real estate without a license?
• The right of rescission is foundational to which piece of legislation?
• In Colorado, which of the following activities can a real estate broker NOT perform as a courtesy?
• How does title insurance differ from other types of insurance in terms of payments?
• Under what circumstances may a landlord legally refuse to lease to a tenant?
• In advertisements, what name must be included to comply with Colorado real estate laws?
• If an appraiser has issues with the contract value, what should the listing agent provide?
• For real estate closing transactions, who is generally responsible for paying closing costs in a conventional loan?
• What must a condominium unit buyer receive at or before the signing of a contract for sale?
• What does a seller's credit column represent on a closing statement?
• For an offer to be valid and binding, what condition must be met?
• What action is defined as "debit buyer" in a settlement statement?
• How must an employing broker designate a broker?
• What type of real estate license can be issued as of January 1, 1997, in Colorado?
• How often are title insurance fees paid?
• If a developer leases property for constructing a shopping center, what type of interest do they have?
• In the context of a real estate transaction, what does the term “debit” typically refer to?
• What is the primary responsibility of a buyer under a Buyer Agency agreement?
• What must brokers ensure when listing items in the Contract to Buy and Sell Real Estate?
• What happens when a certificate of reasonable value (CRV) issued for a VA loan is less than the purchase offer?
• In addition to course requirements, what must an associate broker accomplish to practice?
• What governs the duties and obligations of agents and principals in a real estate transaction?
• What remedy does a buyer have if a hailstorm damages a property before closing?
• If the seller had a loan balance of $127,538 and an interest rate of 8.5%, what is the monthly interest prior to proration?
• A broker without employed licensees is required to maintain what type of document?
• What happens to a lessee's right when the original lessor dies in an estate for years leasehold estate?
• What document must be filed by a real estate licensee when there is an investigation?
• Which of the following is most likely true about a term loan?
• What service does a mortgage broker typically provide?
• What type of tax is the Colorado Use Tax classified as?