Signed receipt of returned earnest money to buyer

Log in Sign up. How can we help? What is your email? Upgrade to remove ads. If the title deadline date is not met: If the buyer provides written notice of unsatisfactory conditions: The Buyer and Seller then have until the Inspection Resolution Deadline in the contract is for the parties to reach agreement on the inspection items or for the Buyer to withdraw their objections, else the contract teminates on that date.

Interpretation of the title commitment should be done by: During the processing of the loan, it is: A house is closed on October The buyers will assume the seller's policy. Since the policy has been paid, how much does the buyer owe the seller at closing? Seller paid for days; he didn't own the policy Oct. The purchase contract called for a homeowner's warranty. There are no charges reflecting the homeowner's warranty on the settlement statement, and buyer and selling agent have not said anything about it.

In Colorado, who of the following is exempt from real estate license law? Property Manager renting single family homes for a variety of owners Investor who owns 12 investment properties and sells one to an owner-occupant.

Inactive licensee assisting friends in filling out purchase offers and negotiating deals. Attorney at law collecting a five percent commission for helping. Investor who owns 12 investment properties and sells one to an owner-occupant.

Private owners may always act for themselves and are not subject to real estate license laws. Attorneys are normally exempt from real estate license law while practicing law but must have a license to act as a broker.

An inactive licensee is still bound by all rules of the commission, and the right-of-way specialist is exempt only for certain specific activities. The time and place of closing is generally scheduled by the listing agent, however it should: Broker Bill Butter is working with Buyer Brian Bread and has found a property on which the Buyer wants to place an offer. The property that he likes is owned by Seller Sammy Samuel and listed by Broker Cherry Cleary. The property is located at E Westgate Ave in Durango, CO.

Buyer Bread accepts this counter offer on April 12th and the closing is scheduled for May An inspection is held on April 16th and Buyer Bread wants some roof shingles repaired and the carpet in the master bedroom to be replaced. Prior to closing, Buyer Bread requests that the seller allow them to start a kitchen remodel prior to closing. Seller Samuel will not allow this and Buyer Bread gets angry and wants out of the contract. When Seller Samuel responded to the initial offer from Buyer Bread which of the following forms should have been used?

The Counterproposal is the correct answer. The "Agreement to Amend and Extend Contract with Broker" is used to amend a contract between a client and their broker such as a listing agreement. The "Agreement to Amend and Extend Contract" is used to amend a contract between the Buyer and Seller such as the purchase contract. There is no approved real estate form that is called a counter offer. If the appraiser contacts the listing broker and indicates a problem reaching the contract value, the: A broker has an Exclusive Right-to-Buy contract with a principal.

Who is to be their customer? Buyer Broker Seller Client. Seller The Exclusive Right to Buyer is also know as the Buyer Agency agreement. It is the contract a buyer signs to engage a broker as a buyer's agent.

Since the buyer is the principal, the only possible customer is a seller. According to the lead-based paint disclosure provision, contained in the Residential Contract to Buy and Sell, which of the following is correct if the building permit for a residential improvement was issued prior to January 1, ?

The contract is void unless disclosure is signed by the seller and brokers prior to the parties signing the sales contract. The seller and brokers must make disclosure prior to closing.

The broker is responsible to disclose the age of the property. Disclosure is required only if the sellers are aware of lead-based paint on the property. The provision about lead-based paint disclosure included in the Residential Contract to Buy and Sell is a federal disclosure requirement. Colorado rules provide that the contract is void unless proper disclosure and all signatures are obtained prior to the parties signing the sale contract.

A buyer submits an offer contingent upon the successful closing of their present home. The maximum amount of days that can be specified in the Holdover Period in the Listing Contract is: If no box is checked in this then Seller does not owe the commission to Brokerage Firm. A contract may be renegotiated after acceptance, if the: In order for the appraiser to obtain access to the property, he or she must first obtain permission from the: All of the following liens must be satisfied in order to transfer clear title except: Dates in the contract can do all of the following except: When a contract is contingent upon the purchaser's ability to obtain special financing, i.

Something you do on a cigar Illegal as it is fraud A legal exaggeration of a property''s benefits Hiding a material fact such as a known deficiency in a furnace.

A legal exaggeration of a property''s benefits Statements of facts made by agents must be accurate. Exaggeration of a property's benefits is called "puffing". While puffing is legal, agents must ensure that none of their statemetns can be interpreted as fraudulent.

An agent describing a plain house as "charming" and "beautiful" may be an exaggeration, but because it is a subjective opinion it cannot be characterized as a falsehood and thus is not an act of fraud.

Closing March 15, next payment due April 1. How many months of escrow can lender take for taxes? This reserve is based lender's own loan requirement and state law, C.

Payments to a reserve escrow account must be adjusted annually upon reasonable belief of substantial improvements to the property or upon official notification of an increase in the actual amount of taxes levied. Failure to make a refund is subject to interest and penalty. If the purchase price exceeds the property's appraisal: It becomes binding when signed by both parties. The seller agreed to clean and certify the furnace prior to closing.

Which monetary encumbrances should be listed by the seller when completing the Exclusive-Right-to-Sell Listing Contract? The status of these encumbrances after the property is sold would not be relevant or known at the time of the listing. A real estate appraiser means: To comply with the dates in the contract to purchase: Title commitments must be ordered in a timely fashion, in order to meet the required contract dates.

A final walk-through is: When there is a contingency on the sale of the purchasers property prior to closing, the: In Colorado, all of the following topics are regulated by Real Estate License Law or Real Estate Commission Rules, except: AAR, CAR, and NAR.

Who is responsible for verifying square footage in home? Seller Lender Buyer's agent Buyer. An agent who is an independent contractor, must make: The water bill has been paid in advance by the seller for the month of August. The closing is August The correct entry on the settlement statement would be: An offer has been presented to the sellers of a property.

The sellers do not want to accept it as it is. They ask their agent to change the terms through a counter proposal. The seller's agent prepares the counter proposal and delivers it to the buyer's agent. The buyers don't want to accept the new terms the seller Is offering.

What can be done? As buyer's agent you would advise them to write a counter proposal and attach it to the previous offer and counter proposal As buyer's agent you would tell them to rewrite the original contract As buyer's agent you would tell them to withdraw the counter proposal None of the above are possible in this scenario. As buyer's agent you would tell them to rewrite the original contract. A purchase contract can only have one counter attached, the buyer can't withdraw a counter, and only sellers can withdraw the counter.

They must sign another contract knowing what terms are acceptable. If the transaction does not close: The purchaser has promised to pay for a one-year home warranty plan. How is it entered? Debit buyer, credit broker Debit buyer, credit seller Credit buyer, debit lender Credit buyer, debit broker. Debit buyer, credit broker Charge the buyer, Broker will pay out after receiving it in.

What is the purpose of the real estate commission in Colorado? This is done chiefly by licensing brokers, enforcing the licensing law through rules, forms, and disciplinary proceedings. Licencee's are not considered "public" therefore the commission does not get involved in disputes between licensee's in matters such as commission disagreements.

According to RESPA, lenders must provide to applicants: Which is not required to be in the file for examination during audit? Copy of the earnest money Contract to Buy and Sell Real Estate Disclosure of Brokerage Relations Warranty Deed.

Warranty Deed Any document, which requires signatures, must be retained. The purchaser is buying a vacant property and needs to move his or her family in as soon as possible.

The seller agrees to allow this early occupancy. A owner agrees to lease a property to be used as a casino. State laws prohibit gambling. This contract would be legally defined as void voidable valid unenforceable. An essential element of a contract is that it be for a legal purpose. If seller does not relinquish possession as indicated and negotiated in the contract, what remedy does buyer have? Eviction and a predetermined daily payment until possession is delivered Always make this amoun t high so the sellers will leave the premises.

Paragraph 16, contract to buy. Title passes from the grantor to the grantee: Gratuitous gifts to a purchaser subsequent to closing and not promised or offered as an inducement to buy: Who is responsible for proofreading the settlement statement before closing?

Lender Seller Broker Closer. Broker The agents should check the statement with regards to the contract and all amendments. When the employing broker of a corporate brokerage is suddenly unable to continue in that position, to whom may the commission issue a temporary "hardship" license? Colorado licensee approved by the corporate board of directors A temporary hardship license for a corporate brokerage can only be issued to a broker licensed in Colorado.

The requirements for ownership and director status are waived. What advice, must you give your clients prior to closing? Advise legal counsel prior to closing. Written disclosures regarding agency should be made: Commission rule E states that "brokerage activities" occur when a broker elicits or accepts confidential information from a party concerning specific real estate needs, motivations, or financial qualifications.

Activities such as open house, preliminary conversations, or small talk concerning price range, location, property styles, or responding to general factual questions about properties that have been advertised for sale or lease do not qualify as triggering brokerage activities. Who will not have a copy of the listing agreement? Seller Listing broker Buyer's agent Listing agent. Licensees are responsible for paying the costs of legal document preparation when they are preparing such documents for their clients.

If the broker delegates this function to an agent title company or closing service , they are responsible for bearing the cost. If the purchaser takes possession prior to closing, the utilities are paid by: Although closing was set for May 1st, a delay in the lender processing of the buyer's loan forced a change in close to May 10th.

This change was accepted by both parties. The buyers did not show up to the closing, nor did they complete the loan application. Keep the earnest money and sue for damages Must return the earnest money to the buyers as they did not qualify for a loan Keep the earnest money, there is no recourse in the agreed purchase contract for a suit for damages. Keep the earnest money, there is no recourse in the agreed purchase contract for a suit for damages Liquidated damages means the buyer is only offering the loss of their earnest money should the buyer default on the contract.

If the buyer had selected "specific performance" as a remedy in the event they defaulted, the seller would have the right to keep their earnest money AND sue for damages. Not showing up for the closing and the failure to even atttempt to secure a loan are clear breaches of the purchase contract. The seller may keep the earnest money, but may not sue for damages.

Who shall request the earnest money to be released, in good funds to the closing clerk, prior to closing? Buyer Seller Listing agent Buyer agent. Listing agent Listing agent generally requests it from the broker at least 24 hours before closing.

From the Contract to Buy and Sell Purchase Contract Good Funds. All amounts payable by the parties at Closing, including any loan proceeds, Cash at Closing and closing costs, shall be in funds that comply with all applicable Colorado laws, including electronic transfer funds, certified check, savings and loan teller's check and cashier's check Good Funds.

If the buyer and seller have not reached a resolution on inspection issues the contract will terminate: The Buyer solely determines if the condition of a property is satisfactory or not. Although the Buyers normally will list items they wish the Seller to address; they are not required to do so. The Buyer can simply terminate the contract should they so desire. Should the Buyer submit items to correct to the Seller, the Seller has until a resolution deadline to come to a negotiated agreement regarding the items with the Buyer.

If a satisfactory agreement is not reached, the contract will terminate automatically on the deadline unless the Buyer withdraws the objections. Since the seller has money going out a closing it would be a debit and since the buyer has money coming in a closing it would be a credit to the buyer.

The Exclusive Right-to-Sell listing contract gives the listing broker the right to: The broker may be the seller's agent and a transaction broker for the buyer The broker can take the listing without being an agent of the seller The listing must have at least a 60 day holdover period The listing has to be for at least thirty days.

The broker can take the listing without being an agent of the seller A broker may list a property as either a Seller's Agent or Transaction Broker. Only a Seller's Agent is considered to be an "agency relationship. In a working relationship you are a neutral party, advocating for neither the buyer or the seller but are instead just a facilitator for the transaction.

That would have the effect of you telling one party you are working for them Buyer or Sellers Agency and the other that you are a neutral party Transaction Broker. That would be dishonest.

Buyer Stanley hired broker Riley, to represent her through the process of purchasing a newer home. After the offer is written, the broker for Stanley makes a copy of the earnest money check, but does not deliver the copy or the check with the contract Stanley has not made a legal offer because no consideration was given Stanley has made a legal offer and Riley can hold the check without depositing it until the contract is accepted Riley need not deliver the check for 2 days regardless of the provisions in paragraph 4 negotiating who will hold the earnest money deposit Riley is subject to disciplinary action.

Stanley has made a legal offer and Riley can hold the check without depositing it until the contract is accepted Colorado law allows the selling broker to hold the check until the offer is accepted. Who is responsible for getting a copy of the contract to the Title Company? Selling agent Listing agent Seller Lender. Listing agent Listing agent helps seller determine which title company will issue commitment. A Exchange is: The IRS Code actually reads: Like-Kind Property in a Exchange The investor must acquire "like-kind" property.

This means that it must be other qualifying forms of real estate. The property just needs to be "like-kind. When a complaint against a licensee results in a possible suspension or revocation, a hearing is required. Which of the following presides over the hearing? Attorney general An administrative law judge The director of the Real Estate Commission An arbitration committee established by the Real Estate Commission. An administrative law judge An administrative law judge presides over all hearings by the real estate commission.

Colorado Real Estate Manual statute In order for each beneficiary to be covered in case of bank failure, the broker must: How should you respond if a client asks you about sex offenders in the neighborhood in which they are planning to buy a property?

Canvas the neighborhood asking about sex offenders Refer them to the local law enforcement agency that keeps the information Call the police station to get the information for them Tell them the information is protected under "fair housing" disability category. Refer them to the local law enforcement agency that keeps the information You should never provide the information for them just refer them to where to get the information. An employing broker can usually avoid disciplinary action for the improper conduct of one of his employed licensees if: They are always ultimately responsible.

A broker can never avoid disciplinary action for improper conduct of a licensee. They are always ultimately responsible A broker can never avoid disciplinary action for improper conduct of a licensee. When must an employing broker keep a ledger? When paying salaries to brokers When putting money in an account to maintain it When accepting money belonging to others When receiving an earned commission.

When accepting money belonging to others What is a "Ledger"? A record collectively called a "ledger" or an equivalent component of an accounting system which records in chronological sequence all money which is received or disbursed by the broker on behalf of each particular beneficiary of a trust account.

realestate final Flashcards | Quizlet

This record must show the monetary transactions affecting each individual beneficiary and must segregate such transactions from those pertaining to other beneficiaries of the trust account. The Real Estate Commision does not require a ledger when an Employing Broker is only managing company money.

If an employing broker does not take physical possession of earnest money buyers write checks directly to the title company , rents written directly to owners , security deposits written directly to owners and such; then the emplying broker does not need an escrow account.

The title commitment is used for all of the following purposes except to: Fixtures listed on the approved Colorado exclusive right to Sell Listing contract will be included If on the property at the time of the listing Unless they are crossed out on the form In every case If attached on the date of the listing unless specifically excluded by Seller.

If attached on the date of the listing unless specifically excluded by Seller If they are attached and not specifically excluded they will be included. Can the agent do this? Yes, brokers provide this advice commonly Yes, as long as the agent is engaged as a buyer's agent No, the agent is not a buyer's agent and therefore cannot provide this advice No, this is outside the scope of permitted activities for a holder of a real estate license.

No, this is outside the scope of permitted activities for a holder of a real estate license This violates the Conway-Bogue court decision which in Colorado binds the conduct of agents. Agents are recognized authorities at conducting real estate transactions.

We are not experts at tax and title matters. Those are within the recognized legal expertise of accountants, title examiners and lawyers. A real estate broker is expected to recommend to clients they seek expert advice when the matter is outside their area of expertise. What happens to the original warranty deed after it has been recorded? It is sent to the buyer It is sent to the seller It is sent to the lender until the loan has been paid off The Public Trustee retains it until the loan has been paid off.

It is sent to the buyer Unlike the title to a car, the property owner gets possession of the warranty deed even if there is a loan against the property. The Contract to Buy and Sell Real Estate specifies that earnest money should be returned to the buyer if: Any one of these would allow a buyer to back out of a contract if done within the established time frames. More on the process of returning Earnest Money: The Colorado Contract to Buy and Sell Real Estate AKA Purchase Contract says the agent holding earnest money has 5 days to return earnest money to whomever is supposed to get it after receipt of written instructions to do do.

This is covered in the Broker Acknowledgements sections of the purchase contact. Such release of Earnest Money will be made within five days of Earnest Money Holder's receipt of the executed written mutual instructions, provided the Earnest Money check has cleared. Most companies as a prudent measure have both parties sign that they agree who gets the earnest money, before they release it. This just makes sense, woe to the agent who releases the earnest money and one of the parties throws a fit over it.

Safer to get the parties to agree in writing first. However, sometimes the party that is giving up the earnest money and their agent makes this a pretty low priority on their things-to-do-list. Keep in mind, they are grumpy the deal is dead and even if they know they need to release the earnest money, they are not happy about it. In the meantime, the other party wants their money.

Buyers in particular are anxious as they are back on the market looking for a property and can't make an offer until they get their earnest money returned. Therefore, the Commission has made is very clear, that they do not want slow paperwork to hold things up when there is no controversy. Does this occasionally put us in an awkward position?

Smart agents who do not like to even get within sniffing distance of having to write out a personal check to cover a perceived, if not actual screw up that be me, except my wife would probably dispute the "smart" assertion will move heaven and earth to get quickly signed releases by both parties before releasing earnest money.

If you find that one of your parties due to the stress of the failed deal ran instantly to consult with the yogi on the mountaintop and are not returning messages. You need to have a talk with your managing broker before doing something you may regret. It is always cooler to share the love and say "my managing broker said to do it and will make it good" then "how do I spell your name on my check".

In the Colorado Listing agreement the holdover period provision entitles the broker to a commission if the property sells to anyone: The broker negotiated with during the listing period unless the seller lists with another exclusive broker and the "Shall" box has not been checked Within a stated period after listing expires The broker negotiated with during the listing period Within the listing period.

The broker negotiated with during the listing period unless the seller lists with another exclusive broker and the "Shall" box has not been checked The Holdover Period says that a listing broker may be entitled to a commission after the expiration of a listing contract for the period of time specified in the clause if: Although the protection is for a negotiated time after the listing expires; it can terminate early if the property is re-listed by another agent and the "Shall Not" box is checked, meaning the old listing agent "shall not" be owed a commission if another brokerage firm has earned one.

If neither the "Shall" or "Shall Not" be owned a commission" box is checked - the default is "Shall Not". See "Holdover Period" in the "When Earned" clause of an Exclusive Right to Sell listing agreement. A minority couple come to an agent looking for a house. The agent knows of properties for which the couple qualify but avoids showing or mentioning these listings.

Instead, the agent takes them to only properties in low-priced and integrated neighborhoods. This practice is known as: Steering is often divided into two broad classes of conduct; Advising customers to purchase homes in particular neighborhoods on the basis of race Failing, on the basis of race, to show, or to inform buyers of homes that meet their specifications. An exclusive right-to-buy Buyer Agency contract may: The start of an Exclusive Right To Buy contracts may be post dated. There is no limit to the number of parties to a contract.

If cash is received with an offer: If an earnest money check does not clear the bank: Regarding a dispute over Earnest Money - if no lawsuit is filed, the broker may: Earnest money abandoned from an unexecuted contract should: According to Real Estate Commission rules - who has responsibility for an accurate closing?

The buyer and seller The title company and closer The lender The designated broker, the employing broker and any substitute broker. The designated broker, the employing broker and any substitute broker The Employing Broker has responsibility for all company closings. The Designated Broker is the broker appointed by the Employing Broker on behalf of the company to service the transaction.

If the Designated Broker is unable to attend a closing, a stand-in broker would need to be appointed and would thus acquire responsibility. This scenario repeats for any company representing the Buyer and the Seller. The buyer and seller and title company have a vested interested in accuracy but are not subject to Commission rules and regulations as they are not licensed. Lenders are licensed but only contribute to the loan portion of the closing. Regardless, the real estate companies and agents have the highest level of responsibility according to law for a closing.

After a failed contract, the earnest money should be retained or returned: When a tenant terminates a lease because the landlord has not furnished hot water for two months, it is called what type of eviction. There are strict rules and regulations regarding Constructive Evictions in Colorado.

They are detailed under the State's Warranty of Habitability which outlines under what circumstances may a property be declared uninhabitable and what steps must be taken by the tenant to perform a constructive eviction to be legally released from a lease. A trust account maintained by a licensed broker in Colorado must have all of the following except: Federal Truth-in-Lending laws are also known as Equal Credit Opportunity Act. Freedom of Information Act. Regulation Z Title VIII.

This was done to promote a level of credit protection for the underlying consumer. Most of the requirements imposed by the Truth in Lending Act are contained within Regulation Z, and the two terms are often used interchangeably. Where both parties have fulfilled their agreements, the contract is known to be: All records are required to be kept for: When an existing contract is replaced with a new contract, this is referred to as: A tenancy whereby neither the lessor or the lessee specify a definite starting date or ending date is known as a: More info on Leasehold Tenancies: Leasehold Tenancy also known as Nonfreehold Estates A nonfreehold estate is an interest in real property that is less than a freehold estate.

Nonfreehold estates are not inheritable and are said to exist without seisin. Also known as a leasehold estate, a nonfreehold estate is created through a lease or rental agreement that can be either written or oral.

The holder of a nonfreehold estate the tenant or lessee holds no ownership interest in the real property, and only has the right to use the property as established in the terms of the lease or rental agreement.

Ownership remains with the landlord lessor. To learn more, see Becoming A Landlord: More Trouble Than It's Worth? Types of Nonfreehold Estates Because nonfreehold estates involve tenants, they are often referred to as "tenancies.

Tenancy for Years This is, also called an estate for years or tenancy for a definite term, is an estate that is created by a lease. A lease is a contractual agreement where a tenant takes a leasehold interest in a real property for a specified duration. The defining characteristic of a tenancy for years is that the term must have a definite beginning and end; that is, a beginning date and either a specific time period such as one year or one month and an end date must be declared.

As long as a lease is for a definite term, it is identified as a tenancy for years. These leases terminate automatically at the specified end date without the need for notice by either party.

Tenancy from Period to Period A tenancy from period to period is an estate that exists when the tenancy is for a definite initial time, but is automatically renewable unless terminated by the lessor or lessee with prior notice that the tenancy is to be ended. These estates, which are also called periodic tenancies, are of indefinite duration since they can be renewed indefinitely.

A tenancy from period to period may be from year to year, month to month, week to week or even day to day, and renews for a like period of time. For example, a month to month periodic tenancy is renewable in one-month periods until it is terminated at the end of a month through proper notice by either party. See also, 11 Mistakes Inexperienced Landlords Make. Tenancy at Will A tenancy at will, or an estate at will, exists at the pleasure of both the lessor and the lessee.

This type of tenancy can be terminated at any time "at the will" of either the owner or the tenant. A tenancy at will lease agreement might contain language that expresses that the lease may be terminated instantly when notice is given. In practice, a tenant is generally entitled to a reasonable amount of time in which to vacate the property. Landlords may prefer a tenancy at will when a property is for sale and any tenants would have to vacate quickly.

Tenants may favor a tenancy at will if they plan on renting only for a short period of time; for example, prior to moving or while waiting to move into a new home. Tenancy at Sufferance A tenancy at sufferance is the lowest form of estate known to law.

Also called an estate at sufferance, it exists indirectly as the result of circumstance, and is never deliberately created. This type of tenancy arises when a person goes into possession of land in a lawful manner, but remains on the property without any right to do so, and without the owner's consent.

The only difference between a tenant at sufferance and a trespasser is that the tenant at sufferance had at one time a right to be on the property, but has stayed beyond the terms of the previous agreement. For example, a tenant who remains after a one-year lease has terminated, without consent or recognition from the owner, becomes a tenant at sufferance. The tenant can be evicted at any time without notice.

Which of the following forms is not a Colorado Real Estate Commission-approved form? An estate from period to period: Security deposits may be retained by the lessor: The following statement is NOT true: If the deposit was tendered with the contract; it must be deposited no later than 3 business days after notice of acceptance of the contract. From the real estate manual: Except as provided in Rule E-l o , all money belonging to others which is received by a broker as a property manager shall be deposited in such broker's escrow or trust account not later than five business days following receipt.

All other money belonging to others which is received by a broker shall be deposited in such broker's escrow or trust account not later than the third business day following receipt.

The "Additional Provisions" section of the Contract to Buy and Sell Real Estate may include: Personal provisions of the listing broker on the client''s behalf Confirmation of the commission split to the cooperating brokerage firm Exculpatory language protecting the brokerage firm Transaction specific items resulting from negotiations or instructions of the parties to the contract.

Transaction specific items resulting from negotiations or instructions of the parties to the contract The additional provisions sections is a blank area in which Brokers have broad discretion to enter any necessary language.

However, the clauses inserted must be a product of the buyers and sellers negotiation and not language, for example, benefiting the Broker. Broker Beatrice meets with buyer Bob, and together they negotiate the terms of an exclusive right-to-buy contract.

Buyer Bob is unrealistic in his expectations of properties available in his price range, and after looking at several houses decides to wait until next year and save some more money before making a purchase. In regards to the exclusive right-to-buy contract, which of the following is true? Beatrice may retain the contract in her original files until next year Beatrice may destroy the contract, as it never came to fruition Beatrice must submit the contract to the office to be retained with all other permanent records Beatrice can hold on to the contract and use it again next year.

Beatrice must submit the contract to the office to be retained with all other permanent records All contracts must remain with the permanent records of the office. Exclusive right to buy contracts expire in one year, so a new contract will be needed. When a buyer executes a real estate sales contract that is accepted and signed by a seller: Buyer has equitable title - Upon acceptance of the sales contract, the buyer has an interest in the property called equitable title.

Legal title is not conveyed until closing. Any box checked in this Contract means the corresponding provision applies. The abbreviation "MEC" mutual execution of this Contract means the date upon which both parties have signed this Contract. The maximum amount of time a landlord can specify in a lease that they will hold a security deposit after lease termination is 30 days 60 days 7 days 15 days. If no time was specified in the lease, the default maximum is 30 days. An agent can advertise a property under his or her name if: A major reason for buying and owning a condominium rather than a detached single-family home is that: I do not like this question as I think it is entirely subjective, BUT it appears on the National licensing exam so here it is.

It is as true that condo's tends to be less expensive as it is that they require less maintenance, but the test wants the "more affordable" answer. If a licensee desires to sell his or her own property, as a FSBO, the licensee must: Under the Real Estate Commission rules, when a listing broker receives an earnest money deposit on a residential sales contract, he must deposit the earnest money in his trust account: It must be deposited in a trust account no later than three business days after acceptance of the contract, unless the buyer and seller instruct the broker in writing to do something different.

An owner refuses an offer, even though it is exactly in accordance with a valid exclusive-right-to-sell listing. What are the owner's rights? The owner does not have to sell. In Colorado "good funds" include a A personal check from the buyer that will clear the bank A title insurance company check A check drawn on the broker's escrow account A teller's check from a savings and loan. A teller's check from a savings and loan From the Contract to Buy and Sell Purchase Contract Good Funds.

This is also covered in Real Estate Commission Rule E Good funds at closing Pursuant to , a real estate licensee who provides closing services shall not disburse funds or instruct an agent to disburse funds until those funds have been received and are either: Such agreement with a financial institution must be for the benefit of the licensee providing the closing service.

If the agreement contains contingencies or reservations no disbursements can be made until these are satisfied. License number of the brokerage and a list of all current active licensees Names of active licensees, addresses, and telephone numbers Address of the brokerage's home office and states in which the brokerage holds licenses Name of licensee's brokerage firm.

Name of licensee's brokerage firm Commission rules regarding advertising of brokerage identity all apply to any Web site or Internet advertising. Brokerage name must appear on web site. Which of the following is required for a person to be a broker of record for a corporation? An licensee shows a home and mentions that it has a lovely fireplace in the living room.

After buying the home, the buyers and agent discover that the brick fireplace is just a decorative fireplace and is not "wood burning. Homeowner warranty insurance The state recovery fund Errors and Omissions coverage the agent's homeowners insurance policy. It does not cover the licensee for fraud on the part of the licensee.

A licensee must have an active policy to have an active real estate license. A contract to buy and sell has only been signed by the buyer, but has been given to the seller's agent along with an earnest money check: The earnest money belongs to the seller This is considered an offer This constitutes a valid contract The buyer can sue the seller for specific performance. This is considered an offer Until the seller signs the contract it is considered an offer and nothing more.

The fee to notarize a Warranty Deed is charged on the settlement statement to: The charge is debit seller. On the settlement sheet do not confuse "recording" the deed with "notarizing" the deed.

Recording the deed is "debit buyer" as it is considered in the buyers best interest to have the deed recorded into the public record.

THE WARRANTY DEED - Although title may be transferred by a number of types of deed such as a quit claim deed, the most common type of deed used in a closing to transfer title is the warranty deed. The seller signs the warranty deed, not the buyer. In addition, a notary public must notarize the deed and an unofficial witness who is not a party to the transaction must sign as well so the deed can be recorded.

The notary and the witness are usually employees of the closing attorney, although sometimes the attorney may ask the licensee to be a witness. Once the seller, the notary, and the unofficial witness have signed the deed, and the seller or attorney hands delivers it to the buyer and the seller has officially transferred title. It is standard practice for the attorney to keep the original warranty deed at closing for recording at the courthouse.

The original deed is then mailed to the buyer after the recording. Which of the following is true concerning commissions earned by a broker in a real estate sales transaction?

An Environmental Impact Statement EIS summarizes the environmental impact of an existing project is used primarily for state and Federally funded projects must be approved by all affected water districts projects the impact on the environment of a proposed project.

This means that the "environment" considered in an EIS includes land, water, air, structures, living organisms, environmental values at the site, and the social, cultural, and economic aspects. An "impact" is a change in consequence that results from an activity.

Impacts can be positive or negative or both. An EIS describes impacts, as well as ways to "mitigate" impacts. To "mitigate" means to lessen or remove negative impacts. Therefore, an Environmental Impact Statement, or EIS, is a document that describes the impacts on the environment as a result of a proposed action. It also describes impacts of alternatives as well as plans to mitigate the impacts. Who of the following is required to obtain errors and omissions professional liability insurance?

Inactive licensees are not required to carry this insurance, however, they cannot conduct any real estate activities either. A Colorado broker with residence out of state accepts an earnest money deposit on a property located in Colorado.

If an offer is given that fulfills all the terms of a contact and the seller rejects that offer - what happens? The listing broker is entitled to a commission The listing broker receives no commission The listing broker can sue for specific performance The listing broker is entitled to a partial commission for services rendered. The listing broker is entitled to a commission When we, as agents, enter an agreement to market someone's property, we are tasked to bring them a "ready, willing and able buyer".

We do that - we get paid. If we do that and the seller gets cold feet, rejecting an offer which met all of the seller's stated requirements, nobody can force the seller to sell, but we did our job and the seller may be liable for a commission to the listing agent.

In Colorado, when must real estate licenses be renewed? If a broker lends money to a client and places it in his trust account: A property owner died, having willed his real property to his two daughters. There is still a chance that they could lose the land for a variety of reasons, but it CANNOT be taken through escheat a challenge to the will condemnation sale to satisfy a tax lien.

Escheat ensures that property always has a recognized owner, which would be the state or government if no other claimants to ownership exist. Most jurisdictions have their own laws and regulations defining escheat and the circumstances under which it can be invoked. Escheat is usually done on a revocable basis, which means that ownership of the estate or property would revert to a rightful heir should one turn up.

Which statement is NOT true? Depositing earnest money must be within three business days after acceptance of contract Withdrawing earnest money must be within the last business day before closing The beneficiary's transaction ledger should be zeroed out after closing and dispersing of funds A copy of the earnest money check with a copy of the validated deposit slip should be placed in the transaction file.

Withdrawing earnest money must be within the last business day before closing It can be anytime before closing-most commonly 1 day before.

The closing instruction form must be used in conjunction with an approved: When a real estate entity is dissolved: Which of the following would be permissible for an unlicensed personal assistant? The purpose of RESPA is to: Disclose the true cost of borrowing funds Eliminate kickbacks Disclose all costs in closing of a property All of the above. All of the above The purpose of RESPA, a federal law, is to disclose to the borrower the true cost of borrowing money and to help eliminate kickbacks.

An associate broker has developed a web site. What must he or she include on the site?

This also applies to internet advertising. Broker attends client closing. Closing responsibility; closing statement distribution. Pursuant to 1 h , at time of closing, the individual licensee who has established a brokerage relationship with the buyer or seller or who works with the buyer or seller as a customer, either personally or on behalf of an employing broker, shall be responsible for the proper closing of the transaction and shall provide, sign and be responsible for an accurate, complete and detailed closing statement as it applies to the party with whom the brokerage relationship has been established.

If signed by an employed licensee, closing statements shall be delivered to the employing broker immediately following closing Document Preparation and Duplicates.

A real estate broker shall immediately deliver a duplicate of the original of any instrument except deeds, notes and trust deeds or mortgages, prepared by and for the benefit of third party lenders to all parties executing the same when such instrument has been prepared by the broker or the broker's employed licensee or closing entity and relates to the employment or engagement of the broker or pertains to the consummation of the leasing, purchase, sale or exchange of real property in which the broker may participate as a broker.

If a broker moves his place of business without advising the Real Estate Commission: His license is inactivated but not licensees working for him His license and all associate brokers working for him are inactivated The licenses of all associate brokers under him are inactivated.

His license and all associate brokers working for him are inactivated We have various questions floating around related to what happens when a broker fails to notify the real estate commission of a business address change. Any licensee who does not notify the Commission of an address change will have their license inactivated.

When the licensee is also the mama or poppa bear of the office the employing broker the penalty goes up. Everybody's license in the office is inactive. Here are the applicable statues: Change of license status - inactive - cancellation. A change of business address or employment without notification to the commission shall automatically inactivate the licensee's license. S 5 The suspension, expiration, or revocation of a real estate broker's license shall automatically inactivate every real estate broker's license where the holder of such license is shown in the commission records to be in the employ of the broker whose license has expired or has been suspended or revoked pending notification to the commission by the employed licensee of a change of employment.

If an employing broker leaves a real estate brokerage, what happens to the transaction records? The brokerage has legal repsonsibility for all transaction records and must keep them for at least 4 years.

The only time an employing broker would be responsible for record retention would be if the company is shutting down. Acceptance of a written offer to purchase real estate requires the signature of the: Standard contract law states that a contract must be signed and accepted to be binding. A buyer or seller has every right to withdraw an offer at no penalty before the signed contract is accepted. Although a signature is required, it alone is not sufficient to constitute valid acceptance: Checking the "Is Not" box means the contract is not assignable Checking the "Is Not" box means the contract is not assignable without the seller's prior written consent.

Checking the "Is Not" box means the contract is not assignable without the seller's prior written consent Assignability and Inurement. What is one of the things that MLS can be used for?

To become an employing broker, one must: After successfully completing the educational classes and passing the state exam, within what time frame must an applicant make application to the Commission? Broker Bill has several agents in his employ. Agent Smith, an "S-Corporation" himself, has his commission checks written out to his "S-Corporation.

The commission checks are not made to the licensee. An Exclusive Agency Addendum to the Exclusive Right-To-Sell Listing Contract: Engages the licensee as the Exclusive Agent for the property Engages the licensee as the Exclusive Agent who will receive a commission upon any sale of the property Allows a second broker to represent the seller under dual agency Allows the seller to not pay a commission to the listing broker if the seller should procure a buyer.

Allows the seller to not pay a commission to the listing broker if the seller should procure a buyer Exclusive Agency is an addendum you add to a listing contract. In it, the seller reserves the right to not to pay a commission to an agent if the seller finds the buyer. Exclusive agency weakens the desire of any agent to list a home.

Its acceptance by any agent varies greatly. Many agents will find it acceptable if you have a particular buyer in mind and the property is desirable. They will sign the listing, with the seller's understanding that they will but not market the property until the situation with the specific buyer resolves itself. The idea is to lock up the listing and hope the buyer falls through. Not too many agents who are savvy will accept an Exclusive Agency if the seller does not have a buyer in mind and simply wants to market the property in competition with their own agent in the hopes of avoiding a commission.

If a seller prepares a counterproposal, to an offer to buy and it is turned down by the buyer: When the buyer has turned down the counteroffer he is allowed to write a new counteroffer, and submit it to the seller attached on top of the original offer and first counter. Countering a counteroffer is legal but generally considered to be bad form. Good form is to prepare a new offer. When showing properties permitted prior to January 1, According to the Real Estate License Law, a transaction and trust account record must be kept for a minimum of how many years?

Earnest Money White Paper | Ohio Association of Realtors

The amount of the assumption fee is disclosed to the buyer: When a counteroffer is made, what happens to the original offer? It is considered a novation It is deemed rejected It is held in secondary position It can be used as a fall back position, in the event that the counteroffer is rejected. It is deemed rejected A counteroffer rejects the original offer and is considered the new contract.

The reason for requiring an earnest money deposit in a purchase contract is to: Any special assessment on the property assessed prior to closing is paid by: 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?

March 1 April 30 May 1 June April 30 Real property taxes may be paid as follows: If the owner wants to make one full payment, the entire tax may be paid on or before the last day of April. A broker must keep which of these funds in his trust account? Rental monies received Fire insurance premium monies not part of a real estate transaction Commissions received Relocation referral fees.

Rental monies received A broker must keep all money, belonging to clients or other individuals, in his trust account. In a new loan closing, sometimes a lender may make some of the payouts, such as recording fees, survey and reserve taxes before the closing. When these amounts are taken out of the loan, the remaining balance is the amount sent to the closing table and is called the Net Loan Proceeds.

The Net Loan Proceeds are entered on the settlement worksheet: As a debit to the broker, single entry As a credit to the broker, single entry As a debit to the buyer, credit to the broker As a credit to the buyer, debit to the broker. As a debit to the broker, single entry Net Loan Proceeds: Debit broker single entry. Here is the play: Net Loan Proceeds is a situation when a lender is making a loan for x and part of that loan is covering expenses that the lender is owed.

In short - the lender is lending money to the buyer to cover expenses that are going to be paid to the lender. The lender does not want to send the entire loan amount to the closing and wait for a check back to cover the money they are owed, they instead take their money out of the loan up front and send the remaining balance called Net Loan Proceeds to the closer.

To show this on a settlement sheet, the closer enters a series of single entries i. Instead there is one big credit all by itself on a line showing the total loan amount the buyer is getting and then two or more debits all by themselves on other lines adding up to the total loan amount. For more info and examples of this check out the new loan examples in the chapter of the real estate manual on Closings.

What type of map is MOST useful for describing the terrain of a very hilly lot? Assessor's map Contour map Recorded map or plat Seismic projection map. Contour map From Dictionary.

A broker received an earnest money deposit. Other than depositing it in an escrow account, he may: According to the approved Colorado Contract to Buy and Sell Real Estate, when may purchaser assign the contract to another purchaser? In the absence of language to the contrary in the Property Managment Agreement a property manager must: Deliver security deposits to owner Deposit security deposit into escrow account Deposit security deposit into operating account Refuse to accept security deposit from tenant.

Deposit security deposit into escrow account Short version: However, before the owner transfer you need to provide appropriate written notification to the tenant as to who is holding the deposit and the holder's contact info.

CP-5 Commission Position on Advance Rentals and Security Deposits Pursuant to C. This applies to tenant security deposits and advance rental deposits, including credit card receipts, held by a broker. A broker may not deliver a security deposit to an owner unless notice is given to the tenant in the lease, rental agreement, or in a separate written notice that the security deposit will be held by the owner.

Such notice must be given in a manner so that the tenant will know who is holding the security deposit, and shall include either the true' name and current mailing address of the owner or the true name and current mailing address of a person authorized to receive legal notices on behalf of such owner, along with specific requirements for how the tenant is to request return of the deposit.

If, after receipt by the broker, the security deposit is to be transferred to the owner or used for the owner's benefit, the broker, in addition to properly notifying the tenant, must secure the consent of the owner to assume full financial responsibility for the return of any deposit which may be refundable to the tenant.

The broker shall not withhold the identity of the owner from the tenant if demand for the return of the deposit is properly. The sales contract should list: How many days notice does a landlord have to give to evict a tenancy-at-will? Tenancy for years A tenancy for years is for a fixed period of time e. The termination date is set at the time the lease is executed. A tenancy for years ends on the last day of the lease term, with no need to give notice. Periodic tenancy A periodic tenancy exists when the rental period is indefinitely renewable for a series of same durations e.

The most common example is a residential lease requiring a tenant to pay monthly rent, but with no definite termination date. Periodic tenancies are generally created by implication and not by an express provision. According to Colorado law, and that of most states, such tenancies require the giving of proper notice for their termination.

Notice to terminate is discussed below under "Termination of leases. A tenancy at will also exists when the agreement allows a tenant to occupy the premises until sold, or until the landlord is ready to construct a new building, or some other indefinite happening.

Similar to a periodic tenancy, a tenancy at will requires the giving of proper notice for its termination. Tenancy at sufferance A tenancy at sufferance arises when a tenant remains in wrongful possession after a lease has ended. In this situation, the tenant is called a "holdover tenant. The choice is the landlord's; the tenant has none. If a tenant holds over due to reasons beyond his or her control, such as illness, the tenant may be held liable only for the reasonable rental of the holdover period.

As to how much notice you need to give a tenant to evict them, Here is the straight stuff from the real estate manual: A tenancy for years ends on the last day of the term, with no notice-to-quit required.

A tenant rented an town-home, signing a month lease. After the lease expired, the tenant paid 1 month's rent and got a receipt.

What kind of leasehold does the tenant have? Tenancy at sufferance Gross lease Tenancy at will Teanancy for years.

Tenancy at will A tenancy at will is a property tenure that can be terminated at any time by either the tenant or the owner landlord. It exists without a contract or lease, and is unspecific in duration or the exchange of payment. A tenancy at will arrangement is desirable to tenants and owners wishing to have the flexibility to change rental situations easily and without breaking a contract.

In the question - since the signed lease expired, absent a written replacement, the landlord and tenant were in a tenancy at will arrangement. To renew an active Colorado real estate license, what continuing education is required of the licensee? Twelve of those hours must consist of taking 4 hour Annual Commission Update Course each year.

CE requirements are listed in Commission Rule B-2 below: Methods of completing continuing education. Licensed brokers must satisfy the continuing education requirement before they apply to renew an active license, activate an inactive license or to reinstate an expired license to active status.

Licensed brokers may satisfy the entire continuing education requirement through one of the following options: Please note that a licensee may not take the same version of the Annual Commission Update Course more than once. If a licensed broker takes more than 12 hours of the Annual Commission Update Course during a license period, the licensee will receive elective credit hours for any additional hours.

The courses and course providers are required to comply with the requirements as described at section 4 a , C. Any inactive or expired licensees who cannot meet the education requirements listed in Section 4 a , b , or c must comply with the education requirements found in Section 4 d before activation or reinstatement of the license. The inspection objections must be made by March The survey must be completed by April Review of title must be completed by April The Sellers indicated in the seller's property disclosure that the water heater had leaked.

The water heater was replaced and all water damage repaired. The sellers further disclosed that the concrete basement floor had lifted due to expansive soils creating a crack in the concrete floor. The buyers inspector noticed the damage to the basement floor and communicated this information to the buyer on March 20th.

The purchase contract is still binding as the listing broker guarantees the floor will be repaired by closing The purchase contract is still binding as the crack was disclosed in the seller property disclosure The buyer may terminate the purchase contract in writing. The buyer also has the option to negotiate a repair cost with the seller.

The buyer may terminate the purchase contract in writing. The buyer also has the option to negotiate a repair cost with the seller The buyer has the ability to terminate the contract with no penalty as long as they communicated the termination to the sellers prior to the March 27th inspection deadline. The buyer alternatively may negotiate a repair with the seller. Disclosing the crack does not prohibit the buyer from objecting. What form signed by the buyer and seller instructs and authorizes the title company to prepare all of the closing documents?

At the time of taking a listing, the broker should have the seller complete which of the following documents? HUD-1 Seller's net proceeds Promissory note for broker'scommission Seller's Property Disclosure. Seller's Property Disclosure The seller's property disclosure and lead based paint disclosure are required. The seller's net proceeds helps show costs the seller might pay and will vary with different offers. A lender may hold how many months of tax reserve in an escrow account?

None 1 2 3. RESPA Real Estate Setlement Procedure Act prevents lenders from holding too much money in an escrow bank account. This means they can only charge the minimum amount, and then the regular monthly charges for the escrowed items. However, they are permitted to charge the full amount if the taxes are due immediately or within 60 days of the closing.

The basic rule of thumb is the mortgage holder can hold no more than three months of payments at any one time. Just how do you determine how much you need to fund the escrow account with at closing? Take all the yearly reserves required by the lender to be escrowed. This can include taxes, property insurance and sometimes other recurring costs. Divide the resulting number by 12 months. Then, multiply the monthly payment amount by the number of months required by the mortgage holder to go into escrow.

The amount of fund required upfront into escrow at closing depends upon how near tax time is to the closing date. If it's within 60 days of tax time, the entire year of payments may be required at closing. If taxes are paid at closing, no more than 3 months will be required to be escrowed for next year's tax payments.