broker NV
Table 1
1 Today’s real estate companies are driven to change their methods of doing business to
Satisfy the egos of the broker/ owners.
Satisfy requirements of state regulators
Avoid corporate interference.
Achieve more profitable operations
2 The use of computers, fax machines and cellular telephones Allows real estate salespeople to work from almost anywhere.
Is perceived by the typical consumer as a business disadvantage
requires the broker to have more office space to accommodate the salespeople.
Is so expensive that only a few successful salespeople can afford the new technology
3 Real estate companies are attempting to serve today’s price- conscious and value-conscious consumers by offering
Sales teams.
Affinity programs.
Information programs
Personal assistants.
4 The planning process begins by Selecting the location for the business.
Recruiting, selecting and hiring the staff
Gathering information about the marketplace and factors that might impact operations.
Determining marketing and advertising strategies.
5 Which of the following factors affect the success of your business?
Inflation
Industry regulations
Changing population demographics
All of the Above
6 The broadest indicator of the strength of the economy which show economic output and growth is the
Number of new housing starts (HNS).
Gross domestic product (GDP).
Consumer price index (CPI).
Gross profit margin (GPM).
7 All of the following political issues benefit the real estate industry, except
Aggressive environmental regulations.
Preservation of mortgage interest deductions
Reduction in regulations and taxes imposed on real estate businesses.
Changes in the tax law to encourage real estate investment.
8 Federal laws that have a direct impact on the real estate industry include
The Americans with Disabilities Act (ADA).
The Real Estate Settlement Procedures Act (RESPA).
The Truth-in-Lending Act.
All of the above
9 Primarily because of its size, one of the most influential segments of the population is the
Generation X population.
International population.
Baby boomer population
Mobile population.
10 In addition to your local market, your geographic market can be as large as you choose by using
On-line real estate services and bulletin boards.
Referral networks
Relocation networks.
All of the above
11 One of the most significant developments in recent years linking today’s consumers to the global real estate market is the
Referral network
Internet
Relocation system
Multiple listing service.
12 When analyzing potential business opportunities for your company in the market place, which of the following would NOT be a significant factor?
The market share of your competitors
The income levels of your competitors’ salespeople
The number of potential users of your services
A projection of the numbers of properties that are likely to sell
13 Due in part to the enormous liability brokers face today, it is advisable to
Offer a broad range of services
Practice within the limits of your expertise.
Deal in all types of properties and transactions.
Offer appraising, auctioning and escrow services in addition to sales
14 Which of the following buyer agency agreements allows the buyer to work with more than one agent as well as locate
Exclusive buyer agency contract
Exclusive agency agreement
Buyer open agency agreement
Specific property buyer agency agreement
15 One of the greatest competitive advantages any firm has is its
Individual sales associates
Consumer services
Prestigious location
Affiliation with a large franchise
16 Which of the following statements about planning is incorrect?
Planning identifies a specific destination for your company
The advice of accountants and business-savvy friends is helpful when developing your plan.
Investing time and money in preparing your business plan is an unnecessary use of resources.
A business plan identifies the methodology needed to reach your goals.
17 The purpose of planning is to Commit the organization’s financial and human resources to the activities that yield the greatest return on the investment.
Preserve resources for customary activities even though they produce marginal results.
Ensure salespeople are satisfied.
Give salespeople an opportunity to influence company direction.
18 A typical long-range business plan spans 10 years
5 years
6 years.
2 years
19 Which of the following statement regarding the long-range business plan is incorrect?
The mission statement provides focus for the organizat
An organization’s general objectives describe and support the organization’s mission.
Each general objective is supported by a number of specific goals
Goals should be aspirational rather than concrete
20 A contingency plan incorporated in the business plan Establishes alternative goals and strategies in the case of unforeseen events
Prevents the organization from spending resources in uncontrolled ways
Both (a) and (b)
Neither (a) nor (b)
21 The working document for managers at all levels in the organization to monitor the organization’s progress is the
Short-term business plan.
Long-term business plan
Contingency plan.
Activity plan.
22 The legal form of ownership in which the broker personally reaps all of the rewards of the business but also bears the responsibility and personal liability for its losses is
Sole proprietorship
Limited liability company
General partnership
S corporation
23 Each of the following would have limited liability, except a(n) Stockholder in a S corporation
Investor in a limited liability company
General partner in limited partnership.
Stockholder in a corporation.
24 The most common reason brokers join franchises is To enjoy maximum freedom to conduct their own affairs
To obtain the professional marketing and advertising expertise.
to be able to follow the program laid out by the franchise
Because they are relatively inexpensive to join.
25 When joining forces with another real estate company, which one of the following is likely to have the most significant bearing on the success of the new venture?
The geographic location of the company’s office
The company’s affiliation with a franchise
The retention of the organization’s salesforce
The company’s presence on the Internet
26 A small centralized operation in which the broker supervises the sales associates or hires a sales manager describes a
One-person organization
One- to ten-agent organization
Monolithic organization
Decentralized organization
27 Which statement is incorrect regarding desk cost? The desk cost is calculated by dividing the expenses of the firm by the number of desks.
There is no profit for the company built into the desk cost calculation.
If annual expenses are $30,000 and there are 3 agents, the desk cost for each agent is $10,000 annually.
Calculating the desk cost of a business helps you determine how many sales associates are needed on staff.
28 The location of your office will be affected by The nature of the work that will be done in that office.
The location of your competitors
The amount of potential business that exists in the area.
All of the above
29 The term ''virtual office'' means An increasing number of people are working primarily from their homes
A large group of workers are telecommuting to work.
That an office can exist anywhere people can use technology
More space is needed in new brokerage offices
30 Review the following considerations and decide which one of the four will have the LEAST consequence when selecting a site for your real estate office.
The configuration of the floor space
Zoning ordinances
License law requirements
Provisions for people with disabilities
31 Which of the following equipment is almost essential in today’s information hungry business environment?
Telephones with automatic dialing, conference calling and voice mail
Facsimile machines and/or fax/ modems on your computer
Computers to manage data, prepare brochures and gain access to on-line services
All of the above
32 One of the major reasons for the design of ''open offices'' in business today is that it
Provides safety for the staff
Fosters teamwork and interaction among staff.
Enables managers to supervise more easily
Serves customers and clients more effectively
33 As companies become increasingly dependent on computerization, their ability to continue in business can be seriously compromised if
Salespeople don’t use the technology that is available.
Regulators restrict the application of computers
Data is not protected from a system failure
Computers are not networked throughout the organization.
34 One of the main reasons new businesses fail is A desire to succeed
Undercapitalization.
A good location
A lack of modern communication and information systems
35 The amount of money needed to get started depends on the structure of your organization and the services you plan to offer to be competitive in the marketplace. At a minimum you need
Start-up capital to set up the office and install telephones and equipment
At least six months of working capital to cover the operating expenses
Both (a) and (b)
Neither (a) nor (b)
36 The ''company dollar'' is defined as the funds remaining from gross income after the cost of sales has been deducted. The cost of sales includes all of the following, except
Fixed operating expenses
Commissions paid to the sales associates and cooperating brokers
Overrides to the manager
MLS, franchise, referral and relocation fees
37 On a profit and loss statement, the gross income less the operating expenses is the
Gross profit
Net income
Company dollar
Break-even point
38 The person primarily responsible for periodically reviewing the financial reports and analyzing aspects of the company’s operations is
The bookkeeper
The broker-owner or upper management
The accountant for the firm
All of the above
39 Typically, the primary tangible reward for sales associates is Their commissions.
Overtime or holiday pay
Fringe benefits
Paid vacation
40 Internal equity means All people who work in the same class of jobs are paid at the same rates.
People with greater experience or with specialized jobs are compensated at higher rates.
The compensation of one sales associate must be commensurate with the pay that another salesperson with similar experience or production receives
All of the above
41 A set of beliefs that guides a person’s actions is called An ethnic code
Standards
Ethics
The ''golden rule.''
42 The formation of ethics is driven by Statutory law.
Governmental rules and regulations
Leaders of a group
Morality, values and principles.
43 A broker or manager can implement ethical behavior throughout the organization by
Putting the organization’s code of ethics in writing
Communicating the code of ethics to everyone in the organization
Making it clear that unethical behavior will not be tolerated.
All of the above
44 The policy and procedures manual Ensures that everyone plays by the same rules and helps resolve conflicts.
Guides the conduct of the sales associates to be consistent with the organization’s business objectives.
Serves as a risk management tool for the company and its employees
All of the above
45 Which of the following would not normally be addressed in the policy and procedures manual?
Current in-house listings
Smoking and substance abuse
Office hours, holidays, personal days
Commission structures, responsibility for office expense, grounds for termination
46 The traditional focus of marketing in real estate has been the promotion of the
Sales associates.
Listings
Services
Location
47 Mass media advertising is usually used to promote the firm. Which of the following types of advertising is not considered mass media advertising?
Television
Radio
Videos
Newspapers
48 According to the Telephone Consumer Protection Act, company solicitors who violate its provisions can be subjected to
Suspension of a solicitation license
Damage suits of up to $500
Damage suits of up to $1000
Suspension of a real estate license
49 Numerous studies indicate that the three most important factors to home buyers are
Price, proximity to schools and a fireplace in the family room
Price, the neighborhood and the size of the property
Location, the color of the house and the size of the property
Location, the neighborhood and the size of the property
50 All of the following advertising statements are unacceptable under Truth-in-Lending, except
''liberal terms available.''
''assume 8% mortgage.''
''a low 3% down payment.''
''only $1,000 down.''
51 A broker accepted a listing in a part of town where Zanduans predominantly live and he wants to advertise this property in the local Zanduan language newspaper. May the broker place the ad in the Zanduan language paper?
No, placing the ad would violate fair housing laws.
No, the broker may only put ads in newspapers of general circulation
Yes, the broker may place the ad provided he also advertises the property in a newspaper with general circulation
Yes, the broker may place the ad because the readers of the newspaper are probably the only ones who would be interested in the property.
52 In most real estate firms the largest expense is Office rent.
Advertising
Licenses and fees.
Telephone service
53 Your firm is probably one of several in your area competing to recruit the top producers and newly licensed sales associates. Sales associates are looking for firms with
A strong reputation for quality and a broker with high ethical standards.
Name recognition in the marketplace
Secretarial and clerical support for the sales associates.
All of the above
54 When staffing an office, a broker probably would not be responsible for hiring
A receptionist/secretary
A sales associate’s personal assistant
A transaction coordinator
Sales associates
55 Which of the following types of salespersons usually require extensive training and management supervision?
Full-time sales associates
Part-time sales associates
New licensees
Sales associates who have GRI designations
56 Broker Sam was recruiting for five sales position openings in the company and received applications from five candidates with similar qualifications. He hired only one of the applicants and rejected four. Sam may have violated employment laws by refusing to hire the other applicants. In which instance was Sam justified in not hiring the applicant?
Applicant Betty, 58 years old, in business for over 15 years
Applicant Joe, a residential home builder, preparing for the state sales license exam
Applicant June, expecting her first child in six months, GRI
Applicant James, uses a wheelchair, member of the Million Dollar Club last three years.
57 Which of the following statements is incorrect regarding recruiting sales associates?
Recruiting sales associates is a constant, ongoing activity.
The purpose of recruiting is to generate a pool of people from which to select appropriate sales associates to hire.
Good managers are always recruiting before they have a critical need in their offices.
Once you have a stable sales staff, don’t waste time recruiting new sales associates.
58 The most desirable way to get experienced sales associates to join your company is to
Send recruiting letters to your competitor’s office.
Show up at open houses to recruit salespeople
Let them approach you
Have your staff solicit them
59 The most obvious and cost-effective method of recruiting is Career nights.
Direct mail.
Offering licensing courses
Classified ads in newspapers
60 To be successful in real estate, a person needs an affinity for selling as well as a natural interest in real estate. In addition they must be
Able to cope with rejection without feeling demoralized
Good communicators and be able to conduct transactions.
Able to withstand pressure while maintaining their composure.
All of the above
61 The most important phase of the selection process is the Formal interview.
Preliminary interview
Application.
Prescreening phase
62 Upon hiring the new sales associate as an independent contractor, management should do all of the following, except
Enter into an independent contractor agreement.
Have the sales associate fill out a W-4 for tax withholding
Give the new hire a copy of the policy and procedures manual.
Make the appropriate real estate license arrangements.
63 The best training method for new licensees is to Have them learn ''scripts'' of what to say when a customer makes a comment or raises an objection.
Use a strategy that works for other sales associates
Give them tools that enable them to ''think on their feet'' to evaluate situations and respond appropriately.
Attend a motivational seminar once a week.
64 For training to be effective, you need a location that is conducive to learning. Which of the following statements is incorrect?
A professional training facility lends credibility to your training session.
The worst place to conduct training programs is at the sales associates’ desks.
Regardless of where you conduct your program, prohibit pagers and cellular phones.
None of the above
65 Which of the types of meetings listed below is not correctly described?
Information meetings involve discussing current information that affects the real estate industry.
Problem identification meetings involve solution-based decision- making
Recognition meetings involve acknowledging accomplishments and giving awards.
Brainstorming meetings get people together to discuss new ideas about a specific problem or issue.
66 A sales manager who wants to have sales meetings that are worthwhile should
Call meetings when there is a clear objective
Plan the agenda around the purpose for which you called the meeting and structure the meeting to prevent it from straying off course.
Begin and end the meeting on time.
All of the above
67 The most common tangible incentive that companies offer sales associates to increase production is
Contests.
Graduated commissions
Praise and encouragement
Awards.
68 The minimum average production (MAP) is Used to determine if a sales associate is producing a profit.
Calculated by adding the minimum profit you expect from the operation to the desk cost and dividing that number by the number of agents.
The minimum amount management expects from each sales associate
All of the above
69 The first step in helping to resolve problems is to Be sure that you are addressing the issue with the appropriate person.
Address the problem in the group
Identify the problem
Agree on a course of action
70 When terminating a sales associate consideration must be given to
Whether the person is a top producer
The legal implications of termination
Testimony of other sales associates.
All of the above
71 Most state’s licensing laws have specific requirements for the way documents are to be handled. Which of the following would not be found in transaction files?
Copies of listings, offers, counteroffers
Proof of the sales associate’s real estate license
Closing cost statements and escrow documents
Disclosures, proof of delivery of documents
72 With regard to retention of documents at the end of a business year, what is the legal requirement for retaining documents that pertain to real estate transactions?
The IRS recommends that they should be kept indefinitely
These records are used primarily for tax preparation and may be discarded after filing your return.
Because the legal requirements for retention of real estate documents varies from state to state, review your state requirements to be in compliance
Good business practice dictates that you should retain all important documents for at least eight years.
73 A manager can maximize income by Helping the sales associates meet their production quotas.
Consistently providing high quality service to sellers and buyers so transactions will run smoothly.
Encouraging commitment to quality service to minimize the risk of costly litigation.
All of the above
74 The lowest cost for sending flyers, letters and messages is by
Duplicating and mailing them.
Duplicating them and using a title representative to deliver them.
Faxing them directly from your computer modem.
Duplicating and faxing them from a freestanding facsimile machine.
75 There are a number of ways that you can make more efficient use of your money by monitoring expenses and instituting cost-containment measures. Which of the following would not be considered cost effective?
Using memos rather than e-mail
Installing energy efficient lighting
Buying in bulk whenever possible
Keeping track of lock boxes and yard signs
76 After reviewing ways to improve the ''bottom line'' for your firm, you may need to revise your plan and make some changes such as
Closing a division which is not showing enough profit
Increasing your capacity for providing your current services (vertical growth).
Branching out in related fields i.e. property management, appraisal, mortgage lending or escrow (horizontal growth).
Any of the above
77 Risk management involves reactive measures and proactive steps to minimize potential loss to the company. Which of the following would be considered proactive?
Recognizing potential problems and preparing procedures to avoid them
Setting aside a litigation fund
Purchasing liability errors and omissions insurance
Deciding that litigation is just another cost of doing business
78 An alternative to litigation which is less costly, both in time and money, is
Mediation.
Binding arbitration.
Either (a) or (b)
Neither (a) nor (b)
79 Any agreement between two or more brokers in competition with one another to fix, control, regulate, increase, decrease or stabilize fees, rates, commissions or other prices
Is called price fixing.
Is illegal.
Cannot be defended on any grounds.
All of the above
80 . A sales associate who relies on representations of the seller, if there is reason to suspect that the information is not true
Has not done anything wrong
Could be guilty of negligent misrepresentation
Has committed fraud
Is merely ''puffing.''
81 The hazardous substance which can damage the brain, kidneys, nervous system and red blood cells is
Lead
Asbestos
Radon
Formaldehyde.
82 The illegal practice of sending potential home buyers or renters to equivalent properties in particular areas in order to maintain the homogeneity of an area is called
Blockbusting.
Panic peddling.
Steering
Redlining
83 Which of the following practices could have the effect of being discriminatory?
Using delaying tactics and being unwilling to provide assistance
Coding applications and qualifying forms in order to identify different groups of people
Limiting privileges or use of facilities on a property
All of the above
84 Seller Sally listed her home with Broker Brad for $200,000. She said she would take 10 percent down and provide seller financing at a market interest rate to the right buyer. Broker Brad showed the property to several prospective buyers. The first offer was made by a nice Zanduan couple. Seller Sally was delighted with the full-price offer but refused it. Under what conditions could the seller refuse the offer and not be discriminatory?
There are no circumstances that would allow Seller Sally to refuse the offer.
The seller could refuse the offer if the prospective buyers were not financially capable of repaying the loan
The seller could refuse the offer if she thought her neighbors would not want Zanduans in their neighborhood.
The seller could refuse the offer on her home but offer to sell them another house she owns in an area that would be more appropriate for them.
85 When dealing with people with disabilities, try to focus on their capabilities rather than their limitations. Real estate licensees should avoid
The terms ''disabled'' or ''handicapped'' when referring to a person with a disability.
The terms ''able bodied'' or ''normal'' when referring to people without disabilities.
The term ''special'' because is segregates rather than integrates people with disabilities.
All of the above
86 All of the following closing expenses are allowed under the Real Estate Settlement Procedures Act, except
Referral fee paid to a licensed real estate broker
Title insurance policy
Fees paid by an escrow company to a sales associate for referring business
Escrow fees and closing charges
87 What characteristics are particularly valuable for a leader? Willingness to learn and open- mindedness
Positive attitude
Willingness to take care of others
All of the above
88 An essential element of leadership is To use power responsibly
To inspire others to cooperate.
To engender trust
All of the above
89 Which of the statements regarding leadership is incorrect? Leaders are accountable and personally responsible for the decisions they make.
The courage to be decisive and to be a risk-taker is a characteristic of a good leader.
Leaders need to draw people into participative roles in the organization.
Leaders should ''micro-manage'' and be involved in every detail.
90 There are differences between managers and leaders. Managers
Are innovators
Look beyond the status quo and are long-range planners.
Focus on the bottom line and solutions to problems
Are willing to risk new approaches.
91 The type of management style in which the manager speaks and the people are expected to respond promptly and without questioning the directives describes the
Dictatorial style
Autocratic style.
Participative style.
Laissez-faire style
92 The management style with which most managers are familiar is the
Dictatorial style.
Autocratic style.
Participative style.
Laissez-faire style.
93 Which management approach promotes initiative and recognizes the value of the human resources?
Dictatorial style
Autocratic style
Participative style
Laissez-faire style
94 Managers should not be judging people but should be Evaluating behavior.
Reinforcing acceptable behavior with praise.
Correcting unacceptable behavior
All of the above
95 Setting priorities and organizing things that need to be done around them is referred to as
Stress management
Laissez-faire management
Time management.
All of the above
96 Which of the following is not one of the four ''players'' needed to be considered in communications?
Receiver
Message
Referee
Sender
97 The process of communicating breaks down when The listener ''turns off'' because he doesn’t trust the speaker’s credibility and integrity.
The issue becomes who’s right rather than what’s being said.
Different perceptions cause us to hear different messages
Any of the above
98 Communicating should be a flow of ideas. Which statement is an example of ''restatement?''
''I don’t think you should be worried about more paperwork.''
''It sounds to me like you anticipate that there will be more paperwork. Is that right?''
''It doesn’t matter what you think about the paperwork. This is what we’re doing.''
''You do get listings, but the way you handle paperwork is lousy.''
99 Which of the following steps involved in preparing a written document is most important?
Draft the document
Write the document
Edit the document
Prepare the final copy
100 To make your written communications more effective you should
Avoid wordiness, such as ''cooperate together.''
Avoid pretentiousness, such as ''aforementioned.''
Avoid jargon, such as ''SFR'' for single family residence.
All of the above