Broker Management
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ExamBrokerManagement.pdf
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Number Question Answers
1
Today’s real estate companies are driven to change their methods of doing
business to
2 The use of computers, fax machines and cellular telephones
3
Real estate companies are attempting to serve today’s price-conscious and value-
conscious consumers by o�ering
4 The planning process begins by
5 Which of the following factors a�ect the success of your business?
6
The broadest indicator of the strength of the economy which show economic
output and growth is the
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Satisfy the egos of the broker/owners.
Satisfy requirements of state regulators
Avoid corporate interference.
Achieve more pro�table operations
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 o�ce space to accommodate the
salespeople.
Is so expensive that only a few successful salespeople can a�ord the new
technology
Sales teams.
A�nity programs.
Information programs
Personal assistants.
Selecting the location for the business.
Recruiting, selecting and hiring the sta�
Gathering information about the marketplace and factors that might impact
operations.
Determining marketing and advertising strategies.
In�ation
Industry regulations
Changing population demographics
All of the Above
Number of new housing starts (HNS).
Gross domestic product (GDP).
Consumer price index (CPI).
Gross pro�t margin (GPM).
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Number Question Answers
7 All of the following political issues bene�t the real estate industry, except
8 Federal laws that have a direct impact on the real estate industry include
9
Primarily because of its size, one of the most in�uential segments of the
population is the
10
In addition to your local market, your geographic market can be as large as you
choose by using
11
One of the most signi�cant developments in recent years linking today’s
consumers to the global real estate market is the
12
When analyzing potential business opportunities for your company in the market
place, which of the following would NOT be a signi�cant factor?
13 Due in part to the enormous liability brokers face today, it is advisable to
14
Which of the following buyer agency agreements allows the buyer to work with
more than one agent as well as locate
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.
The Americans with Disabilities Act (ADA).
The Real Estate Settlement Procedures Act (RESPA).
The Truth-in-Lending Act.
All of the above
Generation X population.
International population.
Baby boomer population
Mobile population.
On-line real estate services and bulletin boards.
Referral networks
Relocation networks.
All of the above
Referral network
Internet
Relocation system
Multiple listing service.
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
O�er a broad range of services
Practice within the limits of your expertise.
Deal in all types of properties and transactions.
O�er appraising, auctioning and escrow services in addition to sales
Exclusive buyer agency contract
Exclusive agency agreement
Buyer open agency agreement
Speci�c property buyer agency agreement
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Number Question Answers
15 One of the greatest competitive advantages any �rm has is its
16 Which of the following statements about planning is incorrect?
17 The purpose of planning is to
18 A typical long-range business plan spans
19 Which of the following statement regarding the long-range business plan is
incorrect?
20 A contingency plan incorporated in the business plan
21
The working document for managers at all levels in the organization to monitor
the organization’s progress is the
Individual sales associates
Consumer services
Prestigious location
A�liation with a large franchise
Planning identi�es a speci�c 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 identi�es the methodology needed to reach your goals.
Commit the organization’s �nancial 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 satis�ed.
Give salespeople an opportunity to in�uence company direction.
10 years
5 years
6 years.
2 years
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 speci�c goals
Goals should be aspirational rather than concrete
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)
Short-term business plan.
Long-term business plan
Contingency plan.
Activity plan.
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Number Question Answers
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
23 Each of the following would have limited liability, except a(n)
24 The most common reason brokers join franchises is
25
When joining forces with another real estate company, which one of the following
is likely to have the most signi�cant bearing on the success of the new venture?
26
A small centralized operation in which the broker supervises the sales associates
or hires a sales manager describes a
27 Which statement is incorrect regarding desk cost?
28 The location of your o�ce will be a�ected by
29 The term ''virtual o�ce'' means
Sole proprietorship
Limited liability company
General partnership
S corporation
Stockholder in a S corporation
Investor in a limited liability company
General partner in limited partnership.
Stockholder in a corporation.
To enjoy maximum freedom to conduct their own a�airs
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.
The geographic location of the company’s o�ce
The company’s a�liation with a franchise
The retention of the organization’s salesforce
The company’s presence on the Internet
One-person organization
One- to ten-agent organization
Monolithic organization
Decentralized organization
The desk cost is calculated by dividing the expenses of the �rm by the number
of desks.
There is no pro�t 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 sta�.
The nature of the work that will be done in that o�ce.
The location of your competitors
The amount of potential business that exists in the area.
All of the above
An increasing number of people are working primarily from their homes
A large group of workers are telecommuting to work.
That an o�ce can exist anywhere people can use technology
More space is needed in new brokerage o�ces
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Number Question Answers
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 o�ce.
31 Which of the following equipment is almost essential in today’s information
hungry business environment?
32
One of the major reasons for the design of ''open o�ces'' in business today is that
it
33
As companies become increasingly dependent on computerization, their ability to
continue in business can be seriously compromised if
34 One of the main reasons new businesses fail is
35
The amount of money needed to get started depends on the structure of your
organization and the services you plan to o�er to be competitive in the
marketplace. At a minimum you need
36
The ''company dollar'' is de�ned 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
37
On a pro�t and loss statement, the gross income less the operating expenses is
the
The con�guration of the �oor space
Zoning ordinances
License law requirements
Provisions for people with disabilities
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
Provides safety for the sta�
Fosters teamwork and interaction among sta�.
Enables managers to supervise more easily
Serves customers and clients more e�ectively
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.
A desire to succeed
Undercapitalization.
A good location
A lack of modern communication and information systems
Start-up capital to set up the o�ce 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)
Fixed operating expenses
Commissions paid to the sales associates and cooperating brokers
Overrides to the manager
MLS, franchise, referral and relocation fees
Gross pro�t
Net income
Company dollar
Break-even point
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Number Question Answers
38
The person primarily responsible for periodically reviewing the �nancial reports
and analyzing aspects of the company’s operations is
39 Typically, the primary tangible reward for sales associates is
40 Internal equity means
41 A set of beliefs that guides a person’s actions is called
42 The formation of ethics is driven by
43
A broker or manager can implement ethical behavior throughout the organization
by
44 The policy and procedures manual
The bookkeeper
The broker-owner or upper management
The accountant for the �rm
All of the above
Their commissions.
Overtime or holiday pay
Fringe bene�ts
Paid vacation
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
An ethnic code
Standards
Ethics
The ''golden rule.''
Statutory law.
Governmental rules and regulations
Leaders of a group
Morality, values and principles.
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
Ensures that everyone plays by the same rules and helps resolve con�icts.
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
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Number Question Answers
45 Which of the following would not normally be addressed in the policy and
procedures manual?
46 The traditional focus of marketing in real estate has been the promotion of the
47
Mass media advertising is usually used to promote the �rm. Which of the
following types of advertising is not considered mass media advertising?
48
According to the Telephone Consumer Protection Act, company solicitors who
violate its provisions can be subjected to
49
Numerous studies indicate that the three most important factors to home buyers
are
50
All of the following advertising statements are unacceptable under Truth-in-
Lending, except
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?
52 In most real estate �rms the largest expense is
Current in-house listings
Smoking and substance abuse
O�ce hours, holidays, personal days
Commission structures, responsibility for o�ce expense, grounds for
termination
Sales associates.
Listings
Services
Location
Television
Radio
Videos
Newspapers
Suspension of a solicitation license
Damage suits of up to $500
Damage suits of up to $1000
Suspension of a real estate license
Price, proximity to schools and a �replace 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
''liberal terms available.''
''assume 8% mortgage.''
''a low 3% down payment.''
''only $1,000 down.''
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.
O�ce rent.
Advertising
Licenses and fees.
Telephone service
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Number Question Answers
53
Your �rm is probably one of several in your area competing to recruit the top
producers and newly licensed sales associates. Sales associates are looking for
�rms with
54 When sta�ng an o�ce, a broker probably would not be responsible for hiring
55
Which of the following types of salespersons usually require extensive training
and management supervision?
56
Broker Sam was recruiting for �ve sales position openings in the company and
received applications from �ve candidates with similar quali�cations. 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 justi�ed
in not hiring the applicant?
57
Which of the following statements is incorrect regarding recruiting sales
associates?
58
The most desirable way to get experienced sales associates to join your company
is to
59 The most obvious and cost-e�ective method of recruiting is
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
A receptionist/secretary
A sales associate’s personal assistant
A transaction coordinator
Sales associates
Full-time sales associates
Part-time sales associates
New licensees
Sales associates who have GRI designations
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 �rst child in six months, GRI
Applicant James, uses a wheelchair, member of the Million Dollar Club last
three years.
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
o�ces.
Once you have a stable sales sta�, don’t waste time recruiting new sales
associates.
Send recruiting letters to your competitor’s o�ce.
Show up at open houses to recruit salespeople
Let them approach you
Have your sta� solicit them
Career nights.
Direct mail.
O�ering licensing courses
Classi�ed ads in newspapers
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Number Question Answers
60
To be successful in real estate, a person needs an a�nity for selling as well as a
natural interest in real estate. In addition they must be
61 The most important phase of the selection process is the
62
Upon hiring the new sales associate as an independent contractor, management
should do all of the following, except
63 The best training method for new licensees is to
64 For training to be e�ective, you need a location that is conducive to learning.
Which of the following statements is incorrect?
65 Which of the types of meetings listed below is not correctly described?
66 A sales manager who wants to have sales meetings that are worthwhile should
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
Formal interview.
Preliminary interview
Application.
Prescreening phase
Enter into an independent contractor agreement.
Have the sales associate �ll 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.
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.
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
Information meetings involve discussing current information that a�ects the
real estate industry.
Problem identi�cation 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
speci�c problem or issue.
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 o� course.
Begin and end the meeting on time.
All of the above
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Number Question Answers
67
The most common tangible incentive that companies o�er sales associates to
increase production is
68 The minimum average production (MAP) is
69 The �rst step in helping to resolve problems is to
70 When terminating a sales associate consideration must be given to
71
Most state’s licensing laws have speci�c requirements for the way documents are
to be handled. Which of the following would not be found in transaction �les?
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?
73 A manager can maximize income by
Contests.
Graduated commissions
Praise and encouragement
Awards.
Used to determine if a sales associate is producing a pro�t.
Calculated by adding the minimum pro�t 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
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
Whether the person is a top producer
The legal implications of termination
Testimony of other sales associates.
All of the above
Copies of listings, o�ers, countero�ers
Proof of the sales associate’s real estate license
Closing cost statements and escrow documents
Disclosures, proof of delivery of documents
The IRS recommends that they should be kept inde�nitely
These records are used primarily for tax preparation and may be discarded
after �ling 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.
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
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Number Question Answers
74 The lowest cost for sending �yers, letters and messages is by
75
There are a number of ways that you can make more e�cient use of your money
by monitoring expenses and instituting cost-containment measures. Which of the
following would not be considered cost e�ective?
76 After reviewing ways to improve the ''bottom line'' for your �rm, you may need to
revise your plan and make some changes such as
77
Risk management involves reactive measures and proactive steps to minimize
potential loss to the company. Which of the following would be considered
proactive?
78 An alternative to litigation which is less costly, both in time and money, is
79
Any agreement between two or more brokers in competition with one another to
�x, control, regulate, increase, decrease or stabilize fees, rates, commissions or
other prices
80
. A sales associate who relies on representations of the seller, if there is reason to
suspect that the information is not true
81
The hazardous substance which can damage the brain, kidneys, nervous system
and red blood cells is
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.
Using memos rather than e-mail
Installing energy e�cient lighting
Buying in bulk whenever possible
Keeping track of lock boxes and yard signs
Closing a division which is not showing enough pro�t
Increasing your capacity for providing your current services (vertical growth).
Branching out in related �elds i.e. property management, appraisal, mortgage
lending or escrow (horizontal growth).
Any of the above
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
Mediation.
Binding arbitration.
Either (a) or (b)
Neither (a) nor (b)
Is called price �xing.
Is illegal.
Cannot be defended on any grounds.
All of the above
Has not done anything wrong
Could be guilty of negligent misrepresentation
Has committed fraud
Is merely ''pu�ng.''
Lead
Asbestos
Radon
Formaldehyde.
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Number Question Answers
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
83 Which of the following practices could have the e�ect of being discriminatory?
84
Seller Sally listed her home with Broker Brad for $200,000. She said she would
take 10 percent down and provide seller �nancing at a market interest rate to the
right buyer. Broker Brad showed the property to several prospective buyers. The
�rst o�er was made by a nice Zanduan couple. Seller Sally was delighted with the
full-price o�er but refused it. Under what conditions could the seller refuse the
o�er and not be discriminatory?
85
When dealing with people with disabilities, try to focus on their capabilities rather
than their limitations. Real estate licensees should avoid
86
All of the following closing expenses are allowed under the Real Estate Settlement
Procedures Act, except
87 What characteristics are particularly valuable for a leader?
88 An essential element of leadership is
Blockbusting.
Panic peddling.
Steering
Redlining
Using delaying tactics and being unwilling to provide assistance
Coding applications and qualifying forms in order to identify di�erent groups of
people
Limiting privileges or use of facilities on a property
All of the above
There are no circumstances that would allow Seller Sally to refuse the o�er.
The seller could refuse the o�er if the prospective buyers were not �nancially
capable of repaying the loan
The seller could refuse the o�er if she thought her neighbors would not want
Zanduans in their neighborhood.
The seller could refuse the o�er on her home but o�er to sell them another
house she owns in an area that would be more appropriate for them.
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
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
Willingness to learn and open-mindedness
Positive attitude
Willingness to take care of others
All of the above
To use power responsibly
To inspire others to cooperate.
To engender trust
All of the above
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Number Question Answers
89 Which of the statements regarding leadership is incorrect?
90 There are di�erences between managers and leaders. Managers
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
92 The management style with which most managers are familiar is the
93
Which management approach promotes initiative and recognizes the value of the
human resources?
94 Managers should not be judging people but should be
95
Setting priorities and organizing things that need to be done around them is
referred to as
96
Which of the following is not one of the four ''players'' needed to be considered in
communications?
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.
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.
Dictatorial style
Autocratic style.
Participative style.
Laissez-faire style
Dictatorial style.
Autocratic style.
Participative style.
Laissez-faire style.
Dictatorial style
Autocratic style
Participative style
Laissez-faire style
Evaluating behavior.
Reinforcing acceptable behavior with praise.
Correcting unacceptable behavior
All of the above
Stress management
Laissez-faire management
Time management.
All of the above
Receiver
Message
Referee
Sender
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Number Question Answers
97 The process of communicating breaks down when
98
Communicating should be a �ow of ideas. Which statement is an example of
''restatement?''
99
Which of the following steps involved in preparing a written document is most
important?
100 To make your written communications more e�ective you should
The listener ''turns o�'' because he doesn’t trust the speaker’s credibility and
integrity.
The issue becomes who’s right rather than what’s being said.
Di�erent perceptions cause us to hear di�erent messages
Any of the above
''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.''
Draft the document
Write the document
Edit the document
Prepare the �nal copy
Avoid wordiness, such as ''cooperate together.''
Avoid pretentiousness, such as ''aforementioned.''
Avoid jargon, such as ''SFR'' for single family residence.
All of the above
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