2023 Edition

Pennsylvania Real Estate Salesperson Practice Exam - State

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Real Estate Commission

1.	The Pennsylvania Real Estate Commission has the duty to oversee which of the following activities under the Pennsylvania Real Estate Licensing and Registration Act (RELRA) where licensing is required?
		a. Real estate sales
		b. Cemetery sales
		c. Camp ground memberships
		d. All of the above.
Under RELRA, the Real Estate Commission oversees three general areas where licensing is required: (1) real estate sales; (2) cemetery sales; and (3) campground memberships. 63 Pa. Stat. 406. Incorrect answer. Please choose another answer.

2.	A real estate license can be suspended or revoked by the Real Estate Commission for which of the following acts or failures to act:
		a. Failure to close a sale after the agent's buyer fails to secure funding.
		b. Representing both a buyer and a seller in a residential sales transaction.
		c. Failure to provide information requested by the Commission on a complaint.
		d. All of the above
Under the Pennsylvania Real Estate Licensing and Registration Act (RELRA), section 604(a)(17), a real estate licensee can have their license suspended or revoked if a complaint is filed against them and the agent fails to respond to a request for information from the Commission. It is not the agent's responsibility to secure funding for a buyer and an agent can properly act as a dual agent as long as all the parties agree to the representation in writing and the agent takes no actions detrimental to either client. Incorrect answer. Please choose another answer.

3.	Will violations of licensing law committed by a real estate salesperson be grounds to suspend or revoke the license of their broker if the broker did not have actual knowledge of the violation at the time it was committed?
		a. Yes, since the broker is vicariously liable.
		b. Yes, since the broker supervises the sales agent.
		c. No, if the agent assumes full responsibility.
		d. No, because the broker needs actual knowledge of the violation.
Under Pennsylvania real estate license law, the commission will only impute responsibility on the broker, for violations of their agents, if the broker had actual knowledge of the violation. 63 Pa. Stat. 702. This is not the same as vicarious liability, which is a civil law concept, where the employer will be liable for the torts their employee commits, with or without knowledge of acts that caused the harm in the scope of employment. Incorrect answer. Please choose another answer.

4.	When the Real Estate Recovery Fund balance is depleted to $300,000 or below, the commission may:
		a. Use surplus funds from licensing fees paid for the year.
		b. Assess an additional fee against each licensee of $100.
		c. Submit legislature with the Commonwealth to request a loan for the funds.
		d. Assess an additional fee against each licensee of $10.
The Pennsylvania Real Estate Recovery Fund was formed under the Real Estate Licensing and Registration Act (RELRA). RELRA, Chapter 8. It is funded by realtor licensing application and renewal fees. The fund balance is to be maintained at $500,000. If the balance of the Real Estate Recovery Fund is less than $300,000 the commission may assess an additional fee against each licensee not to exceed $10. Incorrect answer. Please choose another answer.

5.	Under the Real Estate Recovery Fund in Pennsylvania, recovery payments shall not exceed the payment of $100,000 per licensee. Which of the following is true?
		a. An aggrieved party/claimant can receive up to $50,000 per claim.
		b. The licensee does not have to pay the Recovery Fund back.
		c. An aggrieved party/ claimant shall not exceed $20,000 for any one claim.
		d. A licensee can continue to practice real estate after the Recovery Fund payment is made to the claimant.
The Real Estate Recovery Fund liability portion shall not exceed $20,000 for any one claim and shall not exceed $100,000 per licensee. If there are more than five claimants, and the claims exceed the $100,000 limit, the $100,000 fund will be apportioned to the claimants on the basis of the ratio of their claim to the aggregate value of the claims. The Recovery Fund is funded by realtor renewal fees. When a payment is made to a claimant from the Recovery Fund, the licensee's license is suspended until such time as he or she pays the amount back to the Recovery Fund, plus 10% interest per year. Incorrect answer. Please choose another answer.

Licensure

6.	Which of the following requires a real estate license in Pennsylvania?
		a. Completing maintenance activities for an apartment building in exchange for free rent.
		b. Charging a fee to prepare competitive market analysis for family and friends by searching online for similar homes.
		c. Buying a home, "flipping it," and reselling it as "For Sale by Owner" six months later.
		d. Purchasing 10 or more properties with the intention of selling them for a profit later.
Any person directly or indirectly acting to engage in or conduct business in the capacity of a salesperson in Pennsylvania without being licensed or meeting exemption shall be deemed unlawful as per the real estate commission. (RELPRA, Chapter 3, Section 301). Preparing market analysis to determine the market value of a property so that it can be sold and charging a fee is conducting the business of real estate sales, so would violate RELPA if done without a license. A legally owned property owner can sell their home without a real estate state-accredited license. Incorrect answer. Please choose another answer.

7.	An unlicensed assistant, working in a real estate office, may perform the following tasks in the sale of real estate in Pennsylvania:
		a. Host an open house
		b. Explain information on listing sheets with the public
		c. Discuss mortgage rates with the public
		d. None of the above.
Under a guideline issued by the Pennsylvania Real Estate Commission, it is stated that unlicensed real estate assistants may not perform acts that require a license, including: Host an open house Explain information on listing sheets with the public Discuss mortgage rates with the public Provide information about the building to the public Give tours of a model building Do telemarketing, except in cemetery sales. Incorrect answer. Please choose another answer.

8.	Mary is a full-time employee of Acme Building Company. Acme builds custom homes in Pennsylvania. Mary is hired to work as a salesperson for the homes built by Acme. Does Mary need to be licensed as a salesperson by the Pennsylvania Real Estate Commission to sell Acme owned homes?
		a. Yes.
		b. No, since Acme owns the homes themselves.
		c. No, since Mary is an employee.
		d. No, the Commission does not regulate builders.
Under the Real Estate Licensing and Registration Act (RELRA), there's a type of salesperson referred to as a builder-owner salesperson which requires licensing by the Pennsylvania Real Estate Commission. A builder-owner salesperson is a full-time employee of a builder-owner of single and multi-family dwellings in Pennsylvania who carries out sales or rental activities of the builder-owner homes. To obtain the builder-owner salesperson license, the applicant has to take the Pennsylvania Real Estate Exam. RELRA, Chapters 2 and 5, Subchapter F, 551. Incorrect answer. Please choose another answer.

9.	Tom just obtained his time-share license and wants to offer his services to a local resort to set-up and sell time-shares for them. The resort has only operated as a hotel and does not have a licensed broker on staff. Is it permissible for Tom to sell time-shares for the resort?
		a. Yes, since Tom obtained his time share license.
		b. Yes, as long as the resort approves time shares.
		c. No, since Tom needs to operate under a broker.
		d. Both a and b.
Under the Real Estate Licensing and Registration Act (RELRA), a time-share licensee can only sell time-shares under the supervision of a licensed real estate broker. RELRA, Chapter 2. Incorrect answer. Please choose another answer.

10.	By what date must a real estate license be renewed?
		a. By May 31st of odd numbered years.
		b. By May 31st of even numbered years.
		c. Biannually on May 31st
		d. December 31st of even numbered years.
In Pennsylvania, real estate licenses must be renewed by May 31, of the even year (biennial). If not rewed by that date, the license expires and becomes inactive on June 1st and no transactional activity can be performed. Incorrect answer. Please choose another answer.

11.	If a salesperson wants to change employment from their current broker to another broker, which of the following is necessary to complete the change?
		a. Permission of the current broker
		b. The issuance of a new license
		c. Retaking of the real estate exam
		d. The issuance of a letter of good standing.
If a salesperson wishes to change employment from one broker to another, the salesperson must notify the commission in writing within 10 days after the change and have the new broker send an acknowledgement of the change to the commission. Upon receiving the new broker's acknowledgement, the commission will issue the salesperson a new license. In the interim, before receiving the new license, the salesperson is to use their letter notifying the commission of the change as a temporary license. Pennsylvania Real Estate Licensing and Registration Act (RELRA), Chapter 6, 603. Incorrect answer. Please choose another answer.

12.	John has recently been appointed the administrator of his mother's estate by way of a trust instrument and has decided to advertise the sale of her home. Which of the following is true?
		a. John is exempt from the requirement of a real estate license.
		b. John is in violation of the Real Estate Practice Act and needs to hire a licensed salesperson.
		c. John may not advertise the sale of real estate since he is not a real estate licensee.
		d. Both b and c.
Under the Pennsylvania Real Estate Licensing Registration Act (RELRA), a person acting as trustee in bankruptcy, administrator, executor, trustee or guardian while acting under a court order or under the authority of a will or of a trust instrument is exempt from having a real estate license by the Real Estate Commission. RELRA, Chapter 3, 304(5). Incorrect answer. Please choose another answer.

13.	Bob, a licensed real estate salesperson in Pennsylvania, is convicted of a felony charge of domestic violence in Ohio. Which of the following statements is TRUE?
		a. The conviction is grounds to suspend or revoke Bob's license.
		b. Because the conviction did not occur in Pennsylvania, it is not grounds for suspension or revocation.
		c. Because the conviction is not related to real estate, it is not grounds for suspension or revocation.
		d. Because the conviction is not for fraud, misrepresentation or deceit, it is not grounds for suspension or revocation.
A criminal conviction in a court in Pennsylvania or any other state court, or in a federal court, can result in suspension or revocation of a salesperson's license. Conviction for forgery, embezzlement, obtaining money under false pretenses, bribery, larceny, extortion, conspiracy to defraud or any similar offense, or for any felony, is grounds for suspension or revocation. Pennsylvania Real Estate Licensing and Registration Act (RELRA), Chapter 6, 604(a)(14). Since Bob was convicted of a felony, it does not matter that the type of crime that formed the basis of the conviction was not real estate related or fraud related. All felony convictions are grounds for suspension or revocation of a real estate license in Pennsylvania. Incorrect answer. Please choose another answer.

Regulation of Conduct of Licensees

14.	Broker Raquel is excited that her potential new sellers have verbally agreed to allow her to represent them in the sale of their home. She has made an appointment for the following week to sign all the required documents. Raquel has a For Sale sign in her car and decides to post the sign immediately. Which of the following is TRUE?
		a. Raquel can start advertising based on the seller's verbal approval of their brokerage relationship.
		b. Raquel must wait until she has the seller's permission in writing to post the sign.
		c. Raquel can only post a sign with the language "For Sale Soon".
		d. Raquel must wait for the property to be listed on the MLS before posting the sign.
In Pennsylvania, a broker or salesperson must obtain written consent of the owner before erecting a For Sale or For Rent sign on the property. Pennsylvania Real Estate Licensing and Registration Act (RELRA), Chapter 6, 604(a)(8). Incorrect answer. Please choose another answer.

15.	When advertising real property for sale in Pennsylvania, real estate salespersons are required to include which of the following information in the advertisement?
		a. The name and phone number of the broker
		b. The name and phone number of the salesperson
		c. The words "For Sale" in red to allow the public to know the home is for sale and not for rent.
		d. Both a and b
An advertisement by a salesperson must contain the business name and phone number of the employing broker. The broker's name and phone number must be of equal size as the sales person's name and phone number. Real estate salespersons may not advertise solely under their own names. 49 Pa. Code 35.305(c). Section 35.305 covers all advertising, including internet advertising, emails and websites. Incorrect answer. Please choose another answer.

16.	A licensee represents a developer who seeks to buy a certain tract of land for a housing development. The land is perfect for development, as it's on a hill overlooking a lake. However, the owner of the land has told the licensee she does not want to sell. The developer asks the licensee to contact the owner regularly to see if she will change her mind. The licensee then begins a campaign to communicate with the owner on a weekly basis, with letters, emails and texts. The licensee's conduct constitutes:
		a. Fraud
		b. Harassment
		c. Misrepresentation
		d. Negligence
The licensee's conduct violates the rule against harassment. Under the rules of the Commission, a licensee may not solicit an owner to sell with such frequency that amounts to harassment. 49 Pa. Code. 35.302. Incorrect answer. Please choose another answer.

17.	Broker Stevenson owns a very successful real estate firm in the city of Scranton, Pennsylvania. He wants to include his sale numbers from the prior year in his online marketing to highlight his ability to get a sale for his clients. If Broker Stevenson advertises this production information, which of the following must also be in the advertisement under the real estate advertising rules in Pennsylvania?
		a. The number of licensed branch offices that he maintains in the market.
		b. The municipality that the market comprises.
		c. The dollar volume of sales transactions in the market.
		d. The number of cooperating brokers who engage in business in the market.
If Broker Stevenson includes production numbers (i.e., sale numbers) for a certain time period, he would have to identify the municipality (City of Scranton) that the market comprises for those numbers. Under the rules on advertising for real estate licensees in Pennsylvania, advertisement that includes statements about production or the broker's position in the market must identify the municipality that the market comprises. 49 Pa. Code. 35.307 (b). Incorrect answer. Please choose another answer.

18.	A salesperson can work for how many brokers at the same time in Pennsylvania?
		a. 1
		b. 2
		c. 3
		d. Unlimited
A salesperson can only be employed by one broker at a time in Pennsylvania. 63 Pa.Stat 603. The name of the broker must be on the license of the salesperson. Incorrect answer. Please choose another answer.

19.	A broker with a main office in Greensburg, Pennsylvania, wants to open a branch office in the nearby town of Monroeville. She wants to have a salesperson, who has proven to be very trustworthy and competent, manage the branch office. Is this permissible?
		a. Yes, since the broker owns both the main and branch offices.
		b. Yes, since a salesperson is authorized to manage branch offices.
		c. Yes, as long as no associate brokers work at the branch office.
		d. No.
Real estate law in Pennsylvania requires that main and branch offices be under the direction and supervision of a broker or associate broker. 49 Pa.Code 35.244 (Chapter 5). Incorrect answer. Please choose another answer.

Salespersons A and B are both licensed realtors with Spin Realty in Pennsylvania. Agent A represents a Seller. Agent B finds a Buyer for Agent A’s Seller. Both the Seller and Buyer agree to have Spin Realty represent them in the sale after proper notice and have the agents work exclusively on their behalf.

20.	When the Buyer and Seller enter into a legally binding agreement with Spin Realty and Salespersons A and B are assigned to them respectively, what kind of agency takes place between the Buyer and Seller and Salespersons A and B?
		a. Dual agency
		b. Transaction agency
		c. Designated agency
		d. Both a and c
A designated agent is defined under Pennsylvania license law as one or more licensees employed by a broker who are assigned by the broker to solely represent one client in the transaction. 63 Pa.Stat 201. In this fact pattern, as commonly occurs, a real estate agency may represent both the seller and buyer in a sale. In such a case, the broker, Spin Realty, designated Agents A and B to represent the Seller and Buyer exclusively. The designated agent owes statutory duties, like loyalty, to his or her designated client. 63 Pa.Stat 606.5((b). Incorrect answer. Please choose another answer.

21.	The broker, Spin Realty, has what agency relationship with the Seller and Buyer?
		a. Dual agency
		b. Transaction broker
		c. Designated agency
		d. Both a and b
A dual agent is an agent that acts as agent for both a buyer and seller or lessee and landlord in the same transaction. 63 Pa.Stat 201. In a situation involving a broker using designated agents from its office, Pennsylvania license law considers the broker a dual agent. 63 Pa.Stat 606; 606.5(a)(1). Dual agency is only permitted after certain notice requirements are met. 63 Pa.Stat 606.4. Answer B is incorrect because a transaction licensee does not become an agent of a consumer, but merely facilitates the transaction, like through performing document preparation services. 63 Pa.Stat 201. Incorrect answer. Please choose another answer.

22.	A salesperson earns a commission on a sale, but before it is a paid, the salesperson goes to work for a different broker. How should the salesperson's former broker handle the situation?
		a. Pay the salesperson directly.
		b. Deliver the funds to the new broker to pay the salesperson.
		c. Consider the funds forfeited and not pay anything.
		d. Give a rebate to the client who had been represented by the salesperson.
RELRA does not permit a broker to pay a salesperson who is not employed by them. 63 Pa.Stat 604(a)(19). RELRA does allow a broker to pay another broker for services performed under the Act, so it appears this would be the proper way to handle the situation. 63 Pa.Stat. 604(a)(12.1). Failure to pay the salesperson a commission that was earned could subject the broker to a charge of breach of contract and bad faith. 63 Pa.Stat 604(a)(20). Incorrect answer. Please choose another answer.

23.	A salesperson places a sign in his broker's office window that offers the public a $200 gift card to a local restaurant if they refer sellers of real estate that results in a listing. Is this permissible?
		a. Yes, as long as the sellers are given notice of the gift.
		b. Yes, gifts are permitted for referrals.
		c. Yes, as long as the broker approves of the sign.
		d. No.
RELRA prohibits brokers from paying compensation or something of value to unlicensed persons in a real estate transaction, which includes referral fees. 63 Pa.Stat. 604(a)(12.1). Referral fees can only be paid from brokers to other brokers. 63 Pa.Stat 606.1(d). Incorrect answer. Please choose another answer.

24.	Which of the following duties are included in a salesperson's fiduciary responsibilities to a client under the Pennsylvania Real Estate Licensing and Registration Act (RELRA)?
		a. Accounting
		b. Competence
		c. Confidentiality
		d. All of the above
The duties of accounting, obedience and confidentiality are all fiduciary duties an agent owes his or her client under RELRA. Accounting is the duty to hold the earnest money deposit in escrow as well as maintain financial transparency. 63 Pa.Stat 606.1(a)(5). Competence is the duty to use reasonable professional skill and care that meet the standards for licensees. 63 Pa.Stat 606.1(a)(1). Confidentiality is the requirement to keep private the client's motivating circumstances, financial standing, and other personal details. 63 Pa.Stat 606.1(g). Incorrect answer. Please choose another answer.

25.	Broker Joe, from Johnson Realty, receives two offers for his seller's property: one from Sandy, another associate from Johnson Realty, and one from Frederick, a broker from City Realty. How should Broker Joe proceed with his client?
		a. Submit the highest offer first and if its accepted, not submit the other for consideration.
		b. Submit the offer from City Realty first, to be impartial, and if its accepted, not submit the other for consideration.
		c. Submit the offer from Sandy of Johnson Realty first, since it's the same broker, and if its accepted, not submit the other for consideration.
		d. Submit both offers at same time.
Pennsylvania's Real Estate Licensing and Registration Act (RELRA) requires brokers who represent sellers to present all offers in a timely manner to the seller for consideration. The Real Estate Commission's regulations require offers to be presented in a reasonable practical period of time. 49 Pa. Code 35.292(a)(3). Although there's no state statute or regulation on the order to present offers, the seller has the right to know all the facts of each offer before reaching a decision. Incorrect answer. Please choose another answer.

26.	Buyer Ben is being represented in a purchase transaction by licensee Laura. Ben has questions regarding the purchase and has asked Laura to explain the terms of the contract extensively. He wants a detailed explanation of the repercussions of a breach of contract if the seller backs out of the sale at the last minute. How should Laura respond?
		a. She should tell him that he will get his escrow payment back per the agreement.
		b. She should tell him that his questions are of a legal nature and he should talk with an attorney.
		c. She should explain the contract to him and give him the legal information he requests.
		d. She should tell him that it is very unlikely that a seller will back out, so not to worry about it.
A licensee should be very careful not to offer advice outside of their area of expertise. The Pennsylvania Real Estate Licensing and Registration Act requires salespersons to advise their clients to seek expert advice on matters relating to the transaction that are beyond the salesperson's expertise. 63 Pa.Stat 606.1(a)(8). In our scenario, it can also be considered the unauthorized practice of law without a law license. A licensee should never discourage a client or customer from seeking legal counsel. Incorrect answer. Please choose another answer.

27.	Salesperson Sam is the seller's agent of 129 Birdsong Lane. When showing the home to a potential buyer, Salesperson Sam informed the buyer that the seller had informed him the well had recently been inspected and was in good working order. The buyers moved forward with a purchase and after closing they had issues with the well. After an inspection, they were informed that the well was drying up and they would have to redrill to salvage it. Will Salesperson Sam be held liable for his statements about the well to buyer?
		a. Yes. Broker Sam should have investigated the well himself.
		b. Yes. Broker Sam should have said that he did not know the condition of the well.
		c. Yes. Broker Sam is jointly liable with the seller.
		d. No. Broker Sam had no knowledge of the matter and the information came from the seller.
A broker is not always liable for the conveyance of inaccurate information. Under Real Estate Commission regulations, a salesperson does not have to independently inspect the property or independently verify the accuracy or completeness of a representation made by the client which the licensee reasonably believes to be accurate. 49 Pa.Code 35.292(b) and (c). In this case, Salesperson Sam reasonably relied on information provided by the seller. Incorrect answer. Please choose another answer.

28.	Carla received a $5,000.00 earnest money deposit in the form a check from her buyer on Friday evening after her brokerage firm's office closed. The firm does not have weekend hours. What is the proper action for her to take after receiving the check?
		a. Endorse the check to herself and deposit it into her own account until she can turn funds into her Broker.
		b. Cash the check on Saturday, place the funds into her account and then wire to her brokerage firm's bank account the same day.
		c. Deliver the check to her brokerage firm's office on Monday morning.
		d. Hold the check until the end of the due diligence period just in case her client changes their mind.
Pennsylvania license law requires a salesperson to promptly deliver an earnest money payment to their broker. 63 Pa.Stat 608.5(c). The broker must then deposit the earnest money into an escrow or trust account by the close of the day following the receipt of the funds. 63 Pa.Stat 608.5. Earnest money should always be delivered to the broker as soon as possible. If the brokerage firm is only open during business hours, then it must be delivered at the earliest time possible during those hours. Holding funds in a personal account is illegal and considered commingling of funds. Commingling is a violation of Pennsylvania license law. 63 Pa.Stat 608.5(d). Incorrect answer. Please choose another answer.

29.	Paula, a buyer, calls listing agent Harrison to inquire about a property he has listed for sale. After discussing the property, Paula indicated that she would like to make an offer. Harrison asks Paula if she is currently represented by another licensee. She states she is not presently represented by an agent and is not seeking representation in the transaction. However, she would like Harrison to provide document preparation services for her. Can Harrison assist Paula in the purchase of his listing?
		a. Yes, as long as the seller and Paula agree in writing.
		b. No, she must use a designated agent.
		c. No, dual agency is the only option.
		d. Yes, if Paula agrees in writing.
The Pennsylvania Real Estate Licensing and Registration Act (RELRA) permits brokers and salespersons to act as "transactional licensees" for parties to a real estate transaction. 63 Pa.Stat 201; 606.6. A transactional licensee is a broker or salesperson that does not form an agency relationship with a party to a transaction but acts as a transaction facilitator by acting as a go between for communication purposes or to provide document preparation services. Brokers or salespersons can have agency relationships with one party and be a transactional licensee for another, as long as notice requirements are fulfilled. 63 Pa.Stat 608. It is prohibited to act for more than one party in a real estate transaction without the knowledge and consent in writing of all the parties for whom the licensee acts. 63 Pa.Stat 604(a)(7). Incorrect answer. Please choose another answer.

30.	Agent Smith signs an exclusive buyer listing agreement with Joe. Because Joe is uncertain of his deadline to close on the home, Agent Smith leaves the termination date of the agreement blank until Joe can get a firm timeline of his relocation with his job. Agent Smith keeps a signed copy and gives Joe a copy as well. Are Agent Smith's actions proper?
		a. Yes. This is a common practice. Many clients have uncertain timeframes.
		b. No. Listing agreements must have a definite termination date.
		c. Yes. Listing agreements must be signed and copies given to all parties.
		d. No. A client should not sign a listing agreement until sure of a timeline to move.
Agent Smith's actions violated the Pennsylvania Real Estate Commission regulations for exclusive listing agreements. 49 Pa.Code 35.332. Exclusive listing agreements must set forth the duration of the agreement. 49 Pa.Code 35.332(b)(3). It is a prohibited act under Pennsylvania license law to have a listing agreement without a termination date. 63 Pa.Stat 604(a)(10). Incorrect answer. Please choose another answer.

31.	Which of the following documents must be provided to a seller at the first interview between the salesperson and the seller who seeks listing services?
		a. Consumer Notice
		b. Seller Property Disclosure
		c. Comparative Market Analysis
		d. Agreement of Sale
The Pennsylvania Real Estate Commission regulations require licensees to provide a Consumer Notice to consumers at the initial interview that discloses the relationships in which the broker may engage with the consumer and describes the duties the broker owes in each relationship listed. 49 Pa.Code 35-336; 63 Pa. Stat 608(a). The relationships described in the Consumer Notice are the Seller Agent, Buyer Agent, Dual Agent, Designated Agent and the Transaction Licensee. The Commission requires this disclosure to be given in a certain form that must be signed the consumer. The licensee must give a copy of the signed Consumer Notice to the client and retain a copy six months. 49 Pa.Code 35-336(b). Incorrect answer. Please choose another answer.

32.	When does the initial interview between a salesperson and a consumer occur for purposes of the agency disclosure requirements under Pennsylvania license law?
		a. When a sale contract is signed.
		b. When a listing agreement is signed.
		c. When the client calls to schedule an appointment.
		d. When a substantive discussion occurs between the salesperson and consumer on the real estate needs of the consumer.
The Pennsylvania Real Estate Licensing and Registration Act defines the first interview as the first contact between the licensee and the consumer where there's a substantive discussion on the real estate needs of the consumer. 63 Pa.Stat. 608)a). Incorrect answer. Please choose another answer.

33.	What type of transaction does the Pennsylvania Real Estate Seller Disclosure Law apply to?
		a. Commercial real estate sale with a mortgage
		b. Residential real estate sale using an installment contract
		c. Residential real estate lease with no option to purchase
		d. All of the above.
The Pennsylvania Real Estate Seller Disclosure Law applies to transfers of residential real estate whether by sale, exchange, installment land contract, lease with option to purchase or grant or transfer of a condominium unit. 68 Pa. Stat. 7302; 68 Pa. Stat 7103. It covers the sale of 1-4 units of residential property. Excluded from the act are transfers of new construction that have not been previously occupied when the buyer gets a one year or longer written warranty covering the construction, the property has been inspected for compliance with the local building authorities or a certificate of occupancy has been issued by local authorities. The law requires sellers to disclose material defects prior to the sale. A material defect is defined as a problem with any portion of the real estate that would have a significant adverse impact on the value of the property or that involves unreasonable risk to people on the property. 68 Pa.Stat 7102. Incorrect answer. Please choose another answer.

34.	When filing out the Pennsylvania Seller Disclosure form, the seller supplied the following information: Yes No ____ X Are you aware any problem with the heating and air conditioning system? The seller completed this form in July.During the previous winter, the seller had the HVAC system repaired because it was not blowing hot air and, after the repair, it worked for the rest of the winter for the seller.After the sale, during the following winter, the buyer discovers that the HVAC system is not blowing hot air. Will the seller be liable for failing to disclose the defect with the HVAC system?
		a. Yes, because the HVAC system is not working properly.
		b. Yes, because the seller knew the system was not working properly last winter.
		c. No, because the sale had closed already.
		d. No, because the seller reasonably believed the defect had been corrected.
Under Pennsylvania law pertaining to the seller's disclosures, the seller is not held liable for material defects that are omitted from the disclosure in the following circumstances: (1) where he had no knowledge of the defect: (2) where he had a reasonable belief that the defect had been corrected; or (3) where his statement is based on information provided by a public agency or expert contractor. 68 Pa. Stat. 7309. In this case, the seller had the HVAC system repaired and witnessed it working thereafter, so it would likely be concluded that the seller had a reasonable belief that the defect in the HVAC system had been corrected and he would not be held liable for its repair or replacement based on his failure to report it in the disclosure statement. Incorrect answer. Please choose another answer.

35.	To what extent is a seller required to carry out investigations of his or her property to complete the Pennsylvania Real Estate Seller Disclosure form as to material defects?
		a. None. The seller is under no obligation to investigate the property for defects.
		b. The seller is obligated to test all features and conditions of the property listed in the disclosure form.
		c. The seller is only obligated to carry out tests when he or she has a reasonable belief there is a defect.
		d. The buyer, not the seller, is obligated to investigate the property for defects.
The Pennsylvania Seller Disclosure Law does not put any obligation on the seller to carry out investigations in order to complete the disclosure form. 68 Pa. Stat. 7308. The real estate sales contract will give the buyer the opportunity to carry out investigations of the property in the due diligence phase, but the buyer is not obligated to carry out such investigations. Incorrect answer. Please choose another answer.

36.	Broker Ann has decided she wants to sell her property For Sale by Owner. She checks with her broker and gets approval to do so. She places the following ad in the local paper and online: 425 Baker Street, Philadelphia. For sale by owner. Beautiful 2 story home in quiet neighborhood near public transit, 4-bedroom, 2 full bath, central air, covered garage and more. $450,000. Call 012-555-5555. She immediately starts getting calls on the property. Does this ad comply with Pennsylvania license law?
		a. Yes, license law does not pertain to For-Sale-By-Owner properties.
		b. Yes, it includes all material terms and is stated For-Sale-By-Owner.
		c. No, the ad fails to disclose that it is a licensee owned property.
		d. No, it should not include the price under real estate advertising rules.
Pennsylvanian license law pertains to all real estate related activities involving a salesperson or broker. The Pennsylvania Real Estate Commission regulations require a licensee to state in advertising licensee owned property that the property is licensee owned. 49 Pa.Code 35-304. Broker Ann needs to disclose that the property is agent owned in the advertising. Incorrect answer. Please choose another answer.

37.	Under Pennsylvania license law, a broker who represents a buyer in a real estate sale may provide title transfer and preparation services to the buyer as long as:
		a. The Real Estate Commission approves the dual service.
		b. The broker uses reasonable rates established by the industry.
		c. The broker does not require the buyer to use his or her title services.
		d. The broker has E&O insurance.
If a real estate broker additionally offers financial services, title transfer and preparation services, insurance, repair and construction services or inspections, Pennsylvania Real Estate Commission regulations prohibit the broker from requiring a client to use those other services as part of the agreement to represent the client in the sale of the property. 49 Pa.Code 35.283(d). Incorrect answer. Please choose another answer.

38.	How long does the Pennsylvania Real Estate Licensing and Registration Act (RELRA) require a licensee to retain all records related to a real estate transaction?
		a. 1 years
		b. 2 years
		c. 3 years
		d. 5 years
RELRA requires brokers and salespersons to retain all records related to a real estate sales transaction for three years. 63 Pa.Stat 604(a)(6). Incorrect answer. Please choose another answer.

39.	Larry wants to sell his house and calls Broker Ted, the real estate broker he used to purchase the home five years ago. Seller Larry asks to list his house for sale with Broker Ted at 6% commission but wants the commission to go to whoever sells the property. Seller Larry tells Broker Ted that he is going to use multiple listing brokers to sell his house. While on the phone, Larry and Broker Ted orally agree for Broker Ted to be one of Larry's listing brokers. If Broker Ted sells the house for Larry, can he enforce this oral agreement for a commission?
		a. No, since the listing agreement was not in a writing signed by Larry.
		b. Yes, if Broker Ted gives Larry a written memorandum stating the terms of the agreement.
		c. No, open listing agreements are not permissible in Pennsylvania.
		d. Yes, open listing agreements can be oral, without a written record.
Pennsylvania Real Estate Licensing and Registration Act allows open listing agreements and non-exclusive agreements to be oral and are enforceable as long as the broker gives the seller or buyer a written memorandum stating the terms of the agreement. 63 Pa.Stat 606.1(b)(2) Incorrect answer. Please choose another answer.

40.	Which of the following must be provided to the buyer and seller before signing a sales agreement under Pennsylvania Real Estate Commission regulations?
		a. Statement of Estimated Costs and Return
		b. Survey of the boundaries of the property
		c. Earnest money payments and Receipts
		d. Preapproval letter for a Loan
Commission regulations require the brokers to give each party a written estimate of what reasonably foreseeable expenses the parties can be expected to pay including the broker's commission, mortgage payments and finance costs, tax assessments and settlement expenses. 49 Pa.Code 35-334. The estimates need be to as accurate as can be reasonably expected from a person of knowledge and experience in real estate sales. Incorrect answer. Please choose another answer.

41.	A sales agreement for a manufacturing plant in an industrial area in Pennsylvania must include what information under the Pennsylvania Real Estate Licensing and Registration Act (RELRA) and real estate regulations?
		a. DEP Notice and Phone number
		b. Zoning classification
		c. Due diligence provision
		d. State approval
In the sale of all properties, except those used for single family dwellings, RELRA requires that the zoning classification be stated in the sales agreement. 63 Pa.Stat 608.2(3); 49 Pa.Code 35-333(a)(6). Incorrect answer. Please choose another answer.

42.	Salesperson Jennifer received a $3,000 earnest money deposit from the buyer's salesperson. She immediately gave it to her broker the same day. The offer was accepted later that day, and two business days later the broker deposited the check into his escrow account. Which of the following is true?
		a. The broker should have made the deposit one day earlier.
		b. This is an example of commingling of escrow funds.
		c. The salesperson should have deposited the funds.
		d. The broker followed the proper procedure.
Brokers are legally required to deposit earnest money deposit checks into their trust or escrow account no later than the business day following day they receive the check. 63 Pa.Stat. 608.5(e). 49 Pa.Code 35-324(a). In the case where a broker is permitted by the parties to hold on to a check pending acceptance, the broker must deposit the check no later than the close of the business day following the acceptance of the contract or one day after the acceptance. 63 Pa.Stat 608.5(f); 49 Pa.Code 35-324(b). In the above situation, the broker deposited the check two days after receiving it and after the acceptance, which is a violation. Salespersons are required to promptly turn over earnest money deposits to their broker. 63 Pa.Stat. 608.5(c). Commingling of funds is when the broker mixes earnest money deposits with his or her own personal funds. Incorrect answer. Please choose another answer.

43.	Under the Pennsylvania Real Estate Licensing and Registration Act (RELRA), a broker that provides property management services must place rents received in:
		a. The broker's escrow account
		b. The landlord's business account
		c. The broker's rental management account
		d. Either a or c
Real estate brokers that engage in property management must deposit any rents they receive into a rental management account, that is separate from their escrow account and general business accounts. 63 Pa.Stat 608.5(i). A broker is prohibited from comingling money received by way of property management activities and his or her own accounts. Incorrect answer. Please choose another answer.

44.	Which of the following can hold earnest money deposits received in a real estate sales transaction pending closing under the Pennsylvania Real Estate Licensing and Registration Act (RELRA)?
		a. Title Company
		b. Broker
		c. Salesperson
		d. Both a and b
Under RELRA, the buyer and seller can agree to have persons other than the brokers hold earnest money deposits in escrow accounts as long as it is in writing or electronic form. 63 Pa.Stat 608.5(k). The partis can agree to have a title company hold the earnest money in their escrow accounts. This provision specifically excludes broker associates and salespersons from holding such deposits. Escrow accounts holding earnest money payments must be federally or state insured. 49 Pa.Code 35-325.(a)(1). Incorrect answer. Please choose another answer.

45.	A buyer and a seller have a sales agreement in a residential sales transaction. A $3,000 earnest money payment has been delivered to the seller's broker under the agreement. The agreement gives the buyer a 15 day due diligence period with the opportunity to cancel the agreement in that time period. On the 15th day of the due diligence period, the buyer mails notice to the seller that he cancels the agreement on basis of a home inspection, which seller does not receive until two days later. The buyer requests the broker who holds the escrow to return the earnest money deposit to him. The Seller disputes that the cancellation was made on time and informs the broker who holds the earnest money that she takes the position that the sales agreement is still active, that she intends to go through with the closing and does not agree to the release of the earnest money payment. The closing is cancelled to give the parties the opportunity to work out the issues. A month later, the parties have not come to a resolution. If resolution appears to be unlikely, what action should the broker take?
		a. Return the earnest money to the buyer after 30 days.
		b. Give the money to the seller for breach of contract.
		c. Give the parties 30 days' notice that the broker will petition the court to resolve the matter.
		d. Transfer the earnest money to Real Estate Commission to have the parties mediate the issue.
Under the Pennsylvania Real Estate Licensing and Registration Act (RELRA), a broker cannot arbitrarily release the escrow monies if there is a dispute over who is supposed to receive the monies. Under RELRA, the broker can only release the funds at the consummation of the transaction, following the written instructions signed by the parties (if the written instructions cover how a dispute is to be handled) or by court order. 63 Pa. Stat. 608.5(a). If there is a dispute where resolution appears remote and no signed written instructions by the parties on how to handle the dispute and release the funds, the broker may petition the court to have the parties litigate entitlement to the escrowed funds, after giving the parties 30 days' notice of the petition. 49 Pa.Code 35-327. Practically speaking, the 30 days' notice is to motivate the parties to find a resolution short of going to court and having to pay legal fees. Incorrect answer. Please choose another answer.

46.	The Pennsylvania Human Relations Act (PHRA) prohibits discrimination in real estate transactions. What type of real estate transactions does the PHRA apply to?
		a. Residential property sales
		b. Commercial property sales
		c. Residential and Commercial Leases
		d. All of the above
The PHRA prohibits discriminatory practices in residential and commercial sales, as well as in residential and commercial leasing. 43 Pa.Stat 955.3. The PHRA prohibits inducing a sale or lease on basis that the community or adjacent community includes people of a certain race, religion, ancestry, sex, handicap or disability. It also prohibits discouraging transactions on basis that the property is in a community or adjacent community where people of protected classes live. Finally, it prohibits misrepresentation or advertising that pertains to the community being affected by the residence or future increased or decreased residence of people of the protected classes. Incorrect answer. Please choose another answer.

47.	Immigrants from Poland have settled in Pittsburgh and now seek to purchase a home. If their realtor focuses the showing of homes in the area known as Polish Hill, it can be considered ____________ under the Pennsylvania Human Relations Act (PHRA).
		a. Puffing
		b. Block-busting
		c. Steering
		d. Red-lining
Steering is the prohibited practice of directing prospective buyers or renters to or away from a specific neighborhood based on one of the protected characteristics, such as their age, race, national origin, religious creed or other protected class, thereby limiting the buyer's choice. It is prohibited under PHRA. 43 Pa.Stat 955.3. A charge of steering can be a risk any time a licensee redirects a client based on the licensee's own perceptions. Red-lining is when a bank rejects a home loan applicant based on where the home is located even though the applicant may be creditworthy. Block-busting is the prohibited practice of persuading homeowners to sell their home at low prices with threats of demographic change. Incorrect answer. Please choose another answer.

48.	Of the following, who is not protected as a disabled person under the Pennsylvania Human Relations Act (PHRA)? Assume all of the impairments substantially limit a major life activity.
		a. A blind person
		b. A drug addict currently taking controlled substance
		c. A former drug addict with depression
		d. A person with bi-polar disorder
People with physical or mental handicaps or disabilities are a protected class under the PHRA in employment and housing matters. To be considered disabled, the physical or mental disability must substantially impair or limit a major life activity, such as caring for oneself, concentrating and performing manual tasks. Persons with depression or bi-polar disorder can be considered disabled. A person actively abusing drugs illegally is not protected under PHRA. Incorrect answer. Please choose another answer.

49.	Which of the following states an accurate definition of a "time share" under Pennsylvania law?
		a. The right to use or occupy a unit in a building on a periodic basis according to an arrangement allocating use and occupancy rights of that unit with other similar users.
		b. A right to use a unit of real property for purposes of locating a tent, recreational vehicle or similar device on a periodic basis with other similar users.
		c. The complete and total ownership of real estate and all properties on it with the rights to sell the property.
		d. Holding real estate jointly by two or more parties, with the share of each passing to the other on death.
A "time share" is defined under real estate regulations as the right to use or occupy one or more units on a periodic basis according to an arraignment allocating use and occupancy rights of the unit or units between other similar users. 49 Pa.Code 35-201. A "unit" under this definition is a building or portion thereof permanently affixed to real property and designed for separate occupancy. The term does not include campground memberships, which is stated in Answer B. Answer C is ownership in fee simple and Answer D is joint tenancy. Incorrect answer. Please choose another answer.

50.	Sunny Side Resort in Erie, Pennsylvania held a weekend marketing campaign giving guests a weekend free stay at the resort as long as the guests agreed to attend Sunny Side's time share informational meetings held each day. As a result of the weekend stay and sales presentations, Susie and John were impressed with the accommodations and saw themselves visiting each year. So, on Sunday, they signed the papers to purchase a time share. Do Susie and John have the right to cancel this purchase under the Pennsylvania Real Estate Licensing and Registration Act (RELRA), and if so, by what day of the week should the notice of cancellation be mailed or given to the seller under RELRA?
		a. Yes, by Monday
		b. Yes, by Wednesday
		c. Yes, by Friday
		d. No, there is no right to cancel a time share purchase agreement.
RELRA gives the purchaser of a time share a right cancel the purchase as long as the cancellation is mailed by midnight of the fifth day following the day the purchase was made. 63 Pa.Stat. 609(a). Notice of cancellation must be given by certified return receipt mail or any other bona fide means of delivery, and is effective on the date postmarked. 63 Pa.Stat 609(c). After receiving the notice of cancellation, the seller has ten days to return all payments made under the agreement to the buyer with an acknowledgement the contract is void. 63 Pa.Stat 609(d). The right to cancel is not waivable by the purchaser. 63 Pa.Stat 609(e). If the purchaser cancels, they do not have to return any prizes, premiums or gifts they received. 63 Pa.Stat 609(d). Incorrect answer. Please choose another answer.

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Kimberly Trimmel

Kimberly is a licensed real estate broker in Illinois and a real estate instructor with the Real Estate Institute. She is a certfied instructor with the National Association of Realtors. She has worked as a broker with Century 21, Coldwell Banker and Keller Williams and was formerly the Director of Professinal Standards with the Chicago Association of Realtors.

Our material is specific to the Illinois Real Estate Broker Exam, covering both the National and State sections with these content areas:

Property Ownership
Land Use Regulations
Laws of Agency
Fiduciary Duties
Property Valuation
Financial Analysis
Financing
Transfer of Property
Disclosures
Real Estate Practice
Contracts
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