Term
| A property listed for $150,000 receives an offer for $120,000. The offer’s percentage of listing price is: |
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Definition
| $120,000 ÷ $150,000 = 80% |
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Term
| A seller requires a 2% deposit on a property listed for $320,000. The required deposit (assuming a full price offer) is: |
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Definition
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Term
| An annual tax bill is $1,800. Closing is on April 10. What is the seller’s share of the taxes? (30 day, 12 month method) |
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Definition
Monthly amount = ($1,800 ÷ 12) = $150; no. of months = 3
Daily amount = ($150 ÷ 30) = $5.00; no. of days = 10
Proration = ($150 x 3) + ($5 x 10) = ($450 + 50) = $500 seller’s share |
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Term
| An annual tax bill is $1,800. Closing is on April 10. What is the seller’s share of the taxes? (365 day method) |
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Definition
Daily amount = ($1,800 ÷ 365) = $4.93
Jan 1 thru April 10 = (31 + 28 + 31 + 10) days, or 100 days
Proration = $4.93 x 100 days = $493 seller’s share |
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Term
Income Received in Advance (Rent)
Seller receives $1,000 rent. The month is ¾ over. |
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Definition
Buyer’s share is ($1,000 x 25%) = $250
Credit buyer / debit seller $250. |
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Term
| Buyer will pay $1,000 taxes. The year is ¾ over. |
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Definition
Buyer’s share is ($1,000 x 25%) = $250
Credit buyer / debit seller $750 |
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Term
| An owner insures a home for $100,000. Replacement cost is $150,000. A co-insurance clause requires coverage of 80% of replacement cost to avoid penalty. Fire destroys the house. What can the owner recover from the insurer |
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Definition
| Claim recovery = $150,000 x (67% cost covered ÷ 80% required) = $125,625 |
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Term
recovery with co-insurance clauses
formula: recovery = |
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Definition
| damage claim x (% replacement cost covered)/minimum coverage requirement |
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Term
| A property listed for $650,000 receives an offer for $610,000. This offer’s percentage of the listing price is what? |
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Definition
| $610,000 ÷ $650,000 = 93.8% |
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Term
| A seller requires a 2.5% deposit on a property listed for $400,000. The required deposit (assuming a full price offer) is what? |
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Definition
| $400,000 x 2.5% = $10,000 |
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Term
| An annual tax bill is $2,400. Closing is on February 14th and the day of closing belongs to the seller. What is the seller’s share of the taxes using the 360-day method? |
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Definition
Monthly amount = ($2,400 ÷ 12) = $200; # of months = 1
Daily amount = ($200 ÷ 30) = $6.67; no. of days = 14
Proration = ($200 x 1) + ($6.67 x 14) = ($200 + $93.38) = $293.38 seller’s share; debit seller that amount |
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Term
| A seller receives $1,000 rent in advance on her property that she is selling. The closing occurs on the 10th of the month. Using the 360-day method, how is this proration handled, assuming the seller owns the day of closing? |
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Definition
Seller’s share is ($1,000 / 30 x 10) = $333; buyer’s share is $666.
Credit buyer / debit seller $666. |
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Term
| An owner insures a home for $200,000. Replacement cost is $300,000. A co-insurance clause requires coverage of 80% of replacement cost to avoid penalty. Fire destroys the house. What can the owner recover from the insurer? |
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Definition
| Claim recovery = $300,000 x (67% cost covered ÷ 80% required) = $251,250 |
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Term
| Any person who performs any of the activities listed below for another person, advertises, holds him/herself out as a real estate broker or sales associate, or receives compensation for performing these activities with regard to real estate must have an Oklahoma real estate license. |
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Definition
Solicits listings, including "For Sale by Owner" and expired listings.
Secures listings.
Shows property.
Solicits prospective buyers.
Prepares and presents cost estimates to sellers or buyers.
Prepares contracts and obtains signatures.
Secures lease or rental agreements.
Manages rental properties, including soliciting tenants, negotiating with tenants, securing leases and/or rental agreements, preparing documents and obtaining signatures.
Auctions property.
Negotiates for a consumer in buying, selling, renting or leasing a property.
Negotiates or offers or agrees to negotiate the exchange of real estate for a consumer.
Deals in options to buy or lease property. |
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Term
| Not everyone who deals in real estate is required to have a license. The following persons do not need to have an Oklahoma real estate license. |
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Definition
People buying or selling their own homes.
People buying property and contracts for their own accounts, either as investments or for resale purposes.
Persons who hold a duly executed power of attorney from the owner of a piece of property that grants the power to execute all instruments necessary to make a sale, exchange or lease of the owner's property.
An attorney at law when rendering real estate services in the performance of legal duties.
A receiver, trustee in bankruptcy, executor, administrator, guardian of an estate or person acting under a direct court order.
A person acting as the manager for the owner of an apartment building, duplex, apartment complex or court, when such person resides on the property and is engaged in the leasing of the property for the owner.
An employee acting as the building manager for a licensed real estate broker managing an apartment building, duplex, apartment complex or court, when this employee resides on the property and is engaged in the leasing of the property in connection with his/her employment. |
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Term
| Who DOES NOT need a license? (continued) |
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Definition
An auctioneer who deals only in personal and not real property.
An owner or regular employee of a corporation who is not in the real estate business. Example: A bank that forecloses on a property does not need a license to re-sell that property.
An officer or employee performing his or her official duties for a government entity.
Any employee acting on behalf of a non-profit organization, agency or corporation.
Persons who purchase rights-of-way, easements, leases, permits and licenses for corporations or governmental entities for the purpose of transportation, communication services, cable lines, utilities, pipelines, or oil, gas and petroleum products.
People who act for a government body or corporation for the purpose of acquiring real property by eminent domain. |
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Term
| Who DOES NOT need a license? (continued) |
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Definition
A person working for a not-for-profit real estate referral service.
Any person who is the resident of an apartment building, duplex, or apartment complex or court and receives a resident referral fee for the act of recommending the property for lease to a family member, friend or coworker, as long as the fee does not exceed $100.
A person acting as an assistant to a broker or licensee, as long as such person does not perform any activities that overstep into licensed activities. For example, an assistant may:
Gather information for and prepare a Competitive Market Analysis (CMA) form, but may not present or interpret the information to a buyer or seller.
Check listing information for completeness; but the licensee must verify accuracy.
Submit listing information and changes to the Multiple Listing Service; but the licensee must verify accuracy.
Schedule loan application appointments.
Communicate with title companies as instructed by the licensee.
Write and prepare newsletters.
Prepare rental/lease agreements; but may not discuss lease arrangements, present or explain forms, negotiate terms or obtain signatures. |
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Term
| Which of the following situations would require a real estate license? |
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Definition
Jim negotiates a lease/purchase option for a unit in a condominium complex.
Yes. Anyone dealing in options needs a license.
Sam's neighbor is quitting the cattle business. He hires Sam to auction his heavy farm machinery and the contents of three barns.
No. Sam is not auctioning real property - just personal property.
Sally manages the rental property she lives in and is engaged in leasing the property for her employer who owns the building.
No. Sally is employed by the building owner and lives on the property she's managing.
George manages a rental property and is responsible for securing and preparing leases and obtaining signatures.
Yes. George is performing real estate activities when he solicits leases and obtains signatures. |
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Term
| Amanda works as an assistant to Broker Donavan. She is not licensed. |
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Definition
Name three things she can do.
Gather CMA information.
Schedule loan application appointments.
Write, design and place real estate ads.
Name three things she cannot do.
Give listing information to sales associates and brokers.
Interpret CMA information.
Talk about property with buyers and sellers. |
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Term
true or false: The primary purpose of the Oklahoma Real Estate Commission is to safeguard the public interest – to protect the public against certain illegal or unethical practices.
The second major function of the Commission is to provide quality service to the real estate industry by:
Assisting and providing resources to real estate professionals.
Encouraging and requiring high standards of knowledge and ethical practices from licensees.
Investigating and sanctioning licensed activities.
Prosecuting any unlicensed individual who violates the Oklahoma Real Estate License Code and Rules. |
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Definition
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Term
| Oklahoma Real Estate Commission has the following duties and responsibilities: |
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Definition
Promulgate rules, prescribe fees and make orders.
Prescribe, approve, and monitor pre-license, post-license and continuing education offerings and instructors.
Administer exams to license applicants.
Issue licenses to persons who have passed the exam.
Issue licenses to and regulate the activities of real estate provisional sales associates, sales associates, brokers, branch offices, nonresidents, associations, corporations and partnerships.
Discipline licensees, instructors, and real estate school entities for just cause.
Modify sanctions and reinstate licenses.
Conduct “for cause” discipline proceedings.
Prescribe penalties for failure to pay license renewal fees.
Sell computer testing and license applications to other entities or government bodies, not limited to Oklahoma, to help recover research and development costs.
Initiate the prosecution of anyone who violates the Code.
Contract with attorneys to carry out functions and purposes of the Code.
Apply for injunctions and restraining orders for Code or Rule violations.
Create an Oklahoma Real Estate Contract Form committee which will draft and revise real estate contracts and other appropriate documents.
Enter into contracts and agreements for the payment of food and other reasonable expenses as authorized in the State Travel Reimbursement Act necessary to host, conduct, or participate in meetings or training sessions as is reasonable for the administration of this code; and to conduct an annual performance review of the Executive Director and submit the report to the Legislature. |
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Term
true or false: The Oklahoma Real Estate Commission was created on January 1, 1950, in accordance with the provisions of the Oklahoma Sunset Law and designated as "the sole governmental entity, state, county or municipal, which shall have the authority to regulate and issue real estate licenses in the State of Oklahoma."
The Commission consists of seven (7) members.
All members must be United States citizens.
All members must have been residents of Oklahoma for three (3) years prior to their appointment.
Five (5) members must be licensed brokers who have had at least five (5) years of active experience as brokers prior to their appointment and be engaged fulltime in the business.
One (1) member shall be an active representative of a real estate school that is located within Oklahoma and has been approved by the Commission.
One (1) member shall be a lay person who is not in the real estate business.
No more than two (2) members shall be appointed from the same congressional district according to the latest redistricting act. |
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Definition
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Term
true or false: Members of the Commission are appointed by the Governor with the advice and consent of the Senate.
Members serve until their term expires.
The term of Commission members is four (4) years.
Each successor is appointed by the Governor with Senate approval.
The Governor may select appointees from a list of at least three (3) qualified persons submitted by the Oklahoma Association of REALTORS®, Inc.
Any vacancy will be filled by the Governor with Senate approval.
Any person appointed to fill a vacancy will serve for the remainder of his or her predecessor's term.
Commission members may be removed from office by the Governor for non-performance of duty or malfeasance in office. |
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Definition
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Term
true or false: The Commission members will elect a Chairman and a Vice-chairman annually.
The Chairman (and, in his/her absence, the Vice-chairman) will preside at all the Commission meetings.
The Commission will hire a secretary-treasurer and any other clerks and assistants they need to help carry out the Commission duties.
The secretary-treasurer will keep a complete and permanent record of all the Commission proceedings.
Each member of the Commission is entitled to receive travel expenses essential to performing office duties, as provided in the State Travel Reimbursement Act. |
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Definition
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Term
| The Oklahoma State Treasury created a revolving fund, known as the "Oklahoma Real Estate Revolving Fund." This fund: |
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Definition
Consists of all monies received by the Commission, EXCEPT Oklahoma Real Estate Education and Recovery Fund fees or appropriated funds.
Is a continuing fund not subject to fiscal year limitations.
Is under the control and management of the Commission.
The Commission may invest all or part of the monies from this fund in approved securities. Any interest or dividends that accrue or money received on redemption are to be deposited in the Commission's General Operating Fund.
Any expenditure from this fund can be made without legislative appropriation.
The fund is subject to annual audit by the State Auditor and Inspector. |
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Term
| How many members are on the Commission and what is its makeup? |
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Definition
7 members
5 licensed brokers, each with at least 5 years' experience
1 member from a real estate school that is housed in OK and has been approved by the Commission
1 member - unlicensed - from the general public |
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Term
| What kind of compensation are members of the Commission entitled to? |
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Definition
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Term
| What is the Oklahoma Real Estate Revolving Fund? |
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Definition
| A fund created by the Treasury which consists of all monies received by the Commission, except Education and Recovery Fund fees. |
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Term
| Upon showing just cause, the Commission may discipline licensees, instructors and real estate schools in any of the following ways: |
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Definition
Reprimanding.
Suspending licenses.
Revoking licenses.
Placing licensees on probation.
Imposing administrative fines pursuant to Section 858-402.
Requiring education in addition to the requirements set out in Section 858-307.2.
The Commission may also:
Apply for injunctions or restraining orders.
Investigate written complaints.
Order a Formal Hearing.* |
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Term
| Any unlicensed person who knowingly and willingly violates any provision of the Code will be guilty of a misdemeanor. If convicted, the punishment can be: |
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Definition
A fine of not more than One Thousand Dollars ($1,000.00).
Imprisonment in the county jail for up to six (6) months.
Both fine and imprisonment. |
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Term
| In addition to the civil or criminal actions, if the Commission believes an unlicensed person has engaged in any acts or practices which violate the Code, the Commission may: |
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Definition
Impose a fine of not more than Five Thousand Dollars ($5,000.00) or the amount of the commission or commissions earned, whichever is greater, for each violation of the Code for unlicensed activity.
Apply to the appropriate court for an injunction or restraining order against such acts or practices.
Impose administrative fines which will be enforceable in the district courts of this state.
Notices and hearings and any appeals shall be in accordance with the Administrative Procedures Act.
Any funds collected as outlined above will be deposited in the Oklahoma Real Estate Education and Recovery Fund. |
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Term
| The Commission may impose administrative fines on any licensee who violates the Code or the rules. |
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Definition
The fine will not be less than One Hundred Dollars ($100) and may not exceed Two Thousand Dollars ($2,000) for each violation.
The fine may not exceed Five Thousand Dollars ($5,000) for all violations resulting from a single incident.
All fines must be paid within thirty (30) days of the licensee receiving notification.
If fines are not paid within 30 days, the fines will double and the licensee will have an additional 30 days to pay. If the fine is not paid within the extension period, the license will be revoked automatically.
The license can be suspended until fines are paid.
All monies received by the Commission as a result of imposing fines will be deposited into the Oklahoma Real Estate Education and Recovery Fund.
All fines imposed may be in addition to any other criminal penalties or civil actions. |
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Term
| The Oklahoma State Treasury created a revolving fund, known as the "Oklahoma Real Estate Education and Recovery Fund." This fund is different from the "Oklahoma Real Estate Revolving Fund" that was discussed earlier in this chapter. |
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Definition
Like the Revolving Fund, the Education and Recovery Fund:
Is a continuing fund not subject to fiscal year limitations.
Shall be under the control and management of the Commission.
In addition, as with the Revolving Fund, the Commission may invest all or part of the monies from the Education and Recovery Fund in approved securities. However, any interest or dividends that accrue or any money received on redemption are to be deposited into the Education and Recovery Fund. |
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Term
| The money deposited in the Education and Recovery Fund will come from: |
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Definition
Fees for new licenses
Fees for license renewals
Interest and dividends from securities investments
Monies generated at the time of securities redemptions |
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Term
| At the close of each fiscal year, the Commission must transfer into the Oklahoma Real Estate Commission Revolving Fund: |
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Definition
Any money in excess of the amount required to be retained in the Education and Recovery Fund.
Any amount authorized to be expended that remains unexpended. |
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Term
| At any time when the total amount of monies deposited in the Education and Recovery Fund exceeds Two Hundred Fifty Thousand Dollars ($250,000.00), the Commission may expend the excess funds each fiscal year for the following purposes: |
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Definition
Promote the advancement of education in the field of real estate for the benefit of the general public and those licensed under the Oklahoma Real Estate License Code, as long as the promotion does not suggest advertising of the profession.
Underwrite educational seminars and other forms of educational projects for the benefit of real estate licensees.
Establish real estate courses at institutions of higher learning located in the state and accredited by the State Regents for Higher Education.
Contract for a particular educational project in the field of real estate to further the purposes of the Oklahoma Real Estate License Code. |
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Term
| Peter is an unlicensed person who has been convicted of a Code violation. What can his penalty be? |
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Definition
| $1000 fine, up to 6 months in prison, or both |
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Term
| What is the maximum fine the Commission can impose on a licensee who violates the Code? |
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Definition
$2000 for each violation
$5000 for all violations resulting from a single incident |
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Term
| What sources fund the Education and Recovery Fund? |
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Definition
Fees for new and renewed licenses
Interest and dividends from security investments
Money from security redemptions |
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Term
| true or false: The Contract Forms Committee was created to draft and revise real estate purchase and/or lease contracts and other related addenda for voluntary use by real estate licensees. |
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Definition
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Term
| true or false: Contract Forms Committee - |
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Definition
The committee is made up of eleven (11) members:
Three (3) members are appointed by the Oklahoma Real Estate Commission.
Three (3) members are appointed by the Oklahoma Bar Association.
Five (5) members are appointed by the Oklahoma Association of REALTORS®, Incorporated.
Terms are three (3) years long.
Any vacancy which occurs will be filled by the appropriate appointing agency.
A member can be removed for just cause by the committee.
Each member is entitled to receive travel expenses. |
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Term
| According to the Oklahoma Open Records Act, all open records of the Real Estate Commission may be inspected and copied in accordance with procedures, policies, and fees as set out by the Commission. The Commission can charge the following fees. |
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Definition
$.25 for each xerographic copy or micrographic image
$1.00 for each copy to be certified
$10.00 per hour for a record or file search
Note: A new section of law to be codified in the Oklahoma Statutes as Section 858-313 of Title 59, unless there is created a duplication in numbering, reads as follows:
The following materials of the Commission are confidential and not public records:
Examinations conducted by the Commission and materials related to the examinations; and
Educational materials submitted to the Commission by a person or entity seeking approval and/or acceptance of a course of study. |
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Term
| true or false: Any person may petition the Commission in writing requesting a promulgation, amendment or repeal of any rule. |
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Definition
true;
The petition must be in writing in business letter form or in the form of petitions used in civil cases in Oklahoma and must have an explanation and state the implications of the request. The petition
Must be signed by the person filing the petition and be filed with the Secretary-Treasurer of the Commission.
Must be submitted to the Commission at least thirty (30) days prior to a regular meeting.
Will be considered by the Commission at its first meeting following such thirty (30) days.
Will be scheduled for a public hearing before the Commission within sixty (60) days after being considered by the Commission in a regular meeting.
Within sixty (60) days after the public hearing, the Commission will either grant or deny the petition.
If the petition is granted, the Commission will immediately begin the procedure for the promulgation, amendment or repeal of the rule.
If the petition is denied, the parties who submitted the petition have the right to proper Judicial Review. |
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