1. Which of the following taxes are relevant to all Colorado residential real estate transactions?
A. Ad valorem taxes Correct
B. Local transfer taxes
C. Sales and use taxes
D. Special assessments
Explanation
Ad valorem taxes, based on the assessed value of the property, are applied universally to all Colorado residential real estate transactions as they are the primary property tax. Local transfer taxes vary by jurisdiction and are not universally applied, sales and use taxes typically apply to goods and services rather than real estate, and special assessments are specific to certain improvements or districts, not all transactions.
2. The Contract to Buy and Sell Real Estate states that if an unresolved conflict arises between the buyer and the seller, the parties agree to
A. Terminate the contract
B. Arbitrate before mediation
C. File an interpleader action
D. Mediate before arbitration Correct
Explanation
The Colorado Contract to Buy and Sell Real Estate mandates mediation before arbitration for dispute resolution. This process encourages a collaborative attempt to resolve conflicts through mediation first, which is less formal and costly, before escalating to binding arbitration if necessary.
3. A couple purchasing a furnished residential property will receive ownership of any furnishings by means of a
A. Personal property deed
B. Real property transfer declaration
C. Bill of sale Correct
D. Inventory attached to the settlement statement
Explanation
A bill of sale is the legal document used to transfer ownership of personal property, such as furnishings, in a real estate transaction. Personal property deeds do not exist, real property transfer declarations pertain to real estate, and an inventory attached to the settlement statement does not legally transfer ownership.
4. An employing broker who designates one associate broker to work as a sellers agent and one to work as a buyers agent has what sort of agency relationship?
A. Dual agency
B. Limited agency with both the buyer and the seller
C. No agency with either the buyer or the seller Correct
D. Single agency with the seller and no agency with the buyer
Explanation
In designated brokerage, the employing broker assigns separate brokers to represent the buyer and seller independently, avoiding dual agency. This results in the employing broker having no agency relationship with either party, as each designated broker handles their respective clients duties.
5. The commission, upon its own motion may, or upon a complaint, shall, investigate all of the following EXCEPT
A. Failure to disclose a stigmatized property Correct
B. Violating the Consumer Protection Act
C. Failure to provide a closing statement
D. Converting funds belonging to others
Explanation
Colorado law does not mandate disclosure of stigmatized properties (e.g., properties associated with crimes or hauntings), so the Real Estate Commission would not investigate this issue. Violations of the Consumer Protection Act, failure to provide closing statements, and converting funds are all serious breaches of real estate regulations and subject to investigation.