CRE NATIONAL EXAM | QUESTIONS AND ANSWERS |
2025/2026 UPDATE | WITH COMPLETE SOLUTION!!
Priority of judgment liens would be based on the: Answer - a. date of the debt
b. date of the lien recording
c. amount of the debt
d. the foreclosure process
B. Priority is based on the date of the lien recording
A client wants to buy a commercial property. You tell her they are putting in an
exit ramp off the highway, that is proposed but not set in stone, that would
allow easy access to the business. The client buys and they end up putting the
ramp elsewhere. Are you responsible as the broker? Answer - a. No, the agent
was truthful
b. No, this is puffing
c. yes, this is puffing
d. yes, this is a misrepresentation
A. The agent is blameless. Had the agent not indicated the exit ramp was a
proposal, the agent may have been subject to a claim of misrepresentation.
As per the Free Dictionary regarding "puffing" - Puffing is generally an
expression or exaggeration made by a salesperson or found in an
advertisement that concerns the quality of goods offered for sale. It presents
opinions rather than facts and is usually not considered a legally binding
,promise. Such statements as "this car is in good shape" and "your wife will love
this watch" constitute puffing.
Answer - Ok because the broker doesn't like the other broker either
Not ok and both broker and agent can be in trouble for lack of supervision
The agent could get in trouble, but not the employing broker unless the broker
put his views in writing.
Ok because he is selling his listings quickly
Explanation
An agent has no authority to withhold offers from a client. All offers must be
presented to the client for their review and decision. This is a obligation that
must be understood by the agent and employing broker. An agent's personal
views about another agent are irrelevant to the transaction. There are no
excuses for not putting the client's interests first.
An agent does not like another broker and refuses to present his offers. The
agent's employing broker notices he does a good job and sells his listing
quickly. They agree that he does not need any supervision or training. He is
independent. This is: Answer - a. Ok because the broker doesn't like the other
broker either
b. Not ok and both broker and agent can be in trouble for lack of supervision
c. The agent could get in trouble, but not the employing broker unless the
broker put his views in writing.
d. Ok because he is selling his listings quickly
B. An agent has no authority to withhold offers from a client. All offers must be
presented to the client for their review and decision. This is a obligation that
must be understood by the agent and employing broker. An agent's personal
views about another agent are irrelevant to the transaction. There are no
excuses for not putting the client's interests first.
,All units in a community are being assessed for sidewalk improvements to a
road along one side of the community. This is: Answer - a. Rise in property
taxes
b. A Community Assessment
c. Rise in HOA dues
d. A Special Assessment
D. Although a rise in property taxes is close, because the government is
definitely pulling more money out of your pocket, this situation has its own
name and is referred to as a Special Assessment. A Special Assessment is
whenever the government levies a tax on property owners in an area to pay for
a project deemed to be beneficial to them. Common examples are sidewalks as
in the question, sewer systems, street paving, better street lighting and such.
Home Owner Associations also turn to Special Assessments when they are
short on reserve funds to cover a capital improvement or deferred
maintenance, such as the roof is shot, the pool or parking lot needs resealing,
the building(s) need repainting or the central furnace is dying a painful death.
How does this effect you as an agent? :
Whenever you are representing a buyer in a community with an HOA. Your due
diligence includes reviewing a series of State mandated HOA disclosures from
the HOA management. One of the things you are looking for is any current or
planned Special Assessments.
Often when a developer builds a community, they set the HOA dues artificially
low to attract buyers. Once the HOA is turned over to the residents, it is
, incumbent on them to review and if need be, raise their HOA dues to build
enough of a reserve account to cover future big-ticket maintenance. Boosting
HOA dues is never popular, particularly when the community is new and shiny.
But sooner or later everything new gets old and needs maintenance. If the
community did not set aside funds, the cost of playing catch up can result in
some absolute whoppers of Special Assessments. When that happens,
property values take a beating and owners may try to sell before the
assessment takes affect
Agency means the broker owes to their clients certain duties. Which of the
following is NOT TRUE: Answer - a. Loyalty
b. Honesty
c. Accounting
d. Indemnification
D. Here is a definition of indemnification from The Free Dictionary: "To
compensate for loss or damage; to provide security for financial
reimbursement to an individual in case of a specified loss incurred by the
person."
As brokers we assist our clients with expert knowledge regarding real estate
transactions. We are not an insurance company.
The agency relationship evolved from the master-servant relationship under
English common law. The servant owed absolute loyalty to the master. This
loyalty was superior to the servant's personal interests as well as the interests
of others. Common law is established by court decisions. Under common law,
the agent owes the principal five duties, including: (1) care: (2) obedience, (3)
accounting, (4) loyalty (including confidentiality), and (5) disclosure. Statutory
law is the law enacted by the legislature.
2025/2026 UPDATE | WITH COMPLETE SOLUTION!!
Priority of judgment liens would be based on the: Answer - a. date of the debt
b. date of the lien recording
c. amount of the debt
d. the foreclosure process
B. Priority is based on the date of the lien recording
A client wants to buy a commercial property. You tell her they are putting in an
exit ramp off the highway, that is proposed but not set in stone, that would
allow easy access to the business. The client buys and they end up putting the
ramp elsewhere. Are you responsible as the broker? Answer - a. No, the agent
was truthful
b. No, this is puffing
c. yes, this is puffing
d. yes, this is a misrepresentation
A. The agent is blameless. Had the agent not indicated the exit ramp was a
proposal, the agent may have been subject to a claim of misrepresentation.
As per the Free Dictionary regarding "puffing" - Puffing is generally an
expression or exaggeration made by a salesperson or found in an
advertisement that concerns the quality of goods offered for sale. It presents
opinions rather than facts and is usually not considered a legally binding
,promise. Such statements as "this car is in good shape" and "your wife will love
this watch" constitute puffing.
Answer - Ok because the broker doesn't like the other broker either
Not ok and both broker and agent can be in trouble for lack of supervision
The agent could get in trouble, but not the employing broker unless the broker
put his views in writing.
Ok because he is selling his listings quickly
Explanation
An agent has no authority to withhold offers from a client. All offers must be
presented to the client for their review and decision. This is a obligation that
must be understood by the agent and employing broker. An agent's personal
views about another agent are irrelevant to the transaction. There are no
excuses for not putting the client's interests first.
An agent does not like another broker and refuses to present his offers. The
agent's employing broker notices he does a good job and sells his listing
quickly. They agree that he does not need any supervision or training. He is
independent. This is: Answer - a. Ok because the broker doesn't like the other
broker either
b. Not ok and both broker and agent can be in trouble for lack of supervision
c. The agent could get in trouble, but not the employing broker unless the
broker put his views in writing.
d. Ok because he is selling his listings quickly
B. An agent has no authority to withhold offers from a client. All offers must be
presented to the client for their review and decision. This is a obligation that
must be understood by the agent and employing broker. An agent's personal
views about another agent are irrelevant to the transaction. There are no
excuses for not putting the client's interests first.
,All units in a community are being assessed for sidewalk improvements to a
road along one side of the community. This is: Answer - a. Rise in property
taxes
b. A Community Assessment
c. Rise in HOA dues
d. A Special Assessment
D. Although a rise in property taxes is close, because the government is
definitely pulling more money out of your pocket, this situation has its own
name and is referred to as a Special Assessment. A Special Assessment is
whenever the government levies a tax on property owners in an area to pay for
a project deemed to be beneficial to them. Common examples are sidewalks as
in the question, sewer systems, street paving, better street lighting and such.
Home Owner Associations also turn to Special Assessments when they are
short on reserve funds to cover a capital improvement or deferred
maintenance, such as the roof is shot, the pool or parking lot needs resealing,
the building(s) need repainting or the central furnace is dying a painful death.
How does this effect you as an agent? :
Whenever you are representing a buyer in a community with an HOA. Your due
diligence includes reviewing a series of State mandated HOA disclosures from
the HOA management. One of the things you are looking for is any current or
planned Special Assessments.
Often when a developer builds a community, they set the HOA dues artificially
low to attract buyers. Once the HOA is turned over to the residents, it is
, incumbent on them to review and if need be, raise their HOA dues to build
enough of a reserve account to cover future big-ticket maintenance. Boosting
HOA dues is never popular, particularly when the community is new and shiny.
But sooner or later everything new gets old and needs maintenance. If the
community did not set aside funds, the cost of playing catch up can result in
some absolute whoppers of Special Assessments. When that happens,
property values take a beating and owners may try to sell before the
assessment takes affect
Agency means the broker owes to their clients certain duties. Which of the
following is NOT TRUE: Answer - a. Loyalty
b. Honesty
c. Accounting
d. Indemnification
D. Here is a definition of indemnification from The Free Dictionary: "To
compensate for loss or damage; to provide security for financial
reimbursement to an individual in case of a specified loss incurred by the
person."
As brokers we assist our clients with expert knowledge regarding real estate
transactions. We are not an insurance company.
The agency relationship evolved from the master-servant relationship under
English common law. The servant owed absolute loyalty to the master. This
loyalty was superior to the servant's personal interests as well as the interests
of others. Common law is established by court decisions. Under common law,
the agent owes the principal five duties, including: (1) care: (2) obedience, (3)
accounting, (4) loyalty (including confidentiality), and (5) disclosure. Statutory
law is the law enacted by the legislature.
