Free Colorado Math Practice Test — LicenseIQ

Question 1

A listing agreement in which the broker earns a commission regardless of who sells the property is a(n):

Accepted Answer

In an exclusive right-to-sell listing, the listing broker earns a commission no matter who procures the buyer, even the owner. (Reclassified to section 6 / CORE.)

Question 2

On a broker's website, which is required by Colorado Commission rules?

Accepted Answer

Rule 6.10.D requires the firm name on each viewable page of electronic media.

Question 3

A home sells for $389,000. The seller pays a 5% commission, a $212,600 mortgage payoff, $1,200 attorney fee, $1,950 transfer tax and $600 in other costs. What are the seller's net proceeds?

Accepted Answer

Commission = $389,000 x 0.05 = $19,450. Total costs = $19,450 + $212,600 + $1,200 + $1,950 + $600 = $235,800. Net = $389,000 - $235,800 = $153,200.

Question 4

On the $20,000 commission above, the listing broker keeps 50% and pays 50% to the buyer's broker. How much does the buyer's broker receive?

Accepted Answer

$20,000 x 0.50 = $10,000 to the buyer's broker.

Question 5

When competing brokerages agree to charge the same commission rate, they commit:

Accepted Answer

Agreeing on commissions among competitors is illegal price fixing under the Sherman Antitrust Act; commissions must be set independently and are always negotiable.

Question 6

According to Commission Position 27, a broker's duty to disclose adverse material facts is based on:

Accepted Answer

Colorado's standard is actual knowledge; 'should have known' is not the test, and brokers have no duty to inspect. The Seller's Property Disclosure does not limit the broker's independent duty.

Question 7

According to Commission Position 19, if a Colorado broker prepares and records closing documents and disburses funds, the broker:

Accepted Answer

Commission Position 19 says the broker becomes the Closing Company in that situation and must ensure the parties complete the Commission-approved Closing Instructions when they sign the contract.

Question 8

Quarterly HOA dues of $540 were paid by the seller for July through September (92 days). Closing is August 31, buyer owns the closing day. Using the actual days in the quarter, how much does the buyer owe the seller?

Accepted Answer

Daily rate: $540 / 92 = $5.8696. Buyer's days August 31 through September 30: 1 + 30 = 31 days. 31 x $5.8696 = $181.96. The seller prepaid, so the buyer owes the seller (credit seller, debit buyer). $186.00 wrongly uses a 90-day quarter, and $176.09 counts only 30 days, leaving out the closing day the buyer owns.

Question 9

A rectangular parcel measures 330 feet by 660 feet. How many acres does it contain?

Accepted Answer

Area = 330 x 660 = 217,800 sq ft; 217,800 / 43,560 = 5 acres.

Question 10

A lender approves a $276,000 loan and the buyer wants to keep an 80% LTV. What is the maximum purchase price?

Accepted Answer

Purchase price = loan / LTV = $276,000 / 0.80 = $345,000. ($220,800 wrongly multiplies by 0.80.)

Question 11

Under Commission Rule 5.7, earnest money received by a Colorado brokerage must be deposited no later than:

Accepted Answer

Rule 5.7.B sets the third business day after receipt or contract execution, whichever is later. Five business days applies to property management funds.

Question 12

A seller collected $1,950 rent for June (30 days) on June 1. Closing is June 21 and the buyer owns the closing day. The rent proration is:

Accepted Answer

Daily rent: $1,950 / 30 = $65. The buyer owns June 21 through 30, which is 10 days. 10 x $65 = $650, debited to the seller who collected it. $585 uses 9 days.

Question 13

A broker produces a buyer under a written, enforceable contract. The buyer refuses to close because the title commitment reveals a defect, and the seller fails to cure it within a reasonable time. Under C.R.S. 12-10-301, the commission:

Accepted Answer

Section 12-10-301 provides that when a buyer refuses to complete because of title defects, no commission is owed unless the owner corrects the defects within a reasonable time.

Question 14

Of the Colorado Real Estate Commission's members, how many must be licensed brokers?

Accepted Answer

Three of the five members are brokers with at least five years of Colorado experience, and the remaining two are public members. A board made entirely of brokers is the tempting wrong answer, but the law reserves two seats for the public.

Question 15

A borrower pays $4,500 for 1.5 discount points. What is the loan amount?

Accepted Answer

Loan = cost of points / points as a percentage = $4,500 / 0.015 = $300,000.

Question 16

A buyer purchases a $275,000 home with an 80% LTV loan and pays 2.5 discount points. What do the points cost?

Accepted Answer

Loan = $275,000 x 0.80 = $220,000; points = $220,000 x 0.025 = $5,500. ($6,875 wrongly applies points to the price.)

Question 17

What is the maximum fine the Colorado Real Estate Commission may impose on a broker?

Accepted Answer

C.R.S. 12-10-217 authorizes fines of up to $2,500 for each separate offense, in addition to censure, probation, suspension, or revocation.

Question 18

A lender offers a 95% LTV loan. The buyer has $18,000 for the down payment. What is the maximum purchase price?

Accepted Answer

At 95% LTV the down payment is 5% of price. Price = $18,000 / 0.05 = $360,000; loan = $342,000.

Question 19

A home sells for $520,000 with a 5% commission. The listing broker pays 2.5% to the buyer's broker and splits the listing side 60/40 with the listing salesperson (salesperson gets 60%). How much does the listing salesperson earn?

Accepted Answer

Total = $520,000 x 0.05 = $26,000. Buyer broker gets 2.5% = $13,000, leaving $13,000 for the listing side. Salesperson = $13,000 x 0.60 = $7,800.

Question 20

A buyer purchases a home for $425,000 with a loan of $361,250. What is the LTV?

Accepted Answer

LTV = loan / price = $361,250 / $425,000 = 0.85 = 85%. (15% is the down payment percentage.)

Question 21

Under the Code of Ethics, commission disputes between REALTORS associated with different firms are generally resolved through:

Accepted Answer

Article 17 requires REALTORS to mediate or arbitrate contractual and specific non-contractual disputes with other REALTORS through the association.

Question 22

An investor buys a rental house for $350,000; the land is valued at $75,000. Using straight-line depreciation over 27.5 years, the annual depreciation deduction is:

Accepted Answer

Only the building depreciates: $350,000 - $75,000 = $275,000; $275,000 / 27.5 = $10,000. Using the full price gives $12,727 (wrong).

Question 23

The seller of a rental property collected $1,800 rent for the month on the 1st. Closing is on the 10th, and the seller owns the day of closing (30-day month). What is the rent proration?

Accepted Answer

Daily rent = $1,800 / 30 = $60. Buyer owns days 11-30 = 20 days. 20 x $60 = $1,200, credited to the buyer because the seller collected rent for days the buyer will own.

Question 24

Annual taxes are $3,650. Using a 365-day year, what is the daily proration amount?

Accepted Answer

$3,650 / 365 = $10 per day. (The course's default convention is a 360-day year; this question specifies 365.)

Question 25

An associate broker applying to be an employing broker has 10 residential sales, 3 commercial sales, and 6 residential leases. Using the Rule 2.5.C point values (residential sale 3, commercial sale 6, residential lease 1), how many transaction points does the applicant have?

Accepted Answer

10 x 3 = 30; 3 x 6 = 18; 6 x 1 = 6. 30 + 18 + 6 = 54 points, which exceeds the 50-point minimum. The answer 48 omits the leases.

Colorado real estate math practice test

1. A listing agreement in which the broker earns a commission regardless of who sells the property is a(n):

2. On a broker's website, which is required by Colorado Commission rules?

3. A home sells for $389,000. The seller pays a 5% commission, a $212,600 mortgage payoff, $1,200 attorney fee, $1,950 transfer tax and $600 in other costs. What are the seller's net proceeds?

4. On the $20,000 commission above, the listing broker keeps 50% and pays 50% to the buyer's broker. How much does the buyer's broker receive?

5. When competing brokerages agree to charge the same commission rate, they commit:

6. According to Commission Position 27, a broker's duty to disclose adverse material facts is based on:

7. According to Commission Position 19, if a Colorado broker prepares and records closing documents and disburses funds, the broker:

8. Quarterly HOA dues of $540 were paid by the seller for July through September (92 days). Closing is August 31, buyer owns the closing day. Using the actual days in the quarter, how much does the buyer owe the seller?

9. A rectangular parcel measures 330 feet by 660 feet. How many acres does it contain?

10. A lender approves a $276,000 loan and the buyer wants to keep an 80% LTV. What is the maximum purchase price?

11. Under Commission Rule 5.7, earnest money received by a Colorado brokerage must be deposited no later than:

12. A seller collected $1,950 rent for June (30 days) on June 1. Closing is June 21 and the buyer owns the closing day. The rent proration is:

13. A broker produces a buyer under a written, enforceable contract. The buyer refuses to close because the title commitment reveals a defect, and the seller fails to cure it within a reasonable time. Under C.R.S. 12-10-301, the commission:

14. Of the Colorado Real Estate Commission's members, how many must be licensed brokers?

15. A borrower pays $4,500 for 1.5 discount points. What is the loan amount?

16. A buyer purchases a $275,000 home with an 80% LTV loan and pays 2.5 discount points. What do the points cost?

17. What is the maximum fine the Colorado Real Estate Commission may impose on a broker?

18. A lender offers a 95% LTV loan. The buyer has $18,000 for the down payment. What is the maximum purchase price?

19. A home sells for $520,000 with a 5% commission. The listing broker pays 2.5% to the buyer's broker and splits the listing side 60/40 with the listing salesperson (salesperson gets 60%). How much does the listing salesperson earn?

20. A buyer purchases a home for $425,000 with a loan of $361,250. What is the LTV?

21. Under the Code of Ethics, commission disputes between REALTORS associated with different firms are generally resolved through:

22. An investor buys a rental house for $350,000; the land is valued at $75,000. Using straight-line depreciation over 27.5 years, the annual depreciation deduction is:

23. The seller of a rental property collected $1,800 rent for the month on the 1st. Closing is on the 10th, and the seller owns the day of closing (30-day month). What is the rent proration?

24. Annual taxes are $3,650. Using a 365-day year, what is the daily proration amount?

25. An associate broker applying to be an employing broker has 10 residential sales, 3 commercial sales, and 6 residential leases. Using the Rule 2.5.C point values (residential sale 3, commercial sale 6, residential lease 1), how many transaction points does the applicant have?

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