Arkansas Real Estate Salesperson Exam — All Questions

Earnest money an Arkansas salesperson receives from a buyer must be:

• a.Given directly to the seller with the offer
• b.Delivered promptly to the principal broker for deposit in the firm's trust account✓
• c.Deposited in the salesperson's personal account
• d.Held by the salesperson until closing

Trust funds, including earnest money, are handled through the firm's trust account, for which the principal broker is responsible. A salesperson who receives such funds must deliver them promptly to the principal broker. Commingling or converting trust money is a serious violation of Arkansas license law.

Trust funds delivered to an Arkansas principal broker must be deposited, delivered to an escrow agent, or handled under a written agreement of the parties no later than three days following:

• a.The date the licensee personally receives the funds from the buyer
• b.Execution of the real estate contract by both seller and buyer✓
• c.Acceptance of the buyer's written offer by the seller alone
• d.The date the inspection contingency in the contract ends

No later than three days following execution of a real estate contract by both seller and buyer, trust funds delivered to the principal broker must be deposited in the trust account, delivered to an escrow agent, or deposited under a written agreement of the seller and buyer. If the third day is a Saturday, Sunday, or legal holiday, it extends to the next day that is not. Cite: 17 CAR Sec. 220-1007(g)(1).

An Arkansas broker's trust account must be non-interest-bearing except as specifically authorized, must be federally insured, and its name must include:

• a.The word trust or the word escrow✓
• b.The principal broker's full legal name
• c.The words client funds and the firm's license number
• d.The word fiduciary and the year the account was opened

The trust account must be non-interest-bearing except as authorized, the name on the account must include either trust or escrow, and the account must be at an institution insured by the FDIC or another federal insuring agency. Cite: 17 CAR Sec. 220-1007(c)(4), (5).

An Arkansas principal broker may keep personal funds in the firm's trust account only to cover a bank-required minimum balance and service charges, and the service-charge cushion may not exceed:

• a.One month of service charges
• b.Three months of service charges
• c.Six months of service charges✓
• d.Twelve months of service charges

The broker's own clearly identified funds may be kept in the trust account only for a bank-required minimum balance and for a reasonable amount to cover service charges, which shall not exceed the total of six months service charges. Cite: 17 CAR Sec. 220-1007(d).

Arkansas trust account bank statements must be reconciled in writing:

• a.Each quarter, and the reconciliations kept for one year
• b.Twice a year, and the reconciliations kept for five years
• c.Whenever the Commission requests an audit of the account
• d.At least monthly, and the reconciliations kept for at least three years✓

All trust account bank statements must be reconciled in writing at least monthly and balanced to the total undisbursed trust funds, and copies of the reconciliations must be kept by the broker for at least three years or longer if other law requires. Cite: 17 CAR Sec. 220-1007(g)(2).

Which of the following is NOT one of the circumstances in which an Arkansas broker is deemed to have properly disbursed trust funds?

• a.When the broker decides the buyer has breached the contract✓
• b.Upon the rejection of an offer to buy, sell, rent, lease, exchange, or option real estate
• c.Upon the filing of an interpleader action in a court of competent jurisdiction
• d.Upon securing a written agreement signed by all parties having an interest in the funds

The rule lists the disbursements deemed proper: rejection of an offer, withdrawal of an unaccepted offer, closing, a separate written agreement signed by all parties with an interest, an interpleader action, a court order, or a reasonable interpretation of the contract. A broker's own view that a party breached is not on the list. Cite: 17 CAR Sec. 220-1008(c).

When an Arkansas broker disburses trust funds without the express written agreement of all parties to the contract, the broker must:

• a.File a copy of the disbursement record with the Commission
• b.Immediately notify all parties in writing of the disbursement✓
• c.Hold the remaining balance until the parties sign a release
• d.Obtain a court order confirming the disbursement was proper

When a broker makes a disbursement to which all parties to the contract have not expressly agreed in writing, the broker must immediately notify all parties in writing of the disbursement. Cite: 17 CAR Sec. 220-1008(d).

Real estate forms used by Arkansas licensees in the regular course of business must be approved before use by:

• a.The Arkansas Real Estate Commission
• b.The principal broker of the firm
• c.A licensed Arkansas attorney✓
• d.The Arkansas REALTORS Association

In compliance with Pope County Bar Association, Inc. v. Suggs, real estate forms used by licensees in the regular course of business must be approved by a licensed Arkansas attorney prior to use, and the licensee must be able to produce evidence of that approval. Cite: 17 CAR Sec. 220-1009(c).

An Arkansas selling licensee who receives an offer on property listed exclusively by another firm must present that offer to the listing firm:

• a.Immediately, and in no case more than two hours after receiving it
• b.Within three days after the licensee receives the written offer
• c.At the same time the earnest money is deposited in trust
• d.Not later than the close of the next business day after receipt✓

Offers received by the selling licensee must be presented to the firm holding the exclusive listing contract not later than the close of the next business day after receipt, and earnest money and deposits must be forwarded to the listing firm for deposit in its trust account. Cite: 17 CAR Sec. 220-1012(a)(2), (3).

A broker's price opinion prepared by an Arkansas licensee must not contain the terms:

• a.Market value, appraised value, or appraisal✓
• b.Probable selling price or estimate
• c.Capitalization rate or comparable sale
• d.Limiting condition or assumption

A broker's price opinion or market analysis issued by a licensee shall not contain the terms market value, appraised value, or appraisal, and use of those terms is presumed to violate the statute and subject to sanctions. Cite: Ark. Code Ann. Sec. 17-42-110(d).

Before an Arkansas licensee buys, sells, rents, or leases property for the licensee's own account, the licensee must disclose that interest and licensed status:

• a.Orally, at the first substantive contact with the other party to the deal
• b.In writing, before the sales, rental, or lease contract is entered into✓
• c.In writing, at any time before the transaction actually closes
• d.To the Commission on the disclosure form that it prescribes

Licensees must make full disclosure of the exact facts that they hold a real estate license and are acting for their own account or have an interest in the property, and all such disclosures must be made in writing before the sales, rental, or lease contract is entered into. Cite: 17 CAR Sec. 220-1010.

Which statement about property condition disclosure in Arkansas is correct?

• a.Every seller of residential property must deliver a state disclosure form before closing
• b.A seller may deliver the state form up to three days after the contract is signed
• c.No statute makes every seller disclose condition, but licensees must seek material facts✓
• d.Only sellers of homes built before 1978 must complete a condition disclosure

The Arkansas Real Estate Commission states that no state law requires every property owner to disclose the condition of the property being sold. The licensee's duty comes from Commission rule: exert reasonable efforts to ascertain facts material to the value or desirability of the property so as to avoid misrepresentation. Cite: 17 CAR Sec. 220-1005.