Idaho Real Estate Broker Exam — All Questions

A new environmental ordinance leaves a landowner with no economically viable use of a parcel, although the government takes no title to it. The owner's strongest constitutional claim is:

• a.The ordinance is void because zoning cannot restrict use
• b.A regulatory taking entitling the owner to payment✓
• c.Escheat has occurred and the state now owns the parcel
• d.Spot zoning, since only this parcel lost its value

Regulation that goes so far it denies an owner all economically viable use is treated as a regulatory taking, and just compensation is owed even though the government never took title. Arguing that zoning simply cannot restrict use fails, because regulating land is a valid exercise of the police power and owners have no right to the most profitable use. Escheat moves property to the state only when an owner dies with no will and no heirs, which has nothing to do with an ordinance. Spot zoning describes singling out one parcel for a different classification, not a general environmental rule applied to a class of land.

Reviewing a title report, a broker finds an old recorded covenant, written decades ago, that bars resale of the lot to members of a specified race. Its legal effect today is:

• a.It binds the buyer because it was recorded before purchase
• b.It is void, so a court will never enforce it or enjoin it✓
• c.It stays valid until the homeowners association removes it
• d.It is enforceable by the association but not by an owner

A private restriction that discriminates on a protected basis is void and unenforceable under the federal Fair Housing Act and the Civil Rights Act of 1866, so no court will order compliance or enjoin a violation, and the association has no power the courts would back. Recording rescues nothing, because an illegal restriction gains no force from sitting in the public record. No association vote is required to strip it of effect, although many states let an owner have the language formally struck. Valid CC&Rs, by contrast, are enforced privately by injunction brought by an owner or the association. A broker must never repeat or give effect to such language.

A grantor signs and notarizes a deed naming a nephew as grantee, locks it in a safe deposit box, and tells no one. The grantor later dies. What is the deed's effect?

• a.Title passed when the grantor signed the deed
• b.Title passed because the deed was acknowledged
• c.No title passed, because delivery never occurred✓
• d.Title passes when the estate later records it

A deed operates only when the grantor delivers it with the present intent to pass title and the grantee accepts, and both must happen while the grantor is alive. Signing accomplishes nothing while the instrument stays under the grantor's control in a box no one knows about. Acknowledgment before a notary serves recording, not validity, so notarizing it changes nothing here. An estate representative cannot supply the delivery the grantor failed to make, and recording an undelivered deed does not revive it. The nephew takes only through the will or the intestacy statute, which is why closings hand over the executed deed rather than merely signing it.

A deed is signed by a competent grantor and handed to a grantee who accepts it, but the grantor's signature was never notarized. As between those two parties, the deed is:

• a.Void, since notarizing is a validity requirement
• b.Valid, though it cannot be recorded as it stands✓
• c.Valid only if the grantee later pays a recording fee
• d.Voidable at the option of the grantor's creditors

Acknowledgment is a recording requirement, not an element of a valid deed. Delivered and accepted, the deed transfers title between grantor and grantee even with no notary, but the recorder will reject it, leaving the grantee exposed to later purchasers and lienholders who record first. Calling it void confuses the two ideas: validity turns on a competent grantor, an identifiable grantee, words of conveyance, an adequate legal description, the grantor's signature, and delivery and acceptance. Paying a fee cannot cure a missing acknowledgment, because the recorder cannot accept the instrument at all. Creditors of the grantor gain no power to undo a completed conveyance.

In a deed, which clause opens with the words 'to have and to hold' and defines the extent of the estate the grantee is receiving?

• a.The granting clause containing the words of conveyance
• b.The habendum clause, following the granting clause✓
• c.The acknowledgment taken before a notary public officer
• d.The legal description identifying the land conveyed

The habendum clause follows the granting clause, begins with the traditional phrase 'to have and to hold,' and spells out the estate conveyed, for example a fee simple absolute or a life estate. The granting clause holds the words of conveyance that actually transfer the interest and names the grantee. The acknowledgment is the notary's certificate that the signature is genuine, which the recorder requires but the transfer does not. The legal description identifies the land by metes and bounds, lot and block, or government survey, and it fixes what is conveyed rather than how much of an estate. Reading both clauses tells a broker exactly what the buyer is getting.

A relocation company that has owned a home for three months conveys it, warranting title only against defects that arose during its own ownership. The deed it delivers is a:

• a.Bargain and sale deed implying ownership without covenants
• b.General warranty deed covering the entire chain of title
• c.Quitclaim deed conveying only the interest actually held
• d.Special (limited) warranty deed covering the grantor's period✓

Warranting only against defects created or suffered while the grantor held title describes the special or limited warranty deed, the customary instrument for corporate, relocation, and fiduciary sellers who cannot vouch for what earlier owners did. A general warranty deed reaches back through the whole history of the property and offers the broadest protection, which is more than this seller is giving. A quitclaim carries no warranties at all and passes only whatever interest the signer happens to hold. A bargain and sale deed implies that the grantor owns the property but adds few or no covenants. A buyer taking narrower covenants should lean on an owner's title policy.

A title search shows that a seller's former spouse may still hold a possible interest in the property. What is the usual instrument used to release that interest and clear the record?

• a.A quitclaim deed from the former spouse✓
• b.A general warranty deed from the former spouse
• c.A trustee's deed issued after a foreclosure
• d.A correction deed fixing the legal description

A quitclaim releases whatever interest the signer may hold, with no warranties attached, which makes it the standard tool for removing a cloud such as a possible marital interest, a stale easement claim, or a name discrepancy. Demanding a general warranty deed asks the former spouse to guarantee title he or she may never have owned, and it is normally refused. A trustee's deed is what the trustee under a deed of trust issues to the purchaser at a foreclosure sale. A correction deed reforms a mistake in an earlier deed between the same parties and cannot release an outsider's claim.

A court-appointed personal representative sells a decedent's home during probate, and the buyer's broker asks what instrument will convey title. The answer is:

• a.A trustee's deed given after a nonjudicial foreclosure
• b.A sheriff's deed issued following a judicial sale
• c.A general warranty deed with full title covenants
• d.An executor's or personal representative's deed✓

Estate property is conveyed by an executor's deed when a will names the executor, or by a personal representative's or administrator's deed when the court makes the appointment; these deeds recite the court authority and give only limited covenants. A trustee's deed comes from the trustee under a deed of trust after a nonjudicial foreclosure sale. A sheriff's deed, called a referee's deed in some states, follows a judicial sale ordered by a court. A general warranty deed is not used, because a fiduciary will not personally guarantee title against the acts of the decedent or of owners further back in the chain.

After closing under a general warranty deed, a buyer discovers a recorded utility easement that the deed never disclosed. Which covenant did the grantor breach?

• a.Quiet enjoyment, a promise against eviction by better title
• b.Seisin, a promise that the grantor owns the estate conveyed
• c.Against encumbrances, a promise of no undisclosed burdens✓
• d.Further assurance, a promise to sign curative papers

The covenant against encumbrances promises that no liens, easements, or similar burdens exist beyond those the deed discloses, so a recorded easement left unmentioned breaches it at the moment of delivery. Seisin promises the grantor actually owns the estate being conveyed, which is not the trouble when ownership is sound but burdened. Quiet enjoyment shields the grantee from later eviction by someone holding superior title, and an easement holder's use is not an eviction. Further assurance obliges the grantor to sign additional documents needed to perfect title. A general warranty deed carries all of these along with the right to convey and warranty forever.

A neighbor has openly farmed and fenced a strip of an absentee owner's land, excluding others and never asking permission. To take title by adverse possession the neighbor must prove:

• a.Payment of the owner's property taxes for every year
• b.Open, notorious, continuous, hostile, and exclusive possession✓
• c.A written agreement signed by the record title owner
• d.A recorded deed describing the disputed strip of land

Adverse possession requires possession that is open and notorious, continuous, hostile in the sense of being without permission, and exclusive, held for the statutory period set by state law. Some states add payment of taxes or color of title, but those elements are not universal, so a broker should never assume them from another state's rule. A written agreement from the record owner would destroy the claim outright, since permission defeats hostility. Recording a deed creates no possession and cannot manufacture the required years of use. Adverse possession is one form of involuntary alienation, alongside descent, escheat, foreclosure, eminent domain, and accretion.

An owner dies leaving no will, and after a diligent search no heirs can be located. A broker asked to list the property should understand that title:

• a.Passes by devise to the beneficiaries named in a will
• b.Descends to the decedent's nearest surviving creditors
• c.Vests permanently in the administrator the court appoints
• d.Escheats to the state, an involuntary transfer of title✓

Escheat is the state's claim to property when an owner dies intestate and no heirs can be found, and it is a classic involuntary transfer rather than a voluntary one by deed or will. Devise is a gift of real property by will, so it cannot operate where there is no will and no named beneficiary. Descent carries property to heirs under the intestacy statute, but creditors are paid as claimants out of the estate and never inherit the land itself. An administrator has authority to manage and convey estate property during probate, not to own it permanently. Each state sets its own escheat procedure and waiting period.

A search reveals an old mortgage of record that was paid off but never released, and the lender no longer exists. Which step clears that cloud so title is marketable?

• a.Ordering an abstract of title with an attorney's opinion
• b.Buying an owner's title policy that insures over it
• c.Filing a quiet title action asking a court to clear it✓
• d.Recording a correction deed signed by the current seller

A quiet title action asks a court to determine ownership and extinguish a stale or unreleasable claim, which is the practical cure when the mortgagee has vanished and no release can be obtained. An abstract of title with an attorney's opinion summarizes and evaluates the recorded chain; it reports the cloud rather than removing it, and it offers no indemnity. An owner's policy may insure over a known risk, but insurance pays for loss and leaves the defect on the record for the next buyer to confront. A correction deed fixes a drafting error between the original parties and cannot release a third party's lien.

A seller deeds a parcel to one buyer and later deeds the same parcel to a second buyer, who records first. Which framework decides who owns the land?

• a.A federal recording statute applied in all fifty states
• b.The state's recording act, race, notice, or race-notice✓
• c.The order in which the two deeds were signed and dated
• d.The county recorder's discretion over competing claims

Priority between competing grantees is governed by the recording act of the state where the land lies, and the schemes differ: a pure race state protects whoever records first, a notice state protects a later purchaser who took without notice of the earlier deed, and a race-notice state protects one who took without notice and recorded first. No federal statute governs land recording. Signing dates do not decide the contest, which is precisely why a public recording system exists. Recorders act ministerially and have no power to resolve claims. Because the gap between closing and recording is the danger zone, a broker should press for prompt recording.

A buyer pays for a lender's title policy at closing and asks the broker whether it also protects the buyer's equity in the home. The correct answer is that the policy:

• a.Protects both parties equally up to the full purchase price
• b.Protects the buyer once the mortgage has been fully repaid
• c.Protects the buyer against defects arising after closing
• d.Protects only the lender, declining with the balance✓

A lender's, or mortgagee's, policy insures only the lender's security interest, and its coverage shrinks as the principal is paid down, ending altogether when the loan is satisfied. It never covers the buyer's equity, which is why a separate owner's policy is offered at closing for a one-time premium and lasts as long as the insured holds an interest. Repaying the mortgage does not convert the lender's coverage into the buyer's; it extinguishes it. And no title policy insures defects that first arise after its date. Brokers should explain this plainly before a buyer waives owner's coverage to save money.

Six months after closing, a contractor the buyer hired records a mechanic's lien against the home. The buyer files a claim under the owner's title policy. The insurer will most likely:

• a.Deny, because the defect arose after the policy was issued✓
• b.Pay, because owner's policies cover all future liens
• c.Pay, because the standard exceptions were removed
• d.Deny, because only a lender may file a title claim

Title insurance looks backward: it covers defects that already existed when the policy was issued but were not discovered or excepted, not events that happen later. A lien for work the buyer ordered after closing is a new problem the buyer must resolve directly. Buying extended coverage removes standard exceptions and broadens what is insured as of the policy date, but it does not push coverage forward in time. Owners plainly may claim under their own policies; the lender's policy is the one limited to the lender. Extended coverage typically depends on a current survey, which reveals encroachments and boundary issues a records search alone cannot.

A buyer tours a house and finds an occupant who is not the seller living there under an unrecorded lease. What kind of notice does that occupancy give the buyer?

• a.Actual notice, given by the seller's written disclosure
• b.Constructive notice, given by the public record
• c.No notice at all, since the lease was not recorded
• d.Inquiry notice, requiring the buyer to ask about it✓

Someone in possession who is not the seller puts a buyer on inquiry notice: the buyer is charged with whatever a reasonable investigation of that occupancy would have turned up, including an unrecorded lease or an option to purchase. Actual notice is what a party genuinely knows, typically from a disclosure or a conversation, and no one has told this buyer anything. Constructive notice comes from the public record, which by definition cannot reveal an unrecorded lease. Treating an unrecorded interest as invisible is the classic error, because possession is itself notice. A broker should always ask who occupies a property and on what terms.

Which body licenses Idaho real estate brokers and adopts the rules governing their practice?

• a.The recorder of the county where the property lies
• b.The Idaho Association of Realtors
• c.The Idaho Department of Insurance
• d.The Idaho Real Estate Commission✓

Idaho Code 54-2005 creates the Idaho Real Estate Commission "for the purpose of administering this chapter," and 54-2007 charges it with "administering and enforcing all provisions of this chapter" and expressly vests it with authority to make and enforce the rules it deems necessary. Licensing and rulemaking are therefore state functions carried out by the Commission, which now sits within the Division of Occupational and Professional Licenses. The state Realtors group is a private trade association: membership is voluntary and its code binds only members, so it can neither grant nor revoke a license. The Department of Insurance regulates a different industry entirely. The county recorder maintains the public record of instruments affecting title under Title 55, chapter 8 — a record of what happened to land, not of who is qualified to broker it.

The largest civil penalty the Idaho Real Estate Commission may impose on a licensee who violates the license law is:

• a.One thousand dollars
• b.Two thousand five hundred dollars
• c.Five thousand dollars✓
• d.Twenty-five thousand dollars

Idaho Code 54-2059(1) lets the Commission "temporarily suspend or permanently revoke licenses," issue a formal reprimand, and "impose a civil penalty in an amount not to exceed five thousand dollars ($5,000)" against a licensee found to have violated the Idaho Code, the Commission's rules, or any Commission order. One thousand and two thousand five hundred dollars are both under the statutory ceiling and would understate the Commission's reach. Twenty-five thousand overstates it: the only ten-thousand-dollar figure in the chapter is in 54-2059(2) and 54-2065, which reach a limited liability company or corporation that acted without any license at all, and nothing in the chapter reaches twenty-five thousand. Civil penalties collected are credited to the occupational licenses fund and spent on Idaho real estate education.

An Idaho salesperson applying for a broker license must show active, full-time licensed experience of:

• a.One year within the three years before application
• b.Two years within the five years before application✓
• c.Three years within the seven years before application
• d.Five years within the ten years before application

Idaho Code 54-2012(2)(a) requires a broker or associate broker applicant to provide "satisfactory evidence of having been actively engaged, on a full-time basis, for two (2) years as a licensed real estate salesperson within the last five (5) years immediately prior to the date on which the individual makes application." The evidence must show productiveness commensurate with other licensees, and the Commission may ask for a report of listings and sales certified by the applicant's brokers. One year within three, three within seven, and five within ten are all invented pairings; the statute names exactly one pair. The window matters as much as the count — experience that is old enough to fall outside the five-year lookback does not qualify, though 54-2012(2)(a)(iii) lets the Commission modify the requirement for related background.

To renew an Idaho license on active status, the licensee must certify completion of:

• a.Two commission core courses plus twelve classroom hours✓
• b.Four commission core courses and nothing further
• c.A repeat of the licensing examination each renewal period
• d.Membership in a national association and its ethics course

Idaho Code 54-2023(1) requires each licensee renewing on active status, and each licensee moving from inactive to active, to "successfully complete two (2) commission core courses, plus twelve (12) classroom hours of continuing education credit." Four core courses with nothing further drops the twelve classroom hours that carry most of the requirement. Re-examination is not part of renewal anywhere in the chapter: 54-2014 places the exam at entry, and continuing education is what carries competence forward from there. Association membership is voluntary and cannot be a condition of a state license, though 54-2023(6)(d)(i) does let a licensee claim credit for a national designation course. Under 54-2018(5) a licensee who applies to renew active without the credit hours is subject to discipline.

Idaho Code 54-2053 requires all advertising of listed property to contain, clearly and conspicuously:

• a.The broker's licensed business name✓
• b.The listing associate's personal telephone number
• c.The property's assessed value for the current tax year
• d.The commission rate the seller agreed to pay

Idaho Code 54-2053(2) states that "all advertising of listed property shall clearly and conspicuously contain the broker's licensed business name," and subsection (3) extends the same rule to branch offices. The point is that a consumer reading an advertisement can always identify the licensed firm standing behind it. A personal telephone number identifies an individual rather than the licensed entity and is nowhere required. Assessed value is a county assessor's figure under Title 63 and has no place in the advertising rule; publishing it as though it were market value would risk the misleading-information standard in 54-2053(4). The commission rate is negotiated between broker and client and is not disclosed to the public. Note also that a new business name may not be used in advertising until the Commission approves the change.

An Idaho broker's website names several people who market Idaho property. Idaho Code 54-2053(1) permits naming only those who are:

• a.Members of the local association of Realtors
• b.Actively licensed in Idaho✓
• c.Employed full time rather than part time
• d.Residents of the county where the property lies

Idaho Code 54-2053(1) provides that "only licensees who are actively licensed in Idaho may be named by an Idaho broker in any type of advertising of Idaho real property, may advertise Idaho property in Idaho or may have a sign placed on Idaho property." Active Idaho licensure is the whole test. Association membership is private and voluntary and confers no authority to advertise Idaho property. Full-time status is not a licensing category at all; it appears in the chapter only in 54-2016(4)(b), where full-time work elsewhere raises a presumption that a branch manager cannot supervise. County residency is not required anywhere in the chapter, and a licensee's license is statewide. An unlicensed assistant or an out-of-state licensee without an Idaho license therefore may not be named in the advertisement.

An Idaho sales associate ends her licensed association with her broker. She must give the broker written notice of the termination no later than:

• a.Three business days after the effective date✓
• b.Ten business days after the effective date
• c.Thirty calendar days after the effective date
• d.The close of the current license period

Idaho Code 54-2056(1) requires a sales associate who terminates a licensed association to "provide the broker written notice of the termination no later than three (3) business days after the effective date," and imposes the mirror-image duty on a broker who terminates an associate. Ten business days is the separate clock in 54-2056(3) for notifying the Commission when the termination is for cause, and thirty days and the end of the license period appear nowhere in the section. The statute also warns that written notice to the Commission does not relieve either licensee of the duty to notify the other. Under 54-2056(5) the departing associate must immediately turn over listings, keys, contracts and other property belonging to the broker.

An Idaho sales associate may accept a commission for licensed activity from:

• a.The buyer, paid directly at the closing table
• b.The title company that handles the escrow
• c.The broker with whom the associate is licensed✓
• d.Any Idaho broker who took part in the sale

Idaho Code 54-2054(9) provides that "no sales associate shall accept any commission, compensation or fee for the performance of any acts requiring a real estate license from any person except the real estate broker with whom the sales associate is licensed." Payment direct from the buyer bypasses the broker who is accountable for the transaction, and the same objection defeats payment from the title company, which merely disburses what the closing statement directs. Payment from any participating broker fails too: a cooperating broker pays the associate's own broker, not the associate. The narrow exceptions in the same subsection let an associate share with another associate of the same broker if the broker authorizes it, and take payment from an unlicensed entity the broker paid under 54-2054(2).

An Idaho broker intends to be paid by both the buyer and the seller in one transaction. Idaho Code 54-2054(7) allows this only if the broker first:

• a.Obtains the Commission's written approval of the arrangement
• b.Makes full disclosure in writing to all parties involved✓
• c.Reduces each of the two fees by one half
• d.Records the fee arrangement with the county recorder

Idaho Code 54-2054(7) states that no licensee "shall charge or accept compensation from more than one (1) party in any one (1) transaction, without first making full disclosure in writing of the broker's intent to do so, to all parties involved in the transaction." Disclosure in writing, in advance, to everyone, is the entire condition. The Commission does not pre-approve individual fee arrangements; it disciplines licensees who fail to disclose them. Halving the fees changes the amount but not the conflict, and the statute conditions the practice on disclosure rather than on price. Recording is for instruments affecting title under 55-813, not for compensation agreements. A related rule in 54-2054(6) requires written disclosure before closing of any rebate or fee a licensee will receive from a service provider.

Idaho Code 54-2049 requires a broker to keep transaction files, trust ledgers and reconciliation records for:

• a.One calendar year after the year the event occurred
• b.Three calendar years after the year the event occurred✓
• c.Five calendar years after the year the event occurred
• d.Seven calendar years after the year the event occurred

Idaho Code 54-2049 requires the listed records to be "kept by a broker for three (3) calendar years after the year in which the event occurred, the transaction closed, all funds were disbursed, or the agreement and any written extension expired." The list itself is worth memorizing: accepted, countered and rejected offers; listing and buyer representation agreements and consent-to-limited-dual-representation forms; transaction files; trust account ledger records; and all trust account reconciliation records. One year is shorter than the statute allows and would destroy records while the Commission could still audit them. Five and seven years are longer than the statute requires; seven years is the property-tax recovery period in 63-602G(6), not a real estate retention rule. The clock runs from the end of the year, not the date of the event.

An Idaho sales associate obtains a seller's signature on a counteroffer. A true and legible copy must reach the designated broker's office:

• a.Before the end of the next business day✓
• b.Within three business days of the signing
• c.Within ten business days of the signing
• d.At the time the transaction closes

Idaho Code 54-2051(3) provides that upon obtaining any document signed by a buyer or seller, "a sales associate shall provide a true and legible copy of such document to the designated broker or broker's office prior to the end of the next business day," and the same subsection requires a fully executed purchase and sale agreement, counteroffer or addendum to go to both the buyer and the seller as well. Three and ten business days would leave the broker who answers to the Commission for the file unaware of a live document for most of a week. Waiting until closing is worse still, since the broker must review and approve agreements under 54-2038(1)(b) while the deal is alive. The identical next-business-day rule applies to signed brokerage representation agreements under 54-2050(4).

A buyer hands an Idaho salesperson an earnest-money check along with a written offer. Idaho Code 54-2045(4) requires the salesperson to:

• a.Deposit it in her own account and remit to the broker
• b.Hold it until the seller accepts, then mail it to the seller
• c.Endorse it over to the title company named in the offer
• d.Deliver it immediately to the broker or the broker's office✓

Idaho Code 54-2045(4) provides that "all consideration, including cash, checks held in uncashed form and promissory notes, received by a sales associate in connection with a real estate transaction shall be immediately delivered to the broker or the broker's office." An associate never holds client money in a personal account; under 54-2041 the broker is responsible for everything entrusted to any licensee representing the broker. Holding the check until acceptance is a decision about deposit timing, not delivery: 54-2045(2) does permit a check to be held uncashed, but only with written instructions in the offer, and the associate must still get it to the broker first. Endorsing it to the title company requires the written instruction of both parties under 54-2041(1), which an unaccepted offer has not yet produced.

An Idaho broker receives entrusted money and has no written instruction to do otherwise. Idaho Code 54-2045(1) requires deposit:

• a.On or before the banking day immediately following receipt✓
• b.Within three banking days after the day of receipt
• c.Within five banking days after the day of receipt
• d.On or before the day the transaction is scheduled to close

Idaho Code 54-2045(1) states that "all moneys received by a broker for another in a real estate transaction are to be deposited on or before the banking day immediately following the receipt day of such funds, unless written instructions signed by the party or parties having an interest in the funds direct the broker to do otherwise." Three and five banking days are longer windows the statute does not grant, and holding funds until closing would leave client money outside a trust account for the life of the transaction. The only lawful delay is the written instruction the statute names — typically a direction in the purchase and sale agreement to hold the check uncashed until the seller accepts. Note that 54-2041(2) states the general rule even more sharply: "immediately upon receipt, the broker shall deposit entrusted moneys in a neutral, qualified trust fund account."

An Idaho broker who manages rentals for several owners must hold the rents and security deposits:

• a.In the brokerage operating account with a monthly summary
• b.In each owner's own bank account under that owner's name
• c.In a real estate trust account with a ledger for each owner✓
• d.In an interest-bearing account with the interest paid to the broker

Money a broker holds for another in a regulated real estate transaction goes into a real estate trust account under Idaho Code 54-2041 and 54-2045, and 54-2044(2) requires an individual trust ledger to be created "whenever a broker, or any licensed or unlicensed person representing the broker, receives earnest money or other consideration," showing the parties, the property, each deposit and disbursement and the current balance. A pooled operating account fails twice: 54-2041(3) forbids commingling entrusted money with the broker's own, and a summary is not the ledger the statute describes. Leaving funds in the owner's personal account puts them outside the broker's control, yet 54-2041(5) keeps the broker accountable until a full accounting is given. Interest is the sharpest error: 54-2042(1) requires trust accounts to be noninterest-bearing, and the single-transaction exception in 54-2043 needs both parties' written direction and a written agreement on who receives the interest.

Idaho Code 54-2042(7) caps the broker's own funds held in a real estate trust account at:

• a.One hundred dollars
• b.Three hundred dollars✓
• c.One thousand dollars
• d.Two thousand five hundred dollars

Idaho Code 54-2042(7) permits a broker to deposit firm funds "for the purpose of opening and maintaining the account and for the payment of anticipated bank service charges," then sets the limit: "in no event shall the balance of broker or firm funds in the account exceed three hundred dollars ($300)." The same subsection adds that those maintenance funds may not be disbursed for any purpose other than bank charges levied directly on the trust account. One hundred dollars is below the figure the statute allows and would understate what a broker may lawfully keep on deposit; one thousand and two thousand five hundred exceed the cap and would be commingling under 54-2041(3). Idaho also requires a separate maintenance-fund ledger for these dollars under 54-2044(1), filed with the broker's current open ledgers and kept current at all times.

An Idaho seller has already accepted an offer when a second written offer arrives before closing. The listing broker must:

• a.Present the second offer only if it beats the accepted price
• b.Hold the second offer unless the pending transaction collapses
• c.Return the second offer because the property is under contract
• d.Tender the second offer to the seller as promptly as practicable✓

Idaho Code 54-2051(1) requires a broker or sales associate "as promptly as practicable, to tender to the seller every written offer to purchase obtained on the real estate involved, up until time of closing," and adds that a purchase and sale agreement signed by a prospective buyer "shall be deemed in all respects an offer to purchase." The phrase "up until time of closing" is what decides this item: an accepted offer does not switch the duty off. Holding the offer in reserve, returning it, and screening it against the accepted price all substitute the licensee's judgment for the seller's, and the client is entitled under 54-2087(3) to receive and timely consider all written offers. Whether the seller may accept a second offer is a contract question for the seller and the seller's lawyer, not a reason to withhold it.

A transaction collapses and both parties demand the earnest money the Idaho broker holds. Idaho Code 54-2047 first requires the broker to:

• a.Notify each party in writing of the other party's demand✓
• b.Deposit the money with the Idaho Real Estate Commission
• c.Divide the deposit equally and close out the ledger
• d.File an interpleader action in the district court

Idaho Code 54-2047(1) requires that whenever more than one party makes demand on funds the broker holds, the broker shall "notify each party, in writing, of the demand of the other party" and keep all parties informed of any action taken with the disputed money. Written notice comes first; only then do the options in subsections (2) and (3) open up. The Commission regulates and audits trust accounts under 54-2058(2) but is not a depository, so sending it the money would leave no one accountable for the deposit. Splitting the money down the middle substitutes the broker's convenience for the contract; 54-2047(2) lets the broker disburse only by reasonably relying on the terms of the purchase and sale agreement, and warns that even a proper discretionary disbursement may still expose the broker to civil liability. Interpleader is the parties' or a court's route, while the broker may simply hold the funds under 54-2047(3) pending a court order.

An Idaho designated broker moves the brokerage to a new location without notifying the Commission. Under Idaho Code 54-2040(1):

• a.The license previously issued is automatically inactivated✓
• b.A late fee accrues but the license remains in full force
• c.Nothing occurs until the next scheduled license renewal
• d.The branch manager becomes the responsible broker instead

Idaho Code 54-2040(1) requires each designated broker to maintain a definite, physical place of business, requires written notice to the Commission of any change of business name, location or mailing address, and then states the consequence plainly: "a change of business name or location without notification to the commission shall automatically inactivate the license previously issued." The same subsection bars using a new location as the main office until the Commission acknowledges proper notice. A late fee is the mechanism 54-2018(3) uses for a late renewal, not for an unreported move. Waiting for the renewal cycle would let an unlocatable brokerage keep trading. And nothing in the chapter transfers the designated broker's responsibility to a branch manager; under 54-2039(4) the original designated broker remains responsible for trust funds, pending transactions and records.

An Idaho broker pays the brokerage's office rent out of money held in the real estate trust account. This is:

• a.Permitted, if the broker restores the funds before closing
• b.Permitted, because the broker controls the trust account
• c.A violation of license law and grounds for discipline✓
• d.A private matter between the broker and the depository

Idaho Code 54-2046 states that all funds "must be disbursed from the real estate trust account only in accordance with this section" and that "failure to comply with this section is a violation of license law and will subject the broker to discipline"; subsection (1) permits no disbursement at all without written, signed authorization from the parties or a court order. Office rent has neither. Restoring the money later does not cure the disbursement, and 54-2060(3) makes failure to account for or remit money belonging to another an independent ground for discipline. Control of the account is exactly why the duty attaches: under 54-2042(3) the account is under the broker's full control and under 54-2041(5) the broker remains accountable until a full accounting is given. And this is not a private banking dispute — 54-2058(2) gives the Commission authority to audit the account and 54-2059(1) to revoke the license.

Under Idaho Code 54-2084(1), agency representation of a buyer or seller in Idaho arises:

• a.Orally, provided the licensee notes it in the transaction file
• b.By implication, from the way the licensee has acted
• c.Only by a separate written document the parties agree to✓
• d.Automatically, once a purchase and sale agreement is drafted

Idaho Code 54-2084(1) is categorical: "a buyer or seller is not represented by a brokerage in a regulated real estate transaction unless the buyer or seller and the brokerage agree, in a separate written document, to such representation. No type of agency representation may be assumed by a brokerage, buyer or seller or created orally or by implication." That single sentence disposes of the oral option and the implied one by name. Definition 54-2083(16) repeats it: a representation agreement "can only be made in writing, and cannot be made orally or by assumption or implication." Preparing a purchase and sale agreement creates nothing either — 54-2085(6) provides that neither the Commission brochure nor the representation confirmation creates a brokerage relationship, and 54-2089 adds that even a written agreement to pay compensation does not create one.

Idaho Code 54-2050 requires every seller representation agreement to contain:

• a.Conspicuous and definite beginning and expiration dates✓
• b.A metes-and-bounds legal description of the property
• c.The commission rate customary in the local market
• d.Notice the seller must give before canceling the listing

Idaho Code 54-2050(1)(a) requires "conspicuous and definite beginning and expiration dates" in each seller representation agreement, exclusive or not, alongside a sufficient description of the property, price and terms, all fees or commissions, and the owner's signature and its date. A metes-and-bounds description is expressly not required: 54-2050(1)(b) says nothing in the section requires a legal or metes-and-bounds description and that an agreement is not invalid for lacking one. A customary market rate is not a required element and is not a legal concept in Idaho — fees are negotiated in each engagement. And the notice-to-cancel option is not merely unnecessary but prohibited: 54-2050(3) bars any provision requiring the signing party to notify the broker of an intention to cancel after the definite expiration date, unless the agreement is completely nonexclusive and carries no financial obligation.

An Idaho brokerage represents both the buyer and the seller in the same transaction. Idaho law treats the brokerage as:

• a.A universal agent acting for both parties at once
• b.A limited dual agent, with written consent of both clients✓
• c.A nonagent that owes neither party any duty at all
• d.A subagent of the multiple listing service that published it

Idaho Code 54-2088(1) provides that "a brokerage may represent both the buyer and the seller in the same transaction only as a limited dual agent and only with the express written consent of all other clients involved in the transaction," and 54-2088(3) prescribes the exact consent language. The word limited carries the substance: under 54-2088(4)(b) a limited dual agent has no duty of undivided loyalty to either client. Universal agency means authority to act for a principal across essentially all matters, which is far broader than one transaction and impossible to hold for two opposed parties. Nonagency is a different relationship entirely, defined in 54-2083(13) and carrying the mandatory customer duties of 54-2086, so it is wrong to say no duties are owed. And a multiple listing service is a private cooperative listing platform; Idaho recognizes only the four relationships listed in 54-2084(2), and subagency is not among them.

An Idaho brokerage acting as a limited dual agent assigns separate sales associates to the buyer and the seller. Idaho Code 54-2088(2) provides that:

• a.The assignment ends the brokerage's limited dual agency
• b.The designated broker must serve as one of the assigned agents
• c.Each assigned agent becomes a limited dual agent as well
• d.The designated broker may not serve as an assigned agent✓

Idaho Code 54-2088(2) permits assigned agency at the brokerage's option and with the express written consent of the clients, and closes with a flat prohibition: "the designated broker shall not act as an assigned agent of the brokerage." Definition 54-2083(3) repeats the sentence. The reason appears in 54-2088(5)(a): the designated broker continues as limited dual agent of each client with the duty to supervise the assigned agents, to refrain from advocating for one client over another, and to refrain from disclosing another client's confidential information — a supervisory role that cannot coexist with advocating solely for one side. The assigned agents are not themselves dual agents; each represents one client solely under the duties in 54-2087. And the assignment does not end the dual agency; 54-2088(5)(b) merely blocks imputed knowledge from reaching an assigned agent.

An Idaho licensee shows homes to a buyer who has signed no representation agreement. The licensee is:

• a.A buyer's agent by default, owing the full agency duties
• b.The seller's subagent, whatever the written agreements say
• c.A limited dual agent as soon as an offer is prepared
• d.A nonagent who must still disclose adverse material facts✓

With no written agreement there is no representation under Idaho Code 54-2084(1), so the buyer is a customer under 54-2083(7) and the brokerage is a nonagent under 54-2083(13). The duties do not disappear: 54-2086(1) requires ministerial acts performed with "honesty, good faith, reasonable skill and care," proper accounting for money, and disclosure to the buyer/customer of "all adverse material facts actually known or which reasonably should have been known by the licensee," and 54-2086(3) makes those duties non-waivable. Treating the buyer as a represented client by default would impose the 54-2087 duties nobody agreed to. Subagency is not one of the four relationships in 54-2084(2). And limited dual agency requires express written consent under 54-2088(1), which writing an offer does not supply.

Under Idaho Code 54-2094, the duties a brokerage owes a represented client in Idaho are:

• a.Fiduciary in nature, and enforceable by equitable remedies
• b.Not fiduciary, unless greater duties are agreed in writing✓
• c.Identical in every respect to the common law of agency
• d.Whatever the local association's code of ethics prescribes

Idaho Code 54-2094 says the act "is intended to abrogate the common law of agency as it applies to regulated real estate transactions" and that "unless greater duties are specifically agreed to in writing between the brokerage and a represented client, the duties and obligations owed to a represented client in a regulated real estate transaction are not fiduciary in nature and are not subject to equitable remedies for breach of fiduciary duty." This is the trap for a candidate who studied national agency law: the statutory duties in 54-2087 are real and non-waivable, but they are statutory rather than fiduciary. Calling them fiduciary inverts the section. Saying Idaho simply follows the common law inverts it too, since the act was written to displace that law. And a private association's ethics code binds its members by contract; it cannot set the duties a statute defines.

An Idaho listing expires without a sale. Under Idaho Code 54-2092, the brokerage still owes the former client:

• a.A continuing duty to market the property until it sells
• b.A refund of the advertising costs the client had paid
• c.No duty of any kind, once the agreement's term has run
• d.An accounting for money received, and confidentiality✓

Idaho Code 54-2092 provides that "except as otherwise agreed in writing, a brokerage owes no further duty or obligation to a client after termination of the agreed representation except" accounting for all money and property received during the representation and maintaining the confidentiality of all confidential client information. Two duties survive, and they are named. Marketing does not survive: 54-2091(1) ends the relationship at the earliest of performance, agreement of the parties, or expiration of the agreement. No refund duty appears anywhere in the act; what the client owes or is owed is a matter of the written agreement's terms. And saying nothing survives ignores the express exceptions — indeed 54-2087(6)(a) keeps the confidentiality duty running beyond termination for as long as the information stays confidential and does not become generally known from another source.

An Idaho limited dual agent learns the seller would take less than the listing price. Without the seller's written permission, the agent may:

• a.Tell the buyer, since a dual agent represents both sides
• b.Tell the buyer, but only in answer to a direct question
• c.Not tell the buyer, even though the buyer is also a client✓
• d.Not tell the buyer, unless the buyer's offer is already higher

Idaho Code 54-2088(4)(a) lists four things a limited dual agent "shall not disclose" without the express written consent of the client to whom the information pertains: that a buyer will pay more than the listing price; that a seller will accept less than the listing price; the factors motivating either to buy or sell; and that either will agree to price or financing terms other than those offered. That the buyer is also a client is precisely the situation the subsection governs, so representing both sides is no license to disclose. Answering a direct question is no exception either — the consent form in 54-2088(3) warns both clients that the brokerage "cannot legally disclose" this category of information. The size of the buyer's offer is irrelevant to the prohibition. The clean route is the written permission the statute names.

Idaho Code 54-2085(1) requires a licensee to give a prospective buyer or seller the Commission's agency disclosure brochure:

• a.At the first substantial business contact✓
• b.Before the buyer's written offer is signed and dated
• c.Within ten days after the seller accepts an offer
• d.At closing, together with the settlement statement

Idaho Code 54-2085(1) reads: "a licensee shall give to a prospective buyer or seller at the first substantial business contact the agency disclosure brochure adopted or approved by the Idaho real estate commission," and requires each brokerage to keep a signed and dated record of receipt. The brochure exists so a consumer can choose a relationship before anything is at stake, which is why the trigger is the first substantial contact rather than any document. Signing the offer is later, and by then the consumer has negotiated without knowing whom the licensee served. Ten days after acceptance and delivery at closing are later still. Do not confuse this clock with the second one in 54-2085(3), which requires the relationship to be determined and the necessary agreements executed no later than the preparation of a purchase and sale agreement. Failure on either clock is a violation under 54-2085(5).

Idaho Code 54-2085(3) sets a second deadline. A brokerage's relationship with each party must be determined and all necessary agreements executed:

• a.No later than the first showing of the listed property
• b.Within three business days after an offer is accepted
• c.Before the listing appears in the multiple listing service
• d.No later than the preparation of a purchase and sale agreement✓

Idaho Code 54-2085(3) provides that a brokerage's relationship with a buyer or seller "as an agent, nonagent, limited dual agent, or limited dual agent with assigned agents must be determined and all necessary agreements executed no later than the preparation of a purchase and sale agreement," and that the brokerage must disclose its relationship to both buyer and seller no later than the preparation or presentation of that agreement. Idaho runs two separate clocks and the exam tests both: the brochure at first substantial business contact under 54-2085(1), and the relationship settled by the time the agreement is drafted under 54-2085(3). The first showing and the MLS publication are earlier events the statute does not use, and three business days after acceptance is later than the statute allows. The written confirmation in 54-2085(4) then rides on the agreement itself.

An Idaho home closes on September 1. The annual property tax is $2,190 and the seller has paid none of it. Prorate on a 365-day year, with the day of closing belonging to the buyer. The seller's share is:

• a.$1,095
• b.$1,458✓
• c.$1,464
• d.$732

Work the daily rate first: $2,190 divided by 365 equals $6.00 per day. Because the day of closing belongs to the buyer, the seller owns January 1 through August 31 — 31 + 28 + 31 + 30 + 31 + 30 + 31 + 31 = 243 days. At $6.00 a day that is $1,458, and it appears on the settlement statement as a debit to the seller and a credit to the buyer, because Idaho property taxes for a calendar year are not paid until December 20 and June 20 under Idaho Code 63-903. $1,464 is 244 days, the figure you get by giving the seller the day of closing, which this question assigned to the buyer. $732 is the buyer's own share — the 122 days from September 1 through December 31. $1,095 is simply half the annual tax, which would be right only for a June 30 closing. The Pearson VUE handbook states that any proration item will tell you the day-count basis and who owns the closing day, so read for both.

An Idaho property sells for $412,000. The listing agreement sets a 6% commission, split equally between the listing and cooperating brokerages. The listing brokerage pays its sales associate 60% of its own share. The associate receives:

• a.$4,944
• b.$12,360
• c.$14,832
• d.$7,416✓

Three steps, in order. Total commission: 6% of $412,000 = $24,720. The listing brokerage's half: $12,360. The associate's 60% of that half: $7,416. $12,360 stops one step early and reports the brokerage's share rather than the associate's. $4,944 applies 40% instead of 60% — the brokerage's retained portion, not the associate's. $14,832 takes 60% of the whole $24,720 and forgets the cooperating brokerage entirely. Remember that under Idaho Code 54-2054(9) the associate takes this payment only from the broker with whom the associate is licensed, never from the cooperating brokerage or the closing agent, and under 54-2046(4) no part of any commission leaves the trust account until the buyer and seller have signed the closing statements and been paid what the statement shows they are due.

An Idaho home sells for $355,000. The seller pays a 5% brokerage fee, a $1,275 title policy, $340 in recording and closing fees, and pays off a loan balance of $198,600. Ignoring prorations, the seller nets:

• a.$137,035✓
• b.$137,375
• c.$138,310
• d.$154,785

Total the seller's charges, then subtract from the price. The brokerage fee is 5% of $355,000 = $17,750. Charges are $17,750 + $1,275 + $340 + $198,600 = $217,965. $355,000 - $217,965 = $137,035. Each distractor is one omission. $137,375 leaves out the $340 in recording and closing fees. $138,310 leaves out the $1,275 title policy. $154,785 leaves out the commission altogether, which is the largest single charge after the loan payoff. In practice the responsible broker is the one accountable for this arithmetic: Idaho Code 54-2048(1) requires the broker to "ensure the correctness and delivery of detailed closing statements that accurately reflect all receipts and disbursements" to both buyer and seller, even when a title company or escrow agent performs the closing.

An Idaho parcel measures 1,320 feet by 990 feet and is listed at $457,875. Using 43,560 square feet to the acre, the listing price per acre is:

• a.$7,631.25
• b.$10,175.00
• c.$15,262.50✓
• d.$30,525.00

Area first: 1,320 x 990 = 1,306,800 square feet. Divide by 43,560 square feet per acre and the parcel is exactly 30 acres. $457,875 divided by 30 = $15,262.50 per acre. $30,525.00 is the price per acre if you used 15 acres, the error you get by halving the area or by dividing the 1,320-foot side rather than multiplying. $10,175.00 assumes 45 acres and $7,631.25 assumes 60 acres, both of which come from mis-scaling the conversion. The Pearson VUE candidate handbook tells you that 43,560 square feet per acre and 5,280 feet per mile are not supplied at the test center and must be memorized, and it instructs candidates to round calculations to the nearest whole number where applicable.

An owner-occupied Idaho home has a market value for assessment purposes of $400,000 and qualifies for the homestead exemption. The combined levy rate is 0.9%. The annual property tax is:

• a.$1,800
• b.$2,475✓
• c.$2,250
• d.$3,600

Idaho Code 63-602G(1) exempts the lesser of the first $125,000 of the homestead's market value for assessment purposes or 50% of that value. Half of $400,000 is $200,000, so the lesser figure — and the exemption actually granted — is $125,000. Taxable value is $400,000 - $125,000 = $275,000, and $275,000 x 0.009 = $2,475. $3,600 ignores the exemption and taxes the full $400,000. $1,800 applies a flat 50% exemption and forgets that the statute takes whichever figure is lesser. $2,250 uses a $150,000 exemption, a figure the section does not contain. Note the qualifying conditions in 63-602G(2)(a): the homestead must be owner-occupied and used as the owner's primary dwelling place, and under subsection (4) the owner ordinarily applies only once so long as the same owner keeps occupying the same homestead.