Missouri Real Estate Broker Exam — All Questions

Before showing residential property, what must a Missouri broker hold under 20 CSR 2250-8.090(2)?

• a.A currently effective written buyer's agency agreement with the person being shown the property
• b.A currently effective oral or written listing authorization from the property's owner or the owner's duly authorized agent
• c.A currently effective written seller's agency or transaction brokerage agreement, or other written authorization to show✓
• d.A currently effective written authorization from the multiple listing service carrying the property

20 CSR 2250-8.090(2) provides that "A licensee shall not show residential property unless a broker holds a currently effective written seller's/lessor's agency agreement, seller's/lessor's transaction brokerage agreement, or other written authorization to show." The authority to show comes from the seller's side and must be in writing, so an oral authorization fails. A buyer's agency agreement addresses the licensee's relationship with the buyer and confers no right to enter someone else's property. A multiple listing service is a private cooperative whose rules bind its members; it is not the source of legal authority to show. The related rule 8.090(1) adds that a licensee "shall not advertise or place a sign upon any property offering it for sale or lease to prospective customers without the written consent of the owner."

A Missouri property sells for $272,000 under a listing providing a 6% commission. The seller's loan payoff is $185,400 and other seller-paid closing costs total $3,150. What are the seller's net proceeds?

• a.$66,650
• b.$83,450
• c.$70,280
• d.$67,130✓

Work down the seller's side of the closing statement in order. The commission is calculated on the actual sale price, not the list price: $272,000 x 0.06 = $16,320. Subtract it from the sale price to get $255,680. Subtract the loan payoff of $185,400 to get $70,280, then subtract the $3,150 of other seller-paid costs, leaving net proceeds of $67,130. The $66,650 figure comes from computing the commission on a $280,000 list price instead of the price actually obtained, which overstates the commission by $480. The $70,280 figure is the running total one line early — it omits the other closing costs entirely. The $83,450 figure subtracts the payoff and the costs but forgets the commission altogether.

A Missouri seller wants to net $150,000 after paying a 6% commission and $4,000 in other seller-paid costs. Disregarding any loan payoff, what must the property sell for, to the nearest dollar?

• a.$163,240
• b.$159,574
• c.$164,000
• d.$163,830✓

A net-to-seller problem cannot be solved by adding the commission percentage to the target, because the commission is a percentage of the unknown sale price rather than of the net. Set the sale price as P. The seller keeps P less 6% of P, which is 0.94P, and then pays the $4,000 of other costs, so 0.94P - $4,000 = $150,000. Add the costs to both sides: 0.94P = $154,000. Divide by 0.94 to get P = $163,829.79, or $163,830 to the nearest dollar. Checking it: 6% of $163,830 is $9,829.80, and $163,830 - $9,829.80 - $4,000 = $150,000.20, which rounds correctly. The $163,240 figure comes from multiplying $154,000 by 1.06 rather than dividing by 0.94 — the classic error, since 6% of the larger number is more than 6% of the smaller. The $159,574 figure divides correctly but forgets the $4,000, and $164,000 is simply the target plus the costs plus a round guess.

A Missouri licensee is told by the seller to accept nothing less than certain repair terms, but writes an offer omitting them. Which requirement is breached?

• a.The licensee must obtain the principal's initials on every term before presenting the offer
• b.The licensee must present the offer to the principal's attorney before it is signed
• c.The licensee must include all terms and conditions authorized by the principal and offer on no others✓
• d.The licensee must record the principal's instructions in the transaction file within ten days of receiving them

20 CSR 2250-8.100(1) opens with the duty: "Every licensee shall make certain that all of the terms and conditions authorized by the principal in a transaction are specified and included in an offer to sell or buy and shall not offer the property on any other terms." Both halves are breached here — the authorized terms were left out, and the property was offered on terms the seller did not authorize. Initialing is required by 8.100(3) for changes to a contract, which is a different stage of the process. Missouri requires no attorney review of an offer, and no rule imposes a ten-day filing deadline for a principal's instructions; the retention duty in 20 CSR 2250-8.160(1) runs three years and concerns keeping records, not creating them on a clock.

A buyer's $245,000 offer is accepted on a Missouri property. The buyer obtains an 80% loan-to-value mortgage, has already paid $4,000 earnest money into the broker's escrow account, and owes $6,850 in buyer closing costs at settlement. How much additional cash must the buyer bring to closing?

• a.$55,850
• b.$45,000
• c.$51,850✓
• d.$59,850

Find the loan first, then the gap it leaves. An 80% loan-to-value mortgage on $245,000 is $245,000 x 0.80 = $196,000, so the down payment is $245,000 - $196,000 = $49,000. Add the $6,850 of buyer closing costs to reach $55,850 of total cash required at settlement. The earnest money is money the buyer has already paid, so it is credited against that requirement: $55,850 - $4,000 = $51,850 of additional cash to bring. The $55,850 figure is the total requirement before crediting the earnest money. The $45,000 figure credits the earnest money against the down payment but drops the closing costs. The $59,850 figure adds the earnest money instead of crediting it, moving the answer $8,000 the wrong way.

A Missouri contract shows an offer dated the 3rd, a counteroffer dated the 5th, and the buyer's acceptance signed the 7th. Under 20 CSR 2250-8.100(3), which date governs as the date of final agreement?

• a.The 3rd, as the date the offer that became the contract was written
• b.The 7th, as the date of the last signature or initial to the contract✓
• c.The 5th, as the date the seller stated the terms finally agreed to
• d.The 3rd, unless the parties expressly agree in writing to a different date

20 CSR 2250-8.100(3) requires that "Acceptance of each fully executed contract shall include the date at which final agreement was reached either by 1) specific acknowledgment of final acceptance date; or 2) date of the last signature or initial to the contract." On these facts the last signature is the buyer's acceptance on the 7th, and that is when the parties were finally in agreement — before it, the counteroffer was merely outstanding. Dating the contract from the original offer would start every contingency period before a contract existed. The seller's counteroffer on the 5th stated terms but did not conclude agreement, since the buyer had not yet accepted. The rule's two methods are alternatives for evidencing the same moment, not a license to choose an earlier date by agreement.

What must the closing statement a Missouri broker delivers under 20 CSR 2250-8.150(1) show?

• a.The true sale price, the earnest money received, and the amount and payees of the broker's disbursements✓
• b.The true sale price, the buyer's loan terms, and the appraised value supporting the loan
• c.The true sale price, the earnest money received, and the commission split between the firms
• d.The true sale price, the buyer's loan terms, and each party's estimated income tax consequences

20 CSR 2250-8.150(1) requires "a complete, accurate and detailed statement showing all material financial aspects of the transaction, including the true sale price, the earnest money received, any mortgages or deeds of trust of record, all money received by the broker in the transaction, the amount, and payee(s) of all disbursements made by the broker." The statement traces money through the broker's hands, which is why receipts and disbursements with their payees are central. It is delivered "at the time the transaction is consummated," and a broker who personally handles the closing must sign and date it that day. The internal split of a commission between cooperating firms, the appraised value and the parties' tax consequences are not among the required contents — the first is a matter between the firms, and the last two are outside the broker's remit.

After a Missouri closing in which buyer and seller had different brokers, what does 20 CSR 2250-8.150(3) require each broker to keep?

• a.Legible copies of both the buyer's and the seller's signed closing statements✓
• b.A legible copy of that broker's own client's signed closing statement
• c.Legible copies of both signed closing statements, filed with the Commission
• d.A legible copy of the settlement agent's statement in place of the parties' statements

20 CSR 2250-8.150(3) provides that "The brokers for the buyer and the seller shall retain legible copies of both buyer's and seller's signed closing statements." Each broker keeps both sides, not merely its own client's, so that either firm's file alone shows the whole financial picture of the transaction. Nothing is filed with the Commission; the records are held at the brokerage and, under 20 CSR 2250-8.160(1), retained for at least three years and made available for Commission inspection during usual business hours at the broker's regular place of business. A settlement agent's own statement does not substitute for the parties' signed statements, which are what the rule names.

A Missouri sale closes on September 1. The annual real property tax of $3,600 is payable in arrears. Using a 360-day year of 30-day months and charging the seller through the day before closing, what is the seller's share, credited to the buyer?

• a.$1,200
• b.$2,700
• c.$2,400✓
• d.$3,600

Because Missouri real property taxes are paid in arrears, the buyer will pay the whole year's bill after closing, so the seller's share of the year already used is credited to the buyer at settlement. Charging the seller through August 31 gives eight full 30-day months, January through August, or 240 days. The daily rate is $3,600 / 360 = $10. The seller's share is therefore 240 x $10 = $2,400, and the buyer keeps the remaining four months. The $1,200 figure is the buyer's share rather than the seller's, an easy reversal when the arrears direction is not tracked. The $2,700 figure charges the seller nine months, through the end of September, which runs a month past closing. The $3,600 figure charges the seller the entire year.

A buyer moving to Missouri asks what state or local real estate transfer tax will be charged at closing. What is correct?

• a.A state transfer tax applies to the sale price, and counties may add a local transfer tax of their own
• b.No state transfer tax applies, but counties may impose a local transfer tax
• c.None, because the state and its political subdivisions are barred from imposing such a tax✓
• d.A state transfer tax applies only to transfers of commercial real estate

Missouri is a no-transfer-tax state, and the bar is constitutional rather than merely statutory. Article X, Section 25 of the Missouri Constitution, adopted November 2, 2010 and effective December 2, 2010, provides that "After the effective date of this section, the state, counties, and other political subdivisions are hereby prevented from imposing any new tax, including a sales tax, on the sale or transfer of homes or any other real estate." Because it names counties and other political subdivisions expressly, the answer allowing a local transfer tax is foreclosed, and the provision draws no distinction between residential and commercial property. Recording fees, which pay for the recorder's service, are not a tax on the transfer and continue to appear on Missouri closing statements.

A Missouri broker manages a duplex whose sale closes on June 16. The tenant has paid the full June rent of $1,200 to the broker. Using a 30-day month and giving the buyer the day of closing, what rent is credited to the buyer at closing?

• a.$640
• b.$560
• c.$1,200
• d.$600✓

Rent is collected in advance, so the seller holds money covering days the buyer will own the property, and that portion is credited to the buyer. Giving the buyer the day of closing, the buyer's days are June 16 through June 30 inclusive, which is 30 - 16 + 1 = 15 days. The daily rent is $1,200 / 30 = $40, so the credit is 15 x $40 = $600. The $640 figure counts sixteen days by including June 15, the last day belonging to the seller. The $560 figure counts fourteen days by dropping June 16, the day the convention expressly gives the buyer — the off-by-one error in the other direction. The $1,200 figure credits the entire month, ignoring that the seller owned the property for the first half of it.

Which Missouri closing cost is properly a debit to the seller on the settlement statement?

• a.The lender's origination fee charged on the buyer's new mortgage loan
• b.The recording fee for the deed of trust securing the buyer's new mortgage loan
• c.The premium for the lender's title insurance policy required by the buyer's lender
• d.The brokerage commission the seller agreed to pay under the listing agreement✓

A debit is an amount a party owes at settlement. The commission is the seller's contractual obligation under the listing agreement, so it is debited to the seller and paid from the seller's proceeds — and section 339.105.5 confirms the broker is not entitled to it "until the transaction has been consummated or terminated, unless agreed in writing by all parties." The other three all arise from the buyer's financing and are debited to the buyer: an origination fee is charged by the lender for making the buyer's loan, a lender's title policy protects that lender's interest in the buyer's loan, and the deed of trust being recorded is the instrument securing it. Who pays a given cost can be shifted by contract, but absent such an agreement these three follow the loan, and the loan is the buyer's.