Colorado Real Estate Broker Exam — All Questions
469 questions
A Colorado buyer's agent wants to ask the listing broker to share the seller-paid commission with her. Before she proposes it, she must obtain:
- a.the Commission's advance written consent to the sharing arrangement
- b.an amendment to the seller's exclusive right-to-sell listing contract
- c.the buyer's written approval✓
- d.the seller's written approval delivered through the listing broker
A buyer's or tenant's agent must obtain the written approval of the buyer or tenant before proposing to the seller's or landlord's agent that the buyer's agent be compensated out of the compensation the seller or landlord pays. Payment alone never creates agency. Cite: C.R.S. 12-10-410(5) and (2).
The written agreement that establishes a Colorado single-agency or transaction-broker relationship must:
- a.be signed by both parties at the closing table before disbursement
- b.be filed with the Colorado Real Estate Commission within ten days
- c.be recorded with the county clerk and recorder in the county of the property
- d.conspicuously disclose the amount or rate of the broker's compensation✓
The broker must establish the relationship through a written agreement that specifies and conspicuously discloses the amount or rate of any compensation to be paid to the broker, and must complete that agreement before performing any licensed brokerage activity. Cite: C.R.S. 12-10-403(2), as amended by HB 26-1426, effective August 12, 2026.
A Colorado broker preparing a residential purchase contract finds that a Commission-approved form exists and fits the transaction. Using her attorney's own form instead would be:
- a.proper if the seller agrees to the substitution in writing
- b.proper whenever the property is not residential in character
- c.proper as long as the drafting attorney is licensed in Colorado
- d.improper, since an existing and appropriate Commission form must be used✓
A broker must use a Commission-approved form when such a form exists and is appropriate for the transaction. Attorney forms, Colorado Bar Association forms and the other standard-form categories are available only when no Commission form exists or none is appropriate. Cite: 4 CCR 725-1, Rule 7.1.A; C.R.S. 12-10-403(4)(c).
A Colorado brokerage firm's attorney drafts a form for a situation no Commission form covers. The form must carry:
- a.the Commission's promulgation stamp and its official adoption date
- b.a statement that the Commission has not approved the form✓
- c.the approval language of the Colorado Bar Association
- d.the notarized signature of the Director of the Division of Real Estate
An attorney form must say 'This form has not been approved by the Colorado Real Estate Commission' and must name the attorney or law firm that prepared it and the broker, employing broker or brokerage firm it was prepared for. The broker may not alter it beyond filling in blanks. Cite: 4 CCR 725-1, Rule 7.1.B; C.R.S. 12-10-403(4)(b)(II).
Negotiations lead the parties to delete the appraisal section of a Commission-approved Contract to Buy and Sell Real Estate. The broker must:
- a.retype the contract with the deleted section removed entirely
- b.attach a separate addendum that deletes the section by reference
- c.leave the caption unaltered and add the words 'omitted-not applicable'✓
- d.obtain the Commission's written consent to the deletion beforehand
When a broker deletes one of the listed deletable provisions, the provision's caption or heading must remain unaltered and be followed by 'omitted-not applicable'. Deletions from the printed body must result from negotiation or a party's instruction and be struck through legibly. Cite: 4 CCR 725-1, Rules 7.2.C and 7.2.F.
A Colorado broker who is not a party to the contract wants to insert a clause limiting her own liability to the buyer and seller. That clause is:
- a.prohibited, because a broker may not insert exculpatory language in her own favor✓
- b.permitted once both principal parties have initialed the clause
- c.permitted only in commercial real estate transactions
- d.permitted if the employing broker approves it in writing
A broker who is not a principal party may not insert personal provisions, personal disclaimers, or exculpatory language favoring the broker, employing broker or firm into a standard form. At a principal party's direction the broker may include negotiated commission-payment language. Cite: 4 CCR 725-1, Rule 7.4.B.
A Colorado broker's buyer client is purchasing from a homebuilder that insists on the builder's own purchase contract. Before the buyer signs it, the broker must:
- a.withdraw from the transaction and terminate the buyer engagement
- b.advise the buyer in writing to seek legal advice from an attorney✓
- c.submit the builder's own contract to the Commission for its approval
- d.transfer the builder's terms onto a Commission-approved form
When a principal to the transaction, such as a homebuilder, bank-owned seller or instant buyer, requires its own purchase contract, the broker must send the consumer a written communication advising the consumer to seek legal advice from a licensed attorney before the consumer enters into that contract. Cite: 4 CCR 725-1, Rule 7.5.
A Colorado seller tells his broker to start marketing the house and says they will sort out paperwork later. Before performing any brokerage services, the broker must have:
- a.an oral listing confirmed by an email to the seller the same day
- b.the seller's verbal consent plus a signed brokerage disclosure form
- c.a written listing contract with a definite termination date✓
- d.a written listing contract with no end date
Regardless of the brokerage relationship, all seller and landlord listing contracts must be in writing before any brokerage services are performed, and every such written agreement must carry a definite date for termination. Cite: 4 CCR 725-1, Rules 6.14.C and 6.14.D; C.R.S. 12-10-409(1)(b).
Who is supposed to fill out the Colorado Seller's Property Disclosure?
- a.The seller, to the seller's current actual knowledge✓
- b.The listing broker, working from the tax and MLS records
- c.The buyer's home inspector, after the physical inspection
- d.The title company that is providing the closing services
The Commission's SPD19 form states on its face that the disclosure should be completed by the seller, not by the broker, and that the information is correct to the seller's current actual knowledge as of the date the seller signs. New adverse material facts discovered later must still be disclosed in writing. Cite: Colorado Real Estate Commission form SPD19, adopted August 5, 2025, mandatory use January 1, 2026.
Every Colorado contract of sale for residential real property must carry a radon disclosure. The seller must additionally give the buyer:
- a.a radon test performed within the past twelve months
- b.a certificate signed by a licensed radon mitigation professional
- c.a written waiver of the buyer's right to test for radon
- d.the most recent state radon-in-real-estate brochure✓
Each contract of sale or seller's property disclosure for residential real property must disclose the seller's knowledge of radon testing, records, concentrations, mitigation and any installed mitigation system, and must include an electronic or paper copy of the most recent radon-in-real-estate brochure published by the Department of Public Health and Environment. Cite: C.R.S. 38-35.7-112(2); C.R.S. 12-10-220.5.
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A Colorado brokerage firm will hold the earnest money in a residential sale. It must be deposited in the firm's trust account no later than:
- a.one business day after the broker physically receives the funds
- b.three business days after receipt of funds or mutual execution of the contract, whichever is later✓
- c.five business days after receipt of funds or the mutual execution of the contract, whichever is later
- d.the date of closing, when the funds are delivered to the closing entity
Money belonging to others other than property management receipts must be deposited within three business days of receipt of funds or mutual execution of the contract, whichever is later. Property management money gets five business days. Cite: 4 CCR 725-1, Rules 5.7.A, 5.7.B and 5.12.B.
A Colorado brokerage firm engages in property management. The Commission's rules require it to maintain, at a minimum:
- a.separate trust accounts for rental receipts and for security deposits✓
- b.one trust account holding all money belonging to others
- c.one separate trust account for each property under management
- d.a trust account only when a deposit exceeds one month's rent
A brokerage firm engaged in property management must deposit rental receipts and security deposits in separate trust or escrow accounts, a minimum of one for rental receipts and a minimum of one for security deposits. A firm holding no money belonging to others need maintain no trust account at all. Cite: 4 CCR 725-1, Rules 5.5 and 5.4.
How often must a Colorado employing broker complete a three-way reconciliation of each trust or escrow account?
- a.Quarterly
- b.Annually
- c.Monthly✓
- d.Only when the Commission audits the firm
A three-way reconciliation must be performed monthly and a report maintained, showing that on the same date the journal cash balance, the sum of all ledger balances, and the reconciled bank balance agree. No ledger may ever carry a negative balance. Cite: 4 CCR 725-1, Rule 5.14.C.
Commission money sitting in a Colorado brokerage firm's trust account that has become due and payable to the firm must be:
- a.withdrawn monthly✓
- b.left in the account until every beneficiary consents in writing
- c.withdrawn within three business days after the closing date
- d.transferred into the employing broker's personal operating account
Money in a trust account that becomes due and payable to the brokerage firm must be withdrawn monthly. Leaving earned money there is commingling; a firm may only deposit personal funds to cover bank charges, and must journal and ledger that entry. Cite: 4 CCR 725-1, Rules 5.10.A and 5.10.D.
How long must a Colorado broker and brokerage firm retain the transaction file for a sale that closed?
- a.One year
- b.Three years
- c.Seven years
- d.Four years✓
Transaction files must be retained for four years from the consummation date of the transaction, or from the expiration date of a listing contract that does not consummate. Attorney-drafted transaction clauses must likewise be kept four years from last use. Cite: 4 CCR 725-1, Rules 6.20 and 7.3.B.
A Colorado property management firm wants to charge an owner a non-refundable retainer. Under the Commission's rules the retainer:
- a.is prohibited in every Colorado property management agreement
- b.need not go into a trust account if the parties agree to that in writing✓
- c.must be deposited into the security deposit escrow account
- d.must be refunded if the owner cancels within thirty days
Money collected before services are performed generally must be deposited in a trust account, but nothing prohibits a brokerage firm from taking a non-refundable retainer that need not be deposited, provided this is specifically agreed to in writing between the firm and the person paying it. Cite: 4 CCR 725-1, Rules 5.20.A and 5.20.B.
A Colorado brokerage firm takes over management of an apartment building from another firm. The previous firm must transfer the tenants' security deposits within:
- a.sixty days after execution or assignment of the management agreement✓
- b.thirty days after execution or assignment of the management agreement
- c.ten business days after the new firm makes written demand
- d.the remaining term of each tenant's existing lease
The new firm must disclose the status of any security deposit held by the previous firm to the owner and tenant in writing within thirty days of execution or assignment of the management agreement, and the previous firm must transfer the deposits within sixty days and confirm the amounts transferred. Cite: 4 CCR 725-1, Rule 5.8.B.
A Colorado home sells for $450,000. The state documentary fee the county clerk and recorder collects when the deed is recorded is:
- a.$0, because residential conveyances are exempt
- b.$45.00✓
- c.$450.00
- d.$4,500.00
Colorado's documentary fee is one cent for each one hundred dollars of consideration, or major fraction thereof: $450,000 divided by $100 is 4,500, times $0.01 equals $45.00. No documentary fee is payable when the total consideration is five hundred dollars or less. Cite: C.R.S. 39-13-102(2).
The Real Property Transfer Declaration (TD-1000) that accompanies a Colorado deed presented for recording is:
- a.recorded alongside the deed and open to public inspection
- b.prepared by the closing company and filed with the Division of Real Estate
- c.required only when the property conveyed is commercial or industrial
- d.signed by the grantor or the grantee and sent to the county assessor, not recorded✓
The declaration prescribed by the property tax administrator must accompany any conveyance document presented for recording and be completed and signed by either the grantor or the grantee. The clerk and recorder does not record or file it; it is transmitted to the county assessor. If a grantee fails to supply it within thirty days of the assessor's notice, the penalty is $25 or twenty-five one-thousandths of one percent of the sale price, whichever is greater. Cite: C.R.S. 39-14-102(1).