Delaware Real Estate Salesperson Exam — All Questions

Escrow money a Delaware salesperson receives from a buyer must be:

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

Escrow and trust money must be handled through the broker's escrow account and kept separate from personal and operating funds. A salesperson who receives escrow money must deliver it promptly to the employing broker. Commingling or converting escrow money is a serious violation of Delaware license law.

A Delaware broker must deposit escrow money into the broker's escrow account within:

• a.Twenty-four hours of receiving the money from the buyer
• b.Seventy-two hours of the signing of the agreement by all parties✓
• c.Three business days of the acceptance of the offer by the seller
• d.Five banking days after delivery of the signed agreement of sale to the broker

On the signing of a written agreement by all parties, the licensee must promptly pay over the deposit, and the broker must deposit the money into the broker's escrow account within 72 hours of the signing by all parties, or by the dates defined in the agreement, excluding weekends and federal holidays. Cite: 24 Del. C. Sec. 2923(d).

A Delaware broker's escrow account must be opened in the name of the brokerage organisation, designated an escrow account, and held at:

• a.Any bank chartered in the United States
• b.A Delaware-chartered trust company only
• c.A banking institution approved in advance by the Real Estate Commission
• d.A federally insured banking institution with offices in Delaware✓

Every broker must establish and maintain an escrow account in a federally insured banking institution which has offices within the State; the account must be in the name of the brokerage organisation, designated as an escrow account, and the broker must be a signatory on it. Cite: 24 Del. C. Sec. 2923(a).

The only money of the broker's own that may be kept in a Delaware escrow account is:

• a.The bank's minimum balance and money to cover bank fees✓
• b.An amount equal to one month of anticipated commissions
• c.Any sum the broker identifies in the escrow ledger as personal
• d.Nothing at all, under any circumstance or for any purpose

Except for the minimum balance required by the bank and money to cover bank fees, each escrow account shall be used only for escrow deposits, earnest money deposits, rental money or other money in which the broker's customers or clients have an interest. Cite: 24 Del. C. Sec. 2923(a)(3).

A Delaware brokerage agreement for a lease later turns into a sale of the same property. The broker is entitled to compensation on the sale:

• a.Always, because continuous negotiations preserve the claim
• b.Never, because a lease and a sale are separate transactions
• c.Only if the listing, compensation agreement or lease provided for it✓
• d.Only if the seller signs a new written brokerage agreement before closing

Where continuous negotiations turn a sale into another type of transaction such as a lease, the broker is still entitled to compensation; but if the initial transaction was a lease which later became a sale, the broker is not entitled to compensation unless the listing agreement, other compensation agreement, or lease provided for compensation for a later sale. Cite: 24 Del. C. Sec. 2930(a).

All compensation relating to a Delaware real estate services transaction that is to be paid to a licensee must be paid:

• a.Directly to the licensee by the settlement agent
• b.Through the broker or brokerage organisation✓
• c.By the party who signed the brokerage agreement
• d.Into the brokerage organisation's escrow account

All compensation relating to a real estate services transaction to be paid to a licensee shall be paid through the broker or brokerage organisation, which may pay it to an entity the licensee created to receive compensation in the circumstances the statute describes. Cite: 24 Del. C. Sec. 2930(d).

A Delaware competitive market analysis must carry a prescribed disclosure that it is not an appraisal, printed immediately following the estimated market price in:

• a.Capital letters of any readable size
• b.Italic type of at least ten points
• c.Underlined eight-point type
• d.At least twelve-point bold face type✓

The prescribed disclosure must appear in at least a 12-point bold face type font located immediately following the estimated market price, and must state that the CMA is not an appraisal and may not be used for loan approval, divorce, estate settlement, bankruptcy or similar purposes. Cite: 24 Del. C. Sec. 2931(2).

A Delaware licensee may not perform a competitive market analysis for:

• a.The mortgagee on a property that is under a signed agreement of sale✓
• b.A potential seller who is considering listing the property for lease
• c.A potential buyer deciding what to offer for a listed property
• d.An owner who wants an opinion of value before making repairs

A licensee may perform a CMA for an existing or potential seller or owner for listing purposes, or for an existing or potential buyer or tenant, but shall not perform a competitive market analysis for the mortgagee on a property that is the subject of a signed agreement of sale. Cite: 24 Del. C. Sec. 2931(1).

Under Delaware's Buyer Property Protection Act, the seller's written disclosure of material defects must be made:

• a.Within ten days after the agreement of sale is ratified
• b.At the same time the buyer's offer is presented to the seller
• c.Before the seller signs the listing agreement✓
• d.At any time before the day of final settlement

A seller transferring residential real property must disclose all known material defects in writing, and that disclosure shall be made in writing before the seller signs the listing agreement, updated as necessary for material changes occurring before final settlement. Cite: 6 Del. C. Sec. 2572(b).

The Delaware Seller's Disclosure of Real Property Condition Report must be given to a prospective buyer:

• a.Within three days after the agreement of sale is signed
• b.Prior to the time the buyer makes an offer to purchase✓
• c.At the first showing of the property to that buyer
• d.No later than twenty days before final settlement

The agent, subagent or seller must give a copy of the report to all prospective buyers or the buyer's agent prior to the time the buyer makes an offer to purchase, and the written disclosure form, signed by buyer and seller, becomes part of the purchase agreement. Cite: 6 Del. C. Sec. 2573.

Which transfer of Delaware residential real property is NOT exempt from the Buyer Property Protection Act?

• a.A transfer from one co-owner to another co-owner
• b.A sheriff's sale for default on an obligation secured by a mortgage
• c.A transfer by a fiduciary administering a decedent's estate
• d.A sale by an owner-occupant to an unrelated first-time buyer✓

The exemptions cover transfers by court order, deeds in lieu of foreclosure, sheriff's sales, fiduciaries administering an estate, guardianship or trust, transfers between co-owners, transfers to a spouse or lineal relative, divorce property settlements, and transfers to or from a government entity. An ordinary arm's-length sale by an owner-occupant is not exempt. Cite: 6 Del. C. Sec. 2577.

Delaware's realty transfer tax on a document is apportioned:

• a.Equally between the grantor and the grantee✓
• b.Entirely to the grantee, who presents the deed
• c.Entirely to the grantor, unless the contract says otherwise
• d.In proportion to each party's interest in the property

The realty transfer tax is 3 percent of the value of the property, or 2.5 percent where the municipality or county has enacted the full 1.5 percent local realty transfer tax, and the tax is to be apportioned equally between grantor and grantee. No tax is imposed where the actual value transferred is less than $100. Cite: 30 Del. C. Sec. 5402(a), (b).

Delaware's first-time home buyer reduction in realty transfer tax equals one half of one percent multiplied by the lesser of the property's value or:

• a.Two hundred thousand dollars
• b.Three hundred thousand dollars
• c.Four hundred thousand dollars✓
• d.Five hundred thousand dollars

For a first-time home buyer in a transaction entered into on or after August 1, 2017, the portion of the tax payable by that buyer is reduced by one half percent multiplied by the lesser of the value of the property or $400,000. The reduction applies to the grantee's portion only and does not relieve the grantor. Cite: 30 Del. C. Sec. 5402(c).