Utah Real Estate Sales Agent Exam — All Questions

In a typical Utah residential sale, a sales agent writing an offer will most often use:

• a.The state-approved Real Estate Purchase Contract (REPC)✓
• b.A custom contract drafted by the agent
• c.An oral agreement confirmed later in writing
• d.A form supplied only by the buyer's lender

Utah sales agents typically use the state-approved Real Estate Purchase Contract (REPC) and other Division-approved forms for residential offers. Licensees may complete these standard forms but may not draft complex custom provisions, which would be the unauthorized practice of law.

Earnest money a Utah sales agent receives from a buyer must be:

• a.Sent to the Division of Real Estate for safekeeping
• b.Given directly to the seller when the offer is made
• c.Delivered promptly to the principal broker for deposit in the brokerage trust account✓
• d.Held by the agent in a personal account until closing

Client funds such as earnest money must be handled through the brokerage's real estate trust account, which the principal broker maintains. A sales agent who receives money must deliver it promptly to the principal broker. Commingling or converting trust money is a serious violation of Utah license law.

A Utah seller wants to accept a buyer's offer but at a higher price. The licensee preparing the counteroffer must:

• a.Use an approved addendum form to state the change✓
• b.Strike the price and initial the change in the margin
• c.Retype the whole contract with the new price inserted
• d.White out the price and write the new one above it

Utah rules require a counteroffer or any other modification to be made on an approved addendum form, and separately make it prohibited conduct to counter by striking out, whiting out, substituting new language or otherwise altering either the boilerplate of the Real Estate Purchase Contract or the language inserted to complete its blanks. Cite: Utah Admin. Code R162-2f-401a(18); R162-2f-401b(1)(p).

A Utah seller offers to let his agent keep everything the house brings above a set figure. The agent must decline because Utah prohibits:

• a.Charging a commission set as a percentage of the sale price
• b.Unapproved listing agreements
• c.Paying a licensee compensation after the closing has occurred
• d.Taking a net listing, whatever the seller has agreed to✓

Utah lists taking a net listing among the acts an individual licensee may not do, so the arrangement is barred even where the seller proposed it. Percentage commissions are ordinary, and compensation after closing is normal; what the rule forbids is the open-ended spread between a seller's net and the sale price. Cite: Utah Admin. Code R162-2f-401b(1)(h).

A former client who holds no license sends a Utah agent a buyer without being asked, and the sale closes. The agent may thank the client with:

• a.A commission split of up to ten percent of the gross fee
• b.A gift of appreciation valued at $250 or less✓
• c.Any gift, since the referral was not solicited by the agent
• d.A written referral fee

Paying a finder's fee or any valuable consideration to an unlicensed person for referring a prospect is prohibited, with one narrow exception: a gift valued at $250 or less in appreciation for an unsolicited referral that results in a real estate transaction. A share of the commission is not within the exception. Cite: Utah Admin. Code R162-2f-401b(1)(l); Utah Code 61-2f-401(5).

A mortgage broker offers a Utah sales agent a flat fee for every borrower the agent sends over. The agent:

• a.May accept it if the buyer is told about it in writing beforehand
• b.May accept it if it is paid to the principal broker
• c.May not accept a referral fee from a mortgage broker✓
• d.May accept it only on a refinance, not a purchase

Utah rules bar a licensee from accepting a referral fee from a lender or a mortgage broker at all; there is no disclosure or broker-routing cure. Compensation the licensee does legitimately earn beyond the commission must be disclosed in writing to each party and paid to the licensee's principal broker. Cite: Utah Admin. Code R162-2f-401b(1)(m); R162-2f-401a(16).

A Utah licensee also holds an escrow agent appointment. In a transaction where she represents the buyer, she may:

• a.Act as both if the seller signs a written waiver
• b.Act as both if the title company employs her broker
• c.Act as both if she rebates the escrow fee to the buyer
• d.Not also act as the escrow agent in that transaction✓

Utah rules forbid a licensee from acting as a real estate agent or broker in the same transaction in which the licensee also acts as a mortgage loan originator or lending manager, an appraiser or appraiser trainee, an escrow agent, or a provider of title services. Consent does not cure the conflict. Cite: Utah Admin. Code R162-2f-401b(1)(n).

A Utah principal broker who lists and sells real estate must keep the brokerage real estate trust account in:

• a.A bank or credit union located within Utah✓
• b.Any federally insured institution in the United States
• c.An institution chosen by the buyer's title company
• d.A Division-designated trust company

A principal broker engaged in listing or selling real estate must maintain at least one real estate trust account in a bank or credit union located within the state of Utah, and must notify the Division in writing of the account number, the institution's address and the activity the account is used for whenever it is opened, moved or renumbered. Cite: Utah Admin. Code R162-2f-403a(1).

A Utah real estate trust account must be non-interest-bearing unless the parties agree in writing to an interest-bearing account and:

• a.The buyer receives all of the interest at the closing
• b.The broker reports the interest to the Division monthly
• c.It goes to a qualifying affordable housing charity✓
• d.The interest is split between the buyer and the seller

Utah allows an interest-bearing real estate trust account only where the parties agree in writing, designate in writing who receives the interest, and that recipient is a 501(c)(3) organization operating exclusively to make grants to Utah affordable housing programs, with the recipient program itself a 501(c)(3). Cite: Utah Admin. Code R162-2f-403a(2).

A Utah principal broker leaves some of her own money in the brokerage real estate trust account to cover bank charges. She violates the commingling rule once that balance exceeds:

• a.Any amount, since personal funds may never be deposited
• b.$1,000 of the broker's own money✓
• c.$100 of the broker's own money
• d.$5,000 of the broker's own money

The rule makes it a violation of the statutory commingling prohibition for a principal broker to deposit more than $1,000 of the broker's own funds into a real estate trust account, so a modest cushion for bank charges is allowed up to that line. Cite: Utah Admin. Code R162-2f-403a(13)(a)(i); Utah Code 61-2f-401(4)(b).

A Utah sales agent gives his principal broker a buyer's earnest money check. Absent a written agreement to the contrary, the broker must deposit it into a trust account within:

• a.The next banking day
• b.Ten business days of receiving it
• c.Five calendar days of the offer's acceptance
• d.Three business days of receiving it✓

The principal broker has three business days from receiving a client's money to deposit it into a trust account the broker maintains, or with the parties' written agreement into a title company or other authorized escrow account. The deadline does not apply where the written agreement says the money is held for a set time or deposited on acceptance. Cite: Utah Admin. Code R162-2f-401c(1)(h).

How often must a Utah principal broker reconcile the brokerage trust account records against the bank records and against the client ledgers?

• a.Quarterly, and again at every Division audit
• b.At least monthly, for both sets of records✓
• c.Whenever the account balance changes
• d.Annually, before the renewal

A principal broker must keep a date-sequential record of every deposit and disbursement and a running balance, reconcile the brokerage trust account records with the bank or credit union records at least monthly, and reconcile them with the brokerage client account records at least monthly as well. Cite: Utah Admin. Code R162-2f-403a(10).

A Utah transaction failed years ago and the principal broker still cannot determine who is entitled to the earnest money sitting in trust. After three years the rule requires the broker to:

• a.Remit it to the Utah State Treasurer's Office✓
• b.Transfer it to the operating account as a fee
• c.Split it evenly between the buyer and seller of record
• d.Hold it in trust until a party makes a claim

If a principal broker is unable to disburse trust funds within three years after the failure of a transaction, the rule requires the funds to be remitted to the State Treasurer's Office as unclaimed property under the Revised Uniform Unclaimed Property Act. Where both parties make competing written claims, the broker may interplead the funds or refer the parties to mediation. Cite: Utah Admin. Code R162-2f-403a(8)-(9).