CODE OF ETHICS - Practice Exam

1. A broker has just received from a fellow brokers client/buyer, a written offer to purchase property of his client/seller together with a check
of earnest money payment. Which of the following steps is the most proper and ethical for him to take?
A. Call another fellow broker whose client is also interested in the property in the hope that they can top the offer
B. Call the seller immediately to inform him about the offer and submit at the soonest possible time, both the written offer and the
earnest money payment
C. Show the offer to another prospective buyer in the hope of getting a better price for the seller
D. Reject the first offer outright based on his opinion that the offered price is too low and tell fellow who submitted the offer to
convince the buyer to make a higher offer.
E. None of the above

2. A broker has secured a written offer to purchase at the price and terms expected by his client seller. Before the offer is signed and accepted,
the seller died. Several steps have to be taken by the broker to save the sale and protect the interest of all parties concerned. Which of the
following is inappropriate and unnecessary?
A. File notice lis pendens on the subject property to protects his rights as broker
B. Secure a new written authority to sell from the heirs or their legal guardians or attorney-in-fact if the heirs are all minors
C. Inform the prospective buyer that the registered owner has died.
D. Explain to the buyer the salient point of Section 4, rule 74 which be annotated in the new title if ever the dale pushes through.
E. All of the above

3. Three of the four enumerated acts of a broker are considered unethical. Which act is not unethical?
A. encouraging the parties to a sale to indicate a consideration lower than the actual selling price
B. Keeping a special bank account, separate and distinct from his own funds, for all money receive in trust for other person such as
clients money and similar items
C. Disclosing his client confidential person information to a fellow broker in order to facilitate the sale of his clients property
D. Delaying submission of a formal offer the had received from a prospective buyer in title hope of securing a higher offer
E. None of the above.

4. When a licensed broker accepts a listing from a fellow practitioner, he follows three conditions clearly stated in the code of ethics. Which
one of the following is not a condition to be followed?
A. The agency of the broker who offers the listing should be respected until it has expired and the listing comes to his attention from
a different source.
B. The agency of the listing broker should be respected perpetually in all dealings with his client/principal.
C. The agency of the broker who offers the listing should be respected until the owner, without solicitations, offers to list with him.
D. The listing should not be passed to a third broker without the knowledge and consent of the listing broker.

5. Which one of the following acts of a broker can be considered within the bounds of the code of ethics?
A. Encouraging the parties to a sale to indicate a consideration lower than the actual selling price
B. Serving as witness in court proceedings involving a property owned by his client
C. Disclosing his clients confidential personal information to a fellow broker in order to facilitate the sale of his clients property
D. Delaying submission of a formal offer that he had received from a prospective buyer in the hope of securing a higher offer

6. A broker has secured a written offer to purchase a commercial property at a price of 60 million together with a check of thirty percent down
payment. He is certain that the seller will accept to the offer. Before he can present the offer to the seller, he receives unverified information
that a planned government infrastructure project will call up a significant portion of the property. Several steps have to be taken by the
broker to save inappropriate at the moments?
A. Secure detailed information from the proper government agencies as to the actual scope of the projects.
B. Inform the prospective buyer about the forthcoming government projects and the possible effects it will have on the property.
C. Present the offer to the seller for signing and acceptance to ensure the consummation of the sale.
D. Inform the seller about the forthcoming government projects and the possible effects it will have on the property.

7. The Golden Rule shall be observed in all dealings and relations of the real estate practitioners, except:
A. With clients and fellow practitioners B. The organization to which they belong
C. The general public D. None of the above

8. A real estate broker who accepts a listing from a client follows several ethical guidelines in his relationship with the client. Which one of the
following is not always applicable?
A. He should pledge himself with utmost fidelity and good faith to protect and promote the interest of his client.
B. He should undertake to prepare an accurate appraisal report on the property subject of the listing, as part of his service to his client.
C. He should endeavor to be well informed of current legislation, policies and programs of the government including proposed
legislation, which may affect the interest of his client
D. He should endeavor to make his client and customer conclude a fair contract advantageous to both.
9. The real estate practitioner, in relation to the government, is expected to perform as such except:
A. Secure all the necessary licenses, permits and authority.
B. Pay any and all taxes, fess, dues, levies or charges.
C. Encourage, abet, tolerate, or participate in the aversion or illegal reduction in the payment of all taxes, fess, dues, levies or charges.
D. Should not offer or agree to pay, split or rebate any commission or fee.

10. The real estate practitioners in his advertisements or brochures of properties for sale should present but not:
A. A true picture of the property and its improvements
B. Its rights and interest therein, including its liens and encumbrances
C. Indicate name, firm, address and license number.
D. Conceal relevant information and other related facts.

11. With regard to the relation with a client or customer, the practitioner, in accepting an appointment or authority to act for and in behalf of the
client / customer, can perform such except:
A. Acquire an interest or buy for himself or members of his family within the 4 th civil degree.
B. Endeavor to make buyer and seller conclude a fair contract, advantageous to both parties.
C. Assist his client to acquire possession and ownership of the property bought in accordance with the terms and conditions agreed upon.
D. Should not accept commission or fee from any party in any transaction except from his client unless with the full knowledge and
consent of all parties concerned in the transaction.

12. When accepting a listing from another broker, the broker should respect the agency of the other broker who offers the listing until:
A. The agent agreement has expired.
B. The property has come to the attention of the accepting broker from a different source.
C. The owner, without solicitation, offers to list with the accepting broker.
D. Saw the notice of the property for sale and walk-in within the period of brokers agreement.

13. Which of the following statements is not a valid criterion for ethical behavior?
A. Ethics is the name we give to our concern for good behavior. We feel an obligation to consider not only our own personal well-being
but also that of others and of human society as a whole.
B. Ethics is right for rights sake.
C. A code of Ethics is subservient to laws and regulations. Therefore, any act that is not any law is not a violation of ethical practice.
D. Ethics is having a high moral sense. The capacity to perceive what is right is measured primarily by the application of the Golden Rule.

14. In joint venture agreement between the developer and lot owner, the engagement of a real estate consultant is necessary except?
A. ascertain fair market value of land and evaluate cost estimate of developer
B. review joint venture agreement
C. market the finished project
D. monitor and evaluate developers compliance with his undertaking

15. In an exclusive authority to sell which he gives you for a period of ninety days, your client seller wants a 15 million asking price for his
house. Upon appraisal you realize that the price is very reasonable and fair to both seller and eventual buyer. Knowing from experience that
buyers always give counter offers, how much should you quote when offering the property?
A. P17 Million B. P16 Million C. P15 Million D. P18 Million

16. As an agent of the seller, the real estate broker is usually authorized to do all of the following except:
A. Place "for sale" sign on the listed property B. Cooperate with other brokers to facilitate a sale
C. Bind the principal under a contract to sell D. List the property on the multi-listing service

17. Which of the following newspaper line ads is blatantly unethical?

A. HOUSE ON A VERY QUIET NEIGHBORHOOD B. FLOOD FREE STREET
C. THE VALUE OF THIS PROPERTY WILL DOUBLE IN ONE YEAR D. BEAUTIFUL VIEW

18. Jose takes the following steps as a licensed real estate broker. Which of these actions can be considered unethical?
A. He accepted an exclusive listing for an abandoned house and lot even with his knowledge that somebody died violently in the property.
B. The proceeds to entertain prospective buyers all the while disclosing to them the crime committed inside the property.
C. He also advertised the listing giving the exact address for an open house on one weekend.
D. He invites his friend to attend the open house hoping that real buyers feel that there are many other interested in the property.

19. Three of the following are tricks employed by unethical real estate brokers when bringing clients to view their listings. Which one is not unethical?
A. Using a roundabout route to avoid unwholesome neighborhood.
B. Employing a cleaning company to freshen the smell of the house interiors.
C. Forecasting changes from residential to commercial zoning to hint at high rates of value appreciation.
D. Showing another inferior property to position his listing as the better alternative.
20. Novice real estate brokers have limitations that make it unethical to accept some listings. Which one does not apply?
A. No database of regular clients.
B. Expertise-some listing require higher skills or knowledge beyond their capability.
C. Area of operations-the location of the listing precludes proper and diligent effort to service prospective buyers.
D. Part time brokers-part time brokers cannot give full time attention to listings.

21. After the sale is consummated, the broker should do the following except:
A. Accept commission from both seller and buyer without the knowledge of either of the parties.
B. Should assist the buyer to acquire possession and ownership of the real property bought in accordance with the terms and conditions
agreed upon.
C. Should see to it that both the buyer and the seller concluded a fair contract advantageous to both.
D. In case of court proceeding and called upon to act as witness, should give testimonies in the most unbiased, honest, truthful and
professional manner.

22. There are times when a broker has to share his listings with other brokers. In case of sale, the listing broker should do the following, except:
A. Should share the commission as agreed upon.
B. Should negotiate directly with the client without the consent of the other broker.
C. Should not seek unfair advantage over his fellow brokers.
D. Should not criticize publicly the other broker.

23. A sign giving notice of a property for sale or lease should not be placed on a property by more than one broker and only if
A. The sign is placed at least one meter away from the other sign
B. The sign should be of the same size as the other signs C. Authorized by the owner
D. It should not exceed three signs on the property E. The address of the broker is indicated on the sign

24. As a real estate practitioner, we should but not:

A. Willingly share the lessons and experiences
B. Not use the service of the salesman of the fellow practitioner without their knowledge and consent.
C. Not solicit listings currently listed exclusively with another broker
D. Not pass a listing to a third broker without the knowledge and consent of the listing broker
E. Put sign or notice of a property for sale without authority from the owner.

25. The ethical broker always strives to protect his clients interest. Which of the following is not ethical and not in the best interest of your
client/seller?
A. Maintain utmost confidentiality on matters not directly related to the property.
B. Strive to be familiar with laws and ordinances on real estate.
C. Discuss the negotiating position of your client with the buyers broker to hasten the sale.
D. Tell your client / seller that his price is too high and give your opinion on the fair market value of the property.

26. To the ethical broker, the principle of full disclosure dictates that vital information that can affect the property or the transaction should be
disclosed and explained to his client. Which one of the following is contrary to an ethical disclosure?
A. Changes or planned changes in the zoning affecting the property.
B. Your opinion of future land values in the vicinity of the property.
C. Details of the contract
D. Sale of similar property in the vicinity.

27. A listing currently listed with a real estate broker and obtained and acquired by another broker must not be solicited or obtained by said
broker unless:
A. The authority of the listing broker is non-exclusive
B. The authority of the listing broker has expired
C. The listing broker has not returned the call or text messages of the other broker for at least one week
D. The authority of the listing broker has been evoked
E. The owner, without solicitation from the new broker, offers to list the same with the new broker after the authority of the listing
broker has expired or revoked

28. To constitute negligence or failure to disclose or ascertain to any person with whom person a broker is dealing relative to the property and
within his knowledge at the time of the transaction, what matters must the broker disclose?
A. Previous owner of property or history of title B. Fair market value of property
C. Location, topography and shape of property D. Material fact, data or information
E. Whether property is updated in tax payments

29. For the rule on conflict of interest to apply to a real estate broker selling a property owned by a relative, within what civil degree of relation
is involved?
A. second B. fifth C. fourth D. 1st degree E. third

30. Section 6 of Article 1. - Declaration of Principles of the Code of Ethics for Realty Service Practitioners clearly states the Golden Rule which
says ______________________________________.