Mixed Deck — All Arkansas Real Estate License Topics Flashcards

A real estate advertisement that states 'perfect for young couples' could be considered a Fair Housing violation because it discriminates against:

Answer: Familial status — implying families with children are not welcome

Advertising language that implies a preference for people without children, or for people of a specific family type, violates familial status protections.

A property in Fayetteville was purchased for $175,000 five years ago. The replacement cost of improvements is $200,000 with $30,000 in accrued depreciation and the land is valued at $50,000. What is the property value using the cost approach?

Answer: $220,000

The cost approach calculates value as replacement cost minus depreciation plus land value: $200,000 - $30,000 + $50,000 = $220,000.

In Arkansas real estate transactions, what is the purpose of an escrow account held by the lender?

Answer: To collect and disburse funds for property taxes and insurance on behalf of the borrower

Lender escrow accounts collect monthly portions of taxes and insurance so these obligations are paid on time.

What is the primary duty of a property manager acting as an agent for a property owner?

Answer: To act in the best interests of the owner while complying with all applicable laws

A property manager owes a fiduciary duty to the owner, requiring loyalty, care, and lawful management of the property on the owner's behalf.

Which of the following best describes the Arkansas Real Estate Recovery Fund?

Answer: A fund that compensates consumers harmed by licensee misconduct when a judgment cannot be collected

The Recovery Fund compensates consumers who obtain a court judgment against a licensee but are unable to collect from the licensee directly.

According to the Arkansas Statute of Frauds, which of the following agreements related to real estate MUST be in writing to be enforceable?

Answer: A contract to purchase a property that will close in 6 months.

The Arkansas Statute of Frauds requires that contracts for the sale of land, or any interest in land, must be in writing to be enforceable. A contract to purchase a property, regardless of the closing date, falls directly under this statute. Month-to-month leases are generally exempt, agreements between brokers are separate from the real estate contract itself, and personal property promises should be in writing but aren't governed by the Statute of Frauds for real property.

In Arkansas, an appraisal report for a federally related transaction must comply with:

Answer: The Uniform Standards of Professional Appraisal Practice (USPAP)

USPAP, established by the Appraisal Standards Board, is the required standard for appraisals in federally related transactions in all states including Arkansas.

Which scenario would most likely create an implied agency relationship that an Arkansas licensee should be careful to avoid?

Answer: Giving a buyer specific advice on what price to offer on a property

Providing specific negotiation advice to a buyer without a formal agreement can create an implied agency relationship, exposing the licensee to fiduciary obligations they did not intend.

A month-to-month rental agreement is an example of which type of tenancy?

Answer: Periodic tenancy

A periodic tenancy automatically renews for successive periods until either party gives proper notice to terminate.

Under AREC rules, a licensee wishing to operate as an independent contractor rather than an employee of a broker must:

Answer: Still be affiliated with and supervised by a licensed broker

Regardless of their employment classification as independent contractor or employee, every salesperson must be affiliated with and supervised by a licensed broker.

Under the Arkansas Real Estate License Law, which of the following is exempt from licensing requirements?

Answer: An owner selling their own property without an agent

Property owners selling their own real estate are exempt from the Arkansas licensing requirement.

Which of the following actions could result in suspension or revocation of an Arkansas real estate license?

Answer: Commingling client funds with personal funds

Commingling client funds with personal funds is a serious violation that can result in license suspension or revocation in Arkansas.

The 'depth table' method in land valuation is used to:

Answer: Adjust lot value based on the depth of the parcel relative to a standard depth

Depth tables provide percentage adjustments to account for the fact that lots deeper or shallower than a standard depth contribute different values per front foot.

What is the continuing education requirement for Arkansas real estate license renewal?

Answer: 6 hours annually

Arkansas requires licensees to complete six hours of approved continuing education each year to maintain their license.

What is the legal effect of an 'as-is' clause in an Arkansas residential real estate contract?

Answer: It shifts repair responsibility to the buyer but does not waive disclosure duties

An as-is clause means the seller will not make repairs, but Arkansas law still requires disclosure of known material defects.

Which of the following is an example of negative amortization?

Answer: Monthly payments that are less than the interest accrued, causing the balance to grow

Negative amortization occurs when minimum payments do not cover all accrued interest, causing the unpaid interest to be added to the principal balance.

Under Arkansas law, which of the following is a key requirement for a successful claim of adverse possession, in addition to the common law requirements of open, notorious, hostile, exclusive, and continuous possession?

Answer: Having color of title and paying ad valorem taxes for seven years

Arkansas statutes have added requirements to the common law elements of adverse possession. A claimant must now have "color of title" (a document that appears to give title) and must have paid the property (ad valorem) taxes for seven consecutive years.

A seller's agent learns that the seller is going through a divorce and must sell quickly. Sharing this information with the buyer would violate which duty?

Answer: Confidentiality

Confidentiality requires the listing agent to protect information the seller has not authorized to be shared, including personal circumstances affecting motivation to sell.

If an Arkansas salesperson's employing broker dies, the salesperson may continue to practice real estate for up to:

Answer: 60 days

Arkansas law provides a 60-day grace period for a salesperson to affiliate with a new qualifying broker after their broker's death or license termination.

A buyer's agent who fails to recommend a home inspection for a property with obvious moisture stains has likely breached which duty?

Answer: Reasonable care and diligence

Reasonable care requires the agent to recommend appropriate inspections and protect the client from foreseeable risks, including obvious signs of potential defects.