Arkansas Real Estate License License Law and Disclosures 4 — Questions and Answers
Question 1: Under Arkansas license law, a 'designated agent' is best described as:
- A broker who manages multiple offices
- A licensee appointed by the broker to represent one client exclusively in an in-house transaction (Correct answer)
- An agent who handles only commercial properties
- A licensee appointed by AREC to resolve disputes
Correct answer: A licensee appointed by the broker to represent one client exclusively in an in-house transaction
Designated agency allows a broker to appoint one licensee to represent the buyer and another to represent the seller when both are clients of the same brokerage.
Question 2: Which disclosure is a seller's agent in Arkansas required to make to an unrepresented buyer?
- The seller's minimum acceptable price
- That the agent represents the seller, not the buyer (Correct answer)
- The number of offers the seller has received
- The seller's reason for selling
Correct answer: That the agent represents the seller, not the buyer
A seller's agent must disclose to the unrepresented buyer that they represent the seller's interests, not the buyer's.
Question 3: An Arkansas real estate licensee advertises a property without identifying their licensed status. This is:
- Permitted if the broker approves
- A violation known as blind advertising (Correct answer)
- Acceptable for social media only
- Required for pocket listings
Correct answer: A violation known as blind advertising
Advertising without disclosing licensed status or the brokerage name is called blind advertising and violates Arkansas license law.
Question 4: Which of the following best describes the Arkansas Real Estate Recovery Fund?
- A fund that pays licensee continuing education costs
- A fund that compensates consumers harmed by licensee misconduct when a judgment cannot be collected (Correct answer)
- A fund for broker errors and omissions insurance
- A reserve fund maintained by each brokerage
Correct 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.
Question 5: A broker in Arkansas accepts an earnest money deposit on Friday afternoon. By when must the funds be placed in a trust/escrow account?
- Immediately upon receipt
- By end of business the same day
- Within 3 banking days (Correct answer)
- By the next business day
Correct answer: Within 3 banking days
Arkansas requires earnest money to be deposited into an escrow or trust account within 3 banking days of receipt.
Question 6: Under Arkansas law, a salesperson may receive compensation from:
- The buyer directly if both parties agree
- Only their sponsoring broker (Correct answer)
- Any party to the transaction
- The seller's attorney
Correct answer: Only their sponsoring broker
A salesperson may only receive compensation through their sponsoring/employing broker, never directly from a transaction party.
Question 7: In Arkansas, a broker must keep trust account records for how many years?
- 1 year
- 3 years (Correct answer)
- 5 years
- 10 years
Correct answer: 3 years
Arkansas requires brokers to maintain trust account records for a minimum of 3 years.
Arkansas Real Estate License License Law and Disclosures 4
Under Arkansas license law, a 'designated agent' is best described as: