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HK real estate exam
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Question 1 of 30
1. Question
Which of the following statements are included in the Code of Ethics as a guide for all individuals engaged in estate agency work?
I. Estate agents and salespersons are required not to engage in any activities that are against the law.
II. Estate agents and salespersons should be updated in all developments in the real estate market.
III. Estate agents and salespersons should have been at least a graduate of a business-related college degree.
IV. Estate agents and salespersons should be honest to their clients and thus, protect their clients from fraud.
V. Estate agents and salespersons are not permitted to represent both the vendor and the purchaserCorrect
The Code of Ethics provides guidance to all estate agents and salespersons when engaging in estate agency work. It states that estate agents and salespersons should avoid doing anything that is against the law. In addition, they should have a complete understanding of the laws and regulations as well as should be updated with any developments in real the estate market in order to be able to provide quality services to the clients. While doing their jobs, they are expected to be honest and maintain integrity.
Incorrect
The Code of Ethics provides guidance to all estate agents and salespersons when engaging in estate agency work. It states that estate agents and salespersons should avoid doing anything that is against the law. In addition, they should have a complete understanding of the laws and regulations as well as should be updated with any developments in real the estate market in order to be able to provide quality services to the clients. While doing their jobs, they are expected to be honest and maintain integrity.
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Question 2 of 30
2. Question
Which of the following situations reflects minimizing any conflict of interest situations?
I. Estate agents and salespersons should avoid a business transaction in which they have a beneficial interest involving a property.
II. Estate agents and salespersons in cases where they represent both the vendor and the purchaser are required to inform both the clients of the situation.
III. Estate agents and salespersons representing both clients (vendor and purchaser) should ensure that both clients are informed of beneficial interests they may get from such property.
IV. Estate agents and salespersons should possess the knowledge and competence so they can provide the best services to their clients.
V. Estate agents and salespersons should understand all laws and regulations related to estate agency work.Correct
In doing their jobs as estate agents and salespersons, they are expected to minimize situations with any conflict of interest. Such as avoiding situations where they might have a beneficial interest. However, in situations where they are representing both vendors and clients, they must inform both clients and disclose to both as well the beneficial interest they have in the property concerned.
Incorrect
In doing their jobs as estate agents and salespersons, they are expected to minimize situations with any conflict of interest. Such as avoiding situations where they might have a beneficial interest. However, in situations where they are representing both vendors and clients, they must inform both clients and disclose to both as well the beneficial interest they have in the property concerned.
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Question 3 of 30
3. Question
Mark is a licensed estate agent carrying on the business of estate agency work. Identify which statements should be done by Mark.
I. He should appoint a manager who may not have a valid license but has the appropriate managerial experience.
II. He should inform EAA upon the appointment of a manager and does not need to so when such a manager ceases to be one.
III. He should apply to EAA if there are changes in the relevant statement of particulars of business.
IV. He should indicate in all its documents used in the conduct of business the license number, business name, and location.
V. He should make sure that all salespersons working in his business have valid licenses.Correct
Licensed estate agents carrying on the business of estate agency work are required to display their business name, license number, and location of their business in all documents used such as receipts and brochures as well as in advertisements. When a manager is appointed, he must be a licensed estate agent and upon such appointment or termination, EAA must be notified by Completing Form 9 in the Schedule of the PR within 31 days.
Incorrect
Licensed estate agents carrying on the business of estate agency work are required to display their business name, license number, and location of their business in all documents used such as receipts and brochures as well as in advertisements. When a manager is appointed, he must be a licensed estate agent and upon such appointment or termination, EAA must be notified by Completing Form 9 in the Schedule of the PR within 31 days.
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Question 4 of 30
4. Question
Identify which statements are CORRECT for all licensed estate agents carrying on the business of estate agency work.
I. Form 12 in the Schedule to PR must be completed within three months after the appointment and within 31 days after the termination of a manager.
II. Form 12 in the Schedule to PR must be completed within 31 days during the appointment and termination of a manager.
III. A manager should be appointed for each of the offices for effective control and management.
IV. There is no need to appoint a separate manager for each of the offices as long as there are established protocols and communication channels among the different offices.
V. All salespersons current and prospective should have an estate agent’s or salesperson’s licenses.Correct
Licensed estate agents carrying on the business of estate agency work should appoint a manager to manage each of the offices in cases where there is more than one office. This manager should be a licensed estate agent. When selecting individuals to work for the business as salespersons, it must make sure that they have an estate agent’s or salesperson’s licenses.
Incorrect
Licensed estate agents carrying on the business of estate agency work should appoint a manager to manage each of the offices in cases where there is more than one office. This manager should be a licensed estate agent. When selecting individuals to work for the business as salespersons, it must make sure that they have an estate agent’s or salesperson’s licenses.
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Question 5 of 30
5. Question
Which of the following are applicable to all companies holding an estate agent’s license?
I. It should have at least one director who was issued by EAA with a valid license for estate agents.
II. If it has more than one director, then all of them should have a valid estate agent’s license issued by EAA.
III. It should have at least one director with a valid estate agent license while the other directors may not have such licenses.
IV. It should notify EAA upon the appointment of a person or when such person ceases to be a director by completing Form 11 in the Schedule to the PR within 31 days of such an event.
V. It should have at least five salespersons working in the company with a valid salesperson’s license.Correct
A company holding an estate agent’s license should have at least one director who is a holder of a valid estate agent’s license. It should ensure as well that all of its directors have a valid estate agent’s license issued by EAA as well. It is also required to notify EAA for such an appointment and termination of the engagement of its director in the company.
Incorrect
A company holding an estate agent’s license should have at least one director who is a holder of a valid estate agent’s license. It should ensure as well that all of its directors have a valid estate agent’s license issued by EAA as well. It is also required to notify EAA for such an appointment and termination of the engagement of its director in the company.
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Question 6 of 30
6. Question
Select which statements are applicable to all licensees employed as a salesperson by an estate agent.
I. He is not allowed to receive money from clients, instead money should be directly paid to the employer of the salesperson.
II. He should be able to send a letter of notification to EAA when upon employment.
III. He should make sure that his employer is a licensed estate agent when he is employed as a salesperson.
IV. In an event where a licensee employed as a salesperson receives money from a client, he should immediately give such money to his employer.
V. He should work in the employer for a minimum of three years before he can transfer to another employer.Correct
If a licensee is working as a salesperson for a licensed estate agent, he has to make sure that his employer is a holder of a valid license as an estate agent. In the conduct of his work, if he received money from the client, he should right away give such money to his employer.
Incorrect
If a licensee is working as a salesperson for a licensed estate agent, he has to make sure that his employer is a holder of a valid license as an estate agent. In the conduct of his work, if he received money from the client, he should right away give such money to his employer.
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Question 7 of 30
7. Question
A licensee who is engaged in the sale and purchase or the lease of residential property in Hong Kong should:
I. Comply with the provision that only license estate agents are permitted to handle such transactions.
II. Negotiate properly with the client the commission that he may get with the transaction before offering further his services.
III. Make sure that the provisions in the PR for handling such transaction is observed and complied.
IV. Use Form 1-6 in the Schedule to the PR is completed.
V. Inform the person in negotiation with that he is a licensed estate agent and his license number.Correct
A licensee who is engaged in the sale and purchase or the lease of residential property in Hong Kong should at the beginning of the transaction inform the client that he is a licensed estate agent or licensed salesperson and provide the client his license number. Then, the licensee has to use Forms 1-6 in the Schedule to the PR and should observe and comply with the provisions for such transactions.
Incorrect
A licensee who is engaged in the sale and purchase or the lease of residential property in Hong Kong should at the beginning of the transaction inform the client that he is a licensed estate agent or licensed salesperson and provide the client his license number. Then, the licensee has to use Forms 1-6 in the Schedule to the PR and should observe and comply with the provisions for such transactions.
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Question 8 of 30
8. Question
Identify which of the situations below require forms to be completed.
I. If the licensed estate agent is acting for a vendor in the sale of a property.
II. If the licensed estate agent is acting for a purchaser in the purchase of a property.
III. If the licensed estate agent is acting for another licensed estate agent in the sale of a property.
IV. If the licensed estate agent is acting for a landlord in the leasing of a property.
V. If the licensed estate agent is acting for a salesperson in the sale of a property.Correct
Forms are required to be completed in situations where the licensed estate agent is acting for a vendor(Form 1) in the sale of the property or purchaser(Form 4) in the purchase of a property or landlord(Form 5) in the lease of a property or a tenant(Form 6) in the lease of a property.
Incorrect
Forms are required to be completed in situations where the licensed estate agent is acting for a vendor(Form 1) in the sale of the property or purchaser(Form 4) in the purchase of a property or landlord(Form 5) in the lease of a property or a tenant(Form 6) in the lease of a property.
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Question 9 of 30
9. Question
There are some situations wherein forms are not prescribed for the purposes of the EAO. Which are examples of such situations?
I. When there is no estate agent representing the vendor.
II. If the tenant does not have an estate agent representation.
III. When the property for sale or purchase or for lease is a car parking space alone.
IV. If the property for lease is not a self-contained unit.
V. When a residential property forms part of the first sale of an undivided share in land.Correct
There is no form prescribed for the purposes of the EAO when a car parking space alone is the property for sale and purchase or for lease. If a not self-contained unit is for lease or during the first sale of an undivided share in land in a residential property is part of.
Incorrect
There is no form prescribed for the purposes of the EAO when a car parking space alone is the property for sale and purchase or for lease. If a not self-contained unit is for lease or during the first sale of an undivided share in land in a residential property is part of.
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Question 10 of 30
10. Question
If a licensed estate agent enters into an estate agency agreement for a property concerned, he should:
I. Use Form 1 for the sale and purchase of a property or lease of a property.
II. Use Form 1 for the sale and purchase of a property.
III. Use Form 2 for the lease of a property.
IV. Not use any forms.
V. Comply with section 36(1)(a)(v), (vi) and (vii) of the EAO.Correct
A licensed estate agent when entering into an estate agency agreement for a property should use the appropriate forms. Form 1 for the sale and purchase of a property and Form 2 in case of leasing of a property. Section 36(1)(a)(v), (vi) and (vii) of the EAO should also be complied with.
Incorrect
A licensed estate agent when entering into an estate agency agreement for a property should use the appropriate forms. Form 1 for the sale and purchase of a property and Form 2 in case of leasing of a property. Section 36(1)(a)(v), (vi) and (vii) of the EAO should also be complied with.
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Question 11 of 30
11. Question
Which of the following statements is CORRECT if an estate agency agreement for a property concerned is entered into by a licensed estate agent?
I. A licensed estate agent should inform the client only of the good offers received and excluding those offers that he deemed not good offers.
II. A licensed estate agent should ensure to inform the vendor of any offers received for the property.
III. A licensed estate agent should make sure that the client is aware of all the beneficial interests that he may get if the property will be successfully disposed of.
IV. A licensed estate agent should not enter into an agreement where he will be acting as a vendor and purchaser.
V. A licensed estate agent should inform both the vendor and the purchaser is he is acting as both.Correct
A licensed estate agent should inform the vendor and the purchaser if he is acting for both. When he receives an offer for a property, he is required to inform the vendor of all offers. The license estate agent as well should disclose to the client of any benefits such as commissions or whatsoever that he will possibly receive from the property concerned.
Incorrect
A licensed estate agent should inform the vendor and the purchaser if he is acting for both. When he receives an offer for a property, he is required to inform the vendor of all offers. The license estate agent as well should disclose to the client of any benefits such as commissions or whatsoever that he will possibly receive from the property concerned.
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Question 12 of 30
12. Question
Identify which statements should be complied with by a license estage agent when entering into an estate agency agreement.
I. A license estate agent may enter into an agreement with a purchaser before the inspection of the property by the purchaser has been arranged.
II. A license estate agent may enter into an agreement with a vendor before the property has been advertised.
III. A license estate agent should explain to the client all the terms and conditions in the agreement.
IV. A license estate agent should enter into an agreement with the purchaser after the purchaser has inspected and viewed the property.
V. A license estate agent should enter into an agreement with a vendor after the property has been advertised.Correct
A licensed estate agent may enter into an agreement with a purchaser in the following events whichever comes first, before the inspection of the property by the purchaser or before the agreement is signed. In agreements with vendors in the following events whichever is earliest as well, within seven days after the vendor’s instruction to sell or lease the property or before the advertisement or before the signing of the agreement.
Incorrect
A licensed estate agent may enter into an agreement with a purchaser in the following events whichever comes first, before the inspection of the property by the purchaser or before the agreement is signed. In agreements with vendors in the following events whichever is earliest as well, within seven days after the vendor’s instruction to sell or lease the property or before the advertisement or before the signing of the agreement.
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Question 13 of 30
13. Question
What should be stated in the written agreement in the first sale of undivided land in which a property forms part by a vendor of the property?
I. The agent shall not be allowed to represent both the vendor and the client.
II. Information in Part 1 of Form 1 in the Schedule to the PR shall be obtained by the agent.
III. The agent shall disclose any beneficial interest he has in the property if the agent is acting as well for the purchaser.
IV. All the information required for all the Forms shall be obtained by the vendor only.
V. The vendor shall supply the agent with Part 2 of Form 1 unless if the property is a unit in an uncompleted building.Correct
The written agreement in a first sale of an undivided land should include that the agent shall be responsible for obtaining information in Part 1 of Form 1 in the Schedule of the PR or from the vendor in case he is unable to do so. For Part 2 of Form 1, this shall be supplied by the vendor except if the property is a unit in an uncompleted building.
Incorrect
The written agreement in a first sale of an undivided land should include that the agent shall be responsible for obtaining information in Part 1 of Form 1 in the Schedule of the PR or from the vendor in case he is unable to do so. For Part 2 of Form 1, this shall be supplied by the vendor except if the property is a unit in an uncompleted building.
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Question 14 of 30
14. Question
Record of all property listing and copies of all estate agency agreements entered must be kept by a licensed estate agent. Which of the following statements are true in relation to this?
I. Such records may be inspected by authorized EAA officers.
II. The records should include not less than three years from the receipt of the listings or when the agreements were entered.
III. The records may include only those transactions which has a huge amount of money involved.
IV. The records should include not less than five years from the receipt of the listings or when the agreements were entered.
V. All the records should be certified by the manager signifying is authenticity and accuracy.Correct
Record of all property listing and copies of all estate agency agreements must be kept for not less than three years. The licensed estate agent must be prepared for a possibility of inspection of the records by EAA authorized officers.
Incorrect
Record of all property listing and copies of all estate agency agreements must be kept for not less than three years. The licensed estate agent must be prepared for a possibility of inspection of the records by EAA authorized officers.
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Question 15 of 30
15. Question
In relation to a property’s advertisement, what should a licensed estate agent observe and comply in such activity?
I. When the vendor has given instruction to the licensed estate agent to sell a property, the agent can directly issue an advertisement for that property.
II. The licensed estate agent may do all the necessary actions in order for the advertisements to be effective even without the consent of the vendor.
III. The advertisement should include accurate and not misleading statements about the property.
IV. A written consent from the vendor must be acquired before any advertisement shall be released.
V. If a residential property is to be sublet, this must be included in the advertisement.Correct
Before issuing any advertisements it is crucial that the licensed estate agent will get the written consent from the vendor. When the consent exists, then the advertisement that will be released should contain only accurate information and must do away with misleading statements that will generate misconceptions. Also, include in the advertisement if the property is to be a sublet
Incorrect
Before issuing any advertisements it is crucial that the licensed estate agent will get the written consent from the vendor. When the consent exists, then the advertisement that will be released should contain only accurate information and must do away with misleading statements that will generate misconceptions. Also, include in the advertisement if the property is to be a sublet
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Question 16 of 30
16. Question
What should a manager do when acting in relation to a property involved in an estate agency agreement?
Correct
The manager should ensure that section 36(1)(a)(i) to (vii) of the EAO is complied with as if he were the licensed estate agent who entered such relevant estate agency agreement.
Incorrect
The manager should ensure that section 36(1)(a)(i) to (vii) of the EAO is complied with as if he were the licensed estate agent who entered such relevant estate agency agreement.
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Question 17 of 30
17. Question
Which statement is correct about a licensed estate agent?
Correct
A licensed estate agent is required to comply with section 9(3), (4), and (5) of the PR. A licensed estate agent as well is allowed to switch to a salesperson’s license and he cannot act as a legal adviser of a client.
Incorrect
A licensed estate agent is required to comply with section 9(3), (4), and (5) of the PR. A licensed estate agent as well is allowed to switch to a salesperson’s license and he cannot act as a legal adviser of a client.
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Question 18 of 30
18. Question
When arranging for a property inspection and viewing by a purchaser, what is required to be done a licensee before proceeding with such activity?
Correct
A licensee must obtain first the vendor’s consent before arranging for any schedule for inspection of viewing of a property. Thus, no inspection should be conducted without the knowledge and approval of the vendor.
Incorrect
A licensee must obtain first the vendor’s consent before arranging for any schedule for inspection of viewing of a property. Thus, no inspection should be conducted without the knowledge and approval of the vendor.
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Question 19 of 30
19. Question
In conducting negotiations for a property, which of the following should NOT be done a licensee?
Correct
A licensee should not give due influence to his clients(vendor or purchaser) when entering into an agreement. He should be cautious not to influence their decision making and let the clients make the decisions themselves.
Incorrect
A licensee should not give due influence to his clients(vendor or purchaser) when entering into an agreement. He should be cautious not to influence their decision making and let the clients make the decisions themselves.
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Question 20 of 30
20. Question
After the agreement for the sale and purchase or a lease of a property has been signed, what is the proper thing to do by a licensee?
Correct
A licensee should stop marketing and accepting any offers for a property immediately if the agreement for such property has been signed already.
Incorrect
A licensee should stop marketing and accepting any offers for a property immediately if the agreement for such property has been signed already.
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Question 21 of 30
21. Question
Before an agreement for the sale and purchase or a lease of a property is entered into, a licensee acting as for a vendor should:
Correct
If the licensee is acting for a vendor, an up-to-date land search of a property for sale and purchase or a for lease should be conducted prior to entering into an agreement with a purchaser.
Incorrect
If the licensee is acting for a vendor, an up-to-date land search of a property for sale and purchase or a for lease should be conducted prior to entering into an agreement with a purchaser.
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Question 22 of 30
22. Question
What should be done by a licensed estate agent upon receiving payment of any commission from a client?
Correct
If a licensed estate agent receives payment of any commission from a client, a written receipt should be issued immediately to the client and a copy must be retained of such receipt.
Incorrect
If a licensed estate agent receives payment of any commission from a client, a written receipt should be issued immediately to the client and a copy must be retained of such receipt.
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Question 23 of 30
23. Question
Why is a licensed estate agent required by EAA to provide a certificate issued by a certified public accountant?
Correct
A certificate issued by a certified public accountant may be required by the EAA from the licensed estate agent as proof or certification that proper account is maintained in accordance with section 12(1) of the PR.
Incorrect
A certificate issued by a certified public accountant may be required by the EAA from the licensed estate agent as proof or certification that proper account is maintained in accordance with section 12(1) of the PR.
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Question 24 of 30
24. Question
The COVID-19 pandemic has greatly affected the real estate business and that’s why Peter who is a licensed estate agent unfortunately did not receive any money or in held money on behalf of clients for the financial year. What should Peter do in this situation?
Correct
In events where the licensed estate agent during a financial year did not receive any money from clients, a statutory declaration may be required by the EAA from the licensed estated agent within a specified period.
Incorrect
In events where the licensed estate agent during a financial year did not receive any money from clients, a statutory declaration may be required by the EAA from the licensed estated agent within a specified period.
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Question 25 of 30
25. Question
A client who wanted to engage the services of a licensed estate agent in order to purchase a property. However, upon the verification of the agent, the name of the vendor and the owner of a property is different. What is the proper course of action of a licensed estate agent in this scenario?
Correct
Before releasing any money for a deposit for a property, the licensed estate agent has to validate if the identity of the vendor and the owner of the property is the same. In case if they are not the same, he has to make sure that the vendor possesses the authority to sell the property.
Incorrect
Before releasing any money for a deposit for a property, the licensed estate agent has to validate if the identity of the vendor and the owner of the property is the same. In case if they are not the same, he has to make sure that the vendor possesses the authority to sell the property.
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Question 26 of 30
26. Question
A purchaser’s cheque has been released by a purchaser for a property that he is interested in and consequently, an offer is made to the concerned vendor through the licensed estate agent. However, due to some reasons, the purchaser’s offer is not accepted by the vendor. What should a licensed estate agent do in the situation?
Correct
When a purchaser’s cheque or deposit money released by a purchaser for a property and for some reason the offer is not accepted by the vendor, the licensed estate should return such a purchaser’s cheque or deposit money to the purchaser as soon as possible.
Incorrect
When a purchaser’s cheque or deposit money released by a purchaser for a property and for some reason the offer is not accepted by the vendor, the licensed estate should return such a purchaser’s cheque or deposit money to the purchaser as soon as possible.
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Question 27 of 30
27. Question
Which of the following statements is TRUE in relation to an ex-holder of an estate agent’s or salesperson’s license?
Correct
Ex-holder of an estate agent’s or salesperson’s license can apply for the same type of license or switch to another license provided they meet the requirements for such license and the application is made within the indicated relevant period.
Incorrect
Ex-holder of an estate agent’s or salesperson’s license can apply for the same type of license or switch to another license provided they meet the requirements for such license and the application is made within the indicated relevant period.
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Question 28 of 30
28. Question
Charlie is an ex-holder of a salesperson’s license and he wanted to apply for an estate agent’s license this time. His license has been expired for more than three years but he was able to pass a qualifying examination for estate agents. Will Charlie be able to apply for an estate agent’s license? Why?
Correct
An ex-holder of a salesperson’s license may apply for an estate agent’s license provided that he applies within 24 months from the date of expiration of the license and he passed a qualifying examination for estate agents or he has completed an estate agent’s training course on or before 31 December 2001.
Incorrect
An ex-holder of a salesperson’s license may apply for an estate agent’s license provided that he applies within 24 months from the date of expiration of the license and he passed a qualifying examination for estate agents or he has completed an estate agent’s training course on or before 31 December 2001.
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Question 29 of 30
29. Question
If a licensee has been suspended due to any reasons as decided by the authorized body, a licensee should:
Correct
In any event that a licensee is suspended or a revocation order is imposed, the concerned licensee should immediately cease from engaging in any estate agency work on the date of suspension or when the revocation order takes effect.
Incorrect
In any event that a licensee is suspended or a revocation order is imposed, the concerned licensee should immediately cease from engaging in any estate agency work on the date of suspension or when the revocation order takes effect.
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Question 30 of 30
30. Question
Which of the following is correct in terms of a partnership between two or more licensed estate agents?
Correct
When a partnership exists between two or more licensed estate agents, provisions under sections 38(1)(a), 40(2) and (3), 47(1) and (2), 48(1), and (20) of the EAO will be considered as already complied if at least one of the members has complied with such provisions.
Incorrect
When a partnership exists between two or more licensed estate agents, provisions under sections 38(1)(a), 40(2) and (3), 47(1) and (2), 48(1), and (20) of the EAO will be considered as already complied if at least one of the members has complied with such provisions.
