Practice Quiz

California Real Estate Exam

Category - California

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A bank gave $550 to a licensed real estate salesperson for referring the salesperson’s prospective buyer to the bank for a new loan. When the salesperson’s broker became aware of the $500 referral fee, the broker immediately fired the salesperson, notified the Real Estate Commissioner and warned all of his other salespeople never to accept such a fee. In this situation:
  1. The bank is subject to disciplinary action by the Real Estate Commissioner
  2. The salesperson is subject to disciplinary action by the Real Estate Commissioner, but not the broker
  3. The salesperson and broker are subject to disciplinary action by the Real Estate Commissioner
  4. The broker overreacted because a referral fee is legal
Explanation
Answer: B. A lender cannot give “kick backs” to real estate licensees for referring customer and clients. The real estate commissioner doesn’t have any jurisdiction over banks, but he can discipline any licensee receiving any illegal “kick back” from a lender. The broker does not have to be disciplined because he notified the real estate commission immediately and used reasonable supervision of his employed licensees.
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