Fair Housing and Practice Practice Question

Question

An escrow officer requests clarification from the broker involving risk management documentation. The parties need a practical answer before moving forward. Which answer best applies the rule? (Item 73)

Answer choices

1. A. Use written records and timely disclosures to reduce transaction risk.
2. B. It can be ignored if the transaction is expected to close quickly.
3. C. It requires the licensee to favor the other party over the licensee’s own client.
4. D. It is primarily a tax rule with no effect on brokerage practice.

Correct Answer

A. Use written records and timely disclosures to reduce transaction risk.

Explanation

The correct answer is A because risk management documentation requires candidates to use written records and timely disclosures to reduce transaction risk. The other options overstate the effect of custom, oral agreement, escrow, or independent salesperson action and do not reflect safe California exam practice.

Question details

• Difficulty: easy
• Domain: Fair Housing and Practice
• Objective: risk management documentation

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