Alabama License LawIntermediateAlabama Exam
Which of the following is a permissible referral arrangement under Alabama license law?
APaying an unlicensed friend a referral fee for sending clients
BPaying a licensed real estate agent in another state a referral feeCorrect
CPaying a home inspector a fee for referring buyers
DPaying a mortgage lender a fee for referring buyers to the brokerage
Why Paying a licensed real estate agent in another state a referral fee Is Correct
Answer B: Paying a licensed real estate agent in another state a referral fee
Referral fees may be paid to licensed real estate agents, including those licensed in other states, for referring clients. Paying unlicensed persons or other professionals for referrals is not permitted.
Key Alabama License Law Terms in This Question
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Key Terms to Know
Lien
A financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
Short SaleA sale of real property where the sale proceeds are less than the outstanding mortgage balance, requiring lender approval.
Discount PointsPrepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
Private Mortgage Insurance (PMI)Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
State-Specific Concepts
License Law
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