ch 11 quiz real estate principles

The Marinos are selling their home to the Snyders. Tim is representing both the Marinos and the Snyders in the transaction. He had initially listed the Marinos' home and realized their home would be perfect for his buyer clients, the Snyders. After making all the necessary disclosures to both parties, he showed the Snyders the Marinos' home and they are buying it. The Marinos are paying commission on the transaction to Tim's broker, who in turn, will compensate Tim. Since the Marinos are paying Tim's commission, does this constitute an agency relationship, and, if so, what kind of an agency relationship?

The fact that one party (the Marinos/sellers) or another party (the Snyders/buyers) pays a commission does not create an agency relationship. Since Tim is representing both clients in the transaction and has made the necessary disclosures to both parties, it appears he already has a dual agency agreement with the parties. However, payment of commission does not in itself create an agency agreement. So, while Tim may have a dual agency relationship with these clients, the relationship is not based on the payment of commission.

The Lemps have been looking at new homes for weeks and have not found anything worthy of an offer. Mikel, their agent, has invested a large amount of time in showing homes with no luck. Today, he calls Mr. Lemp and says, "I have found you the perfect home! The home is amazing! The yard is perfect and lush. The school district is the best in the state. This home and area are the most prestigious in the city!" Are these types of statements legal?

Yes, this is legal as long as Mikel does not violate the Federal Fair Housing Laws. These statements are considered "Puffing" in the real estate world. "Puffing" can be unethical if the statements are not true, but it is not illegal.

Price fixing, group boycotts, bid rigging, market allocation and division of markets by location or price are all examples of ________________ and are punishable by ___________________.

Antitrust violations; fines of up to $100 million for corporations and up to $1 million for individuals and/or prison time The Sherman Antitrust Act prohibits price fixing, group boycotts, bid rigging, and market allocation and division of markets by location or price. Violating antitrust prohibitions is a felony punishable by a fine up to $100 million for corporations and $1 million or 10 years imprisonment or both for individuals.

What is the difference between commingling and conversion? Which, if either, is considered a more serious violation?

Commingling is the practice of mixing a client's money with the agent's personal funds. Conversion is the unlawful misappropriation and use of a client's funds by a licensee. Conversion is the more serious violation. While commingling or mixing the client's money with the agent's personal or business funds is illegal, conversion or misappropriation and use of a client's funds by a licensee, resulting in the agent converting those funds into his own, is a much more serious violation than commingling and has heavy criminal penalties.

Hassan is not happy with the listing agreement on his home through REE Realty Company. He has not been pleased with the showings without notice, the agents showing his home have been rude, and he doesn't feel the property has received the advertising or exposure promised when he signed the listing contract. What is his best option for terminating the listing with REE Realty Company?

Hassan could speak with the broker and possibly come to a mutual agreement that it is in both parties' best interest to cancel the listing.

RSS Real Estate Brokerage is the listing broker for the Pratte property. RSS delegates some of the responsibility of the listing to Helpful Real Estate Company. The two brokers cooperate on listings frequently and have a good working relationship. Unfortunately, RSS failed to get the principal's (Pratte's) agreement to the delegation. What is the relationship between RSS Real Estate Brokerage and Helpful Real Estate Company?

Helpful Real Estate Company becomes the agent of RSS Real Estate Brokerage due to the appointment without the consent of the principal. In a situation in which the listing broker appoints another broker without the consent of the principal, the second broker becomes the agent of the listing broker.

Howard wants to purchase a vacation property. He decides to use the expertise of a real estate professional. One of his business associates recommends Jose. Howard explains to Jose that he wants Jose to only represent his purchasing interest, and a contract is signed. Who is the agent? Who is the principal? What is their relationship? What is Jose's role?

Jose is the agent; Howard is the principal; they have an agency relationship; Jose is a special agent. AND Jose is the agent; Howard is the principal; they have a fiduciary relationship; Jose is a special agent.

Perry is listing his home with Extra Real Estate Company, a brokerage. He wants the listing as follows: He must receive $250,000 from the sale of the home, anything above that price is the broker's commission. Which type of listing agreement is Perry demanding?

Net Listing

TBH Realty Company is handling the sale of the Lopez (seller) home to the Bright (buyer) family. The buyers give an earnest money deposit to the brokerage in the amount of $5,000. The money is then deposited into the broker's account at the bank on the seventh business day after receiving the funds. Has TBH Realty Company followed all trust account regulations with the earnest money?

No, not only should the broker have deposited the earnest money within three business days of receipt of the funds, the money was to have been deposited into the broker's trust fund not the broker's account.

Scott is trying to sell his home FSBO. The Bartells believe Scott's home could be their dream home, but they have been working with Melinda, a licensee, to find a new home. Melinda shows the Bartells the home, failing to disclose her status as an agent. They love Scott's home and want to buy it. Scott is not interested in any way, shape, or form in working with an agent. However, the Bartells have made an offer above his asking price and he can't refuse it over the Melinda issue. Which of the following describes the creation of this agency relationship?

Ratification With a ratification, an agency relationship is created when the principal accepts the conduct of someone who acted without prior authorization as the principal's agent, such as Melinda failing to disclose her status as an agent and Scott accepted Melinda's action because he wanted to sell the property.