EXAM - Section 11, Unit 1: Employment and Cooperation Agreements in Arizona

Mitch, your seller client, asked you about the tax ramifications of selling his townhome. What's your best response?

"That's not my area of expertise. You should ask your tax advisor."

What is the MLS?

A database of real estate information

Which of the following is true of agency agreements?

A listing agreement is an express agreement.

When a seller wants to expedite the closing process, what can a buyer offer to address this need?

A quick closing

An exclusive right-to-sell agreement must include ______.

A start and end date for the listing period

What is a real estate employment agreement in Arizona?

A term for the listing agreement or buyer agency agreement

Listing agents have the responsibility to receive, care for, and ____________ for all money received on the client's behalf.

Account

As an Arizona licensee, you can legally enter into an additional employment agreement with a represented party if that party signs the state-required acknowledgement and gets a liability release from the first licensee. What else is true about this situation?

Although it's legal, a civil suit is still possible.

An office exclusive is ______.

An off-market listing

Which of the following is a true statement?

Arizona brokers are allowed to pay/receive compensation from brokers in other states as long as there is a written cooperation agreement in place.

Written cooperation agreements with out-of-state brokers are between the ______ and the ______.

Arizona licensee's broker, out-of-state licensee's broker

At what point must a listing agent disclose material facts to all parties involved in the transaction?

As soon as possible

All Arizona real estate employment agreements must be in writing, written in clear and unambiguous language, stipulate all terms of the agreement (including compensation), have a beginning and ending date, and ______.

Be signed by all parties

What is the term used to describe a situation in which a listing agent and a buyer's agent cooperate in the same transaction?

Co-brokerage

When you, as an Arizona licensee, cooperate with other brokers in a transaction, what is it called?

Co-brokerage

In what type of market could a buyer's strategy be to ask the seller to pay closing costs?

Cold market

Which of the following is exempt from the Clear Cooperation policy?

Commercial listings

Ned represents Sofia in the sale of her townhome. Luciana represents Sofia's buyer, Arturo. What is Luciana's responsibility to Sophia?

Disclosure that the buyer will not have the funds for the down payment unless they sell their current home.

Which of these tasks must a licensee perform for buyer clients?

Ensure that the buyer receives copies of all signed paperwork.

Which one of the following tasks must licensees perform for seller clients?

Ensure that the buyer's earnest money is deposited.

Juan is an Arizona licensee who is speaking with his broker about procuring additional agreements. What are they discussing?

Entering into a second contract to buy/sell property with a party who's already under contract with another licensee

When working with a seller, you signed a listing agreement that ensured you'd receive a commission, provided the property sold during the listing term. What type of listing agreement did you sign?

Exclusive right to sell

When you are the only licensee to represent a buyer, what type of agency relationship is in place?

Exclusive right-to-represent

You are working as a buyer's agent in Arizona. The listing agent hasn't yet paid you your portion of the commission split even though the closing was several weeks ago. If there's a dispute about the amount of your commission, what can you do?

File a civil court action (lawsuit).

Dee-Dee, a listing agent, has an exclusive right-to-sell agreement with her seller clients. She is providing a CMA, marketing the property, listing it on the MLS, and handling buyer inquiries. When she has a buyer on the line, she'll negotiate with the buyer's agent and prepare the offer to purchase. She works on a commission basis rather than for a flat fee. What type of listing service is she providing?

Full service

What should an agent do if a seller client requests an office exclusive?

Fully inform the seller about the dangers of reduced market exposure

Whoa—this market is hot, hot, HOT! You've had five offers come in since you listed your seller client's home yesterday. Of the options listed, which is the best strategy?

Have all buyers submit their "highest and best" offer, then help the seller decide which offer is most appealing.

Jenelle is an Arizona listing broker who's working with Adam, a New Mexico broker who has a buyer client for Jenelle's listing. Which of the following activities is Adam allowed to perform in Arizona?

He can't conduct any real estate activities, including marketing, negotiating, or placing signs.

Sara is your buyer customer. She doesn't want to sign a buyer agency agreement. What duty do you owe her?

Honesty and fairness

When there is no agency agreement in place between you and a buyer, which of the following duties do you owe that buyer?

Honesty and fairness

Which of the following is acceptable to include in an MLS listing?

House includes an alarm system.

Mateo is an Arizona licensee who runs into Tristan, an old friend, at a coffee shop. Tristan tells Mateo he's had his house up for sale for nine months and hasn't received any offers. Mateo offers to represent Tristan if Tristan can convince his current licensee to let him out of the original listing contract. Which of the following is true?

If Mateo does this, he could lose his license.

Which of the following is a violation of Arizona license laws?

Inducing a party to modify/break an existing real estate employment agreement for personal gain

Marc is a listing agent. He's at the property putting up the yard sign, even though the property isn't technically for sale yet and he can't accept offers. What must be true?

It's a coming soon listing.

Buyer Kristin has a buyer agency agreement with Carlotta, a licensee. Kristin's brother, Dalton, is going to showings with Kristin and helping her decide which house is the best fit. Who is/are Carlotta's client(s)?

Kristin

In Arizona, which of the following is a true statement?

Licensees can legally procure additional agreements but must get an acknowledgment from the buyer or seller that they may have to pay a second commission.

Which of the following is true about coming soon listings?

Licensees can't accept offers on them.

Which type of listing service is most popular with sellers of For Sale by Owner properties?

Limited service/flat fee

An exclusive right-to-sell agreement provides the ________ with a commission no matter who brings the buyer to the transaction.

Listing agent

What does MLS stand for?

Multiple Listing Service

Which of the following is the basis for the Clear Cooperation policy?

NAR Code of Ethics

Ron is regretting his decision to enter into this buyer agency agreement. He knew he wouldn't be compensated for his time, but he thought it would be pretty easy to help the buyers find a home, demand very little of his time, and maybe help him make some new contacts. The buyers are working with other agents who have shown the buyers at least a dozen homes that meet their criteria, with no decision in sight. Which type of agency agreement is in place?

Non-exclusive, not-for-compensation

Your buyer clients are submitting an offer on a newly built home in a very trendy part of town. The seller requires that the home be sold for at least $450,000. What is a good strategy for structuring the offer in this case?

Offer full price or more.

Norm has a listing. He can't post it to the MLS and he can't advertise it to the broad public. He can talk to colleagues at his brokerage firm about it, but it's going to take a lot of work to sell this property without having all of his marketing tools at his disposal. What type of listing does he likely have?

Office exclusive

You represent seller April, who is your Uncle Clyde's girlfriend. You receive an offer from Barry on behalf of a prospective buyer. Whose interests do you represent, and in what order?

Only April's

James, a seller, signed a listing agreement that allowed him to contract with multiple agents but only pay a commission to the agent who located a buyer. This type of listing agreement is called ______.

Open

Patsy's home had been on the market for five weeks, and two brokers had buyers who were ready to make offers. If Patsy accepted one of those offers, the corresponding broker would be the only one to earn a commission. What type of listing does this describe?

Open listing

On what type of listing (or listings) may a net listing be used in states where they are legal?

Open, exclusive agency, or exclusive right-to-sell listings

Ben is the listing agent for property seller Terry, who's requested an open listing agreement. From Ben's perspective, what's the disadvantage to signing an open listing agreement with Terry?

Other agents and the seller create more competition against Ben for the commission.

In a hot market, what pricing strategy may incite bidding wars?

Pricing at or just below market value

In a neutral market, what pricing strategy may generate interest in the property, possibly prompting multiple offers?

Pricing below market value

Who are the parties to a listing agreement?

Property sellers and their agent

Which of the following is a danger of office exclusives?

Reduced market exposure

What two things must a listing agent disclose to all parties involved in a real estate transactions?

Relevant material facts and all sources of compensation

Which of the following is a buyer's agent's task or duty?

Representing the buyer's interests

As a licensee, you'll have several tasks you must perform for your buyer client. One of these tasks is to ______.

Review transaction documents with the buyer, clarifying anything that could be confusing, without stepping outside the scope of your license

Jessica is an Arizona broker. She has two licensees working on transactions involving out-of-state brokers. Which of the following is true?

She is allowed to pay/receive compensation from brokers in other states as long as there is a written cooperation agreement in place.

Charlise has an important meeting this afternoon and dropped by her firm's Mesa office to restock her supply of real estate employment agreements because she'll need one for her meeting. What do we know about her meeting?

She'll be meeting with a potential client.

Mavis is a buyer's agent working with Blaine, an unrepresented seller. Mavis's buyer, Cintra, makes an offer on Blaine's property. Mavis assists Blaine with the paperwork. What's Mavis's relationship to the parties?

She's an agent to Cintra, and the seller is her customer.

Written cooperation agreements with out-of-state brokers are between which two parties?

The Arizona licensee's broker and the out-of-state licensee's broker

In a buyer agency relationship, whom does the licensee represent?

The buyer

When a licensee represents a seller, which one of the following statements is true about the licensee's ability to list other properties that are for sale?

The licensee is permitted to list other properties for sale, even if they're competing properties.

Your buyer client Haley is making an offer on her first home Although she can afford the full listing price, you advise her to offer 10% below the list price. What's a good reason for doing so?

The market is cold

If a buyer wants to write an offer and asks for your help but doesn't want to sign an agency agreement with you, who do you represent?

The seller

If you've shown Suzie three properties, and she decides to put an offer in on one of them but hasn't signed an agency agreement with you, who do you represent?

The seller

Who does the agent assisting the buyer in a transaction represent if there's no buyer agency agreement?

The seller

Licensee Randy has a written listing agreement with Brent, a seller. The buyer is Tim. Who is Randy's client?

The seller (Brent)

In a buyer agency relationship, what relationship does the seller have to the licensee?

The seller is the licensee's customer.

Why are net listings illegal in some states?

There's potential for a conflict of interest.

In Arizona, what's true about real estate employment agreements?

They can be legally reassigned to another broker if all parties agree in writing.

Which of the following activities can out-of-state brokers perform in Arizona?

They can't conduct any real estate activities, including marketing, negotiating, or placing signs.

Which of the following is true about net listings?

They often involve a conflict of interest.

Dani is in love with the ranch-style home on Cardinal Avenue, says she simply must have it, and is willing to pay cash. The seller is concerned about an appraisal. Which of the following would be a good strategy for structuring her offer?

Waive the appraisal.

If a seller is concerned about an appraisal, what can a buyer do to address this need when structuring the offer?

Waive the appraisal.

Bernie represented Oscar in the sale of Oscar's home. They signed an exclusive right-to sell-listing agreement. If Oscar were able to find his own buyer, would he owe Bernie a commission?

Yes, because "exclusive right to sell" means Bernie gets paid no matter who finds the buyer.

Are office exclusives legal?

Yes, but licensees must provide a disclosure to the seller that other brokers won't be given the opportunity to sell/show the property.

You are working as a buyer's agent for Nathan. Which of the following is true?

You can be compensated by the listing broker through a commission split

You've had your Arizona real estate license for less than a month when you get the opportunity to work with an out-of-state licensee. Your buyer client is moving to Utah, and you're helping him find a home there. He's just given you a check for earnest money. Which of the following is true?

You must handle the funds in accordance with Arizona rules.

As an Arizona salesperson, you know that all compensation must pass through your broker. When you work with an out-of-state licensee, there must be a written cooperation agreement in place. This agreement is between which two parties?

Your broker and the other licensee's broker

Jim is a listing agent. What offers must he present to his client, and when?

he must present all offers as soon as practicable

In a seller agency relationship, to which party does the licensee owe undivided loyalty?

seller