Real estate brokerage

A listing on a property could be considered an A. offer to sell B. option to purchase C. solicitation of offers to buy D. unilateral promise to sell

C

What is the most common way to create an agency relationship between a home seller and a broker? A. buyer broker agreement B. by implication C. listing agreement D. oral contract

C.

______ secure the services of a licensed property manager through a property management agreement, which is also a type of brokerage agreement

Landlords

______ may secure the services of brokers to find property to rent with a brokerage agreement

Tenants

A licensee may be able to accept commission form a former employing broker if licensed under that broker when the commission was earned. true or false

True

broker protection clause

a clause in an agency agreement that entitles the broker to commission if the property is sold during a certain period after the agreement expires

__________ secure the services of a broker though a buyer agency agreement, sometimes called a buyer representation agreement or a buyer brokerage agreement

buyers

Brokerage contracts are _________ that establish the agency relationship between a client and a real estate broker

employment agreements

Landlords secure the services of a licensed property manager through a ___________, which is also a type of brokerage agreement. Landlords could also contract with brokers to find tenants

property management agreement

_______ secure the services of a broker through a listing agreement

sellers

A broker with an open listing on Shelly's house gets a commission only if he is the procuring agent. true or false

true

A property sold for $249,500. The total sales commission is 6% and is divided as follows: Listing brokerage gets 60% of the commission; selling brokerage gets 40% of the commission. The selling agent gets 60% of the selling brokerage commission. How much will the selling agent earn? A. $3,592.80 B. $5,389.20 C. $5,988.00 D. $8,982.00

A

After paying its franchise fee, XYZ brokerage is left with $14,004 in commission on the sale of Rob's house. If XYZ has 40%-60% split with its licensees, how much will listing agent Debra earn in commission? A. 5,601.60 B. 6,224.00 C. 8,402.40 D. 14,004.00

A

During a listing interview, a seller demands that the listing agent reduce the proposed commission by 1%. What is the best course of action for the licensee? A. call the employing broker and discuss the matter B. explain that commissions are generally fixed in each locality C. go ahead and reduce the commission D. refuse the listing, as commissions are not negotiable

A

In a typical listing agreement, the agent's promise is A. delivering a ready and willing buyer B. due diligence in marketing the property for sale C. finding a prospective buyer

A

The listing agreement provides that the listing broker may make an offer of cooperation to other brokers to assist in finding purchasers willing to buy the seller's property. A buyer's agent sees this in the MLS. In this case, the cooperating broker represents the A. buyer B. buyer and the seller C. listing broker D. seller

A

The listing broker will receive commission for the sale unless the owner sells it himself. A. exclusive agency B. exclusive right to sell C. net listing D. open listing

A

Who are the parties to a property management agreement? A. landlord and property manager B. listing broker and landlord C. tenant and landlord D. tenant, landlord, and property manager

A

in a typical listing agreement, the agent's consideration is A. delivering a ready and willing buyer B. due diligence in marketing the property sale C. placing the listing in the MLS D. the promise to find a buyer

A

Non-exclusive buyer agency agreement

An agreement between a buyer and any number of brokers where broker earns a commission only if he is the one who introduces the buyer to the property she purchases

Broker Bob is retained by Big Town Developer to sell condo units for 5.5% commission on each sale. If every condo unit sells for $145,000, how many condos does Bob have to sell to earn at least $70,000? A. 12 B. 9 C. 8 D. 6

B

Broker Mike listed a property for sale. He negotiated a 5% commission on the first $200,000, a 4% commission on the next $300,000, and a 6% commission on any amount over half a million dollars. The property sold for $600,000. What is Mike's commission? A. 26,600 B. 28,000 C. 30,000 D. 32,000

B

Buyer Ray contracts with agent Debra, guaranteeing Debra's sponsoring broker will receive a 3% commission for finding him a house, regardless of who pays. Debra finds a house, and the MLS indicates that the listing agent will pay 2% of the sales price to a buyer's agent. How much will Debra's sponsoring broker earn? A. 2% from the seller and nothing from the buyer B. 2% from the seller and 1% from the buyer C. 2% from the seller and 3% from the buyer D. 3% from the buyer and nothing from the seller

B

In the MLS, it states that the listing broker will pay 4% to a buyer's broker. Buyer's broker Sue earns a total of $5,660 commission. What was the sales price of the property? A. $80,858 B. $141,500 C. $186,667 D. $226,400

B

Of these buyer agreement, which offers the MOST protection for the broker's commission? A. exclusive agency buyer agency agreement B. exclusive buyer agency agreement C. open buyer agency agreement D. non exclusive buyer agency agreement

B

Regardless of who sells the property, the listing broker will receive commission A. exclusive agency B. exclusive right to sell C. net listing D. open listing

B

Terry is ready to purchase his first house. He has a contract with a broker to help him find a house and represent his interests throughout the purchase process. What type of contract is this? A. broker employment agreement B. buyer agency agreement C. option to buy agreement D. purchase agreement

B

The seller lists her house with New Age Realty. The next day, the seller goes to work and mentions listing her house. A co-worker expresses interest in the listing. What kind of listing would make the broker entitled to a commission if the co-worker makes an offer acceptable to the seller? A. exclusive agency B. exclusive right to sell C. net listing D. open listing

B

Which agreement limits the buyer to representation by a single brokerage, and the broker is paid the negotiated fee only if the broker finds the property that the buyer eventually purchase? A. buyer agency agreement B. exclusive agency buyer agency agreement C. exclusive buyer agency agreement D. open buyer agency agreement

B

Which contract would NOT be considered a brokerage agreement? A. amy signs a contract with Billy to find an apartment for her to lease B. Brad signs a contract with Carol to purchase her house C. Cathy signs a contract with Dennis to manage one of his properties D. Dusty signs a contract with Ernest to market his house for sale

B

Which type of listing provides the greatest opportunity for an agent to get paid? A. exclusive agency B. exclusive right to sell C. open

B

XYZ brokerage negotiates a 7% commission for selling Rob's house, offering 3% of the sales price to a selling broker. When the house sells for $389,000, how much will XYZ brokerage earn if it pays the first 10% of its commission to a national realty company as a franchise fee? A. 11,670 B. 14,004 C. 24,507 C. 27,230

B

An open buyer agency agreement means that the broker Susan is paid A. if any broker introduces her buyer client to the property he ultimately buys B. only if her buyer client purchases a property that she has listed C. only if she introduces her buyer client to the property he ultimately buys. D. no matter who introduces her buyer client to the property he ultimately buys

C

Broker James offers 3% on the sale of his listing to any cooperating broker, he's charging 7% commission total. If James received $8,000 in commission how much did the house sell for and how much did the selling broker earn? A. house sold for $180,000 and the selling broker earned $6,000 B. house sold for $180,000 and the selling broker earned $5,400 C. house sold for $200,000 and the selling broker earned $6,000 D. house sold for $200,000 and the selling broker earned $8,000

C

Broker Jeff's JT Realty earns $18,785 commission on a $289,000 sale. What was the commission rate? A. 5.75% B. 6% C. 6.5% D. 7

C

Generally speaking a broker has earned his or her commission A. at the closing table B. when the listing agreement is signed C. when a ready, willing, and able buyer is found on terms acceptable to the seller D. when a sales contract is signed

C

Mountain Realty sells TipTop Realty's listing. Mountain receives $2,250, which is 50% of a 6% commission. What is the sales price of the home? A. 65,000 B. 72,600 C. 75,000 D. 83,500

C

Pat's home is listed for sale on the MLS by listing broker Abe. There is no offer of cooperation mentioned. Broker Jane has a buyer client who is interested in Pat's home and presents an offer, which Pat accepts. Pat is paying 7% commission. How much of the commission must Pat pay Jane? A. 7% B. 3.5% C. nothing D. impossible to tell

C

Penny just sold her house for $186,000. The commission rate in the listing agreement was 6.5%. How much commission did she owe from the sale of the house? A. 7,558 B. 11,160 C. 12,090 D. 28,615

C

Real estate licensee generally receive commission from their employing broker when A. they list a home for sale B. they have a signed purchase agreement C. the transaction closes D. the loan application goes through

C

Seller Nick signed a contract that stipulates the broker will be compensated even if Nick finds the buyer herself. What type of agreement is this? A. buyer agency agreement B. exclusive agency agreement C. exclusive right to sell agreement D. open agreement

C

Seller Oliver will pay 6% of the sales price of his home, equally split between the listing broker and the selling broker. Hilltop Realty earns $6,750 in commission when its client buys Oliver's house. Find the sales price of the property. A. 40,500 B. 112,500 C. 225,000 D. 405,000

C

Seller Sam calls a real estate agent to list his home. Sam tells the agent that he wants $156,000 in his pocket at closing and the agent can have the rest for the commission. What type of listing would this be? A. exclusive agency B. exclusive right to sell C. net listing D. open listing

C

Ted and his broker Judy have an agreement in which Judy may extend her property search to other brokerages, or unlisted properties, such as FSBO properties or properties not for sale that match the buyers specifications. What type of agreement is this? A. buyer agency agreement B. exclusive agency buyer agency agreement C. exclusive buyer agency agreement D. non exclusive buyer agency agreement

C

The listing agent presents a full price cash offer with no contingencies to the seller during the listing period. The seller refuses to sign the contract, bc he does not like the buyers. Which statement do you think is TRUE? A. no commission can be due unless the sale closes B. the buyer could sue to force the sale C. the listing agency is due a commission D. the listing contract should be automatically terminated

C

The listing agent presents a full price cash offer with no contingencies to the seller during the listing period. The seller refuses to sign the contract, because he does not like the buyers. Which statement do you think is TRUE? A. no commission can be due unless there is a closing B. the buyer could sue for specific performance C. the listing agency is due a commission D. the listing contract would be automatically terminated

C

Which is least likely to be negotiable in a listing agreement? A. the broker's cooperation with other brokers B. the commission C. whether there is an end date D. the scope of activities permitted

C

Which statement indicates that the listing agreement is an exclusive right to sell? A. a statement about the negotiated commission percentage B. a statement that the agreement terminates at the end of the listing period C. a statement that the broker is paid regardless of who sells the property D. a statement that the broker will list the property in the MLS

C

You are currently associated with Ace realty. They recently changed the commission structure and so you're looking for a new employing broker. You decide to go to work for Tip Top Real Estate. On your last day at Ace, you have three active listings. What happens to them? A. Ace can agree to sell the listings to Tip Top B. ace has the option to let you take the listings with you if you agree to give them their commission split C. the listings remain at Ace D. you can take them with you to Tip Top

C

the seller sets a price he's willing to accept; the broker receives any excess amount s commission A. exclusive agency B. exclusive right to sell C. net listing D. open listing

C

A property sells for $236,400. The licensee involved in the transaction receives 40% of her employing broker's 7% commission. How much money does the licensee receive? A. $1,158.36 B. $3,782.40 C. $5,832.00 D. $6,619.20

D

A real estate licensee will lose the right to a commission if he or she A. did not personally market and sell the listing B. fails to advertise the property C. produces a willing buyer D. was not licensed when a sale occured

D

A seller who lives in a small town has posters made up advertising his house for sale. He posts them on many telephone poles around the neighborhood. As part of the poster, he advertises that he will pay 3% to any broker who brings him a buyer. This type of listing is a(n) A. exclusive agency B. exclusive right to sell C. net listing D. open listing

D

Licensee Karen of listing agency Diamond Realty has concluded a lengthy and detailed negotiation with licensee Jim of buyer agency Garnet Realty. After the closing of this transaction, which is the most likely scenario? A. karen and jim will both be paid by Diamond Realty B. Karen and Jim will both be paid by Garnet Realty C. Karen and Jim will both be paid by the seller D. Karen is paid by Diamond Realty and Jim is paid by Garnet Realty

D

Listing brokerage Rapid Realty receives a commission check of $28,700 from the sale of client Dan's house. The house sold for $410,000. Find the commission rate A. 6.25% B. 6.5% C. 6.75% D. 7%

D

Seller Barbara just sold her house for $379,000. Her listing agreement indicates that she will pay 6.5% of the sales price as commission when the transaction closes. How much commission does she owe? A. $2,463.50 B. $5,830.77 C. $16,012.75 D. $24,635.00

D

Seller Laura will pay 4% of the sales price of her home to the listing brokerage and 3% to a cooperating brokerage. ABC brokerage earns $5,340 in commission when its client buys Laura's house. Find the sales price of the property. (rounded to the nearest dollar) A. 76,286 B. 104,785 C. 133,500 D. 178,000

D

Tallulah sells her cottage through XYZ Realty, promising to pay commission of 7 1/4%. Both the listing broker and the selling broker are agents at XYZ Realty, which earns $31,646.25 on the deal. What did the house sell for (rounded to the nearest dollar)? A. $221,524 B. $225,954 C. $229,435 D. $436,500

D

Which situation would NOT require a licensee to disclose his or her compensation arrangement? A. buyer's agent receives a bonus from the listing agent for submitting an offer by a certain date B. the licensee in a dual agency situation receives compensation from both parties C. the licensee receives a commission split from another broker D. a selling agent gets a bonus from a client for selling above the listing price.

D

the seller can have as many brokers as she chooses A. exclusive agency B. exclusive right to sell C. net listing D. open listing

D

Jonah lists his home with PDQ realty, allowing them to put a sign in the yard, list it in MLS, and advertise it in the local newspaper. During the listing period, Jonah sells the home to his brother and is not obligated to pay PDQ any commission. What type of listing did Jonah have with PDQ? A. exclusive agency B. net listing C. non-exclusive right to sell D. open listing

a

Net listing

a compensation strategy in which the seller sets a net amount that is acceptable for the property; if the actual selling price exceeds that amount, the broker is entitled to keep the excess as commission. Net listings are illegal in many states

referral fee

a fee paid from one employing broker to another employing broker for directing a buyer or seller to a real estate agent in that brokerage

Multiple listing service (MLS)

a listing service where local member brokers agree to share listings and commissions on properties sold jointly. The MLS consists of an online database that is updated regularly to include new listings. It does not create a subagency relationship among brokers and their clients

open listing

a non-exclusive listing, given by a seller to as many brokers as he chooses. If the property is sold, a broker is only entitled to a commission if he is the procuring cause of the sale

Seller financing arrangement

a statement indicating the seller is willing to consider seller financing, if applicable

conflict of interest

a statement that any conflicts of interest will be disclosed

Indemnification Clause

a statement that the buyer and seller will not sue each other in the event that misinformation was shared between them

earnest money

a statement that the seller agrees that the person holding the earnest money deposit may keep an uncashed check until the seller accepts the offer

listing agreement

a written agency contract between a seller and a broker, stating that the broker will be paid a commission for finding ( or attempting to find) a buyer for the seller's real property. A listing agreement is a personal service contract

exclusive agency listing

an agency contract between a seller and a broker that entitles the broker to a commission if anyone other than the seller finds a buyer for the property during the listing term

Exclusive right to sell listing

an agency contract between a seller and a broker that entitles the broker to a commission if anyone, including the seller, finds a buyer for the property during the listing term

Cooperating agent

an agent who works with a listing agent to sell property in a real estate transaction; the selling agent who found a buyer for the listed property. Also called cooperating broker

Arbitration

an alternative to a court proceeding where the parties agree to submit facts and evidence to an impartial third party

buyer agency agreement

an employment contract between a buyer and a broker that grants the broker the right to represent the buyer in the purchase or lease of property and that makes the buyer responsible for paying commission to the broker

Exclusive agency buyer agency agreement

an employment contract between a buyer and broker in which the broker earns commission only if she is the broker who finds the property the buyer eventually purchases

exclusive buyer agency agreement

an employment contract between a buyer and broker in which the broker is paid the negotiated fee even if the buyer purchases property through another broker or finds it on his own

procuring cause

an uninterrupted series of events leading to the creation of a contract; the party whose efforts resulted in the creation of a binding contract for sale

Tenants may secure the services of brokers to find property to rent with a _______

brokerage agreement

buyers secure the services of a broker through a _________, sometimes called a buyer representation agreement or a buyer brokerage agreement

buyer agency agreement

commission

compensation paid to a broker for services in a real estate transaction; usually a percentage of the sales price. Commission is negotiable and should be clearly spelled out in a written brokerage agreement

Dangling commission

compensation that licensees may accept from a broker with whom they are no longer associated, assuming they were licensed with that broker at the time the commission was earned and the right to any commission under such circumstances is spelled out in the employment agreement

In order to form an agency relationship, there must be some sort of negotiated compensation. true or false

false

Ned is a former client of licensee Kim, who works for ABC Realty. Ned is moving to another state and is looking for a good buyer's agent. Kim refers Ned to her sister in law Kelsey, who is a licensee working for XYZ Realty in that state. Kelsey can pay Kim a finder's fee for referring Ned to her. true or false

false

Barb's son Thomas is a licensed real estate broker. When she decides to sell her house, Thomas cannot be her listing agent unless she agrees to pay him commission. true or false

false. compensation is not a requirement of an agency relationship

an open listing is likely to result in better service since there are more brokers working for the seller. true or false

false. it's more likely that exclusive listing agreements result in better service for sellers than open listing agreements because the broker's claim to a commission is more secure

Broker Liz has a listing agreement to find a ready, willing, and able buyer for Chuck's house. This gives her incidental authority to include his house on her Sunday morning "real estate roundup" tv show true or false

false. need the written consent of the seller

The contract that creates an agency relationship between a property owner and a property manager is a lease. true or false

false. the contract between a property owner and property manager is called a property management agreement.

Harry wants to sell his house, so he signs an open listing agreement with Joe of Lots-O-Wealth Realty. Harry promises to pay Joe a commission only if he finds a ready, willing, and able buyer. This is an example of a bilateral contract. true or false

false. this is a unilateral contract

Sellers secure the services of a broker through a ______

listing agreement

Do you think that it's necessary for a real estate broker to have the listing on a property in order to advertise it? yes or no

no

Licensee Fred's employing broker has an exclusive buyer agency agreement with client Gail indicating that she will pay 3% of the sales price if she finds the house of her dreams. Do you think that Fred is required to disclose his commission from Gail to the listing broker? yes or no

no. Fred has no legal or ethical obligation to disclose the terms of the agreement between his employing broker and client Gail to anyone, including the listing broker

other brokers is a statement that

the seller will not enter into a listing contract with another broker during the term of the agreement

compensation

the valuable consideration given by one person or entity to another person or entity in exchange for the performance of some activity or service

Commission is always negotiable between a sponsoring broker and a client. true or false

true

Lisa wants to sell her house, so she signs an exclusive right of sale agreement with broker Lori of Lakeside Real Estate. Lisa promises to pay Lakeside a commission when the house sells. This is an example of a bilateral contract. true or false

true

Offer of cooperation

usually published in a MLS that includes the amount (most frequently a percentage of the sales price or a flat fee) offered as compensation to another brokerage for participating in a property transaction, for example, as a selling agent, buyers agent, or leasing agent

What if the listing broker offers a commission split to a buyer's agent? would Fred be obligated to disclose that to client Gail? yes or no

yes. the listing broker is offering to pay a buyer's agent 2% of the 6% commission, Fred is obligated to inform client gail of that fact