Unit 8: Real Estate Brokerage

social media

Internet tools to facilitate the creation and sharing of information

CRS

Affiliate designation of NAR specializing in residential property

Terry is the personal assistant of a real estate sales associate. Terry must be paid by the broker who employs the sales associate. This means that

Terry has a real estate license.

Two real estate professionals were found guilty of conspiring with each other to allocate real estate brokerage markets. A seller suffered an estimated $90,000 loss because of their activities. If the seller brings a civil suit against the two real estate professionals, what can the seller expect to recover?

$270,000 plus attorney's fees and costs

Junk emails are prohibited by what legislation?

CAN-SPAM Act

Realist Code of Ethics

Established by the National Association of Real Estate Brokers

A sales associate can carry out all the same activities as a real estate broker.

False

A sales associate's compensation is determined by the client.

False

If a state licensing authority's regulations conflict with statutory law, the regulations will prevail.

False

Price-fixing, which is the practice of setting prices for products or services rather than letting competition in the open market establish those prices, is legal.

False

Real estate license laws do not include disciplinary systems.

False

States' licensing rules and regulations do NOT have the same force and effect as statutory law.

False

Real estate license laws are intended to protect the public.

True

The federal law that makes contracts originated, negotiated, and executed over a combination of computer and cell phone enforceable is

UETA.

All of the following are prohibited under the antitrust laws EXCEPT

a broker setting a company commission schedule.

Spam

Unsolicited junk email

REALTOR®

Member of the National Association of REALTORS

Realtist

Member of the National Association of Real Estate Brokers

ready, willing, and able buyer

Person who is prepared to buy property on the seller's terms and is ready to take positive steps to consummate the transaction.

disclaimers

A statement indicating no legal responsibility for information; no warranties or representations have been made.

Ethics

A system of moral principles, rules, and conduct

boycott

When individuals or businesses withhold their patronage to a business as a protest or to reduce competition. occurs when two or more businesses conspire against another business or agree to withhold their patronage to reduce competition.

Multiple Listing Service (MLS)

A marketing organization composed of member real estate professionals who agree to share their listing agreements with one another in the hope of procuring ready, willing, and able buyers for their properties more quickly than they could on their own. Most multiple listing services accept exclusive right-to-sell or exclusive agency listings from their member real estate professionals.

Electronic signature in Global and National Commerce Act (E-sign)

An act that makes contracts (including signatures) and records legally enforceable regardless of the medium in which they are created.

employee

For tax purposes, someone who works as a direct employee of an employer and has employee status. The employer is obligated to withhold income taxes and Social Security taxes from the compensation of employees. follow rules governing working hours, office routine, attendance at sales meetings, assignment of sales quotas, and adherence to dress codes.

NAR

Has an established Code of Ethics that REALTORS must subscribe to.

GRI

Has completed the requirements of the REALTOR Institute

electronic contracting

is a growing part of real estate practice because it quickly and efficiently integrates information in a real estate transaction between clients, lenders, and title and closing agents.

The amount of commission paid to a sales associate is determined by

mutual agreement with the broker

A sales associate wants to be classified by the IRS as a qualified real estate agent—the equivalent of holding independent contractor status for tax purposes. The sales associate must meet all of the following requirements EXCEPT

perform all work unsupervised by the managing broker.

Do-not-call registries and laws such as the Telephone Consumer Protection Act, Junk Fax Prevention Act, and rules of the Federal Communications Commission dictate

prohibited communications.

Price-fixing is punishable by up to a $1 million fine and 10 years in prison under

the Sherman Antitrust Act

penalties for violating antitrust laws

under the federal sherman antitrust act people who fix prices or allocate markets may be subject to a maximum of a one million dollar fine and ten years in prison. for corporations the fine may be up to 100 million.

To be entitled to receive compensation from a real estate sales transaction, an individual must be all of the following EXCEPT

unrelated to either the buyer or the seller.

National Do Not Call Registry

which is managed by the Federal Trade Commission (FTC). The registry is a list of telephone numbers from consumers who have indicated their preference to limit the telemarketing calls they receive. The registry applies to any plan, program, or campaign to sell goods or services through interstate phone calls.

Antitrust laws

Laws designed to preserve the free enterprise of the open marketplace by making illegal certain private conspiracies and combinations formed to minimize competition. Most violations of antitrust laws in the real estate business involve either price-fixing (real estate professionals conspiring to set fixed compensation rates) or allocation

Independent Contractor

Someone who is retained to perform a certain act but who is subject to the control and direction of another only as to the end result and not as to the way in which the act is performed. Unlike an employee, an independent contractor pays for all expenses and Social Security and income taxes and receives no employee benefits. Most real estate sales associates are independent contractors, meeting the Internal Revenue Service definition for a qualified real estate agent.

Uniform Electronic Transactions Act (UETA)

Sets forth rules for entering into an enforceable contract using electronic means.

A real estate company has adopted a 100% commission plan. The monthly desk rent required of sales associates is $1,500, payable on the last day of the month. In August, a sales associate closed a transaction that earned a commission of $11,370 and a second transaction that earned a commission of $6,875. The sales associate's additional expenses for the month were $2,170. How much of the total monthly income did the sales associate keep?

14,575

Internet Data Exchange

Allows MLS members equal rights to display MLS data

Under antitrust laws, which of the following activities is acceptable?

A broker setting a company commission schedule

Which of the following is allowed under antitrust laws?

A broker setting a company commission schedule

A real estate assistant would never be required to have a real estate license.

False

The Institute of Real Estate Management (IREM) is affiliated with the National Association of Real Estate Brokers (NAREB).

False

commission

Payment to a real estate professional for services rendered, such as in the sale or purchase of real property; usually a percentage of the selling price of the property.

Internet Data Exchange (IDX) policy

Policy that allows all multiple listing service (MLS) members to restrict internet access to MLS property listings.

Standard of Practice

Practical applications of the articles of the REALTOR Code of Ethics

A broker has established the following office policy: "All listings taken by any sales associate of this real estate brokerage must include compensation based on a 7% commission. No lower commission rate is acceptable." If the broker attempts to impose this uniform commission requirement, which statement is TRUE?

The broker may, as a matter of office policy, legally set the minimum commission rate acceptable for the firm.

Procuring Cause

The effort that brings about the desired result. Under an open listing, the real estate professional who is the procuring cause of the sale receives the commission. activities such as conducting an open house, placing an advertisement in the local real estate advertising magazine, making the property listing available on the internet, and showing the house to the buyer.

Managing Broker

The real estate professional who is responsible for supervision of the real estate professionals who act on behalf of the brokerage; may also be called a supervising broker.

minimum level of services

The services that real estate professionals must provide to clients, as prescribed differently by certain states; for example, assisting clients in negotiation and answering questions from clients about offers, counteroffers, and contingencies.

electronic contracting

Transactions conducted through email or fax

A real estate broker is licensed to buy, sell, exchange, or lease real property for others and to charge a fee for those services.

True

A real estate broker's compensation is specified in the contract with the client.

True

ARELLO promotes state licensing standards.

True

All 50 states regulate the activities of real estate professionals.

True

Group boycotting, allocation of customers or markets, and tie-in agreements are all prohibited acts under the Sherman Antitrust Act.

True

Laws cannot guarantee an ethical or moral marketplace.

True

Many trade organizations serve the real estate business. The largest is the National Association of REALTORS® (NAR).

True

The purpose of the Electronic Signatures in Global and National Commerce Act (E-Sign) is to make contracts (including signatures) and records legally enforceable, regardless of the medium in which they are created.

True

A REALTOR® is BEST described as an individual who is

a real estate licensee and a member of the National Association of REALTORS® (NAR).

In order for a broker to be paid on an open listing, the broker must

be the procuring cause of the sale.

Many organizations seek to ensure a high standard of conduct in their members by developing and requiring adherence to a

code of ethics.

A recent important change to real estate brokerage practice is

digital communication in all its forms.

price fixing

is a practice in which competitors agree to set prices or other terms and conditions for products or services rather than letting competition in the open market establish those prices.

code of ethics

is a written system of standards for ethical conduct. The code contains statements designed to advise, guide, and regulate behavior.

brokerage

is simply the business of bringing parties together. A real estate broker is licensed to buy, sell, exchange, or lease real property for others and to charge a fee for those services.