Ch.12

Which of the following duties refers to a broker's obligation to keep the principal informed about financial aspects of their assignment?

accounting

Christopher has hired a real estate broker to help facilitate the sale of his home. Realizing that Christopher is most likely going to realize a loss on his investment due to the recent decline in housing values in his neighborhood, the broker has agreed to charge Christopher a lower commission rate as long as Christopher enters into an exclusive right of sale listing contract. If Christopher ends up selling his house for $364,583 and takes home $350,000 after paying the real estate broker's commission, what was the commission rate that the broker ended up charging?

4% 364583-350000=14583 14583/364583 = 3.9%

As an agent for the buyer or seller, a broker has six basic fiduciary responsibilities. Which of the following definitions best describes the responsibility of obedience?

A broker must follow the instructions of the principal to the limits of what is legal and ethical

Suppose you are interested in selling your home and would like to clear a net value of $300,000. If you have agreed to pay your broker a commission of 5.5% (no matter who ultimately is responsible for finding the buyer), what price must you sell the home for in order to meet your net profit (rounded to the nearest dollar)?

Gross Value = Net Value / [ 1 - Broker Commission ] = $ 300,000 / [ 1 - 0.055 ] = $ 300,000 / 0.945 = $ 317,460.3

According to the law of agency, real estate brokers are required to observe several duties as they act as an agent for an individual trying to buy or sell a property. Which of the following duties refers to a broker's obligation to be completely open and honest with the principal?

disclosure

One of the traditional requirements for individuals who wish to obtain a brokerage license has been to demonstrate financial capacity to cover damage judgments brought against them by clients. In order to address this concern, some states have required licensees to first obtain

errors and omission insurance

There are a number of different types of listing contracts that can be used when marketing a property. Which of the following types of listings requires the broker to be paid a commission if any other broker, or even the owner, sells the property during the contract period?

exclusive right of sale listing

Which of the following duties refers to a broker's obligation to never subordinate the best interest of their principal to the interests of others?

loyalty

It is common for real estate firms to identify submarkets, such as property types or particular sections of a city, in which they can specialize and concentrate their transaction activity. This practice is referred to as

market segmentation

State licensing laws generally prescribe two levels of real estate brokerage licensing: the broker license and the salesperson license. Which of the following responsibilities is an individual with a salesperson license permitted to do?

negotiate listing contracts or contracts for sale

All 50 states have licensing laws that regulate persons and companies that engage in the brokerage business. Interpreting and enforcing state licensing laws falls under the responsibilities of which of the following parties?

real estate commission

In an open-listing contract, an individual broker is entitled to a commission if

she procures the buyer of the property

Which of the following duties refers to a broker's obligation to represent the interests of their principals to the best of their ability in the same way they would represent themselves, acquiring and applying the necessary knowledge and information about relevant laws and regulations, the market, and subject property?

skill and care

Real estate brokers operate under the law of agency, which gives a broker the right to act for a principal in trying to buy or sell a property. In the basic principal-agent relationship of real estate brokerage, real estate brokers act in the capacity of a

special agent

Federal and state laws prohibit discrimination in housing. However, exemptions do exist depending on the particular type of property that is being considered. All of the following activities could be considered exempt in specific scenarios except refusing to sell or rent

to a person because of race