Chapter 9 Quiz

Seller L 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 L'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. $178,000 ABC was the cooperating brokerage, so they received a 3% commission, or $5,340. To find the sales price of the property, divide the commission by the rate: $5,340 (Part) / .03 (Rate) = $178,000 (Total). The property sold for $178,000.

Licensee K of listing agency ABC Realty has concluded a lengthy and detailed negotiation with licensee J of buyer agency XYZ Realty. After the closing of this transaction, which is the most likely scenario? A. The seller will pay both K and J. B. ABC Realty will pay both K and J. C. XYZ Realty will pay both K and J. D. ABC Realty will pay K; XYZ Realty will pay J.

D. ABC Realty will pay K; XYZ Realty will pay J. A licensee may only receive compensation directly from her broker. In a cooperative sale, the respective brokers will pay their respective licensees.

What mandates how much a real estate broker can charge for a commission? A. multiple listing service membership regulations B. National Association of REALTORS® bylaws C. state licensing law D. There are no mandates.

D. There are no mandates.. What a broker charges for a commission is purely negotiable between the broker and a client.

A seller who lives in a small town has posters made up advertising his house for sale. He posts them on telephone poles around the neighborhood. On the poster, he indicates that he will pay 3% to any broker who brings him a buyer. What type of listing might this be considered? A. exclusive agency B. exclusive right to sell C. net listing D. open listing

D. open listing When a seller offers a commission to any broker who finds a buyer, this could be a form of an open listing. The seller does not recognize any exclusive agency.

From whom may a salesperson or associate broker accept commission? a. employing broker only b. employing broker or buyer c. employing broker or listing broker d. employing broker or seller

a. employing broker only

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. landlord and property manager

Al just sold his house for $462,700. His listing agreement with Tops Realty indicates that he will pay 7.5% commission based on the sales price when the transaction closes. Tops is paying 45% of that to selling brokerage Uptown Real Estate. Selling sales associate Jill gets 60% of Uptown's commission. How much did Jill earn? a. $6,246.45 b. $9,369.68 c. $11,451.83 d. $19,086.38

b. $9,369.68

Jessie's house just sold for $342,000 and he paid a total of $22,230 in commission to the listing and selling brokerages. What was the commission rate? a. 6% b. 6.5% c. 7% 7d. .25%

b. 6.5%

Horace had an exclusive listing on Susie's house for 9 months. The week after it expired, she sold it to a co-worker. Is there anything that might help Horace collect commission on this transaction? a. protection agreement b. protection period clause c. protection waiver d. Horace is completely unprotected.

b. protection period clause

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. The house sold for $180,000 and the selling broker earned $6,000. b. The house sold for $180,000 and the selling broker earned $5,400. c. The house sold for $200,000 and the selling broker earned $6,000. d. The house sold for $200,000 and the selling broker earned $8,000.

c. The house sold for $200,000 and the selling broker earned $6,000.

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. a statement that the broker is paid regardless of who sells the property

Seller Nicki signed a contract that stipulates the broker will be compensated even if Nicki 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. exclusive right to sell agreement An exclusive right to sell agreement means the broker is paid even if someone else sells the property during the listing period.

Licensee Lyle may accept compensation from a. any other licensee. b. cooperating brokers. c. his employing broker. d. the seller client.

c. his employing broker.

An open buyer agency agreement means that 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. only if she introduces her buyer client to the property he ultimately buys.

The agreed-upon commission rate for selling an apartment building is 6% of the first $100,000 and 4% of anything over $100,000. If the total commission paid is $9,200, what is the sales price of the real estate? a. $80,000 b. $100,000 c. $150,000 d. $180,000

d. $180,000

A property sells for $236,400. The licensee involved in the transaction receives 40% of the employing broker's 7% commission. How much money did the licensee receive? a. $1,158.36 b. $3,782.40 c. $5,832 d. $6,619.20

d. $6,619.20

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. 7%

Luke signs a listing agreement with Raelynn, promising a 7% commission only if she finds a buyer for his house. This contract is an a. executed bilateral contract. b. executed unilateral contract. c. executory bilateral contract. d. executory unilateral contract.

d. executory unilateral contract.

Real estate fees or commissions are a. determined by the local board or association. b. mandated by the states' rules and regulations. c. mandated by statutory law. d. negotiated between the client and broker.

d. negotiated between the client and broker.

J 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, J sells the home to his brother and is not obligated to pay PDQ any commission. What type of listing did J have with PDQ? A. exclusive agency B. net listing C. nonexclusive right to sell D. open listing

A. exclusive agency Under an exclusive agency agreement, the seller can still sell the property on his own and not owe a commission. In an exclusive agency listing, unlike an open listing, only the listing brokerage can put a sign in the yard and advertise it.

In the multiple listing service, it states that the listing broker will pay 4% to a buyer's broker. Buyer's broker S 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. $141,500 We don't know the total commission paid, but we know that buyer's broker Sue earned $5,660, which was 4% of the sales price. To find the sales price of the home, then, divide the commission by the commission rate: $5,660 ÷ 0.04 = $141,500

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

B. $28,000 It breaks down this way: 5% of $200,000 = $10,000; 4% of $300,000 = $12,000; and 6% of $100,000 = $6,000. Add them together to get $28,000.

T is a licensee at Lakeside Realty, where she has a 55%-45% commission split with her broker. Her buyer bought a house for $432,000. The listing broker offered 3% to a cooperating broker. How much did T earn on the sale? A. $5,832 B. $7,128 C. $7,776 D. $9,504

B. $7,128 First, find out how much Lakeside earned with their 3% commission: $432,000 x 0.03 = $12,960. Then find T's 55% share of that: $12,960 x 0.55 = $7,128.

A homeowner just sold his house for $462,700. His listing agreement with Tops Realty indicates that he will pay 7.5% commission based on the sales price when the transaction closes. Tops is paying 45% of that to selling brokerage Uptown Real Estate. Selling sales associate J gets 60% of Uptown's commission. How much did J earn? A. $6,246.45 B. $9,369.68 C. $11,451.83 D. $19,086.38

B. $9,369.68 First, find the total commission: $462,700 x 0.075 = $34,702.50. Next, find Uptown's share: $34,702.50 x 0.045 = $15,616.13. Then find J's share of that: $15,616.13 x 0.60 = $9,369.68. J will receive $9,369.68 in commission at closing.

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

B. exclusive right to sell Only the exclusive right to sell listing agreement entitles a broker to a commission no matter who finds the buyer.

A property manager becomes an agent of a property owner by signing a A. listing agreement. B. management agreement. C. power of attorney. D. specialized statement.

B. management agreement. The management agreement between a property manager and a property owner creates an agency relationship.

N 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. $12,090 When calculating commission, multiply the sales price (Total) by the commission percentage (Rate): $186,000 x 6.5% (0.065) = $12,090 commission.

Licensee M receives a commission of $11,268. He has a 50%-50% split with his broker. The sales price of the property is $375,600. What rate of commission did the broker charge? A. 3% B. 4.5% C. 6% D. 12%

C. 6% This is a two-part question. First, determine the total commission made on the sale. If M receives $11,268 as half of the commission, then the total commission is $22,536. Now, use the commission formula. Commission Rate (%) = Commission (Part) ÷ Sales Price (Total): $22,536 ÷ $375,600 = 0.06. The commission rate charged was 6%.

You are currently associated with Ace Realty. They recently changed the commission structure and so you're looking for a new 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 the commission split. C. The listings remain at Ace. D. You can take them with you to Tip Top.

C. The listings remain at Ace. A listing agreement is a contract between the client and the broker at Ace. As such, the broker owns those listings and you cannot take them with you, even if you are the agent who worked to get the signed listing agreements.

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. listing agreement A listing agreement is a contract that creates an agency relationship between a seller and a broker.

Seller S calls a real estate agent to list his home. S 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. net listing With a net listing, the seller sets a net amount he is willing to accept for the property, and the broker is entitled to keep any amount in excess of that as commission.

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

C. nothing The listing agent commission is 7%, but the seller is not obligated to pay the buyer's broker anything.

An open buyer agency agreement means that a broker earns commission 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. only if she introduces her buyer client to the property he ultimately buys. A nonexclusive buyer agency agreement or open buyer agency agreement is one in which a broker earns a commission only if she is the agent who introduces the buyer to the property he purchases. This agreement offers the least protection for a broker to receive a commission.

Generally speaking, a broker has earned 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. when a ready, willing, and able buyer is found on terms acceptable to the seller. A broker is generally entitled to commission only after fulfilling the duty of finding a ready, willing, and able buyer on the seller's terms. The agency agreement should, of course, spell out the specific conditions of the compensation.

Of these, which is LEAST LIKELY to be negotiable in a listing agreement? A. the broker's cooperation with other brokers B. the commissions C. whether there is an end date D. the scope of activities permitted

C. whether there is an end date. Most states require listing agreements to contain a definite termination date. The other items are negotiable, and a licensee must inform the consumer of that fact.