Real Estate Guide Unit 9

Which law has a feature that commercial email messages must include a means by which the recipient can unsubscribe? A) TCPA B) FCC Act C) CAP-SPAM Act D) COPPA

CAN-SPAM Act

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.

Allocation of customers or markets

Agreement between real estate professionals to divide markets and do not compete with each other's business.

An owner tells a group of brokers, "I will pay a commission to whoever brings me a buyer." In this case, the broker who is going to get paid must be the: A) Procuring cause. B) Dual agent. C) Exclusive agent. D) Facilitator.

Procuring cause

T/F: The amount of a broker's compensation is always negotiable.

TRUE

T/F: 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

T/F: Under the Sherman Antitrust Act, people who fix prices or allocate markets may be subject to a maximum of a one million dollar fine and 10 years in prison.

TRUE

Assuming that the listing broker and selling broker split their commission from a transaction equally, what was the sales price of the property if the commission rate was 6.5% and the listing broker received $12, 593.50? A) $193,746 B) $139,900 C) $387,492 D) $256,200

$387,492

All of these are violations of federal antitrust laws EXCEPT: A) Tie-in agreements B) Allocation of customers C) Commission splitting D) Group boycotting

Commission splitting

An independent contractor and a broker can agree upon which of the following? A) Compensation the contractor would receive B) Work schedule the contractor would have to follow C) Sales meetings the contractor would need to attend D) Number of hours the contractor would have to work

Compensation the contractor would receive

All of these are requirements for independent contractor status used by the IRS EXCEPT: A) Specific hours stated in a written agreement B) A substantial portion of the individual's income is based on sale production rather than hours worked. C) A written agreement that specifies that the individual will not be treated as an employee for tax purposes. D) A current real estate license.

Specific hours stated in a written agreement.

All of these are ways for a broker to charge for services EXCEPT: A) Hourly rate B) Commission based on a percentage of the selling price. C) Standard community rate. D) Flat fees

Standard community rate

T/F: A real estate broker's compensation is specified in the contract with the client.

TRUE

Spam

Unsolicited junk main

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.

Even if a consumer has requested placement on the National Do Not Call Registry, a real estate professional may call the consumer up to how many months after the consumer's last purchase? A) 6 B) 18 C) 12 D) 3

18

Boycott

When individuals or businesses withhold their patronage to a business as a protest or to reduce competition

In real estate, a sales associate is always: A) An independent contractor. B) A licensee who performs real estate activities on behalf of a broker. C) A combination office manager, marketer, and organizer with a fundamental understanding of the real estate industry, who may or may not be licensed. D) An employee of a licensed broker.

A licensee who performs real estate activities on behalf of a broker.

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.

Under the Sherman Antitrust Act, the penalty for a person found guilty of fixing prices or allocating markets is: A) A maximum of $100 million B) $50,000 per transaction up to a maximum of $500,000 C) A maximum of $1 million fine and 10 years in prison D) A minimum of $100,000

A maximum of $1 million and 10 years in prison

National Do Not Call Registry

A national registry, managed by the Federal Trade Commission, that lists the phone numbers of consumers who prefer to limit the telemarketing calls they receive.

Real Estate Broker

A person who is licensed only to perform real estate activities on behalf of a broker.

Electronic contracting

A process of integrating information electronically in a real estate transaction between clients, lender, and title and closing agents.

Disclaimers

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

Commissions are negotiable: A) Unless the exclusive agency listing is used, because the seller can compete with the broker. B) In all cases. C) Unless representing a buyer, when the listing broker offers a co-op. D) When using an exclusive listing agreement, but not an open listing.

In all cases

A licensed real estate salesperson has a written contract with his broker specifying that he will not be treated as an employee. The salesperson's entire income is from sales commissions rather than an hourly wage. Based on these facts, the salesperson is considered a(n): A) Subagent. B) Independent contractor. C) Real estate assistant. D) Employee.

Independent contractor

The name for the current policy of the National Association of REALTORS that allows all multiple listing service (MLS) members equal rights to display MLS data is the: A) Virtual office website B) Open Listing Data Service C) Internet Listing Display Policy D) Internet Data Exchange

Internet Data Exchange

Brokerage

Is simply the business of bringing parties together

A real estate sales associate who is an independent contractor, as opposed to an employee, will have a substantial portion of the individual's income: A) Based on the number of hours worked. B) Determined eligibility for health insurance and workers' compensation. C) Subject to federal tax and withheld by the employer D) Based on sales production or other output

Based on sales production or other output

Real estate license laws exist primarily to protect: A) Government agencies B) Real estate firms C) Licensees from unlicensed individuals D) Consumers

Consumers

A recent important change to real estate brokerage practice is: A) Fac transmissions. B) Use of personal assistants. C) Digital communication in all its forms. D) The use of electronic signatures.

Digital communication in all its forms

An important purpose of the E-Sign Act is to: A) Give contracts created using email the same legal standing as those on paper. B) Prevent notarization of electronically transmitted agreements. C) Require stringent security measures for email communication. D) Require all parties to use electronic contracting if the seller prefers it.

Give contracts created using email the same legal standing as those on paper.

What is the compensation plan called if a salesperson's commission split increases depending on whether the salesperson achieves higher production goals? A) Cooperating broker commission B) 100% commission plan C) Graduated commission split D) Procuring cause commission

Graduated commission split

Administrative regulations that administer real estate license laws: A) Have the same force and effect as statutory law. B) Can only be changed by the legislature. C) Are option for licensees, though their adherence is always recommended. D) Can be modified, if necessary, to insure compliance by large real estate firms.

Have the same force and effect as statutory law

What is the main value of a multiple listing service (MLS) for sellers? A) It simplifies closing procedures B) It reduces cooperation among brokers C) It exposes the property to a greater number of prospective buyers. D) Real estate professionals do not have to work as hard to secure property listings.

It exposes the property to a greater number of prospective buyers.

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: A) Prohibited communications. B) How often a business person can contact a customer. C) Communications that are permitted. D) How many direct mail solicitations can be sent to a single address.

Prohibited communications

Uniform Electronic Transactions Act (UETA)

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

T/F: All 50 states regulate the activities of real estate professionals.

TRUE

Group boycott

Two or more businesses conspiring against another business

Internet Date Exchange

Allows MLS members equal rights to display MLS data.

Electronic Signatures 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 that are created.

All of the following are prohibited under the antitrust laws EXCEPT: A) Competing brokers allocating markets based on the value of homes. B) Competing property management companies agreeing to standardized management fees C) Real estate companies agreeing not to cooperate with a broker because of the fees that the broker charges. D) A broker setting a company commission schedule.

A broker setting a company commission schedule

Which of the following is allowed under antitrust laws? A) A broker setting a company commission schedule B) Real estate companies agreeing not to cooperate with a broker because of the fees that the broker charges. C) Competing brokers allocating markets based on the value of homes D) Competing property management companies agreeing to standardized management fees.

A broker setting a company commission schedule

An arrangement to sell on product only if the buyer purchases another product as well is called: A) An allocation of customers B) A fee-for-services C) A tie-in agreement D) A buydown provision

A tie-in agreement

Although state laws vary regarding internet advertising, which of these is typically element of state policy or law? A) Ads must contain true, current information and avoid misleading the potential client or customer. B) On a website containing their ads, real estate professionals only need to identify themselves as a broker or salesperson on the site's home page. C) It is acceptable for only the sales associate's name (without the broker's name) to be shown in an add. D) Email sent by a real estate professional needs to include the professional's name, phone number, and real estate license number.

Ads must contain true, current information and avoid misleading the potential client or customer.

Price-fixing

An agreement between competitors to set prices.

Comparative Market Analysis (CMA)

An analysis performed to assist a seller in pricing a property.

The real estate industry, including all licensed real estate brokers and sales associates is subject to: A) More regulations for smaller firms. B) Social security taxation. C) Antitrust laws. D) Fair competition laws.

Antitrust laws

In order for a broker to be paid on an open listing, the broker must: A) Put the property in MLS and offer other brokers a co-op B) Notify all other listing brokers if they have an offer C) Be the procuring cause of the sale D) Split the commission with any other broker than listed the property

Be the procuring cause of hte sale

T/F: A real estate assistant would never be required to have a real estate license.

FALSE

T/F: A real estate sales associate is licensed to buy, sell, exchange, or lease real property for others, and to charge a fee for those services.

FALSE

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

FALSE

T/F: A sales associate's compensation is determined by the client.

FALSE

T/F: If a state licensing authority's regulations conflict with statutory law, the regulations will prevail.

FALSE

T/F: If present at the time the transaction closes, a broker is considered to be the procuring cause of a sale.

FALSE

T/F: Only a few state regulate the activities of real estate brokers and salespeople.

FALSE

T/F: 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

T/F: Real estate license laws do not include disciplinary systems.

FALSE

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

FALSE

T/F: The practice of illegally setting standard prices for products or services is called a tie-in agreement.

FALSE

T/F: When information is taken from the internet, it is always accurate.

FALSE

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.

After license laws are enacted by the legislature, who is responsible for adopting administrative regulations? A) Brokers and salespeople appointed by the governor. B) Licensing authority (division, commission, etc.) C) A subcommittee that reports to the legislature. D) A local association of REALTORS.

Licensing authority (Division, commission, etc.)

A qualified buyer makes a written offer on a property on March 6 by filling out and signing a sales agreement. Later that day, the seller accepts and signs the agreement, keeping one copy. The broker gives a copy of the signed agreement to the buyer on March 8. The seller's deed is delivered on May 1. The deed is recorded on May 7, and the buyer takes possession on May 15. When is the broker's commission payable if this is a usual transaction. A) May 7 B) May 15 C) May 1 D) March 8

May 1

A broker who owns a realty agency does not permit his salespeople to charge less than an 8% commission in any transaction. After reading a newspaper article about this realty agency's policies, the broker of another realty agency decides to also adopt the 8% minimum. Based on these facts, which of these statements is TRUE? A) The realty agency's policy is price-fixing and violates the antitrust law. B) Neither broker has committed an antitrust violation. C) Both brokers engaged in illegal price-fixing. D) Although the realty agency's original policy was legal, the second realty agency's adoption of the minimum commission may constitute an antitrust violation if both brokers are in the same real estate market.

Neither broker has committed an antitrust violation

A real estate sales associate has a licensed personal assistant who usually must be: A) Paid by the sales associate, who is then reimbursed by the employing broker. B) Paid by the sales associate's employing broker. C) Hired by the sales associate independently and not under the employ of the brokerage. D) Subject to all federal requirements applicable to an employee.

Paid by the sales associate's employing broker

Commission

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

Internet Date Exchange (IDX) policy

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

Tie-in arrangement

Providing product or services to customers only if customers buy another product or service as well.

The primary purpose of the Uniform Electronic Transactions Act (UETA) is to: A) Facilitate the use of social media. B) Allow brokers to close more deals. C) Protect consumers against unwanted email. D) Remove barriers in electronic commerce that would otherwise prevent enforceability of contracts.

Remove barriers in electronic commerce that would otherwise prevent enforceability of contracts.

When communicating with clients or consumers via email, all of these are examples of professional email etiquette EXCEPT: A) Responding to emails within one week. B) Avoiding sending large attachments C) Providing useful information in the subject line D) Using spell check

Responding to emails within one week

Many states have modified the traditional term broker and salesperson to stress that all licensees must be knowledgeable of and comply with the law. The person who performs licensed activities under the authority of a broker is frequently called a: A) Sales associate B) Managing broker C) Junior broker D) Junior licensee

Sales associate

Antitrust laws do NOT prohibit real estate: A) Salespersons within the same office agreeing on a standard commission rate. B) Brokers allocating markets based on the value of homes. C) Companies agreeing on fees charged to sellers. D) Companies allocating markets based on the location of commercial buildings.

Salespersons within the same office agreeing on a standard commission rate.

Uniform Electronics Transactions Act

Sets basic rules for entering an enforceable contract using electronic means.

T/F: 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

T/F: A real estate sales associate is an individual who is licensed to perform real estate activities on behalf of a licensed broker.

TRUE

T/F: ARELLO promotes state licensing standards

TRUE

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

TRUE

T/F: Laws cannot guarantee an ethical or moral marketplace

TRUE

T/F: Price-fixing, group boycotting, and allocation of markets are three examples of antitrust violations.

TRUE

T/F: Real estate license laws are intended to protect the public.

TRUE

T/F: Real estate license laws set up a disciplinary system to enforce the acceptable standards of conduct and practice for licensees.

TRUE

T/F: The Internal Revenue Service has established criteria for determining whether a sales associate is classified as an employee or a nonemployee for income tax purposes.

TRUE

Sales associate A and sales associate B work for the same firm. They agree to divide their region into an eastern half and a western half; sales associate A will handle listings in the east, and sales associate B will handle listing in the west. Which statement is TRUE? A) The two sales associates have violated the Sherman Antitrust Act and are liable for treble damages. B) The two sales associates are guilty of group boycott with regard to other sales associates in their firm. C) The agreement does not violate antitrust laws. D) The agreement constitutes illegal price-fixing.

The agreement does not violate antitrust laws.

A real estate broker had a listing agreement with a seller that specified a 6% commission. The broker showed the home to a prospective buyer. The next day, the buyer called the seller directly and offered to buy the house for 5% less than the asking price. The seller agreed to the price and informed the broker in writing that no further brokerage services would be required. The sale went to closing six weeks later. Based on these facts, which of these statements is TRUE? A) While the broker was the procuring cause of the sale, the seller properly canceled the contract; without a valid employment agreement in force at the time of closing, the broker is not entitled to a commission. B) Under the facts as stated, the broker is not the procuring cause of this sale but is still entitled to a commission. C) The broker was the procuring cause of the sale and is entitled to the full 6% commission. D) The broker is entitled to a partial commission, and the buyer is obligated to pay it.

The broker was the procuring cause of the sale and is entitled to the full 6% commission

Procuring cause

The broker who starts an uninterrupted chain of events that results in the sale of a property.

Independent contractor

The broker-licensee relationship where at least 75% of the compensation is based on commissions earned and the broker does not withhold payroll taxes.

Procuring clause

The effort that brings about the desired result. Under an open listing the sponsoring broker who is the procuring cause of the sale receives the commission.

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.

The broker may still be entitled to a commission in which of these situations where a pending property sale did NOT close? A) The buyer wanted to add the kitchen appliances to the sale, but the seller refused. B) The seller decided not to sell C) Financing fell through for the buyer D) The buyer decided not to buy the property.

The seller decided not to sell

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.

Why have real estate license laws been put into effect? A) To prevent licensees from engaging in profit-making activities. B) To protect the public and establish standards of professionalism. C) To protect licensees from lawsuits. D) To establish maximum levels of competency and a moral marketplace.

To protect the public and establish standards of professionalism.

Electronic Contraction

Transactions conducted through email or fax

What is the practice called when a consumer selects specific services to use and only pays the real estate professional for those services? A) Tie-in agreement B) Allocation of markets C) Discounted services D) Unbundling of services

Unbundling services

The use of electronic signatures makes routine paperwork more efficient and has been encouraged by adoption by most states of the: A) Uniform Electronic Transactions Act B) Real Estate Transactions Act C) Uniform brokerage Transactions Act D) Real estate licensing laws

Uniform Electronic Transactions Act

To be entitled to receive compensation from a real estate transaction, an individual must be all of the following EXCEPT: A) The procuring cause of the sale B) Unrelated to either the buyer or the seller C) Employed by the buyer or the seller under a valid contract D) A licensed real estate broker

Unrelated to either the buyer or the seller