Unit 7 and 8 Agency Comprehensive Quiz

Drew is a provisional broker affiliate of Smith and Walston Realtors and he has accepted a listing for a home in Chapel Hill which the sellers wish to market for $750,000. Smith and Walston cooperates with outside firms and has an office policy that the selling side of the commission will be 55% of the total amount charged. Furthermore, Smith and Walston has a standardized Independent Contractor agreement stating that all Provisional Brokers in the firm will be on a 70% split. Drew lists the home at a 5% total commission and sells it to a buyer represented by Sam of Fonville Morisey. Assuming the home sells for full price, what would Drew receive in commission compensation?

$750,000 X 5% = $37,500 total commisison $37,500 total commission X 45% = $16,875 listing side commission $16,875 listing side commission X 70% = $11,812.50 Drew Commission

A firm lists a property for $785,000 which ultimately sells for $772,500 in a co-brokered transaction. The seller has agreed to pay a 5.5% total commission to the listing firm. The listing firm has agreed to pay a 2.5% commission to a cooperating selling firm. How much commission will the listing firm retain?

5.5-2.5=3% commission retained by the listing firm $772,500 X 3% = $23,175 commission retained by listing firm

All of the following statements regarding North Carolina real estate license requirements are true EXCEPT:

Provisional Brokers must complete 90 hours of postlicensing (3 30 hour classes) within 18 months of licensure to remain Active and remove the provisional status. Provisional brokers do not have to complete Postlicensing if they are Inactive or do not wish to remain on Active status.

A provisional broker is representing a buyer that becomes interested in a home that is listed "For Sale by Owner" that is on the Do Not Call Registry. The broker may do all of the following, EXCEPT:

A broker cannot SOLICIT the listing when a seller is on the Do Not Call Registry unless the seller invited the broker to call, there is a past business relationship with the firm within the past 18-months or there is a personal relationship between the seller and broker. The key to the statement above is "Solicit". The buyer's agent can ask the seller if they will offer compensation to a buyers agent. Prior to viewing the property, the agent should explain WWREA. If the seller refuses to pay compensation, the buyer's agent should timely disclose to the buyer that they will need to pay commission.

Sam Sleazy tells broker Hank Honor that he wants to list his property with him, but that Hank should not disclose problems with the septic tank to potential buyers. Since Hank owes obedience to his seller, Hank should

A broker must comply with their client's lawful instructions. A client requesting an agent to omit material facts would not be considered a lawful instruction. The agent must explain to the client that they cannot withhold material facts and if the seller insists, must refuse the listing.

A seller and broker signed a listing agreement. The written contract stated that upon expiration, if neither party notifies the other of their intent to terminate the agency, the contract will renew itself for the same period. This listing agreement

A listing agreement must provide for definite end date. The only agreement that allows for an automatic renewal is a property management agreement. A listing agreement must contain a list price, signatures of all owners to the property, legal description and anti-discrimination policy.

A North Carolina buyer's agent has found three listed properties that meet his/her client's detailed list of required features. Although all three of the properties are listed for very similar prices in the same neighborhood, one of the listings offers the selling agent a $2000 bonus for procuring a signed contract by the end of the month. Given these facts, must the buyer's agent disclose the bonus to his/her buyer-client before writing an offer?

All compensation must be disclosed in writing before a buyer makes an offer.

All the following situations will terminate an agency relationship EXCEPT:

All of A, B, and C would terminate an agency relationship. Death of the real estate firm would also end an agency relationship. However, death of an individual licensee would have no effect on an agency relationship.

A North Carolina buyer's agent who is a provisional broker makes an appointment to show her buyer-client a property listed by a cooperating firm. After having made the appointment but before showing the property, the buyer's agent learns that the listing firm is offering a $500 incentive bonus to any agent who procures the sale of the property. Given these circumstances, how must the buyer's agent disclose the incentive bonus to her buyer-client?

Buyers must always be informed of all commissions, bonuses, payments, etc in a transaction before they are allowed to make an offer. This disclosure must be made in writing.

The doctrine of "caveat emptor" still applies to some extent to the relationship between

Caveat emptor, meaning let the buyer beware, applies to the seller and the buyer. The agent or agents have a duty to disclose material facts - disclosing what they know or reasonably should have known.

Designated Agency can be practiced within the same firm in all of the following situations EXCEPT:

Even when designated agency is practiced by the firm and authorized by both the buyer and seller, it cannot be practiced by the broker in charge and a provisional broker within the office. All other combinations of provisional broker and non-provisional broker will be permitted to practice designated agency unless they have personal or confidential information about the other party. The BIC will appoint the brokers (PB or Non-PB) that will act as designated agents.

Most standard listing agreements include all the following provisions EXCEPT:

Listing agreements do not guarantee that the property will be sold.

In order to earn a commission as a listing broker under a typical exclusive right to sell listing agreement, all the following requirements must be met EXCEPT the

Most listing agreements do not require closing for a commission to be earned. They require the listing firm produce a ready, willing, and able buyer who wishes to purchase the property at terms the seller has indicated are acceptable.

A North Carolina buyer's agent has found three listed properties that meet his/her client's detailed list of required features. Although all three of the properties are listed for very similar prices in the same neighborhood, one of the listings offers the selling agent a $2000 bonus for procuring a signed contract by the end of the month. Given these facts, must the buyer's agent disclose the bonus to his/her buyer-client before writing an offer?

No, because the buyer-client will see the bonus on the settlement statement which will satisfy the CommissionÂ's disclosure requirement.All compensation must be disclosed in writing before a buyer makes an offer.

Which of the following statements regarding Living Area (Square Footage) is accurate?

Statement A is false because brokers are never required to disclose square footage. It is not a material fact. If they choose to do so, they should use the NCREC guidelines, but only if they actually choose to state living area on their listing. Statement B is incorrect because living area is measured with exterior measurements, not interior ones. Statement C is false because stairs count as living area on both floors, not just one.

The North Carolina Real Estate Commission's Residential Square Footage Guidelines contains which of the following provisions?

Statement B is incorrect because stairs count as living area on both floors. Statement C is NEVER correct. Licensees must either measure personally or hire a licensed appraiser to do so. Statement D is incorrect because the correct place to measure on all residential property (except condos) is outside, not inside.

Which of the following would NOT be considered a material fact that must be disclosed to potential buyers?

The fact that a someone died in the home - murder, suicide or otherwise - is not a material fact. The remainder are material facts that an agent would need to disclose to all parties in the transaction. It is not a material fact if someone has died in the home, that a registered sex offender lives nearby or that a seller is behind on the mortgage when foreclosure notice has not been received.

When selling another brokerage's listing, the selling broker may be:I. An agent of the buyerII. A sub-agent of the seller through the listing broker

Typically, the selling broker represents the buyer, however the selling broker may act as subagent of the seller.

Suzy, a licensee with All Stars Realty, is the on-site agent at Babbling Brook subdivision. She held a busy open house on Sunday with 25 visitors attending. The following day a potential buyer comes to the sales center without an agent and wants to be shown all currently available listings. What, if anything, must Suzy give them?

When a brokers holding open house there is no obligation to disclose the Working with Real Estate Agents Brochure unless the conversation shifts from facts about the property to personal / confidential information. When a buyer is requesting an individual showing, this is considered first substantial contact and therefore the broker must disclose the Working with Real Estate Agents Brochure and determine the type of agency that will be practiced.

A listing which specifies that the broker's commission will be the excess of the selling price over a specific amount desired by the seller is a (an)

While a net listing is not favored, it is not illegal. The broker will only be compensated if the sales price exceeds the amount desired by the seller. The seller agrees to pay the broker the excess sales proceeds over the amount agreed to in the listing contract.

Co-broking

occurs when two agents work together—one representing the buyer, and the other for the seller (or, in the case of a rental, the landlord)—to complete (i.e. co-broker) a deal. The commission is split between the two agents.

In subagency

the agent bringing the buyer is actually working for the seller as a subagent of the listing broker.

Broker Ron Thompson listed and sold Mr. Simpson's property. Thompson did not disclose to Mr. Simpson that there was a potential zoning change in the works that would allow the property to be used as a convenience store. This new use would substantially increase the value of Mr. Simpson's property. Which of the following is true?

A broker must disclose material facts to all parties to the transaction. If Thompson was aware of the change then this is an example of willful omission. If Thompson was not aware of the change and it is widely publicized, then this is an example of negligent omission. Willful vs. negligent comes down to intent. Misrepresentation vs omission will depend if something is said orally or in writing.

An agency relationship can be terminated by all of the following, EXCEPT:

Listing agreements and buyer agency agreements are between the client and the firm, with an agent appointed as primarily responsible for fulfilling the firm's duties. The brokerage would appoint another broker to represent the buyer or the seller in the event that a provisional broker died.

An Exclusive Right To Sell Listing Agreement likely includes all of the following EXCEPT:

Listing agreements are contracts between the seller and a real estate firm they have hired to sell their property. The agreement should specify the amount of any commissions, when the commission is earned, etc. The agreement does not, however, guarantee the sale of the property.

All of the following will terminate an exclusive buyer agency agreement, EXCEPT:

Listing and buyer agency agreements are owned by the firm, so they will not terminate if a provisional broker or salesperson leaves the firm. The firm will appoint another affiliated broker to manage the buyer agency agreement. A written buyer agency agreement must have a definite end date and will automatically expire on the end date. In addition death of the buyer or when the buyer purchases a property will terminate the buyer agency agreement.

All of the following statements relating to a broker with a license on inactive status are true EXCEPT the broker

"Current" status is the opposite of "Expired" status. This means the only requirement to stay current is to pay the renewal fee by June 30. A licensee who pays the renewal fee but is not up to date on education requirements will be "current" but also "Inactive"

A listing agent has knowledge of a "pending foreclosure" of a property and does not disclose this information. The agent is guilty of:

A "pending foreclosure" is a material fact that must be disclosed. If a broker fails to disclose this, and they are aware of it is considered willful omission. Omission is where a broker fails to say anything. Misrepresentation is where a broker states something in writing or verbally that is not accurate. Willful vs. negligent comes down to intent. It is not a material fact that the seller is only behind in mortgage payments.

A provisional broker enters into a listing agreement with a seller for 6 months. When does the broker earn compensation?

In order to earn compensation a listing broker must find a ready, willing and able buyer at the price and terms agreed to by the seller. When a seller enters into a contract, even if it is less than the list price, the broker earns compensation. It is correct that compensation is paid at closing, however the compensation is earned earlier. The listing agent and buyer's agent are not entitled to compensation when a buyer terminates the contract during the due diligence period.

A buyer's representative agrees to rebate $2,000 of the selling side commission on a purchase to their buyer client. The client is not licensed in any state. Would this represent a violation of North Carolina License Law?

In this question, it is KEY that the buyer is being rebated a commission on their own transaction. License law only requires someone to have a real estate license if they are being paid to provide a real estate service for OTHERS. In this case, the buyer is being paid to provide a real estate service for themselves.....doesn't need a license for that. Do keep in mind there may be lending laws that limit such a thing and the way it can be done, but License Law has no such limitation.

A broker is listing a property for sale that has a bonus room. The room has been finished and is directly accessible, however is heated with a portable electric heater. May the bonus room be included in the listing as living area?

Living area must be heated, finished and directly accessible. There are no requirements that the space be cooled. It must be heated by conventional means, not by a portable unit.

Which of the following statements regarding a North Carolina provisional broker is true?

Statement A is incorrect because a PB who does not timely take the postlicensing will simply be inactive until they take the courses. Statement B is incorrect because postlicensing courses are 30 hours each. Continuing Education is 8 hours annually (2 4 hour courses....one Update and one Elective). Statement C is incorrect because credit from continuing education and postlicensing is not interchangeable.

Connie Cautious wishes to buy a property listed with Delta Realty. Company policy allows dual agency but Connie insists upon exclusive buyer's representation. She still wants to purchase the property. Delta Realty

When a brokerage represents both the buyer and seller in a transaction dual agency arises. The brokerage cannot act as an exclusive agent to the buyer when the already represent the seller. If the buyer only wants exclusive buyer representation, then they should refer the buyer to another firm.

Frank LaCoeur retains the privilege of selling his own house under a listing agreement with Effie Berouka and three other brokerages. Broker Nora Williamson finds a buyer for the house. No compensation is paid to either agent. The listing agreement LaCoeur and Berouks signed is:

A seller is not obligated to pay compensation to the listing agent (Effie Berouka) as she was not the procuring cause in the transaction. The sellers not obligated to pay Nora Williamson as the problem does not say that she also had an agreement with the seller. In an open listing multiple brokers compete against the seller, however only the agents that have signed an open listing agreement are entitled to compensation if they find the buyer.

settlement statement

A settlement statement is a document that summarizes the terms and conditions of a settlement, most commonly a loan agreement. A loan settlement statement provides full disclosure of a loan's terms, but most importantly it details all of the fees and charges that a borrower must pay extraneously from a loan's interest.

A brokerage has hired an unlicensed employee to assist with properties that are listed for sale and for rent. The unlicensed employee would be able to perform all of the following, EXCEPT:

An unlicensed assistant can perform may action under property management, like showing property and filling out pre-printed lease forms. They cannot show property to prospective buyers as this action requires a license. The licensed broker is responsible for supervision of an unlicensed assistant and could face disciplinary action from the Commission if license laws or rules are violated.

A property sells for $432,500 in a co-brokered transaction. The seller has agreed to pay a 6% commission to the listing firm. The listing firm has agreed to equally split the commission the selling firm. If the buyer's broker will receive 80% of the selling firm's commission, how much commission will the buyer's broker receive?

$432,500 X 6% = $25,950 total commission $25,950 X 50% = $12,975 commission to selling side $12,975 X $10,380 Buyer's agent commission

A non-provisional broker adds language to her listing agreement which allows either party to terminate the contract prior to the receipt of an offer. Is the non-provisional broker in violation of North Carolina License Law or Commission Rules?

A provisional or non-provisional broker is permitted to add language or draft language in a listing agreement or buyer's agency agreement since they are a party to the contract. The no drafting rule applies to the Offer to Purchase and Contract - where the broker is not buyer or selling the property personally. A broker that is an attorney may draft language in a purchase contract, even if they are not a party to the contract.

HPW Real Estate has taken and Exclusive Right To Sell Listing Agreement stating that they will be compensated 6% of the total sales price of the home at 685 Oak Grove Rd. HPW has a firm policy of compensating all cooperating real estate firms who produce a buyer with 45% of the total commission. Based on this information, what would the selling side commission be (rounded to the nearest $1) if the property were to close with a final sales price of $276,500?

$276,500 X 6% = $16,590 total commission $16,590 X 45% = $7,465.50 selling side commission

A provisional broker is on a listing appointment and is giving her listing presentation. The seller asks the amount of compensation the broker is expecting to be paid. The provisional broker states that her firm policy is a 6% commission fee. The seller asks her to reduce the commission to 5%. The provisional broker should:

It is a violation of the Sherman Antitrust Act to collude with other brokers and set commission rates that all competitors will charge - price fixing. It is not a violation for a brokerage to set a policy for the amount of commission they will charge to their clients, or a commission range. A brokerage can refuse to negotiation a lower commission. A provisional broker should seek permission from his/her BIC before reducing the amount of commission to be charged to a client. The amount of commission must be in the listing agreement prior to the client signing for it to be valid.

Broker Smith has a listing on a house in North Carolina which contains a provision that the house is to be sold in an "as is" condition. Smith learns of a major hidden defect in the property and, when showing a prospective purchaser, should

North Carolina is a caveat emptor state, which means let the buyer beware. The seller has very limited items that they are required to disclose to a buyer - lead-based paint, synthetic stucco (EIFS), leaking polybutylene, flood hazard, meth lab contamination and the Mineral Oil and Gas Disclosure. The duty to disclose falls upon the agent - that is responsible to disclose what they know or reasonably should have known about the property. A broker is responsible for disclosing patent defects. A broker is not responsible for disclosing latent defects (hidden), unless they are aware of the issue.

A prospective purchaser asks the showing broker, a subagent of the seller, whether the seller would accept $5,000 less than the asking price. The broker thinks that the seller would accept $7,000 less than the asking price. How should the broker respond?

The buyer is not represented in the transaction as the broker is acting as a subagent. Both the listing broker and the subagent must promote the seller's interest. Neither of the agents can weaken the seller's bargaining position by recommending a lower offer. The broker must keep the seller's information confidential and not disclose it.

Sharon is a buyer looking for a home. She knows Tim, a buyers' agent, but is not ready to sign any agreement with him. She is pretty sure she'll want to work with him exclusively, but wants to look at a few houses first. Which statement BEST describes her situation?

The buyers agency agreement may be oral up until the point that the buyer wants to make the first offer. Then it must be reduced to writing. In oral buyers agency agreement must be nonexclusive - the client can see other people and open ended - no end date. If the buyer refuses to sign a written buyers agency agreement, the agent can no longer represent them. If they presented an offer to the seller, acting as a subagent, they have a duty to disclose any personal or confidential information learned about the buyer.

A listing agreement has been executed between Triple S Realty and Sam Seller that calls for Triple S to receive compensation for the sale of Sam's home under any circumstances with the exception of a buyer being produced as a result of Sam's own marketing of the property at his job. Which of the following listing agreements describes this situation?

The exclusive agency listing is one in which the seller may continue to try to sell the property on their own without the help of their listing firm and if they are successful will not have to pay a commission. They have exclusively tied themselves to one listing firm and that firm will be owed a commission if either the listing firm or another cooperating firm produces the buyer, but NOT if the seller sells it themselves. In an Exclusive Right To Sell listing agreement, the listing firm would be owed a commission under ANY circumstances, no matter who produces the buyer.

The North Carolina Residential Property Disclosure Act requires all of the following EXCEPT:

This form is the seller's form. Sellers are under no obligation to disclose anything they know about the property. Brokers have an obligation to disclose material facts but sellers do not. Brokers are obligated to give the form to the sellers in most residential transactions and request they complete it but not to require that the form be completed.

An owner requests a broker to list a property for sale at $170,000. Upon inspection, the broker believes the property is worth $180,000. The broker should

When a broker represents a client they must put the client's interest above all others. The broker has a duty to prepare a comparative market analysis and provide this to his/her client so that they can make an informed decision on what to list the property for. A broker owes a client OLD CAR - obedience, loyalty, disclosure, confidentiality, accounting and reasonable skill, care and diligence.

Under which of the following situations would a broker not have to disclose the Working with Real Estate Agents Brochure?

When a property is being auctioned off, it is impractical for a broker to disclose the Working with Real Estate Agents Brochure (WWREA). WWREA is not required in residential lease transactions, however a broker can still choose to provide it to a prospective tenant. WWREA is required in residential and commercial purchase transactions. Since a tenant wants to purchase a property (buyer), the broker must disclose WWREA at first substantial contact.

Bob Broker is BIC of XYZ Realty and has listed Mr. Smith's property. Sue is a provisional licensee with XYZ Realty and has been representing a buyer who now wants to buy Mr. Smith's property. XYZ offers all forms of agency allowable in North Carolina. Which of the following best describes Sue?

When both the buyer and seller are represented by the same brokerage firm, dual agency arises. The next question would be - does the firm practice dual/designated agency and have the buyer and seller agreed to both. There are two things that will prevent designated agency even when both the buyer and seller have agreed - PB and BIC and already possessing personal / confidential information. A provisional broker and the broker in charge cannot act as designated agents - they can act as dual agents.

As agent of the seller, a real estate broker is usually authorized to do all of the following EXCEPT:

A broker represents a seller as a special agent. A special agent can gather information and advise his or her client (unless practicing dual agency), however cannot sign on behalf of their principal / client, even with the seller's verbal permission. A broker must present all offers and let the seller decide how to proceed.

A real estate broker is permitted to call a person to solicit a listing when the person is listed on the federal Do Not Call Registry in which of the following situations?

Brokers are free to call previous clients for any reason at all within an 18 month period after a transaction ends. A property listed as a FSBO may only be called if the broker has a buyer who is interested in that property, not to solicit the listing. A property being an expired listing does not give the broker the right to call someone on the Do Not Call list. Statement 4 is incorrect because such requests only are good for 90 days.

To maintain a provisional broker's license on active status, the licensee must

In order to be on Active status, a broker must have done everything correct. This begins with paying the renewal fee online between May 15 and June 30. If the $45 renewal fee is not paid by June 30, the license will go to Expired status. While a provisional broker must hang their license with a BIC in order to be active and they should sign a written agreement with their firm, there is no requirement to do so. The correct number of hours for continuing education is 8 hours per year. Postlicensing courses must all be completed within 18 months of licensure if the PB wishes to maintain Active status.

All of the following statements are true of Buyer Agency in North Carolina EXCEPT:

Oral buyer agency is never binding on either the client or the firm. It cannot tie the two together in any way or for any period of time. In order for the agreement to be binding, it MUST be put into writing.

The legal practice of oral buyer agency in North Carolina must meet all of the following requirements EXCEPT:

Oral buyer agency is not binding....at all....for any period of time.

Caroline lists a home for sale and is charging a 6% listing commission. The sellers must pay off their mortgage of $173, 530, closing costs of $4,300, and property taxes of $3,800. If Caroline sells the property for $216,628, what will be the sellers' net proceeds on the transaction (to the nearest dollar)?

Seller credits = $216,628 Seller Debits = $173,530 +$4,300 +$3,800+ $12,997.68commission ($216,628 X 6%) = $194,627.68 Seller Credits - Seller Debits = $216,628 - $194,627.68 = $22,000.32

What is the amount (rounded to the nearest dollar) a seller can expect to obtain from the sale of the seller's house if they must pay off a mortgage balance of $165,000, pay closing costs of $1,150, pay a brokerage commission of 5.5%, and net the property closes for $228,730?

Seller credits = $228,730 Seller Debits = $165,000 +$1,150 + $12,580.15commission ($228,730 X 5.5%) = $178,730.15 Seller Credits - Seller Debits = $228,730 - $178,730.15 = $49,999.85

Sherman Act

The Sherman Antitrust Act (the Act) is a landmark U.S. law, passed in 1890, that outlawed trusts—groups of businesses that collude or merge to form a monopoly in order to dictate pricing in a particular market. The Act's purpose was to promote economic fairness and competitiveness and to regulate interstate commerce. The Sherman Antitrust Act was the first attempt by the United States Congress to address the use of trusts as a tool that enables a limited number of individuals to control certain key industries

Which of the following statements would be true regarding a properly completed "Exclusive Buyer Agency Agreement" in North Carolina?

These statements are both very true of written buyer agency agreements in NC.

Gregory is a licensed North Carolina provisional broker who is affiliated with ABC Real Estate and is working with a buyer client named Richard who has been viewing homes for the last several weeks. Richard is interested in making an offer on one of the properties Gregory has shown him but has further questions about the home. Gregory reaches out to the listing agent on the property to obtain this information on Richard's behalf. Which of the following statements is accurate regarding this communication?

When a licensee is representing a buyer and contacting a seller or seller's agent, they should ALWAYS disclose that they represent a buyer immediately at the beginning of the conversation. They do not wait for substantial contact. This is a very specific rule and it will be tested in this way.

A listing agent has knowledge of a "pending foreclosure" of a property and does not disclose this information. The agent is guilty of:

Willful omission A "pending foreclosure" is a material fact that must be disclosed. If a broker fails to disclose this, and they are aware of it is considered willful omission. Omission is where a broker fails to say anything. Misrepresentation is where a broker states something in writing or verbally that is not accurate. Willful vs. negligent comes down to intent. It is not a material fact that the seller is only behind in mortgage payments.

A house being listed for sale has a finished bonus room above the garage that is accessible through the second floor main hallway but is not connected to the house's central heating and air conditioning system. In order for the listing agent to include the bonus room in the reported square footage for the house, which of the following actions must first be taken by the homeowner?

Currently, the room does not meet the criteria for living area because it does not have a permanent heating source. Installation of one will change that so long as it meets all of the other requirements.

Which of the following statements regarding federal solicitation/antitrust laws would represent a violation of Federal Law?

Licensees may never make statements that establish a "normal", "average", or "customary" commission. They may also never compare what they and their firm charge to what other firms charge for the same service. They may only talk about their own fees or those of their firm. A firm may have a written policy that they always charge the same amount. That is allowable so long as they make it clear to the consumer that it is negotiable in the sense that the consumer could go to a different firm and find a different price. A For Sale By Owner seller may be contacted by a licensee (even if on the Do Not Call list) if the licensee has a buyer client who is interested in viewing/purchasing the seller's property. The licensee may NOT call for solicitation of the listing purposes. Mass emails (even unwanted) are allowed so long as they have an "unsubscribe" link. Bo would be within his rights to call this former client because licensees have an 18 month window after the end of a transaction to continue to call their former clients.

In co-brokered residential real estate sales transactions where the selling agent is a subagent, which agent owes his primary loyalty to the buyer?

The seller's agent (listing agent) represents the seller. The selling agent is acting as subagent - which means that they represent the seller as well. The buyer is not represented.

A broker who is entitled to collect a commission when the sellers sell their own property

An Exclusive Right to Sell listing agreement entitles the broker to receive compensation no matter how the property is sold, optioned, exchanged, conveyed or transferred. The seller would not be obligated to pay commission if the listing contract was open (non-exclusive) or an exclusive agency listing, where the seller is competing against the agent(s).

A listing broker should

The listing agent cannot complete the seller's property disclosure statement. It must be completed by the seller. The Residential Property Owner and Association Disclosure Statement (RPOADS) is used for the seller to make representations about the property or to select no representation. The listing agent can advise the seller about their responsibility and the consequences. A broker would not disclose material facts to the buyer on RPOADS. The broker can disclose material facts on the MLS listing or in the agent only comments section. RPOADS is not required in all real estate transactions, only residential resale when it is not a foreclosure or transfer among related parties.

Which of the following would create an agency relationship between a brokerage and a seller?

Agency is formed by agreement between the client and the firm. A listing agreement must be in writing from inception - provide for a definite end date, contain non-discriminatory language and disclosure of the broker's license number. A broker should prepare a CMA to present to the seller during the listing process, however it does not create agency. The Working with Real Estate Agents Brochure must be presented a first substantial contact, which explains the various forms of agency, however does not create an agency relationship. A buyer agency agreement may be oral so long as it is non-exclusive and open ended, and must be reduced to writing prior to presentation of an offer.

A property is listed with a single broker firm, with the seller agreeing to both dual and designated agency. Per the terms of the standard NCAR Exclusive Right to Sell Listing Agreement and North Carolina law, the listing contract will be terminated in all of the following instances, EXCEPT:

When a property is listed by an independent broker (one broker or firm) and either the seller or the agent dies, the agreement will terminate. If the property is destroyed by fire the listing agreement will terminate, unless the property is under contract and the buyer purchases the property and will receive the insurance proceeds relating to its repair / replacement. If a seller refuses to sell to minorities or any protected class, the listing agent must remind the seller that they cannot discriminate. If the seller still seeks to discriminate the listing agent must terminate the listing agreement and will be entitled to compensation. While the standard NCAR listing agreement and OPC state the seller will provide a general warranty deed, the seller can cross out and write in special warranty deed. This would not be a violation of license law as the change was made by the seller and not the agent.

Ann Agent is working with Bob Buyer and knows that Bob is willing to pay the asking price of a property listed with her firm. She must keep this confidential if

When an agent is aware of personal / confidential information that could weaken a client's bargaining position they are obligated to keep it private (conceal the info), unless it rises to the level of material fact. A broker that is representing the seller exclusively or as a designated agent, and becomes aware of the fact that the buyer would pay more, they have an obligation to disclose it to their client. When an agency agreement terminates, the broker is no longer obligated to keep the clients information confidential if they are involved in a transaction where they represent the seller.

Francine has listed her next door neighbor Jim's house for sale. Although Jim does not disclose it on the Residential Property Disclosure Form, Francine knows that his basement floods during spring rains. Jim has re-painted and replaced carpet, so does not see the need to disclose "ancient history". Francine agrees to withhold that information. Francine is guilty of:

A broker must disclose material facts that they know or reasonably should have known. In this instance Francine is aware that the basement floods. Purposefully withholding the information is willful omission. Negligent omission would occur if Francine was not aware however a reasonably prudent agent would have discovered it (from visible water lines from past flooding). Willful misrepresentation is purposefully lying - the key points being intent and making a false statement such as informing the buyer that the property has never flooded. Negligent misrepresentation is making a mistake - which is not intentional; however, a false statement was made.

A provisional broker receives a call from a prospective buyer on a property that he has listed. The buyer and provisional broker meet at the property. The provisional broker realizes that they left the Working with Real Estate Agents Brochure at the office. The provisional broker orally explained the brochure and the buyer consented to representation and authorized dual agency. Is the provisional broker's actions lawful?

A broker must explain the Working with Real Estate Agent's Brochure at first substantial contact. If it is not reasonable to deliver a copy of the form in person, or if in this instance the broker does not have a copy available, they must still explain the brochure and then have 3 calendar days to send a copy to the prospective client / customer. A client that has not signed the form may still consent to oral buyer's agency and authorize dual/designated agency.

A buyer enters into an exclusive buyer agency agreement with XYZ Realtors without authorizing dual or designated agency. The buyer has not been able to locate a property listed with other brokerage firms, however discovers a property that XYZ Realtors has listed. Can XYZ Realtors show the property to the buyer?

A buyer or seller can subsequently agree to dual agency representation even though they initially did not agree. If the buyer agency agreement is in writing, then the subsequent authorization must be in writing. If the buyer agency agreement is oral, then the subsequent authorization may be oral.

All listing contracts must contain all of the following EXCEPT

A listing agreement must be in writing, have a definite end date, contain the prescribed nondiscrimination language and disclosure of the broker's license number. The agreement must be signed by all owners of the property in the broker has the authority to sign on behalf of the firm (acting as a general agent for the firm - and will become a special agent to the seller once the listing agreement is fully signed)

Broker Horning listed a property under a valid written exclusive right to sell listing agreement. At the closing the owner refused to pay the broker's fee. Which of the following can Horning do?

A listing broker earns commission when they procure a ready willing and able buyer, at the price and terms agreed to by the seller - or when the property goes under contract. Commission is paid at closing by the seller. When the seller refuses, they have breached the contract and the broker is entitled to sue them in court.

A broker tells a prospective buyer that the owner of his listing is having financial problems and must sell. This is

A material fact is loosely defined as something that would impact a buyer's decision to buy or a seller's decision to sell. Certain items are always material facts - a party not being able to perform, meth lab, leaking polybutylene pipes, or a defect that the broker is aware of. The fact that a seller is having financial problems is not a material fact unless it is possible that they will not be able to close. The listing broker must keep that information confidential (conceal it) , unless pre-foreclosure notice has been received which makes it a material fact.

A North Carolina real estate broker who has listed a home for sale and is preparing to market the property for the seller should do all of the following EXCEPT:

Brokers must never complete the Residential Property Disclosure forms for the seller. Brokers must disclose material facts, but not on the seller's form. They should do so in their own listing of the property.

Andrew is the owner of a commercial development property and has executed an Exclusive Right to Sell Listing Agreement with Blue Sky Commercial Properties which calls for a sales commission that will be charges as follows: 7% of the first $1 Million in sales price, 6% on the second $1Million of Sales Price, and 5% on any remainder of sales price which exceeds $2,000,000. The property is subsequently sold for a total of $4,750,000.00. Based on this information, what is the total commission due to Blue Sky Commerical Properties?

Commission on the first $1 Million is $1,000,000 X 7% = $70,000 Commission on the 2nd Million is $1,000,000 X 6% = $60,000 Commission on the overage....$4,750,000 - $2,000,000 = $2,750,000 $2,750,000 X 5% = $137,500 Total commission = $70,000 + $60,000 + $137,500 = $267,500

federal solicitation/antitrust laws

Congress passed the first antitrust law, the Sherman Act, in 1890 as a "comprehensive charter of economic liberty aimed at preserving free and unfettered competition as the rule of trade." In 1914, Congress passed two additional antitrust laws: the Federal Trade Commission Act, which created the FTC, and the Clayton Act. With some revisions, these are the three core federal antitrust laws still in effect today. The antitrust laws proscribe unlawful mergers and business practices in general terms, leaving courts to decide which ones are illegal based on the facts of each case. Courts have applied the antitrust laws to changing markets, from a time of horse and buggies to the present digital age. Yet for over 100 years, the antitrust laws have had the same basic objective: to protect the process of competition for the benefit of consumers, making sure there are strong incentives for businesses to operate efficiently, keep prices down, and keep quality up. Here is an overview of the three core federal antitrust laws. The Sherman Act outlaws "every contract, combination, or conspiracy in restraint of trade," and any "monopolization, attempted monopolization, or conspiracy or combination to monopolize." Long ago, the Supreme Court decided that the Sherman Act does not prohibit every restraint of trade, only those that are unreasonable. For instance, in some sense, an agreement between two individuals to form a partnership restrains trade, but may not do so unreasonably, and thus may be lawful under the antitrust laws. On the other hand, certain acts are considered so harmful to competition that they are almost always illegal. These include plain arrangements among competing individuals or businesses to fix prices, divide markets, or rig bids. These acts are "per se" violations of the Sherman Act; in other words, no defense or justification is allowed.

North Carolina real estate licensees who are issued their first real estate license on August 15 and wish to maintain the license on active status must complete required continuing education no later than

Continuing Education is always due by June 10 of each calendar year for all licensees in order to maintain Active status. Each licensee must take a total of 8 hours of CE which consists of one 4 hour Update class and a 4 hour elective of the licensee's choice. Any licensee who does not complete this requirement will fall to "Inactive" status as of July 1 after they miss the deadline. "Inactive" status means they must stop all work on behalf of clients IMMEDIATELY. The first June 10 of licensure is a "freebie" for new license holders. No matter what date your license is issued on, you skip the June 10 deadline the FIRST time. So, the first time a new licensee has to take CE is by the second June 10 they have a license.

The seller of a property has hired Vibrant Realty to represent them in listing their home for sale at $530,000 and agreed to compensate Vibrant with 5% of the total sales price. Vibrant and the seller have agreed that an offer of compensation will be made to outside real estate firms who might produce a buyer and they will be paid 2% of the total sales price if they do produce a buyer. Based on this information, how much compensation (rounded to the nearest dollar) can the listing side of the transaction expect to retain if the home sells for $528,000?

Listing side commission = 5-2= 3% of sales price $528,000 X 3% = $15,840

The North Carolina Real Estate Commission may take all of the following actions EXCEPT:

NCREC does not have the power to fine licensees or to force licensees to pay back money to anyone.

Which of the following types of listing agreements requires the seller to pay a commission to the listing agency regardless of who procured the buyer?

The Exclusive agency listing is one in which the seller may continue to try to sell the property on their own without the help of their listing firm and if they are successful will not have to pay a commission. The exclusive right to sell listing agreement specifies that any acceptable buyer produced from any source is sufficient to get the listing firm paid. An open listing agreement is a type of listing that is not exclusive where the seller can hire more than one listing firm and will only compensate the firm that brings the buyer.

Bob, a Buyer's Agent, just met Gary and Sue Smith who want to buy a home. Bob wants them to work exclusively with him for at least 3 months. When MUST the Smiths sign an Exclusive Buyer Agency Agreement?

The key word is exclusively. If a broker wants and exclusive agreement, that agreement must be in writing. Oral buyers agency must be nonexclusive, open ended and reduced to writing prior to writing an offer. A written buyer agency agreement must have a definite end date, contain the prescribed anti-discrimination language and disclose the brokers license number.

Which of the following actions by real estate brokers is permissible under federal antitrust laws?

This type of negotiation is allowed and expected. Statement A (A local area listing service operated by a group of brokers prohibits the posting of listings in the service by limited service or flat fee listing brokers.) is illegal because you cannot block a certain group of brokers from the market because they have a certain business model. Statement C (A group of brokers in an area agree to not refer business to settlement attorneys who charge fees above a certain amount.) is illegal (called group boycotting) because the brokers are acting as a group to undermine the business of a service provider. Statement D ( A brokerage firm directs its affiliated licensees to avoid showing the listings of limited service listing brokers when working with buyers.)is illegal for the same reason as Statement A.

A buyer decides not to sign an Exclusive Buyer Agency Agreement with a firm, but still wants to see property without representation. The agent must:

When a broker does not represent the buyer, they can act as a seller's subagent or agent of the seller. A broker must represent at least 1 party in the transaction. The broker has a duty to discover and disclose material facts to all parties in the transaction. When a broker represents the seller they are not permitted to prepare a comparative market analysis and can only recommend the listing price if an unrepresented buyer asks how much they should offer.

What form of agency exists under the a standard real estate listing contract between the broker and the client?

When a broker represents a seller under a listing agreement, a buyer under a buyer agency agreement or a tenant under a tenant agency agreement they act as a special agent. Brokers are permitted to gather information and present it back to their client. They have no ability to sign on the client's behalf or make decisions. General agency arises between a broker and owner in a property management agreement or when a broker affiliates with a brokerage. Universal agency is accomplished by signing a power of attorney or acting as attorney in fact.

Carlos has a listing at 112 Maple Way. The seller has agreed to dual and/or designated. A potential buyer, Tom, calls Carlos from the sign in the yard. Since Tom does not have an agent, Carlos asks if he would like representation. Tom wants to delay signing an agency agreement as long as possible and agrees to oral buyer's agency. Carlos asks Tom if he is pre-qualified and other financial questions which Tom answers truthfully. Which statement BEST describes Carlos' agency position in this transaction?

When one broker of the firm represents both the buyer and the seller, the only option for the agent is dual agency. When the firm represents both the buyer and the seller in a transaction dual agency arises. The question then becomes can the firm designate agents or not. A provisional broker and a broker in charge can never be designated agents. A firm cannot practice designated agency if they are aware of personal or confidential information about the other party at the point that they would designate. Single or exclusive agency would mean that the firm represents only one party.

Samir is a nonprovisional broker affiliate of XYZ Realty and is holding an open house at his new listing of 540 Oakmont Street in Knightdale. Candace, a potential buyer, tours the property during the open house and has a relatively long discussion with Samir regarding the home, its features, and the surrounding neighborhood. Which of the following statements is accurate regarding this interaction?

When representing a seller and speaking with a buyer, the licensee does not have to disclose their agency relationship immediately at the beginning of the conversation. They must do so at or before "first substantial contact", which is the moment the buyer gives any personal/confidential information that might harm them in the transaction. Statement #4 is incorrect because consumers are never required to sign the Working with Real Estate Agents Brochure

A broker is subject to being disciplined by the North Carolina Real Estate Commission for which of the following activities?

Writing explicit contract terms into the sale contract at the direction of his/her buyer-client Items A(Disclosing plumbing issues in the listed property against the seller-client's direct instructions),B(Refusing to pay a referral fee to an active out-of-state licensee that resides in North Carolina), and D (Failure to verify all entries on the settlement statement.) are all expected duties of a licensee in NC. C is the practice of law. We can only fill in the blanks on preprinted forms, not draft or create the overall language of contractual agreements that we are not a party to.