Unit 9

3 types of compensations

1)flat fee 2)percentage of sales price 3)net listing (illegal in some states)

OLD CAR

1.Obedience (no unlawful) 2.Loyalty (an agent must place the interest of the principle above all others) 3.Disclosure 4.Confidentiality (price, term, motivation) 5.Accounting 6. Reasonable skill and care

Listing agreement must include and be: 8

1.in writing, 2.Price and terms (listing price, financial terms), 3.amount or method of compensation (flat fee? % fee?, net listing ?), 4.negotiable commission clause 5.Definite beginning and expiration dates 6.Multiple listing clause (MLS) 7.may have broker protection (state dependent) 8. Signatures

one who is employed to represent a principle

Agent/ fiduciary

all listings "must" have a : a)broker protection clause b) termination date

B

exclusive agency

Brokerage gets paid if property sells, unless the seller finds the buyer

------is when trust funds are used for personal reasons or given to the wrong people

Conversion

Home warranties also cover title issues (T/F)

F

if a property is being sold "as is" , the agent has no duty to disclose knowledge about a leaking roof (T/F)

F

if the seller misrepresent a latent defect in the seller's property disclosure, the broker would also be held liable, even if the broker had performed a visual inspection and found no obvious defect (T/F)

F

it is acceptable for 2 brokers who are good friends to discuss commissions even if they work for different firms (T/F)

False , according to Sherman Antitrust Law

the death of a sales person would terminate an agency contract with a buyer ?

False, no death or bankruptcy of brokerage or principle would terminate the contract

Typically, property managers are -----------agents for owners and salespersons are --------agents of their brokers.

General, General

An agent owes the principle the fiduciary duties of

Obedience, loyalty, disclosure, confidentiality, accounting, and reasonable skill and care

Sherman Antitrust Law

Price fixing is conspiring to establish fixed fees or prices for services is illegal.

Commissions are based on what? listing price or sales price ?

Sales price

Agent Authority (3 levels) low to hight

Special agent General agent Universal agent

2 principle responsibility of property managers are to presser and or increase the value of the investment property and generate income for the owner (T/F)

T

A brokerage firm's commission is always negotiable, but they principle or employing broker may set the minimum rate acceptable for the firm (T/F)

T

An agent may disobey unlawful or unethical instructions from a principle (T/F)

T

Brokerage firms are required to withhold social security and income tax from wages paid to their employees

T

Conversion is the practice of using escrow or entrusted money as if it were the broker's money. (T/F)

T

Earnest money held by a broker must be in a special trust or escrow account (T/F)

T

Listing Contracts should be express written agreement (T/F)

T

The duty of loyalty requires an agent to place the principle's interest above those of all others, including the agent's own self interest (T/F)

T

To receive payment in an open listing , the broker must be the procuring cause of the sale (obtain the buyer) (T/F)

T

all contracts belong to the principle broker

T

an agent owes a customer the duties of reasonable care and skill, honest and fair dealing, and disclosure of known facts about the property (T/F)

T

an exclusive agency listing allows both the seller's broker and the buyer's broker to receive a commission (T/F)

T

the terms of the contract w a warranty company will determine what is covered (T/F)

T

A broker protection clause provides that the property owner will pay the listing broker a commission if, with in a specified number of days after the listing expires, the owner sells the property to someone the broker originally introduced to the owner (T/F)

T (state law dependent )

Commingling is an illegal act in which a real estate broker mixes clients or customer funds with personal funds (T/F)

True

brokers may not discuss commissions with any brokers outside their firms (T/F)

True

Real estate commissions are always negotiable (T/F)

True , according to Sherman antitrust law

Sherman Antitrust Law: each brokerage firm sets its own rates (T/F)

True, their own!

Listings must have ------dates

beginning and expiration

Licensees may only be paid by their

brokerage firm

the ----- owns all contracts (listings, , and purchase agreements)

brokerage firm

exclusive right to sell

brokerage gets paid if the property sells, regardless of who finds the buyer

Principal : one who ----- another to act on her behalf; may may or may not be the person who pays the agent

employs

An agent's fiduciary duties are owed to the person who

employs the agent

Types of LIsting

exclusive (right to sell, exclusive agency) and non- exclusive

max protection to brokerage

exclusive right to sale

The type of listing agreement that provides brokers max protection of their commission is

exclusive right to sell

Responsible brokers can require independent contractors to keep specific office hours

false

it is acceptable for a broker to add an automatic renewal clause to a listing of less than 60 days (T/F)

false

an agent employs another to act on his behalf (T/F)

false, a principle does

Common law of agency specifies ------duties to principle (OLD CAR)

fiduciary

an express agreement is created by a direct statement; may be called a

fiduciary agreement

Sherman Antitrust Law :All fees and commissions charged to the public are always

negotiable

universal agency can be created by a general -------, which makes the holder an attorney - in fact.

power of attorney

Listings can not have an automatic

renewal clause

Independent contractors (employed by the firm) pay own ----

taxes

if an employee , the brokerage must with hold ----- but does not have to guarantee vacation , set schedule, or work set hours

taxes