Chapter 6 Real estate

RF101 form goes with what type of agreement?

Exclusive right to sell (Designated Agency)

When using the farming approach, affinity is a key factor when identifying a neighborhood. Which statement best describes affinity?

an area that the licensee likes

When using the farming approach, turnover is a key factor when identifying a neighborhood. Which statement best describes turnover?

an area with a fair amount of listings (not to many, not too few)

At the termination of the exclusive right to sell agreement the listing period, if the property hasn't sold, the seller and agent may agree to?

- extend the listing period in writing - sign a new listing agreement (all sellers must sign including wife and husband) - go their separate ways

What type of listing is not allowed in TN?

net listing

Do or don't when handling a push back on price? Change the value you determined.

don't

cold market

- Pricing: Price below market. This will help generate interest from buyers but don't expect full-price offers buyers may go even lower. -Countering a lower-than-full-price offer: This depends on how low the offer is. One approach is to select a midway point between the gap and add a small amount so that it would seem unfriendly to counter again. This works if that point is acceptable to the seller, and the buyer's truly interested. If the offer is truly abysmal, the buyer's likely fishing and not that interested. Counter close to list. -Multiple offers: This is rare in a cold market unless the property is priced significantly below market, to the point investors are interested.

exclusive agency agreement

- is an option for sellers and landlords who want to reserve the right to find a buyer or tenant themselves and avoid paying a brokerage fee, but who still want to make sure their property receives the broadest possible market exposure - only one broker list the property - if that broker or any other broker sells the property, the listing agent is owed a commission as agreed to in the agency agreement. However, if the owner finds a buyer/tenant, the owner pays nothing

what are the benefits of meeting twice with sellers before presenting a CMA?

- it provides more accurate information for the CMA - puts them in front of the seller multiple times

Without the broker's permission, a seller terminated a listing agreement before the date stated in the contract. What might the seller owe? Select all that apply.

- marketing and advertising expenses to date - full commission if a ready, willing, and able to buyer were found

negotiation duties of a listing agent?

-Meet with the buyer's agent to receive the offer, or receive the offer by fax, email, etc. -Review the offer with your seller and explain any special requests or requirements. -Prepare a seller's net sheet based on the current offer. -Assist the seller with a response, including a counter-offer, if appropriate. -Present any acceptance or counter-offer to the prospective buyer's representative. -Repeat this process until all parties reach an agreement. -Manage the process throughout.

Neutral market

-Pricing: Price below market. This invites interest in the listing and may prompt multiple offers, up to the listing price and beyond. -Countering a lower-than-full-price offer: If the offered price is close but acceptable, sellers may decide to accept. Check other terms first, though. Sometimes a lower offer is a better deal if another buyer has made a higher offer but is asking for seller credits or doesn't have solid financing. Here's another option: If the seller feels strongly about the price, counter at or slightly below list price. -Multiple offers: Unlikely; if it does happen, go with the best offer and try to obtain a back-up from the second-best offer.

RF161 goes with what type of agreement?

Agreement to show

How to find Listings?

FORCE 1. farming - use TAD to choose an area to concentrate business (Turnover, Affinity, Diversity) 2. For Sale by owner - contact sellers attempting to sell their own homes, find FSBO sellers through newspaper ads, websites, craiglists, FSBO signs 3. Referrals - revive prospective client names from other licensees, former clients or customers, industry professionals, attorneys, neighbors, and create networks by joining community groups, organizations and activists 4. Cold Calling- call homeowners to determine whether they or anyone they know is interested in selling their home, must adhere to telemarketing laws and regulations, such as DO Not CALL IMPLEMATION ACT) 5. Expired Listings - identify unsold properties approaching listings termination date, after date passes, contact seller about re-listing the property (must wait until AFTER listing is expired (terminates, and take care not to criticize perfidious agents)

What method is of finding a listing is this? One method involves scouring Craigslist, local newspapers, and driving the neighborhood, looking for For Sale by Owner properties. Once he identifies possible opportunities, he does some research to determine if the property is well-priced and if it's an opportunity worth pursuing. He usually steers clear of properties he thinks are priced too high.

For Sale By Owners

Sarah is moving out of state, and needs to sell her house quickly. She meets with Andrew, the managing broker at a local firm. She tells Andrew that, because she'll be out of state often, she needs a listing agent who'll not only market the property, but also alert her if anything seems out of place. Andrew explains the available types of agency, and Sarah decides that working with a designated agent seems to make the most sense, because she'll have an advocate in her corner while she's away. Which listing agreement should Andrew use?

RF101

At a listing appointment, licensee Chet asks Sam, the seller, if his property is his own home or an investment property. Why would Chet ask this?

if the home is his own, he's likely to be purchasing a new one, so Chet has a chance to land two transactions

net listing

is an agreement in which the seller specifies a desired price for the property and agrees that the broker's commission will be any amount above that price. Net listings can be written for exclusive right to sell, exclusive agency, or open listings.

__________spells out the scope of your authority and the duties you owe your seller client.

listing agreement

What form number creates seller agency relationship between seller and broker?

RF102

Do or don't when handling a push back on price? Show comparables used to derive the seller's property value.

do

what allows cooperating agents to access the property to show it to prospective buyers?

lockbox

According to Keira, what's always a factor with every listing presentation?

price

An exclusive right to sell agreement includes

-A start and end date for the listing period The listing price -The amount of commission that will be paid to the listing agent -The amount to be paid to any cooperating agents -The types of marketing the listing agent may use -Notice that the owner must provide the buyer with a property disclosure statement

hot market

-Pricing: Price below market. When others are listing at or above market rate, pricing below market may incite bidding wars, fetching far more than pricing it at market rate. -Countering a lower-than-full-price offer: A lower-than-full-price offer may go unanswered entirely, because it's likely that offers above list price are forthcoming. By not countering, the seller doesn't have to wait for a response from a not-that- interested buyer. The seller can ask the party to resubmit a higher offer, however. -Multiple offers: Have all buyers submit their "highest and best" or accept the best offer and try to obtain a back-up offer from the second-best.

You never want to walk into a listing presentation empty-handed. This gives sellers the sense that you're unprepared. What items does Keira typically bring to a listing presentation?

1 .CMA 2. MLS Listing sheets for comparable properties 3. marketing plan 4. listing contracts

Marketing the Property

1. Listing on the MLS: Other licensees will see the listing on the MLS when looking for properties to show their clients. 2.For sale signs: Licensees must receive permission to place these signs (usually in the listing agreement). 3. Flyers: These contain information about the property, including price and features. These can be attached to the for sale sign or placed in an obvious spot inside the home. 4. Advertisements: Properties may be advertised in newspapers or on the Internet. Advertisements must follow state and federal laws and include necessary elements, such as licensee designation and contact information.

what must be done servicing the listing for showings?

1. Lockboxes: These contain keys to the property. Licensees must receive permission to place a lockbox on the property (usually in the listing agreement). Other agents access the key through the lockbox to show the property to their clients. 2. Secure belongings: Homeowners should place valuables in a secure location or move them to a safety deposit box during showings.

what do you do to a listing on an open house day?

1. Schedule a day and timeframe: An open house is usually scheduled when the property initially hits the market. The homeowner should plan to be away from the property during this time. The agent should plan to be present during the entire open house. 2. Advertise: Get the word out through newspapers, flyers, Internet, or social media. 3. Get the property ready: The property should be clean, organized, and bright to make a positive first impression. 4. Signs: Use directional open house signs to guide buyers to the property. 5. Visitor log: Track the visitors who go through the property. This is a security measure, but it could also lead to new clients. 6. Information packets: Have flyers, business cards, and information about the area ready for prospective buyers. 7. Lock up: The agent should walk through the property to make sure everything is in order and lock or secure the property before leaving.

3 steps to finding a listing using farming

1. Turnover - fair amount of new listings, not too many or too few 2. Affinity - licensee should like the area 3. Diversity - variety of features, home sizes, amenities to draw many buye

The Tennessee exclusive listing agreements allow the seller to offer broker compensation in the event the property is leased, rather than sold. Which of these are true, relative to leasing compensation?

1. can be flat fee or percentage 2. based on monthly rental amount 3. continuers for duration of lease 4. must be paid within 5 days of rent due date

3 standard types of listing agreements?

1. exclusive right to sell agreement 2. exclusive agency agreement 3. open listing agreements

3 seller negotiation strategies

1. neutral market 2. hot market 3. cold market

What are good things to discuss with seller at time of signing the listing agreement?

1. other agents who show the property may be acting as a buyer's agent 2. arrangements for showing the home (such as leaving the hope, opening blinds, day/times to avoid) 3. Commissions related to the transaction

which method is Rhonda using to find a listing? Rhonda is a new licensee. She wants to find an area of town and establish herself as the real estate agent to use. She starts by sending a letter introducing herself to all of the individuals living in the area. She places ads in the monthly community newsletter. Around the holidays, she visits each home, leaving a card and magnetic calendar with her name and contact information. As spring approaches, she visits homes again, leaving packets with flower seeds and notepads with her information on them. What is this an example of?

Farming (Rhonda's goal is that any time people in the neighborhood want to sell their home, or know someone who wants to move, they'll think of her. She wants to establish a steady supply of business in this neighborhood. Regular interactions or reminders—"Hey, I'm here, I can help you sell your home"—may help meet this goal.)

Let's take a look at a few approaches Alison took with various clients. Alison priced Jenna's property just below market rate. Jenna wasn't initially sure about this approach, but Alison explained that she believed others were pricing homes above market rate. At a more-than-fair price, Alison believed a bidding war would ensue and garner a better price than pricing at market value. She was right! Within a week on the market, multiple offers came flooding in. Alison and Jenna then asked all of the buyers to present their highest and best offer. From those, Jenna accepted the best offer and secured another offer as a back-up. This approach worked for Alison, partly because of market conditions. Which type of market was Alison likely working in?

Hot market

What form number Creates designated agency relationship between seller and single licensee?

RF101

What form number Grants broker the right to show an unlisted property?

RF161

what is your goal as a listing agent?

Your greater duty is to help your sellers obtain the best price for the property, in a timely manner (given current market conditions), that matches their needs and motivation to sell.

What should an agent caution his seller about?

against sharing sensitive information during the listing term

When should you schedule and open house?

as soon as the property hits the market

Ask or don't ask before listing appointment? Have you done any recent upgrades?

ask

Ask or don't ask before listing appointment? What can you tell me about the property?

ask

Ask or don't ask before listing appointment? What do you owe on the property?

ask

Ask or don't ask before listing appointment? Why do you want to sell?

ask

When you're putting together a listing presentation, which of these is a key point to address?

buyers won't pay more for a home than the market

Tiffany just obtained a list of all of the homeowners in an area. She checks the numbers to make sure they're not on the Do Not Call Registry, then starts making calls to see if they or anyone they know is interested in selling their home. What method is this?

cold calling

What method of finding a listing is Albert using? Albert calls homeowners to ask whether they or anyone they know would like to sell their home. Albert usually focuses his calls on homeowners in a specific area of town. He's very careful to check the Do Not Call registry before calling any of the numbers, and he only calls during permissible hours (8 a.m. to 9 p.m.).

cold calls

After meeting with her sellers, the Kowalskis and evaluating the market, Alison has come up with a strategy, and she doesn't think the Kowalskis will be thrilled to hear it. She thinks the best way to generate interest, given the number of similar properties on the market, is to price just below market value, and even then, not to expect a bidding war or multiple offers. In fact, the Kowalskis may need to be prepared for an offer that's even lower than the recommended list price. There's nothing wrong with the property; it's just the nature of this market. Which type of market is this?

cold market

When finding listings, which statement describes the cold call approach?

contacting homeowners to determine whether they or anyone they know is interested in selling

When finding listings, which statement describes the expired listings approach?

contacting homeowners whose listings contracts have ended without a sale

Do or don't when handling a push back on price? Show properties priced too high that did not sell

do

just as the agent has duties to perform, so do the sellers. What's one of the most important duties the sellers have when offering their property for sale?

disclosure

Do or don't when handling a push back on price? Disparage agents who provided a higher value range.

don't

Ask or don't ask before listing appointment? Where did you come up with that number? The property isn't worth that.

don't ask

Which one of the following tasks must licensees perform for seller clients?

ensure the collection of the earnest money deposit from the buyer

An agreement that allows sellers to work with an agent while still trying to locate the buyer themselves is called an _________________agreement. If the sellers find the buyer, the sellers don't owe a commission to the agent.

exclusive agency

Larry Gray is selling the home he grew up in. A former childhood friend, Rick, always told Larry to look him up if he ever sells the house. Larry wants to give his old pal an opportunity to purchase the home, but also wants it to be marketed by an agent. It doesn't really seem right to pay the agent a commission if Rick is the buyer, so Larry signed this type of contract with his agent.

exclusive agency agreement

what type of agreement is if that broker or any other broker sells the property, the listing agent is owed a commission as agreed to in the agency agreement. However, if the owner finds a buyer/tenant, the owner pays nothing

exclusive agency agreement

RF102 form goes with what type of agreement?

exclusive right to sell (seller Agency)

Gerald wants a real estate agent that's going to work hard for him, and he's willing to pay the agent no matter who brings the buyer to the table. What type of agreement is in place?

exclusive right to sell agreement

allows the listing agent to list the property and receive a commission no matter who brings the buyer to the seller

exclusive right to sell agreement

what type of listing agreement is this an example of? Even when the owner finds a buyer, the listing agent is owed a commission, provided the sale occurs during the agreement term. This near guarantee of a commission makes it easier for the listing agent to expend money and time marketing the property.

exclusive right to sell agreement

An ________________________ agreement allows the listing agent to list the property and receive a commission no matter who brings the buyer to the table.

exclusive right-to-sell

Which Method of trying to find a listing Is Tarek Using? Tarek keeps a close eye on MLS listings, especially those listings approaching their termination date that have not yet been sold. If the property is unsold after the termination date, he contacts the sellers to gauge their motivation to sell and their interest in listing the property for sale with him. What method is this?

expired listings

Choosing a neighborhood and concentrating real estate activities there is an example of the ______ approach to finding listings.

farming

Markets the property, shows it is professionally represented, and provides broker contact information?

for sale sign

does the agent get compensation or not in an exclusive right-to sell agreement The property sells after the listing agreement ends, but the buyer learned of the property during the listing period?

gets paid commission

Dan just listed a property two days ago and already has offers pouring in. It's a hot market and properties are moving quickly. Which of these options is the best strategy?

have buyers submit their " highest and best" offers and then help his seller decide which offer is most appealing

In addition to the property address, what other information helps identify the property in the listing agreement?

legal description

As we've mentioned a few times already, an agency relationship is created by an agreement. Which one of these agreements will you use to become the seller's agent?

listing agreement

The listing agreements to sell lots or land provide a section for the seller to list the conveyance of any ________.

mineral rights

What is this an example of? a seller wants to sell the property for at least $400,000! if the property sells for more, that money will go to the listing broker as commission

net listing

which listing is often a conflict of interest?

net listing

This was a tough market for Alison to predict. After talking with Brody, her seller, and evaluating market conditions, they thought it best to price his property below market value to generate interest and hopefully garner multiple offers. After a few weeks on the market, an offer came in that was $20,000 below list price. Hoping to do a little better, Brody countered at just below list price, and the buyer accepted. Thinking about the reason for pricing below market value and the subsequent response, which type of market was Alison likely working in?

neutral market

An agreement that allows sellers to contract with multiple agents but only pay a commission to the agent who locates a buyer is called a

open listing agreement

Patsy's home had been on the market for five weeks, and two brokers had buyers who were ready to make offers. If Patsy accepted one of those offers, the corresponding broker would be the only one to earn a commission. What type of listing does this describe?

open listing agreement

The Damons are selling their home. Thinking that it'll help them cast the widest net of prospective buyers, they have agreements with Bill, Jan, and Paul, all of whom work with different brokers. Only the lucky dog who brings the buyer to the table gets the 5% commission the parties agreed to. What type of agreement is in place?

open listing agreement

what type of agreement is this? Only the agent who brings in the buyer earns the commission, and if the seller finds a buyer herself, no one is owed a commission

open listing agreement

In states where they're legal, for which type of listing or listings may a net listing be used? Select the most complete answer.

open, exclusive agency, or exclusive right-to-sell

n a hot market, what pricing strategy may incite bidding wars?

pricing at or just below market value

exclusive right-to sell listing agreement

provides the highest service to the seller and the most protection for the brokers commissions - allow the listing agent to list the property and revise a commission no matter who brings the buyer to the seller

Which Method Is David Using to find a listing? David was ready to sell his home. He talked to several co-workers about getting his home ready to go on the market, when one of them mentioned Chris, the real estate licensee who helped him sell his home. He dug up his contact information and gave it to David, who called Chris later that evening to set up an appointment to discuss listing the house.

referrals

the only way to create agency relationship in TN is for both parties to

sign an agency agreement

In which of these instances would a broker still be owed a commission, even after a listing agreement terminates?

the eventual buyer inquired about the property during the agreement period

Bernie represented Oscar in the sale of Oscar's home. They signed an exclusive right-to sell-listing agreement. If Oscar were able to find his own buyer, would he owe Bernie a commission?

yes Bec the "exclusive right to sell" means Bearnie gets paid no matter who finds the buyer

open listing agreements

unilateral agreements in which a seller may contract with many real estate agents to locate a buyer

After you've made a professional listing presentation and the seller has declined to use you as a listing agent, what's the best practice?

you should accept the outcome either way