Real estate principles key terms

How much money can a licensee place in an account of others?

$200 maximum

Broker/sales agency can 'do business as' what 4 ways?

1. A brokerage firm 2. Sole proprietorship 3. Partnership 4. Corporation

For compensation, tax & etc, how is a sales agent treated by a brokerage?

1. Independent contractor 2. Employee

In a transaction of a business opportunity, what does the business's assets include?

1. Personal property Example: inventory, trade fixtures, the business's goodwill 2. Stock

What percentage of US businesses qualify a small business?

95%

Prepaid Rental Listing Service

Allows one to sell a list of rental properties to prospective tenants Only good for 2 years

Compensation means

Compensation for ask requiring a real estate license, (regardless whether calculated as a percentage of transaction price flat fee, hourly rate or any other manner)

Who is California's current Real Estate Commissioner?

Doug McCauley

Before commission is paid to licensee what is deducted?

Expenses & offsets

What's a 'manufactured home'

Mobile home

If a licensee is served with a lawsuit or claim what must they do first?

Notify brokerage of claim

What is division 4 of business and professions code

Real Estate Law

If charges are proven what is the penalty to a licensee?

Suspension or revocation of license

What is a business's goodwill?

The benefit derived from the business is favorable relationship with his customers.

Who enforces real estate law?

The real estate commissioner

What happens when a business opportunity & real property is sold at the same time?

The sales are usually treated as separate concurrent transactions.

Who appoints the Real Estate Commissioner?

governor

What is fictitious business name statement commonly referred to as..?

'Doing Business As' DBA

Real Estate Salesperson

(often referred to as a sales associate or associate licensee) can act only under the control and supervision of a responsible broker; that is, the real estate broker by whom the salesperson is employed.

What are the qualifications to becoming a real estate broker?

-2-5 years of experience in real estate - Or a four year degree with a major or minor in real estate.

If a license is revoked how long must a person wait to re-apply?

1 year

What does the real estate salesman exam look like, what does it take to pass?

1. 150 multiple choice questions 2. 70% 105 questions right 3. 3 1/4 hours session to complete

What does the brokers exam look like, what does it take to pass?

1. 200 questions 2. 75% 150 questions correctly 3. Two 2 /12 sessions

Under what circumstance would you not need to renew your real estate license?

1. 70 years of age or older 3. Have been licensed in a good standing for 30 continuous years in California

Partnership

1. A brokerage can be a partnership if at least one of the partners is a licensed real estate broker. 2. Every partner who performs activities that require a real estate license must be licensed as a real estate broker but there can be only one broker partner of record. 3. At least one broker partner must obtain an addi- tional license for each branch office location. 4. The partnership itself needs no separate license.

For advertising and solicitation materials of a business team, what names need to be displayed?

1. A licensed agent and their real estate number 2. Licensed broker name predominately shown

A real estate license is not needed for the following people

1. A person who deals only with their property 2. A corporation who has a special officer that performs the tasks, who receives no special compensation 3. A licensed security broker/dealer who's involved in a business opportunity at that capacity 4. An attorney has duly executed power from owner of property 5. An Attorney at law, Rendering services has duty as attorney 6. A person acting under order any court: receiver or trustee in bankruptcy 7. A trustee selling under deed of trust 8. Employees of lending institutions, pension trusts, credit unions, or insurance companies, in connection with loans secured by liens on real property or a business opportunity. 9. Escrow agents collecting funds in connection with loans secured by liens on real property

What are NOT considered solicitation materials under the license number requirement?

1. Advertisements in electronica media including radio cinema and TV ads 2. Print advertising in newspaper or periodical 3. For sale signs placed on around property

Terms of agreeing to a franchise

1. Agree to sell goods under the marketing plan by the franchisor 2. The services and businesses plan is substantially associated with the franchisors trademark 3. Franchisee is required to pay, directly or indirectly, a franchise fee

In order to sell a business opportunity the agent must

1. Alert the buyer to federal state and local government requirements 2. in order to obtain necessary business permits license and clearances

Proprietary Information & Files Independent contractor agreement

1. All files and documentation like listing, leads & transaction are property of broker and must be given back immediately by licensee if requested by brokerage or under termination of agreement. 2. Brokeridge method of conducting business is protected by trade secret. 3. Associate licensee shall not benefit from or take advantage of Brokerage except in with the ways that were agreed to in writing

What's an entire agreement mean?

1. All the details are in the agreement 2. The contract agreements are final and complete 3. No previous agreement or contemporaneous oral agreement can alter the entire agreement 4. Only a further agreement in writing executed by broker and associate licensee can change the entire agreement

Listing means?

1. An agreement with the property owner to locate a buyer to a transaction involving real property which can be brokered by a real estate licensee 2. Or an agreement with a party to locate or negotiate for any such property or transaction

What are the guidelines accordance to agreement to mediate disputes?

1. Before resorting to arbitration or court-action, both parties must agree to timely notify the other person by mediating disputes between in accordance to their agreement. 2. If disputes are not mediated/resolved, broker and associate licensee may mutually agreed to submit disputes regarding commissions of property transaction to & by the procedures and rules set forth in the California code of ethics and aberration manual.

License inspection protocols

1. Both broker and agent must have license available for inspection at place of work. 2. If the broker has more than one place of work they must provide license for inspection at each location.

What are the roles of commissioner, licensee and claim party, when a real estate claim goes to court?

1. Commissioner becomes complainant 2. The licensee is the respondent 3. The person who initiated the complaint is the witness

In order to get a real estate sales person's license renewed what is necessary?

1. Complete 45 hours of continuing education CE, by courses approved by CalBRE 2. 18 hours related to consumer protection 3. three hour courses on - ethics, professional conduct and legal aspects of real estate - Agency relationships and duties in real estate brokerage practice - Trust fund accounting and handling - Fair housing - Risk management

A business opportunity listing should not be taken by an agent unless they are able to

1. Fully informed the business assets and liabilities 2. And able to convey that information to purchasers

What are the restrictions for a restricted license?

1. Limit the length of license term 2. Require employment by a particular real estate broker 3. Other conditions like filing of surety bonds for protection of persons with him the license does business

Where is California Association of realtors located, physically and on the web?

1. Los Angeles 2. CAR.com

Team of agents without a broker, what's the rules of naming the partnership?

1. Needs to provide a surname of the agents 2. Cannot used terms, 'broker, brokerage'

What does (SBA) small business administration define as a small business?

1. No more than $1 million a year revenue 2. No more than 250 employees

What are real types of property transactions? Theres 7

1. Offer to sell, to sell & solicit sellers. 2. Offer to purchase, to purchase & to solicit purchasers 3. Exchanging 4. Soliciting or obtaining property listings for sale or exchange 5. Leasing, renting, offering to lease or rent 6. Selling, purchasing or exchanging leases 7. Applying for purchase or lease federally own land

If brokerage terminates licensee, the licensee shall not solicit what?

1. Perspective or existing clients or customers based on companies generated leads obtained during employment 2. Any principal with existing contractual obligation's to broker 3. Any principal with contractual transactional obligation for which the broker is entitled to be compensated

What kind of work unlicensed real estate assistant legally do?

1. Record filing: rent receipts, loan payments, escrow sheets 2. Meeting non-principals: Appraiser loan inspector fire inspector 3. Computer data entry or retrieval 4. Word processing, such as downloading digital photos and graphics for flyer composition or distribution

What are the penalties a real estate commissioner can order for violation?

1. Reeducation, examples course on ethics 2. Payment of a fine 3. Return of documents and other materials 4. Reimbursement to the real estate recovery account of amounts paid to victims a violation on the offenders half

An agent at a mortgage loan brokerage is capable of what duties?

1. Soliciting borrowers or lenders for loans 2. Negotiating loans 3. Servicing loans (collecting or other tasks for loans) ■Purchase, sale, or exchange of such an obligation with a member of the public (consumer) ■Servicing of such an obligation by agreement with a member of the public

Corportation

1. The corporation license application and fee 2. A certificate of status issued by the secretary of state within 30 days before submission of the application; or the Articles of Incorporation filed with the secretary of state if a California stock corporation originally filed the articles within six months of the application 3. A statement of officers as filed with the Secretary of State

What does it mean when the broker-salesman contract form is proprietary?

1. The form is unique to the entity that created it. 2. The form is copyrighted. 3. Cannot be copied without permission from the copyright holder.

What three things must happen when a sales person change brokers?

1. The former employing broker must notify California Bureau of real estate Sacramento headquarters immediately, in writing 2. Former employer must return the salesmen's license certificate within three days of termination of employment and sign Salesman Change Application Form 3. R/E form 214 must be completed by salesman and new employer within five days and sent to Sacramento

What power does the Brokeridge have when their licensee is served a lawsuit or claim?

1. They can deduct offsets from Commission compensations I pay for dispute costs 2. They retain the authority to settle claims or dispute whether or not associate consents to such settlement.

What does statutory language mean in terms of broker salesman contract?

1. Wording, style & size of contract terms is dictated by state law. 2. Contracts with statutory language can still be copyrighted.

If associate licensee wants a personal assistant, what must be provided?

1. Written agreement between licensee and assistant establishing terms and responsibilities along with compensation supervision and compliance with applicable law. 2. The agreement must be subject to brokers review and approval. 3. If assistant has real estate license it must be provided to the broker. 4. both associate licensee and personal assistant must sign any agreement that broker has established for such purposes

How long is the fictitious business name statement

5 years from the DEC 31st

What's the average amount of years that a small business changes ownership?

5-8 years

Sole Proprietor

A business that legally has no separate existence from its owner. Income and losses are taxed on the individual's personal income tax return.

What's the requirement for a mobile home to be sold?

A compliance with the health and safety code

Transaction means

A sale, exchange, lease or rental of real property, a business opportunity, or a manufactured home, which may lawfully be brokered by a real estate license. Would like to know what a business opportunity and manufactured home means??

What is required of the broker and sales person by Real Estate Law?

A written agreement Regulation 2726 of Real Estate Commissioner

What limits a independent contractor relationship between, Broker & licensed sales associate?

A. 1. Neither can claim 'employment agreement' 2. Both Independent contracting parties (with respect to the agreement) 3. Agreement cannot be construed as a 'partnership' B. 1. Broker can't restrict associate licensee activities to a particular geographical area 2. Cannot dictate licensees activities; hours, leads, open houses, opportunity/floor time, production prospects, sales meetings, schedule, inventory, time off, vacation, or similar activities except to the extent required by law C. Licensee is not required to accept an assignment by broker to service a particular current or perspective listing or parties D. 1. Licensee can use whatever methods in soliciting obtaining listing sales exchanges leases rentals and other transactions. (So long as it's legal) 2. Broker is under control of the results of a licensees work only but NOT the means by which those results are accomplished. 3. Licensee cannot bind brokerage by any promise or representation 4. Brokerage is not liable for any obligation or liability incurred by a licensee. E. Licensee is only renumeration is the compensation specified in paragraph eight. F. 1. Licensee cannot be treated as an employee for state or federal tax purposes (unless the licensee performs loan activity) but if the loan activity is within the bounds of independent contractor relationship then licensee cannot be treated as employee for state and tax purposes. G. For workers compensation purposes (insurance), an independent contractor licensee is considered an employee; according to California Labor and Workforce Development Agency. Broker must bear the cost of workers compensation insurance.

Licensed activity independent contractor agreement

A. Licensed activity, that is in accordance with independent contractor and brokerage agreement, will be performed in the name of the broker. B. Licensee has access to all listings that other salesman associated with broker does. (Unless broker chooses to place the exclusive servicing to A specific associate licensee, or other specific licensees associated with broker.) C. Licensee associate has to pay for professional licenses, supplies & services without reimbursement from brokerage, except as required by law or contract. D. Associate licensee licensed activities must promote the business to best benefit their associated brokerage & themselves. Examples of activities: 1. sell, exchange, lease or rent properties 2. solicit additional listings clients and customers 3. Bring business back to associated brokerage E. 1.Associate licensee shall not break federal, state, local law or regulation regarding license activity. 2. Must be familiar and comply with laws above, including anti-discrimination and restrictions against giving or accepting a fee for the referral of business title companies. 3. In accordance to California Business and Professional Codes & Real Estate Settlement Procedures Act, (RESPA) F. 1. associate licensee is allowed to use the facilities of the brokerage. brokerage shall make available. G. 1. Associate licensee CANNOT engage in the following licensed activities: Property management, loan brokerage, and business brokerage, without EXPRESS consent of broker. 2. Unless associate licensee is a broker themselves. This comes with many restrictions mainly that the broker cannot do prohibited activities in the name of brokerage.

Undisclosed dual agency

Acting for more than one party in a transaction without the knowledge & consent of all parties

Desist and Refrain Order

An order directing a person to stop from committing an act in violation of the Real Estate Law.

bulk transfer of goods

Any transfer of a substantial part of the materials, supplies, merchandise, equipment, or other inventory of a business that is NOT in the ordinary course of the business's activities

Supervision: independent contractor agreement

Associate licensee After (or within 24hrs or agreed time) preparing signing or receiving, shall submit to brokerage all information in regards to 1. Documents with material affect upon rights and duties of principals in transaction 2. All information or items connected with the transaction available to licensee must be available to brokerage. 3. All documents in which the associate licensee is principal

Continued misrepresentation

Continued or flagrant course of misrepresentation and false promises

Where does an agent acquire mobile home dealer license?

Department of Ho using and Community development HCD

certificate of status

Document issued by California secretary of state showing a corporation's place of domicile, date of incorporation, corporate number, name and address of agent for service of process, and other information

False promise

False promise in order to influence, persuade or induce. An example: an offer of a rebate or gift to client that is not fufilled.

Uniform Commercial Code

Governs the sales or transfers of goods ordinarily held for sale in the course of business. - Protects creditors of seller by requiring A notice of transfer at least 12 business days before

California Bureau of Real Estate (CalBRE) formerly, Department of Real Estate

Headed by the Real Estate Commissioner, administers the Real Estate Law in California.

Under what circumstances would an agent need to get a mobile home dealer license?

If the agent sells two or more mobile homes at their place of business

Real Estate Brokerage

Is a business in which real estate license-related activities are performed under the supervision of a real estate broker.

California legislation

Is compiled into a series of booked called, codes.

caveat emptor

Latin phrase meaning "let the buyer beware"

What does it mean to hold harmless and indemnity of broker?

Licensee agrees to indemnify defend and hold broker harmless from all claims, dispute, litigation and judgments, awards, cost in attorney fees.

Making a secret profit

No compensation of any form may be received by the licensee without the knowledge of the licensees client. This happens when a licensee purchase property through a dummy buyer then resells it at a higher price.

Can a real estate agent make deals without being a part of a brokerage?

No.

Real Estate law has two parts..?

Part 1 covers licensing Part 2 covers transactions & includes the Subdivided Lands Law.

What's does the word principal stand for?

Party to the transaction

Commingling

Placing the licensees own money in the same account with money of others

What is required of a mortgage loan originator license?

Registering once a year with National wide mortgages licensing system and registry MNLS

Misrepresentation

Statement or active deception on matter of significance to the transaction, Most common example: failure to disclose property defect.

What happens win and associate licensee is terminated with listings/dealing undergoing transactions?

The broker will hire another associate to complete or complete transaction themselves and deduct reasonably from terminated licensees compensation.

What happens when independent contractor associate licensees of a brokerage are on the same side of a deal, doing the same job? How is commission determined?

The brokerage will allocate the commission in accordance to written agreements. Brokerage can with hold total compensation if there is a dispute between associates or if there's no written agreement.

If the brokers office policy manual conflicts, differs or changes from the terms of this agreement, which policy Will govern the relationship between broker and associate licensee?

The brokers office policy manual

How to get a mineral oil & gas (MOG) Real estate license?

They currently are no longer issuing this license. There is no continuing education for these licenses. Those who have it already can renew and continue work with it.

How does a independent contractor licensee get paid commission?

Through the brokerage

True or false: an agent is an employee of a broker

True

In what scenario could a real estate brokerage transfer stock?

When a stock transfer is part of a transaction involving a business opportunity?

When don't the brokers need to include the licensing number and advertisement materials?

When other licensed employees or broker associates have their license numbers listed

How is a sales person's license activated?

When the employing broker provides salesman name to CalBRE.

What happens when a brokers license expires?

Will place all licenses with their salesman or brokers who work for the employing broker on nonworking status

Combining listings with option without informed consent of seller

You can't list and sell a house without the seller agreeing to the agents profit in writing

What does the Real Estate Commissioner do?

determines administrative policy and enforces that policy in the best interests of those dealing with real estate licensees. 1. screens candidates for licensing; 2. prepares subdivision public reports; 3. conducts licensee disciplinary action; 4. investigates nonlicensees performing activities for which a license is required; and 5. regulates nonexempt franchises and real property securities.

What are requirements for Real Estate Commissioner?

must have been a practicing real estate broker in California for five years or engaged in some form of real estate activity for five of the past 10 years.

What is the Regulations of the Real Estate Com- missioner

serve to clarify and interpret the Real Estate Law. They have the force and effect of law.

A brokerage, whether a sole proprietorship, corporation, or partnership, can do business under a fictitious name as long as...

the real estate license is in that name.

What is the primary purpose of both the Real Estate Law and the Regulations of the Real Estate Commissioner?

to protect the members of the public with whom real estate licensees come into contact in their business activities.

After a real estate license expires how much time do have to renew it

two years from the expiration date