Unit 13: Real Estate Brokerage

employment status.

The compensation earned by a licensee depends on his or her:

Due to their employee status, a broker must provide workers compensation coverage to all sales associates as well as any non-licensee employees of the firm.

Even though sales associates are considered self-employed for federal and state income tax purposes, a broker must provide Workers' Compensation insurance for:

CAN-SPAM laws

Federal and state law regulating commercial e-mail messages.

do-not-call

Federal and state regulations regarding unsolicited phone calls.

Americans with Disabilities Act

Federal law passed in 1990 that prohibits discrimination against individuals with disabilities.

commingle

The mixing of funds belonging to one party with funds belonging to another party

Only $200 of personal funds may be in the trust fund account.

A broker may keep up to _______ of personal funds in the trust fund account to pay for bank charges or service fees related to the trust account.

sole proprietorship

A business that is owned and operated by one person.

Jones v. Mayer

A case prohibiting racial discrimination by upholding the 1866 Civil Rights Act and the 13th Amendment to the U.S. Constitution.

A commercial e-mail message is "any electronic mail message, the primary purpose of which is the commercial advertisement or promotion of a commercial product or service." E-mails sent as part of an ongoing commercial transaction, called transactional e-mail messages, are excluded from the Act.

A commercial e-mail message is an e-mail sent to:

S corporation

A corporation that operates like a corporation but is treated like a partnership for tax purposes.

commission

A fee for services rendered usually based on a certain percentage of the sales price of a property.

corporation

A legal entity whose rights in business are similar to that of an individual.

joint and several liability

A legal term used in reference to a debt or a judgment for negligence, in which each debtor or each judgment defendant is responsible for the entire amount of the debt or judgment.

3 years.

A licensed broker must keep real estate records for:

independent contractor

A person who is hired to do work for another person but who is not an employee of that person.

township.

A real estate brokerage can be set up in all of the following ways, except a(n):

ethics

A set of principles or values by which an individual guides his or her own behavior and judges that of others.

making real estate investments.

All of the following are activities of a brokerage, except: finding buyers and securing listings. making real estate investments. arranging financing. negotiating transactions.

The Bureau of Real Estate does not issue real estate partnership licenses.

All of the following businesses can get a California real estate broker license, except a(n): a. sole proprietorship. b. partnership. c. corporation. d. S corporation.

limited liability company

An alternative business entity that has characteristics of both corporations and limited partnerships.

DBA

Another name for a fictitious business or trade name.

commercial e-mail message

Any electronic mail message whose primary purpose is the commercial advertisement or promotion of a commercial product or service.

Choices (a), (c), and (d) used half-truths, inflated claims, and ambiguous or superlative terms.

Ben just took a listing on a three-bedroom fixer-upper home located in an area with very good schools. Although it is a mixed neighborhood, it is primarily Malaysian. He's eager to sell the home and wrote the following ads. Which of the ads best follows acceptable advertising guidelines? a. "This is the best home in the neighborhood in a good school district." b. "Nice fixer, located by parks and good schools with three-bedrooms for the family." c. "Clean, bright, and move-in ready for the right family." d. "Beautiful home near parks, looking for Malaysian family."

fictitious business name

Business name that does not include the last name of the owner.

trust funds are mixed with personal funds.

Commingling is strictly prohibited by real estate law and occurs when:

Housing Financial Discrimination Act

It is illegal to discriminate in the provisions of the availability of financial assistance because of the consideration of: 1. Trends, characteristics or conditions in the neighborhood or geographic area surrounding a housing accommodation, unless the financial institution can demonstrate in the particular case that such consideration is required to avoid an unsafe and unsound business practice; or 2. Race, color, religion, sex, marital status, national origin or ancestry. It is illegal to consider the racial, ethnic, religious or national origin composition of a neighborhood or geographic area surrounding a housing accommodation or whether or not such composition is undergoing change, or is expected to undergo change, in appraising a housing accommodation or in determining whether or not, or under what terms and conditions, to provide financial assistance. These provisions govern financial assistance for the purpose of the purchase, construction, rehabilitation or refinancing of one to four unit family residences occupied by the owner and for the purpose of the home improvement of any one to four unit family residence.

implements a high standard of ethics.

It is imperative to choose a brokerage that:

cold calling

Making unsolicited calls to unknown people to get new business.

trust funds

Money received by a broker to be used in a real estate transaction.

desk cost

Profitability measure calculated by dividing the total operating expenses of the firm by the number of licensed sales associates.

Singling out one faith to the exclusion of others is discriminatory.

Real estate ads should not have words that state or imply a preference with regard to race, color, religion, handicap, sex, familial status, or national origin. Of the following phrases, which would be unacceptable?

credit history.

Real estate ads should not state or imply a preference or limitation with regard to all of the following, except:

elderly.

Section 54-55.1 of the California Civil Code prohibits discrimination in the rental, leasing, or sale of housing accommodations to all of the following except the:

employee

Someone who is under the control and direction of a broker.

Unruh Civil Rights Act

State law that prohibits discrimination by businesses.

California Fair Employment and Housing Act

State law that prohibits discrimination in the sale, rental or financing of practically all types of housing.

steering

Steering involves guiding a renter to a specific area of the property for discriminatory reasons.

The California Fair Employment and Housing Act (Rumford Act) prohibits discrimination in the sale, rental or financing of housing. Housing Financial Discrimination Act (Holden Act) prohibits discrimination in real estate lending. The Unruh Civil Rights Act covers discrimination in business.

The California law that prohibits discrimination in the sale, rental or financing of practically all types of housing is called the:

The company dollar is the amount a broker has left after all commissions have been paid. The desk cost shows how much each sales associate must earn to cover expenses. It is calculated by dividing the total operating expenses of the firm by the number of licensed sales associates.

The amount a broker has left after all commissions have been paid is called the:

company dollar

The amount a broker has left after all commissions have been paid.

prospecting

The process of identifying potential customers.

blockbusting

The illegal practice of telling people that property values in a neighborhood will decline because minorities purchase the homes.

Blockbusting or panic selling is illegal. Steering is the illegal practice of showing clients property in only certain areas. Redlining is the illegal use of a property's location to deny financing.

The illegal practice of telling people that property values in a neighborhood will decline because of a specific event, such as the purchase of homes by minorities is called:

redlining

The illegal use of a property's location to deny financing.

Under the Do Not Call rules, real estate licensees or unlicensed assistants may make cold calls provided that the calls are only made between 8:00 a.m. and 9:00p.m.

Under the do-not-call rules, when may a real estate licensee make cold calls?

The sales associates are employees of the broker, and as we have learned, all listing contracts are between the seller and the broker, not the sales associate who took the listing. When a salesperson leaves the employ of a particular broker, any listings he or she has will remain with that broker.

When a salesperson transfers his or her license to another broker, the listings obtained by the salesperson:

Corporations are subject to double taxation.

Which of the following business entities would be subject to double taxation?

Paying non-licensees for assisting in the sale of real property

Which of the following is not an operation of real estate brokerage?

All must be included in a commercial e-mail.

Which of the following items must be included in a commercial e-mail message?

The three answers correctly list the three requirements.

Which of the following statements is correct regarding the basic tests used to determine statutory nonemployee status?

A homeowners' association or CC&Rs cannot prohibit private owners from displaying real estate signs on their own property. The signs must be reasonably located, in plain view of the public, of reasonable dimensions and design, and used to advertise the property for sale or lease, or to advertise directions to the property.

Which of the following statements is incorrect regarding real estate signs?

The license law considers a salesperson an employee, For income tax purposes, the IRS classifies real estate licensees as statutory nonemployees.

Which of the following statements is incorrect?

All statements are correct: Choice (a) - B&P Code Section 10140.5. Choice (b) - B&P 10140.6 & Reg. 2770.1. Choice (c) - Reg. 2770.

Which of the following statements regarding advertising is correct? a. A real estate broker or firm must disclose its licensed status in all advertising. b. Anytime a broker advertises real estate services, a term such as broker, agent, licensee (or the abbreviations bro. or agt.) must be included in the advertisement. c. A salesperson may not use his or her name and telephone number in an advertisement without including the broker's name. d. All of the statements are correct.

Trust funds are money, or anything of value, received from the buyer by an agent on behalf of a seller, such as: cash, a check used as a deposit for a purchase, or a personal note made payable to the seller. Do not confuse other monies such as commissions, general operating funds, and rents and deposits from broker-owned real estate with trust funds.

Which of the following would not be considered trust funds?

A real estate broker may open a real estate brokerage in his or her name, or a fictitious business name. The broker may have multiple locations and take ownership in a variety of ways, such as sole proprietorship, partnership, corporation, or limited liability company (LLC).

Which statement is correct regarding a real estate brokerage business?

The employment agreement does not have to be on a form approved by the Real Estate Commissioner.

Which statement is incorrect regarding the broker/salesperson employment agreement?

Blockbusting

__________ is the act of telling others that property values will decline because of a specific event, such as a large influx of minorities into a neighborhood.

partnership

a legal relation existing between two or more persons contractually associated as joint principals in a business