Unit 6: Brokerage Agreement Questions

Any business entity found guilty of violating the Antitrust Act can be fined up to how much?

$1,000,000 *an individual may be fined up to $10,000 or imprisoned for up to 2 years, or both

A listing agreement must include:

- a description of the property - the listing price - the commission to be paid - the signature of all parties - a definite expiration date.

If the seller's disclosure is delivered after the seller accepts a purchase agreement, the buyer has _________ after delivery to terminate the purchase agreement.

72 hours

In which of the following situations would the seller be exempt from completing a seller's disclosure form? A six month old condominium A foreclosure sale A 10-year old single family detached home A short sale

A foreclosure sale

Which of the following would not be exempt from seller's disclosure requirements? A lender or borrower in default A four-family residential unit A ex-wife selling to her ex-husband after a divorce A family selling their mother's home after her death

A four-family residential unit

What is a real estate example of a group boycott?

A group of brokers decide not to cooperate with another broker who is offering a discount commission rate.

What does Michigan require of a broker who wants to manage property?

A written property management employment contract that outlines the broker's duties, responsibilities and activities as the property manager; and describes the handling, management, safekeeping, investment, disbursement and use of property management money, funds and accounts.

In this type of agreement, only one broker is allowed to act on behalf of the principal. However, if the owner sells the property him or herself, no commission is paid to the broker. What is this agreement called?

An exclusive agency agreement

Which of the following is NOT a service provision agreement? Listing Buyer's agency Dual agency Property management

Dual agency

List the most common types of listing agreements. Which do you think is the most often used in Michigan?

Exclusive Right-to-Sell (Most used in Michigan) Exclusive Agency Open Listing

What's the purpose of the Seller's Disclosure Act?

Forewarn buyers of a property's condition before making an offer.

Which of the following is not a required item for a listing agreement? List price Definite expiration date Legal description Agreed upon commission

Legal description

Name three (3) types of consumer brokerage agreements

Listing Buyer's agency Property management contract

What is the term for when a licensee starts a chain of events which results in the sale of a property?

Procuring cause

What are a licensee's responsibilities and liabilities regarding the Seller's Disclosure?

Responsibilities - Obtain the completed form Deliver form to buyers Request signed copy from buyers before presenting offer to sellers Liabilities None - as long as the agent didn't know if the seller violated the act

What is the document used to forewarn prospective buyers of the condition of the property prior to that prospective buyer writing an offer?

Seller's Disclosure Statement

Who owns listings?

The broker owns the listings. Therefore, a listing agent who is not the broker may not take listings with him or her when leaving the firm

What happens if a seller does not provide a disclosure before he executes a binding purchase agreement with a buyer?

The buyer has 72 to 120 hours (depending on the method of delivery) to terminate the agreement.

What's a protection clause?

The protection clause states that the broker is still entitled to a commission for a set period of time after the listing expires if the property is sold to anyone who looked at the property with the broker or any cooperating broker during the period the property was listed.

If a licensee tells a person that he or she could pay a lower commission rate if the person purchases a subscription to the licensee's newsletter, the licensee is guilty of

a tying arrangement.

The four commonly used types of brokerage agreements are

an employment contract between a broker and his or her affiliates a listing agreement a buyer representation agreement a property management agreement.

Broker Reggie tells newly licensed Broker Archie that his brokerage works in Riverdale and Broker Archie cannot take any listings in that area. This is an example of the illegal practice of

customer allocation.

Commission rates are

fully negotiable between the agent and client.

Any interest earned on a property management account

must be handled in accordance with the property management employment contract.

A real estate broker who engages in property management: can keep rental payments in the brokerage's general account or in a separate account. must keep rental payments in a separate account. must keep rental payments in the brokerage's general account. will not accept rental payments as they will go directly to the owner.

must keep rental payments in a separate account.

Regarding a seller's disclosure form, the listing agent is required to

obtain and deliver a fully completed disclosure form to the potential buyer or buyer's agent.

If two brokers conspire to set a commission rate in their area, they are guilty of

price fixing.

A _______________ is a contract between a property owner and a broker who is being hired to manage rental property.

property management agreement

Written brokerage agreements are also known as

service provision agreements.

For a broker to become an owner's leasing agent

they must sign a written property management employment contract.