UNIT 8

Two or more businesses conspiring against another business

Group boycott

Which law has a feature that commercial email messages must include a means by which the recipient can unsubscribe? A) CAN-SPAM Act B) COPPA C) TCPA D) FCC Act

A

The purpose of the Electronic Signatures in Global and National Commerce Act (E-Sign) is to make contracts (including signatures) and records legally enforceable, regardless of the medium in which they are created. TRUE OR FALSE

TRUE

Practical applications of the articles of the REALTOR Code of Ethics

Standards of Practice

A real estate broker is licensed to buy, sell, exchange, or lease real property for others and to charge a fee for those services TRUE OR FALSE

TRUE

A real estate broker's compensation is specified in the contract with the client TRUE OR FALSE

TRUE

ARELLO promotes state licensing standards TRUE OR FALSE

TRUE

disclaimers

A statement indicating no legal responsibility for information; no warranties or representations have been made.

code of ethics

A written system of standards for ethical conduct.

The use of electronic signatures makes routine paperwork more efficient and has been encouraged by adoption by most states of A) the Real Estate Transactions Act. B) the Uniform Electronic Transactions Act. C) the Uniform Brokerage Transactions Act. D) the real estate licensing laws.

B

managing broker

The real estate professional who is responsible for supervision of the real estate professionals who act on behalf of the brokerage; may also be called a supervising broker.

employee

For tax purposes, someone who works as a direct employee of an employer and has employee status. The employer is obligated to withhold income taxes and Social Security taxes from the compensation of employees. See also independent contractor.

Has completed the requirements of the REALTOR Institute

GRI

minimum level of services

The services that real estate professionals must provide to clients, as prescribed differently by certain states; for example, assisting clients in negotiation and answering questions from clients about offers, counteroffers, and contingencies.

Providing product or service to customer only if customer buys another product or service as well

Tie-in agreement

Member of the National Association of REALTORS

realtor

price-fixing

a practice in which competitors agree to set prices or other terms and conditions for products or services rather than letting competition in the open market establish those prices.

ready, willing, and able buyer

Person who is prepared to buy property on the seller's terms and is ready to take positive steps to consummate the transaction.

Internet Data Exchange (IDX) policy

Policy that allows all multiple listing service (MLS) members to restrict internet access to MLS property listings

Setting commission rate among competitors for services

Price-Fixing

boycott

When individuals or businesses withhold their patronage to a business as a protest or to reduce competition.

antitrust laws

Laws designed to preserve the free enterprise of the open marketplace by making illegal certain private conspiracies and combinations formed to minimize competition. Most violations of antitrust laws in the real estate business involve either price-fixing (real estate professionals conspiring to set fixed compensation rates) or allocation

independent contractor

Someone who is retained to perform a certain act but who is subject to the control and direction of another only as to the end result and not as to the way in which the act is performed. Unlike an employee, an independent contractor pays for all expenses and Social Security and income taxes and receives no employee benefits. Most real estate sales associates are independent contractors, meeting the Internal Revenue Service definition for a qualified real estate agent.

Two sales associates who work for the same firm agree to divide their town into a northern region and a southern region; one sales associate will handle listings in the north, and the other will handle listings in the south. Which statement is TRUE? A) The agreement does not violate antitrust laws. B) The agreement constitutes illegal price-fixing. C) The two sales associates are guilty of a group boycott with regard to other sales associates in their firm. D) The two sales associates have violated the Sherman Antitrust Act and are liable for treble damages.

A Because both sales associates are in the same firm, their agreement is not an intercompany agreement to allocate markets; it is merely fixing responsibility within one company and is quite proper and not subject to antitrust law.

electronic contracting

A process of integrating information electronically in a real estate transaction between clients, lender, and title and closing agents.

multiple listing service (MLS)

A marketing organization composed of member real estate professionals who agree to share their listing agreements with one another in the hope of procuring ready, willing, and able buyers for their properties more quickly than they could on their own. Most multiple listing services accept exclusive right-to-sell or exclusive agency listings from their member real estate professionals.

National Do Not Call Registry

A national registry, managed by the Federal Trade Commission, that lists the phone numbers of consumers who prefer to limit the telemarketing calls they receive. --List of phone numbers from consumers who want to limit telemarketing calls

Agreement between real estate professionals to divide market and not compete with each other's business

Allocation of customers or markets

Electronic Signatures in Global and National Commerce Act (E-Sign)

An act that makes contracts (including signatures) and records legally enforceable regardless of the medium in which they are created.

A real estate company has adopted a 100% commission plan. The monthly desk rent required of sales associates is $1,500, payable on the last day of the month. In August, a sales associate closed a transaction that earned a commission of $11,370 and a second transaction that earned a commission of $6,875. The sales associate's additional expenses for the month were $2,170. How much of the total monthly income did the sales associate keep? A) $18,245 B) $14,575 C) $16,075 D) $16,745

B The associate's earnings: $189,500 × 6% = $11,370; $125,000 × 5.5% = $6,875; $11,370 + $6,875 = $18,245 total earnings. Her expenses: $1,500 desk fee + $2,170 other = $3,670 total expenses. Net earnings: $18,245 total earnings - $3,670 total expenses = $14,575 net earnings.

A sales associate took a listing on a house that sold for $329,985. The commission rate was 5%. A sales associate employed by another broker found the buyer. The seller's broker received 60% of the commission on the sale; the buyer's broker received 40%. If the seller's broker kept 30% and paid the seller's sales associate the remainder, how much did the seller's sales associate earn on this sale? A) $5,774.74 B) $4,346.85 C) $6,929.68 D) $8,249.00

C

Affiliate designation of NAR specializing in residential property

CRS

On the sale of any property, a sales associate's compensation is based on the total commission paid to the broker. The sales associate receives 30% of the first $2,500, 40% of the next amount between $2,500 and $7,500, and 50% of any remaining amount exceeding $7,500. If a property sells for $234,500 and the broker's commission rate is 6.5%, what is the sales associate's total compensation? A) $5,847.00 B) $6,871.25 C) $7,621.25 D) $6,621.25

D

Terry is the personal assistant of a real estate sales associate. Terry must be paid by the broker who employs the sales associate. This means that A) the sales associate doesn't make very much money. B) ultimate responsibility for Terry's conduct in the performance of work-related activities lies with the sales associate. C) Terry is a part-time employee. D) Terry has a real estate license.

D

A system of moral principles, rules, and conduct

Ethics

A real estate assistant would never be required to have a real estate license TRUE OR FALSE

FALSE

A sales associate can carry out all the same activities as a real estate broker

FALSE

A sales associate's compensation is determined by the client TRUE OR FALSE

FALSE

If a state licensing authority's regulations conflict with statutory law, the regulations will prevail TRUE OR FALSE

FALSE

Real estate license laws do not include disciplinary systems TRUE OR FALSE

FALSE

State's licensing rules and regulations do NOT have the same force and effect as statutory law TRUE OR FALSE

FALSE

The Institute of Real Estate Management (IREM) is affiliated with the National Association of Real Estate Brokers (NAREB). TRUE OR FALSE

FALSE

Price-fixing, which is the practice of setting prices for products or services rather than letting competition in the open market establish those prices, is legal

FALSE, ITS ILLEGAL

Member of the National Association of Real Estate Brokers

Realtist

Established by the National Association of Real Estate Brokers

Realtist Code of Ethics

Uniform Electronic Transactions Act (UETA)

Sets forth rules for entering into an enforceable contract using electronic means. --Sets basic rules for entering an enforceable contract using electronic means

brokerage

The bringing together of parties interested in making a real estate transaction.

procuring cause

The effort that brings about the desired result. Under an open listing, the real estate professional who is the procuring cause of the sale receives the commission.

Has an established Code of Ethics that REALTORS must subscribe to

NAR

commission

Payment to a real estate professional for services rendered, such as in the sale or purchase of real property; usually a percentage of the selling price of the property.

All 50 states regulate the activities of real estate professionals TRRUE OR FALSE

TRUE

Group boycotting, allocation of customers or markets, and tie-in agreements are all prohibited acts under the Sherman Antitrust Act TRUE OR FALSE

TRUE

Laws cannot guarantee an ethical or moral marketplace TRUE OR FALSE

TRUE

Many trade organizations serve the real estate business. The largest is the National Association of REALTORS® (NAR). TRUE OR FALSE

TRUE

Real estate license laws are intended to protect the public TRUE OR FALSE

TRUE