Unit 8: Real Estate Brokerage

A real estate broker was responsible for a chain of events that resulted in the sale of a client's property. This is called

procuring cause.

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?

$14,575

Two real estate professionals were found guilty of conspiring with each other to allocate real estate brokerage markets. A seller suffered an estimated $90,000 loss because of their activities. If the seller brings a civil suit against the two real estate professionals, what can the seller expect to recover?

$270,000 plus attorney's fees and costs

Junk emails are prohibited by what legislation?

CAN-SPAM Act

Which law has a feature that commercial email messages must include a means by which the recipient can unsubscribe?

CAN-SPAM Act

An independent contractor and a broker can agree upon which of the following?

Compensation the contractor would receive

A broker would have the right to dictate which of the following to an independent contractor?

Conduct in compliance with statutory law and regulations

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

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

States' licensing rules and regulations do NOT have the same force and effect as statutory law.

FALSE

When information is taken from the internet, it is always accurate.

FALSE

Does it make any difference that Ivy receives no compensation for helping family and friends?

No, not charging does not prevent the real estate Commission from investigating her conduct.

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

Terry has a real estate license.

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?

The agreement does not violate antitrust laws.

The federal law that makes contracts originated, negotiated, and executed over a combination of computer and cell phone enforceable is

UETA.

Which act encourages the use of electronic signatures, making routine paperwork much more efficient?

Uniform Electronic Transactions Act

If Ivy later obtains a real estate license, will she still have a problem?

Yes, her conduct prior to being licensed could still be questioned.

Is there any problem with Ivy acting so generously on behalf of family and friends?

Yes, she may be charged with engaging in activities that require a real estate license.

All of the following are prohibited under the antitrust laws EXCEPT

a broker setting a company commission schedule.

Under the Sherman Antitrust Act, the penalty for a person found guilty of fixing prices or allocating markets is

a maximum $1 million fine and 10 years in prison.

A real estate sales associate, classified by the IRS as an independent contractor, receives

a negotiated share of commissions on transactions.

Many states have modified the traditional terms broker and salesperson to stress that all licensees must be knowledgeable of and comply with the law. The person who performs licensed activities under the authority of a broker is frequently called

a sales associate.

Regulations of agencies that administer real estate license laws

have the same force and effect as statutory law.

Commissions are negotiable

in all cases

Sales associates who are paid in a lump sum and who are personally responsible for paying their own taxes are probably treated for tax purposes as

independent contractors.

A real estate sales associate has a licensed personal assistant who usually must be

paid by the sales associate's employing broker.

A sales associate wants to be classified by the IRS as a qualified real estate agent—the equivalent of holding independent contractor status for tax purposes. The sales associate must meet all of the following requirements EXCEPT

perform all work unsupervised by the managing broker.

Antitrust laws do NOT prohibit real estate

sales associates within the same office agreeing on a standard commission rate.

National Association of Real Estate Brokers (NAREB)

state, regional, and local associations.

The National Association of REALTORS® is composed of

state, regional, and local associations.

Price-fixing is punishable by up to a $1 million fine and 10 years in prison under

the Sherman Antitrust Act.

The use of electronic signatures makes routine paperwork more efficient and has been encouraged by adoption by most states of

the Uniform Electronic Transactions Act.

An owner tells a group of brokers, "I will pay a commission to whoever brings me a buyer." In this case, the broker who is going to get paid must be

the procuring cause.

To be entitled to receive compensation from a real estate sales transaction, an individual must be all of the following EXCEPT

unrelated to either the buyer or the seller.

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

Under antitrust laws, which of the following activities is acceptable?

A broker setting a company commission schedule

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

TRUE

Laws cannot guarantee an ethical or moral marketplace.

TRUE

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

TRUE

A broker has established the following office policy: "All listings taken by any sales associate of this real estate brokerage must include compensation based on a 7% commission. No lower commission rate is acceptable." If the broker attempts to impose this uniform commission requirement, which statement is TRUE?

The broker may, as a matter of office policy, legally set the minimum commission rate acceptable for the firm.

Which statement BEST explains this sentence: "To recover a commission for brokerage services, a broker must be employed by a client"?

The client must make an express or implied agreement to pay a commission to the broker.

A state has recently updated its Rules and Regulations for the Real Estate Profession. Which statement is most likely TRUE regarding this update?

The rules and regulations have the same force and effect as the license law itself.

The real estate industry, including all licensed real estate brokers and sales associates, is subject to

antitrust laws.

A real estate sales associate who is an independent contractor, as opposed to an employee, will have a substantial portion of the individual's income

based on sales production or other output.

In order for a broker to be paid on an open listing, the broker must

be the procuring cause of the sale.

The primary reason real estate license laws exist is to protect

consumers.

A recent important change to real estate brokerage practice is

digital communication in all its forms.