Chapter 8
The organization which arose out of the early days of the civil rights movement as an association of racial minority real estate brokers in response to the conditions and abuses that eventually gave rise to fair housing laws is A) none of these. B) the National Association of REALTORS®. C) the National Association of Real Estate Brokers (NAREB). D) the National Organization of Real Estate Professionals.
C
The real estate industry, including all licensed real estate brokers and sales associates, is subject to A) fair competition laws. B) social security taxation. C) antitrust laws. D) more regulations for smaller firms.
C
The use of electronic signatures makes routine paperwork more efficient and has been encouraged by adoption by most states of A) the real estate licensing laws. B) the Real Estate Transactions Act. C) the Uniform Electronic Transactions Act. D) the Uniform Brokerage Transactions Act.
C
Under antitrust laws, which of the following activities is acceptable? A) Real estate companies agreeing not to cooperate with a broker because of the fees that the broker charges B) Competing property management companies agreeing to standardized management fees C) A broker setting a company commission schedule D) Competing brokers allocating markets based on the value of homes
C
When acting as an employee rather than an independent contractor, a sales associate may be obligated to A) personally pay all withholding taxes. B) list properties in the sales associate's own name. C) work set hours. D) accept a commission from another broker.
C
Commissions are negotiable A) unless representing a buyer, when the listing broker offers a co-op. B) unless the exclusive agency listing is used, because the seller can compete with the broker. C) when using an exclusive listing agreement, but not an open listing. D) in all cases.
D
Internet advertising regulations include which of the following stipulations? A) Real estate professional must disclose license status on each page of website that contains an advertisement. B) Advertising may not be misleading. C) Sponsoring broker's name must be included in advertising. D) All of these.
D
The moral principles of a profession include A) a code of conduct for relations within the industry among its professionals. B) standards for integrity and competence in dealing with consumers. C) neither standards for integrity nor a code of conduct. D) standards for integrity as well as a code of conduct.
D
The primary purpose of the Uniform Electronic Transactions Act (UETA) is to A) protect consumers against unwanted email. B) allow brokers to close more deals. C) facilitate the use of social media. D) remove barriers in electronic commerce that would otherwise prevent enforceability of contracts.
D
When using email to communicate with clients, real estate professionals should A) perform a spelling check before sending. B) use a subject line that indicates what the message is about. C) respond in a timely manner to customer and client messages. D) do all of these.
D
Does it make any difference that Ivy receives no compensation for helping family and friends? A) Yes, because she isn't charging, there is nothing wrong with her actions. B) No, not charging does not prevent the real estate Commission from investigating her conduct.
The answer is no, not charging does not prevent the real estate commission from investigating her conduct. The fact that Ivy volunteers to help others with their real estate purchases does not prevent the real estate Commission from investigating whether her conduct is a violation of the real estate law.
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 False
false
When information is taken from the internet, it is always accurate. True False
false
Many trade organizations serve the real estate business. The largest is the National Association of REALTORS® (NAR). True False
true
Question #2 of 2 Question ID: 936765 Laws cannot guarantee an ethical or moral marketplace. True False
true
States' licensing rules and regulations do NOT have the same force and effect as statutory law. True False
false
The Institute of Real Estate Management (IREM) is affiliated with the National Association of Real Estate Brokers (NAREB). True False
false
A broker would have the right to dictate which of the following to an independent contractor? A) Conduct in compliance with statutory law and regulations B) Number of hours the person would have to work C) Sales meetings the person would need to attend D) Work schedule the person would have to follow
A
A broker's policy requires a 7% commission on all listings; no lower commission rate is acceptable. Which statement is TRUE? A) The broker may legally set the minimum commission rate acceptable for the firm. B) The broker must present the uniform commission policy to the local professional association for approval. C) A homeowner may sue the broker for violating the antitrust law's prohibition against price-fixing. D) The sales associates associated with the brokerage will not be bound by the requirement and may negotiate any commission rate they choose.
A
A real estate licensee has a written contract with a broker specifying that the licensee will not be treated as an employee. The licensee's entire income is from sales commissions rather than an hourly wage. Based on these facts, the licensee is considered A) an independent contractor. B) a real estate assistant. C) an employee. D) a subagent.
A
A real estate sales associate, classified by the IRS as an independent contractor, receives A) a negotiated share of commissions on transactions. B) company-provided health insurance. C) a company-provided automobile. D) a monthly salary or hourly wage.
A
The Counselors of Real Estate (CRE), Commercial Investment Real Estate Institute (CIREI), and Institute of Real Estate Management (IREM) are affiliated institutes of A) National Association of REALTORS® (NAR). B) National Association of Real Estate Agents (NAREA). C) National Organization of REALTORS® (NOR). D) American Realty Association (ARA).
A
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) $8,249.00 C) $6,929.68 D) $4,346.85
C
Activities such as price-fixing, group boycotting, allocation of customers or markets, and tie-in agreements are violations of A) the Schumacher Antitrust Act. B) the Sheridan Antitrust Act. C) the Sherman Antitrust Act. D) the Stassen Antitrust Act.
C
All of the following are prohibited under the antitrust laws EXCEPT A) real estate companies agreeing not to cooperate with a broker because of the fees that the broker charges. B) competing property management companies agreeing to standardized management fees. C) a broker setting a company commission schedule. D) competing brokers allocating markets based on the value of homes.
C
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 A) based on the number of hours worked. B) based on sales production or other output. C) subject to federal tax and withheld by the employer. D) determine eligibility for health insurance and workers' compensation.
B
After license laws are enacted by the legislature, who is responsible for adopting administrative regulations? A) A subcommittee that reports to the legislature B) Licensing authority (division, Commission, etc.) C) Brokers and sales associates appointed by the governor D) A local association of REALTORS®
B
An arrangement to sell one product only if the buyer purchases another product as well is called A) a fee-for-services. B) a tie-in agreement. C) a buydown provision. D) an allocation of customers.
B
Even if a consumer has requested placement on the National Do Not Call Registry, a real estate professional may call the consumer up to how many months after the consumer's last purchase, delivery, or payment? A) 12 months B) 18 months C) 6 months D) 3 months
B
Real estate professionals should do which of the following when using text messages to communicate with clients? A) Abstain from using text messages totally B) Use clear and concise language and follow any state laws regarding text messaging C) Only send text messages for contract forms D) Use many acronyms and abbreviations to save money
B
The National Association of REALTORS®(NAR) A) is the second-largest trade association in the country. B) is the largest real estate trade association in the country. C) is the tenth-largest trade association in the country. D) has somewhat less than one million members.
B
The Uniform Electronic Transactions Act encourages the use of A) all of these. B) electronic signatures. C) licensed assistants. D) virtual brokerages.
B
What is the main value of a multiple listing service (MLS) for sellers? A) It simplifies closing procedures. B) It exposes the property to a greater number of prospective buyers. C) It reduces cooperation among brokers. D) Real estate professionals do not have to work as hard to secure property listings.
B
A REALTOR® is BEST described as an individual who is A) any real estate professional who assists buyers, sellers, landlords, or tenants in any real estate transaction. B) a member of the National Association of Real Estate Brokers who specializes in residential properties. C) a real estate licensee and a member of the National Association of REALTORS® (NAR). D) a real estate professional who acts as a point of contact between two or more people in negotiating the sale, purchase, or rental of property.
C
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? A) A homeowner may sue the broker for violating the antitrust law's prohibition against price-fixing. B) The sales associates of the brokerage will not be bound by the requirement and may negotiate any commission rate they choose. C) The broker may, as a matter of office policy, legally set the minimum commission rate acceptable for the firm. D) The broker must present the uniform commission policy to the local professional association for approval.
C
Hinting to prospective clients that there is a "going rate" of commission or a "normal" fee implies that rates are, in fact, standardized and is A) a violation of antitrust laws. B) recommended by the National Association of REALTORS® to insure fair competition in maintaining fair fees. C) not a violation of antitrust laws. D) a common practice allowed in most states.
The answer is a violation of antitrust laws. The challenge for real estate brokers and sales associates is to avoid even the impression of price-fixing. Hinting to prospective clients that there is a 'going rate' of commission or a 'normal' fee implies that rates are, in fact, standardized. The broker must make it clear to clients that the rate stated is only what that broker's firm charges
A broker can agree upon which of the following with an independent contractor? A) Number of hours the person would have to work B) Work schedule the person would have to follow C) Compensation the person would receive D) Sales meetings the person would need to attend
The answer is compensation the person would receive. Brokers may agree upon the compensation that their independent contractors will receive for work not yet done, but they may not dictate working schedules or attendance at sales meetings.
Group boycotting is illegal and occurs when A) a group of neighbors decide to boycott the services of a particular agent. B) agents refuse to provide services to a certain class of individuals. C) agents of one real estate organization refuse to socialize with another. D) two or more businesses conspire against another business or agree to withhold their patronage to reduce competition.
The answer is two or more businesses conspire against another business or agree to withhold their patronage to reduce competition. Group boycotting occurs when two or more businesses conspire against another business or agree to withhold their patronage to reduce competition. Group boycotting is illegal under the antitrust laws.
Question #3 of 3 Question ID: 936764 If Ivy later obtains a real estate license, will she still have a problem? A) Yes, her conduct prior to being licensed could still be questioned. B) No, getting licensed grandfathers in her previous behavior.
The answer is yes, her conduct prior to being licensed could still be questioned. It is doubtful that Ivy could obtain a real estate license while being investigated by the real estate Commission for a possible violation of the real estate law. But even if she could obtain a real estate license, her conduct before obtaining the license could still be questioned.
Which of the following is NOT covered by an extended title insurance policy? A) Rights of parties in possession B) Defects and liens listed in the policy C) Certain unrecorded liens D) Defects that may be discovered by an inspection
The answer is yes, she may be charged with engaging in activities that require a real estate license. Ivy may face a complaint filed with the state real estate Commission, charging that she is engaging unlawfully in activities that require a real estate license
Group boycotting, allocation of customers or markets, and tie-in agreements are all prohibited acts under the Sherman Antitrust Act. True False
false