Unit 12: Implementation and Presentation
Which of the following responses would be the BEST answer to a listing seller who asks you, "Why should you have to split the commission. Why doesn't the buyer pay a share of the commission?"
The answer is "commission splitting is the customary way that real estate licensees earn money on transactions." The sharing of the seller-paid commission between the listing broker and the selling broker is a core element of the real estate business. A licensee should explain how commission fees may be split and obtain the sellers' approval or disapproval to split fees with sellers' subagents or buyers' brokers without disparaging the real estate business.
Which of the following statements would be the BEST way to begin an explanation of a brokerage's policy on intermediary brokerage to a customer who is interested in entering a seller agency agreement?
The answer is "intermediary brokerage is a method of handling the transaction if a suitable buyer for your property is identified who does not have a relationship with another broker." The brokerage's policy on intermediary brokerage should be explained to the seller before entering a brokerage agreement in terms that the seller can understand.
Why should a listing broker who decides to offer other brokers a less-than-attractive commission split be sure a property owner understands this intent?
The answer is it may mean that other brokers will be less motivated to find a suitable buyer. The listing broker should explain to the seller how commissions will be split, including the listing broker's intention of offering a less-than attractive split, which may impact the motivation of other brokers.
In a multiple-offer situation, the broker should do which of the following?
The answer is provide the offers to the seller as they come in, unless otherwise directed by the seller. The agent should discuss the possibility of multiple offers with the seller before the situation arises so they are prepared to respond accordingly. A broker is not legally required to submit the highest or cash offer first. An agent should be careful not to treat potential buyers unfairly or to give some information to one potential buyer without providing the same information to all the potential buyers.
When working with a buyer on a transaction, a licensee who is subagent for the seller must act in the best interests of the
The answer is seller. Another broker as subagent for the seller must, at all times, act in the best interests of the seller.
Before listing the property, the seller
The answer is should be given a copy of the listing contract to review. This will allow the seller to consider the various provisions and have an opportunity to develop thoughtful questions. Allowing this preparation on the part of the seller will make the actual listing appointment during which the paperwork is completed proceed more smoothly.
When showing properties to a buyer-customer, the licensee should
The answer is show in-house properties meeting the buyer's requirements first, and proceed to other broker's listings only if the buyer expresses no interest in the company's listings. A broker is obligated under a listing contract to negotiate the best possible transaction for the client. [22 TAC § 535.2(b)] Although a licensee may assist buyer-customers in finding properties that meet their personal and financial needs, the licensee's first duty is to the in-house seller-client.
Which comment by a licensee to a buyer-customer would NOT be appropriate?
The answer is "the seller has a new job in another state and needs to sell very badly." A broker is obligated under a listing contract to negotiate the best possible transaction for the client [22 TAC § 535.2(b)]. Revealing a seller-client's motivation to sell without the seller's consent for such a negative marketing strategy could harm the seller's ability to get the best possible price for the property. The presence of the septic tank would be a mandatory disclosure item, regardless of the licensee's relationship with the seller. Pointing out positive features, such as children of similar ages in the area, enhances the seller's negotiation position. Explaining provisions of the sales contract is a duty owed to the client and also a means of treating the customer fairly, honestly, and competently. [22 TAC § 531]
In a typical conversation between a broker who works alone and a property owner who is interested in selling, which topic might require the MOST extensive explanation of subagency?
The answer is MLS. The broker must explain what subagency means and the optional use of subagents in an MLS, and obtain the seller's authorization to use subagents. If the seller elects not to have the listing broker offer subagency or elects to offer it on a selective basis, a decision must be made regarding the use of an MLS.
Texas Real Estate Commission's (TREC) Information About Brokerage Services
The answer is Texas Real Estate Commission's (TREC) Information About Brokerage Services. At the beginning of the listing appointment, but before an agency relationship is established or the listing agreement is discussed, the licensee should explain and discuss the Texas Real Estate Commission's (TREC) Information About Brokerage Services notice or an equivalent, as required by the Real Estate License Act (TRELA) section 1101.558(c), regarding the written statement concerning agency options.
Which of the following descriptions would be accurate and appropriate for a listing broker to use when describing the role of a subagent to a seller?
The answer is a subagent is a licensee who does not work for me but is someone with whom I would make a cooperative agreement to represent you and your interests. A subagent is a license holder who represents a principal through cooperation with and the consent of a broker representing the principal and who is not sponsored by or associated with the principal's broker.
During the listing presentation, it would be appropriate for broker Ted to present the statutory written statement regarding brokerage services. Ted should also caution the sellers that until they definitely decide to list with him, they should not reveal information that may later hurt their negotiation position with a buyer because Ted might later be required to reveal that information should he be dealing with a buyer-client. What else should Ted discuss with the sellers during the listing presentation?
The answer is all of these are topics. A licensee has a duty to represent the interests of his client. Warning prospects to be careful about revealing confidential information that may be harmful to their negotiating strategy, however, is an excellent example of the licensee's ethical duty to treat other parties to the transaction fairly. [22 TAC § 531.1] Presenting the statutory statement not only meets the requirement under the law [§ 1101.558(c)-(d)] but also affords the licensee the opportunity to smoothly introduce the broker's office policies as they relate to the roles described in the statutory statement. The seller must make a choice, but it must be an informed choice based on disclosed limitations on brokerage services (i.e., single agency office, no offer of subagency, etc.).
Customer Henry met Broker Judd when Henry called Judd's office to ask about a property listed on the internet. That property is not suitable, but Henry agreed to Judd's offer to look at another property. At what point must Judd clarify whether he is going to be working with Henry in a subagent capacity or in a buyer's agent capacity?
The answer is before looking at properties listed on the MLS. A seller's agent can make appointments, show properties meeting the buyer's stated criteria, and describe general features and conditions. Before beginning a search through the MLS system for suitable properties, a decision must be made as to whether the broker will proceed showing additional properties to the buyer while acting in a subagent capacity or in a buyer's agent capacity.
Which of the following phrases BEST represents how a seller generally regards brokers other than the listing broker who may show their property?
The answer is conduits of information to customers. Other brokers cooperating with the seller through the listing broker are normally viewed by sellers as conduits for the flow of facts and figures between buyers and sellers. Many sellers are reluctant to provide confidential information to the other broker for fear the other broker will divulge this information to the buyer.
A broker is a subagent of the seller, and the buyer is represented by another agent. The broker must
The answer is disclose to the buyer either orally or in writing that the broker is an agent of the seller. A subagent of the seller acts as the seller's agent. The subagent is not an intermediary. A subagent is not required to provide the IABS written disclosure because the buyer is represented by another agent. If the buyer was not represented by another agent, the subagent would be required to provide the IABS disclosure in writing; it must not be provided orally.
Which information should a broker who is acting as subagent to the seller obtain from the listing broker?
The answer is how earnest money deposits will be handled. The subagent should never consider obtaining improper information, such as the types of buyers a seller wants to target or the racial composition of the community. In addition, the subagent will probably not be privy to confidential information the seller may share with the listing agent, such as lowest acceptable offer. The subagent should inquire about the listing broker's policies regarding handling earnest money deposits, using a lockbox, drafting offers, choosing an escrow company, and placing a loan.
Customer Clara attended an open house on a home owned by the Winters, a property listed by broker Judd. After Clara showed serious interest in the property, Judd explained his agency relationship with the seller and answered Kay's questions. When she learned that the home did not have central air-conditioning, Clara was clear that she was no longer interested in the property. When can Judd pursue Clara's business as a buyer?
The answer is immediately, by explaining the services he can offer. At first contract, if the buyer decides not to buy the listed property, the licensee can explain that the buyer may wish to use the services of the listing broker to search for another appropriate property; if so, the agency relationship and whether the buyer is a customer or a client must be clarified.
A listing agent representing the seller receives a second offer on the property while the seller is considering the first offer. What is the BEST course of action for the broker to pursue?
The answer is the agent should notify the seller of the second offer and advise the seller not to accept the first offer without also considering the second. A listing broker is required to present all offers directly to the seller. A broker should not make determinations about whether an offer will or will not be presented to the client, even if the broker believes that an offer will be rejected by the client. There is no rule of first in first out regarding the timing or submission of offers to the client. A client can consider several offers at the same time.
