Unit 13: Real Estate Brokerage Quiz

$200 Only $200 of personal funds may be in the trust fund account

A broker may keep up to __________ of personal funds in the trust fund account to pay for bank charges or service fees related to the trust account

AA. sole proprietorship

A business that is owned and operated by one person.

U. Jones v. Mayer

A case prohibiting racial discrimination by upholding the 1866 Civil Rights Act and the 13th Amendment to the U.S. Constitution.

offer the real estate agent's services to an unknown person. A commercial e-mail message is "any electronic mail message, the primary purpose of which is the commercial advertisement or promotion of a commercial product or service." E-mails sent as part of an ongoing commercial transaction, called transactional e-mail messages, are excluded from the Act.

A commercial e-mail message is an e-mail sent to:

S corporation

A corporation that operates like a corporation but is treated like a partnership for tax purposes

commission

A fee for services rendered usually based on a certain percentage of the sales price of a property.

partnership

A form of business in which two or more persons join their money and skills in conducting the business

corporation

A legal entity whose rights in business are similar to that of an individual.

joint and several liability

A legal term used in reference to a debt or a judgment for negligence, in which each debtor or each judgment defendant is responsible for the entire amount of the debt or judgment.

3 years Hint: A licensed broker must retain the records of a real estate transaction at the main office for 3 years. This includes copies of all listings, purchase agreements, canceled checks, trust account records, and other documents that are part of the transaction.

A licensed broker must keep real estate records for:

independent contractor

A person who is hired to do work for another person but who is not an employee of that person.

ethics

A set of principles or values by which an individual guides his or her own behavior and judges that of others.

making real estate investments. Hint: The activities of a brokerage are varied and can be divided into five separate areas: securing listings, finding buyers, negotiating transactions, arranging financing, and closing transactions.

All of the following are activities of a brokerage, except:

partnership The Bureau of Real Estate does not issue real estate partnership licenses.

All of the following businesses can get a California real estate broker license, except a(n):

brokerage

An activity involving the sale of something through an inter-mediary who negotiates the transaction for payment.

limited liability

An alternative business entity that has characteristics of both corporations and limited partnerships.

DBA

Another name for a fictitious business or trade name.

commercial e-mail message

Any electronic mail message whose primary purpose is the commercial advertisement or promotion of a commercial product or service.

"Nice fixer, located by parks and good schools with three-bedrooms for the family." Choices (a), (c), and (d) used half-truths, inflated claims, and ambiguous or superlative terms. a. "This is the best home in the neighborhood in a good school district." c. "Clean, bright, and move-in ready for the right family." d. "Beautiful home near parks, looking for Malaysian family."

Ben just took a listing on a three-bedroom fixer-upper home located in an area with very good schools. Although it is a mixed neighborhood, it is primarily Malaysian. He's eager to sell the home and wrote the following ads. Which of the ads best follows acceptable advertising guidelines?

fictitious business name

Business name that does not include the last name of the owner.

blockbusting. Hint: Blockbusting is persuading an owner to sell or rent housing by saying that people of a particular race, religion, etc., are moving into the neighborhood.

Causing panic selling by telling people that value in a neighborhood will decline because of a specific event, such as the purchase of homes by minorities is illegal and is called:

trust funds are mixed with personal funds. Hint: Trust funds may not be commingled (mixed) with funds belonging to the broker. Commingling is strictly prohibited by real estate law and may be punished by revocation or suspension of a real estate license.

Commingling is strictly prohibited by real estate law and occurs when:

all clerical workers and all sales associates. Due to their employee status, a broker must provide workers compensation coverage to all sales associates as well as any non-licensee employees of the firm

Even though sales associates are considered self-employed for federal and state

CAN-SPAM laws

Federal and state law regulating commercial e-mail messages.

do-not-call

Federal and state regulations regarding unsolicited phone calls.

Americans with Disabilities Act

Federal law passed in 1990 that prohibits discrimination against individuals with disabilities

Control and direction of the work performed Hint: The general rule used by the IRS is that an individual is an independent contractor if the payer has the right to control or direct only the result of the work and not what will be done or how it will be done.

How does the IRS determine whether someone is an independent contractor?

agent Hint: The term brokerage generally means an activity involving the sale of something through an intermediary who negotiates the transaction for payment. In the case of a real estate brokerage, the product is real property, with the broker as negotiator and agent of the principal, expecting a commission at the end of the negotiation.

In a real estate brokerage, the negotiator is the:

implements a high standard of ethics. Hint: Since your livelihood will depend on the integrity of your employing broker's license, it is imperative to choose a brokerage firm that follows all legal and ethical business practices.

It is imperative to choose a brokerage that:

cold calling

Making unsolicited calls to unknown people to get new business.

trust funds

Money received by a broker to be used in a real estate transaction.

desk cost

Profitability measure calculated by dividing the total operating expenses of the firm by the number of licensed sales associates.

No Scientologists or Hare Krishnas Singling out one faith to the exclusion of others is discriminatory.

Real estate ads should not have words that state or imply a preference with regard to race, color, religion, handicap, sex, familial status, or national origin. Of the following phrases, which would be unacceptable?

credit history. Hint: Real estate ads should not have words that state or imply a preference or limitation with regard to race, color, religion, handicap, sex, familial status, or national origin.

Real estate ads should not state or imply a preference or limitation with regard to all of the following, except:

by the broker. Hint: Sales associates will receive their share of the commission from their brokers when a transaction for which they are responsible closes. To receive compensation from a real estate transaction, the person must have a real estate license and must be supervised by a licensed real estate broker.

Real estate salespeople are paid:

Anytime Hint: Real estate licensees and unlicensed assistants may make cold calls providing the calls are made only between 8:00 a.m. and 9:00 p.m. These calling restrictions do not apply if the person is already your customer, if you have written permission to call them, or if you have a personal relationship with them.

Salesperson Sally listed seller Sam's home. According to the Do-Not-Call Rules, when can Sally call Sam?

employee

Someone who is under the control and direction of a broker.

Unruh Civil Rights Act

State law that prohibits discrimination by businesses.

California Fair Employment and Housing Act

State law that prohibits discrimination in the sale, rental or financing of practically all types of housing

California Fair Employment and Housing Act. The California Fair Employment and Housing Act (Rumford Act) prohibits discrimination in the sale, rental or financing of housing. Housing Financial Discrimination Act (Holden Act) prohibits discrimination in real estate lending. The Unruh Civil Rights Act covers discrimination in business.

The California law that prohibits discrimination in the sale, rental or financing of practically all types of housing is called the:

R. Housing Financial Discrimination Act

The Housing Financial Discrimination Act (Holden Act) prohibits all financial institutions from discriminating in real estate loan approvals based on the geographic location, the neighborhood, or any other characteristic of the property.

company dollar. The company dollar is the amount a broker has left after all commissions have been paid. The desk cost shows how much each sales associate must earn to cover expenses. It is calculated by dividing the total operating expenses of the firm by the number of licensed sales associates

The amount a broker has left after all commissions have been paid is called the:

company dollar

The amount a broker has left after all commissions have been paid.

employment status. Hint: Employment status refers to the relationship between a salesperson and his or her broker—as an employee or self-employed. The compensation earned depends primarily on the salesperson's employment status.

The compensation earned by a licensee depends on his or her:

commingling

The illegal practice of depositing client's funds in a broker's personal or general business account

steering

The illegal practice of only showing clients property in certain areas

blockbusting

The illegal practice of telling people that property values in a neighborhood will decline because minorities purchase the homes.

Blockbusting Blockbusting or panic selling is illegal. Steering is the illegal practice of showing clients property in only certain areas. Redlining is the illegal use of a property's location to deny financing.

The illegal practice of telling people that property values in a neighborhood will decline because of a specific event, such as the purchase of homes by minorities is called:

redlining

The illegal use of a property's location to deny financing.

prospecting

The process of identifying potential customers.

broker. Hint: Since a salesperson represents his or her broker in all operations, listings belong to the broker and not to the salesperson. When a salesperson leaves the employ of a particular broker, any listings he or she has will remain with that broker.

The reason a listing must remain with the broker when the listing agent moves to a new broker is the seller's contract is with the:

three business days following the receipt of the funds. Hint: Trust funds must be placed into the hands of the owner of the funds, into a neutral escrow depository, or into a lawful trust account no later than 3 business days following receipt of the funds by the broker or the broker's salesperson.

The time allowed for the deposit of trust funds is:

Only between 8:00 a.m. and 9:00 p.m. Under the Do Not Call rules, real estate licensees or unlicensed assistants may make cold calls provided that the calls are only made between 8:00 a.m. and 9:00 p.m.

Under the do-not-call rules, when may a real estate licensee make cold calls?

will remain with the original broker. The sales associates are employees of the broker, and as we have learned, all listing contracts are between the seller and the broker, not the sales associate who took the listing. When a salesperson leaves the employ of a particular broker, any listings he or she has will remain with that broker.

When a salesperson transfers his or her license to another broker, the listings obtained by the salesperson:

Corporation Corporations are subject to double taxation.

Which of the following business entities would be subject to double taxation?

Clear and conspicuous identification that the message is an advertisement or solicitation Valid and conspicuous physical postal address of the sender Clear and conspicuous notice that the recipient may opt out of further commercial e-mail messages from the sender All must be included in a commercial e-mail

Which of the following items must be included in a commercial e-mail message?

A broker must disclose its license status in all advertising. Hint: A real estate broker or firm must disclose its license status in all advertising. Anytime a broker advertises real estate services, a term such as broker, agent, or licensee (or the abbreviations bro. or agt.) must be included in the advertisement. This requirement applies to all real estate licensees, both brokers and salespeople.

Which of the following statements is correct regarding real estate advertising?

a. The salesperson must have a valid California real estate license. b. The salesperson must be compensated on the basis of the number of sales closed and commissions earned—not on the basis of the number of hours worked. c. There must be a written contract between the employing broker and the salesperson specifying that the salesperson will not be treated as an employee for both federal and California tax purposes. d. All of the statements are correct The three answers correctly list the three requirements.

Which of the following statements is correct regarding the basic tests used to determine statutory nonemployee status?

A homeowners' association can prohibit private owners from displaying real estate signs on their own property homeowners' association or CC&Rs cannot prohibit private owners from displaying real estate signs on their own property. The signs must be reasonably located, in plain view of the public, of reasonable dimensions and design, and used to advertise the property for sale or lease, or to advertise directions to the property.

Which of the following statements is incorrect regarding real estate signs?

For federal income tax purposes, the salesperson is considered an employee. The license law considers a salesperson an employee, For income tax purposes, the IRS classifies real estate licensees as statutory nonemployees.

Which of the following statements is incorrect?

a. A real estate broker or firm must disclose its licensed status in all advertising. b. Anytime a broker advertises real estate services, a term such as broker, agent, licensee (or the abbreviations bro. or agt.) must be included in the advertisement. c. A salesperson may not use his or her name and telephone number in an advertisement without including the broker's name. All statements are correct: Choice (a) - B&P Code Section 10140.5. Choice (b) - B&P 10140.6 & Reg. 2770.1. Choice (c) - Reg. 2770.

Which of the following statements regarding advertising is correct?

Commissiond Trust funds are money, or anything of value, received from the buyer by an agent on behalf of a seller, such as: cash, a check used as a deposit for a purchase, or a personal note made payable to the seller. Do not confuse other monies such as commissions, general operating funds, and rents and deposits from broker-owned real estate with trust funds.

Which of the following would not be considered trust funds?

A real estate broker may open a real estate brokerage in his or her name. A real estate broker may open a real estate brokerage in his or her name, or a fictitious business name. The broker may have multiple locations and take ownership in a variety of ways, such as sole proprietorship, partnership, corporation, or limited liability company (LLC).

Which statement is correct regarding a real estate brokerage business?

The employment agreement must be on a form approved by the Commissioner. The employment agreement does not have to be on a form approved by the Real Estate Commissioner.

Which statement is incorrect regarding the broker/salesperson employment agreement?

State and federal agencies Hint: Real estate advertising is regulated by state and federal agencies that expect real estate companies to be truthful when advertising property or services.

Who regulates real estate advertising?