Unit 18

Explain a Net Listing

A buyer wants the agent to keep anything above and beyond their set price. It is ILLEGAL in most states. An agent needs to encourage the seller to refuse the seller's offer and encourage the seller to pay a flat fee or a percentage of the sale price.

______________________is an organization of member brokers who agree to cooperate in the sale of properties listed by other brokers in exchange for a share of the broker's resulting commission.

A multiple listing service (MLS)

12 of 20 - Which is TRUE about listings? A net listing is illegal in all states. An open listing is an exclusive contract. A seller can sell his or her own home and owe no commission if he or she signs an exclusive agency listing. An exclusive listing must always be at least 30 days long.

A seller can sell his or her own home and owe no commission if he or she signs an exclusive agency listing.

When an amendment is made to a listing agreement, what happens to the terms of the original listing agreement?

All other terms and conditions of the original listing agreement remain unchanged.

1 of 20 - What does a carryover clause do?

Allows the broker to collect a commission for some period of time after the listing expires.

Give an example of a compensation agreement that is not a listing agreement.

An agreement that a broker signs with an unrepresented seller in which that seller agrees that if he or she enters into a purchase contract with the buyer named in the agreement within a specified time period, the seller will pay a specified commission to the broker's firm at closing.

In most states, listing agreements must have these four components:

An identification of the property A promise of compensation to the broker The specifics of that compensation Written document with signatures of the seller or sellers

Describe an open listing.

An open listing is a non-exclusive listing that allows a seller or buyer to engage a number of different brokers to sell or help purchase property. The broker who brings the buyer or finds the suitable property gets the commission. If the owner sells the property or the buyer finds his or her own property, no commission is owed to any broker.

How can an agent determine who has title to a property he or she is listing?

Ask the seller for a copy of the deed or other title document. Call and check with a title company in the area where the property is located. Call or visit the county tax office and check the records.

List three circumstances under which a listing agreement can terminate.

Broker helped seller find ready, willing, and able buyer Expiration date of agreement arrived Parties mutually or individually agree to end relationship

2 of 20 - In what section on an MLS listing form would an agent look at to determine the type of foundation used in the construction of the home?

Building Information

7 of 20 - Under what section on the MLS listing form would the type of parking be found? Site information Community information Building information Location information

Building Information

18 of 20 - The difference between an exclusive right to sell listing and an exclusive agency listing has to do with what issue? Commission Dual agency Seller's warranties Closing costs

Commission

20 of 20 - Land contracts are also known as Trust Accounts Installment Mortgages Land Notes Contract for Deed

Contract for a Deed

20 of 20 - Which of the following situations might impact a listing agreement? Death of a Broker Change of broker's business address Transfer of broker to another MLS board Out of state move by seller

Death of a Broker

10 of 20 - Which component is not required in most listing agreements? Identification of the property Specifics of compensation defined Signatures collected Escrow company named

Escrow Company Named

4 of 20 - Broker Jill has an agreement with seller Alice that says Jill will receive compensation if anyone except Alice sells Alice's home. What kind of agreement is this? Exclusive agency Net listing Exclusive right to sell Open listing

Exclusive Agency

Three common types of buyer agency agreements:

Exclusive buyer agency agreement - This agreement is also known as the exclusive right to represent. With the signing of this agreement, the buyer is legally bound to compensate the agent when the buyer purchases any property of the same type as described in the contract. The managing broker is entitled to payment regardless of who locates the property. This means that even if the buyer finds the property himself or herself, the buyer must still pay the agent the agreed upon commission. Exclusive-agency buyer agency agreement - This exclusive contract is between the agent and the buyer. However, with this type of agreement the agent is entitled to payment only if he or she actually finds the property that the buyer purchases. If the buyer finds a property himself or herself, the buyer does not owe the agent a commission. Open buyer agency agreement - This is a nonexclusive agency contract between a buyer and a broker. A buyer can enter into similar agreements with an unlimited number of other brokers. Only the broker who actually locates the property that the buyer eventually purchases is entitled to the commission.

17 of 20 - The listing type that assures a broker that he or she will receive compensation no matter who procures the buyer is what kind of agreement? Net listing Exclusive right to sell Open listing Exclusive agency

Exclusive right to sell

16 of 20 - A CONTRACT in which the seller finances the sale of real estate in periodic installments rather than financing through a third party such as a bank is called a Contract of Trust. Payment Contract. Escrow Deed. Home Note.

Home Note

8 of 20 - Which is the best method to identify a property? Mailing address Legal description Subdivision plot number Property owner's name(s)

Legal description

14 of 20 - Licensee Mike was owed a commission from seller Jane. Jane has refused to make payment. What recourse does licensee Mike have? Licensee Mike can sue Jane. Licensee Mike can petition the MLS for compensation. Licensee Mike can seek damages through his broker. Licensee Mike can place a lien on the property.

Licensee Mike can seek damages through his broker.

16 of 20 - Martha signs a listing agreement with Broker Patrick. Which of the following would probably not be found in the agreement they signed? Patrick's commission Martha's price Expiration date of the contract Martha's average utilities

Martha's average utilities

20 of 20 - Which of these sources would NOT be a way to determine who holds title to a property? Seller Title Company County Tax Office Mortgage Bank

Mortgage Bank

6 of 20 - Which of these sources would NOT be a way to determine who holds title to a property? Seller Title Company County Tax Office Mortgage Bank

Mortgage Bank

To provide the MLS with the necessary information about the property being sold, should the listing broker submit the listing agreement itself?

No. Instead, the listing agent should submit the information either on a state-provided form or in another means as agreed upon by local brokers or the Board of REALTORS.

5 of 20 - Broker Alice has a listing agreement with Jack. If Broker Tom procures a buyer for Jack, Tom will get the commission and Alice will not. What kind of listing agreement does Alice have with Jack? Exclusive agency Net Exclusive right to sell Open

Open

5 of 20 - Which of these listing agreements is considered a unilateral contract? Open Exclusive Agency Net Exclusive Sale and Listing

Open

The three most common types of listings are:

Open Listing - non-exclusive contract, authorizing a broker to serve as the agent for either the sale or the purchase of property. With this type of listing, a broker is not under the same obligation to perform as with other listing agreements, so an open listing is often considered to be a unilateral contract. (rare & offer no assurance for commission) Exclusive Right to Sell Listing - (most common) a broker has exclusive right to list the property, sellers usually see a quicker and more profitable sale. *listing must have a termination date Exclusive Agency Listing - broker lists the property but the owner still has a right to try to sell it without owing the broker a commission

7 of 20 - What are the three most common types of listings?

Open Listing, Exclusive Right to Sell Listing, and Exclusive Agency Listing

19 of 20 - Which type of contract is not covered under Indiana Code? Straight land contract Wrap-around land contract Power of sale Any land contract

Power of Sale

2 of 20 - Under what type of land contract does a trustee have the power to foreclose if the buyer stops making payments? Straight Wrap-around Typical Power of sale

Power of Sale

What are the two most common changes to an original listing agreement?

Price changes and extensions to the listing period

4 of 20 - What are the two changes most often made to a listing agreement?

Price changes and listing period extensions

Here the broker and sellers agree to a specific number of days after the listing expiration during which the broker may still receive a commission.

Safety Clause

11 of 20 - On an MLS listing form, in what section would you find information regarding waterfront footage? Site information Building Information Community Information Homeowner's Association Information

Site Information

Entire Contract

States that this agreement supersedes all previous discussions, negotiations and agreements between the seller and the broker. Therefore, anything that is not written into this agreement is not part of the agreement.

1 of 20 - The sale price of a property is $100,000. The buyer pays $10,000 down and makes one payment of $268 on the existing loan balance of $50,000, bearing interest at 5%. The buyer then makes a second (monthly) payment of $253 to the seller on $40,000 owner-carried financing, bearing interest at 6.5%. What type of land contract is this an example of? Straight Wrap-around Power of sale All of the above

Straight

8 of 20 - A listing agreement can terminate when which of the following occurs? The agreement expires The client wishes to modify the agreement The client refuses to pay the agreed commission The broker does not perform as expected

The agreement expires

If a transaction doesn't complete, under what circumstances would the broker still be entitled to a commission?

The broker is still entitled to receive the commission if the transaction does not complete due to the seller's or buyer's default.

17 of 20 - Under a land contract, which of the following is FALSE? The buyer is typically entitled to possession of the property as soon as he signs the contract. The buyer is typically entitled to possession of the property as soon as he pays the first periodic installment. The buyer is typically entitled to possession of the property as soon as the seller moves out. The buyer is typically entitled to possession of the property as soon as he/she tenders a down payment.

The buyer is typically entitled to possession of the property as soon as the seller moves out.

Licensee Tim works for Broker Marty. Tim lists Seller Gary's home, fills out all the paperwork and signs the agreement. The listing agreement is a contract between whom?

The contract is between Broker Marty and Seller Gary. As an employee of Marty, Tim is acting as a subagent.

13 of 20 - How does a licensee make a change to a listing agreement? The licensee asks his/her broker to initiate a new agreement with the changes included. The licensee orally agrees with the client to the changes. The licensee crosses out the old information and writes in the change. The licensee creates a form to use to document the changes.

The licensee crosses out the old information and writes in the change.

19 of 20 - What is the best course for a licensee who has been denied compensation due to a fraudulent seller?

The licensee should inform his or her broker.

9 of 20 - What is the common disposition of a listing when the listing agent moves to another agency?

The listing stays with the broker

18 of 20 - Licensee Jones is in the process of closing on a sale. However, the property title has been found to have uncorrectable defects. What is the result regarding Jones compensation? If the property doesn't close, there will be no compensation. The title company owes licensee Jones compensation. Compensation will be prorated based on work performed by licensee Jones. The seller is still liable for licensee Jones' compensation.

The seller is still liable for licensee Jones' compensation.

5 of 20 - What is the result of courts and legislators limiting sellers' rights to forfeiture under land contracts? More buyers are interested in entering into land contracts. The simplicity of the alternative financing through land contracts may be disappearing. Sellers are being freed from the complexities of traditional mortgage foreclosure. The line between land contracts and mortgages is becoming more and more pronounced.

The simplicity of the alternative financing through land contracts may be disappearing.

Broker Sara has lost her license for unprofessional conduct. What will happen to her listings?

The state licensing authority can choose to appoint a temporary broker to close any of Sara's pending transactions. Otherwise, all Sara's listings will terminate.

10 of 20 - What happens to a listing agreement when the broker's firm goes out of business?

The state's real estate licensing agency may choose to appoint a temporary broker to close the transaction.

What is required for a listing agreement to be modified after it has been signed by all parties?

The written consent of all parties

10 of 20 - SAFE licensing requirements contain the following exceptions: They do not apply if Agent Bob is selling Mary's home to Agent Bob's brother. They do not apply if Seller Dan is entering into a land contract with his wife's third cousin. They do not apply if Cecelia is entering into a land contract on her own home. They do not apply when the bank finances mortgage loans.

They do not apply if Cecelia is entering into a land contract on her own home.

15 of 20 - When an amendment is made to a listing agreement, what happens to the terms of the original agreement? They are amended along with the desired changes. They are no longer in effect. They stay the same. They are deleted from the agreement.

They stay the same.

18 of 20 - What clause should a seller include in a land contract? Breach of contract clause Time-is-of-essence clause Balloon payment clause Marketable title clause

Time-is-of-essence clause

1 of 20 - What is the purpose of the SAFE Act? To establish a nation-wide mortgage licensing system and registry for the residential mortgage industry To protect buyers under land contracts from forfeiture due to default To protect sellers under land contracts in regards to forfeiture due to buyer default To establish a state-wide mortgage system to regulate land contracts

To establish a nation-wide mortgage licensing system and registry for the residential mortgage industry

3 of 20 - What is the cleanest way to make a change to a listing agreement?

Use a state-approved form designed for listing agreement modifications

13 of 20 - When does equitable conversion give the contract buyer a real property interest? When the final installment payment is made When the contract is signed When the balloon payment is made When the terms of the contract are agreed upon

When the contract is signed

What is the major difference between an exclusive right to sell listing and an exclusive agency listing?

With exclusive right to sell, the broker has the exclusive right to market the property and receive a commission regardless of who procures the buyer. With exclusive agency, the owner retains the right to find a buyer and sell the property and owe the exclusive broker no commission.

9 of 20 - In which type of land contract does the seller earn interest on the difference between what the seller owes on an existing loan and what the buyer is paying for the property? Wrap-around Straight Power of sale All of the above

Wrap Around

The listing agreement is

a legally-binding contract that creates an agency relationship authorizing a broker to serve as the agent for a principal in a real estate transaction.

12 of 20 - A multiple listing service is an organization of member brokers who agree to cooperate in the sale of properties listed by other brokers in exchange for... a share of the listing broker's commission. the full commission. help with other members' listings. payment of MLS membership fees.

a share of the listing broker's commission.

Once the listing agreement has been completely filled out and signed, the seller must receive a copy of the document ____________________________.

at the time the signatures are obtained

6 of 20 - Upon a buyer's default, the seller has available federal law remedies. only mortgage law remedies. both mortgage and statutory law remedies. both statutory and common law remedies.

both statutory and common law remedies.

15 of 20 - A multiple listing service (MLS) is an organization of member brokers who agree to

cooperate in the sale of properties listed by other brokers in exchange for a share of the broker's resulting commission.

8 of 20 - Indiana courts will enforce forfeiture only under circumstances with notions of __________ and ________ under the law. default and breach fairness and justice equality and legality rights and equality

fairness and justice

18 of 20 - Equitable conversion is the legal doctrine that allows land contracts. is the conversion of intangible consideration into tangible consideration. is what determines the interests of seller and buyer under a land contract. is the treating of land as equitable to money.

is what determines the interests of seller and buyer under a land contract.

13 of 20 - A listing amendment form does not usually include... property address. MLS listing number. legal description. listing office.

legal description.

7 of 20 - One advantage of a land contract to a buyer would be if the seller required a large balloon payment at the end of the contract. if the buyer had a large down payment to lower the asking price of the property. the lack of an appraisal. no down payment in exchange for a higher asking price.

no down payment in exchange for a higher asking price

6 of 20 - A straight land contract has higher interest rates than the other types of land contracts. a balloon payment at the end of the contract. no override of interest. no interest.

no override of interest

The agreement is actually a contract between the firm of the broker and the seller. According to the license law of most states, listings, transactions, management agreements, and other contracts relating to providing brokerage services are property of the ________________

real estate firm.

15 of 20 - A seller dealing with a buyer who has poor or no credit history is most likely to increase the seller's chances of obtaining a larger down payment. the risk of buyer default. the chance a buyer will make all payments on time to establish a better credit history. the risk of the buyer not maintaining the property.

the risk of buyer default

6 of 20 - If the real estate transaction does not complete, the seller may still be responsible for paying a commission to the listing broker if

the seller has a spouse who won't sign the deed.