Unit 9....Real Estate Brokerage

A broker was accused of violating antitrust laws. Of the following, the broker was MOST likely accused of

price fixing

All of these are violations of federal antitrust laws except

Commission splitting

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

Conduct in compliance with statutory law and regulations

The name for the current policy of the National Association of REALTORS that allows all multiple listing service (MLS) members equal rights to display MLS data is the

Internet Data Exchange

brokerage

Is simply the business of bringing parties together

What is the main value of a multiple listing service (MLS) for sellers?

It exposes the property to a greater number of prospective buyers

antitrust laws

Laws designed to preserve the free enterprise of the open marketplace by making illegal certain private conspiracies and combinations formed to minimize competition.

after license laws are enacted by legislature who is responsible for adopting administrative regulations

Licensing authority (division, commission, etc.)

A seller listed and sold her property for $325,000. She agreed to pay the listing broker a 7% commission. The listing broker offered a listing 40/60 selling split to any cooperating broker who sold the property. How much did the seller have to pay in commission fees?

$22,750

A sales associate took a listing on a house that sold for $329,985. The commission rate was 5%. A sales associate employee by another broker found the buyer. The sellers broker received 60% of the commission on the sale; the buyers broker received 40%. Of the sellers broker kept 30% and paid the sellers sales associate the remainder, how much did the sellers sales associate earn on this sale?

$6,929.68

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?

18

disclaimers

A statement indicating no legal responsibility for information; no warranties or representations have been made.

An analysis performed to assist a seller in pricing a property

comparative market analysis (CMA)

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

procuring cause

The broker who starts an uninterrupted chain of events that result in the sale of a property

procuring cause

An individual who is licensed to buy, sell, exchange, or lease property for others, and to charge a fee for those services

real estate broker

All of these are requirements for independent contractor status used by the IRS except

specific hours stated in a written agreement

An arrangement to sell one product only if the buyer purchases another product as well is called

tie in agreement

The amount of commission paid to a sales associate is determined by

Mutual agreement with the broker

A broker who owns a realty agency does not permit his salespeople to charge less than an 8% commission in any transaction. After reading a newspaper article about this realty agency's policies, the broker of another realty agency decides to also adopt the 8% minimum. Based on these facts, which of these statements is TRUE?

Neither broker has committed an antitrust violation

Uniform Electronic Transactions Act (UETA)

Sets forth rules for entering into an enforceable contract using electronic means.

employee

Someone who works for an employer.

All of these are ways for a broker to charge for services EXCEPT

Standard community rate

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

A broker has established the following office policy: "All listings taken by any salesperson associated with this real estate brokerage must include compensation based on a 7 percent commission. No lower compensation 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

Why have real estate license laws been put into effect?

To protect the public and establish standards of professionalism

In real estate, a sales associate is always

a licensee who performs real estate activities on behalf of a broker.

Two real estate professionals were found guilty of conspiring with each other to allocate real estate brokerage markets. A seller suffered a $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

On the sale of any property, a sales associate's compensation is based on the total commission paid to the broker. The sales associate receives 30% of the first $2,500, 40% of any amount between $2,500 and $7,500, and 50% of any amount exceeding $7,500. If a property sells for $234,500 and the broker's commission rate is 6.5%, what is the sales associate's total compensation?

$6,621.25

A form of compensation computed as a percentage of the total sales price of a property

commission

Multiple Listing Service (MLS)

A marketing organization composed of member real estate professionals who agree to share their listing agreements with one another in the hope of procuring ready, willing, and able buyers for their properties more quickly than they could on their own. Most multiple listing services accept exclusive right-to-sell or exclusive agency listings from their member real estate professionals.

National Do Not Call Registry

A national registry, managed by the Federal Trade Commission, that lists the phone numbers of consumers who prefer to limit the telemarketing calls they receive.

electronic contracting

A process of integrating information electronically in a real estate transaction between clients, lender, and title and closing agents.

Electronic Signatures in Global and National Commerce Act (E-Sign)

An act that makes contracts (including signatures) and records legally enforceable regardless of the medium in which they are created.

commission

Payment to a real estate professional for services rendered, such as in the sale or purchase of real property; usually a percentage of the selling price of the property

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

ready, willing, and able buyer

Person who is prepared to buy property on the seller's terms and is ready to take positive steps to consummate the transaction.

Internet Data Exchange (IDX) policy

Policy that allows all multiple listing service (MLS) members to restrict internet access to MLS property listings.

The primary purpose of the Uniform Electronic Transactions Act (UETA) is to

Remove barriers in electronic commerce that would otherwise prevent enforceability of contracts

A real estate broker had a listing agreement with a seller that specified a 6% commission. The broker showed the home to a prospective buyer. The next day, the buyer called the seller directly and offered to buy the house for 5% less than the asking price. The seller agreed to the price and informed the broker in writing they no further brokerage services would be required. The sale went to closing six weeks later. Based on these facts, which statement is true?

The broker was the procuring cause of the sale and is entitled to the full 6% commission

Which statement best explains this sentence: To recover a commission for brokerage services, a broker must be employed as the agent of the client?

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

procuring cause

The effort that brings about the desired result. Under an open listing, the broker who is the procuring cause of the sale receives the commission.

Managing Broker

The real estate professional who is responsible for supervision of the real estate professionals who act on behalf of the brokerage; may also be called a supervising broker.

The device by which a state licensing authority administers and enforces the statutory law

administrative regulations

Although state laws vary regarding internet advertising, which of these is a typical element of state policy or law?

ads must contain true, current information and avoid misleading the potential client or customer

An illegal division of territories to avoid competition

allocation of markets

A sales associate's contract with her broker states that she is not an employee. In the last year, less than half her income was commission, with the rest an hourly wage paid by the broker. The IRS would classify her as

an employee

A sales associate whose activities are closely controlled, and who is entitled to benefits, unemployment compensation, and income tax withholding

employee

An important purpose of the E-Sign Act is to

give contracts created using email the same legal standing as those on paper

What is the compensation plan called if a salesperson's commission split increases depending on whether the salesperson achieves higher production goals?

graduated commission split

When two or more businesses conspire against another business to withhold patronage to reduce competition is not

group boycott

A sales associate who works under the terms of a written contract and receives a substantial portion of her income from sales production rather than hours worked

independent contractor

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

price-fixing

is a practice in which competitors agree to set prices or other terms and conditions for products or services rather than letting competition in the open market establish those prices

Membership in this service provides an opportunity for the marketing of propety

multiple listing service (MLS)

boycott

occurs when two or more businesses conspire against another business or agree to withhold their patronage to reduce competition

At a realty agency, salespeople pay a monthly desk rent of 15% of their monthly income. In May, one salesperson receives 5% on a $560,000 sale, 6% on a $348,000 sale and 6.75% on an $89,500 sale. The only other salesperson at the agency who received a commission in May got 6% on a $410,000 sale. How much did the agency receive in May?

$11,928.19

A real estate company has adopted a 100% commission plan. The monthly desk rent required of sales associates is $1500, 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

A broker listed a seller's home for $425,000 with a 4% commission, plus $3,000 for advertising costs. The buyer offered $380,000, and after several counteroffers, finally agreed to $400,000. What was the total cost to the seller?

$19,000

The salesperson's agreement with the broker was a 40/60 split with the broker keeping 40% of the commission. The seller was charged 5.5%. How much did the salesperson receive if she listed and sold a house for $279,500?

$9,223.50

Salesperson in a realty agency are compensated based on this formula: 35% of the commission earned on any sale, less a $200 per-transaction desk rental. Salespeople are responsible for paying 75% of all marketing and sales expenses for any property they list, and a $75 per transaction fee to cover the monthly expenses of advertising and marketing the agency's services. If a salesperson sold a house for $500,000, with a 6% commission, how much would the salesperson be paid if the sale incurred $800 in marketing and advertising costs?

$9,625

A qualified buyer makes a written offer on a property on March 6 by filling out and signing a sales agreement. Later that day, the seller accepts and signs the agreement, keeping one copy. The broker gives a copy of the signed agreement to the buyer on March 8. The seller's deed is delivered on May 1. The deed is recorded on May 7, and the buyer takes possession on May 15. When is the broker's commission payable if this is a usual transaction?

May 1

Independent Contractor

Someone who is retained to perform a certain act but who is subject to the control and direction of another only as to the end result and not as to the way in which the act is performed. Unlike an employee, an independent contractor pays for all expenses and Social Security and income taxes and receives no employee benefits. Most real estate salespeople are independent contractors.

A state has recently updated its Rules and Regulations for the Real Estate Profession. Assuming this state is like all others, which statement is TRUE regarding this publication?

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

After a particularly challenging transaction finally closes, the client gives a sales associate a check for $500 "for all your extra work" which statement is accurate

The sales associate may receive compensation only from the broker

minimum level of services

The services that real estate professionals must provide to clients, as prescribed differently by certain states; for example, assisting clients in negotiation and answering questions from clients about offers, counteroffers, and contingencies.

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

UETA

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

a negotiated share of commissions on transactions

Laws that prohibit price fixing and tie-in agreements

antitrust laws

The business of bringing parties together

brokerage

A person who is prepared to buy on the seller's terms and is ready to take positive steps toward consummation of the transaction

ready, willing, and able buyer

Statutes enacted by state legislatures to protect the public and ensure a standard of competence in the real estate industry

real estate license laws

When communicating with clients or consumers via email, all of these are examples of professional email etiquette except

responding to emails within one week

A person who is licensed only to perform real estate activities on behalf of a broker

sales associate

The broker may still be entitled to a commission in which of these situations where a pending property sale did not close

the seller decided not to sell

What is the practice called when a consumer selects specific services to use and only pays the real estate professional for those services?

unbundling services

When acting as an employee rather than an independent contractor, a sales associate may be obligated to

work set hours