Chapter 8
nothing; she is not a licensee and is, therefore, not entitled to a commission. Only a real estate licensee may earn a commission for a real estate transaction. Peg would really have no recourse to demand any commission in this situation.
Jack knows that his neighbor Peg's brother is moving to town. He tells Peg that if she gets her brother to buy his house, he'll give her a 5% commission, even though she's not a real estate licensee. Peg's brother buys the house, and Jack doesn't pay her a dime. What can Peg do to get her commission?
true. A broker with an expired or inactive license may receive compensation if the license was active at the time the brokerage activity was performed and the compensation was earned.
Licensee Marie negotiated a signed purchase agreement on a property while she was working for ABC Realty. She placed her license on inactive status before the transaction closed and before the seller paid the commission. Although her license is no longer active, Marie can accept an earned commission from ABC Realty.
true
Lisa wants to sell her house, so she signs an exclusive right to sell listing agreement with broker Lori of Lakeside Real Estate. Lisa promises to pay Lakeside a commission when the house sells. This is an example of a bilateral contract.
Multiple Listing Service (MLS)
A listing service whereby member brokers agree to share listings and commissions on properties sold jointly. The MLS generally consists of an online database that is updated regularly to include new listings.
Multiply the sales price by XYZ's commission rate of 4% to find its commission: $389,000 x 0.04 = $15,560. Since XYZ takes 10% off the top to pay a franchise fee, multiply the total commission earned by 90% (or 0.90) to find what XYZ keeps: $15,560 x 0.90 = $14,004.
Here's a slight twist: XYZ Brokerage negotiates a 7% commission for selling Rob's house, offering 3% of the sales price to a selling brokerage. When the house sells for $389,000, how much will XYZ Brokerage earn if it pays the first 10% of its commission to a national realty company as a franchise fee?
when the proceeds from the sale are distributed by the closing attorney. Compensation is typically DUE AND PAYABLE upon the distribution of the proceeds from the sale by the closing attorney.
If sellers Melissa and Juan sign the listing agreement with Sunshine Realty, when would Sunshine Realty's commission be due and payable?
seller's market
(more buyers than sellers) A situation in the housing market when a large number of buyers are looking for housing in an area of limited availability.
buyer's market
(more sellers than buyer) A situation in the housing market when there are many homes available for sale, but few buyers.
true
A business must honor a recipient's opt-out request within 10 business days.
Exclusive buyer agency agreement
A contract between a buyer and a broker that grants only one broker the right to represent the buyer in the purchase of property and entitles the broker to the negotiated fee even if the buyer purchases property through another broker; depending on the language of the contract, the broker may also be entitled to compensation if the buyer finds the property and purchases it directly from the owner.
false. A real estate agent may call a client with whom he has an established business relationship for up to 18 months after the client's last transaction or payment, even if the client's number is on the national Do Not Call Registry.
A licensee may telephone the residence of a person who qualifies as an established business relationship during a period no longer than 180 days after the last contact with that person.
Comparative Market Analysis (CMA)
A method of determining the approximate market value of a home by comparing the subject property to similar homes that have sold, are presently for sale, or did not sell in a given area. Also called Competitive Market Analysis.
false. A real estate licensee is usually an independent contractor.
A real estate licensee is more likely to be an employee of his brokerage firm.
true
A real estate licensee who is an independent contractor is paid based on successful real estate transactions, not on hours worked.
Statutory Nonemployee
A real estate licensee who is treated as an independent contractor for tax purposes when specified conditions are met: Proper licensing, compensation based on sales, and services performed under a written contract.
Established Business Relationship (EBR)
A relationship that may allow a telemarketer or seller to call a consumer for up to 18 months after the consumer's last purchase, delivery, or payment (even if the consumer's number is on the National Do Not Call Registry).
the consent decree was issued by an admin agency. Administrative agencies issue cease and desist orders. Consent decrees are binding agreements reached before judgment in a court case by which the accused party consents to change its behavior without admitting wrongdoing.
ABC Company was charged with violating federal antitrust laws. ABC Company agreed to a consent decree. Which statement is FALSE?
interpleader
An action in which property that is held by a third party (such as earnest money) is deposited with the court to resolve a dispute as to ownership.
true
An affiliated licensee can be either an employee or an independent contractor of a brokerage firm.
Nonexclusive buyer agency agreement
An agreement between a buyer and any number of brokers where a broker earns a commission only if he is the one who introduces the buyer to the property she purchases.
market allocation
An antitrust violation where competitors agree to not compete with each other in specific markets by dividing up geographic areas, types of products, or types of customers. Also called Territory Allocation.
true.
An effective and productive way to begin and continue a business relationship is to obtain the client's or customer's express written permission to stay in touch.
net to seller
An estimate of the money a seller should receive from a real estate transaction based on a certain selling price after all costs and expenses have been paid. Also called Seller's Net.
is not subject to withholding requirements.
An independent contractor
false
As long as your brokerage firm uses the National Do Not Call Registry, it does not need to maintain its own internal do not call list.
true
At the end of the year, a real estate broker who files as an independent contractor receives a 1099-MISC form that details her compensation for the year.
$38,948 Bonnie paid $7,350 in commission ($105,000 x 0.07). Add that to the other expenses to find total expenses of $66,052. Subtract that amount from the sales price to find a net to seller of $38,948.
Bonnie sold her condo for $105,000. She paid off the $58,000 owed on her mortgage, 7% commission, attorney fees of $200, prorated interest of $345, and prorated association fees of $157. How much did she net on the deal?
the agreement must be in writing
Broker Anabelle will be entering into an agreement to provide brokerage services to a seller. Which statement about this agreement is TRUE?
must be in writing. A landlord secures the services of a licensed property manager through a property management agreement. All property management agreements must be in writing and signed by the parties. A property management agreement may allow for automatic renewal if the landlord may terminate with notice at the end of any contract period and any subsequent renewals.
Broker Arnold will be entering into an agreement to provide brokerage services to a landlord. This type of agreement
the seller
Broker Ethan is a seller's subagent working with buyer Caitlyn. In this situation, Ethan represents
if he initiated the contact with Sandra
Broker Frank has been trying for several months to sell Sandra's home. When Frank contacts Sandra to renew the listing, Sandra informs him that she just signed a listing agreement with REALTOR® Jim that becomes effective one day after the current listing expires. Jim has violated the Code of Ethics
the agreement may be oral or in writing. A seller secures the services of a broker through a listing agreement. All listing agreements must be in writing and signed by the parties and must include the broker's license number. A written agency agreement cannot include an automatic renewal clause.
Broker Nan will be entering into an agreement to provide brokerage services to a seller. Which statement about this agreement is FALSE?
dominique closes on the purchase of the property. A buyer agency contract is terminated by full performance, which occurs when all the terms of the contract have been carried out. The agency relationship between a buyer and a real estate broker ends when the buyer acquires a property.
Buyer Dominique and broker Byron, with XYZ Realty, have entered into an exclusive buyer agency agreement. This agreement will terminate if
$174,332
Carrie is selling her home. She needs to pay off a $120,000 mortgage. Her estimated closing costs are $3,000, and she has agreed to pay a 6.5% commission. After the sale, Carrie wants to have at least $40,000 so that she can make a down payment on a new condo. What is the minimum she can accept for the sale of her home?
true
Commission rates are negotiated between the client and the brokerage.
true
In order to be considered an independent contractor, a licensee's compensation must be based on commissions for sales produced rather than a salary or hourly wage.
false. it is a tortious interference.
Inducing a party to break an existing contract is referred to as tortious obstruction.
true
One of the duties of a buyer's agent is to perform a comparative market analysis before the buyer makes an offer.
right-to-control
The IRS uses the ___________ test to determine whether someone is an employee or an independent contractor.
First, figure the costs: $115,000 + $1,000 + $425 = $116,425. Because the commission rate is 5%, you can now divide the costs by 95% (100% - 5%) to find the minimum acceptable offer: $116,425 / 0.95 = $122,552.63.
The Jones family is considering an offer on their home. They must pay off a $115,000 loan, pay closing costs of $1,000, and a survey fee of $425. Their broker is charging them a 5% commission. Determine the minimum acceptable offer.
suzanne should use interior measurements for her calculations.
To complete the property data sheet, listing agent Suzanne will measure the home owned by sellers Melissa and Juan. Which statement is FALSE?
Any opt-out mechanism must be able to process opt-out requests for at least 30 days after the message has been sent. Once a request is made, it must be honored within 10 business days.
To comply with provisions of the CAN-SPAM Act, a business must process any opt-out request it receives for at least ________ after the email is sent.
Independent Contractor
Under common law, a person who contracts to do a job for another, but who maintains control over how the task is carried out, rather than following detailed instructions.
breach
Violation of an obligation, duty, or law.
false. It is: Controlling the Assault of Non-Solicited Pornography and Marketing
t or f? CAN-SPAM is an acronym for Controlling Access to Non-Solicited Phonecalls And Mail.
National Do Not Call Registry
National registry managed by the Federal Trade Commission that limits commercial telemarketers from phoning consumers who place their telephone numbers on a list.
earns commission based on results of his work efforts. An independent contractor is paid commissions for sales or other output, rather than the number of hours worked.
An important part of the relationship between a brokerage firm and an affiliated licensee who is an independent contractor is that the licensee
false
As an agent for sellers Melissa and Juan, Suzanne is NOT obligated to disclose material facts to any potential buyer. t or f?
gretchen, her buyer clients, and her seller clients.
Broker Gretchen is a member of the local MLS. Who would likely benefit from Gretchen's MLS membership?
true
One of the duties of a listing agent is to perform a comparative market analysis on the property.
Tortious Interference
The causing of harm by disrupting another's relationship, for example, interfering with a contractual relationship so that one party fails to execute her promise.
false
The earnings of a person who is working as an independent contractor are subject to Social Security tax withholding through the employer.
true
Under the CAN-SPAM Act, every electronic solicitation must include some clear option to opt out of future communications.
false. Under the federal Junk Fax Prevention Act, it is unlawful to send unsolicited advertisements to any fax machine, including businesses and residences.
Under the federal Junk Fax Prevention Act, unsolicited advertisements may be sent to businesses but not residences.
boycott
A concerted refusal by two or more people to deal with a particular person or company.
Buyer Agency Agreement
A contract between a buyer and a broker that grants the broker the right to represent the buyer in the purchase of property and that makes the buyer responsible for paying commission to the broker.
true. the best way to terminate is the complete the sale.
Issa's property is listed with broker Isaac. The best way for this listing contract to terminate is for Isaac to find a ready, willing, and able buyer on terms acceptable to Issa.
178,000
Seller Laura will pay 4% of the sales price of her home to the listing brokerage and 3% to a cooperating brokerage. ABC Brokerage earns a commission of $5,340 when its client buys Laura's house. Find the sales price of the property (rounded to the nearest dollar).
illegal per se
Something that is unlawful in and of itself without considering context or intent; generally made so because of statute, constitution, or case law.
general warranty deed
The Exclusive Right to Sell Listing Agreement requires sellers Melissa and Juan to deliver what type of deed?
cease an desist order
an administrative agency directive to stop an offending activity
A copy of the seller's deed may be attached as an exhibit.
Broker Suzanne is completing the property description in the Exclusive Right to Sell Listing Agreement. Which statement is TRUE?
full-service listing
A contract under which a brokerage firm provides the seller with a wide range of traditional brokerage services, including marketing the property, showing the property, presenting and reviewing offers, and handling earnest money.
false. this is a co listing.
When two brokerage firms join forces to list the same property and mutually agree to share the commission, it is referred to as an open listing.
a property management agreement between broker Willis and landlord Yvonne
Which of these agency contracts must be in writing?
designated agency (define)
A contractual relationship between a broker and a client in which one or more licensees associated with the brokerage firm are appointed to represent the client in an in-house transaction, to the exclusion of all other affiliated licensees. Also called Split Agency.
injunctive relief
A court-ordered prohibition against a specific act or conduct, as opposed to a judgment for money.
open listing
A nonexclusive listing, given by a seller to as many brokers as he chooses. If the property sells, only the broker who is the procuring cause is entitled to a commission.
$6,619.2
A property sells for $236,400. The licensee involved in the transaction receives 40% of her employing firm's 7% commission. How much money does the licensee receive?
Step 1: Find the total commission: $249,500 x 0.06 = $14,970. Step 2: Find the selling brokerage firm's commission: $14,970 x 0.40 = $5,988. Step 3: Find the selling agent's commission: $5,988 x 0.60 = $3,592.80. The selling agent earns $3,592.80 on the deal.
A property sold for $249,500. The total sales commission is 6% and is divided as follows: Listing brokerage firm gets 60% of the commission; selling brokerage firm gets 40% of the commission. The selling agent gets 60% of the selling brokerage firm's commission. How much will the selling agent earn?
listing agreement
A written agency contract between a seller and a broker, stating that the broker earns a commission for finding (or attempting to find) a buyer for the seller's real property.
cooperating agent
An agent who works with a listing agent to sell property in a real estate transaction; the selling agent who finds a buyer for the listed property. Also called Cooperating Broker.
co-listing
An agreement in which two brokerage firms join forces to list the same property and mutually agree to share the commission.
protection agreement
An agreement that entitles the broker to compensation from the seller if the property is sold to a specific buyer; it is an agreement with the seller for a single transaction.
tie-in agreement
An antitrust violation in which one transaction or agreement is contingent on a second transaction or agreement. Also called Tying Agreement.
yes. Lisa is attempting to change Jim's commission policies by giving him less favorable terms. This is a form of boycotting and would be considered an antitrust violation.
Broker Lisa is not happy about the low commission rates charged by broker Jim's agency. She tells him that if he sells one of her properties, she'll only pay him 1% of the earned commission unless he ups his commission fees when she brings him a buyer for one of his listings. Would this be considered an antitrust violation?
It breaks down this way: 5% of $200,000 = $10,000; 4% of $300,000 = $12,000; and 6% of $100,000 = $6,000. Add them together to get $28,000.
Broker Mike listed a property for sale. He negotiated a 5% commission on the first $200,000, a 4% commission on the next $300,000, and a 6% commission on any amount over half a million dollars. The property sold for $600,000. What is Mike's commission?
no. Price-fixing is per se an unreasonable restraint of trade, but this conversation took place among agents of the same brokerage firm, not competing firms, so it is not price-fixing.
Hank and Russ are both affiliated licensees for Northwoods Realty. At a company meeting, the broker-in-charge, Bob, told them not to accept any listing for less than 7%. Do you think this is an example of price-fixing?
False. This would be an example of price-fixing, which is per se an unreasonable restraint of trade and, therefore, illegal under the Sherman Antitrust Act.
If a local real estate board publishes a suggested commission schedule but does not mandate that members follow it, it would NOT be considered an antitrust violation.
Sunshine Realty's trust account until the transaction closes or terminates.
If broker Suzanne, who is affiliated with Sunshine Realty, receives an earnest money deposit related to the sale of the property owned by Melissa and Juan, the money will be held in
when a ready, willing, and able buyer is found on terms acceptable to Melissa and Juan
If sellers Melissa and Juan sign the listing agreement with Sunshine Realty, when would Sunshine Realty earn a commission?
Yes. With an exclusive agency agreement, the broker earns a commission if anyone other than the seller introduces the buyer to the property.
Lois signs the exclusive agency agreement, excluding the two named prospects for 10 days. Two weeks after she signs, another broker brings a buyer through the house. He puts in an offer that Lois accepts. Did Chip earn commission on this deal?
amount of earnest money deposit. Earnest money is paid by the buyer, and the buyer is not a party to the listing agreement. The other items are required disclosures under the Seller Representations paragraph.
Seller Jose is entering into an Exclusive Right to Sell Listing Agreement (NCAR Standard Form 101) with brokerage firm ABC Realty. Jose would be required to disclose all of the following EXCEPT the
race, color, religion, sex, national origin, handicap, or familial status.
The federal Fair Housing Act prohibits discrimination in housing based on
False. It was an appeal on U.S. v. National Association of Real Estate Boards that affirmed real estate agents are not excluded from charges of restraint of trade.
The federal lawsuit that affirmed that service-oriented businesses, such as real estate brokerage, would not be excluded from charges of restraint of trade was U.S. v. Long Island Board of REALTORS®, Inc.
exclusive right to sell
The seller lists her house with New Age Realty. The next day, the seller goes to work and mentions listing her house. A coworker expresses interest in the listing. Which listing would entitle the broker to a commission if the coworker makes an acceptable offer to the seller?
$1 million
When someone is found guilty of violating federal antitrust statutes, the maximum fine that can be imposed on that individual is
price-fixing
An antitrust violation that occurs when two or more competitors agree to fix the prices that they will charge. In real estate, it might occur when brokers agree with other brokers on commission rates; even the implication that brokers have discussed and/or reached agreement on fees could be illegal.
antitrust
An area of federal law concerned with maintaining competition in private markets by prohibiting unlawful restraint on trade.
true. It's more likely that an exclusive listing agreement results in better service for a seller than an open listing agreement because the broker's claim to a commission is more secure, so he is likely to work harder to bring about the sale.
An open listing is likely to result in better service because there are more brokers working for the seller.
procuring cause
An uninterrupted series of events leading to the creation of a contract; the party whose efforts resulted in the creation of a binding contract for sale; for example, a broker whose efforts resulted in an executed contract, thus entitling her to a commission.
designated agency
Another buyer, Rebecca, is interested in making an offer on Melissa and Juan's house. Like Melissa and Juan, Rebecca also has an agency relationship with Sunshine Realty. If the broker-in-charge appoints Suzanne to represent and advocate for Melissa and Juan and appoints another licensee to represent and advocate for Rebecca, this situation is a
dual agency
Buyer Sergio is interested in making an offer on Melissa and Juan's house, which is listed by Suzanne at Sunshine Realty. If Suzanne is also buyer Sergio's agent, this situation is a
no. it only prevents you from disclosing what your commission % is.
Do antitrust laws prevent you from discussing the commission you intend to offer a cooperating brokerage?
no. Simply advertising the rate to the consumer is not a violation. Because it's not consulting with any other brokerage firm to set a commission rate, there is no restraint of trade.
Do you think that a so-called "discount" brokerage is violating antitrust laws if it advertises its commission rate?
yes
John from XYZ Realty calls Jack and asks if he had decided to give XYZ his listing. Jack replies, "I was going to, but Bill from ABC Brokerage said because XYZ is a discount brokerage, nobody will show your listings. So, I listed with ABC." Do you think that John could prove that he was injured by Bill's actions?
exclusive agency
Jonah lists his home with PDQ Realty, allowing them to put a sign in the yard, list it in the local multiple listing service, and advertise it in the local newspaper. During the listing period, Jonah sells the home to his brother and is not obligated to pay PDQ any commission. What type of listing did Jonah have with PDQ?
no. Kelly and Ryan work for Andy. The decision to not do business with Mike did not involve any other real estate firms but is their own company policy. They are not guilty of violating antitrust laws. Of course, another question is: Are they meeting their fiduciary duties to their buyer clients?
Kelly and Ryan are affiliated licensees at Andy's Realty. One day, over lunch with Andy, they agree that Mike's Discount Real Estate is really hurting their commission earnings, so they decide not to show his listings to buyer clients of Andy's Realty. Are they guilty of group boycotting?
Paragraph 3(d)
There are several built-in bookcases in the living room in Melissa and Juan's house. If Melissa and Juan intend to keep the bookcases and do NOT want them to be included in the sale, where should their intentions be indicated in the Exclusive Right to Sell Listing Agreement?
false. This is a unilateral contract. Harry made a promise to pay a commission on the condition that Joe finds a buyer. Joe has no obligation to find that buyer, however.
t or f? Harry wants to sell his house, so he signs an open listing agreement with Joe of Lots-O-Wealth Realty. Harry promises to pay Joe a commission only if he finds a ready, willing, and able buyer. This is an example of a bilateral contract.
$9,369.68
Al just sold his house for $462,700. His listing agreement with Tops Realty indicates that he will pay a 7.5% commission based on the sales price when the transaction closes. Tops is paying 45% of that to selling brokerage Uptown Real Estate. Jill, an affiliated licensee at Uptown, gets 60% of Uptown's commission. How much did Jill earn?
has a fiduciary relationship with clients.
All of the following are factors used by the IRS to determine if a real estate agent qualifies as a statutory nonemployee EXCEPT: -is properly licensed. - is paid for output, not hours worked. - has a written contract with the brokerage firm. - has a fiduciary relationship with clients.
collette's license is revoked.
Buyer Moe and broker Collette, with ABC Realty, have entered into an exclusive buyer agency agreement. This agreement would be terminated by all of the following EXCEPT
false. The broker may have acquired confidential information about the seller. Switching agency relationships is NOT recommended and requires the informed consent of the seller.
Buyer Wanda has been working with broker Tyrone, who has been acting in the capacity of the seller's subagent. Once they have established a rapport, the recommended practice would be for them to switch to a buyer agency relationship.
earnest money
(down payment sort of)Money offered as an indication of good faith regarding the future performance of a purchase agreement.
home warranty
A contract between a homeowner and a home warranty company that provides coverage for the repair or replacement of named components of the home for a specified period of time, such as one year.
limited service listing
A contract under which a brokerage firm provides limited brokerage services, as agreed to by the client, rather than the full traditional brokerage services.
true
A licensee on inactive status may be able to accept a commission if her license was active when the commission was earned.
mediation (define)
A method of settling a dispute in which a disinterested third party facilitates a discussion between the two parties and the parties come up with their own solution.
Arbitration
A method of settling a dispute in which an impartial third party hears the case and renders a binding decision.
selling agent
A written agency contract between a seller and a broker, stating that the broker earns a commission for finding (or attempting to find) a buyer for the seller's real property.
Property Management Agreement
A written agreement that creates an agency relationship between the property owner/investor and the property manager.
exclusive agency listing
An agency contract between a seller and a broker that entitles the broker to a commission if anyone other than the seller finds a buyer for the property during the listing term.
exclusive right to sell listing
An agency contract between a seller and a broker that entitles the broker to a commission if anyone, including the seller, finds a buyer for the property during the listing term.
broker protection clause
An optional clause that brokers may include in a listing agreement that obligates the seller to compensate the broker even if the property is sold after the listing agreement expires under certain circumstances. Also called Carryover Provision or Extender Clause.
6.5%
Broker Jeff's JT Realty earns a commission of $18,785 on a $289,000 sale. What was the commission rate?
none. Because they are affiliates of the same brokerage firm and did not involve licensees from other firms in their decision, they are not guilty of violating antitrust laws.
Dave and Sue are affiliated licensees for #1 Realty. Over lunch one day, they discuss the new Save-a-Lot Brokerage in town that charges a flat $2,000 fee instead of a commission rate. They decide that they will not show Save-a-Lot's listings to prospective buyers. What type of violation might this situation be considered, if any?
false. property management agreements can have renewal clauses.
If broker Anthony will be providing brokerage services to landlord Becca, their written property management agreement CANNOT include an automatic renewal clause.
6 in the first blank and N/A in the second blank . In this scenario, the amount of the commission is a percentage of the sales price. Although the house is listed at $210,000, it may not sell at that price, so the dollar amount of the commission has not been determined.
If the house is listed at $210,000, and the sellers and the brokerage firm agree on a commission rate of 6%, what should listing agent Suzanne enter for the fee in Paragraph 7(a) of the Exclusive Right to Sell Listing Agreement?
When discussing commission splits, the first number represents the affiliated licensee's commission. With a 40%-60% split, the licensee gets 40%, which means XYZ keeps 60%. Multiply the commission by the licensee's split to determine how much she earned: $14,004 x 0.40 = $5,601.60. While seller Rob paid a total commission of $27,230 ($389,000 x 7%), listing agent Debra receives only about 20% of that.
Let's continue this example. After paying its franchise fee, XYZ Brokerage is left with a commission of $14,004 on the sale of Rob's house. If XYZ has 40%-60% split with its licensees, how much will listing agent Debra earn as a commission?
whether there is an end date.
Of these, which is LEAST LIKELY to be negotiable in a listing agreement?
XYZ Realty's trust account until the transaction closes or terminates. unless otherwise indicated in a sales contract, any earnest money paid will be held in the listing firm's trust account until the transaction closes or terminates.
Seller Amelia has entered into an Exclusive Right to Sell Listing Agreement (NCAR Standard Form 101) with broker Wyatt at XYZ Realty. If Wyatt receives an earnest money deposit related to the sale of the property, the money will be held in
false. vice-versa
The Sherman Antitrust Act was enacted to enhance the Clayton Antitrust Act.
Compensation is typically EARNED when a ready, willing, and able buyer is found (by the firm, a cooperating firm, the seller, or anyone else) at a price and on terms acceptable to the seller.
Under an exclusive right to sell listing, when is a broker's commission typically EARNED?
mediation
Under the Exclusive Right to Sell Listing Agreement, if a dispute arises between the sellers, Melissa and Juan, and their listing brokerage firm, Sunshine Realty, and they fail to settle the dispute in good faith, the parties agree to try to resolve the dispute through
The seller declares bankruptcy before the listing period ends.
Which termination of agency would be due to operation of law?
true. according to Real Estate Commission Rule A.0104(a), every agreement for brokerage services in a real estate transaction and every agreement for services connected with the management of a property owners' association must be in writing and signed by the parties and must include the broker's license number.
t or f? A written agency agreement must include the broker's license number.
false. Paragraph 6 specifies the listing price and the terms, including financing, that the seller will accept when the property is sold. The details regarding existing loans are entered elsewhere.
t or f? When completing Paragraph 6 of Exclusive Right to Sell Listing Agreement, listing agent Suzanne would enter the listing price along with the details regarding any existing loans on the property.
consent decree
A binding agreement reached before judgment in a court case by which the accused party consents to change its behavior without admitting wrongdoing.
false. its blockbusting.
Another word to describe a specific type of panic selling is redlining.
true.
Broker Gretchen is a member of the local MLS. Only those properties she has listed under an exclusive right to sell agreement can be submitted for inclusion in the MLS.
$141,500
In the multiple listing service, it states that the listing broker will pay 4% to a buyer's broker. Buyer's broker Sue earns a total of $5,660 as a commission. What was the sales price of the property?
net listing
Seller Sam calls a real estate agent to list his home. Sam tells the agent that he wants $156,000 in his pocket at closing and the agent can have the rest for the commission. What type of listing would this be?
$436,500
Tallulah sells her cottage through XYZ Realty, promising to pay a commission of 7.25%. Both the listing broker and the selling broker are agents at XYZ Realty, which earns $31,646.25 on the deal. What did the house sell for (rounded to the nearest dollar)?
limited service contract
Tessa is interested in selling her house. She enters into an agreement to hire broker Nico but only to market the property through the local real estate association. Their agreement is a(n)
This penalty was imposed by an administrative agency, the FTC, not the courts. Therefore, this is a cease and desist order, not injunctive relief. If a brokerage ignored the order, the FTC could ask the courts to step in and impose injunctive relief or stiffer penalties if appropriate.
The Federal Trade Commission ordered Best Deal Real Estate and We Sell Homes Fast Realty to destroy a commission tip sheet that they shared with their agents. This is an example of injunctive relief.
The listing broker is due a commission. Although sellers are not obligated to accept any offer on their home, the contract with the broker will most likely obligate them to pay a commission. The broker has done what he was hired to do by bringing in an offer that meets the exact terms the sellers had set. This is why it's very important to have the sellers' terms clearly defined in the listing agreement.
The listing agent presents a full-price cash offer with no contingencies to the sellers during the listing period. The sellers refuse to sign the contract because they do not like the buyers. Which statement do you think is TRUE?
Buyer Brad signs a contract with seller Carol to purchase her house. A contract between a buyer and seller is a purchase contract, and a broker is not a party to such a contract.
Which contract would NOT be considered an agency contract?
an exclusive buyer agency agreement between broker Ian and buyer Carlos. A broker may enter into an oral agency agreement with a buyer or tenant if the relationship is nonexclusive and the agreement does not bind the buyer or tenant for a fixed period of time (i.e., an open-ended agreement).
Which of these agency contracts must be in writing?
buyer agency agreement
A contract between a buyer and a broker that grants the broker the right to represent the buyer in the purchase of property and that stipulates the conditions under which the broker will be compensated.
true
A description of the brokerage firm, such as the location and types of real estate services offered, is a common provision of an employment contract.
June 1 and July 30 the document lays it out as: firms buyers exclusive agent shall begin ___ and subject to paragraph 4 shall expire at midnight _____.
Jack and Jill Green are interested in purchasing a property, and they enter into an agreement with Owen White, a broker with Moonlight Realty. The agreement will begin on June 1, last for 60 days, and expire at midnight on July 30. If Owen uses the NCAR Exclusive Buyer Agency Agreement, what should he enter in the two blanks in the Duration of Agency paragraph?
exclusive buyer agency agreement
Jack and Jill Green are interested in purchasing a property. They enter into an agreement with Owen White, a broker with Moonlight Realty. Jack and Jill agree that they will not work with any other brokerage firms and that Moonlight Realty will be entitled to the negotiated fee when they purchase a property, regardless of the manner in which the property is found. This agreement is a(n)
false. can still work with brokerage.
Jack and Jill Green have entered into a buyer agency agreement, and the agreement is signed by Owen White, a broker with Moonlight Realty. If Owen's real estate license is revoked, the agency agreement is automatically terminated.
$130,216
James is selling his home. He needs to pay off a $96,000 first mortgage and a $12,000 second mortgage, and he wants $10,000 cash in hand for himself. If his closing costs are $3,100 and he contracts to pay a 7% commission, how much must he sell the property for? Round your answer up to the nearest dollar.
First, determine how much she needs to cover her costs and desired cash: $65,000 + $15,000 + $10,000 + $1,200 = $91,200. Because she's paying a 7% commission, you next divide the costs by 93% to find the minimum selling price: $91,200 / 0.93 = $98,064.52.
Joan is selling her home. She needs to pay off a $65,000 first mortgage and a $15,000 second mortgage, and she wants $10,000 in cash for herself. If her closing costs will total $1,200 and she must pay a 7% commission, how much must she sell the property for?
First, add all of the expenses to find the desired net after the commission: $2,000 + $150,000 + $58,000 = $210,100. Then determine the amount of the sales price left after commission: 100% - 7% = 93% or 0.93. Finally, divide the desired net by the sales price after commission: $210,000 / 0.93 = $225,807. Joe must sell his home for at least $225,807 to get the desired net and pay the contracted commission and other expenses.
Joe needs to pay an estimated $2,000 in closing costs and $150,000 on his current mortgage, and he wants $58,000 in cash for a down payment on another house. His listing agreement obligates him to pay a 7% commission to the brokerage. What is the minimum selling price he can accept? Round your answer up to the nearest dollar.
false. an exclusive buyer agency agreement must be in writing. A broker may enter into an oral agency agreement with a buyer or tenant if the relationship is nonexclusive.
Owen, a broker with Moonlight Realty, provided Jack and Jill with a copy of the Working with Real Estate Agents brochure. After reviewing its contents, Jack and Jill decide they would like to enter into an exclusive buyer agency agreement. This agreement may be oral or written.
yes
REALTOR® Kim has an exclusive listing and places a sign on the property. REALTOR® Nash sees the sign but also notices the owners are home, so he asks them directly who the property is listed with, what type of agreement they have, and the expiration date of the contract. Did Nash violate the NAR Code of Ethics?
true
Someone who calls a phone number that is on the National Do Not Call Registry to solicit business can be fined over $40,000 per violation.
established business relationship
When someone has made an inquiry, application, purchase, or transaction involving a business, the relationship is referred to as a(n)
the broker's right to exercise control over an individual's work or how he performs his services. The IRS has developed guidance on assessing the degree of control and independence to better determine how to properly classify a worker.
Whether someone working at a brokerage firm is an employee or an independent contractor is determined by
above-grade
Which of the following is NOT one of the criteria for space to be considered living area?
A buyer tells a licensee to show him only homes in predominantly Hispanic neighborhoods, and the licensee agrees to do so. Steering refers to channeling or directing prospective buyers or tenants to or away from specific neighborhoods based on their race, religion, national origin, or other protected class to maintain or change the character of a neighborhood. Steering is prohibited even if requested by the buyer or tenant.
Which situation is an example of steering?
Dual agency. A dual agency arises when a buyer who has an agency relationship with the listing brokerage firm is interested in the seller's property.
You have a listing on a house, and one of your buyer clients is interested in making an offer on it. This situation is a
subagent
an agent who has been given authority by another agent to assist in carrying out the principal's orders.
false. she should still inform the buyers of material facts about the condition of the home.
t or f? Listing agent Lydia knows that the roof leaks in the attic. She sees that the seller included this information on the Residential Property and Owners' Association Disclosure Statement, but she makes no further mention of it. The buyers do not make any inquiries about the roof. Lydia has met her statutory obligation to disclose this information.
the county in which the buyer is interested in purchasing property.
A written buyer agency agreement must include all of the following EXCEPT
18 months
A broker has an established business relationship with a former client for up to ___________ after a transaction closes. This allows the broker to solicit business over the phone even if that consumer is on the National Do Not Call Registry.
$1200. Penalties in a civil lawsuit could be triple the damages claimed. In this case, it could be $1,200.
A licensee violated antitrust laws by insisting her client use a particular home inspector. If the client paid $400 more for the home inspection than she would have if she had chosen her own home inspector, she may be able to recover up to ______ in penalties, not counting attorney fees?
False. Blockbusting is attempting to induce, for profit, someone to sell or rent property based on the entry into the neighborhood of persons in a protected class. Though not specifically an antitrust violation, it would be considered an unfair practice under the Federal Trade Commission Act, in addition to being a violation of fair housing laws.
A licensee who tells homeowners that property values are declining because the ethnic or racial makeup of the neighborhood is changing could be found guilty of an antitrust violation.
$20,000
A property is being sold for $122,000, and the seller's estimated closing expenses amount to $3,000. If the seller originally purchased the property for $97,500 and paid $1,500 in closing expenses, what is the seller's estimated profit on the sale?
Price-fixing. Even the appearance of discussing fees could be considered an example of illegal price-fixing.
At a local convention of real estate licensees, broker Quinn mentioned that he was going to have to raise his commission rates or close his office. Quinn could be found guilty of
yes. The listing price is always the decision of the seller. Your duty of obedience means that you would have to defend your client's pricing decision.
Let's say your CMA indicates that a reasonable asking price for Carrie's property is $160,000, and you're sure that her house will not sell for $175,000. Are you obligated to list for $175,000 if that's what she wants and you accept the listing?
contact Sam and ask him the nature and terms of any agreement he has with the Byers. Because the Byers aren't sure if they signed an exclusive agreement with Sam, Dennis may call Sam to find out.
Licensee Dennis is hosting an open house when prospects Bob and Betty Byers arrive. Dennis asks the Byers if they have someone helping them find a home. The Byers reply that licensee Sam has taken them to several homes, but they aren't sure if they have an exclusive agreement with Sam. What is the best action for Dennis to take?
yes
Licensee Rosa is meeting with buyer client Roberto who just moved to town from Mexico. She asks where he wants to live, but being new to town, he just says "close to where I work, preferably by other Mexican families." If Rosa obeys Roberto's request and concentrates the search for houses in an area with a high Mexican population, could she be guilty of steering?
in-house transaction
A situation in which a single brokerage represents both the buyer and seller in the same real estate transaction.
monopoly
A situation where only one or very few companies dominate the market share of a particular product or service.
false
A third buyer is also interested in Melissa and Juan's house. The buyer's agent is Owen, who is affiliated with Moonlight Realty. This situation is an in-house transaction.
when a ready, willing, and able buyer is found on terms acceptable to the seller. A listing broker is generally entitled to a commission only after fulfilling the duty of finding a ready, willing, and able buyer on the seller's terms, although the specific conditions of the compensation should be spelled out explicitly in an agency agreement.
Generally speaking, a listing broker has earned his commission
paragraph 4. A refrigerator is considered personal property, and any personal property that will be included in the sale and conveyed to the buyers (at no value) is listed in Paragraph 4, Personal Property.
If Melissa and Juan agree to include a refrigerator with the sale of their house, where should this be indicated in the Exclusive Right to Sell Listing Agreement?
the original purchase price of the property. The sellers are not obligated to disclose the original purchase price. The other items are required disclosures under the Seller Representations paragraph.
In the Exclusive Right to Sell Listing Agreement, sellers Melissa and Juan are required to disclose all of the following EXCEPT
buyer. Accepting an offer of cooperation does not establish any agency relationship between the two brokers or the clients they represent. In this instance, the buyer's agent is the representative of the buyer. Sam will discuss cooperative splits next.
The listing agreement provides that the listing broker may make an offer of cooperation to other brokers to assist in finding purchasers willing to buy the seller's property. A buyer's agent sees this in the MLS. In this case, the cooperating broker represents the