Chapter 8 Quiz

When someone is found guilty of violating federal antitrust statutes, the maximum fine that can be imposed on that individual is $50,000 $100,000 $250,000 $1 million

$1 million

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? $400 $800 $1,000 $1,200

$1,200 Penalties in a civil lawsuit could be triple the damages claimed. In this case, it could be $1,200.

Matt wants to sell his home. He must pay off his existing $93,800 mortgage and pay $5,500 in closing costs. If he pays a 6% commission, what is the minimum offer he can accept? Round your answer up to the nearest dollar. $99,217 $100,209 $102,803 $105,639

$105,639

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. $110,603.75 $110,880.95 $122,246.25 $122,552.63

$122,552.63

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. $118,877 $129,577 $130,216 $233,723

$130,216

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? $20,000 $23,000 $24,500 $26,000

$20,000 $122,000 - $3,000 = $119,000 Adjusted Sales Price; $97,500 + $1,500 = $99,000 Adjusted Purchase Price; $119,000 - $99,000 = $20,000 Net Profit.

Seller Oliver agreed to pay 6% of the sales price of his house, equally split between the listing broker and the selling broker. Hilltop Realty earns a commission of $6,750 when its client buys Oliver's house. Calculate the sales price of the property. $40,500 $112,500 $225,000 $405,000

$225,000

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? $38,948 $38,998 $43,008 $43,057

$38,948

You can contact a former client for up to ___________ months after a transaction closes even if that client is on the National Do Not Call Registry. 9 24 18 12

18

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. 10 business days 30 days 45 days 60 days

30 days 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.

Broker Anabelle will be entering into an agreement to provide brokerage services to a seller. Which statement about this agreement is TRUE? A. The agreement must be in writing. B. The agreement may be oral or in writing. C. The agreement is called a property management agreement. D. The agreement must include an automatic renewal clause.

A. The agreement must be in writing.

Which of the following is NOT one of the criteria for space to be considered living area? A. above-grade B. directly accessible from another living space C. finished D. heated

A. above-grade

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 A. amount of the earnest money deposit. B. approximate balance on his current deed of trust. C. presence of any fuel tanks on the property. D. property is located in a Special Flood Hazard Area.

A. amount of the earnest money deposit.

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? A. exclusive agency B. exclusive right to sell C. net listing D. nonexclusive right to sell

A. exclusive agency

Under the NCAR Exclusive Right to Sell Listing Agreement, a seller is required to disclose all of the following EXCEPT A. the amount of the earnest money deposit. B. any known special assessments that have been approved or are under consideration. C. any mobile homes on the property. D. the presence of any fuel tanks on the property.

A. the amount of the earnest money deposit.

Buyer Stephen and broker Deborah are entering into a buyer agency contract using the NCAR Exclusive Buyer Agency Agreement. All of the following information must be included in the agreement EXCEPT A. the county in which Stephen is interested in purchasing property. B. Deborah's license number. C. nondiscriminatory language as required by the Real Estate Commission. D. a specific termination date.

A. the county in which Stephen is interested in purchasing property.

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? A. $26,600 B. $28,000 C. $30,000 D. $32,000

B. $28,000

Tina is an affiliated licensee at Lakeside Realty, where she has a 55%-45% commission split with her employing brokerage firm. Her buyer client bought a house for $432,000. The listing broker offered 3% to a cooperating broker. How much did Tina earn on the sale? A. $5,832 B. $7,128 C. $7,776 D. $9,504

B. $7,128

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 A. ABC Realty's license is suspended. B. Collette's license is revoked. C. Moe and Colette mutually agree to terminate. D. Moe declares bankruptcy.

B. Collette's license is revoked.

Broker Hans is a member of the local MLS. When Hans submits a property listing to the service, he is offering to cooperate with A. all local brokers, including MLS members and nonmembers. B. all other MLS member brokers, including buyer's agents and seller's subagents. C. only those MLS members who are buyer's agents. D. only those MLS members who are seller's subagents.

B. all other MLS member brokers, including buyer's agents and seller's subagents.

An important part of the relationship between a brokerage firm and an affiliated licensee who is an independent contractor is that the licensee A. cannot be charged for office space or supplies provided by the firm. B. earns commissions based on the results of his work efforts. C. is not subject to any direction or control by the firm. D. is paid for the number of hours worked.

B. earns commissions based on the results of his work efforts.

Seller Nicholas signed a contract that stipulates the broker will be compensated only if someone other than Nicholas finds the buyer. What type of agreement is this? A. buyer agency agreement B. exclusive agency agreement C. exclusive right to sell agreement D. open agreement

B. exclusive agency agreement

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? A. exclusive agency B. exclusive right to sell C. net listing D. open listing

B. exclusive right to sell

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 A. allocation. B. price-fixing. C. securities violations. D. nothing; he did not violate any rules or laws.

B. price-fixing.

A written buyer agency agreement must include all of the following EXCEPT A. the broker's license number. B. the county in which the buyer is interested in purchasing property. C. nondiscriminatory language as required by the Real Estate Commission. D. a specific termination date.

B. the county in which the buyer is interested in purchasing property.

Broker Ethan is a seller's subagent working with buyer Caitlyn. In this situation, Ethan represents A. Caitlyn. B. the seller. C. both Caitlyn and the seller. D. no one

B. the seller.

If a seller signs an exclusive right to sell listing agreement with Super Realty, when would Super Realty earn a commission? A. when the proceeds from the sale are distributed by the closing attorney B. when a ready, willing, and able buyer is found on terms acceptable to the seller C. when an offer from a ready, willing, and able buyer is presented to the seller D. when the listing agreement is signed

B. when a ready, willing, and able buyer is found on terms acceptable to the seller

Penny just sold her house for $186,000. The commission rate in the listing agreement was 6.5%. How much commission did she owe from the sale of the house? A. $7,558 B. $11,160 C. $12,090 D. $28,615

C. $12,090

Which contract would NOT be considered an agency contract? A. Broker Francine signs a contract with seller William to market his house for sale. B. Broker Scott signs a contract with owner Teresa to manage one of her properties. C. Buyer Charlene signs a contract with seller Marvin to purchase his house. D. Tenant Donna signs a contract with broker Christopher to find an apartment for her to lease.

C. Buyer Charlene signs a contract with seller Marvin to purchase his house.

Buyer Dominique and broker Byron, with XYZ Realty, have entered into an exclusive buyer agency agreement. This agreement will terminate if A. Byron dies. B. Byron's license is revoked. C. Dominique closes on the purchase of a property. D. a property is destroyed after Dominique makes an offer.

C. Dominique closes on the purchase of a property.

All of the following are examples of steering EXCEPT A. a licensee shows a Hispanic buyer only properties in predominantly Hispanic neighborhoods. B. a licensee refuses to show property in a predominantly white neighborhood to minority buyers. C. a licensee persuades homeowners to sell their homes by suggesting that people of a particular protected characteristic are moving into the neighborhood. D. a buyer tells a licensee to show him only homes in predominantly Asian neighborhoods, and the licensee agrees to do so.

C. a licensee persuades homeowners to sell their homes by suggesting that people of a particular protected characteristic are moving into the neighborhood.

If broker Hans is a member of the local MLS, what listings would he likely be required to submit to the service? A. no listings B. all listings C. all exclusive right to sell listings D. all exclusive listings

C. all exclusive right to sell listings

Which type of buyer agency agreement limits the buyer to representation by a single brokerage firm and entitles the broker to the negotiated fee even if the buyer purchases a property through another broker? A. an open buyer agency agreement B. a nonexclusive buyer agency agreement C. an exclusive buyer agency agreement D. any buyer agency agreement

C. an exclusive buyer agency agreement

Which action by a group of real estate licensees who are affiliated with different firms would be considered illegal boycotting? A. agreeing to charge the same commission for specific services B. dividing up their town into quadrants so that each could focus on her specific area C. deciding to avoid showing clients homes listed by Discount Dan D. including a clause in their listing contracts requiring clients to use AAA Inspection as their home inspector

C. deciding to avoid showing clients homes listed by Discount Dan

Seller Nicki signed a listing contract that stipulates the broker will be compensated even if Nicki finds the buyer herself. What type of agreement is this? A. buyer agency agreement B. exclusive agency agreement C. exclusive right to sell agreement D. open agreement

C. exclusive right to sell agreement

A seller calls you to list his home. He says he wants $75,000 in his pocket at closing, and you can keep the rest for your commission. What type of listing would this be? A. cost listing B. exclusive agency listing C. net listing D. open listing

C. 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? A. exclusive agency B. exclusive right to sell C. net listing D. open listing

C. net listing

A nonexclusive listing in which only the broker who is the procuring cause of a sale earns a commission is a(n) A. limited-services listing. B. net listing. C. open listing. D. protected listing.

C. open listing.

Licensees Rob and Ronnie, who are affiliated with different brokerage firms, are having dinner when Ronnie mentions she's having trouble getting listings in a particular part of town. Rob says he's happy to handle all the listings in that neighborhood if she agrees to quit trying to land clients there. In exchange, he'll send prospective clients her way if they live closer to her business. This is an example of A. boycotting. B. price-fixing. C. territory allocation. D. tying in.

C. territory allocation.

Under an exclusive right to sell listing, when is a broker's commission typically EARNED? A. when the listing agreement is signed B. when an offer from a ready, willing, and able buyer is presented to the seller C. when a ready, willing, and able buyer is found on terms acceptable to the seller D. when the proceeds from the sale are distributed by the closing attorney

C. when a ready, willing, and able buyer is found on terms acceptable to the seller

Generally speaking, a listing broker has earned his commission A. at the closing table. B. when the listing agreement is signed. C. when a ready, willing, and able buyer is found on terms acceptable to the seller. D. when a sales contract is signed.

C. when a ready, willing, and able buyer is found on terms acceptable to the seller.

Of these, which is LEAST LIKELY to be negotiable in a listing agreement? A. the broker's cooperation with other brokers B. the commissions C. whether there is an end date D. the scope of activities permitted

C. whether there is an end date Every written agreement for brokerage services in a real estate transaction must be for a definite period of time. The other items are negotiable.

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). A. $76,286 B. $104,785 C. $133,500 D. $178,000

D. $178,000

What entity manages the National Do Not Call Registry? A. Department of Housing and Urban Development B. Federal Housing Agency C. Federal Reserve Board D. Federal Trade Commission

D. Federal Trade Commission

ABC Company was charged with violating federal antitrust laws. ABC Company agreed to a consent decree. Which statement is FALSE? A. ABC Company agrees to change its offending business practice. B. ABC Company does not admit any wrongdoing. C. The consent decree was issued before a court could render judgment. D. The consent decree was issued by an administrative agency.

D. The consent decree was issued by an administrative agency.

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 A. in the trust account of the buyer's brokerage firm until the offer is accepted. B. in the trust account of the buyer's brokerage firm until the transaction closes or terminates. C. by an escrow agent named in the sales contract until the offer is accepted. D. by an escrow agent named in the sales contract until the transaction closes or terminates.

D. by an escrow agent named in the sales contract until the transaction closes or terminates.

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? A. tell the Byers to call Sam to find out the nature and terms of any agreement they have with him B. tell the Byers they cannot talk to Sam C. sign the Byers to an exclusive buyer agency agreement D. contact Sam and ask him the nature and terms of any agreement he has with the Byers

D. contact Sam and ask him the nature and terms of any agreement he has with the Byers

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 A. by establishing a new contract with Sandra before the previous one had expired. B. by not informing Frank that he had signed a contract with Sandra. C. just by talking to Sandra before her listing contract expired. D. if he initiated the contact with Sandra.

D. if he initiated the contact with Sandra. If Sandra initiated contact with Jim to arrange a new contract when the old contract expired, there would be no violation.

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? A. boycotting B. market allocation C. price-fixing D. no violation

D. no violation

Buyer Caleb and broker Mona have entered into a buyer agency agreement. According to the terms of the agreement, Caleb can enter into buyer agency agreements with other firms, and Mona will earn the negotiated fee only if she is the procuring cause of the sale. This agreement is a(n) A. exclusive buyer agency agreement. B. exclusive right to buy agreement. C. limited buyer agency agreement. D. nonexclusive buyer agency agreement.

D. nonexclusive buyer agency agreement.

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? A. record a lien against Jack's property B. submit to an arbitration hearing with the local board of REALTORS® C. sue Jack for breach of contract D. nothing; she is not a licensee and is, therefore, not entitled to a commission

D. nothing; she is not a licensee and is, therefore, not entitled to a commission

According to the North Carolina Real Estate Commission's Residential Square Footage Guidelines, to be classified as living area, a space must be finished and have a ceiling height of at least ___________, unless the ceiling is sloped. A. five feet B. six feet C. six feet four inches D. seven feet

D. seven feet The space must have a ceiling height of at least seven feet. There are exceptions to the seven-foot ceiling height requirement. Under beams, ducts, etc., the height must be at least six feet four inches. In rooms with sloped ceilings, the ceiling height must be at least five feet, and at least one-half of the finished area of the room must have a ceiling height of at least seven feet.

An employment contract between a brokerage firm and an affiliated licensee who is an independent contractor should address all of the following EXCEPT A. activities that the licensee may or may not perform on behalf of the firm. B. affiliated licensee's responsibility for certain expenses. C. compensation. D. the time that a contractor should report to the office each day.

D. the time that a contractor should report to the office each day.

An employment contract between a brokerage firm and an affiliated licensee who is an independent contractor should address all of the following EXCEPT A. compensation. B. the contractor's duties. C. required insurance. D. the time that a contractor should report to the office each day.

D. the time that a contractor should report to the office each day.

What possible antitrust violation could be avoided by giving a client an affiliate disclosure form? A. group boycotting B. market allocation C. price-fixing D. tie-in agreement

D. tie-in agreement

A listing broker will lose the right to a commission if she A. did not personally show the property to the buyer. B. does not advertise the property. C. produces a willing buyer. D. was not licensed when the seller entered into a binding sales contract.

D. was not licensed when the seller entered into a binding sales contract.

A broker's buyer client is interested in a property that is for sale by owner. Because the seller is not represented by a broker, the buyer's broker is NOT obligated to disclose her agency status. True False

False

Antitrust laws are in place to ensure that licensees have a minimum level of education and training to protect the public. True False

False

At the end of the year, an independent contractor will receive a W-2 form that details his compensation for the year. True False

False

The contract that would create an agency relationship between property owner Penelope and property manager Polly is a lease. True False

False

The earnings of a person who is working as an independent contractor are subject to Social Security tax withholding through the employer. True False

False

A group boycott is illegal only if its intention is to drive a competitor out of business. True False

False A boycott intended to compel a firm to abandon its current marketing strategies, for example, is also illegal.

Individuals may NOT file a lawsuit for antitrust violations against a business, only administrative agencies or the government may do that. True False

False Anyone whose business or property has been injured by anyone violating antitrust laws may file a private civil lawsuit in state or federal court.

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. True False

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.

The National Do Not Call Registry limits phone calls by political organizations and charities as well as commerce-related businesses. True False

False The National Do Not Call Registry applies to commerce-related phone calls, such as telemarketers and sellers who provide, offer to provide, or arrange to provide goods or services to consumers in exchange for payment. It does not apply to political groups or charities.

Buyer Charles and broker Martin, with PDQ Realty, have entered into an exclusive buyer agency agreement. This agreement would be terminated by all of the following EXCEPT A. Charles and Martin mutually agree to terminate. B. Charles closes on the purchase of a property. C. Martin's license is revoked. D. PDQ Realty's license is suspended.

Martin's license is revoked.

A bonus room is considered living area if it is heated, finished, and directly accessible from another living area and meets ceiling height requirements. True False

True

A licensee on inactive status may be able to accept a commission if her license was active when the commission was earned. False True

True

A written agency agreement must include the broker's license number. True False

True

An affiliated licensee can be either an employee or an independent contractor of a brokerage firm. True False

True

Broker Sydney provided a copy of the Working with Real Estate Agents Disclosure to Wesley, a prospective buyer. After reviewing its contents, they decide to enter into a nonexclusive buyer agency agreement that Wesley can terminate at any time. This agreement may be oral or written. True False

True

Buyer Elliot agrees to an agency relationship with broker Fiona. If their relationship is nonexclusive and the agreement does not bind Elliot to Fiona for a fixed period of time, they may enter into an oral agency agreement. True False

True

Commission rates are negotiated between the client and the brokerage. True False

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. True False

True

One of the duties of a buyer's agent is to perform a comparative market analysis before the buyer makes an offer. True False

True

One of the duties of a listing agent is to perform a comparative market analysis on the property. True False

True

You can contact a former client for up to 18 months after a transaction closes even if that client is on the National Do Not Call Registry. True False

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. True False

True Violators face severe penalties, including fines on the federal level that can exceed $40,000 (periodically adjusted for inflation) per call.

A broker with an open listing on Shelly's property receives a commission only if he is the procuring cause of a sale. True. False.

True.

At the end of the year, what form will an employee receive that details her compensation for the year? 1040-IND 1099 W-2 W-4

W-2

Broker Greg has a 120-day listing contract with Marcia to sell her house. Marcia had hoped that Greg would find her a buyer quickly so that she could avoid declaring bankruptcy, but that is not the case. With 20 days left in the listing period, Marcia declares bankruptcy. Does this terminate their agency agreement? Yes No

Yes

An independent contractor A. has no responsibility to the firm that employs her. B. has taxes withheld from her paycheck. C. is not subject to withholding requirements. D. never pays taxes on her earnings.

is not subject to withholding requirements. An independent contractor is responsible for her own taxes. Her employer does not withhold anything.

Someone working at a brokerage firm in the role of an affiliated agent may be any of the following EXCEPT an employee. an independent contractor. licensed. unlicensed.

unlicensed.