Contracts & regulations 7 A
The buyer agent of company P closed on a property on Tuesday. The buyer agent should bring the completed file and commission check to the broker: as soon as possible by Friday after dinner and a celebration cocktail before the property closes
Files need to be kept in the office unless removed for signatures or closing, then they must be returned ASAP.
In Colorado in the event that an Exclusive Right-to-Buy Contract is not signed by a buyer, the default relationship is that of a: buyer-broker relationship dual agency relationship seller-agency relationship transaction broker relationship
In the absence of a contractual agreement, transaction brokerage is created.
In the Exclusive Right-to-Buy Contract, who is responsible with regard to registered sex offenders? Sex offenders privacy rights are protected by state and federal law Sellers will be required to disclose any sex offenders in the neighborhood Buyers must obtain this information from local law enforcement agencies Brokers must disclose the presence of any known sex offenders
It is the buyer's responsibility to do research to find out about registered sex offenders that may be living in the neighborhood.
The buyer's legal procedure to enforce a contract is: Lis pendens Specific performance An attachment An injunction
Specific performance is the buyer's legal remedy to enforce the terms of the contract
An agent and buyer enter into an Exclusive Right-to-Buy Contract, the Broker must be a buyer's agent Buyer may have agreements with several brokers The broker is bound to work with one buyer at a time Buyer is bound to work with only one broker during the term of the contract
The buyer agrees to only work with one broker with the Exclusive Right-to-Buy Contract regardless of whether it is an Agency or TB contract.
In a buyer-agency situation, what responsibility does the principal have to the agent? To present all offers in a timely manner To account for funds A fiduciary responsibility He may have to pay a commission
The buyer is required to pay a commission. The broker is required to present all offers in a timely manner, account for funds and be loyal.
Which of the following is true when a broker negotiates a fee under the Exclusive Right-to-Buy Contract? The listing broker must pay the negotiated fee at closing The buyer will pay the fee at closing The broker may be directed to seek payment from any or all of several sources If the broker cannot get the fee from the listing broker or seller, the buyer is under no obligation to pay
The buyer may direct the broker to seek payment from various sources. If the broker is unable to collect the fee from any of the other sources, the buyer may be obligated to pay the fee, depending upon which box is checked in para.7 of the contract. (7.1 says buyer is obligated to pay, 7.3 says buyer is not obligated to pay. All other choices in this question are not totally correct so they couldn't be the right answer.
An Exclusive Right-to-Buy contract may: not continue for an indefinite period of time without a specific termination date have a termination date up to one year after the start date of the contract may involve three or more parties to the contract all of the above
all of the above All real estate agency contracts must have a definite beginning and ending date. The start of an Exclusive Right-to-Buy contract may be post dated. The Buy/Sell contracts are limited to a maximum of one year. There is no limit to the number of parties to a contract.
All of the following are true in the Colorado Right-to-Buy Contract except: That the broker may be compensated by the seller Allows for the broker to be an agent for the sellers as well as the buyers May provide that the broker be paid an hourly rate Must have definite termination date
The broker cannot represent both parties in the same transaction as an agent, but may help or assist both as a transaction broker.
In a buyer-agency situation, what responsibility does the agent have to the principal? To be vicariously liable for their actions To pay a commission To disclose psychologically impacting events surrounding a property To be an advocate of the buyer's best interests
A buyer agency relationship establishes advocacy of the buyer's best interest; it is a fiduciary responsibility.
The real estate broker is liable to the buyer if he: executes a contract in the seller's name after proper power of attorney authorization acts in excess of the authority given by his principal makes statements based on misrepresentations by the seller gives buyer's earnest money to seller and sale later fails through no fault of agent
A broker may be held liable for acting in excess of his authority but, normally, not for making a misrepresentation based on statements from the owner. Executing a contract in the name of the principal or acting in excess of the authority given to him by the principal would make him liable to the principal not the buyer.
The alternative dispute resolution, mediation clause, in the Exclusive Right-to-Buy Contract is for the purpose of: limiting the time period for disputes to 30 days encouraging alternatives to litigation reducing the cost of resolving disputes all of the above
All The mediation clause in the Exclusive Right-to-Buy Contract limits the time prior to litigation to 30 days and is designed to reduce the cost of dispute resolution.
Agency disclosure does not have to be made to a buyer under which of the following circumstances? Showing a home at an open house When responding to general factual questions concerning advertised properties During "small talk" regarding general price range, location, property styles, etc. All of the above
All of the above You need to disclose your brokerage relationship in writing before engaging in any activity which requires a brokerage license. Commission rule E-35 states that "brokerage activities" occur when a broker elicits or accepts confidential information from a party concerning specific real estate needs, motivations, or financial qualifications. Activities such as open houses, preliminary conversations, or small talk concerning price range, location, property styles, or responding to general factual questions about properties that have been advertised for sale or lease do not qualify as triggering brokerage activities.
What is the maximum commission rate that a buyer may be charged pursuant to an Exclusive Right-to-Buy contract? 0.028 0.03 0.07 none of the above
Anti-trust laws prohibit price fixing. There is no maximum. All commissions are negotiable.
Under an Exclusive Buyer Agency Agreement, the broker has what agency relationship to the purchaser? Principal Fiduciary Transaction Broker Client
Any time agency is established the broker has a fiduciary responsibility. A fiduciary relationship is one where one person places complete confidence in another in regard to a particular transaction or one's general affairs or business.
How is the relationship handled when a buyer wishes to work with a broker to locate property to purchase? Brokerage will be an agent for the buyer unless there is written agreement for another relationship Buyer and broker must sign an exclusive representation agreement Buyer will be a customer with no working relationship to the brokerage company Buyer and broker may agree to a relationship which could include agency, transaction-brokerage, or no working relationship between the parties
Buyer and broker may agree to a relationship which could include agency, transaction-brokerage, or no working relationship between the parties The buyer has many options: he or she can be an unrepresented "customer" after appropriate disclosure, can sign an agency representation agreement, or can hire the broker as a transaction-broker either in an exclusive arrangement, oral agreement, or by default.
What is the responsibility for disclosure involving registered sex offenders (Megan's Law) according to the Exclusive Right-to-Buy Contract? Sex offenders' privacy rights are protected by state and federal law Sellers will be required to disclose any sex offenders in the neighborhood Buyers must obtain information on known sex offenders from local law enforcement officials Brokers must disclose the presence of any known registered sex offenders
Buyers must obtain information on known sex offenders from local law enforcement officials If the possible presence of registered sex offenders is a concern, the buyer is responsible for contacting local law enforcement officials. This is clearly stated in Exclusive Right-to-Buy Contracts.
In a legally binding contract consideration could be: A refrigerator Money A promise All of the above
Consideration can be cash, something of value, or even as simple as a promise.
A broker enters into an Exclusive Right-to-Buy contract with a purchaser. The purchaser finds a satisfactory property and makes an offer, which is accepted. The listing broker is unavailable during much of the transaction and the selling broker performs several of the listing broker's responsibilities. In gratitude, the seller offers a $500 bonus to the selling broker. When is it acceptable for the broker to receive this money? Never, as he is an agent of the buyer Only with the listing broker's permission With full written disclosure to both parties After clearing it with the Real Estate Commission
Dual commissions are legal with full written disclosure to all parties. However, the bonus must be paid to the selling broker's broker for disbursement. The selling broker can only receive money from his/her broker.
The Exclusive Right-to-Buy Contract is available as: various sizes and shapes multiple flavors different colors buyer-agency and transaction broker relationships
Exclusive Right-to-Buy Contracts can establish either buyer agency or transaction brokerage depending upon which box is checked at the top of the contract. If no box is checked it will be assumed to be a transaction broker relationship.
Which of the following statements is true concerning agency? Payment establishes agency The use of the Brokerage Relationships form establishes agency Office policy establishes agency Written agreement establishes agency
ONLY a written contractual agreement establishes agency.
In a transaction broker situation, what responsibility does the principal have to the agent? To present all offers in a timely manner To account for funds A fiduciary responsibility He may have to pay a commission
Pursuant to the terms of an Exclusive Right-to-Buy Contract the buyer may be obligated to pay a commission.
From whom may the buyer's sales agent receive payment for their services? Anyone Their broker only The listing agent's broker Their client
Their broker only All contracts are with the company, not the agent. The company receives payment from the client and then compensates the agent. An associate broker may only receive their commission from their broker.
Which of the following is true of brokers working for buyers under the Exclusive Right-to-Buy Contract? They may require listing brokers to adjust their offered split to match the buyer's broker's negotiated fee They may negotiate an hourly fee to be paid in addition to any other compensation agreed upon They may also seek a refundable retainer fee, which must be credited toward any fee earned They may also receive compensation from lenders and other service providers without disclosure to the buyer
They may negotiate an hourly fee to be paid in addition to any other compensation agreed upon All compensation received by the buyer's broker must be disclosed. Hourly fees may be charged in addition to other compensation if that is what the parties have agreed upon.
When a buyer executes a real estate sales contract that is accepted and signed by a seller: buyer may take possession of the real estate seller gives buyer ownership rights buyer gets legal title buyer has equitable title
Upon acceptance of the sales contract, the buyer has an interest in the property called equitable title. Legal title is not conveyed until closing.
The length of the holdover period in the Exclusive Right-to-Buy Contract is best described as: a maximum of 120 days a maximum of 180 days a freely negotiable period
a freely negotiable period that may be invalidated when the buyer signs a new Exclusive Right-to-Buy ContractThe Holdover Period says that a broker may be entitled to a commission after the expiration of a buyer agency contract for the period of time specified in the clause if: 1) the broker negotiated with the seller during the listing period and 2) the broker submitted the name of this seller in writing to the buyer. Although the protection is for a negotiated time after the agreement expires, it can terminate early if the buyer signs another buyer agency agreement with another agent and the "Will Not" box is checked, meaning the old agent "will not" be owed a commission if another brokerage firm has earned one. If neither the "'Will' or 'Will Not' be owed a commission" box is checked - the default is "Will Not." See "Holdover Period" in the "When Earned" clause of an Exclusive Right-to-Buy agreement.
A transaction broker may disclose the following information regarding a buyer he is assisting in the purchase of a property: that the buyer is willing to pay more for the property than he offered what the buyer's motivation to purchase the property is adverse material facts regarding the buyer's financial ability to purchase the property what the buyer's race and country of origin is
adverse material facts regarding the buyer's financial ability to purchase the property The buyer's financial ability to purchase the property is considered a fact, which must be disclosed to a seller.
Broker Brown met buyers (the Bakers) at an open house. They established good rapport with each other, and the purchasers signed an Exclusive Right-to-Buy Contract with Broker Brown. The Bakers called Brown on numerous occasions to make an appointment to view properties. In each case Brown had a previous engagement. Finally the Bakers found a home they wanted at a house that was being held open by another broker and the Bakers purchased the property through that broker. When Brown learned of the transaction he demanded his commission, claiming it was rightfully his as a result of the Exclusive Right-to-Buy Contract. Broker Brown: is entitled to receive his commission under the terms of the Exclusive Right-to-Buy agreement did not fulfill his obligations under the terms of the Exclusive Right-to-Buy agreement and is likely not entitled to receive a commission should receive a referral fee from the broker holding the open house as the buyers are rightfully his none of the above
did not fulfill his obligations under the terms of the Exclusive Right-to-Buy agreement and is likely not entitled to receive a commission Broker Brown has not earned a commission. He was obligated to be available when the Bakers' wanted to view properties. By not being reasonably available, he breached the contract.