Real Estate Online - Agency
An organization of real estate brokers that exists for the purpose of exchanging listing information is known as a:
The answer is "multiple listing service." A "multiple listing service" is an organization of brokers who have agreed to exchange listings. The listing broker will be paid a commission if any member of the service sells the property, and will share the commission with the selling broker. Members of the service have a contractual obligation to distribute their listings to the other members.
A salesperson works for ABC Realty and sells a property listed by XYZ Realty, which pays the buyer's representative an MLS co-op fee. The salesperson may only receive her commission from:
The answer is ABC Realty. A salesperson may receive compensation ONLY from his or her principal broker.
The seller has asked the salesperson to lower the listing commission, which of the following is an appropriate response?
The answer is I will need to ask my broker if I can accept that price. Only the principal broker can set or change the fees the firm charges. All other choices are in violation of antitrust laws.
The acronym used to remember the fiduciary responsibilities that a real estate agent has to the principal is:
The answer is OLD CAR. Obedience, loyalty, disclosure, confidentiality, accounting, and reasonable skill and care.
If brokers conspire to set commission rates, it is a violation of the:
The answer is Sherman Antitrust Act. Collectively setting commissions with other firms is an antitrust violation.
A seller has told the listing agent that she will take less than the asking price. The listing agent stated this in a marketing session at the board of REALTORS. In this case, the listing agent's statement is:
The answer is a breach of confidentially. An agent may not share any confidential information with anyone unless he or she has written permission.
A multiple listing may properly be defined as a listing agreement in which:
The answer is a broker with an exclusive listing has a contractual obligation to distribute the listing among certain other brokers. A multiple listing service is an organization of brokers who have agreed to exchange listings. The listing broker will be paid a commission if any member of the service sells the property, and he will share the commission with the selling broker. Members of the service have a contractual obligation to distribute their listings to the other members.
The relationship between a real estate agent and his or her client is which of the following?
The answer is a fiduciary relationship. An agent and principal have an agency relationship. An agency relationship is a fiduciary relationship. Agents (or fiduciary) must be loyal to their clients, fully disclose all material facts to their clients, account for all moneys to their clients, use skill, care, and diligence, and obey all lawful instructions of their clients. Universal agency is created by a power of attorney. General agency is most typically found in property management contracts. Dual agency is between an agent and two or more parties.
A licensee acting on behalf of a property owner is best described as:
The answer is a fiduciary. An agent is a fiduciary (holding a position of trust). An agent (or fiduciary) must be loyal to his principal, fully disclose all material facts to his or her principal, account for all moneys to his or her principal, use skill, care, and diligence, and obey all lawful instructions of his or her principal. An agent is a dual agent if representing more than one principal in the transaction. An agent is an implied agent if acting without express authorization, but assuming authority based on the principal's actions.
On the day of closing, the sellers inform the listing broker that they are not going to close and want to keep their home. The listing brokerage firm, in this case, is owed?
The answer is a full commission. The broker is entitled to the commission, since it was the seller's fault that the sale did not close. Liquidated damages is found only in purchase contracts and is tied to the buyer being in default.
To be valid, an exclusive right to sell listing must have:
The answer is a specific ending date. All listing contracts must be written and have a definite termination date to be enforceable in court. Liquidated damages are used in sales contracts only. The listing contract requires the brokerage to find a ready, willing, an able buyer to earn the commission.
To create a valid listing for the purposes of selling real estate, a broker must have:
The answer is a written contract. The Statute of Frauds requires listings of real property to be written. A power of attorney, which would authorize the broker to sign contracts on behalf of the seller, is not needed and is generally not given.
The relationship established between a principal and an agent is known as:
The answer is agency. The relationship is agency, with the agent having fiduciary obligations to the principal.
Someone who is employed by and has the legal authority to act for someone else is called a(n):
The answer is agent. Agents are authorized to act for the principal.
A listing agreement between a brokerage firm and seller may be terminated by:
The answer is all of these. A listing may be terminated by death of the principal broker or seller, bankruptcy of the principal broker or seller, destruction of the property, performance (producing a ready, willing, and able buyer), mutual consent of the principal broker and seller, or expiration of the listing period. Because listings create agency relationships, death of either party will terminate the listing, and the heirs are not bound to the contract. Bankruptcy and destruction of the property would make performance impossible, so they, too, terminate the listing.
In order to create a valid listing contract, who must sign the contract?
The answer is all property owners and the agent. All sellers and the listing agent, who represents the brokerage firm, must sign the listing contract. If only one of the property owners signs, the sale cannot include the full property, only the ownership rights of the party signing.
"Single agency" refers to:
The answer is an agent who represents only one party. Single agency means the agent represents only one party.
A listing agreement is:
The answer is an employment contract. A listing agreement is an employment contract. It authorizes the broker to try to find a buyer for the seller's property. It is not a purchase or option to sell contract.
Which of the following statements about brokerage operations is correct?
The answer is an exclusive agency listing permits the owner to sell without being liable for a commission. An exclusive agency listing provides that the broker is entitled to a commission if any agent sells the property. This allows the owner to sell the property himself and not be liable for a commission. The broker's commission is established by negotiation and not limited by law. Agreements between brokers or between brokers and salespersons may be oral. The broker can receive a commission if he procures the buyer during the listing period and the seller accepts the offer or negotiates the sale after the listing period expires according to the protection (safety) clause found in most listings.
The seller has given the brokerage firm an exclusive agreement that allows the company to earn a full commission upon the closing of the sale of the property, no matter who procures the buyer. This is know as:
The answer is an exclusive right-to-sell listing. The exclusive right-to-sell provides that the broker will be paid a commission regardless of who sells the property, including the owner.
A listing that allows an owner to list concurrently with more than one brokerage firm is:
The answer is an open listing. An open listing provides that the broker will be paid a commission if he or she procures a buyer at terms listed or acceptable to the seller. It allows the seller to sell the property and to enter into listings with other brokers, since the seller's obligation is to pay the listing broker only if the broker procures the buyer.
An agent is approached by a couple to find them a home. When should the agent disclose to the couple that she works for the seller?
The answer is as soon as possible. Disclosure must be made as soon as possible and before any confidential items are shared by the consumer.
When should licensees disclose whom they represent to members of the public?
The answer is as soon as possible. Disclosure must be made as soon as possible and before any confidential items are shared by the consumer.
The person to whom a power of attorney is granted is called the:
The answer is attorney-in-fact. Universal agency gives the "attorney in fact" unlimited power to bind and act in place of the principal. An attorney at law is a lawyer.
As an agent for the seller, a principal real estate broker, is usually authorized to do all of the following EXCEPT:
The answer is bind the client under a sales contract. Listing authorizes the broker to act as an agent, in a fiduciary capacity, to find a buyer for the property. It does not usually give the broker authority to accept offers and bind the seller to a sale or to reject offers on behalf of the seller. The broker, instead, must submit all written offers to the seller for acceptance or rejection. Generally, the listing will authorize ads, "for sale" signs, and cooperation with other brokers.
A real estate agent for the seller is usually authorized to do all of the following EXCEPT:
The answer is bind the principal under a sales contract. A listing authorizes the broker to act as an agent, in a fiduciary capacity, to find a buyer for the property. It does not usually give the broker authority to accept offers and bind the seller to a sale or to reject offers on behalf of the seller. The broker, instead, must submit all written offers to the seller for acceptance or rejection. Generally, the listing will authorize ads, "For Sale" signs, and cooperation with other brokers.
Which of the following breaches ethical standards?
The answer is both underpricing and overpricing properties. Both underpricing and overpricing properties breach a licensee's ethical duty.
To create buyer agency, the agent and buyer sign a:
The answer is buyer agency contract. Buyer agency is created by a buyer agency contract.
A seller engages a real estate broker to find a buyer ready, willing, and able to purchase the seller's parcel of real property. The seller executes and delivers to the broker an exclusive right-to-sell employment contract. A few weeks prior to the expiration date of the employment contract, the seller decides to revoke the contract before any sale occurs and prior to the broker finding a buyer ready, willing, and able to buy the property. The owner:
The answer is can revoke this contract but could be liable for damages. No one can be forced to retain an agent he or she does not want, or represent a seller he or she cannot perform loyally for. Therefore, unless the agency is coupled with an interest, either the seller or the broker can terminate the listing at any time. However, if the broker will suffer a loss (e.g., advertising expense) the broker could sue to recover damages for his or her loss.
A broker's listing contract in the form of a letter addressed by the owner to the broker provides that the broker will be paid a commission if within 30 days the real estate is sold for $30,000 "by you, by me, or by anyone else." This:
The answer is creates an exclusive right to sell listing. The exclusive right-to-sell provides that the broker will be paid a commission regardless of who sells the property, including the owner. Since the letter was in writing, it complies with the Statute of Frauds.
The maximum amount of commission on a real estate transaction is:
The answer is determined by the broker's contract with the seller. There is no law, rule, regulation, etc., limiting commissions. Commissions are established by the listing contract as negotiated between the real estate professional and the client.
It is improper for a broker representing the owner to:
The answer is disclose to a buyer that a homeowner will take less than the list price. An agent must be honest regarding the property. Being honest does entail disclosing defects in the property and advising a party to seek expert advice when necessary. Agents may not share confidential information of the principal they represent unless given written permission.
A buyer's agent who is calling to set up a showing on a listed property should disclose the fact that she represents the buyer so that the listing agent can avoid:
The answer is divulging confidential information. The listing agent should avoid sharing the sellers confidential information with anyone, but in particular, a buyer's agent.
An agency listing agreement between the owner of real property and a real estate broker:
The answer is does all of these. An agency listing is an employment contract establishing an agency relationship between the broker and seller. An agency relationship is a fiduciary relationship. A fiduciary relationship is a position of trust and loyalty, which an agent has with regard to the client. Since the listing establishes an agency relationship only for the purpose of securing a buyer, it must define the agent's authority and responsibility as well as the seller's responsibility when the broker performs the required acts.
An agent representing both the buyer and seller in the same transaction is called:
The answer is dual agency. Acting as an agent for both parties is dual agency. Transaction brokerage is non-agency. Representing only one party is single agency,. Dual capacity occurs when an agent is also a principal in the same transaction.
Which type of listing allows the broker the right to collect a commission if any other brokerage firm brings a buyer but not if the seller obtains the buyer?
The answer is exclusive agency listing. An exclusive agency listing provides that the broker is entitled to a commission if any other real estate professional sells the property. This allows the owner to sell the property himself and not be liable for a commission.
Which of the following statements concerning commissions is TRUE?
The answer is exclusive agency listings permit the owner to sell without being liable for a commission. An exclusive agency listing provides that the broker is entitled to a commission if any agent sells the property. This allows the owner to sell the property himself and not be liable for a commission. The broker can receive a commission if he procures the buyer during the listing period and the seller accepts the offer or negotiates the sale after the listing period expires according to the protection (safety) clause found in most listings. Commision sharing agreements between brokerage firms or between brokers and salespersons may be oral. The broker's commission is established by negotiation and is not limited or created by law.
The most common type of listing contract, which gives the brokerage firm maximum protection, is known as:
The answer is exclusive right to sell. The listing gives the maximum protection to the firm, since the firm will be paid no matter who sells the property.
The principal broker at XYZ Realty has told her salespeople to try to only sign listing contracts that give the firm the most protection. In this case, the salespeople should be trying to get what type of listings?
The answer is exclusive right-to-sell listings. An open listing provides for the broker to be paid a commission if he or she procures a buyer at terms listed or acceptable to the seller. It allows the seller to sell the property himself and to enter into listings with other brokers, since his obligation is to pay the listing broker only if the broker procures the buyer.
A broker is entitled to a commission regardless of who sells the property during the listing period if he or she has which of the following listings?
The answer is exclusive right-to-sell. The exclusive right-to-sell provides that the broker will be paid a commission regardless of who sells the property, including the owner.
The position of trust assumed by the broker as an agent for the principal is described most accurately as a:
The answer is fiduciary relationship, which is a position of trust. An agency relationship is a fiduciary relationship. Agents (or fiduciaries) must be loyal to their principal; fully disclose all material facts to their principal; account for all moneys to their principal; use skill, care, and diligence; and obey all lawful instructions of their principal.
When an agency relationship is created, the agent has a relationship to the principal known as a:
The answer is fiduciary relationship. The obligations an agent owes the principal create the fiduciary relationship. It may be an exclusive or general agent relationship.
A listing broker shows a buyer a rural property. When the buyer asks about getting a water permit, the broker says it should not be an issue, even though he is aware that the seller was recently denied a water permit. After closing, the buyer is also denied a water permit. The broker's behavior is considered to be:
The answer is fraud. Fraud is a deceitful misstatement of a material fact known to be false, done with intent to deceive or with reckless indifference as to its truth, and relied upon by the injured party, to his or her detriment (damage).
The type of agency, which is typical in property management, in which the agent has limited authority to bind the principal is known as:
The answer is general. A general agent such as a property manager has limited power to bind the principal. Universal agency gives the "agent in fact" unlimited power to bind and act in place of the principal. Special or specific agency has no power to bind the principal.
In an exclusive right to sell listing where the broker procures a ready, willing, and able buyer whose offer has been accepted, but the sale is not closed, the brokerage:
The answer is has earned a commission. The commission has been earned and will be paid at closing, and if the seller refuses to sell, the brokerage firm can sue the seller for the fee owed.
A broker receives two offers, at practically the same time, on a property he has listed. He gets one directly from a proposed buyer. The other comes from a cooperating broker, and, if it is accepted, he will get only 1/4 of the commission. Under these conditions, which of the following statements is TRUE?
The answer is he should submit both offers to the seller and let the seller make his choice. An agent must promptly submit all written offers to the seller until the seller accepts an offer. The agent does not have to submit offers in the order received.
When a real estate agent represents more than one party in a transaction and this representation of more than one party is with knowledge and written consent of all parties,:
The answer is his action is called a "dual agency." Representing two principals in a transaction is a "dual agency." This is legal if both principals are aware of it and give their consent. Single agency is representing only one party in the transaction.
As a listing agent, what obligations do you owe to an unrepresented buyer?
The answer is honesty and fairness. An unrepresented buyer is a customer who is owed honesty and fairness.
In the seller's property disclosure, the seller failed to disclose that he had electrical work done by an unlicensed handy man. He also told the salesperson that all work on the home was done by license professionals who pulled permits. After closing, the buyer discovered a number of electrical issues and sued both brokerage firms, the seller's agent and the buyer's agent. In this case, the seller's agent:
The answer is is innocent of any wrongful act. Both agents are liable for material facts of which they knew or should have known. Neither of the agents would have been expected to know these facts. However, the buyer's agent should have recommended that the buyer have the property inspected. The seller's agent and brokerage firm did nothing wrong.
A dual agency is:
The answer is legal if written consent by both parties is given. Dual agency, if allowed by the state agency law, requires the written consent of both parties.
An owner of property gave a listing to a principal broker. Shortly thereafter, the owner died. In this case, the:
The answer is listing is immediately terminated. A listing may be terminated by death of the principal broker or seller, bankruptcy of the principal broker or seller, destruction of the property, performance (producing a ready, willing, and able buyer), mutual consent of the principal broker and seller, or expiration of the listing period. Because listings create agency relationships, death of either party will terminate the listing, and the heirs are not bound to the contract.
The prime obligation of an agent to the client is:
The answer is loyalty. The agent's prime obligation is to be loyal to his or her client. Therefore, the agent must fully disclose all material facts to the client, account for all moneys to the client, use skill, care and diligence, and obey all lawful instructions of the client.
A real estate agent:
The answer is may act as dual agent with the knowledge and written consent of both parties. An agent may represent any number of parties in a transaction, provided he or she has the knowledge and written consent of all parties to do so. While the agent is a fiduciary, he or she is not neutral and must represent the interest of his or her principal.
Any commission paid to a broker under a buyer-broker agreement:
The answer is may be paid by either the buyer or seller. The brokerage firm's commission may be paid by either the buyer or seller. It is typically paid by the seller. However, commissions are always negotiable, so they can be paid by the buyer.
Any commission paid to a broker under a listing agreement:
The answer is may be paid by either the buyer or seller. The brokerage firm's commission may be paid by either the buyer or seller. It is typically paid by the seller. However, commissions are always negotiable, so they can be paid by the buyer.
A listing broker trying to make a sale:
The answer is may make statements of opinion as long as they are noted as such and are not intended to deceive. Opinions are acceptable as long as they are stated as opinions and not intended to deceive. All material facts, even if unpleasant or not brought up by the party, need to be disclosed.
Which of the following is NOT a strict legal term for a type of employment contract or listing?
The answer is multiple listing. A multiple listing is an exclusive listing sent to a multiple listing service. It is not a form of listing agreement.
In order to be enforceable, an exclusive listing for residential property:
The answer is must be signed by all owners and the listing agent. The listing must be in writing and signed by the owner and listing agent. The exclusive listing may contain words specifying the fact that the brokerage would be entitled to a commission regardless of who sold the property, without ever stating "exclusive right to sell."
At the time of her death, Mrs. Sampson, a licensed broker, had 50 listings. The business, including all its assets, was left to her daughter, Jane Jones, who was also a licensed real estate broker. If the daughter wished to legally collect commissions on the sale of the listed properties, she would be required to:
The answer is negotiate a new listing with each of the 50 property owners. Agency agreements are personal contracts, and therefore, terminate with the death of the principal or the agent. They cannot be sold, assigned, or inherited. To collect commissions, the daughter must negotiate new listings.
The amount of a commission the listing brokerage firm receives for the sale of a property is determined by:
The answer is negotiation between seller and the listing broker. All commissions are always determined through negotiation. Only the principal broker of the firm may set commission rates within the firm. Collectively setting commissions with other firms is an antitrust violation. Commission rates are not regulated by law or set by Boards of REALTORS.
The commission rate for the sale of real estate is determined by:
The answer is negotiation with the seller. There is no law, rule, regulation, etc., limiting commissions. Commissions are established by the listing contract negotiated between the real estate professional and the seller. Note, it is a violation of anti-trust laws for brokers to agree on rates to be charged.
A licensed real estate broker took an exclusive agency listing from an owner for a 90-day term. After the broker had expended considerable time and expense in trying to locate a buyer, the owner sold the property himself during the listing period. Under these circumstances, the broker was entitled to:
The answer is no commission. An exclusive agency listing provides that the broker is entitled to a commission if any agent sells the property. This allows the owner to sell the property himself and not be liable for a commission.
A buyer's single agent presenting an offer to the listing agent represents:
The answer is only the buyer. A single buyer's agent represents only the buyer.
An owner signed a listing with a broker where it was understood that, if the property were sold through the efforts of any other broker or the owner, the listing broker would not be entitled to a commission. This kind of listing contract is called a(n):
The answer is open listing. An open listing provides for the broker to be paid a commission if he procures a buyer at terms listed or acceptable to the seller. It allows the seller to sell the property himself and to enter into listings with other brokers, since his obligation is to pay the listing broker only if the broker procures the buyer.
A written instrument giving authorization to a person to act as an agent on behalf of another for one specific act or transaction is called:
The answer is power of attorney. An attorney-in-fact is created by a power of attorney. An agency in real estate is created by a listing agreement or buyer's brokerage agreement.
The difference between an exclusive right-to-sell listing and an exclusive agency listing is that in the exclusive agency listing, the:
The answer is principal will owe no commission if the principal sell's the property on his or her own. An exclusive agency listing provides that the broker is entitled to a commission if any agent sells the property. This allows owners to sell the property themselves and not be liable for a commission. Under an exclusive right-to-sell listing, the broker is entitled to the commission if anyone, including the owner, sells the property. Either type of listing may provide that the agent will pay promotional expenses (or may provide that the seller will do so). The seller has the right to sell on his or her own property, in either case. The exclusive agency listing provides that the seller does not owe a commission if he or she does sell the property. The exclusive right-to-sell listing provides that the seller owes a commission if he or she does sell the property. It is false to imply that the agent would not be paid under any circumstance.
The party who is represented by an agent is always called the:
The answer is principal. An agent represents a principal who may or may not be a seller.
A broker had an open listing on a house. To collect a commission, she would have to prove all of the following EXCEPT:
The answer is she has the only open listing on the property. To get a commission on an open listing, the broker must have a license, find a buyer, and be the procuring cause (the one whose efforts produced the offer). Other brokers may also have open listings on the property at the same time, but only the procuring cause broker will earn the commission.
The type of agency a listing agent has with a principal is known as:
The answer is special agency. Special or specific agency, which a listing agent has, gives the agent no power to bind the principal. A general agent, such as a property manager, has limited power to bind the principal. Universal agency gives the "agent in fact" unlimited power to bind and act in place of the principal. Dual agency is representing two parties in the same transaction.
A real estate broker representing the seller usually is a(n):
The answer is special agent. A special agent is an agent given authority to represent the principal in one specific transaction. The broker is not given general agency authority to perform in a range of matters. He is given authority to try to arrange a sale of the property for the seller. This authority is given in the listing agreement and creates an express agency rather than an ostensible (apparent) agency or a broader universal agency.
ABC Realty has an exclusive agency listing on the seller's property and has put it in the MLS. A salesperson from XYZ Realty brings an offer, which the seller accepts, and the transaction closes. The commission will be:
The answer is split between the two brokerage firms, per the MLS terms. In an exclusive agency listing, the brokerage firm who lists the property (ABC Realty) will receive a commission if anyone other than the seller sells the property. In this case, since the property was listed in the MLS, the commission is split between the two firms, based upon the local MLS agreement.
The duty of loyalty to a principal's interests requires a listing agent to:
The answer is submit all written offers received on the property. Listing agents must submit all written offers to their principal.
A broker had an exclusive listing on a house. The listing price was $73,250; the commission was 8% of the selling price. The broker received an offer from a buyer for $71,500, along with a $7,000 deposit. The offer included a termite and dry rot inspection as a contingency. The seller accepted the offer and instructed the broker to deposit the $7,000 into escrow. The broker should deposit:
The answer is the $7,000 with an escrow company to which the parties have agreed. The broker must follow all legal instructions of his principal. He must place the funds in escrow. He cannot withdraw the funds for his use until authorized to do so. Use of clients' funds is called conversion. He cannot put his clients' funds in an account with his own funds. Mixing of his funds with clients' funds would be commingling. Conversion and commingling are illegal.
The commission a buyer's agent earns is paid by:
The answer is the buyer or seller or listing firm. The commission earned by a buyer's agent may be paid by the buyer, seller, or listing brokerage firm.
Under a buyer representation contract, a salesperson working for this broker must represent:
The answer is the buyer's interest. Buyer representation contracts create buyer agency, with the firm representing the buyer.
A seller signed an exclusive right-to-sell listing for his residence for a term of 6 months with a local brokerage firm. The price was set at $30,000; the commission was to be 6%. During the listing period, the house was destroyed by a fire. Under these circumstances:
The answer is the firm is not entitled to a commission, and the listing is terminated. Real estate listings create employment or personal service contracts, which are terminated by death of the broker or seller, bankruptcy of the broker or seller, destruction of the property, performance (producing a ready, willing, and able buyer), mutual consent of the broker and seller, or expiration of the listing period.
The amount of commission a principal broker must pay a salesperson from a real estate sales transaction is determined by:
The answer is the independent contractor agreement. The salesperson's share of the commission is determined by the Independent Contractor agreement between the principal broker and the salesperson. The purchase contract would only show the commission paid to the principal broker, not the portion to the broker.
In an exclusive right to sell listing, if the owner sells the property who gets the commission?
The answer is the listing brokerage. With an exclusive right to sell, the brokerage firm gets paid no matter who sells the property.
In creating a valid agency relationship, the party or parties who must be legally competent include.
The answer is the principal(s) and agent. All parties must sign the listing contract.
A broker acting under a listing contract for the sale of a residence usually receives his commission when:
The answer is the sale is closed. The broker is usually paid from the sales proceeds at closing.
A seller signed a 90-day listing for his property with a salesperson for ABC Realty. One month later, the seller died. At the same time, the salesperson received an offer for the property. Which of the following is correct concerning the offer?
The answer is the seller's estate is not required to sell the property or pay a commission. A listing may be terminated by death of the broker or seller, bankruptcy of the broker or seller, destruction of the property, performance (producing a ready, willing, and able buyer), mutual consent of the broker and seller, or expiration of the listing period. Because listings are employment contracts, death of either party will terminate the listing, and the heirs are not bound to the contract. Death terminated the listing and all obligations under it.
Under a listing contract, a salesperson working for the listing broker must represent:
The answer is the seller's interest. Listing contracts create seller agency, with the firm representing the seller.
The commission for a listing is determined by negotiation of:
The answer is the seller, salesperson and broker. Commissions are negotiable in all cases. The principal broker has the right to set the fees for the firm and may be involved along with the salesperson in negotiating for a listing commission with the seller.
In the most common kind of agency relationship, a real estate broker represents:
The answer is the seller. While buyer agency has increased, it is still most common for an agent to represent the seller.
A salesperson for ABC Realty has moved to XYZ Realty. What happens to the listings the salesperson took at ABC Realty?
The answer is they belong to ABC Realty. The listings belong to ABC Realty, not the salesperson who listed the property.
A broker who does NOT have an agency relationship with any of the parties and who performs ministerial acts for one or more of the parties for compensation is known as a(an):
The answer is transaction broker. A designated agent is an affiliated licensee who is assigned by the broker to represent only one client in a transaction, while another licensee is assigned by the same broker to represent a different client in the same transaction. A dual agent is a broker who has an agency relationship with both the seller and the buyer or both the landlord and the tenant in the same transaction.
Which form of agency gives the agent the broadest powers to act for the principal?
The answer is universal agency. Universal agency allows the agent unlimited power to bind and act for the principal.
The type of agency in which an agent has legal authority to act in place of the principal is known as:
The answer is universal agency. Universal agency gives the "attorney in fact" unlimited power to bind and act in place of the principal. General agency has limited power to bind the principal, and special or specific agency has no power to bind the principal.
An agent owes her principal the duty of following all instructions. In the event that the principal asks the agent to commit an unlawful act, the agent should:
The answer is withdraw from the listing. When required to commit an unlawful act, the agent should refuse, and withdraw from the agency relationship.
To be enforceable, a listing must be:
The answer is written. All listing contracts must be written and have a definite termination date to be enforceable in court.
A seller has signed a listing agreement with a brokerage firm to sell her home. By the terms of the agreement, the firm will definitely receive a commission if the home is sold by anyone during the listing period. This type of contract is called a(n):
The answer is "exclusive right-to-sell." The exclusive right-to-sell provides that the broker will be paid a commission regardless of who sells the property, including the owner.
A seller listed her townhouse with a local real estate broker. The listing is an example of.
The answer is a special agency. Listing and buyer representation contracts create special agency.
ABC Realty has an exclusive agency listing, and a cooperating brokerage firm brings an offer, which the seller accepts. In this case, who will receive a commission?
The answer is both firms. In this type of listing, the firm and co-op brokerages will be paid if they sell the property. No one earns a commission if the seller sells the property herself.
A listing broker receives his authority to accept an earnest money deposit in the:
The answer is listing contract
In a single agency relationship, a real estate broker represents:
The answer is only a buyer or seller, not both. Single agency means the agent represents only one party.
Commissions are set by negotiation between the:
The answer is principal and broker. Commissions are negotiated between the brokerage firm and the principal being represented. The Real Estate Commission would not be part of negotiation, as it would violate anti-trust law.
A person who hires or appoints an agent is called the:
The answer is principal. The principal is the party the agent works for and who the agent owes fiduciary duties to. An attorney-in-fact is one type of agent. An agent has a fiduciary responsibility to the principal.
An independent broker has sold her company to XYZ Realty. What happens to the active listings she has?
The answer is she cannot transfer her listings. Contracts for personal services, including listing contracts, cannot be assigned. Therefore, the listings cannot be transferred to another brokerage firm.
A listing agreement between a real estate brokerage firm and a seller is known as what form of agency?
The answer is special. Special or specific agency, which a listing agent has, gives the agent no power to bind the principal. A general agent, such as a property manager, has limited power to bind the principal. Universal agency gives the "agent in fact" unlimited power to bind and act in place of the principal.
A seller offers to pay the listing salesperson a bonus if she gets an accepted offer within the first 30 days. If the salesperson earns the bonus, who will pay it?
The answer is the broker, after closing. A salesperson may receive compensation ONLY from his or her principal broker.