Unit 8
The seller has signed a listing agreement with a listing firm that authorizes the listing firm to collect a 6% commission. According to company policy, the firm offers 40% of the total commission to any cooperating broker that sells the listing. If another firm sells the listing for $125,000, what commission amount will the listing firm retain?
$4500 $125,000 sales price × 6% commission rate = $7,500 commission × 60% (100% - 40% other firm's split) = $4,500 ABC's share
If a seller needs to net $50,000 after the sale of a property, what is the minimum acceptable sales price if the selling expenses include a 7% commission and $1,200 in additional settlement expenses?
$55,053.76 $50,000 net + $1,200 CC = $51,200,100% - 7% = 93%, $51,200 ÷ 93% = $55,053.76
A house was listed for sale at $84,900. The seller received $71,424 after paying the broker a 7% commission. What was the selling price of the property?
$76,800.00
A building sold for $157,000 with a listing commission rate of 6%. The individual listing broker got 10%; the brokerage firm and the individual selling broker equally split the balance. The individual listing broker's share is
$942.00
In a sales transaction, which of the following statements is/are TRUE of a listing agreement?1. It must be in writing to be legal and enforceable. 2. It requires the seller to sell the property if terms of an offer match the terms in the listing.
1 Only
Under the North Carolina Residential Property Disclosure Act, the seller must 1. provide a completed property disclosure form to the buyer before the buyer makes an offer. 2. disclose all known property defects on the mandatory form.
1 only
The purchaser's right to cancel shall expire if not exercised prior to the following, whichever occurs first:
1. The end of the third calendar day following the purchaser's receipt of the disclosure statement 2. The end of the third calendar day following the date the contract was made 3. Settlement or occupancy by the purchaser in the case of a sale or exchange 4. Settlement in the case of a purchase pursuant to a lease with option to purchase
A total commission of $4,410 was earned from a sale. The listing broker retained 25% of the total commission and paid 5% of the total commission to the multiple listing service. Of the balance of the commission, the co-brokering firm retained 45%, with the balance going to the selling agent. How much commission did the selling agent receive?
1697.85 $4,410 = 100% gross commission: 100% - 25% listing firm - 5% MLS fee = 70% to co-brokering firm/selling agent, $4,410 × 0.70 = $3,087 × 0.55 to selling agent = $1,697.85 (100% - 45% retained by firm = 55%)
A house recently sold for $135,000 at a commission rate of 6.5%. The MLS service received 5% of the commission as a listing fee. The listing broker got 40% of the commission with 55% going to the selling broker. You, the selling agent, have an in-house split of 60% to you, 40% to your broker. What was your earned commission?
2895.75 $135,000 SP × 0.065 = $8,775 gross commission × 0.55 selling broker's share = $4,826.25 × 0.60 your share = $2,895.75
A small office building sold for $949,000. The listing broker received a commission of $54,990. What was the broker's commission rate?
5.8%
Which statement is FALSE regarding oral buyer agency relationships?
All oral buyer agency agreements must be exclusive.
Alonso, who is affiliated with Beautiful Homes Realty, obtains a listing on a property in the countryside, and he signs a listing agreement with the seller. He later finds a buyer for the same property, and the buyer agrees to allow Beautiful Homes Realty to represent her and signs a written buyer agency agreement. Which of these statements is TRUE?
Alonso is a dual agent and must disclose dual agency and get written consent from both parties.
A listing contract contains a clause that gives the broker the right to collect a commission after the listing contract terminates if the owner sells the property to someone the broker introduced to the property. This is what type of clause?
Extender
Jelani is a licensed real estate broker affiliated with Top Gun Realty and has a written buyer agreement with Kristin. At the time that Kristin hired Jelani and his firm, she authorized exclusive agency only. Which of these statements is TRUE regarding the properties Jelani may show to Kristin?
He may show an in-house listing so long as he gets Kristin to consent to dual agency authorization in writing before showing an in-house listing.
Do Not Call exceptions
Real estate brokers may call a consumer they have an established business relationship with for up to 18 months after the consumer's last purchase, delivery, or payment, even if the consumer is listed on the National Do Not Call Registry. A broker also may call a consumer for up to three months after the consumer makes an inquiry or submits an application.
Which statement about listing contracts is FALSE?
Real property is transferred when a listing agreement is signed by the seller.
The following transactions are subject to the Mineral and Oil and Gas Rights Mandatory Disclosure Statement (MOGS):
Sales subject to the Residential Property Disclosure Act (i.e., selling residential property consisting of not less than one nor more than four dwelling units) The first sale of a dwelling never inhabited (i.e., new construction) A lease with option to purchase where the lessee occupies the dwelling Sale of residential property where the parties agree not to complete a Residential Property and Owner Association Disclosure Statement (RPOADS)
All of the following would terminate a listing EXCEPT
nonpayment of the commission by the seller.
Exclusive-agency listing
one broker is specifically authorized to act as the exclusive agent of the principal. However, the seller under this form of agreement retains the right to personally sell the property, without obligation to the broker; the seller can compete with the agent to save the commission
Exclusive right-to-sell listing
one brokerage firm is appointed as sole exclusive agent of the seller and is given the exclusive right, or authorization, to represent the property in question.
A buyer's agent must
properly qualify the prospective buyer/client.
Placing listing in an MLS may be advantageous because
sellers have more marketing exposure for their property.
Curt has just signed his first buyer representation agreement with Ted and Sue. When acting as a buyer's agent, Curt would be upholding his fiduciary duty if he does all of the following EXCEPT
shows the same listing to another buyer after his first buyer has expressed little interest in the property.
The listing broker brings the seller an offer from a buyer customer that meets all the requirements of the listing agreement. The seller decides NOT to sell. This means that
the broker has earned the commission.
Typical matters addressed in a buyer agency agreement include the following EXCEPT
the broker's requirement to disclose the nature of the buyer's offers to other buyer clients.
The North Carolina Residential Property Disclosure Act requires all of the following EXCEPT
the seller must disclose what they know about their property on the mandatory form.
Open listing
the seller retains the right to employ any number of brokers as agents; it is a nonexclusive type of listing. The brokers can act simultaneously, but the seller is obligated to pay a commission only to that broker who successfully procures a ready, willing, and able buyer.
The seller wants to net $85,000 cash from the sales transaction. The sales commission is 7%, the seller's closing costs are $1,000, and the seller's loan payoff figure is $65,000. What must the sales price be to accomplish the seller's goal?
$162,366 $85,000 seller desired net + $1,000 closing costs + $65,000 loan payoff = $151,000 net amount seller needs ÷ 0.93 (100% - 7% comm. rate) = $162,365.59 sales price (rounded up to $162,366.00)
A seller wishes to provide an incentive to his listing broker by offering this compensation structure: the broker will receive 5% on the first $100,000 of purchase price offered; 6% on the next $100,000 of purchase price offered; and 7% on any price offered above the first $200,000. If the seller receives an offer of $310,000 and accepts it, how much will the broker receive?
$18,700 ($100,000 × 5% = $5,000 $100,000 × 6% = $6,000, $110,000 × 7% = $7,700, $5,000 + $6,000 + $7,700 = $18,700)
If dual agency is undisclosed, which of these would MOST likely occur?
Disciplinary action by North Carolina Real Estate Commission and a potential civil lawsuit by the parties
A broker gets a commission if her listed property is sold, no matter who sells it, if she used what type of listing agreement?
Exclusive right to sell
All sellers of residential properties must provide buyers the Residential Property and Owners' Association Disclosure Statement.
False
The North Carolina Association of REALTORS® contracts have been characterized as the only contract forms acceptable for use in North Carolina.
False
Which of the following statements is NOT true about the North Carolina Residential Property Disclosure Act?
If the seller marks "no representation" on the form, the agent is relieved of their duty to discover and disclose material facts.
A broker listed a property at an 8% commission rate. After the sale closed, the seller discovered that the broker had been listing similar properties at a 7% commission rate. Based on this information, which of the following statements is/are TRUE? 1. The broker has violated antitrust laws. 2. The seller can cancel the listing agreement without penalty.
Neither 1 or 2
Anne is representing a buyer as a single agent to purchase a for-sale-by-owner property. The seller has agreed to pay Anne a 2.8% fee at closing of the sale. Anne has nothing else in writing, so she attaches an addendum to the offer 1) stating the agreed-to amount of commission to be paid, 2) including disclosure that Anne is a single agent and the seller will be a third party, and 3) using language to the effect that Anne has no liabilities for any representations made to the seller. Are Anne's actions acceptable?
No, Anne should have used a separate agreement to address the commission, the proper form for disclosure of agency, and she cannot limit her liability.
Under North Carolina law, which form of oral representation would be allowed?
Oral nonexclusive buyer agency before writing an offer
Do not contact laws govern all the following areas EXCEPT
Postal mail
The listing broker found no issues during a visual inspection of the property. The seller's residential property disclosure states that there are no problems. After closing, the buyers find long-standing issues with water entering the basement. Who is MOST likely to be held liable for nondisclosure of this latent material defect?
The seller only, because brokers are not responsible for undisclosed latent defects
Tony, a real estate broker, is assisting a buyer purchasing a property. While showing a property listed with Tony's firm, he notices that the hot water faucet was not operating properly in the downstairs bathroom. Regarding questions on the residential property disclosure statement, the seller has checked all the boxes with "no representation." When the prospective buyer expresses interest in the home, what are Tony's obligations?
Tony must disclose the faucet issue as a material fact to the firm's seller, and he must also disclose it to the firm's prospective buyer, even if the seller objects to such disclosure.
A real estate broker may work with a buyer initially with an oral agreement, but once the buyer asks for assistance with developing an offer, the broker must be formally employed by that buyer using a written agreement.
True
Real estate brokers may call consumers with whom they have an established business relationship for up to 18 months after the consumer's last transaction even if the consumer is listing on the National Do Not Call Registry.
True
Sellers of brand-new homes must provide a complete Mineral, Oil and Gas Disclosure Statement (MOG) to consumers.
True
When scheduling properties for showing, the buyer's agent must disclose her agency status to the listing agent or to the seller if the seller is a for sale by owner.
True
Klara is a licensee who is representing a seller. At the open house, a buyer indicates that he is interested in purchasing the home. Klara has an agency discussion with the buyer, provides him with the Working with Real Estate Agents brochure and has the buyer sign a buyer agency agreement. What else must Klara have from both the seller and the buyer in order to proceed with the transaction?
Written disclosure and consent to dual agency representation
The state-mandated oil and gas rights disclosure language is required in sales contracts for all of the following EXCEPT
an office building.
The owner is required to separately disclose as to 1) mineral rights and 2) oil and gas rights whether:
any previous owner has severed the mineral or oil and gas rights, the current owner has severed either mineral or oil and gas rights, or the current owner intends to sever either mineral or oil and gas rights prior to transferring the property to the purchaser.
Concerning the Residential Property Disclosure Statement, a listing broker should
assist the seller by answering questions and giving guidance.
The NCREC rules require a listing broker who is about to discuss a buyer's confidential information with a buyer consumer to do all of the following EXCEPT
give the Working with Real Estate Agents disclosure at first physical contact.
In North Carolina, a listing agreement
is required by North Carolina License Law to be written from formation.
