Unit 8: Real Estate Brokerage
Affiliate designation of NAR specializing in residential property
CRS
An independent contractor and a broker can agree upon which of the following?
Compensation the contractor would receive
Which group of people is protected the MOST by real estate license laws?
Consumers
Has completed the requirements of the REALTOR Institute
GRI
Two or more businesses conspiring against another business
Group boycott
After license laws are enacted by the legislature, who is responsible for adopting administrative regulations?
Licensing authority (division, Commission, etc.)
Has an established Code of Ethics that REALTORS must subscribe to
NAR
A list of phone numbers from consumers who want to limit telemarketing calls
National Do Not Call Registry
Member of the National Association of Realtors
REALTOR
Which of the following is allowed under antitrust laws?
Real estate companies agreeing not to cooperate with a broker because of the fees that the broker charges
Sales associate A and sales associate B work for the same firm. They agree to divide their region into an eastern half and a western half; sales associate A will handle listings in the east, and sales associate B will handle listings in the west. Which statement is TRUE?
The agreement does not violate antitrust laws
Two sales associates who work for the same firm agree to divide their town into a northern region and a southern region; one sales associate will handle listings in the north, and the other will handle listings in the south. Which statement is TRUE?
The agreement does not violate antitrust laws
A real estate company has adopted a 100% commission plan. The monthly desk rent required of sales associates is $1,500, payable on the last day of the month. In August, a sales associate closed a transaction that earned a commission of $11,370 and a second transaction that earned a commission of $6,875. The sales associate's additional expenses for the month were $2,170. How much of the total monthly income did the sales associate keep?
$14,575
Two real estate professionals were found guilty of conspiring with each other to allocate real estate brokerage markets. A seller suffered an estimated $90,000 loss because of their activities. If the seller brings a civil suit against the two real estate professionals, what can the seller expect to recover?
$270,000 plus attorney's fees and costs
Assuming that the listing broker and selling broker split their commission from a transaction equally, what was the sales price of a rural property if the commission rate was 6.5% and the listing broker received $12,593.50?
$387,492 2 × $12,593.50 = $25,187 $25,187 ÷ 0.065 = $387,492
On the sale of any property, a sales associate's compensation is based on the total commission paid to the broker. The sales associate receives 30% of the first $2,500, 40% of the next amount between $2,500 and $7,500, and 50% of any remaining amount exceeding $7,500. If a property sells for $234,500 and the broker's commission rate is 6.5%, what is the sales associate's total compensation?
$6,621.25
Providing product or service to customer only if customers buys another product or service as well
Tie-in arrangement
A real estate broker is licensed to buy, sell, exchange, or lease real property for others and to charge a fee for those services.
True
ARELLO promotes state licensing standards.
True
All 50 states regulate the activities of real estate professionals.
True
Group boycotting, allocation of customers or markets, and tie-in agreements are all prohibited acts under the Sherman Antitrust Act.
True
Laws cannot guarantee an ethical or moral marketplace.
True
Many trade organizations serve the real estate business. The largest is the National Association of REALTORS® (NAR).
True
Real estate license laws are intended to protect the public.
True
The purpose of the Electronic Signatures in Global and National Commerce Act (E-Sign) is to make contracts (including signatures) and records legally enforceable, regardless of the medium in which they are created.
True
What is the practice called when a consumer selects specific services to use and only pays the real estate professional for those services?
Unbundling services
Sets basic rules for entering an enforceable contract using electronic means
Uniform Electronics Transactions Act
Real estate professionals should do which of the following when using text messages to communicate with clients?
Use clear and concise language and follow any state laws regarding text messaging
All of these are violations of federal antitrust law EXCEPT
commission splitting
4 A recent important change to real estate brokerage practice is
digital communication in all its forms
The Uniform Electronic Transactions Act encourages the use of
electronic signatures
An important purpose of the E-Sign Act is to
give contracts created using email the same legal standing as those on paper
The National Association of REALTORS® has adopted a code of ethics for
its members
National Association of Real Estate Brokers (NAREB)
members are known as Realtists
A real estate sales associate has a licensed personal assistant who usually must be
paid by the sales associate's employing broker
Regarding the collection of information from visitors to an internet site, brokers should
post a privacy policy and limit the personal information that can be collected from children younger than 13
Do-not-call registries and laws such as the Telephone Consumer Protection Act, Junk Fax Prevention Act, and rules of the Federal Communications Commission dictate
prohibited communications
The primary purpose of the Uniform Electronic Transactions Act (UETA) is to
remove barriers in electronic commerce that would otherwise prevent enforceability of contracts
The moral principles of a profession include
standards for integrity as well as a code of conduct
The National Association of REALTORS® is composed of
state, regional, and local associations
Even if a consumer has requested placement on the National Do Not Call Registry, a real estate professional may call the consumer up to how many months after the consumer's last purchase, delivery, or payment?
18 months
Sales associates who are paid in a lump sum and who are personally responsible for paying their own taxes are probably treated for tax purposes as
independent contractors
A broker was accused of violating antitrust laws. Of the following, the broker was MOST likely accused of
price-fixing
A real estate broker was responsible for a chain of events that resulted in the sale of a client's property. This is called
procuring cause
When communicating with clients or consumers via email, all of these are examples of professional email etiquette EXCEPT
responding to emails within one week
Setting commission rate among competitors for services
Price-Fixing
A real estate assistant would never be required to have a real estate license.
False
A sales associate can carry out all the same activities as a real estate broker.
False
A sales associate's compensation is determined by the client.
False
If a state licensing authority's regulations conflict with statutory law, the regulations will prevail.
False
Price-fixing, which is the practice of setting prices for products or services rather than letting competition in the open market establish those prices, is legal.
False
Real estate license laws do not include disciplinary systems.
False
States' licensing rules and regulations do NOT have the same force and effect as statutory law.
False
The Institute of Real Estate Management (IREM) is affiliated with the National Association of Real Estate Brokers (NAREB).
False
When information is taken from the internet, it is always accurate.
False
When using email to communicate with clients, real estate professionals should
- perform a spelling check before sending - use a subject line that indicates what the message is about - respond in a timely manner to customer and client messages
Commissions are negotiable
- unless representing a buyer, when the listing broker offers a co-op - unless the exclusive agency listing is used, because the seller can compete with the broker -when using an exclusive listing agreement, but not an open listing
Many organizations seek to ensure a high standard of conduct in their members by developing and requiring adherence to a
code of ethics
Transactions conducted through email or fax
Electronic contracting
A system of moral principles, rules, and conduct
Ethics
allows mls members equal rights to display MLS data
Internet Data Exchange
Member of the National Association of Real Estate Brokers
Realist
Established by the National Association of Real Estate Brokers
Realist Code of Ethics
Internet tools to facilitate the creation and sharing of information
Social Media
Unsolicited junk email
Spam
Practical applications of the articles of the REALTOR Code of Ethics
Standards of Practice
Practical applications of the articles of the REALTORS® Code of Ethics are known as
Standards of Practice
Members of professional associations are expected to comply with the
code of ethics as set forth by each organization
A broker has established the following office policy: "All listings taken by any sales associate of this real estate brokerage must include compensation based on a 7% commission. No lower commission rate is acceptable." If the broker attempts to impose this uniform commission requirement, which statement is TRUE?
The broker may, as a matter of office policy, legally set the minimum commission rate acceptable for the firm
Which statement BEST explains this sentence: "To recover a commission for brokerage services, a broker must be employed by a client"?
The client must make an express or implied agreement to pay a commission to the broker
A broker asks a neighbor who is thinking of selling the family home if the broker can present an offer from a prospective buyer, and the neighbor agrees. At this point, which statement is TRUE?
The neighbor is not obligated to pay the broker a commission
A state has recently updated its Rules and Regulations for the Real Estate Profession. Which statement is most likely TRUE regarding this update?
The rules and regulations have the same force and effect as the license law itself
The broker may still be entitled to a commission in which of these situations where a pending property sale did NOT close?
The seller decided not to sell
A REALTOR® is BEST described as an individual who is
a real estate licensee and a member of the National Association of REALTORS® (NAR)
An arrangement to sell one product only if the buyer purchases another product as well is called
a tie-in agreement
Hinting to prospective clients that there is a "going rate" of commission or a "normal" fee implies that rates are, in fact, standardized and is
a violation of antitrust laws
If a sales associate hints to prospective clients that the commission rate matches the "going rate," this action is
a violation of antitrust laws
A sales associate's contract with her broker states that she is not an employee. In the past year, less than half her income was commission, with the rest an hourly wage paid by the broker. The IRS would classify her as
an employee
A real estate licensee has a written contract with a broker specifying that the licensee will not be treated as an employee. The licensee's entire income is from sales commissions rather than an hourly wage. Based on these facts, the licensee is considered
an independent contractor
In order for a broker to be paid on an open listing, the broker must
be the procuring cause of the sale
The National Do Not Call Registry is managed by
the Federal Trade Commission (FTC)
The name for the current policy of the National Association of REALTORS® that allows all multiple listing service (MLS) members equal rights to display MLS data is
the Internet Data Exchange
Many trade organizations serve the real estate business. The largest is
the National Association of REALTORS® (NAR)
The organization which arose out of the early days of the civil rights movement as an association of racial minority real estate brokers in response to the conditions and abuses that eventually gave rise to fair housing laws is
the National Association of Real Estate Brokers (NAREB)
Activities such as price-fixing, group boycotting, allocation of customers or markets, and tie-in agreements are violations of
the Sherman Antitrust Act.
Price-fixing is punishable by up to a $1 million fine and 10 years in prison under
the Sherman Antitrust Act.
The use of electronic signatures makes routine paperwork more efficient and has been encouraged by adoption by most states of
the Uniform Electronic Transactions Act
Group boycotting is illegal and occurs when
two or more businesses conspire against another business or agree to withhold their patronage to reduce competition
Under the Sherman Antitrust Act, market allocation is punishable by
up to a $1 million fine and 10 years in prison
Agreement between real estate professionals to divide market and not compete with each other's business
Allocation of customers or markets
5 A qualified buyer makes a written offer on a property on March 6 by filling out and signing a purchase offer. Later that day, the seller accepts and signs the offer, keeping one copy. The broker gives a copy of the signed agreement to the buyer on March 8. The seller's deed is delivered on May 1. The deed is recorded on May 7, and the buyer takes possession on May 15. When is the broker's commission payable if this is a usual transaction?
May 1
The Counselors of Real Estate (CRE), Commercial Investment Real Estate Institute (CIREI), and Institute of Real Estate Management (IREM) are affiliated institutes of
National Association of REALTORS® (NAR)
A real estate broker's compensation is specified in the contract with the client.
True
Many states have modified the traditional terms broker and salesperson to stress that all licensees must be knowledgeable of and comply with the law. The person who performs licensed activities under the authority of a broker is frequently called
a junior broker
A real estate sales associate, classified by the IRS as an independent contractor, receives
a negotiated share of commissions on transactions
The services performed by a licensed real estate professional
can be customized to the needs of the client or customer
