4 - Working with Clients

Question 1

Arbitration

Answer 1

An alternative to a court proceeding where the parties agree to submit facts and evidence to an impartial third party.

Question 2

Asking Price

Answer 2

The price the seller asked for the property when it was first put on the market. Also called Listing Price.

Question 3

Binder

Answer 3

An agreement that may accompany an earnest money deposit. Used by attorneys as a blue print for creating a sales contract but is not a contract. Typically used in Downstate New York.

Question 4

Buyer-Broker

Answer 4

An agent representing the interests of the buyer of a property. Also called Buyer’s Agent.

Question 5

Broker Protection Clause

Answer 5

Provides the broker is still entitled to commission if the property is sold during a certain time period under certain circumstances.

Question 6

Broker’s Agent

Answer 6

Engaged and works directly for the broker - a broker’s agent is not a subagent of the seller or buyer. Still owes the same fiduciary duty to the broker’s seller or buyer the broker does.

Question 7

Buyer-Broker Contract

Answer 7

An employment contract between a buyer and broker that grants the broker the exclusive right to represent the purchaser in the purchase or lease of property and that makes the buyer responsible for paying commission to the buyer-broker. Also called a Buyer Agency.

Question 8

Caveat Emptor

Answer 8

A latin phrase meaning “let the buyer beware.” The rule that says a buyer is expected to examine property carefully, instead of relying on the seller to point out problems.

Question 9

Commissions

Answer 9

The compensation paid to someone in lieu of or in addition to his or her regular salary.

Question 10

Comparitave Market Analysis

Answer 10

A method of determining the approximate market value of a home by comparing the subject property to other homes that have sold, are presently for sale, or did not sell in a given area.

Question 11

Condition

Answer 11

A provision in a contract, deed, law, regulation, guideline, etc. that makes the parties’ rights and obligations depend on the occurrence (or non-occurrence) of a particular event. Also called a Contingency Clause.

Question 12

Cooperating Agent

Answer 12

An agent who works with a listing agent to sell property in a real estate transaction; the selling agent who found a buyer for the listed property. Also called Cooperating Broker.

Question 13

Counteroffer

Answer 13

A counteroffer represents a change in response to an offer to enter into a contract, changing come terms of the original offer. A counteroffer is a rejection of the original offer and does not create a binding contract unless the new counteroffer is accepted by the original offeror (the counterofferee).

Question 14

Earnest Money Deposit

Answer 14

Money offered as an indication of good faith regarding future performance of a purchase agreement.

Question 15

Disclosure Statement

Answer 15

Document required by law which reveals specific information.

Question 16

Errors and Omissions (E&O) Insurance

Answer 16

Professional liability insurance that protects real estate licensees from mistakes or negligence. A typical policy pays legal fees and judgements resulting from real estate activities. It doesn’t cover fraud, transactions of buying or selling your own real estate, and, depending on the policy, may not cover civil rights violations (punitive damages are usually exempt).

Question 17

Exclusive Agency Listing

Answer 17

Listing agreement that entitles the broker to a commission if anyone other than the seller finds a buyer for the property during the listing term.

Question 18

Exclusive Right to Sell Listing

Answer 18

Listing agreement that entitles the broker to a commission if anyone, including the seller, finds a buyer for the property during the listing term.

Question 19

Farming an Area

Answer 19

A phrase used to create an image of working on a specific area over a period of time for prospects.

Question 20

Latent Defect

Answer 20

A defect that is not visible or apparent; a hidden defect that would not be discovered in a reasonably thorough inspection of the property.

Question 21

Legal Description

Answer 21

A precise description of a piece of property.

Question 22

Listing

Answer 22

A written contract between a seller and a real estate broker, stating that the broker will be paid commission for finding (or attempting to find) a buyer for the seller’s real property. A listing is a personal services contract.

Question 23

Listing Broker

Answer 23

The broker with whom a seller signs a listing agreement and to whom commission is typically paid upon the successful procurement of a buyer. Also called a Listing Agent.

Question 24

Net Listing

Answer 24

A listing agreement in which the seller sets a net amount that is acceptable for the property; if the actual selling price exceeds that amount, the broker is entitled to keep the excess as commission. Net listings are illegal in New York.

Question 25

Open Listing

Answer 25

A non-exclusive listing, given by a seller to as many brokers as he or she chooses. The broker is only entitled to a commission if he or she is the procuring cause of the sale.