Ch. 2

Question 1

Laws that make it illegal to conspire to restrain trade or the free flow of goods and services in a market place.

Answer 1

Antitrust Laws

Question 2

A written employment agreement that creates an agency relationship between a broker and a buyer. The buyer employs the broker to put forth a reasonable effort to find a property for the buyer to purchase and to negotiate on behalf of the buyer.

Answer 2

Buyer Agency Agreement

Question 3

Expenses of the sale or loan refinancing, that must be paid in addition to the purchase price in the case of the buyer’s expenses or be deducted from the proceeds of the sale in the case of the seller’s expenses.

Answer 3

Closing Costs

Question 4

The amount owed a broker as payment for services rendered in connection with the listing contract or buyer agency agreement.

Answer 4

Commission

Question 5

An agency agreement giving the listing broker the exclusive right to market the seller’s property. The seller promises to pay a commission to the listing broker if the terms of the contract are fulfilled, except if the buyer is procured by the seller.

Answer 5

Exclusive Agency Listing Contract

Question 6

An agency agreement giving the listing broker the exclusive right to market the seller’s property. The seller promises to pay a commission to the listing broker if the terms of the contract are fulfilled, no matter who procures the buyer.

Answer 6

Exclusive Right to Sell Listing Contract

Question 7

An agency relationship created through words, written or orally spoken.

Answer 7

Express Agency

Question 8

A contract created by the parties stating their intentions either verbally or in writing.

Answer 8

Express Agreement (Express Contract)

Question 9

A fee or commission paid to an unlicensed person for performing brokerage activity.

Answer 9

Fee Splitting

Question 10

One authorized to conduct all of a principal’s affairs within the context of one specific contract.

Answer 10

General Agent

Question 11

Competitors conspiring against another business or agreeing to withhold their patronage to limit competition.

Answer 11

Group Boycott

Question 12

An agency relationship created between parties as evidenced by their actions.

Answer 12

Implied Agency

Question 13

A contract created between parties as evidenced by their actions.

Answer 13

Implied Contract

Question 14

A sale in which the listing broker is the only broker in the transaction.

Answer 14

In-house Sale

Question 15

An Offer to Purchase that is written at the price and on substantially the terms set forth in the listing. Even if the seller does not accept this offer the broker may be owed a commission. This is a cash contingency-free offer written for the list price or greater.

Answer 15

Mirror Image Offer

Question 16

An agreement whereby brokers pool their listings and offer to cooperate and compensate other brokers. Voluntary organization where members agree to market their properties and offer subagency to other agents.

Answer 16

Multiple Listing Service (MLS)

Question 17

An employment contract in which the broker receives as commission all excess monies over and above the minimum sales price agreed on by broker and seller.

Answer 17

Net Listing

Question 18

The broker will earn their commission only if they procure a buyer specified in the listing contract.

Answer 18

One-Party Listing Contract

Question 19

An agency contract between several brokers and a seller. The only broker entitled to a commission is the one that procured the buyer.

Answer 19

Open Listing Contract

Question 20

Competitors conspiring together to eliminate competition by agreeing on the prices they will charge consumers.

Answer 20

Price-Fixing

Question 21

Uninterrupted chain of events which lead to the sale. The WB-1 Exclusive Right to Sell listing contract states a buyer is procured when a valid and binding contract of sale is entered into between the seller and the buyer or when a ready, willing and able buyer submits a written offer at the price and on substantially the terms specified in the listing contract.

Answer 21

Procure

Question 22

A prospective buyer of property who is legally capable and financially able to consummate the deal.

Answer 22

Ready, Willing and Able Buyer

Question 23

A way of terminating the rights of the parties under a contract whereby the parties act as if the contract never existed and forfeit their right to sue.

Answer 23

Rescission

Question 24

One authorized by a principal to perform one particular act or transaction.

Answer 24

Special Agent

Question 25

A remedy for breach of contract whereby a party sues the breaching party for cash damages.

Answer 25

Sue for Damages