Ch 3 Section 2 The Real Estate Brokerage Business

Question 1

Brokerage

Answer 1

The aspect of the real business where a licensed agent brings together 2 or more persons to complete a real estate transaction

Question 2

Compensation

Answer 2

Paid to a licensed broker for performing any of the 6 services of real estate

Question 3

Monopolistic practices

Answer 3

Order to preserve and maintain competition among business

Question 4

Competition

Answer 4

Interpreted by most courts as that economic condition in which prices are determined by market forces without interference from private concerns

Question 5

At the federal level the ______________ is enforced by the Federal Trade Commission

Answer 5

Sherman Antitrust Law

Question 6

Boycotting

Answer 6

When 2 or more firms conspire to cut out or not use another firm.

Question 7

Allocate

Answer 7

Illegal for 2 or more firms to agree to divide

Question 8

Tie -in

Answer 8

requirement that the client contract for a different service at the same time

Question 9

CAN- SPAM Act

Answer 9

sets rules for commercial email, establishes requirements for commercial messages, gives recipients the right to stop unsolicited emails, and spells out tough penalties for violations $16,000

Question 10

CAN SPAM main requirements

Answer 10

• Don’t use misleading or false header information
• Don’t use misleading or false header information
• Identify the message as an ad
• Tell recipients where you’re located
• Tell recipients how to opt- out of receiving future emails
• Honor opt- out requests promptly
• Monitor what others are doing on your behalf

Question 11

this applies to any plan, program, or campaign to sell goods or services through interstate phone calls

Answer 11

Do Not Call Registry

Question 12

Who are required to search the registry at least once every 31 days and remove from their call list all consumers who have registered their phone numbers with the service ?

Answer 12

Telemarketers and Sellers

Question 13

Violators can be fined up to how much per incidence (do not call list)

Answer 13

$16,000

Question 14

The law allows a call to be placed to a former client for up to how many months after the last transaction?

Answer 14

18 months

Question 15

independent contractor

Answer 15

one who is hired or retained to do a particular job with little or no supervision as to how the work is to be accomplished

Question 16

Employee

Answer 16

one who works under the direct supervision of an employer

Question 17

Real estate licensees who operate as independent contractors must comply with the following requirements:

Answer 17

• Be licensed as real estate agent
• have a written contract specifying that the licensee will not be treated as an employee (licensee may not receive anything that might be considered an employee benefit and cannot have fixed office hours)
• be paid for services on the basis of sales production rather than the number of hours worked

Question 18

a personal service contract and therefore may not be assigned

Answer 18

a listing contract

Question 19

Elements of a typical listing contract :

Answer 19

• Date la of contract
• Names and addresses of the parties
• Description of the property ( in some states this must be the legal description, in others an address will suffice)
• information about the property
• selling price and terms
• commission agreement and protection clause
• required disclosures of agency relationships
• notification of disclosures required of the seller concerning the property
• brokers authority to place a “For Sale” sign on the property and advertise the property

Question 20

Broker as agent

Answer 20

empowered to act for and in the name of his client within the scope of his authority

Question 21

Licensees advise sellers by comparing the sellers property to similar properties that have sold recently

Answer 21

Competitive market analysis or CMA

Question 22

Listing protection clause

Answer 22

states that the broker is owed a commission for a specified time period after expiration of the listing if the broker can prove he was the procuring cause to sale

Question 23

3 classifications of listing contract

Answer 23

• Open listing
• exclusive listing
• exclusive right to sell

Question 24

open listing contract

Answer 24

an oral or written listing agreement given to any number of brokers

Question 25

exclusive listing contract

Answer 25

a written listing for real property whereby the seller/ client agrees to list the property with a single broker and pay that broker a commission if a licensee sells the property but the owner reserves the right to sell the property himself an not pay a commission

Question 26

exclusive right to sell

Answer 26

is a written listing whereby the seller/ client agrees to list the property with a single broker and also agrees to pay the broker his commission even if the owner sells the property

Question 27

Listing agreements may be terminated in the following manner:

Answer 27

• abandonment by the broker, involving the brokers failure to act
• breach by one party, giving the other party the right to terminate
• lapse of either specified or reasonable time
• Performance by the broker
• Mutual agreement
• Revocation by client
• Death, insanity, or bankruptcy of either the client or the agent and
• Foreclosure resulting in change it ownership

Question 28

Net listing

Answer 28

agreement whereby the seller/client agrees to receive a set amount for the sale of its house

Question 29

Multiple listing service (MLS)

Answer 29

an organization made up many brokers who wish to exchange listing information

Question 30

Termination of a buyer agency agreement

Answer 30

• abandonment by the broker, demonstrated by the brokers failure to act
• breach by one party, giving the other part of the right to terminate
• Laps of either specified or reasonable time
• Performance by the broker
• Mutual agreement
• Revocation by buyer subject to the possible right of the agent to sue the buyer
• Death, insanity, or bankruptcy of either a client or the agent

Question 31

Sales contract

Answer 31

Written or bilateral, executory, assignable contract that is binding on all assigns

Question 32

Executory contract

Answer 32

Is the one in which one or both parties has not yet performed - it is not yet completed
- a contract that has been executed on the other hand is one that is completely finished - nothing left to be done

Question 33

Earnest money

Answer 33

Is a cash deposits that usually accompanies an offer to purchase as good faith evidence that the offeror’s intention are serious

Question 34

Equitable title

Answer 34

The buyer can enforce specific performance of the contract in a court of equity to get title

Question 35

Breach by buyers

Answer 35

Forfeiture of the buyers earnest money to deposit is the most common remedy for breach by the buyer

Question 36

Breach by seller

Answer 36

If the seller defaults on the contract and there are no provisions for liquidated damages of the buyer, buyer may also sue for damages, specific performance or recession of the contract

Question 37

Non disturbance Clause

Answer 37

An agreement in a sales contract where the seller retains mineral rights and the buyer needs a guarantee that the exploration for minerals will not interfere with the surface development of the property

Question 38

Option

Answer 38

An agreement whereby an owner agrees to give a prospective buyer/lessee the right to buy or lease a particular piece of property for a fixed price any time during an agreed upon period of time

Question 39

Lease contract

Answer 39

An agreement transferring the right of exclusive use and possession of real estate for a specified period of time.

Question 40

Statue of Frauds

Answer 40

Provides that a lease for more than one year must be in writing to be enforced in a court of law

Question 41

Non disturbance clause

Answer 41

Is used in mortgage contracts on income producing property to protect the continuation of the lease in the event of loan foreclosure