Ch 3 Section 2 The Real Estate Brokerage Business Flashcards
Brokerage
The aspect of the real business where a licensed agent brings together 2 or more persons to complete a real estate transaction
Compensation
Paid to a licensed broker for performing any of the 6 services of real estate
Monopolistic practices
Order to preserve and maintain competition among business
Competition
Interpreted by most courts as that economic condition in which prices are determined by market forces without interference from private concerns
At the federal level the ______________ is enforced by the Federal Trade Commission
Sherman Antitrust Law
Boycotting
When 2 or more firms conspire to cut out or not use another firm.
Allocate
Illegal for 2 or more firms to agree to divide
Tie -in
requirement that the client contract for a different service at the same time
CAN- SPAM Act
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
CAN SPAM main requirements
- 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
this applies to any plan, program, or campaign to sell goods or services through interstate phone calls
Do Not Call Registry
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 ?
Telemarketers and Sellers
Violators can be fined up to how much per incidence (do not call list)
$16,000
The law allows a call to be placed to a former client for up to how many months after the last transaction?
18 months
independent contractor
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
Employee
one who works under the direct supervision of an employer
Real estate licensees who operate as independent contractors must comply with the following requirements:
- 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
a personal service contract and therefore may not be assigned
a listing contract
Elements of a typical listing contract :
- 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
Broker as agent
empowered to act for and in the name of his client within the scope of his authority
Licensees advise sellers by comparing the sellers property to similar properties that have sold recently
Competitive market analysis or CMA
Listing protection clause
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
3 classifications of listing contract
- Open listing
- exclusive listing
- exclusive right to sell
open listing contract
an oral or written listing agreement given to any number of brokers
exclusive listing contract
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
exclusive right to sell
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
Listing agreements may be terminated in the following manner:
- 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
Net listing
agreement whereby the seller/client agrees to receive a set amount for the sale of its house
Multiple listing service (MLS)
an organization made up many brokers who wish to exchange listing information
Termination of a buyer agency agreement
- 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
Sales contract
Written or bilateral, executory, assignable contract that is binding on all assigns
Executory contract
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
Earnest money
Is a cash deposits that usually accompanies an offer to purchase as good faith evidence that the offeror’s intention are serious
Equitable title
The buyer can enforce specific performance of the contract in a court of equity to get title
Breach by buyers
Forfeiture of the buyers earnest money to deposit is the most common remedy for breach by the buyer
Breach by seller
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
Non disturbance Clause
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
Option
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
Lease contract
An agreement transferring the right of exclusive use and possession of real estate for a specified period of time.
Statue of Frauds
Provides that a lease for more than one year must be in writing to be enforced in a court of law
Non disturbance clause
Is used in mortgage contracts on income producing property to protect the continuation of the lease in the event of loan foreclosure
