Chapter 05 - Real Estate Brokerage Operations

Question 1

Arbitration

Answer 1

A process whereby, with the consent of all parties to the dispute, the matter is submitted to a disinterested third party who makes a binding judgment.

Question 2

Blind advertisement

Answer 2

An advertisement of a listed property that provides only a telephone number, a post office box, and/or an address without the licensed name of the brokerage firm.

Question 3

Commingle

Answer 3

The mixing of a buyer’s seller’s, tenant’s, or landlord’s funds with the broker’s own money or mixing escrow money with the broker’s personal funds or brokerage funds.

Question 4

Conflicting demands

Answer 4

When the buyer and seller make demands regarding the disbursing of escrowed property that are inconsistent and cannot be resolved.

Question 5

Corporation

Answer 5

An artificial person or legal entity created by law and consisting of one or more persons that is formed by filing articles of incorporation.

Question 6

Declaratory judgment

Answer 6

Filed with the judge in a court of law if the broker believes that he or she is entitled to a portion of the disputed escrow funds.

Question 7

Deposit

Answer 7

A sum of money, or its equivalent, delivered to a real estate licensee as earnest money, payment, or partial payment in connection with a real estate transaction.

Question 8

Earnest money deposit

Answer 8

Money given as good faith to accompany an offer to purchase or lease real property; also referred to as a good-faith deposit or binder deposit.

Question 9

Escrow account

Answer 9

An account for the deposit of money held by a third party in trust for another for safekeeping.

Question 10

Escrow disbursement order (EDO)

Answer 10

A determination by the FREC of who is entitled to disputed funds.

Question 11

General partnership

Answer 11

An association of two or more persons for the purpose of jointly conducting a business, each being responsible for all the debts incurred in the conducting of that business.

Question 12

Good faith

Answer 12

A party’s honest intent to transact business, free from any intent to defraud the other party; each party’s faithfulness to one’s duty or obligations set forth by contract.

Question 13

Interpleader

Answer 13

A legal proceeding whereby the broker, having no financial interest in the disputed funds, deposits with the court the disputed escrow deposit so that the court can determine the rightful claimant.

Question 14

Kickback

Answer 14

When a broker receives money from someone other than the buyer or the seller, such as for referring a buyer or seller to a particular vendor for services.

Question 15

Limited liability company (LLC)

Answer 15

A form of business organization that offers the best features of a corporation and a partnership; members of an LLC are protected from personal liability as in a corporate form of ownership and enjoy the tax advantages of a partnership.

Question 16

Limited liability partnership

Answer 16

A business entity that features protection from personal liability in much the same way as limited partners in a limited partnership.

Question 17

Limited partnership

Answer 17

A business entity consisting of one or more general partners and one or more limited partners.

Question 18

Litigation

Answer 18

One of the settlement (escape) procedures that provides for the matter to be resolved in a court of law when there are disputing parties regarding escrow funds.

Question 19

Mediation

Answer 19

An informal, non-adversarial process intended to reach a negotiated settlement that is not binding.

Question 20

Ostensible partnership

Answer 20

Exists where the parties do not form a real partnership but act or do business in such a manner that the public, having no knowledge of the private relations of the parties, would reasonably be deceived into believing that a partnership exists.

Question 21

Point of contact information

Answer 21

Any means by which to contact the brokerage firm or individual licensee, including mailing address(es), physical street address(es), e-mail address(es), telephone number(s), or facsimile telephone number(s); the brokerage firm’s name must be above, below, or adjacent to the point of contact information.

Question 22

Policy manual

Answer 22

A collection of office rules and regulations created to inform sales associates and employees of the standards and procedures in that particular office.

Question 23

Puffing

Answer 23

A licensee’s boasting of a property’s benefits.

Question 24

Sole proprietorship

Answer 24

A business owned by one person with no legal separation between the owner and the business.

Question 25

Telephone solicitation

Answer 25

The initiation of a telephone call for the purpose of encouraging the purchase of, or investment in, property, goods, or services.