Chapter 12

Question 1

buyer and tenant
representation

Answer 1

Services provided by a real
estate agent to represent the
interests of a buyer or tenant
in a real estate transaction,
including helping them find
suitable properties,
negotiating terms, and
facilitating the transaction

Question 2

due
diligence

Answer 2

process of conducting
thorough research,
investigation, and analysis of
a property or investment
opportunity to evaluate its
suitability, risks, and
potential returns

Question 3

exclusive
agency

Answer 3

agreement giving a real
estate broker the exclusive
right to represent a property
owner and earn a
commission only if the
broker, or any other licensed
agent, finds a buyer or tenant
for the property

Question 4

listing
agreement

Answer 4

contract between a
property owner (seller or
landlord) and a real estate
broker, authorizing the broker
to market and sell or lease
the property on behalf of the
owner.

Question 5

multiple
listing service

Answer 5

service provided by a real
estate association or
organization where
participating brokers share
information about properties
for sale or lease, allowing
them to cooperate and
facilitate transactions more
efficiently

Question 6

net
listing

Answer 6

listing agreement where the
property owner agrees to sell
the property for a specified
net amount, with any amount
exceeding that net going to
the broker as commission

Question 7

A property owner agrees to
sell their property for
$200,000, with any amount
above $200,000 going to the
broker as commission

Answer 7

net
listing

Question 8

open
listing

Answer 8

non-exclusive listing
agreement where the
property owner retains the
right to list the property with
multiple brokers and only
pays a commission to the
broker who procures a ready,
willing, and able buyer or
tenant

Question 9

procuring
cause

Answer 9

The agent or broker who is
the primary reason for
bringing about a successful
real estate transaction,
resulting in the sale or lease
of a property and earning a
commission

Question 10

Even if legally valid, oral listings are generally not advisable for an agent because

Answer 10

they can be difficult to enforce if disputed

Question 11

One of the principal determinants of “procuring cause” in a completed transaction is

Answer 11

being first to find the customer

Question 12

A multiple listing authorization gives a broker what authority?

Answer 12

To list the owner’s property in a multiple listing service

Question 13

A married couple who own a house as tenants by the entireties want to give a broker the exclusive authorization to sell the house. Who must sign the listing agreement to make a valid contract?

Answer 13

Both owners and the broker

Question 14

A broker is hired to procure a customer for a client. In order to earn compensation, the agent must procure a customer who

Answer 14

is ready, willing, and able to transact

Question 15

An agent’s performance of due diligence concerning a listing can best be described as

Answer 15

ascertaining the facts about the client and the property at the onset of the listing period

Question 16

A seller wants a licensee to put her home in the MLS and conduct an openhouse but do nothing else to sell it for a reduced commission. The kind of listing agreement that would allow this arrangement is a(n)

Answer 16

limited services agreement.

Question 17

The most significant difference between an owner representation agreement and a buyer representation agreement is

Answer 17

the client

Question 18

If an agent has an exclusive listing to sell a property, and the property is then taken by eminent domain, what is the status of the listing?

Answer 18

It may be terminated against the agent’s will

Question 19

What kind of listing agreement is a buyer representation agreement?

Answer 19

An exclusive, exclusive agency, or open listing