Chapter 12

Question 1

Can realtors write contracts?

Answer 1

No, but they can give legal advice on approved forms.

Question 2

What’s the difference between a broker and realtor?

Answer 2

All realtors are brokers, not all brokers are realtors. Realtor is a professional trade association.

Question 3

Who pays the commission?

Answer 3

Seller pays both sides out of her proceeds.

Question 4

Who keeps the commission in a standard % of price model?

Answer 4

The list side and sale side each split the commission paid. Each side splits their take with their firm. Ex. On $500k sale, $30k commission. Seller and listing take $15k. Each firm takes $7.5k, so each broker takes $7.5k

Question 5

Listing broker

Answer 5

Broker that represents the SELLER to “list” a property pursuant to a “listing contract”.

Question 6

Selling broker

Answer 6

Broker who brings the BUYER and connects the sale. Relatively new.

Question 7

What is the broker’s duty?

Answer 7

Every broker acts as an agent to one side and has a fiduciary duty to represent her side.

Question 8

Traditionally, what was the brokerage model?

Answer 8

RE brokers were always agents of the seller! Represented the buyer as sub-agents of the seller. Conflict of interest!

Question 9

An agent is an ________ of the principal while a transaction broker is a _________ of the _______

Answer 9

Advocate, facilitator, parties

Question 10

If there was a murder in a house I’m trying to sell, do I have to disclose that?

Answer 10

No! In fact it’s against the law to

Question 11

If my house had a floor that collapsed and damaged a lot of electrical and piping, do I have to disclose that?

Answer 11

Yes, must disclose material facts that are adverse to the property

Question 12

Listing contract

Answer 12

A contract for services between the seller and listing broker.

Question 13

Exclusive right to sell listing

Answer 13

Seller pays regardless of who procures the buyer. Ex. Neil with mom’s houses.

Question 14

Exclusive brokerage listing

Answer 14

Seller pays unless seller procures buyer. Ex. I’m selling a house through Chhabria and I find Brandon. I will represent myself and pay Brandon’s agent’s commissions. If the buyer comes through other means, I will pay Neil and buyer’s broker commission.

Question 15

Imputed agency

Answer 15

If two brokers in the same firm represent both sides of the sale. Intra-firm transactions were considered dual agency by their nature.

Question 16

What are two solutions to imputed agency?

Answer 16

1. Transaction brokerage. Transaction brokers are facilitators of the parties, not advocates of either side.
2. Designated agency. Ex. Raju and Neil would sign contracts saying they would work for their side and not share information.

Question 17

Transaction-broker addendum

Answer 17

An agent can sign the transaction-broker addendum, which says that if she gets in a position where she is representing both sides, she will switch her legal status. Most effective in Curtis’s eyes.

Question 18

How many RE licenses are available now?

Answer 18

One! CO was the first state to enact this.