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Finance 331 > chapter 12: Real Estate Brokerage and Listing Contracts > Flashcards

chapter 12: Real Estate Brokerage and Listing Contracts Flashcards

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1
Q

what do brokers do

A

bring buyers and seller together

collect commission for a successful transaction

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2
Q

net commission

A

difference between required price and actual price

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3
Q

commissions are usually paid by

A

sellers

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4
Q

net listing

A

the seller is assured a certain fixed net price for the property and the broker is allowed to retain any amount of the actual sales price above that figure

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5
Q

law of agency

A

gives a broker or salesperson the right to act for a principal in trying to buy or sell a property

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6
Q

a real estate broker can be paid by

A

anybody

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7
Q

a real estate sales person can be paid by

A

only their broker

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8
Q

principal

A

the person giving authority to an agent

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9
Q

universal agent

A

power to act for principal in all matters

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10
Q

general agent

A

power to act within limits of a business or employment relationship
-property manager

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11
Q

special agent

A

power to act in a specific event or transaction

-brokers

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12
Q

fiduciary relationship

A

the special duties and obligations to a principal required of an agent including:

  • confidientiality
  • obedience
  • accounting
  • loyalty
  • disclosure
  • skill and care
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13
Q

example of principal and agent

A 
principal= rider
agent = horse
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14
Q

duties of principal

A

open
honest
fair

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15
Q

listing contract

A

-creates an agency relationship (special agent)
- a contract for services not for real estate
-usually between seller and broker
-increasingly between buyer and broker
-frequently involves subagency through multiple listing service
-

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16
Q

dual agency

A

representing both buyer and seller

  • must be disclosed to all parties
  • both principals must give written consent
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17
Q

buyer agency agreement

A

broker receives compensation for successfully locating a property for the buyer to purchase

18
Q

multiple listing service

A

sharing of property sales listings by a number of real estate brokers with an agreement as to how costs and commissions are to be shared

19
Q

subagency

A

the agency role of a broker is extended to one or more additional brokers, who also become fiduciary of the principal and are empowered to act on his or her behalf. the subagent shares any commission with the original broker. this agency chain can extend through multiple agents in the case of MLS

20
Q

problem of dual agency

A

-works closer with one than the other

21
Q

designated agent

A

brokerage representing both sides appoints seperate agent for each

22
Q

buyer agent by law

A

salesperson showing a house becomes buyer agent unless declaring otherwise

23
Q

transaction broker

A

not an agent for buyer or seller

-also called facilitating or intermediary broker

24
Q

types of brokerage relationships

A

page 312

slide 15

25
Q

most common problem in real estate brokerage relationships is

A

unintended dual agency

26
Q

licensing laws

A

state laws that authorize persons who meet specified qualifications to engage in a business or profession

27
Q

broker license

A

can operate own brokerage agency

  • most complete license
  • responsible for completion of documents used in sales and leases, for handling money held in trusts for clients, and for the actions of their employees
28
Q

salesperson license

A

must work for a broker

-usually an independent contractor of the brokerage firm

29
Q

real estate commission

A

appointed commission responsible for overseeing the implementation and administration of a state’s real estate license law. it is usually empowered to grant, revoke, or suspend licenses and otherwise discipline real estate brokers operating in the state

30
Q

industry certifications

A
  • realtor
  • CCIM: certified commercial investment member
  • SIOR: society of industrial and office realtors
  • IREM: certified property manager of the institute of real estate management
31
Q

general requirements to obtain a RE license

A
  • 18+ 21 for broker
  • high school education
  • 70 classroom hours
32
Q

recovery fund

A

reserve of funds collected from real estate license fees to pay for losses to clients legally judged to have been caused by a licensed salesperson or broker. the existence of such funds varies from state to state

33
Q

errors and omission insurace

A

some states require licensees to purchase to cover damages arising from professional mistakes

34
Q

license law infractions

A 
mishandling trust money
improper handling of fees
failure to provide required information
misrepresentation and fraud
improper business practices
35
Q

anti-discrimination laws

A

title 8 of the civil rights act of 1968 prohibits discrimination by race, color, religion, national origin, sex, familial status and handicap including:

  • refusal to rent or sell
  • offering different terms and conditions
  • selective advertising
  • blockbusting
  • denying home loans
  • denying real estate services
  • coercing, intimidating or interfering with exercise of these rights
36
Q

innovations in brokerage

A
  • buyer brokerage
  • advertising, document preparation, administration of transactions
  • discount brokerage
  • electronic marketing
37
Q

listing contracts

A
  • an agreement between the owner of real estate and a real estate broker or brokerage firm that allows the broker to attempt to sell the property.
  • a broker earns a commission by finding a ready, willing and able buyer for the specified price and terms
38
Q

open listing

A

a contract between a property owner and a broker that gives the broker the right to market the property
-lack of exclusivity

39
Q

exclusive agency listing

A

requires the sellers to pay a commission to the broker if the property is sold by anyone other than the owners

40
Q

exclusive right of sale listing

A

the sellers list their property with one broker and agree to pay that broker a commission if the property is sold within a specified time or if not specified, within a reasonable time
- the broker will be owed a commission if any other broker or even the owner sells the property during the contract period

41
Q

deriving a gross selling price to achieve a target net price

A

slide 25

42
Q

considerations in selecting a broker

A
  • how will the firm market the property
  • amount and type of advertising
  • experience with the firm?
  • general reputation in the community?

Finance 331 (10 decks)

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