Chapter 13 Flashcards
anti-trust
laws
Laws and regulations aimed
at promoting fair competition
and preventing monopolistic
practices in the marketplace,
including price-fixing,
collusion, and market
allocation.
brokerage
real estate brokerage is a
company or agency that
employs real estate agents to
facilitate real estate
transactions on behalf of
clients
business
brokerage
specialized field of real
estate brokerage focused on
facilitating the sale or
purchase of businesses,
including small businesses,
franchises, and commercial
enterprises
co-brokerage
cooperative agreement
between two or more
brokerage firms to share
commissions and work
together on a real estate
transaction.
collusion
illegal agreement or
secret cooperation between
competitors to deceive,
manipulate, or control the
market to their advantage,
typically involving price-fixing
or market allocation
commingling
Mixing or combining client
funds with personal or
business funds, which is
prohibited in real estate
transactions to protect client
funds from misuse
commission
fee paid to a real estate
agent or broker for their
services in facilitating a real
estate transaction, usually
calculated as a percentage of
the property’s sale price or
lease value
employee
person who works for an
employer under a contract of
employment, receiving
wages or salary and typically
subject to the employer’s
direction and control.
goodwill
The intangible value or
reputation associated with a
business, including its brand,
customer loyalty, reputation,
and positive relationships,
which can contribute to its
market value
independent
contractor
A person who works for
themselves and is not
considered an employee of
another company, typically
responsible for managing
their own work schedule,
taxes, and business
expenses
market
allocation
An illegal practice where
competitors agree to divide
markets or territories among
themselves, eliminating
competition and depriving
consumers of choice
price
fixing
An illegal practice where
competitors agree to set
prices at a certain level,
eliminating competition and
artificially inflating prices for
consumers
prospecting
process of identifying
and pursuing potential
clients or leads for real estate
transactions, typically
through networking,
marketing, and outreach
efforts
securities
Financial instruments or
investments that represent
ownership interests, debt
obligations, or rights to
income or profits, such as
stocks, bonds, and mutual
funds.
The objective of the listing presentation is to
provide all information necessary for the owner to execute the listing
In business brokerage, the notion of goodwill is best defined as
the value or price of the business over and above the value of its other assets
Real estate sales agents are legally authorized to
represent their employing broker in procuring clients and customers
A corporation would like an agent to sell its country grocery store. Included in the sale are the inventory, equipment, and real property. The agent locates a full-price buyer who does not want to acquire any of the business’s actual or potential liabilities. To do this transaction, the corporation would most likely
propose an asset sale
What is an asset sale?
the purchaser takes possession of some or all of the assets of the business, as well as the real estate, in exchange for the sale price
Three brokers from different firms are having lunch together after a downtown business club meeting. In their conversation, a fourth broker from another firm is mentioned. The three brokers agree that they dont like this other broker, and decide they will no longer show her listings to potential buyers. If they act on this decision, they may be guilty of an illegal act of
group boycotting.
Which of the following statements about the handling of trust funds is TRUE?
Funds being held for a client must be placed in a trust account within a required number of days after all parties have accepted an offer to purchase.
What is an independent brokerage?
A brokerage that is not affiliated with a franchisor
A salesperson working with a customer shows a property that is listed by a brokerage firm other than the salesperson’s and obtains an offer that is $50,000 less than the listing price. What must the salesperson do about this offer?
Present the offer to the seller at the earliest possible moment
Obtaining exclusive listings for the broker is traditionally one of the salesperson’s most fundamental tasks because
a commission is assured if a buyer is procured
A joint venture may generally broker real estate if the co-venturers
are properly licensed
The practice of competing brokers in a local market agreeing on a standard commission rate is a violation of
fair trade and anti-trust laws
The three principal brokerage firms in a market agree to pay sales agents 15% more than any other competitor currently in practice. This is an example of
collusion
To engage in business brokerage, a broker generally must hold a real estate license because
a business sale usually involves a transfer of a real property interest
What offense is broker Smith committing if she fails to deposit earnest money into escrow in a timely manner?
Commingling
One similarity between a general partnership and a limited partnership is that
both may broker real estate if properly licensed
When a property is “under contract,”
the principals have entered into a sale contract and must satisfy any contingencies prior to closing
