Chapter 13

Question 1

A sponsoring broker’s Licensee lists a unit for sale in a condominium building. The Licensee in this transaction:

Answer 1

Acts on behalf of the sponsoring broker

Question 2

A real estate sponsoring broker was responsible for a chain of events that resulted in the sale of one of his client’s properties. This is referred to as a:

Answer 2

Procuring cause

Question 2

A Licensee may advertise a property for sale only if he or she:

Answer 2

Uses the employing sponsoring broker’s name in the advertisement

Question 3

Wilia is a Licensee working for Sponsoring broker Vic. Willa sells a $150,000 home listed by Vic’s office. The listed commission is 6.5 percent of the selling price. Sponsoring broker Vic and Willa agreed that Willa would receive 55 percent of any commission that she generated for the office. Willa is entitled to receive:

Answer 3

$5,362.50

Question 4

To be entitled to collect a real estate commission, a sponsoring broker must be able to prove all of the following:

Answer 4

Had a valid real estate sponsoring broker’s license, Was a procuring cause, Was employed to perform certain acts

Question 5

To be entitled to collect a real estate commission, a sponsoring broker must be able to prove all of the following EXCEPT that he or she:

Answer 5

Belonged to a real estate board

Question 6

Which of the following is NOT prohibited under the antitrust laws?

Property management companies standardizing management fees

Sponsoring brokers allocating markets based on the value of homes

Real estate companies agreeing NOT to cooperate with a sponsoring broker because of the fees that sponsoring broker charges

A sponsoring broker deciding whether to join a MLS

Answer 6

A sponsoring broker deciding whether to join a MLS

Question 7

A Licensee may not receive compensation or commission from anyone EXCEPT:

Answer 7

His/her sponsoring broker

Question 7

A property owner signed a 90-day listing agreement with a sponsoring broker. The owner was killed in an accident before the listing expired. Now the listing is:

Answer 7

Terminated automatically upon the death of the principal

Question 8

The type of listing agreement that provides for the payment of a commission to the sponsoring broker even though the owner makes the sale without the aid of the sponsoring broker is called an:

Answer 8

Exclusive-right-to-sell listing

Question 8

An owner lists her property for sale with a sponsoring broker. Another sponsoring broker, however, finds a buyer for the house. The listing sponsoring broker did not receive a commission from the sale. The type of listing contract between the owner and the sponsoring broker could have been a(n):

Answer 8

Open listing

Question 9

Under which of the following listing agreements can the owner of listed property sell the property on his or her own without having to pay the listing sponsoring broker a commission?

Answer 9

open listing and exclusive agency listing

Question 10

Sponsoring broker Juanita was accused of violating antitrust laws. She was probably
accused of:

Answer 10

allocation of customers or price fixing

Question 11

While an agent was showing a house to a potential buyer, the agent said, “I don’t think there’s a better view in the city!” Was this statement by the agent permissible?

Answer 11

Yes, and it can be best described as puffing.

Question 11

Unless some other written agreement has been made, the sponsoring broker will usually receive the sales commission from the seller when:

Answer 11

the transaction is closed.

Question 12

A real estate agent who is an independent contractor receives:

Answer 12

negotiated commissions on transactions.

Question 13

A sponsoring broker lists a property for sale at $200,000 with a 5 percent commission, and he later obtains a verbal offer to purchase the property from a prospective buyer. The seller indicates to the sponsoring broker that the offer would be acceptable if it were submitted in writing. Before it can be put in writing, the buyer backs out and revokes the verbal offer. In this situation, the sponsoring broker would be entitled to:

Answer 13

no commission.

Question 14

In a typical agency relationship between the sponsoring broker and the client, the sponsoring broker’s commission is determined by:

Answer 14

mutual agreement.

Question 15

The type of buyer agency agreement that best protects the buyer.

Answer 15

Open buyer agency agreement.

Question 16

A listing agreement may be terminated for any of the following reasons:

Answer 16

sale of the property, agreement of the parties, destruction of the premises.

Question 16

The Illinois court decision in Chicago Bar Association et al. v. Quinlan and Tyson, Inc., held that:

Answer 16

real estate licensees may complete preprinted forms, but not draft legal documents.

Question 17

A listing agreement may be terminated for any of the following reasons EXCEPT the:

Answer 17

death of the broker working for the sponsoring broker.

Question 18

By executing a listing agreement with a seller, a real estate sponsoring broker has become:

Answer 18

an agent of the seller.

Question 19

Sponsoring broker Wayne took a listing on a property and shortly thereafter discovered that his client had been previously declared incompetent by the court. The listing now is:

Answer 19

void.

Question 19

The provision in a listing agreement that gives additional authority to the sponsoring broker and obligates the sponsoring broker to distribute the listing to other sponsoring brokers is a(n):

Answer 19

multiple listing clause.

Question 20

A property owner lists his property for sale with a sponsoring broker. During the negotiations, the owner told the sponsoring broker that the owner wanted $238,000 for the property, and anything above that amount the sponsoring broker could keep as his commission. The listing with this type of provisions is known as a:

Answer 20

net listing.

Question 21

A listing contract in which the sponsoring broker’s commission is contingent on the sponsoring broker being able to produce a buyer before the property is sold by the owner or another sponsoring broker is called a(n):

Answer 21

open listing.

Question 22

All of the following are typical provisions of a listing agreement:

Answer 22

price the seller is asking for the property, commission rate to be paid to the listing sponsoring broker, responsibilities of the sponsoring broker.

Question 22

A sponsoring broker who represents a seller under an exclusive listing receives two
offers for the property at the same time, one from one of his agents and one from an agent of a cooperating sponsoring broker. What should the sponsoring broker do?

Answer 22

Submit both offers at the same time

Question 23

Sponsoring broker Paul listed the Kennedy’s property for sale under an exclusive-right-to-sell agreement. One of Paul’s agents, Tanya, obtained an offer to purchase the property along with a certified check for 5 percent of the purchase price as earnest money. What should Tanya do with the earnest money check?

Answer 23

Give the money to Paul for deposit in his trust account

Question 24

A seller refused to pay a commission to the sponsoring broker even though there was a valid listing agreement and the sponsoring broker procured a buyer for the property. What can the sponsoring broker do?

Answer 24

Sue the seller in court for the commission

Question 24

All of the following are typical provisions of a listing agreement EXCEPT the:

Answer 24

date the sponsoring broker will schedule an open house.

Question 25

The type of listing agreement that provides the least protection for the listing sponsoring broker is the:

Answer 25

open listing.

Question 26

Under an exclusive agency listing, the listing sponsoring broker would NOT be entitled to a commission if:

Answer 26

the seller exchanges the property with a neighbor across the street.

Question 27

All of the following are types of listing contracts:

Answer 27

open listing, exclusive agency, exclusive right-to-sell.

Question 28

All of the following are types of listing contracts EXCEPT a(n):

Answer 28

MILS mediation agreement.

Question 28

A listing agreement may be terminated by all of the following:

Answer 28

by mutual agreement, by operation of law, because of impossibility of performance.

Question 29

The sponsoring broker enters into a listing agreement with a seller in which the seller will receive $12,000 from the sale of a lot and the sponsoring broker will receive any sale proceeds over this amount. This type of listing is a(n):

Answer 29

net listing.

Question 30

A listing agreement may be terminated by all of the following EXCEPT:

Answer 30

because the seller can’t find another house to buy.

Question 30

Two different sponsoring brokerage companies claimed they were entitled to a commission from the sale of a property that was listed by one of the firms under an open listing agreement. The sponsoring broker who is entitled to the commission is the one who:

Answer 30

was the procuring cause of the sale.

Question 31

An owner who is interested in selling his house is usually concerned about how much
money he can get when it sells. A comparative market analysis may help the seller determine a realistic listing price. Which of the following is true?

Answer 31

A comparative market analysis contains a compilation of other similar properties that have sold

Question 32

In Illinois, if a sponsoring broker is taking a listing and asks the seller to complete a disclosure of property conditions, which of the following statements is true?

The disclosures are optional, and the seller may avoid liability by refusing to make any disclosures about the condition of the property.

The standard disclosures cover a narrow range of structural conditions only.

An agent should give the seller advice regarding which property conditions to disclose and which to ignore.

Seller disclosure of property conditions is required by Illinois statute.

Answer 32

Seller disclosure of property conditions is required by Illinois statute.

Question 33

614 Stevenson Street in Peoria is owned by Walter. Walter lives in Chicago, and the house in Peoria is occupied by married couple, Chris and Debbie. If Walter wants to sell the property, who is required by law to sign the listing agreement?

Answer 33

Walter only

Question 34

All of the following must appear in a written Illinois listing agreement:

Answer 34

a statement that the property must be shown to all prospective buyers regardless of race, color, religion, national origin, sex, handicap or familial status, The time duration of the listing, The proposed gross sales price of the property.

Question 35

All of the following must appear in a written Illinois listing agreement EXCEPT:

Answer 35

the complete legal description of the property being sold.

Question 36

Kendra is an Illinois real estate licensee and the listing agent for a home. After one month of the three-month listing has gone by without any offers on the property, Kendra becomes concerned. At the time the listing agreement was signed, Kendra and the sellers orally agreed that if no offers were received after one month, the price of the property would be reduced by ten percent. Because the sellers are out of town, Kendra crosses out the old listing price, writes in the new one, and then updates the information on the computerized listing service. Three days later, a prospective buyer comes into Kendra’s office to make an offer on the property. Based on these facts, which of the following statements is true?

Answer 36

Illinois licensees are prohibited by law from making any addition to, deletion from or other alteration of a written listing agreement without the written consent of the principal.

Question 37

Which of the following is true of listing agreements in Illinois?

All listing agreements must be in writing to be legal.

All exclusive listing agreements must be in writing to be enforceable.

Open listing agreements are illegal.

Net listings are not legal in Illinois.

Answer 37

All exclusive listing agreements must be in writing to be enforceable.

Question 38

Which of the following constitutes grounds for the suspension or revocation of a real estate license?

Failure to specify a termination date in a listing agreement

Inclusion of a multiple-listing clause in a listing agreement

Entering into a guaranteed sales agreement

Encouraging a seller to agree to a net listing

Answer 38

Failure to specify a termination date in a listing agreement