Chapter 13 the Brokerage Business Flashcards
Brokerage:
The business of procuring customers on behalf of clients for the purpose of completing a real estate transaction.
Co-Brokerage:
A brokerage practice where agents and brokers outside of the listing broker’s agency assist as subagents in procuring a customer in exchange for portions of the commission.
Multiple Listing Service:
An organization of brokers who agree to cooperate in marketing the pooled listings of all members.
Independent Contractor:
A sales agent who works for a broker but is not legally an employee. The employer exerts only limited control over the contractor’s actions, does not provide employee benefits, and does not withhold taxes from the contractors’s pay.
Employee:
A sales agent may be an employee. The broker is responsible and liable for the for the sales agent’s actions.
A broker has greater control over the actions of an employee. Specifically:
a broker can impose a sales methodology. In addition, a broker can enforce all office policies, including hours, meeting attendance, and telephone coverage.
a broker must withhold income taxes and pay unemployment compensation tax on behalf of an employee
an employee may receive the benefits enjoyed by the broker’s non-selling employees
Commission:
Compensation earned by a sales agent for procuring listings and for procuring buyers or tenants, whenever a transaction results. In the jargon of brokerage, these are the two “sides” to a commission: the listing side and the selling side.
Prospecting:
Prospecting is any activity designed to generate listing prospects: parties who intend to sell or lease property and who have not yet committed to a broker. Prospecting activities include mailing newsletters and flyers, selling directly and person-to-person, advertising, and selling indirectly via community involvement.
Commingling:
An unlawful practice of mixing escrow funds with the agency’s operating funds or broker’s personal funds.
Conversion:
An illegal act of appropriating escrow funds for payment of an agency’s operating expenses or broker’s personal use.
Anti-trust Laws:
Laws designed to prevent monopolies and unfair trade practices.
Collusion:
An unlawful agreement between competitors to monopolize a market, disadvantage other competitors, or otherwise undertake activities in violation of fair trade laws.
Price Fixing:
An act of collusion where competitors agree to establish prices at certain levels to the detriment of customers or other competitors.
Market Allocation:
The practice of colluding to restrict competitive activity in portions of a market in exchange for a reciprocal restriction from a competitor: “we won’t compete against you here if you won’t compete against us there.”
Business Brokerage:
The brokerage of a business enterprise in addition to any real property it may own or lease
Goodwill:
An intangible business asset valued at the difference between the sale price and the value of all other assets of the business.
