Chapter 13: The Brokerage Business

Question 1

Which of the following represents the core activity of real estate brokerage?

Answer 1

Procuring customers for clients and effecting transactions

Question 2

What is co-brokerage?

Answer 2

Outside brokers acting a sub-agents assist a listing agent in procuring a customer

Question 3

Which of the following best summarizes the critical skills in real estate brokerage?

Answer 3

Listing, marketing, facilitating transactions, and managing information

Question 4

Which of the following is a valid distinction between a corporation and a proprietorship?

Answer 4

A corporation has perpetual existence: a proprietorship terminates upon the owner’s death

Question 5

One similarity between a general partnership and a limited partnership is that…

Answer 5

Both my broker real estate is properly licensed

Question 6

To real estate companies agree to conjoin the resources for the development and sale of an apartment complex, for which profits will be shared equally. This is an example of…

Answer 6

A joint venture

Question 7

Which of the following characterizes a real estate franchisee?

Answer 7

A locally-owned brokerage affiliated with a national franchise or for purposes of enhanced image and resources

Question 8

The term “realtor”…

Answer 8

May only be used by brokers belonging to the National Association of Realtors

Question 9

Real estate sales agents are legally authorized to…

Answer 9

Represent their employing broker in procuring clients and customers

Question 10

An important distinction between an independent contractor salesperson (IC) and an employee salesperson is…

Answer 10

The IC is responsible for taxes; the broker does not withhold

Question 11

An important commitment employing brokers make to salespeople is…

Answer 11

Providing them with all things in the agency

Question 12

A sales person’s commission rate and structure is established by…

Answer 12

Competitive conditions

Question 13

Three of the most important skills involved in the listing process are…

Answer 13

Locating clients, pricing property, and making listing presentations

Question 14

Pricing a property correctly is pivotal to marketing listings, because…

Answer 14

Underpricing a property does not serve the best interests of a client

Question 15

The objective of the listing presentation is to…

Answer 15

Provide all information necessary for the owner to execute the listing

Question 16

In marketing an owner’s property, the objective of an agent’s marketing plan is to…

Answer 16

Expose the property to the maximum number of prospects in relation to marketing expenses and efforts

Question 17

Entertaining offers from a buyer, an agent must be careful to…

Answer 17

Avoid disclosing what price the owner will except

Question 18

When a property is “under contract”…

Answer 18

The principles have entered into a sale contract and must satisfy any contingencies prior to closing

Question 19

Conversation is the act of…

Answer 19

Appropriating client or customer deposits for use in the agencies business

Question 20

Comingling is the practice of…

Answer 20

Mixing escrow funds with the brokers operating funds

Question 21

Real estate advertising is a regulated activity. One important restriction in placing ads is…

Answer 21

The advertising must not be misleading

Question 22

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…

Answer 22

Collusion

Question 23

Two leading agencies jointly agree to raise commissions charging a certain class of clients 8% of the sales price. Which of the following is true?

Answer 23

The brokers have illlegally fixed prices

Question 24

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…

Answer 24

Propose an asset sale

Question 25

A broker is reviewing the balance sheet of her new listing to sell the business. Three of the entries on the books or licenses, trademarks, and goodwill. These would be examples of…

Answer 25

Intangible assets

Question 26

In business brokerage, the notion of goodwill is best defined as…

Answer 26

The value or price of the business over and above the value of its other assets

Question 27

A syndication is…

Answer 27

A group of inactive investors who join with a number of active partners to purchase, manage, and sell properties for a profit

Question 28

In order to sell interests in a syndication, an agent must…

Answer 28

Obtain a Series 22 securities license