Chapter 15 - Real Estate Brokerage

Question 1

Licensees who are paid in a lump sum and who are personally responsible for paying their own taxes are probably …

Answer 1

-independent contractors

Question 2

A licensed real estate salesperson entered a written contract with a broker, specifying that the salesperson is not an employee. In the past year, just less than half of the salesperson’s income from real estate transactions came from sales commissions. The remainder was based on an hourly wage paid by the broker. Using these facts, it is likely that the IRS would classify the salesperson as which of the following for federal income tax purposes?

• Independent contractor
• Employee
• Part-time real estate salesperson
• Self-Employed

Answer 2

-Employee

Question 3

Two licensees were found guilty of conspiring with each other to allocate real estate brokerage markets. A women suffered a $90,000 loss because of their activities. If the women brings a civil suit against the two licensees, what can she expect to recover?

Answer 3

$270,000 plus attorney’s fees and costs (3 times as much as she lost)

Question 4

Two salespersons who work for the same brokerage firm agree to divide their town into a northern region and a southern region. One salesperson will handle listings in the northern region and the other will handle listings in the southern region. Which statement is TRUE regarding this agreement?

• The two salesperson have violated the Sherman Anti-Trust Act and are liable for triple damages
• The two salespersons are guilty of group boycotting with regard to other salespersons in their office.
• The agreement constitutes illegal price-fixing
• The agreement does not violate anti-trust laws

Answer 4

-The agreement does not violate anti-trust laws

Question 5

Any comment about a new listing on an internet social site …

Answer 5

-can become permanent record

Question 6

After a particularly challenging transaction finally closes, the client gives the listing salesperson a check for $500 “for all your extra work”. Which statement is TRUE?

• While such compensation is irregular, it is appropriate for the salesperson to accept the check.
• The salesperson should accept the check and deposit it immediately in a special escrow account.
• The salesperson may receive compensation only from the broker.
• The salesperson’s broker is entitled to 80% of the check.

Answer 6

-The salesperson may receive compensation only from the broker.

Question 7

A broker has established the following office policy: “All listings taken by any salesperson associated with this real estate brokerage must include compensation based on a 7% commission. No lower compensation rate is acceptable”. If the broker attempts to impose this uniform commission requirement, which statement is TRUE?

• A homeowner may sue the broker for violating the antitrust law’s prohibition against price-fixing
• The broker may, as a matter of office policy, legally set the minimum commission rate acceptable for the firm.
• The salespersons associated with the brokerage will not be bound by the requirement and may negotiate any commission rate they choose.
• The broker must present the uniform commission policy to the local professional association for approval.

Answer 7

-The broker may, as a matter of office policy, legally set the minimum commission rate acceptable for the firm.

Question 8

In general, under the Junk Fax Prevention Act of 2005, without express written consent or without an established business relationship with the recipient, real estate licensees …

Answer 8

-may not legally send out an unsolicited commercial fax message

Question 9

In Pennsylvania, a salesperson may advertise a property for sale on the internet only if the salesperson …

Answer 9

-uses the employing broker’s name in the advertisement.

Question 10

A broker was accused of violating antitrust laws. Of the following, the broker was MOST likely accused of

Answer 10

-price-fixing

Question 11

A real estate salesperson, classified by the IRS as an independent contractor, receives

Answer 11

-negotiated commissions on transactions

Question 12

As a general agent of the broker, a salesperson may …

Answer 12

-carry out real estate activities in the name of the broker

Question 13

With regard to commission rates, a broker may …

Answer 13

-impose a minimum rate in the office.

Question 14

Pennsylvania’s real estate licensee law considers the broker’s affiliated licensees, whether associate broker or salesperson as

Answer 14

-an employee of the broker

Question 15

The real estate website should include…

Answer 15

a disclaimer that this site is for information only.

Question 16

Violations of federal antitrust laws committed by individuals can result in …

Answer 16

-a fine up to 1 Million dollars for individuals

100 million for corporation

Question 17

After the last transaction, real estate licensees may call consumers with whom they have an established business relationship for up to …

Answer 17

-18 months

Question 18

Which of the following is required under the CAN-SPAM Act?

• If not pornographic, misleading subject lines are permitted
• Routing information may be hidden
• Commercial emails may appear to be personal messages
• Email recipients must have an opt-out method.

Answer 18

-Email recipients must have an opt-out method.

Answer 19

-refrain from controlling how the salespersons conducts business activities

Question 20

For a salesperson to be viewed as an independent contractor, federal law requires

Answer 20

-a written employment contract with the broker that clearly states the terms of the employment

Question 21

The amount of commission due to a salesperson is determined by

Answer 21

-mutual agreement

Question 22

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

Answer 22

procuring cause

Question 23

In Pennsylvania, salespeople may advertise a property for sale only if they

Answer 23

-use the employing broker’s name in the advertisement

Question 24

A real estate salesperson who is an independent contractor receives

Answer 24

-negotiated commissions on transactions

Question 25

Upon discovering a latent defect in the property, the licensee should discuss the problem with the seller and then

Answer 25

-inform any prospective buyers of the defect

Question 26

To be entitled to collect a real estate commission, brokers must be able to prove all of the following EXCEPT

• that they have a valid real estate broker’s license
• that they were the procuring cause
• that they are employed to perform certain activities
• that they belong to a real estate board

Answer 26

-that they belong to a real estate board

Question 27

A broker lists a property for sale at $100,000 with a 5 percent commission, and he later obtains a verbal offer to purchase the property from a perspective buyer. The seller indicates to the 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 broker is entitle to …

Answer 27

-no commision

Question 28

A salesperson finally concluded difficult negotiations that resulted in the sale of a listed parcel of property. For all of her extra efforts, the salesperson can legally demand a performance bonus from …

Answer 28

• no one

Question 29

Antitrust laws prohibit all of the following EXCEPT…

• property management companies standardizing management fees
• brokers allocating markets based on the value of homes
• real estate companies agreeing not to cooperate with a broker because of the fees that broker charges.
• a broker deciding whether to join a multiple listing service (MLS)

Answer 29

-a broker deciding whether to join a multiple listing service(MLS)

Question 30

A licensed salesperson may receive compensation or commission from

Answer 30

-only the employing broker

Question 31

The broker informs the affiliate licensees that from now on, the minimum commission they may charge a seller is 7 percent. In this situation, the broker is …

Answer 31

-legally permitted to do this