Chapter 3

Question 1

Agency

Answer 1

the relationship between principal and agent wherein the agent is employed by the principal to do certain acts, like negotiating with third parties

Question 2

Commission

Answer 2

This is earned when you have produced a buyer who is “ready, willing, and able” to purchase at the price and under the terms agreed to by both seller and buyer, whether or not escrow closes

Question 3

Cooperating broker

Answer 3

a non-listing broker with whom the listing broker agrees to share a commission if the non-listing broker produces a buyer

Question 4

Employment contracts

Answer 4

in California, this type of contract must be in writing to be enforceable

Question 5

Exclusive right to sell listing

Answer 5

Entitles the broker to commissions on all sales during the life of his or her agreement with the owner, even when the owners themselves sell the property

Question 6

listing

Answer 6

an employment contract between an owner and a licensed real estate broker entered into for the purpose of the broker providing service to find a ready willing and able person to buy rent or lease a property

Question 7

listing interview

Answer 7

an appointment with a prospective seller with the intent of persuading that seller to list a property with you at a fair market price

Question 8

lockbox

Answer 8

this contains the property’s keys and greatly facilitates the showing process

Question 9

multiple listing service (MLS)

Answer 9

a group of brokers banding together to share listing and commissions

Question 10

net listing

Answer 10

this type of listing provides that the agent is to retain all money received in excess of predetermined net price to the owner

Question 11

open listing

Answer 11

a written contract authorizing one or more brokers to act as agents in the sale of the principals property for a fixed commission

Question 12

pocket buyer

Answer 12

this person is prepared to buy a property before that property is actually listed with a broker

Question 13

riders

Answer 13

supplemental attachments to signs, like “three bedrooms:

Question 14

safe harbor clause

Answer 14

a negotiated period after the termination of the listing during which the listing broker may still be entitled to a commission if the property is sold to a buyer who was shown the property during the listing period

Question 15

sellers proceeds

Answer 15

how much cash the seller will receive after payment of all liens and expenses