MRE_Chapter5 Flashcards
Caveat Emptor
Let the buyer beware
The common law Doctrine of Caveat Emptor
Buyers were pretty much on their own
ARELLO
Association of Real Estate License Law Officials (ARELLO)
Purpose of License Laws
- Establishing basic requirements for obtaining a real estate license - Defining which activates require licensing - Describing the acceptable standards of conduct and practice for licensees - Enforcing those standards through a disciplinary system
Brokerage
The business of bringing parties together
Real Estate Broker
A person licensed to buy, sell, exchange, or lease real property for others and to charge a fee for these services
Broker-Salesperson Relationship
- A real estate salesperson is any person licensed to perform real estate activates on behalf of a licensed real estate broker. - A broker is fully responsible for the action performed by the Salesperson
Real Estate Assistants
Is a combination of office manager, marketer, organizer and facilitator who has a fundamental understanding of Real Estate industry
Commission Earned When..
- A completed sales contract has been executed by a ready, willing and able buyer The contract has been accepted and executed by the seller Copies of the contract are in possession of all Parties
Procuring Cause
To be a procuring cause, the broker must have started a chain of events that resulted in a sale. Like Conducting Open Houses, Placing Advt, Showing House,etc.
A ready, willing and able buyer
Is one prepared to buy on the seller’s terms and ready to complete the transaction
Broker entitled for commission (non-consummated situation)
- If seller had a change of mind and refused to sell - Seller spouse reused to sign the deed - Seller had a title with uncorrected defects - Seller committed fraud with respect to the transaction - Seller was unable to deliver possession - Seller insisted on terms not in the listing - Seller had mutual agreement with the buyer to cancel the transaction
Graduated Commission Splits
Splits the commission based on the commission value. Like 50/50 up to $25000, 60/40 for $25000 to $30000, etc
Unbundling Services
Offering services in a piecemeal fashion
Agent’s Seller Services
- Prepare the property for sale - Performing Competitive Market Analysis (CMA) & Pricing the property - Assisting with marketing the property using MLS & web sites - Locating & screening buyer - Drafting a purchase sales agreement - Assisting with the closing transaction
Agent’s Buyer Services
- Consulting on renting vs. buying - Mortgage pre-approval - Consulting on a buyer’s desired location - Visiting properties & checking properties - Drafting a purchase sales agreement & help with negotiation - Assisting with the closing transaction
FSBOs
Sale By Owners
Minimum level of services
- Accept delivery of and present offers and counteroffers to the client - Assist the client in developing , negotiating and presenting offers and counteroffers - Answer the client’s questions about offers, counteroffers and contingencies
Independent Contractor Requirements
- The individual must have a current Real Estate license - The licensee must have a written contract with the broker that species that the licensee will not be treated as an employee - Atleast 90% of the individual’s income as a licensee must be based on sales production and not on number of hr worked
Anti-trust Violations
- Price-Fixing - Group Boycotting - Allocation of customers - Allocation of markets - Tie-in Agreements
Price Fixing
Practice of setting prices for products or services rather than letting competition in the open market set the price
Group Boycotting
When two or more business conspire against another business or agree to withhold their patronage to reduce competition
Allocation of Customers/Markets
- An agreement between real estate broker to divide their markets and refrain from competing for each other’s business. - Allocation may be by Geographic Basis, Price Range , Category of housing , etc.
Tie-In Agreements
aka ‘Tying Agreements’, are agreements to sell one product only if the buyer purchases another product as well. The sale of the first(desired) is tied to purchase of second.
