Practical Guide to Everyday Practice Flashcards
List three factors that brokers should consider when analyzing agency compliance.
Establishing a best practices model for all licensees to follow considering agency compliance
Establishing a section in the broker’s company policy manual that strictly deals with agency compliance
Identifying a specific review routine internally for all paper flow including contracts, listing agreements, buyer agency agreements, and any other contractual items needed for review
What is the most important tool a broker can use in establishing a daily routine for his or her licensees?
A comprehensive policy and procedures guide.
Name three reasons for monitoring sources in real estate.
Changes in real estate laws, rules, and regulations
Changes in marketing principles for listing properties
Updates to training programs offered by associations
After closing, the agent should put the new client on a list for future marketing. This list is called what?
Sphere of influence list
Whether a broker represents the seller or the buyer, what three things should the broker make sure the licensees do?
Use Written Disclosure
Clarify his or her role in the transaction
Use the help of others when needed
What is the most frequent basis for complaints against real estate licensees?
Failure to disclose material facts
When the broker actually has two offers to present, what should the broker do?
The broker should prepare both presentations with the net proceed statements to present to the seller
When should all offers be presented?
As soon as possible
Explain backup offer.
When a buyer wants to make an offer to a seller even though the seller is under contract with another buyer
What is not determined by who pays the commission?
Representation
What is equitable title?
A buyer’s right to have property transferred once all conditions of the contract are met.
When do problems and the potential for litigation concerning the disposition of earnest money arise?
An aggrieved party refuses to do what the contract says
List three questions a broker should ask when identifying risk. (See screens 23 and 24 for other correct answers.)
Are there some agents whose specialty invites greater risk?
Does the brokerage list REO properties? While the bank may believe they do not have to disclose known material defects, the agent does in most cases.
Does the company have meetings to address some of the ethical issues?
What is a broker opened up to if he does not have a structured way in dealing with potential problems?
Potential lawsuits
When questioning the seller regarding the property, what form should the agent use?
A property condition disclosure form
After identifying risks, what is the next step a broker should take?
The next step is to implement corrective action to reduce or eliminate known risks.
The most important tool a broker can use in establishing a daily routine for his or her licensees
is to have a comprehensive policy and procedures guide to train agents and hold them accountable for their daily activities.
Each licensee should
thoroughly review all buyer agency agreements, contracts, listing agreements, and any other paperwork pertinent to the transaction.
Licensees should review any information entered into the MLS system for errors
and then make changes immediately if any problems are identified.
Communication is as critical in real estate offices as it is between client and broker.
Open lines of communication should be practiced on a daily basis so that a licensee knows help is only a phone call away.
Of utmost importance in a brokerage firm is continuously monitoring different sources for:
Changes in real estate laws, rules, and regulations
Changes in marketing principles for listing properties
Updates to training programs offered by associations
Continuing education compliance
Court cases and how they may affect the firm
Changes in the competitive environment
Whether a broker represents the seller or the buyer, the broker should make sure licensees do these three things:
Use written disclosures
Clarify his or her role in the transaction
Use the help of others when needed
Brokers should recognize that the most frequent basis for complaints against real estate licensees is
their failure to disclose material facts. As the listing agent, a brokerage must be prepared to prove in a legal dispute with a buyer-customer that important information was provided unless such disclosure is prohibited by law.
A key agency component in all transactions is
the duty of an agent to disclose information to his or her client. Any offer made to a seller from a potential buyer must be disclosed.
All offers
should be presented as soon as possible
Only the seller has the right to
accept, reject, or counter an offer.
When the broker actually has two offers to present
the broker should prepare both presentations with the net proceeds statements. The broker should obtain as much information about the buyers as possible to help the seller make an educated decision.
When a buyer wants to make an offer to a seller even though the seller is under contract with another buyer
this creates a backup offer which would become effective only if the first offer did not proceed to closing.
The seller should not entertain backup offers without
he permission of the first buyer, because the buyer has equitable title to the property.
Equitable title
is the buyer’s right to have the property transferred once all conditions of the contract are met.
Disputes over earnest money usually arise when
either buyer or seller perceive the other to be at fault for failing to close.
One of the most important considerations is how to handle commissions
Since all commissions are negotiable, who pays the commission does not determine representation
A realistic evaluation
is the best place to start when developing effective risk management guidelines. The next step is to implement corrective action to reduce or eliminate known risks.
The most critical component in managing risk is
the capacity to evaluate a claim at the earliest possible time.
