Practice Quiz 2

Question 1

Unilateral Employment Agreement

Answer 1

An oral or written employment agreement obligating the broker to use their best-efforts to fulfill the client’s real estate goals without imposing a due diligence duty on the broker until a match is located, commonly called an open listing.

Question 2

Exclusive Right-to-Buy Listing Agreement

Answer 2

A written employment agreement by a broker and a prospective buyer of real estate employing and entitling the broker to a fee when property is purchased during the listing period.

Question 3

Withdrawal-from-Sale Clause

Answer 3

A provision in an exclusive listing agreement which calls for a broker fee to be earned and payable when the seller withdraws the property from sale, makes the property unmarketable, transfers ownership or, without the broker’s consent, further leases the property.

Question 4

Referral Fee

Answer 4

A fee paid illegally by one service provider to another, both rendering services in a real estate transaction, in exchange for the referral of a principal when the buyer’s mortgage financing subjects the transaction to RESPA Regulation X rules.

Question 5

Cooperating Broker

Answer 5

A broker or their agent acting as a subagent of the seller’s broker with specific affirmative duties of care owed the seller, but not the buyer.

Question 6

Safety Clause

Answer 6

A provision in an exclusive listing agreement earning the broker a fee during an agreed safety period after expiration of the employment for marketing efforts with identified buyers, tenants or property, if the client sells the listed property to an identified buyer or purchases or leases an identified property during the safety period.

Question 7

Safety Period

Answer 7

An agreed period commencing on expiration of a broker’s employment during which a broker earns a fee under safety clause conditions.

Question 8

Advance Costs

Answer 8

Funds deposited with a broker to cover out-of-pocket costs incurred on behalf of the depositor while performing brokerage services.

Question 9

Broker Cooperation Provision

Answer 9

A clause in employment agreements entered into by brokers and their clients enabling brokers, when acting on behalf of their clients in a transaction, to share fees between themselves at the brokers’ discretion.

Question 10

Advance Cost Sheet

Answer 10

An itemization of the costs incurred to properly market a property for sale which are to be paid by the owner.

Question 11

Trust Funds

Answer 11

Items which have or evidence monetary value held by a broker for a client or others when acting in a real estate transaction.

Question 12

Bilateral Employment Agreement

Answer 12

A written exclusive employment agreement obligating the broker to exercise due diligence to fulfill the client’s real estate objectives in exchange for the promise to pay a fee under various circumstances.

Question 13

Procuring Cause

Answer 13

A continuing series of negotiating activity performed by a broker or their agents during their employment by a client that, without break in continuity, results in a completed sale or purchase of the property by the client.

Question 14

Covenants, Conditions, and Restrictions (CC&Rs)

Answer 14

Written rules, limitations and restrictions on use agreed to by all property owners in a subdivision or common interest development.

Question 15

Fee Sharing Agreement

Answer 15

An agreement, written or oral, between different brokerage operations to share fees earned on a transaction which are typically paid by the property owner.

Question 16

Marketing Package

Answer 16

A property information package handed to prospective buyers containing all the disclosures compiled by the seller’s agent on the listed property.

Question 17

Quantum Meruit

Answer 17

Compensation paid to a broker on termination of a listing agreement set as the value of the time, effort and money the broker expended acting on the employment, not based on the lost opportunity of the employment.

Question 18

Kickback

Answer 18

A fee improperly paid to an transaction agent by another provider as compensation for rendering no service for the provider beyond the referral of a principal in a transaction the agent is to be paid a fee for the service they provide.

Question 19

Affiliated Business Arrangement (ABA)

Answer 19

Referral of a client to a financially controlled business whose earnings are shared with the broker.

Question 20

Subagent

Answer 20

An individual who has been delegated agency duties by a broker employed by a client, not the client themselves.

Question 21

Exclusive Agent

Answer 21

An agent who is acting exclusively on behalf of only one party in a transaction.

Question 22

Real Estate-Owned Property (REO)

Answer 22

Property acquired by a mortgage holder through foreclosure.

Question 23

Restraint on Alienation

Answer 23

A limit placed on a property owner’s ability to sell, lease for a period exceeding three years or further encumber a property, as permitted by federal mortgage policy.

Question 24

Release and Cancellation of Employment Agreement

Answer 24

A form used by a broker when employed by a client under an existing listing agreement that is terminated by mutual agreement, to document the agreed-to termination of the employment, cancel the listing agreement and liquidate any claims that may have arisen due to the employment.

Question 25

Termination-of-Agency Clause

Answer 25

A provision in an exclusive listing agreement which calls for a broker fee to be earned and payable when the client cancels the employment without cause.