Quiz: Ch 2

Question 1

T/F: The most common form in which a broker is compensated is through a commission that is fixed dollar amount.

Answer 1

False:

Commissions are usually expressed as a percentage of the sales price.

Question 2

T/F: A listing agreement must include a legal description or other unambiguous description of the property.

Answer 2

True

Question 3

T/F: A broker who finds a ready, willing, and able buyer is entitled to compensation regardless of whether the sale closes.

Answer 3

True
Under most listing agreements, a broker is entitled to compensation if she finds a ready, willing, and able buyer. A broker might decide, however, not to sue in order to collect that commission.

Question 4

T/F: Net listings are legal in California only if the agent discloses the amount of the commission before the seller becomes committed to the transaction.

Answer 4

True

Net listings, in which the broker keeps any portion of the sales price beyond a specified amount, are discouraged because they create an opportunity for unscrupulous brokers to take advantage oh home sellers.

Question 5

T/F: You must use a standard pre-printed form from the MLS in order to satisfy the requirement that the listing agreement is in writing.

Answer 5

False
Any written agreement is acceptable, so long as it identifies the property and specifies how the broker will be compensated. It is always easiest, though to use a pre-printed form.

Question 6

T/F: In California, an exclusive right to sell listing agreement cannot be for longer than one year.

Answer 6

False
Exclusive agency and exclusive right to sell listing agreements must have a definite termination date, but there is no minimum or maximum length. The duration of the agreement is entirely negotiable between the parties.

Question 7

The standard listing period for residential properties is 60 days.

Answer 7

False

Listing periods of 90 days are probably the most common. You should recommend a period that gives you enough time to market the property and close the transaction, based on the sales price range and market conditions.

Question 8

A listing agreement can only be terminated by mutual agreement

Answer 8

False

Listing periods of 90 days are probably the most common. You should recommend a period that gives you enough time to market the property and close the transaction, based on the sales price range and market conditions.

Question 9

The paragraph shown above is an example of a safety clause

Answer 9

True

A safety clause is also sometimes known as an extender clause or a protection clause.

Question 10

The purpose of a safety clause is to protect you and your broker from a buyer and seller who wait to sign a purchase agreement until after the listing period expires, to avoid paying a commission.

Answer 10

True

A safety clause usually protects the broker’s commission if the buyer was shown the property or mad and offer during the listing period. Th buyer and seller cannot delay the sale to avoid paying the commission.

Question 11

The excerpt show above is known as unilateral offer of subagency clause.

Answer 11

False

This is actually an example of an offer of cooperation clause.

Question 12

The paragraph shown above makes the MLS a party to the listing agreement.

Answer 12

False

This is an example of hold harmless clause. It protects you and your broker from legal expenses incurred due to misrepresentations by the seller.

Question 13

If you need to extend the expiration date of a listing, the best practice is to use an amendment addendum form and have it signed by the sellers and the listing agent.

Answer 13

True

Changes to the listing agreement require written consent of the sellers and the listing agent. Although it may be possible to make the change on the original listing agreement form, it is best to use and amendment addendum.

Question 14

A transfer disclosure statement must be used in “for s ale by owner” transactions

Answer 14

True
The seller of a residential property with up to four units must complete a transfer disclosure statement, even if no listing agent is involved.

Question 15

A buyer who decides to rescind the purchase agreement after receiving a transfer disclosure statement must do so within seven business days of receiving the statement.

Answer 15

False

The buyer has three (3) days in which to rescind the agreement if the transfer disclosure statement is delivering in person. If the statement is mailed, the buyer has five days from the date it is deposited in the mail.

Question 16

The listing agent should fil out the transfer disclosure statement on behalf of the seller.

Answer 16

False

The agent fills out a separate section of the form, based on her visual inspection of the property. You could be liable for any inaccuracies if you fill out the seller’s section.

Question 17

The seller may give the buyers copies of reports from inspections of the property instead of a transfer disclosure statement.

Answer 17

False

The seller must always use a transfer disclosure statement. Inspection reports may be attached as part of the disclosures, but they do not satisfy all of the seller’s obligations.

Question 18

Any latent defect must be disclosed, even if there is not a specific question on the transfer disclosure statement about the particular tope of defect.

Answer 18

True

All latent defect must be disclosed, regardless of whether they are addressed in the transfer disclosure statement.

Question 19

If a home was built after 1978 the seller must use a lead-based paint disclosure form.

Answer 19

False

The lead-based pain disclosure requirements apply to houses built before 1978.

Question 20

After receiving the natural hazard disclosure statement, the buyer has the same right to rescind the purchase agreement, as with the transfer disclosure statement.

Answer 20

true

The buyer may rescind the agreement within three days if the natural hazard disclosure statement is delivered personally, or with five days it it is mailed.

Question 21

Mello-Roos lien is created by a special assessment to provide the community services such as police or parks.

Answer 21

True