Real Estate National Test Ch 8

Question 1

D: Brokerage

Answer 1

is the business of bringing parties together.

Question 2

D: Real Estate Broker

Answer 2

is licensed to buy, sell, exchange, or lease real property for others and to charge a fee for those services.

A broker may be an agent for a client, or a broker and client may decide on a different form of representation if allowed by state law.

Question 3

D: real estate salesperson

Answer 3

is licensed to perform real estate activities on behalf of a licensed real estate broker.

The broker for whom the salesperson works is called the employing broker, and both will be subject to the terms of an employment agreement, even when the salesperson is an independent contractor for tax and other purposes.

The broker is fully responsible for the actions performed in the course of the real estate business by all persons licensed under the broker, which is why the sales associate can never be an independent contractor for purposes of the licensing law.

A sales associate can carry out only those responsibilities delegated by the employing broker and can receive compensation only from that broker. As an agent of the broker, the sales associate has no authority to make contracts with or receive compensation from any other party. The agency relationship also makes the broker liable for the acts of a sales associate that fall within the scope of the employment agreement.

Question 4

D: Vicarious Liability

Answer 4

means that the broker can be held responsible for the conduct while performing brokerage activities of every sales associate employed by the broker.

Question 5

D: Managing Broker

Answer 5

who may also be called the supervising broker, is responsible for the supervision of the real estate professionals who act on behalf of the brokerage.

In a one-office firm, the managing broker may be the broker under whose license the firm has been created.

In a larger company, every branch office of the brokerage typically will be required to designate a managing broker for that office location, and the managing broker may be required to live within a certain number of miles of the office.

Question 6

What are the requirements must be met for a sales associate to establish a nonemployee status with the employing broker for tax purposes:

Answer 6

1. The sales associate must have a current real estate license.
2. The sales associate must have a written contract with the broker that specifies that the sales associate will not be treated as an employee for federal tax purposes.
3. A substantial portion of the sales associate’s income as a real estate professional must be based on sales production or other output and not on the number of hours worked.

Question 7

D: Real Estate Assistant

Answer 7

AKA: Personal Assistant or Professional Assistant)

Can be a combination office manager, marketer, organizer, and facilitator who has a fundamental understanding of the real estate industry.

The assistant can be a staff member working for more than one real estate professional but often works for a specific sales associate.

The assistant might be required to have a real estate license, depending on the tasks performed.

The extent to which the assistant can help the real estate broker or sales associate with transactions will be determined by the state licensing law and regulations.

An unlicensed assistant generally may perform duties that include clerical tasks, office management, website development and maintenance, and production of marketing pieces, but with little direct contact with consumers.

A licensed assistant, on the other hand, can also set up and host open houses and assist in all aspects of a real estate transaction, including day-to-day contact with consumers.

Usually, an unlicensed personal assistant working for a sales associate can be paid by the sales associate, but a licensed personal assistant working for a sales associate must be paid by the employing broker.

For purposes of the real estate licensing laws and regulations, both the sales associate and licensed personal assistant are under the supervision of the employing broker.

Question 8

To be entitled to receive compensation from a real estate sales transaction, an individual must be?

Answer 8

1. A licensed real estate broker
2. Employed by the buyer or seller under a valid contract
3. The procuring cause of the sale.

Question 9

D: Multiple Listing Service (MLS)

Answer 9

A marketing organization composed of member real estate professionals who agree to share their listing agreements with one another in the hope of procuring ready, willing, and able buyers for their properties more quickly than they could on their own.

Most multiple listing services accept exclusive right-to-sell or exclusive agency listings from their member real estate professionals.

Question 10

D: Procuring Cause

Answer 10

To be considered the procuring cause of a sale, the broker must have started or caused an uninterrupted chain of events that resulted in the sale.

A broker (or a sales associate of the broker) who causes or completes such a course of action without a contract or without having been promised payment is a volunteer and may not legally claim compensation.

Question 11

If the transaction is not consummated, the real estate broker may still be entitled to a commission if the seller?

Answer 11

1. Has a change of mind and refuses to sell.
2. has a spouse who refuses to sign the deed.
3. Has a title with uncorrected defects.
4. Committed fraud with respect to the transaction.
5. Is unable to deliver possession within a reasonable time.
6. Insists on terms, not in the listing
7. Has a mutual agreement with the buyer to cancel the transaction.

Question 12

D: Price Fixing

Answer 12

is a practice in which competitors agree to set prices or other terms and conditions for products or services rather than letting competition in the open market establish those prices.

Question 13

D: Group Boycott

Answer 13

occurs when two or more businesses conspire against another business or agree to withhold their patronage to reduce competition.

Question 14

D: Tie-In Agreements

Answer 14

AKA Tying Agreements

are agreements to sell one product only if the buyer purchases another product as well. The sale of the first (desired) product is tied to the purchase of a second (less desirable) product.

Question 15

What R the penalties for violating the antitrust laws, from the Federal Sherman Antitrust Act

Answer 15

The Penalty for price-fixing or allocating markets is a Max of $1 Million fine and 10 years in prison.

For corporations, the penalty is as high as $100 Million.

The person that is harmed by the antitrust violation may sue for DMGs and acquire 3x’s the amount of DMG.

Question 16

D: Code of Ethics

Answer 16

A written system of standards for ethical conduct.

Question 17

Realtors are expected to what code of ethics.

Answer 17

REALTORS® are expected to subscribe to NAR’s Code of Ethics.

Question 18

D: Internet Data Exchange Policy (IDX)

Answer 18

The National Association of REALTORS® has adopted an Internet Data Exchange (IDX) policy that allows all MLS members to have equal rights to display MLS data, while also respecting the rights of the property owner and the real estate broker who represents the property owner to market a property as they wish.

A blanket opt-out provision provides that those MLS participants interested in keeping their listings from competitors’ websites cannot then display other real estate brokers’ listings.

Real estate brokers who opt out of displaying their listings on competitors’ websites can, at the direction of a seller, make an exception and display the seller’s property on the MLS website.

Question 19

NAR’s Internet Data Exchange policy, internet advertising laws, and regulations frequently include what stipulations:

Answer 19

1. All electronic communicvation by a real estate professional must include the professional’s name office address, and broker affiliation.
2. Real Estate professionals must disclose their license status on each page of a website that contains an advertisement.
3. The listing of only a sales associate’s name without the sponsoring broker’s name in an advertisement is prohibited.
4. An advertisement must be a true, current representation of the information it contains, and not be misleading.

Question 20

What are the two federal govern electronic contracting?

Answer 20

1. Uniform Electronic Transactions Act (UETA)

2. Electronic Signatures in Global and National Commerce Act (E-Sign).

Question 21

What 3 states have not accepted the Uniform Electronic Transaction Act (UETA)

Answer 21

1. illinois
2. New York
3. Washington

Question 22

What are the key provisions found in the Unifrom Electronic Transaction Act (UETA)?

Answer 22

1. A contract cannot be denied its legal effect just because an electronic record was used.
2. A record or signature cannot be denied its legal effect just because it is in an electronic format.
3. If a state’s law requires a signature on a contract, an electronic signature is sufficient.
4. If a state’s law requires a written record, an electronic record is sufficient.

Question 23

What is the purpose of The Electronic Signatures in Global and National Commerce Act (E-Sign)?

Answer 23

Is to make contracts, including signatures, and records legally enforceable, regardless of the medium in which they are created.

Question 24

Real estate professionals may call consumers with whom they have an established business relationship for up to?

Answer 24

18 months after the consumer’s last purchase, delivery, or payment, even if the consumer is listed on the National Do Not Call Registry.

Also, a real estate professional may call a consumer for up to three months after the consumer makes an inquiry or submits an application.

Question 25

In real estate, a sales associate is always?

A. a licensee who performs real estate activities on behalf of a broker.

B. a combination office manager, marketer, and organizer with a fundamental understanding of the real estate industry, who may or may not be licensed.

C. an employee of a licensed broker.

D. an independent contractor.

Answer 25

A) a licensee who performs real estate activities on behalf of a broker.

Question 26

A broker who owns a realty agency does not permit his sales associates to agree to more than a 5% commission in any transaction. After reading a newspaper article about this realty agency’s policies, the broker of another realty agency decides to also adopt the 5% maximum. Based on these facts, which of these statements is TRUE?

A)Both brokers engaged in illegal price-fixing.

B) Although the first realty agency’s policy is legal, the second realty agency’s adoption of the same maximum commission may constitute an antitrust violation if both brokers are in the same real estate market.

C) Neither broker has committed an antitrust violation.

D) The first realty agency’s policy is price-fixing and violates the antitrust law.

Answer 26

C) Neither broker has committed an antitrust violation.

The answer is neither broker has committed an antitrust violation.

Brokers must independently determine commission rates or fees for their own firms.

Because the second agency’s broker learned about the first agency’s policies from a public source, the newspaper, and did not discuss the policy with the first agency, neither broker has committed an antitrust violation.

Question 27

Assuming that the listing broker and selling broker split their commission from a transaction equally, what was the sales price of a rural property if the commission rate was 6.5% and the listing broker received $12,593.50?

Answer 27

The answer is $387,492. The problem can be solved using these two steps:

(1) Find the entire commission by doubling the listing broker’s half: 2 × $12,593.50 = $25,187. (2) Find the sales price by dividing the entire commission by the brokerage rate:

$25,187 ÷ 0.065 = $387,492.

Question 28

The sale of a single-family house produced a total commission of $45,825. The sales associate who was responsible for bringing the buyer to the transaction has a 60/40 commission split arrangement with the employing broker, with the sales associate receiving 60 percent. If the total commission was split between the listing and selling firms, what is the commission that the buyer’s sales associate will receive?

Answer 28

The answer is $13,747.50. Fifty percent of $45,825 is $22,912.50, and 60 percent of that amount is $13,747.50, which is the buyer’s sales associate’s compensation for the transaction.

Question 29

The moral principles of a profession include?
A) standards for integrity and competence in dealing with consumers.

B) a code of conduct for relations within the industry among its professionals.

C) neither standards for integrity nor a code of conduct.

D) standards for integrity as well as a code of conduct.

Answer 29

D) standards for integrity as well as a code of conduct.

The answer is standards for integrity as well as a code of conduct. The moral principles of a profession include standards for integrity and competence in dealing with consumers and a code of conduct for relations within the industry among its professionals.