section 12 listing agreements

Question 1

To be valid, a listing agreement
a. must be in writing.
b. may be oral or written.
c. must be an express agreement.
d. must be enforceable.

Answer 1

b. may be oral or written.

Question 2

The type of listing that assures a broker of compensation for procuring a customer, regardless of the procuring party, is a(n)
a. exclusive right-to sell agreement.
b. exclusive agency agreement.
c. open listing.
d. net listing.

Answer 2

a. exclusive right-to sell agreement.

Question 3

An owner agrees to pay a broker for procuring a tenant unless it is the owner who finds the tenant. This is an example of a(n)
a. exclusive right-to sell agreement.
b. exclusive agency agreement.
c. open listing.
d. net listing.

Answer 3

b. exclusive agency agreement.

Question 4

A landlord promises to compensate a broker for procuring a tenant, provided the broker is the procuring cause. This is an example of a(n)
a. exclusive right-to sell agreement.
b. exclusive agency agreement.
c. open listing.
d. net listing.

Answer 4

c. open listing.

Question 5

A property owner agrees to pay a broker a commission, provided the owner receives a minimum amount of proceeds from the sale at closing. This is an example of a(n)
a. exclusive right-to sell agreement.
b. exclusive agency agreement.
c. open listing.
d. net listing.

Answer 5

d. net listing.

Question 6

The most significant difference between an owner representation agreement and a buyer representation agreement is
a. the client.
b. the commission amount.
c. agency law applications.
d. contract law applications.

Answer 6

a. the client.

Question 7

A multiple listing authorization gives a broker what authority?
a. To list the owner’s property in a multiple listing service
b. To sell several properties for the owner at once
c. To sell or lease the property
d. To delegate the listing responsibilities to other agents

Answer 7

a. To list the owner’s property in a multiple listing service

Question 8

A broker is hired to procure a customer for a client. In order to earn compensation, the agent must procure a customer who
a. has seen the property and reviewed all documents.
b. is ready, willing, and able to transact.
c. has completed an acceptable sale or lease contract.
d. will successfully complete the transaction at closing.

Answer 8

b. is ready, willing, and able to transact.

Question 9

One of the most important actions an owner’s agent is authorized to perform under an exclusive listing agreement is
a. showing the property.
b. assisting the customer in evaluating the relative merits of other properties.
c. authorizing price adjustments in a timely manner.
d. executing the sale or lease agreement.

Answer 9

a. showing the property.

Question 10

An agent’s performance of due diligence concerning a listing can best be described as
a. initiating the marketing plan on or before a deadline.
b. expending an amount of effort that is commensurate with the nature and size of the transaction.
c. ascertaining the facts about the client and the property at the onset of the listing period.
d. helping customers satisfy their needs to the extent they are entitled.

Answer 10

c. ascertaining the facts about the client and the property at the onset of the listing period.

Question 11

The amount of a real estate broker’s commission is
a. established among competing brokers.
b. established through negotiation with clients.
c. established by the Board of Realtors.
d. established by state real estate license law.

Answer 11

b. established through negotiation with clients.

Question 12

A client suddenly decides to revoke an exclusive right-to-sell listing midway through the listing term. The reason stated: the client did not like the agent. In this case,
a. the client is criminally liable for discrimination on the basis of the cause for cancellation.
b. the client may be liable for a commission and marketing expenses.
c. the agent can sue the client for specific performance, even if no customer had been located.
d. the agent has no recourse but to accept the revocation.

Answer 12

b. the client may be liable for a commission and marketing expenses.

Question 13

A “protection period” clause in an exclusive listing provides that
a. the owner is protected from all liabilities arising from the agent’s actions performed within the agent’s scope of duties.
b. the agent has a claim to a commission if the owner sells or leases to a party within a certain time following the listing’s expiration.
c. agents are entitled to extend a listing agreement’s term if a transaction is imminent.
d. an owner is not liable for a commission if a prospective customer delays in completing an acceptable offer.

Answer 13

b. the agent has a claim to a commission if the owner sells or leases to a party within a certain time following the listing’s expiration

Question 14

The document that puts an agent or broker in business. A legally enforceable real estate agency agreement between a real estate broker and a client, authorizing the broker to perform a stated service for compensation. The unique characteristic of a listing agreement is that it is governed both by agency law and by contract law.

Answer 14

listing agreement

Question 15

A listing agreement which pays the listing broker a commission if anyone at all procures a customer.

Answer 15

Exclusive right

Question 16

A listing agreement which pays the listing broker a commission if anyone other than the property owner procures a customer.

Answer 16

Exclusive Agency:

Question 17

A non-exclusive listing which pays an agent a commission only if the agent is procuring cause of a ready, willing, and able customer.

Answer 17

Open Listing:

Question 18

A listing which states a minimum sale or lease price the owner will accept, with any excess going to the broker as a commission. Professionally discouraged, if not illegal.

Answer 18

Net Listing:

Question 19

A broker’s listing with a buyer to locate a suitable property for purchase or lease.

Answer 19

Buyer and Tenant Representation:

Question 20

Multiple listing is a significant feature of brokerage practice. Multiple listing is an authorization to enter a listing in a multiple listing service.

Answer 20

Multiple Listing:

Question 21

the listing context refers to verifying the accuracy of the statements in the listing regarding the property, the owner, and the owner’s representations. Especially important facts for a broker or agent to verify are:
* the property condition
* ownership status
* the client’s authority to act

Answer 21

Due Diligence:

Question 22

• A party who was first to obtain a ready, willing, and able customer, or a party who expended the effort to induce the customer to complete the transaction.

Answer 22

• Procuring Cause:

Question 23

In addition to creating contractual obligations, a listing agreement creates
a. an agency relationship with fiduciary obligations.
b. a general partnership with financial obligations.
c. a joint venture.
d. a temporary business entity subject to corporation regulations.

Answer 23

a

Question 24

The scope of authority granted by a listing agreement generally allows the agent to
a. create contractual obligations for the client.
b. negotiate the selling price between client and customer.
c. hire inspectors, architects, and other individuals to prepare the property for marketing.
d. advertise and show the property.

Answer 24

d

Question 25

Even if legally valid, oral listings are generally not advisable for an agent because
a. they do not specify a commission.
b. they are not recognized by cooperating brokers.
c. they can be difficult to enforce if disputed.
d. they have no expiration date.

Answer 25

c

Question 26

A salesperson, without an oral or written listing agreement, brings potential buyers to the seller. The seller says, “You can bring me buyers if you want, but I’m not paying you a commission.” The salesperson then continues to direct buyers to the property. Which of the following is true about this situation?
a. There is no agency relationship, and therefore the seller will owe no commission if one of the salesperson’s buyers buys the property.
b. An implied agency may have been created, with obligations to perform for both seller and agent.
c. The seller and agent have an illegal, undisclosed agency relationship.
d. The agent has an open listing with no commission agreement, and therefore no fiduciary duties to the seller.

Answer 26

b

Question 27

An agent signs a listing agreement with a home seller, but then becomes too busy to fulfill the agreement. To alleviate the problem, the agent assigns the agreement to a competing broker. Which of the following is true about this situation?
a. The agent cannot assign the listing agreement.
b. The new broker acquires the full set of fiduciary duties to the client.
c. The new broker has to split any commission that results with the assigning broker.
d. The original broker has to disclose the assignment to the seller.

Answer 27

a

Question 28

From an agent’s point of view, the most desirable form of listing agreement is a(n)
a. exclusive agency.
b. exclusive right to sell.
c. open.
d. net.

Answer 28

b

Question 29

What kind of listing agreement is a buyer representation agreement?
a. An implied listing.
b. An informal open listing.
c. An exclusive listing with a disclosed dual agency.
d. An exclusive, exclusive agency, or open listing.

Answer 29

d

Question 30

What is a multiple listing?
a. A listing shared by a listing agent and a selling agent.
b. A listing that a listing agent delegates to a subagent.
c. A listing that is entered in a multiple listing service to enable cooperation with member brokers.
d. A listing that authorizes a listing agent to market more than one property for a seller.

Answer 30

c

Question 31

Which of the following conditions is necessary for a customer to qualify as “ready, willing, and able?”
a. The customer’s offer must be accepted.
b. The customer must be legally capable of completing the transaction.
c. The customer must have a commitment from a lender.
d. The customer must have no business relationship with the agent.

Answer 31

b

Question 32

Although a listing broker may delegate marketing responsibilities to a salesperson, the broker may not delegate the authority to
a. obtain and distribute compensation.
b. provide cooperating brokers with information about the property.
c. advertise the property.
d. inspect the property for hazardous substances.

Answer 32

a

Question 33

One of the principal determinants of “procuring cause” in a completed transaction is
a. having a written listing agreement.
b. being a member of the multiple listing service that listed the property.
c. being first to find the customer.
d. having a cooperative commission agreement with the seller.

Answer 33

c

Question 34

If an agent has an exclusive listing to sell a property, and the property is then taken by eminent domain, what is the status of the listing?
a. The seller’s obligations under the listing are assigned to the agency that takes the property.
b. It becomes a voidable contract.
c. The commission clause of the agreement is canceled.
d. It may be terminated against the agent’s will.

Answer 34

d

Question 35

A broker obtains an exclusive listing to sell a house but after a month abandons the listing because the seller is “too much trouble.” What can the seller do in this situation?
a. Nothing.
b. Sue the broker for money damages.
c. Sign a listing agreement with another broker and force the first broker to pay the commission.
d. Force the broker to perform the contract without compensation.

Answer 35

b

Question 36

What is a “listing price?”
a. The seller’s gross asking price as stated in the listing.
b. The price that is actually achieved in a transaction.
c. The price that must be obtained for the listing agent to earn a commission.
d. The lowest price that is acceptable to the seller.

Answer 36

a

Question 37

A married couple who own a house as tenants by the entireties want to give a broker the exclusive authorization to sell the house. Who must sign the listing agreement to make a valid contract?
a. Either owner.
b. Both owners and all mortgage lien holders.
c. Both owners and the broker.
d. Either owner and the broker.

Answer 37

c

Question 38

A “protection period” clause in an exclusive listing provides that
a. the owner is protected from all liabilities arising from the agent’s actions performed within the agent’s scope of duties.
b. the agent has a claim to a commission if the owner sells or leases to a party within a certain time following the listing’s expiration.
c. agents are entitled to extend a listing agreement’s term if a transaction is imminent.
d. an owner is not liable for a commission if a prospective customer delays in completing an acceptable offer.

Answer 38

b

Question 39

A client suddenly decides to revoke an exclusive right-to-sell listing midway through the listing term. The reason stated: the client did not like the agent. In this case,
a. the client is criminally liable for discrimination on the basis of the cause for cancellation.
b. the client may be liable for a commission and marketing expenses.
c. the agent can sue the client for specific performance, even if no customer had been located.
d. the agent has no recourse but to accept the revocation

Answer 39

b

Question 40

The amount of a real estate broker’s commission is
a. established among competing brokers.
b. established through negotiation with clients.
c. established by the Board of Realtors.
d. established by state real estate license law.

Answer 40

b

Question 41

An agent’s performance of due diligence concerning a listing can best be described as
a. initiating the marketing plan on or before a deadline.
b. expending an amount of effort that is commensurate with the nature and size of the transaction.
c. ascertaining the facts about the client and the property at the onset of the listing period.
d. helping customers satisfy their needs to the extent they are entitled.

Answer 41

c

Question 42

One of the most important actions an owner’s agent is authorized to perform under an exclusive listing agreement is
a. showing the property.
b. assisting the customer in evaluating the relative merits of other properties.
c. authorizing price adjustments in a timely manner.
d. executing the sale or lease agreement.

Answer 42

a