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Real Estate > Session 4: Employment Agreements & ADRE Investigations > Flashcards

Session 4: Employment Agreements & ADRE Investigations Flashcards

1
Q

Employment Agreements

A

A real estate employment agreement means a written agreement by which a real estate broker is entitled to compensation for services rendered

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2
Q

Listing Agreement

A

Employment agreement between the selled and the listing broker.

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3
Q

Exclusive Right to Sell (ER)

A

Written listing agreement appointing a broker the exclusive agent for the sale of the property for a specified period of time.
Entitled to a commission if the owner, the broker, or anyone else sells the property

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4
Q

Exclusive Agency Listing (EA)

A

A written listing agreement giving a sole agent the right to sell a property for a specified time, but the owner reserves for himself the right to sell the property without owing a commission.

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5
Q

Open Listing

A

Seller may employ any number of brokers at the same time, but the seller owes a commission only to the broker who sells the property. If the seller sells the property, the broker is not entitled to a commission

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6
Q

Net Listing

A

The listing states the amount the seller is to receive from the sale of the property. The broker’s commission is any amount above the new amount the seller is to receive.

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7
Q

Pocket Listing

A

Property is not listed on MLS. The seller can either opt-out of MLS advertising (office exclusive listing) or property is “coming soon” and is sold before hitting MLS. Can also be marketed to a select group of individuals.

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8
Q

Broker Protection Clause

A

Provides payment of a commission to the broker after the listing expires

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9
Q

Do employment agreements have to have a definite start and end date?

A

Yes

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10
Q

Does the employment agreement need to contain compensation?

A

Yes

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11
Q

Who does the employment agreement need to be signed by?

A

All parties i.e. husband and wife

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12
Q

Can the employment agreement be given to another broker? If so, how?

A

Yes, as long as written consent is given and signed by all parties

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13
Q

What does an agent need if a “fsbo” seller agrees to work with them?

A

Unrepresented Seller Compensation Agreement

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14
Q

Can you automatically advertise a house on the MLS?

A

No, you need written permission from the seller in the listing agreement.

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15
Q

Can you automatically place a lockbox and/or a sale sign on the property?

A

No, you need written permission from the seller in the listing agreement.

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16
Q

How do you know what items in the house can be sold in the house?

A

The listing agreement goes through which fixtures and personal property stay with the house.

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17
Q

When do you need to deliver conveyance documents?

A

Within 24 hours

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18
Q

Do you have to bring all verbal offers to your client?

A

Only if they have specified in writing that they want to hear them

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19
Q

Do you have to bring offers after one has been accepted?

A

Only if your client has specified in writing that they want them.

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20
Q

Can your client pull out of escrow to accept a better offer?

A

No. If the buyer pulls out the seller can have a backup offer, but the seller cannot pull out.

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21
Q

How long does the broker have to keep true copies of receipts and disbursement?

A

5 years

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22
Q

Competitive Market Analysis

A

Comp, helps sellers determine the sale price of their home. Helps buyers know the general price for that area.

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23
Q

Market Value

A

Most probable price for a property

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24
Q

Ready, willing, and able buyer

A

A buyer who is motivated! Ready to act immediately upon terms of listing agreement

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25
Q

When is commission EARNED?

A

When a broker brings a seller a ready, willing, and able buyer regardless of whether the seller sells or refuses

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26
Q

Can a promotional activity give away an award or prize?

A

No

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27
Q

Does the promotion need to clearly state the broker?

A

Yes

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28
Q

Does the promotion need to have an expiration date?

A

Yes

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29
Q

Can a subdivider run a lottery?

A

Yes

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30
Q

Can a seller pull out of an ER within the set dates of the contract?

A

No

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31
Q

Buyer-broker agreement

A

Between buyer and broker. The buyer agrees to work with a broker exclusively and will pay a commission if the seller does not.

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32
Q

When does an agent need to accompany their buyer to see houses?

A

Always on the first visit!

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33
Q

Multiple Listing Service

A

Members of specific MLS share their listings and commissions with other members.

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34
Q

Are there only 1 MLS?

A

No, there are multiple

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35
Q

Can you sell a house that’s listed on an MLS that you aren’t a member of?

A

Yes, but you might not get paid.

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36
Q

Do you have to disclose a co-broke to your client?

A

No

37
Q

ADRE

A

Arizona Department of Real Estate

38
Q

Who investigates the code of ethics?

A

Arizona Realtors Association

39
Q

Who handles HOA disputes?

A

Court

40
Q

Who handles Landlord-Tenant disputes?

A

Court

41
Q

Who handles construction defects?

A

Contractors

42
Q

Who handles mortgage and title issues?

A

AZ Department of Insurance

43
Q

Who handles earnest money disputes?

A

AZ Department of Financial Institutions

44
Q

Who handles commission disputes between licensees?

A

Court

45
Q

How many days do you have to respond to a complaint?

A

20 days

46
Q

Who represents ADRE in legal matters?

A

Attorney General

47
Q

The owner listed her property for sale with a broker. When the owner sold the home herself, she didn’t owe anyone a commission. Based on these facts, what type of listing did the broker and the owner most likely have?

A

Open listing

48
Q

Death of either the principal or broker terminates what contract?

A

Listing contract

49
Q

Procuring Cause is most significant to a seller in relation to a?

A

Exclusive Agency (EA) listing

50
Q

A broker has most likely earned a commission when?

A

The broker has communicated the acceptance of the seller to the buyer

51
Q

What was the sales price of a property whose owner paid a $6,000 commission at a 6% rate?

A

6000 / 0.06 = $100,000

52
Q

The final decision on a property’s listed price should be made by the?

A

Seller

53
Q

A seller has sold his property to a friend without the services of a real estate broker. The seller still owes the broker a commission because the seller signed an

A

Exclusive-right-to-sell listing

54
Q

Steve received $9,500 on his half of his broker’s 6% commission. The sale price was?

A

9500 / 0.03 = $316,667

55
Q

A broker secured a signed offer with the exact terms of the listing, but the seller refused to accept it. Which of the following statements is true?

a. the broker can demand that the seller accept the offer
b. the buyer could maintain a suit to force the seller to sell because there was compliance with the listing
c. the broker would still be entitled to their commission
d. all of the above

A

The broker would still be entitled to his/her commission

56
Q

If two licensees have an issue with their commission, what must they do?

A

Allow the deal to close, then go to court

57
Q

If a buyer backs out of an agreement to buy because he or she changes their mind…

a. the seller keeps the deposit
b. the buyer will lose the deposit
c. the earnest money is subject to loss
d. all of the above

A

The seller keeps the deposit
The buyer loses their deposit
The earnest money is subject to loss

58
Q

When you take a listing in AZ, it is customary to charge

A

What the seller agrees to

59
Q

Two brokers split the 6% commission on the sale of a four-bedroom house. What was the sales price if the selling salesperson earned a commission of $3,085, which was 40% of his broker’s share?

A

3085 / 0.4 = 7712.5

7712.5 / 0.03 = $257,083

60
Q

A broker obtains a verbal ER listing for 4 months. This listing would be

A

Unenforceable

61
Q

Who are the parties to a listing agreement?

A

Seller and broker

62
Q

What kind of listing agreement is illegal in most states because of the potential for conflict of interest between a broker’s fiduciary responsibility to the seller and the broker’s profit motive?

A

Net Listing

63
Q

A licensee shall not describe a premium offered at no cost or reduced cost to promote sales or leasing as a

a. promotion
b. award
c. prize
d. both a & b

A

Award or prize

64
Q

Who regulates escrow money issues in AZ?

A

AZ Department of Financial Institutions

65
Q

The licensee has how many days to respond to the Department’s notice of an investigation being initiated?

A

20 days

66
Q

Who regulates Title Insurance companies in AZ

A

AZ Department of Insurance

67
Q

The agent has a listing with the seller that states “90-day listing and 90 days after or until the home is sold”. Is this a valid listing?

A

No, listings must have a beginning and ending date.

There has to be an actual date, not just a time frame.

68
Q

What type of advertising does not require your broker to manage?

A

A salesperson’s PERSONAL Facebook page

69
Q

What advertising does your broker need to manage?

A

All advertising no matter the medium.

70
Q

Salesperson Donna has entered into a 90 day ER listing with seller Steve. The listing has expired three days ago and Steve has just sold the home on his own to someone who has seen the home while it was listed. What effect does this have on Donna?

A

Donna would be entitled to the commission ONLY if a “broker protection clause” was used in the listing agreement. This is because the buyer saw the home during the 90 listing.

71
Q

The designated broker reviews, dates, and initials all employment agreements, sales contracts, leases (as applicable), and similar documents within how many days of execution?

A

10 business days

72
Q

A listing agent has a listing that expired at the end of 60 days but the property is not sold. The agent has to wait 40 days to get in touch with the owners because they are on a cruise but is pretty sure the sellers will extend the listing. What should the agent do during the waiting period?

A

Remove all marketing and do not market during the waiting period.

73
Q

The for-sale sign in front of the home that is listed with Revelation Real Estate must include:

A

The employing broker’s name only. This has to be the legal name and include a DBA if applicable

74
Q

The owner died one month after signing a six-month ER listing. The day after the owner’s death, the listing agent procured a buyer for the full list price. The admin of the owner’s estate does not wish to sell. What are the rights of the parties?

A

Death will cancel an ER if the principal or broker dies during the term of the employment agreement.
The listing automatically cancels, the admin does NOT have to sell, and the commission does NOT need to be paid.

75
Q

A real estate broker made a mistake with filling out the listing agreement. The EA listing states “7 cents” rather than “7 percent” commission. The owner sells the property himself. The broker is entitled to

A

Nothing. In an EA the owner does not have to pay if they found the buyer.

76
Q

The code of ethics and standards of practice of real estate was established by

A

National Association of REALTORS

77
Q

A real estate agent who represents the buyer has a fiduciary responsibility to who?

A

The buyer

78
Q

Jody, a salesperson, receives 50% of all commissions earned. Jody sells 175 acres for $1,200 per acre. The commission rates are 10% on the first $50,000, 8% on the next $25,000, and 4% thereafter. What is Jody’s commission?

A 
1200 x 175 = $210,000 (sales price)
50000 x 0.1 = 5000
25000 x 0.08 = 2000
210000-5000-2000 = 135000
135000 x 0.04 = 5400
5000+2000+5400 = 12400
12400 / 2 = $6,200
79
Q

The buyer and his agent have entered into a buyer/broker exclusive employment agreement and the buyer has agreed to pay a representation fee. Who is this fee payable to?

A

Buyer Broker

80
Q

The AZ Real Estate Commissioner will not get involved with

a. Auditing a real estate broker’s branch office
b. Commission dispute between two licensees
c. A written complaint against a licensee
d. Investigating a licensee for any reason

A

Commission dispute between two licensees

81
Q

The commissioner has the power to do all of the following acts except:

a. Create real estate statues
b. Investigate licensees for any reason
c. Audit real estate brokerages
d. Prescribe rules and regulations

A

Create real estate statutes

82
Q

Can the commissioner investigate licensees for any reason?

A

Yes

83
Q

Can the commissioner audit real estate brokerages?

A

Yes

84
Q

Can the commissioner prescribe rules and regulations?

A

Yes

85
Q

Brian is a real estate agent in AZ and has a good friend who just wrote a contract with a “fsbo”. The friend was not represented by Brian but now asks if he will look over her contract and give advice. What should Brian do?

A

Recommend that his friend hire an attorney.

If Brian gave advice it could imply agency and he could be tied to the transaction

86
Q

Salesperson A enters into an “Open” listing with the seller on September 1 and salesperson B enters into an “ER” listing with the same seller on October 1. Salesperson A brings the seller a ready, willing, and able buyer. Who gets the commission?

A

The seller will be responsible to pay both brokers their commission.

87
Q

Mary, a real estate agent, is offering a $1,000 bonus to a buyer’s agent who brings their client to Mary’s open house on Saturday and writes an offer that is accepted by the seller. Is this legal?

A

Yes, bonuses are legal as long as it’s disclosed to all parties

88
Q

A subdivider in San Tan Valley is holding a drawing/contest to induce prospective buyers to visit the subdivision. Are subdividers allowed to hold drawings/contests in AZ?

A

Yes, if they meet the requirements by the ADRE

Real Estate (20 decks)

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