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Minnesota Real Estate Exam > Unit 1: Minnesota Agency > Flashcards

Unit 1: Minnesota Agency Flashcards

1
Q

What are the 4 types of agency relationships allowed in Minnesota?

A
  1. Seller’s Broker
  2. Buyer’s Broker
  3. Dual Agency
  4. Facilitator
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2
Q

What is dual agency?

A

When the broker represents both the seller and the buyer in the same transaction, whether both parties have the same salesperson or not.

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3
Q

What is needed in order for dual agency to be legal?

A

The relationship must be disclosed to both parties and both parties must agree to it in writing.

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4
Q

What is a facilitator?

A

A licensee performing services but does not represent either party.

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5
Q

Because facilitators do not represent the buyer or seller, what is the only fiduciary duty they owe?

A

Confidentiality

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6
Q

T/F A salesperson cannot be a facilitator if his broker presents the buyer and/or seller?

A

True

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7
Q

T/F Agency representation trumps facilitation.

A

True

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8
Q

In a dual agency, the dual agency disclosure needs to be included in what 3 documents of a transaction?

A
  1. Listing
  2. Buyer’s representation
  3. Purchase Agreement
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9
Q

When must the broker and/or the salesperson provide the written agency disclosure?

A

At the first substantive contact with a RESIDENTIAL buyer or seller.

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10
Q

T/F The agency disclosure form is a contract.

A

False. The form only provides information and disclosure. it does not create an agency relationship.

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11
Q

What is the full name of the agency disclosure form?

A

Agency Relationships in Real Estate Transactions disclosure form

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12
Q

What is considered a substantive contact with a prospective client?

A

A face-to-face meeting or a phone call

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13
Q

What are the 5 pieces of information that agents must be disclosed in all transactions before negotiations begin?

A
  1. they are a licensee
  2. who they represent
  3. any financial interest in the transaction
  4. any family relationship with a party to the transaction
  5. if selling their own property, that they are a licensee
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14
Q

In a listing agreement, what are the first 4 pieces of information that must be included?

A
  1. Definite expiration date
  2. Legal description of the property
  3. List price & any terms required by the seller
  4. Negotiable Commission Clause
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15
Q

In a listing agreement, what are the second 4 pieces of information that must be included?

A
  1. Clear statement explaining the conditions that will entitle a broker to a commission.
  2. Clear statement explaining if the agreement may be canceled.
  3. Override Clause
  4. Dual agency disclosure and consent provision
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16
Q

In a listing agreement, what are the last 3 pieces of information that must be included?

A
  1. Notice to the seller, if the seller does or does not want to have the licensee arrange for closing services.
  2. Notice stating that the seller will not be obligated to pay the licensee after the listing expires, if they enter into a valid listing agreement
  3. Description of the seller’s obligations to cooperate with marketing, provide access to the property, & allow pictures/information be displayed on the internet.
17
Q

What part of the listing agreement is only present in a residential transaction?

A

The notice stating that the seller will not be obligated to pay the licensee after the listing expires, if the seller enters into another valid listing agreement.

18
Q

What font and font size does the negotiable commission clause need to be?

A

10-point boldface type

19
Q

In a listing agreement, where does the negotiable commission clause need to be?

A

Immediately before the provision relating to the broker’s compensation.

20
Q

What are the 3 ways compensation can be computed?

A
  1. Percentage of selling price
  2. Net selling price
  3. Flat fee
21
Q

T/F Net selling price is not recommended but sometimes used in commercial transactions.

A

True

22
Q

What is an override clause?

A

The broker/salesperson is entitled to a commission during a specified period after the listing agreement expires, if the property is sold to someone the agent dealt with during the listing term.

23
Q

In an override clause, how many hours after the listing expired does the broker/salesperson have to give a protective list to the seller?

A

72 hours

24
Q

In an override clause, how long is the protection period?

A

No longer than 6 months for residential and up to 2 years for the purchase or sale of a business.

25
Q

How does the override clause terminate?

A

If the client lists with another broker.

26
Q

What are the 2 provisions that a licensee is not allowed to include in a listing agreement?

A
  1. Holdover Clause (automatic renewal)

2. Override Clause longer than 6 months

Minnesota Real Estate Exam (20 decks)

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