Unit 18

Question 1

Licensing Law require written documents contain…

Answer 1

• Brokers fee and duration of the contact
• Nature and extent of services
• Statement identifying any possibility that the broker or any license by the broker may provide services to more than one consumer in a single transaction
• Brokers policies on agency
• Statement describing the real estate recovery fund
• Statement regarding conflicts of interest and ongoing duty to disclose conflicts.

Question 2

Exclusive right to sell

Answer 2

• One authorized broker-agent receives a commission

- Seller pays broker-agent regardless of who sells the property

Question 3

Exclusive Agency Listing

Answer 3

• There is only one authorized broker-agent
• The broker is compensated only if the procuring cause
• The seller retains the right to sell without obligation

Question 4

Open Listing

Answer 4

• There are multiple agents
• Only the agent who is procuring cause can be compensated
• The seller retains the right to sell independently without obligation.

Question 5

Multiple Listings

Answer 5

A multiple listing clause may be included in an exclusive listing. It is used by brokers who are members of a multiple listing service MLS.

Question 6

Net Listing

Answer 6

A net listing provision specifies that the seller will receive a net amount of money from a sale, with the excess going to the listing broker as commission. The broker is free to offer the property at any price greater than the net amount. The broker is entitled to any amount exceeding the sellers stated net proceeds.
Illegal in many states and discouraged in others.

Question 7

Expiration of listing period

Answer 7

Must specify a definite period of time during which the broker is to be employed. Cannot exceed 12 months. Some brokers include a protection clause to protect commission- if procuring cause still get commission even if listing agreement expires.

Question 8

Info needed for a listing agreement

Answer 8

• Name and relationships
• Street address and legal descriptions
• Size type age and construction of improvements
• number of rooms and their sizes.
• Dimensions of the lot
• Existing loans ect.
• Special assessments
• Zoning
• Property taxes
• neighborhood amenities
• disclosures

Question 9

Comparative Market Analysis (CMA)

Answer 9

Used to help sellers come to a reasonable asking price. Compares location, size, age, style, amenities of properties that are comparable to the sellers property. as follows

• Recently sold properties- what buyers were willing to pay for a similar property and what lenders considered to be valuable on which they made lending decisions.
• properties currently on the market- competition
• Properties that were listed but did not sell- to high of an asking price.

CMA is not an appraisal- PA requires a statement saying that.

Question 10

Calculating sales price, commissions and nets to seller

Answer 10

Sales Price x Commission Rate= commission
Commission / Commission Rate= sales price
Commission / sales price = commission rate
Sales price (100% - commission rate)= net to seller

Question 11

Real Estate Seller Disclosure

Answer 11

The seller must disclose property conditions required by law in most states. In PA residential real property sellers must disclose all material defects.
Sellers must be truthful to avoid litigation. A signed and dated disclosure statement must be presented to prospective buyers before they sign an agreement of sale.

Question 12

Exclusive buyer agency

Answer 12

Exclusive agency agreement. The buyer is legally bound to compensate the broker if the buyer purchases a property of the type described in the contract within the agreed upon time frame. the broker is entitled to compensation regardless of weather the property is located by the broker, the buyer, or another licensee.

Question 13

Exclusive agency buyer agency

Answer 13

Exclusive buyer agency agreement. This agreement limits the broker’s right to compensation. Brokers are entitled to payment only if they locate the property the buyer ultimately purchases. The buyer retains the right to locate a suitable property on their own without obligation to compensate the broker.

Question 14

Non exclusive buyer agency

Answer 14

Open agency contract. It permits the buyer to enter into similar agreements with an unlimited number of brokers. The buyer is obligated to compensate only the broker who locates the property the buyer ultimately purchases.

Question 15

info collected about buyer

Answer 15

• Names of buyers
• Type of property desired
• geographic area covered by the agreement
• price range
• length of time the contract will run
• scope of work to be performed by the agent
• contract terms
• terms and source of compensation
• dual agency?
• financial terms of a purchase
• inclusions and contingencies

Question 16

Buyer representation agreement

Answer 16

• Type of buyer agency agreement
• Time period of the contract
• Brokerage fees and obligations
• Property requirements and term of purchase
• brokers protection clause
• signatures of all parties
• disclosures related to conflict of interest
• Nondiscrimination wording
• Disclosure for zoning issues, real estate recovery fund…ect
• Dual agency?
• Designated agency?
• Provision for assignment