Unit 3.5 - Agency Contracts and Compensation (Quiz) Flashcards
A listing agreement has been executed between Triple S Realty and Sam Seller that calls for Triple S to receive compensation for the sale of Sam’s home under any circumstances with the exception of a buyer being produced as a result of Sam’s own marketing of the property at his job. Which of the following listing agreements describes this situation?
Choose only ONE best answer.
A Exclusive Agency Listing B Exclusive Right To Sell Listing C Net Listing D Open Listing
A
Exclusive Agency Listing
The exclusive agency listing is one in which the seller may continue to try to sell the property on their own without the help of their listing firm and if they are successful will not have to pay a commission. They have exclusively tied themselves to one listing firm and that firm will be owed a commission if either the listing firm or another cooperating firm produces the buyer, but NOT if the seller sells it themselves. In an Exclusive Right To Sell listing agreement, the listing firm would be owed a commission under ANY circumstances, no matter who produces the buyer.
All the following situations will terminate an agency relationship EXCEPT:
Choose only ONE best answer.
A
Expiration of the terms of the agency agreement.
B
Mutual agreement to discontinue the relationship.
C
Fulfillment of the purpose for which the relationship was created.
D
Death of the individual broker that signed the agreement for the real estate firm.
D
Death of the individual broker that signed the agreement for the real estate firm.
Death of the parties to an agency agreement would terminate the agency agreement, but it is the entire FIRM which is a party to the agreement with the client. The death of the individual broker does not matter. It would require death of the entire firm (going out of business)
Sea Coast Real Estate has executed a written agency agreement with Billy the buyer. Which of the following would end that agency agreement?
Choose only ONE best answer.
A
A property Billy is purchasing is destroyed by a hurricane
B
Billy closes on the purchase of a For Sale By Owner property where the seller offers no compensation to buyer agents
C
Billy makes an all cash offer over list price on a home that is declined by the seller
D
Billy decides to stop working with Sea Coast
B
Billy closes on the purchase of a For Sale By Owner property where the seller offers no compensation to buyer agents
Destruction of the property only terminates seller (listing) agency agreements. Since the buyer hires their firm to help purchase ANY property, the agreement would continue until the buyer found another acceptable property or the agreement expired. Once the buyer purchases ANY property, the buyer agency agreement comes to an end.
A provisional broker enters into a listing agreement with a seller for 6 months. When does the broker earn compensation?
Choose only ONE best answer.
A
When a buyer has made an offer to purchase the property.
B
When a buyer has closed on the property?
C
When a seller accepts an offer for less that the list price.
D
When a buyer terminates a contract during the due diligence period.
C
When a seller accepts an offer for less that the list price.
In order to earn compensation a listing broker must find a ready, willing and able buyer at the price and terms agreed to by the seller. When a seller enters into a contract, even if it is less than the list price, the broker earns compensation. It is correct that compensation is paid at closing, however the compensation is earned earlier. The listing agent and buyer’s agent are not entitled to compensation when a buyer terminates the contract during the due diligence period.
An agency relationship can be terminated by all of the following, EXCEPT:
Choose only ONE best answer.
A Death of a provisional broker. B Mutual agreement of the parties C Death of the principal before a contract of sale is signed D Dissolution of the brokerage firm
A
Death of a provisional broker.
Listing agreements and buyer agency agreements are between the client and the firm, with an agent appointed as primarily responsible for fulfilling the firm’s duties. The brokerage would appoint another broker to represent the buyer or the seller in the event that a provisional broker died.
Frank LaCoeur retains the privilege of selling his own house under a listing agreement with Effie Berouka and three other brokerages. Broker Nora Williamson finds a buyer for the house. No compensation is paid to either agent. The listing agreement LaCoeur and Berouks signed is:
Choose only ONE best answer.
A an exclusive right to sell listing agreement. B an exclusive agency listing agreement. C an open listing agreement. D a limited services listing agreement.
C
an open listing agreement.
A seller is not obligated to pay compensation to the listing agent (Effie Berouka) as she was not the procuring cause in the transaction. The sellers not obligated to pay Nora Williamson as the problem does not say that she also had an agreement with the seller. In an open listing multiple brokers compete against the seller, however only the agents that have signed an open listing agreement are entitled to compensation if they find the buyer.
What is a Net Listing (agreement)?
When seller agrees to compensate listing firm however many $ above the listing price
What is a Limited Services Listing (agreement)?
An agreement that allows seller to hire firm for situational services.
~ex. simply entering listing into the MLS and that is it. (fiduciary responsibilities still apply). Like ordering a la carte, don’t get the sides.
What is an Exclusive Right to Sell Listing (agreement)?
Broker gets paid no matter what, no matter who produces a buyer. This is the most ideal type of listing agreement.
What is an Exclusive Agency Listing (agreement)?
Listing firm is hired exclusively, but seller holds the right to do sell themselves and not pay us.
What is an Open Listing (agreement)?
Seller could have multiple contracts with multiple firms.
A seller and broker signed a listing agreement. The written contract stated that upon expiration, if neither party notifies the other of their intent to terminate the agency, the contract will renew itself for the same period. This listing agreement
Choose only ONE best answer.
A
is legally valid and binding contract evidenced by the signatures of the parties
B
is in compliance with Commission rules and regulations
C
Violates the Sherman Act
D
Violates license law and Commission rules
D
Violates license law and Commission rules
A listing agreement must provide for definite end date. The only agreement that allows for an automatic renewal is a property management agreement. A listing agreement must contain a list price, signatures of all owners to the property, legal description and anti-discrimination policy.
In order to earn a commission as a listing broker under a typical exclusive right to sell listing agreement, all the following requirements must be met EXCEPT the:
Choose only ONE best answer.
A
broker’s license must be on active status.
B
listing agreement must be in writing and signed by the seller and broker.
C
closing of the transaction with the transfer of title must be complete.
D
broker must procure a “ready, willing and able” buyer offering contract terms that meet with the seller’s agreement.
C
closing of the transaction with the transfer of title must be complete.
Most listing agreements do not require closing for a commission to be earned. They require the listing firm produce a ready, willing, and able buyer who wishes to purchase the property at terms the seller has indicated are acceptable.
Most standard listing agreements include which of the following provisions?
Choose only ONE best answer.
A
A release of liability for misrepresentation by the listing firm
B
Compensation to be paid to the individual agent
C
Duties of the listing firm and the seller
D
Guarantee of sale by the listing firm
C
Duties of the listing firm and the seller
Listing agreements do not guarantee that the property will be sold.
Salesperson Horning listed a property under a valid written exclusive right to sell listing agreement. At the closing the owner refused to pay the listing fee. Which of the following can Horning do?
Choose only ONE best answer.
A
She and her office can take the seller to court and sue for the commission
B
She and her office are entitled to a lien on the seller’s property for the amount of the commission
C
She and her office can go to court and stop the transaction until she is paid
D
She and her office can collect the commission from the buyer
A
She and her office can take the seller to court and sue for the commission
A listing broker earns commission when they procure a ready willing and able buyer, at the price and terms agreed to by the seller - or when the property goes under contract. Commission is paid at closing by the seller. When the seller refuses, they have breached the contract and the broker is entitled to sue them in court.
