Unit 6

Question 1

Brokerage Agreements

Answer 1

Contracts for the professional services of the sponsoring broker. In IL can be oral or written but oral not recommended.
Establish rights and duties of the sponsoring broker as agent for the buyer or seller

Agreement must state illegal to refuse to sell to any person because of their membership to a protected class

Question 2

Listing Agreement

Answer 2

Contract between the sponsoring broker and seller. Exclusive agreement must be in writing!

Question 3

Buyer Agreement

Answer 3

Between sponsoring broker and buyer

Question 4

Management Contract

Answer 4

Between sponsoring broker and owner of a rental company

Question 5

Exclusive Right to Sell (Listing Agreement)

Answer 5

One broker appointed as seller’s sole agent. Majority of residential listing agreements in IL are Exclusive Right to Sell.

CANNOT have automatic extension clauses

Question 6

Exclusive Agency

Answer 6

Broker acts as exclusive agent but seller retains right to sell without obligation to broker.

Brokers does best to sell but if seller finds their own buyer, broker does not get commission

Question 7

Open Listing Agreement/Non exclusive

Answer 7

Seller can retain any number or brokers as agents. Whoever finds buyer gets compensated

Question 8

Net Listing

Answer 8

Specifies seller receives a net amount from a sale and rest goes to the listing broker as commission

Legal in IL but not recommended due to potential for fraud

Question 9

Option Listing

Answer 9

Gives broker right to purchase the property at some point at a specific price.

Question 10

Multiple Listing Service

Answer 10

a marketing organization whose members make their listings available for showing and sale

Question 11

No Subagency in IL

Answer 11

Licensees works for buyer unless consumer chooses not to be

Question 12

Paying commission does not equal agency in IL

Answer 12

TRUE

Question 13

Listings agreements can be terminated under following conditions

Answer 13

• agreement purpose fulfilled
• term expires
• property destroyed or use changed
• title is transferred
• mutual agreement
• broker or seller dies or becomes incapacitated
• either party breaches contract

After termination only duties are:
account for monies
keep information confidential

Question 14

Broker Protection Clause/Safety Clause

Answer 14

Commission will be paid if within a specified period of time after expiration the owner sells to someone who saw property while listed (usually 60-90 days)

This discourages private agreements.

Cannot be enforced if property gets relisted with another brokerage

Question 15

CMA

Answer 15

analyzes similar properties to help sellers determine listing price - look at solds, on the market and expired.

Provide price range

Question 16

Appraisal

Answer 16

only based on sold properties. Give specific value

Question 17

Market Value

Answer 17

most probable price a property would bring under normal conditions in the open market

Question 18

Estimated Proceeds

Answer 18

Sales price minus all fee and expenses

Question 19

Disclosures in IL

Answer 19

Agency Disclosures and Property Disclosures

Question 20

Written Exclusion Listing Agreements must include:

Answer 20

Price
commission and time of payment
duration with termination date
names
signatures
address or legal description
duties
non discrimination statement
antitrust statement

Question 21

Disclosure of Material Facts

Answer 21

Broker cannot withhold

Question 22

Disclosure of Interest

Answer 22

broker must disclosure any interest they have in property

Question 23

Disclosure of Special Compensation

Answer 23

Must disclosure in writing to all parties and licensee receives the payments through sponsoring broker

Question 24

Earnest $ + purchaser default

Answer 24

must be in larger font on agreeement

Question 25

Seller Disclosure of Property Condition

Answer 25

Given before offer made or buyer has 3 days to rescind contract. Lead paint disclosure if built before 1978. Radon disclosure

Question 26

Listing Agreements

Answer 26

Broker must provide full signed copy to seller within 24 hours of execution

Question 27

Exclusive Listing Agreement Minimum Services

Answer 27

Accept and present all offers, etc
Assist w/ developing and communications counters, etc
Answer questions

Question 28

Buyer Agency Agreement

Answer 28

employment contract. Buyer is principal 3 types

Question 29

Exclusive Buyer agreement/Exclusive Right to Represent

Answer 29

Buyer legally bound to pay whenever buyers purchase property described in the contract

Question 30

Exclusive agency buyer agreement

Answer 30

broker gets payment only if they locate the property

Question 31

Open Buyer

Answer 31

non-exclusive and only compensate broker who finds the property

Question 32

Buyer Broker Duties include

Answer 32

needs assessment
property selection
viewing properties
negotiations
follow up

Question 33

Prepare CMA to establish offer price. Must consider:

Answer 33

condition
time on market
supply and demand
seller's motivation
terms and contingencies