Unit 6 - Brokerage Agreements

Question 1

Define Statues of Frauds

Answer 1

Part of a state law that requires that certain instruments to be in writing, such as deeds, real estate sales, leases

Question 2

Define Exclusive Rights to Sell Listing

Answer 2

One authorized broker receives a commission regardless of who sells the property

Question 3

Define Exclusive Agency

Answer 3

Owner appoints a broker as their exclusive agent but reserves the right to sell to a prospect without paying a commission

Question 4

Define Open Listing

Answer 4

There are multiple brokers, only the selling broker is entitled to a commission & the seller retains the right to sell independently

Question 5

Define Net Listing

Answer 5

The broker is entitled to any amount exceeding the sellers stated net

Question 6

Define Option Listing

Answer 6

Gives the buyer the right to purchase the listed property at some point in the future

Question 7

Define a Multiple Listing Service (MLS)

Answer 7

A marketing organization whose members make their listings available for showing & sale through all other members

Question 8

Define a Comparative Marketing Analysis (CMA)

Answer 8

A tool to analyze properties similar in size, location and amenities

Question 9

Define Market Value

Answer 9

Most probable price a property would bring in under normal conditions

Question 10

What are the 5 types of Disclosure?

Answer 10

Material Facts
Interest
Special Compensation
Earnest Money & Purchaser Default
Property Condition

Question 11

Define Disclosure of Material Facts

Answer 11

A broker must not withhold material facts concerning a property of which they have knowledge from

Question 12

Define Disclosure of Interest

Answer 12

Broker must disclose in writing to the parties any direct or indirect interest in the property

Question 13

Define Disclosure of Special Compensation

Answer 13

A broker is prohibited from accepting any finder fees, commissions, discounts, kickback or other compensation

Question 14

Define Earnest Money

Answer 14

If a purchaser defaults & is not entitled the refund of the earnest money, wording must be included in the listing in bold

Question 15

Define Disclosure of Property Condition

Answer 15

A seller disclosure of property condition is required by Illinois law through a property disclosure statement

Question 16

A listing agreement must address what?

Answer 16

Brokers Authority
Names of all parties
Brokerage Firm
Listing Price
Real Property

Question 17

Define Minimum Services

Answer 17

Provision of the Real Estate Licensee Act of 2000 that requires licensees to perform a minimum level of service to clients

Question 18

Define Broker Protection Clause

Answer 18

Clause that allows the broker to receive a commission if the owner sells the property to someone who looked at the property while it was listed with the broker

Question 19

Define Buyer Agency Agreement

Answer 19

An employment contract that gives the buyer a degree of representation

Question 20

Define Exclusive Buyer Agency Agreement

Answer 20

The buyer is legally bound to compensate the broker if the buyer purchases a property as described in the contract

Question 21

Define Exclusive Agency Buyer Agency Agreement

Answer 21

Brokers are only entitled to a commission if they locate the property the buyer ultimately purchases

Question 22

Define an Open Buyer Agency Agreement

Answer 22

Permits the buyer to enter into similar agreements with an unlimited amount of brokers

Question 23

What are the buyer broker service?

Answer 23

Needs Assessment
Property Selection
Viewing Properties
Negotiation
Follow-Up

Question 24

Whats considered during the buying process?

Answer 24

Property Condition
Length of Time on the Market
Supply & Demand
Sellers Motivation
Terms & Contigencies

Question 25

Define Contemporaneous Offers

Answer 25

When a buyer agent is acting as designated agent for more than one prospective buyer interested in the property