Unit 9 Exam Flashcards
On the sale of any property, a sales associate’s compensation is based on the total commission paid to the broker. The sales associate receives 30% of the first $2,500, 40% of the next amount between $2,500 and $7,500, and 50% of any remaining amount exceeding $7,500. If a property sells for $234,500 and the broker’s commission rate is 6.5%, what is the sales associate’s total compensation?
The answer is $6,621.25.
Why?
Total commission to the firm: $234,500 × 6.5% = $15,242.50. The salesperson’s commission is computed in three parts: (1) Use $2,500 of the $15,242.50 for a commission at 30% = $750. (2) Use another $5,000 of the $15,242.50 for commission at 40% = $2,000. So far, the salesperson has received commissions on $7,500: $2,500 + $5,000. The agent now gets 50 percent commission on the $7,742.50 that is left: $15,242.50 - $7,500 = $7,742.50. (3) The commission on $7,742.50 at 50% = $3,871.25. Total of three parts of the salesperson’s commission: $750 + $2,000 + $3,871.25 = $6,621.25.
A broker’s policy requires a 7% commission on all listings; no lower commission rate is acceptable. Which statement is TRUE?r
The answer is the broker may legally set the minimum commission rate acceptable for the firm.
Why?
Brokers have the right to set commissions within their own firm. This is not an antitrust violation. Sales associates who wish to continue with that broker can be required to comply.
A broker can agree upon which of the following with an independent contractor?
The answer is compensation the person would receive.
Why?
Brokers may agree upon the compensation that their independent contractors will receive for work not yet done, but they may not dictate working schedules or attendance at sales meetings.
The National Do Not Call Registry is managed by
The answer is the Federal Trade Commission (FTC).
Why?
The registry is a list of telephone numbers from consumers who have indicated their preference to limit the telemarketing calls they receive.
The Do Not Call Improvement Act of 2007 states that real estate professionals may call consumers with whom they have an established business relationship for up to how many months after the consumer’s last purchase, delivery, or payment?
The answer is 18 months.
Why?
This is true even if the consumer is listed on the National Do Not Call Registry.
A real estate broker was responsible for a chain of events that resulted in the sale of a client’s property. This is calledh
The answer is procuring cause.
Why?
A broker who starts a chain of events that results in a sale and does so without abandoning the transaction, may be considered the procuring cause of sale.
The answer is procuring cause. A broker who starts a chain of events that results in a sale and does so without abandoning the transaction, may be considered the procuring cause of sale.
The answer is the rules and regulations have the same force and effect as the license law itself.
Why?
Each state has a licensing authority with power to issue licenses and create regulations that enforce the statutes of the real estate law.
All of the following are prohibited under the antitrust laws EXCEPT
The answer is a broker setting a company commission schedule.
Why?
A broker may independently determine commission rates or fees for the firm only.
A broker was accused of violating antitrust laws. Of the following, the broker was MOST likely accused of
The answer is price-fixing.
Why?
Antitrust laws prohibit group boycotting, allocation of customers and markets, tie-in agreements, and price-fixing. Price-fixing is when competing brokers set a standard commission rate.
A broker has established the following office policy: “All listings taken by any sales associate of this real estate brokerage must include compensation based on a 7% commission. No lower commission rate is acceptable.” If the broker attempts to impose this uniform commission requirement, which statement is TRUE?
The broker may, as a matter of office policy, legally set the minimum commission rate acceptable for the firm.
A sales associate took a listing on a house that sold for $329,985. The commission rate was 5%. A sales associate employed by another broker found the buyer. The seller’s broker received 60% of the commission on the sale; the buyer’s broker received 40%. If the seller’s broker kept 30% and paid the seller’s sales associate the remainder, how much did the seller’s sales associate earn on this sale?
The answer is $6,929.68.
Why?
Amount the listing salesperson’s broker received: $329,985 × 5% × 60% = $9,899.55 Amount the listing broker kept: $9,899.55 × 30% = $2969.87 (rounded to the nearest cent). The salesperson’s earnings: $9,899.55 – $2,969.87 = $6,929.68.
