Unit 9 Review Questions Flashcards
All of these are requirements for independent contractor status used by the Internal Revenue Service EXCEPT
specific hours stated in a written agreement.
Why?
The real estate broker may require an employee to follow rules, such as working a certain number of hours. However, the broker may not do so if treating the affiliated sales associate as an independent contractor.
A real estate broker had a listing agreement with a seller that specified a 6% commission. The broker showed the home to a prospective buyer. The next day, the buyer called the seller directly and offered to buy the house for 5% less than the asking price. The seller agreed to the price and informed the broker in writing that no further brokerage services would be required. The sale went to closing six weeks later. Based on these facts, which of these statements is TRUE?
The broker was the procuring cause of the sale and is entitled to the full 6% commission.
Why?
Because the broker introduced a ready, willing, and able buyer to the seller prior to the seller’s cancellation of the listing agreement, the broker is entitled to the commission
In real estate, a sales associate is always
a licensee who performs real estate activities on behalf of a broker.
Why?
While the sales associate may be treated as an independent contractor for income tax purposes, the salesperson must still work directly under the broker’s name.
The amount of a broker’s compensation is always negotiable.
True.
Why?
Because the real estate industry is subject to antitrust laws, the amount of a broker’s compensation is always negotiable and may not be set or determined by a multiple listing association or any professional organization.
An important purpose of the E-Sign Act is to
give contracts created using email the same legal standing as those on paper.
Why?
The E-Sign Act diminishes legal barriers in electronic contracting, but it does not specify required security measures. Notarization is allowed. Parties are not required to use electronic contracting.
A real estate sales associate is an individual who is licensed to perform real estate activities on behalf of a licensed broker.
True.
Why?
A real estate sales associate is any person licensed to perform real estate activities on behalf of a licensed real estate broker; the broker is fully responsible for the actions performed in the course of the real estate business performed on behalf of the broker.
What is the practice called when a consumer selects specific services to use and only pays the real estate professional for those services?
Unbundling services
Why?
Unbundling services means offering services as the consumer desires them. With discounted services, the consumer receives the full package of services but pays a discounted price. Allocation of markets involves an agreement between brokers to divide their markets and stop competition.
A real estate sales associate is licensed to buy, sell, exchange, or lease real property for others, and to charge a fee for those services.
False.
Why?
A real estate broker is licensed to buy, sell, exchange, or lease real property for others and to charge a fee for those services.
After license laws are enacted by the legislature, who is responsible for adopting administrative regulations?
Licensing authority (division, commission, etc.)
Why?
Administrative regulations are written and adopted by the licensing authorities in each state. They have the same force as the law, but they are easier to change because they do not require legislative approval.
All of these are violations of federal antitrust laws EXCEPT
commission splitting.
Why?
Brokers may legally share and split commissions. Price fixing, allocation of customers, and group boycotting are illegal under the antitrust laws.
The practice of illegally setting standard prices for products or services is called a tie-in agreement.
False.
Why?
Price-fixing is the practice of competitors setting prices for products or services. A tie-in agreement is an agreement to sell one product only if the buyer also purchases another product.
The broker may still be entitled to a commission in which of these situations where a pending property sale did NOT close?
The seller decided not to sell.
Why?
If the sale is not completed due to the seller’s default (deciding not to sell), then the broker is generally due a commission. Courts may prevent a real estate broker from receiving a commission if the broker knew that the buyer was unable to perform.
Why have real estate license laws been put into effect?
To protect the public and establish standards of professionalism
Why?
Real estate license laws protect the public by ensuring a standard of competence and professionalism in the real estate industry.
The name for the current policy of the National Association of REALTORS® that allows all multiple listing service (MLS) members equal rights to display MLS data is the
Internet Data Exchange.
Why?
NAR has adopted the Internet Data Exchange. The policy allows all MLS members to have equal rights to display MLS data, while also respecting the rights of the property owners and the brokers who represent them to market the property as they wish.
An arrangement to sell one product only if the buyer purchases another product as well is called
A tie-in arrangement is
Why?
an agreement to sell one product only if the buyer purchases another product; the sale of the first desired product is tied to the purchase of a second, less-desirable product. Fee-for-services refers to splitting apart the collection of services that a broker offers. A buydown provision is a financing option. Allocation of customers refers to dividing a market and refraining from competing.
