Chapter 3: Agency and the Listing Agreement

Question 1

The relationship between principal and agent wherein the agent is employed by the principal to do certain acts, like negotiating with third parties.

Answer 1

Agency

Question 2

This is earned when you have produced a buyer who is “ready, willing, and able” to purchase at the price and under the terms agreed to by both seller and buyer, whether or not escrow closes.

Answer 2

Commission

Question 3

A non-listing broker with whom the listing broker agrees to share a commission if the non-listing broker produces a buyer.

Answer 3

Cooperating broker

Question 4

In California, this type of contract must be in writing to be enforceable.

Answer 4

Employment contract

Question 5

Entitles the broker to commissions on all sales during the life of his or her agreement with the owner, even when the owners themselves sell the property.

Answer 5

Exclusive Right To Sell listing

Question 6

An employment contract between an owner and a licensed real estate broker entered into for the purpose of the broker providing service to find a ready, willing, and able person to buy, rent, or lease a property.

Answer 6

Listing

Question 7

An appointment with a prospective seller with the intent of persuading that seller to list a property with you at a fair market price.

Answer 7

Listing interview

Question 8

This contains the property’s keys and greatly facilitates the showing process.

Answer 8

Lockbox

Question 9

A group of brokers banding together to share listings and commissions.

Answer 9

Multiple Listing Service (MLS)

Question 10

This type of listing provides that the agent is to retain all money received in excess of a predetermined net price to the owner.

Answer 10

Net listing

Question 11

A written contract authorizing one or more brokers to act as agent(s) in the sale of the principal’s property for a fixed commission.

Answer 11

Open listing

Question 12

This person is prepared to buy a property before that property is actually listed with a broker.

Answer 12

Pocket buyer

Question 13

Supplemental attachments to signs, like “Three Bedrooms.”

Answer 13

Riders

Question 14

A negotiated period after the termination of the listing during which the listing broker may still be entitled to a commission if the property is sold to a buyer who was shown the property during the listing period.

Answer 14

Safe harbor clause

Question 15

How much cash the seller will receive after payment of all liens and expenses.

Answer 15

Seller’s proceeds

Question 16

A contract by which a principal employs an agent/broker to do certain things for the principal, usually finding a buyer for his or her property, is called a:

a) court order.
b) purchase offer.
c) purchase contract.
d) listing.

Answer 16

d) listing.

Question 17

In California, a listing agreement:

a) is an employment contract.
b) must be in writing to be enforceable.
c) both a and b.
d) is neither a or b.

Answer 17

c) both a and b.

Question 18

Although agents ordinarily represent owners and sellers, they may be employed occasionally to represent buyers in:

a) negotiating leaseholds.
b) obtaining mortgage loans.
c) purchasing business opportunities.
d) all of the foregoing activities.

Answer 18

d) all of the foregoing activities.

Question 19

The type of listing in which the owners would be held liable for a commission even if they themselves sold the property is called a(n):

a) exclusive agency listing.
b) exclusive right to sell listing.
c) multiple listing.
d) open listing.

Answer 19

b) exclusive right to sell listing.

Question 20

The listing which is most likely to give rise to charges of misrepresentation or fraud is the:

a) multiple listing.
b) open listing.
c) net listing.
d) exclusive listing.

Answer 20

c) net listing.

Question 21

A “pocket buyer” refers to a buyer:

a) with deep pockets, meaning lots of money.
b) who is prepared to buy a property before it’s listed with a broker.
c) who is a friend or relative of the broker.
d) all of the above.

Answer 21

b) who is prepared to buy a property before it’s listed with a broker.

Question 22

A “safe harbor” clause is usually found in the most preferred type of listing, which is the:

a) open listing only.
b) exclusive right to sell listing.
c) net listing.
d) multiple listing.

Answer 22

b) exclusive right to sell listing.

Question 23

If you leave the employ of a broker and go to work for another broker:

a) your listings stay with your old broker.
b) your listings are your own and go with you to your new brokerage.
c) you must split your commissions between your old and new broker.
d) none of the above.

Answer 23

a) your listings stay with your old broker.

Question 24

A commission is earned by the broker when all terms of the contract have been fulfilled and he or she has produced a buyer who is:

a) ready to buy.
b) able to buy.
c) willing to buy.
d) all of the above.

Answer 24

d) all of the above.

Question 25

How a house appears when compared to the rest of the neighborhood is called:

a) landscape lookability.
b) curb appeal.
c) comparative shopping rating.
d) paint and plaster appeal.

Answer 25

b) curb appeal.