Buyer's Agent's Benefits, Compensation and Disclosures Flashcards Preview

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Flashcards in Buyer's Agent's Benefits, Compensation and Disclosures Deck (34)
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1
Q

In addition to price, there are many other items to be negotiated in the contract counteroffer stage of negotiations including but not limited to:

A

Earnest money and down payment deposits
Financing and seller financing (if applicable)
Interest rate, commissions, and terms
Home warranty, termite inspection, repairs, and inspection contingencies
Assessments, appraisal, closing costs, title report
Possession date, hazard insurance, extensions
Personal property inventory (what stays and what doesn’t).

2
Q

Assignable contract

A

A contract which the rights can be given, or assigned, to some other party. The parties should understand if a contract is assignable or not before entering into negotiations.

3
Q

Contract Acceptance

A

The seller’s acceptance of the offer is effective only if delivered in writing to the buyer or buyer’s agent. The buyer can revoke the offer at any time before the seller’s acceptance. The acceptance should be dated and timed.

4
Q

In a buyer representation with a broker, the buyer can do what with regards to the agreement?

A

The buyer can tailor the agent services to meet the buyer’s needs and adjust the compensation accordingly.

5
Q

A licensee motivated to show and sell the client all available properties that meet the client’s requirements has a commission that is what?

A

Guaranteed and Protected

6
Q

In addition to having greater control, what can an agent do with an agency agreement?

A

The agent can ask more questions, find out if the buyer is pre-qualified, and has little concern about losing the buyer to a FSBO or another broker.

7
Q

What is an assignable contract?

A

A contract which the rights can be given, or assigned, to some other party.

8
Q

Regardless of who will be responsible for payment of commission to the broker, how should these agreements be handled?

A

Always in writing

9
Q

Generally, the buyer’s broker’s fee is paid from where?

A

From the sales proceeds at closing

10
Q

What is a retainer fee?

A

advance payment of service

11
Q

When should clients be brought into the middle of a commission dispute between brokers?

A

Never

12
Q

Buyer paid fees can take many forms including:

A

Hourly rate
Percentage fee
Flat rate

13
Q

An alternative method of buyer’s broker compensation is the gross price method

A

The buyer pays the gross purchase price and the seller pays the buyer’s broker’s commissions.

14
Q

advantages of the sellers paying the commission are:

A

Presents no suggestion of interfering with the listing broker’s commission agreement with the seller
Allows no reasonable basis for procuring cause disputes
Clears up questions of who works for whom and who pays whom
Protects the buyer-client from having to pay the broker’s commission at closing if the seller refuses to pay, but it provides the option to do so should the situation require
Protects the buyer’s agent from the listing agent’s chances of losing commission due to breach of agreement or a badly worded listing agreement
Works equally well for listed, unlisted, MLS, or non-MLS property
Does not trigger the TRELA prohibition concerning payments from more than one party to the transaction without knowledge and consent of both parties
Places responsibility for securing the compensation of the buyer’s broker directly on the client whose interests were served by the broker

15
Q

disadvantages of the sellers paying the commission are:

A

May change some expected tax advantages for the parties
Is relatively untested in the courts in Texas
Could delay closings if there is confusion among lenders concerning the transaction

16
Q

What barriers prohibit the seller from paying the buyer’s broker fee or authorizing the listing broker to share fees with the buyer’s broker?

A

There are no legal barriers that prohibit the seller from paying the buyer’s broker fee

17
Q

A written acknowledgment of buyer representation is in the form of a what?

A

An agency disclosure form

18
Q

Name three forms of buyer paid fees.

A

Hourly Rate, Flat Fee, Percentage Fee

19
Q

Which method of broker compensation helps reduce the concerns over excess commission expense and double charging, and is easier for the seller to understand and respond to a customary sales price offer?

A

Gross price method

20
Q

The sellers must:

A

Disclose all known lead-based paint hazards in the house.
Keep signed acknowledgements for three years as proof of compliance.
Give buyers a pamphlet prepared by the US environmental protection agency (EPA) called Protect Your Family from Lead in Your Home.
Allow buyers a ten-day opportunity to test the house for lead. `

21
Q

If the sellers are selling a home built before 1978

A

they must comply with the Residential Lead-Based Paint Hazard Reduction Act of 1992.

22
Q

The agent may counsel the client on what items to ask the seller to agree to including but not limited to:

A

All adverse environmental conditions to be removed
All required building permits have been issued
The property is the same or the required improved condition at the time of closing as the buyer contracted it to be
The property is clear of debris and the plumbing, heating, air conditioning, electrical systems, and appliances are all in good working condition
No personal property items will be substituted for those at the property when it was shown and that were expected to remain with the property by contract

23
Q

What must a broker provide to a buyer?

A

A Written Statement describing seller agency, buyer agency, and intermediary brokerage.

24
Q

The National Association of Realtors® Code of Ethics and Standards of Practice require that the buyer’s agent disclose the relationship to the listing agent when?

A

At First Contact

25
Q

Because of better disclosure rules, regulations, and laws, agents are required to provide better service to whom?

A

Their clients

26
Q

A report the seller provides the buyer that discloses information about the property is called what?

A

Property disclosure form

27
Q

Buyers’ brokers

A

frequently develop their own buyer agency agreements.

28
Q

Regardless of who will be responsible for payment of commission to the broker

A

These agreements should be in writing

29
Q

Throughout the course of negotiations within a buyer-agent relationship, the buyer-agent must act with care when it comes to:

A
Price and appraised value
Earnest money
Contingencies
Fixtures and inventory
Seller financing
Condition of Property
30
Q

Generally, the buyer’s broker fee is paid

A

out of the sales proceeds either from an authorized commission split between brokers or through a credit from the seller to the buyer then paid to the broker, at closing.

31
Q

The “Broker Information and Ratification of Fee” section in the standard TREC contract form ….

A

details under what conditions and in what amount any compensation will be paid from the listing broker to the broker bringing the buyer.

32
Q

There usually is a written acknowledgment of buyer representation

A

in the form of an agency disclosure form, with a written confirmation included with the purchase contract.

33
Q

The broker should make any agency disclosures in writing

A

and try to obtain the signature of the buyer acknowledging receipt of the disclosures and written statement.

34
Q

TRELA requires

A

that agents disclose their representation to other parties and to the agents of other parties at the time of first contact.