Chapter 9: Agency Contracts

Question 1

These laws prohibit monopolies and contracts, combinations, and conspiracies that unreasonably retrain trade. Most common of these violations are price fixing, group boycotting, and allocation of customers or markets.

Answer 1

antitrust laws

Question 2

A principal-agent relationship in which the broker is the agent for the buyer, with fiduciary responsibilities to the buyer. The broker represents the buyer under the monthly payments for a set time. Employment contract.

Answer 2

buyer-agency agreement

Question 3

A comparison of the prices of recently sold homes that are similar to a listing seller’s home in terms of locations, style, and amenities; an estimate of market value; also called a broker price opinion.

Answer 3

comparative market analysis (CMA)

Question 4

A document evidencing formal employment between employer and employee or between principal and agent. In real estate, this is generally a listing agreement, a buyer agency agreement or a management agreement.

Answer 4

employment contract

Question 5

A listing contract under which the owner appoints a real estate broeker as the exclusive agent for a designated period of time to sell the property, on the owner’s state terms, for a commission. The owner reserves the right to sell without paying anyone a commission if the owner sells to a prospect who has not been introduced or claimed by the broker

Answer 5

exclusive-agency listing

Question 6

A listing contract under which the owner appoints a real estate broeker as the exclusive agent for a designated period of time to sell the property, on the owner’s state terms, and agrees to pay the broeker a commission when the property is sold, regarless of who sells the property.

Answer 6

exclusive right-to-sell listing

Question 7

A carry-over or protection clause in a listing contract that says the listing broker is entitled to commission for a time period after expiration of the listing term if the property is transferred to a prospect that the broker introduced to the proeprty during the listing term; overerride clause. This clause is void if the property is listed with another broker.

Answer 7

extender clause

Question 8

AKA limited service agreements, is the arrangement where the consumer decides which services are needed and then works with and pays the broker solely for those services

Answer 8

fee-for-service agreement

Question 9

The length of property along the street or waterfront

Answer 9

frontage

Question 10

An employment contract between a property owner (as principal) and a real estate firm/broker (as agent) by which the broker is employed to find a ready, willing and able buyer for the owner’s real estate on the owner’s terms, for which service the owner agrees to pay a commission

Answer 10

listing agreement

Question 11

A marketing organization composed of member brokers who agree to share their listing agreements with one another in the hope of procuring ready, willing, and able buyers for their properties more quickly than they could on their own. Most MLSs accept only exclusive right-to-sell or exclusive-agency listings from their member brokers

Answer 11

multiple listing service (MLS)

Question 12

A national registry, managed by the Federal Trade Commission, that lists the phone numbers of consumers who prefer to limit the telemarketing calls they receive.

Answer 12

National Do Not Call Registry

Question 13

A listing based on the net price the seller will receive if the property is sold. Under this listing, the broker can offer the property for sale at the highest price obtainable to increase the commission. While this type of listing is illegal in many states, it is legal but not encouraged in NC.

Answer 13

net listing

Question 14

The state law that requires sellers to provide a prescribed property disclosure statement to any prospective buyer prior to presentation of first offer on the property. Exemptions include new construction, foreclosed properties and lease purchases but not for sale by owner transactions.

Answer 14

North Carolina Residential Property Disclosure Act

Question 15

the seller retains the right to employ any number of brokers as agents; it is a nonexclusive-type of listing. A listing agreement under which the broker’s commission is contingent on the broker personally producing a ready, willing and able buyer before the property is sold by the seller or another broker.

Answer 15

open listing

Question 16

aka extender clause. A carry-over or protection clause in a listing contract that says the listing broker is entitled to commission for a time period after expiration of the listing term if the property is transferred to a prospect that the broker introduced to the proeprty during the listing term; overerride clause. This clause is void if the property is listed with another broker.

Answer 16

override clause

Question 17

practice of setting prices for products or services rather than letting competition in the open market establich those prices.

Answer 17

price fixing

Question 18

The effort that began a chain of events that brings about thee desired result. Under an open listing, the broeker who is the procuring cause of the sale receives the commisson.

Answer 18

procuring cause

Question 19

An agreemet between an unlisted property owner and abroker to secure payment for the broker if the property is sold to the particular buyer named in the agreement; it does not create a general listing, and may not create agency at all–only compensation for a buyer’s agent. Sometimes called a “one-shot” listing.

Answer 19

protection agreement

Question 20

the use of exaggerated comments or opinions, is not permitted.

Answer 20

puffing

Question 21

One who is prepared to buy property on the seller’s temrs and is ready to take positive steps to consummate the transaction; one of the agent’s requirements for entitlement to commission

Answer 21

ready,willing, and able buyer

Question 22

typically a small amount of compensation, usually paid up front by the buyer/client when the buyer-agency agreement is established. This fee is advanced partial compensation for services.

Answer 22

retainer fee

Question 23

due and payable by the buyer/principal on the signing and acceptance of an offer to purchase proeprty found by the buyer’s agent. Typically, it is actually paid at closing.

Answer 23

success fee