General - Chapter 5 Lesson 1

Question 1

Brokerage agreement

Answer 1

employment contract that establishes the agency relationship between a client, or principal, and a real estate broker, the agent

Question 2

contract signed technically between…

Answer 2

implying broker and client (not you)

Question 3

States require…

Answer 3

in writing + termination date

Question 4

For sellers…

Answer 4

Listing agreement

Question 5

For buyers…

Answer 5

Buyer agency agreement

Question 6

For tenants…

Answer 6

tenant agreement

Question 7

For property owners…

Answer 7

property management agreement

Question 8

listing agreement

Answer 8

states broker earns commission for finding (or attempting to find) a buyer for seller’s property

Question 9

Type of listing: exclusive right to sell

Answer 9

to listing broker no matter who sells

Question 10

Type of listing: exclusive agency

Answer 10

to listing broker unless seller sells

Question 11

Type of listing: open listing

Answer 11

only to broker who sells property (broker that “wins” known as procuring cause)

Question 12

Type of listing: net listing

Answer 12

Method of compensation (illegal, strongly discouraged, or rarely used in many states)

Question 13

Buyer agency agreement

Answer 13

contract between a buyer and a real estate broker

Question 14

Type of BAC: exclusive buyer agency

Answer 14

to broker no matter who finds property

Question 15

Type of BAC: Exclusive Agency Buyer Agency

Answer 15

To broker only if they find property

Question 16

Type of BAC: Open buyer agency

Answer 16

only to broker who finds property

Question 17

If you have an open listing agreement on a seller’s house, you will earn commission only if you are the procuring cause.

Answer 17

True

Question 18

Tenant Agreement

Answer 18

written agreement creates agency relationship between broker and tenant. Earning fee, could be exclusive or non-exclusive

Question 19

Property Management Agreement

Answer 19

written agreement that creates agency relationship between landlord/property owner and property manager, Critical component - detailed description of property manager’s authority

Question 20

A client may be able to cancel a brokerage contract without risk of damages if the termination is…

Answer 20

for cause

Question 21

Commission

Answer 21

primary source of compensation

Question 22

terms of commission should be…

Answer 22

clearly spelled out in writing

Question 23

Violation of antitrust laws to…

Answer 23

suggest that there is a uniform commission rate (price-fixing)

Question 24

You shouldn’t just cover the amount of commission but the…

Answer 24

timing

Question 25

traditionally a listing broker is entitled to commission when...

Answer 25

a ready, willing, and able buyer is found

Question 26

Ready and Willing

Answer 26

makes offer that meets the terms established

Question 27

able

Answer 27

have financial ability to complete the purchase

Question 28

If a ready willing and able buyer is found but sale does not close...

Answer 28

broker has still earned their commission

Question 29

broker protection clause

Answer 29

states the listing broker is entitled to commission if property sells within a certain period after the agreement expires "... to whom the broker has exposed the property."

Question 30

if client refuses to pay

Answer 30

breach of contract and broker has right to file a civil lawsuit, but most brokerage agreements include a clause requiring the parties to attempt to negotiate or participate in mediation

Question 31

Mediation

Answer 31

Neutral third party helps broker and client talk, doesn't always prevent lawsuit

Question 32

Arbitration

Answer 32

more formal dispute resolution option, arbitrator's decision is final and legally enforcable

Question 33

Procuring cause

Answer 33

involves an unbroken chain of events