Level 9 - Agency Contracts (Sales) & Related Practices

Question 1

What are 5 requirements for agency contracts?

Answer 1

• be in writing
• have a defined expiration date
• contain the anti-discriminatory language prescribed by Commission rule
• be signed by all parties
• include the listing broker’s individual license number

Question 2

What must a listing broker do in order to get paid?

Answer 2

• have current NC license
• have a valid written listing contract with the seller
• procure a “ready, willing, and able” buyer

Question 3

What must a buyer broker do in order to get paid?

Answer 3

• have current NC license
• have a valid buyer agency contract
• must locate a property that the buyer agrees to purchase.

Question 4

ready, willing, and able buyer

Answer 4

a buyer who is ready and wiling to purchase the property and is financially and legally able to do so

Question 5

procuring cause

Answer 5

the defining action or actions that brought a buyer or buyers to purchase a property

Question 6

retainer fee

Answer 6

a non-refundable, specified fee paid by the buyer after entering into an oral or written buyer agency contract.

Question 7

success fee

Answer 7

a specified amount in the buyer agency contract that the buyer’s broker will earn upon the closing of the transaction

Question 8

net listing

Answer 8

an agreement in which the seller names a minimum sales price they will accept for a property, with any excess paid to the broker as commission

Question 9

protection period

Answer 9

a limited time frame after an agency agreement ends where an agent can be owed compensation if certain situations occur.

Question 10

exclusive agency

Answer 10

an agreement in which the seller has an exclusive relationship with a broker but retains the right to sell the property to named prospects.

Question 11

exclusive right to sell

Answer 11

an agreement in which the seller guarantees the named broker receives a commission if the property is sold, regardless of who brings the buyer

Question 12

limited services model

Answer 12

a type of listing agreement that allows the client to select brokerage services for a flat fee

Question 13

open listing

Answer 13

a nonexclusive listing agreement that gives multiple brokers (and owners themselves) the right to sell the property.

Question 14

boycotting

Answer 14

an agreement between two or more competitors to NOT do business with another competitor for the purpose of inducing the other competitor to change its business practices or fail altogether.

Question 15

Do Not Call Registry

Answer 15

regulates telemarketing calls from commercial organizations (such as brokerages)

Question 16

FSBO (for sale by owner)

Answer 16

a property owner who is selling their own home.

Question 17

price fixing

Answer 17

any effort made by competitors to jointly establish a fixed rate, price, or commission; considered an antitrust violation

Question 18

Sherman Antitrust Act

Answer 18

a landmark law passed in 1890 that prohibits the formulation of trusts, or monopolies in the marketplace; this law governs business by regulating anti-competitive conduct to promote fair competition on behalf of American consumers,

Question 19

tortious interference with contractual relations

Answer 19

wrongful interference in a business relationship.

Question 20

gross profit

Answer 20

the profit that remains after deducting the purchase price from sales price

Question 21

marketing plan

Answer 21

a plan created to secure the other party needed to carry out a real estate transaction that includes sales and advertising.

Question 22

“net cash-in-hand” proceeds

Answer 22

the seller’s net profit that deducts the remaining principal balance from the sales price rather than the original purchase price of the property.

Question 23

net profit

Answer 23

the profit that remains after closing costs are taken into account.

Question 24

above-grade

Answer 24

space on any level of a dwelling that has living area and no earth adjacent to any exterior wall on that level.

Question 25

below-grade

Answer 25

space on any level which has living area, is accessible by interior stairs, and has earth adjacent to any exterior wall on that level

Question 26

heated living area

Answer 26

a heated living area must be enclosed, heated by a conventional heating system (not a space heater), finished with flooring, walls, and a ceiling, intended for human occupancy, and accessible from other heated living areas.