Practicce

Question 1

If a licensee is a(n) ___, a sponsoring broker is required by law to withhold Social Security tax and income tax from wages paid.

Answer 1

Employee

Question 1

With independent contractors, a sponsoring broker is required by law to withhold Social Security tax and income tax from wages paid to those independent contractors. True or false?

Answer 1

False

Question 2

While business plans are important in many industries, they are not needed in a real estate brokerage, and in fact can be a waste of precious time. True or false?

Answer 2

False

Question 3

Only a ___ may collect commission in Illinois.

Answer 3

sponsoring broker

Question 4

It is illegal for a sponsoring broker to split a commission with a sponsored licensee. True or false?

Answer 4

false

Question 5

When a sponsoring broker takes a certain percentage of their sponsored licensee’s commission, this is a(n) ___.

Answer 5

Commission split

Question 6

Price-fixing, group boycotting, allocation of customers, allocation of markets, and tie-in agreements are all ___.

Answer 6

Antitrust violations

Question 7

Tie-in agreements are ___.

Answer 7

illegal

Question 8

The 3 types of real estate licenses in Illinois are

Answer 8

Broker
Managing broker
Leasing agent

Question 9

What are the 3 specific requirements for a licensee to be treated as an independent contractor for federal tax purposes?

Answer 9

1) Hold an active real estate license
2) Must agree in writing not to be treated as an employee for tax purposes
3) at least 90% of income must be based on sales production

Question 10

At least ___% of an independent contractor’s income must be based on sales production.

Answer 10

90%

Question 11

All licensees must have a(n) ___ agreement with their sponsoring broker, regardless if they are an independent contractor or regular employee.

Answer 11

Employment agreement

Question 12

In Illinois, what serves as proof that a listing broker earned a commission from the sale?

Answer 12

Closing of sale

Question 13

Procuring cause disputes between brokers are usually settled through a(n) ___ hearing.

Answer 13

arbitration

Question 14

Disputes between a broker and a client may either be settled through a(n) ___ hearing, or they may go to court

Answer 14

arbitration

Question 15

All money coming in and out of a real estate office are handled by…

Answer 15

the sponsoring broker

Question 16

Who is responsible for handling escrows?

Answer 16

Sponsoring broker

Question 17

Who is responsible for paying commissions?

Answer 17

Sponsoring broker

Question 18

Harry is a sponsoring broker who oversaw Ed. Ed took a listing on a $73,000 house at a 6% commission rate. Tom was the broker on the opposite end of this transaction who found a buyer for the property, and he was sponsored by Matt. The two brokerages split the commission equally. Matt’s brokerage kept 45% of Tom’s commission. How much was Tom’s share of commission?

Answer 18

$1204.50

Question 19

What are 5 antitrust law violations?

Answer 19

1) Price fixing
2) Group boycotting
3) Allocation of customers
4) Allocation of markets
5) tie in agreements

Question 20

A sponsoring broker owns a vacant lot in a popular area of town. A builder wants to buy the lot and build 3 new homes on it. The sponsoring broker refuses to sell the lot to the builder unless the builder also agrees to purchase 3 other less desirable lots further east. What antitrust violation occurred?

Answer 20

Tie-in agreement

Question 21

The amount of commission paid to a sponsored licensee is determined by…

Answer 21

Mutual agreement with the sponsoring broker

Question 22

In Illinois, the ___ is the usual proof in a court of law that the broker has produced a buyer and earned a commission.

Answer 22

closing of sale

Question 23

Real estate licensees who are paid in a lump sum and who are personally responsible for paying their own taxes are probably:

Answer 23

independent contractors

Question 24

Independent contractors are responsible for paying their own ___ and ___.

Answer 24

Income taxes Social security

Question 25

"To recover a commission for brokerage services, a sponsoring broker must be employed as the agent of the seller." Therefore, the seller must have made a(n) ___ or ___ to pay a commission to the sponsoring broker for selling the property.

Answer 25

Express agreement or Implied agreement

Question 26

Federal regulations require unsolicited commercial email to be identified as a(n) ___ and include the sender's valid ___.

Answer 26

advertisement physical address

Question 27

A broker received $2,520 as the firm's 50% share of a commission. If the property sold for $72,000, what was the commission rate?

Answer 27

7%

Question 28

A broker listed the seller's home for $300,000. Before the listing contract expired, the broker brought the seller a full-price offer on the seller's terms, containing no contingencies. Who is probably liable for the commission?

Answer 28

The seller

Question 29

A new sponsored real estate licensee wants to find new business among the firm's expired listings. Under the National Do Not Call Registry, for how long after the listing has expired may the licensee solicit business from the firm's previous listings?

Answer 29

18 months

Question 30

Who is authorized to collect a commission in Illinois?

Answer 30

Managing broker or sponsoring broker

Question 31

To collect a ___ on a real estate transaction, the agent must have been "hired" by way of an agreement in which the principal (seller or buyer) agreed to pay.

Answer 31

commission

Question 32

A sponsored broker must have a written employment agreement with...

Answer 32

the sponsoring broker

Question 33

A real estate licensee may not legally send an unsolicited commercial fax message without express ___ or without ___ with the recipient.

Answer 33

written consent an established business relationship

Question 34

Under Illinois law, one of the permitted activities an UNLICENSED real estate assistant of a licensee is that they may sit at a property for a broker tour that is not open to the public. True or false?

Answer 34

True

Question 35

A sponsoring broker may dictate ___ to an independent contractor

Answer 35

compensation

Question 36

The ___ defines the employment or independent contractor relationship, including supervision, duties, compensation, and termination.

Answer 36

employment agreement

Question 37

A sponsored licensee wants to receive a lump-sum payment at the end of each transaction. At least 90% of the individual's income as a licensee must be based on ___.

Answer 37

Sales production

Question 38

A sponsored licensee wants to receive a lump-sum payment at the end of each transaction. The sponsored licensee must agree in writing not to be treated as a(n) ___ for federal tax purposes

Answer 38

employee

Question 39

A sponsored licensee wants to receive a lump-sum payment at the end of each transaction. The sponsored licensee must hold an active...

Answer 39

real estate license

Question 40

A sponsored licensee wants to receive a lump-sum payment at the end of each transaction. At least 90% of the individual's income as a licensee must be based on hours worked. True or false?

Answer 40

False

Question 41

A sponsored licensee wants to receive a lump-sum payment at the end of each transaction. The sponsored licensee must agree in writing not to be treated as an independent contractor for federal tax purposes. True or false?

Answer 41

False

Question 42

A sponsored licensee wants to receive a lump-sum payment at the end of each transaction. Is the sponsoring broker obligated to withhold social security from their pay?

Answer 42

No

Question 43

A sponsored licensee wants to receive a lump-sum payment at the end of each transaction. The licensee is an ___.

Answer 43

Independent contractor

Question 44

Two real estate companies agreed to boycott the services of a title company so that a new title company can take over the corresponding market share. The two real estate companies are violating the ___.

Answer 44

Sherman Antitrust Act

Question 45

According to the Illinois license law, a sponsored real estate licensee may not accept a commission from another sponsoring broker unless…

Answer 45

it was was previously earned

Question 46

The ___ is a list of phone numbers of consumers who do not want to be contacted by commercial telemarketers

Answer 46

National Do Not Call Registry

Question 47

The broker's commission was $8,200. If the commission rate was 6%, what was the selling price of the property?

Answer 47

$136,666.67

Question 48

After a particularly challenging transaction finally closes, the client gives the sponsored broker representing the client a check for $500 "for all your extra work. Can the sponsored broker accept this? Why or why not?

Answer 48

No, because only a licensed managing or sponsoring broker may collect a commission in Illinois

Question 49

A licensee entered into a contract with her sponsoring broker, specifying that she is not an employee. In the past year, just less than half of the licensee's income from real estate activities came from sales commissions. The remainder was based on an hourly wage paid by the sponsoring broker for office administrative duties. The IRS would MOST likely classify the licensee as an ___.

Answer 49

employee

Question 50

Compensation for an ___ is determined by hours worked

Answer 50

Employee

Question 51

Membership of this service provides an opportunity for the marketing of property

Answer 51

Multiple Listing Service

Question 52

An illegal division of territories to avoid competition

Answer 52

Allocation of markets

Question 53

Laws that prohibit price fixing and tie-in agreements

Answer 53

Antitrust Laws

Question 54

A form of compensation computed as a percentage of the total sales price of a property

Answer 54

Commission

Question 55

A person who is licensed only to perform real estate activities on behalf of a broker

Answer 55

Sales associate

Question 56

The business of bringing parties together

Answer 56

Brokerage

Question 57

A sales associate who works under the terms of a written contract and receives a substantial portion of her income from sales production rather than hours worked

Answer 57

Independent contractor

Question 58

The device by which a state licensing authority administers and enforces the statutory law

Answer 58

Administrative regulations

Question 59

A sales associate whose activities are closely controlled, and who is entitled to benefits, unemployment compensation, and income tax withholding

Answer 59

Employee

Question 60

A person who is prepared to buy on the seller's terms and is ready to take positive steps towards consummation of the transaction

Answer 60

Ready, willing, able buyer

Question 61

An individual who is licensed to buy, sell, exchange, or lease property for others, and to charge a fee for those services.

Answer 61

Real Estate Broker

Question 62

The broker who starts an uninterrupted chain of events that results in the sale of a property.

Answer 62

Procuring Cause

Question 63

An analysis performed to assist a seller in pricing a property

Answer 63

Comparative Market Analysis (CMA)

Question 64

Statutes enacted by state legislatures to protect the public and ensure a standard of competence in the real estate industry.

Answer 64

Real Estate License Laws

Question 65

When two or more businesses conspire against another business to withhold patronage to reduce competition.

Answer 65

Group boycot

Question 66

How many states regulate the activities of real estate?

Answer 66

All 50 states + District of Columbia

Question 67

___ laws set up a disciplinary system to enforce the acceptable standards of conduct and practice for licensees

Answer 67

Real estate license

Question 68

a real estate ___ is licensed to buy, sell, exchange, or lease real property for others and to charge a fee for those services

Answer 68

broker

Question 69

The internal revenue services have established criteria for determining whether a sales associate is classified as an ___ or an __ for income tax purposes

Answer 69

employee or non-employee

Question 70

___ is the practice of illegally setting standard prices for products or services

Answer 70

price fixing

Question 71

A real estate ___ is an individual who is licensed to perform real estate activities on behalf of a licensed broker

Answer 71

sales associate

Question 72

A broker is considered the procuring cause of a sale if the broker...

Answer 72

started an uninterrupted chain of events that resulted in the sale

Question 73

Price-fixing, group boycotting, and allocation of markets are three examples of ___.

Answer 73

antitrust violations

Question 74

Under the ___, people who fix prices or allocate markets may be subject to a maximum $1 million fine or 10 years in prison

Answer 74

Sherman Antitrust Act

Question 75

Even if a consumer has requested placement on the National Do Not Call Registry, a real estate professional may call the consumer up to how many months after the consumer's last purchase?

Answer 75

18

Question 76

All of the following are required of a broker when seeking to collect a commission for brokering the sale of a property EXCEPT A. Having been procuring cause in the transaction or having an exclusive-right-to-sell agreement B. Having had a contract of employment—an agency representation agreement C. Complying with a set commission rate set by a trade organization D. Having a valid real estate broker's license

Answer 76

Complying with a set commission rate set by a trade organization


Question 77

Professional organizations may set fees or commissions splits. True or false?

Answer 77

False

Question 78

All of these are ways for a broker to charge for services EXCEPT
 A. standard community rate
 B. commission based on a percentage of the selling price
 C. flat fees
 D. hourly rate


Answer 78

standard community rate


Question 79

What is the practice called when a consumer selects specific services to use and only pays the real estate professional for those services?

Answer 79

Unbundling services

Question 80

Federal antitrust law permits commission splitting. True or false?

Answer 80

True

Question 81

The listing and the selling broker agree to split a 7% commission 50-50 on a $196,900 sale. The listing broker gives the listing salesperson 30% of his commission, and the selling broker gives the selling salesperson 35% of his commission. How much does the selling salesperson earn from the sale?

Answer 81

$2,412.93

Question 82

Salesperson Nellie finally concluded some extremely difficult negotiations that resulted in the sale of a listed parcel of land. For all of her extra efforts, she can legally receive a performance bonus from ___.

Answer 82

Her sponsoring broker

Question 83

Who pays commission to the real estate licensee?

Answer 83

The sponsoring or managing broker

Question 84

A broker who owns a realty agency does not permit his salespeople to charge less than 8% commission in any transaction. After reading a newspaper article about this realty agency's policies, the broker of another realty agency decides to also adopt the 8% minimum. Based on these facts, who committed an antitrust violation?

Answer 84

Neither broker

Question 85

The the main value of a ___ for sellers Is that it exposes the property to a greater number of prospective buyers

Answer 85

multiple listing service (MLS)

Question 86

Real estate broker Todd was responsible for a chain of events that resulted in the sale of one of his client's properties. This is referred to as
___.

Answer 86

Procuring cause

Question 87

A broker, who starts a chain of events that results in a sale, and does so without abandoning the transaction, may be considered the ___ of the sale

Answer 87

procuring cause

Question 88

After license laws are enacted by legislature, who is responsible for adopting administrative regulations?

Answer 88

Licensing authority

Question 89

Two real estate companies agreed to boycott the services of a title company so that a new title company can take over the corresponding market share. What type of antitrust violation is this?

Answer 89

Group Boycotting