Real Estate Brokerage

Question 1

Who regulates activities of RE professionals?

Answer 1

All 50 states, District of Columbia, and all Canadian provinces licence and regulate. Good Info on current laws is Association of Real Estate License Law Officials ARELLO.org

Question 2

Purpose of license laws

Answer 2

To protect the public by ensuring a standard of competence and professionalism.
Achieved by:
-establishing basic requirements for obtaining license and requiring continuing education.
-defining which activities require license
-describing the acceptable standards of indict and practice
-enforcing those standards through disciplinary system.

Question 3

Brokerage

Answer 3

The business of bringing parties together. Real estate broker is licensed to buy, sell, exchange or lease real property for other and to charge a fee for those services.
Maintains space and equipment/
hires licensed real estate professionals as well as unlicensed support
Determines compensation
Directing staff
Implementing procedures for licensees to follow In carrying out activities permitted by states laws and regulations.
May be indépendant or part of a regional or national franchise

Question 4

Real estate salesperson

Answer 4

Is licensed to perform real estate activities on behalf of a licensed real estate broker.

Question 5

Employing broker

Answer 5

Broker for whom the sales person works for.
Both broker and salesperson will be subject to the terms of the employment agreement even when sales person is an independent contractor.

Question 6

Managing broker

Answer 6

Aka supervising broker is responsible for supervision of the RE professionals who act on behalf of the brokerage.

Question 7

Commission

Answer 7

Aka brokers fees

Paid when sale is consummated by delivery and acceptance of the sellers deed.

Question 8

To receive compensation…

Answer 8

Must be

• a licensed real estate broker
• employed by the buyer or seller under a valid contract, and
• the procuring cause of the sale.

Question 9

Procuring cause

Answer 9

To be considered the procuring cause of a sale, the broker must have started or caused an uninterrupted chain of events that resulted in the sale.

Question 10

Ready, willing, and able buyer

Answer 10

One who is prepared to buy on the sellers terms and is ready to take positive steps towards consummation if the transaction.

Question 11

Broker may still be entitled to commission if the seller:

Answer 11

• has a change of mind and refuses to sell
• has a spouse who refuses to sign the deed
• has a title with Uncorrected defects
• committed fraud with respect to the transaction
• is unable to deliver possession within a reasonable time
• insists on terms not in the listing
• has a mutual agreement with the buyer to cancel the transaction

Question 12

Feel for service for sellers

Answer 12

• helping the seller prepare the property for sale
• performing a comparative market analysis to assist the seller in pricing the property
• assisting with marketing the property using the MLS and websites
• locating and screening a buyer
• helping fill in the blanks of a sales agreement
• assisting with negotiations
• being available to assist with the closing of the transaction

Question 13

Fee for service for buyers

Answer 13

• working out the economics of renting vs owning
• helping a buyer with a mortgage preapproval
• consulting on a buyers desired location
• visiting properties with a buyer and checking property info
• helping fill in the blanks of an offer to purchase
• assisting with negotiations
• being available to assist with the closing of the transaction

Question 14

Antitrust laws

Answer 14

At federal level, the Sherman Antitrust Act provides specific penalties for a number of illegal business activities. Each state has them too. They prohibit monopolies and any contracts, combinations, and conspiracies among competitors that unreasonably restrain trade. Most common ones are price fixing, the group boycott, allocations of costumées or markets, and tie in agreements.

Question 15

Price fixing

Answer 15

A practice in which competitors agree to set prices or other terms and conditions for products or services rather than letting competition in the open market establish those prices. In real estate, this occurs when competing brokers agree to set sales commissions, fees, or management rates.

Question 16

Boycott

Answer 16

This occurs when two or more businesses conspire against another business or agree to withhold their patronage to reduce competition.

Question 17

Allocation of customers or markets

Answer 17

This involves an agreement between real estate brokers to divide their markets and refrain from competing for each other’s business.

Question 18

Tie-in agreements

Answer 18

Agreements to sell one product only if the buyer purchases another product as well.

Question 19

Penalties

Answer 19

The penalties for violating anti-laws or severe. Under the federal Sherman antitrust act, the penalty for fixing prices or allocating market is a maximum $1 million fine and 10 years in prison. For corporations, the penalty maybe as high as $100 million. An individual who has suffered a loss because of an antitrust violation may sue for trouble damages – three times the actual damages sustained.

Question 20

Internet Data Exchange (IDX) policy

Answer 20

This allows all MLS members to have equal rights to display MLS data, while also respecting the rights of the property owner in the real estate broker who represents a property owner to market the property as they wish.

Question 21

Blanket opt-out provision

Answer 21

Provides that those MLS participants interested in keeping their listings from competitors websites cannot then display other real estate brokers listings.

Question 22

National Association of Realtors has search sites available

Answer 22

Realtor.com
Zillow.com
Trulia.com
Home builders have Nahb.org

Question 23

Internet advertising laws and regulations stipulations

Answer 23

• all electronic communication by a real estate professional must include the professionals name, office address, and broker affiliation.
• Real estate professionals must disclose their license status on each page of the website that contains an advertisement.
• The listing of only a sales associate name without the sponsoring broker’s name in an advertisement is prohibited.
• an advertisement must be a true, current representation of the information it contains and not be misleading.

Question 24

Electronic contracting

Answer 24

Transactions conducted through email or fax.

Question 25

Uniform Electronic Transactions Act

Answer 25

Created by The national conference of commissioners on uniform state laws. It has been adopted by all but three states. The law sets forth basic rules for entering an enforceable contract and using electronic means. primary purpose. To remove barriers and electronic commerce that would otherwise prevent enforceability of contracts. - a contract cannot be denied the legal effect just because an electronic record was used. - a record or signature cannnor he denied its legal effect just because it's in an electronic format: - if a states law requires a signature on a contract, an electronic signature is sufficient. - if a states law requires a written record, an electronic record is sufficient.

Question 26

Electronic signatures in global and national commerce act

Answer 26

Passed by congress in 2000. Purpose is to make contracts and records legally enforceable, regardless of the medium in which they are created. Applies to states that haven't take on UETA

Question 27

National do not call registry

Answer 27

Managed by the federal trade commission. 2003 do not call legislations was signed and the Do Not Call Improvement Act of 2007. Applies to any plan, programs or campaign to sell goods or services. Does not limit political organizations, charities, collection agencies, or telephone surveyors. Does apply for profit telemarketer. Telemarketers and sellers are required to search every 31 days and drop registered numbers. RE PROFESSIONALS may call consumers they have established business with for up to 18 months. Also may call for up to 3 months after consumer makes an inquiry or submits an application. Unless consumer asks not be called.

Question 28

Other agencies that monitor spam communications

Answer 28

The telephone consumer protections act, junk fax prevention act, and rules of the Federal Communications Commission. -fax Controlling the assault of non-solicited pornographers and marketing Act of 2003 CAN-SPAM - email spam MUST have an unsubscribe feature Children's online privacy protection act (July 1, 2013) this limits the personal info that can be collected from a child younger than 13

Question 29

Real Estate Broker

Answer 29

Licensed to Buy, sell, exchange, or lease real property for others for a fee and may operate as a sole proprietorship, partnership, corporation, or a limited liability company.

Question 30

Real estate sales associate

Answer 30

A sales person or broker who is licensed to perform real estate activities only on behalf of a licensed real estate broker. The broker – employer is liable for the actions of the sales associate with in the scope of the employment agreement or is provided by state law.

Question 31

Independent contractor

Answer 31

And employee who usually receive the commission, with no withholding for Social Security, income tax, and other purposes and has the freedom to set hours and accomplish goals. A real estate broker always has liability in supervisory responsibilities for the real estate related work activities of the sales associate.

Question 32

Employee

Answer 32

They receive salary in lieu of orin addition to commission; they receive benefits, such as health insurance, profit-sharing, and Worker's Comp.; and has an employer who is required to withhold Social Security, income taxes, and other applicable federal and state taxes from earnings. The employer set hours, duties, and other specifics of the employees day today work and remains liable for related work activities of the employee.

Question 33

IRS requirements

Answer 33

For a qualified real estate agent to be treated as a non employee for tax purposes.

Question 34

A brokers compensations

Answer 34

Can be a commission based on property's sales price, a flat fee, or an hourly rate. It is earned when the seller except an offer from a ready, willing, and able buyer prepared to buy on the sellers terms and ready to take the positive steps towards consummation of the transaction.