Unit 8 Quiz Questions Flashcards
Why have real estate license laws been put into effect?
a. To protect licensees from lawsuits
b. To protect the public and establish a standard of competence
c. To prevent licensees from engaging in profit-making activities
d. To establish maximum levels of competency and a moral marketplace
To protect the public and establish a standard of competence
Real estate license laws protect the public by ensuring a standard of competence in the real estate industry.
In real estate, a sales associate is always
a. an independent contractor.
b. an employee of a licensed broker.
c. a licensee who performs real estate activities on behalf of a broker.
d. a combination office manager, marketer, and organizer with a fundamental understanding of the real estate industry, who may or may not be licensed.
A licensee who performs real estate activities on behalf of a broker.
While the sales associate may be treated as an independent contractor for income tax purposes, the sales associate must work for a broker, who is responsible for the associate’s conduct.
Requirements for independent contractor status used by the Internal Revenue Service include
a. a pending real estate license.
b. specific hours stated in a written agreement.
c. an understanding that the individual will not be treated as an employee for tax purposes.
d. that all of the individual’s income will be based on sales production rather than hours
worked
An understanding that the individual will not be treated as an employee for tax purposes.
The reason it would not be b is the real estate broker may require an employee to follow rules, such as working a certain number of hours, but the broker may not do so if treating the
affiliated sales associate as an independent contractor.
A broker does not permit his sales associates to charge less than an 8% commission in any transaction. After reading a newspaper article about this broker’s policy, the broker at another firm decides to adopt a 7% minimum commission rate to undercut the competition. Based on these facts, which of these statements is TRUE?
a. The first broker’s policy is price-fixing and violates the antitrust law.
b. Although the first broker’s policy was legal, the second broker’s adoption of a lower rate
to undercut the competition is not based on the cost of doing business.
c. Both brokers engaged in illegal price-fixing.
d. Neither broker has committed an antitrust violation.
Neither broker has committed an antitrust violation.
Brokers can independently determine commission rates or fees for their own firms.
A real estate broker had a listing agreement with a seller that specified a 6% commission. The broker showed the home to a prospective buyer. The next day, the buyer called the seller
directly and offered to buy the house for 5% less than the asking price. The seller agreed to the price and informed the broker in writing that no further brokerage services would be
required. The sale went to closing six weeks later. Based on these facts, which of these
statements is TRUE?
a. While the broker was the procuring cause of the sale, the seller properly canceled the
contract; without a valid employment agreement in force at the time of closing, the broker
is not entitled to a commission.
b. The broker is entitled to a partial commission, and the buyer is obligated to pay it.
c. Under the facts as stated, the broker is not the procuring cause of this sale but is still
entitled to a commission.
d. The broker was the procuring cause of the sale and is entitled to the full 6% commission.
The broker was the procuring cause of the sale and is entitled to the full 6% commission
Because the broker introduced a ready, willing, and able buyer to the seller prior to the seller’s cancellation of the listing agreement, the broker is entitled to the commission.
A qualified buyer makes a written offer on a property on March 6 by completing and signing a sales agreement. Later that day, the seller accepts and signs the agreement, keeping one copy.
The seller’s broker gives a copy of the signed agreement to the buyer on March 8. The seller’s deed is delivered on May 1. The deed is recorded on May 7, and the buyer takes possession on
May 15. When is the broker’s commission payable if this is a usual transaction?
a. March 8
b. May 1
c. May 7
d. May 15
May 1
Although the commission was earned when the buyer was notified of the seller’s acceptance (March 8), the commission is typically paid at the time the deed is delivered.
All of these are violations of federal antitrust laws EXCEPT
a. group boycott.
b. allocation of customers.
c. commission split.
d. tie-in agreement.
Commission split.
Brokers may legally share and split commissions. Price fixing, allocation of customers, and a group boycott are illegal under the antitrust laws.
All of these are ways for a broker to charge for services EXCEPT
a. standard community rate.
b. flat fee.
c. hourly rate.
d. commission based on a percentage of the selling price.
Standard Community Rate
Under antitrust laws, brokers may not collaborate and agree to charge the same rate to customers. Brokers may charge for services using a flat fee, an hourly rate, or a commission
based on a percentage of the selling price.
What is the main value of a multiple listing service (MLS) for sellers?
a. Real estate professionals do not have to work as hard to secure property listings.
b. It simplifies closing procedures.
c. It reduces cooperation among brokers.
d. It exposes the property to a greater number of prospective buyers.
It exposes the property to a greater number of prospective buyers.
The MLS exposes the property to many different real estate professionals, encouraging cooperation among brokers and expediting sales.
After license laws are enacted by the legislature, who is responsible for adopting administrative regulations?
a. A subcommittee that reports to the legislature
b. A local association of REALTORS®
c. Licensing authority (division, commission, etc.)
d. Brokers and salespeople appointed by the governo
Licensing authority (division, commission, etc)
Administrative regulations are written and adopted by the licensing authorities in each state. They have the same force and effect as the law, but they are easier to create and change
because they do not have to go through the legislative process.
When communicating with clients or consumers via email, it is best to
a. send solicitations to all local residents, even when not personally known.
b. be as vague as possible about the real reason for the message.
c. avoid sending large attachments.
d. respond to emails within one week.
Responding to emails within one week.
Examples of email etiquette include using the subject line in a useful and helpful manner;
avoiding spelling errors; responding promptly to all email messages; and being specific, to
the point, and brief. Do not send unsolicited emails.
Although state laws vary regarding internet advertising, which of these is a typical element of
state policy or law?
a. Email sent by a real estate licensee needs to include the licensee’s name, phone number,
and real estate license number.
b. Ads must contain true, current information and avoid misleading the potential client or
customer.
c. On a website containing their ads, real estate licensees only need to identify themselves as
a broker or salesperson on the site’s home page.
d. It is acceptable for only the sales associate’s name (without the broker’s name) to be
shown in an ad.
Ads must contain true, current information and avoid misleading the potential client or customer.
A phone number and license number are not usually required in an email. Status as a broker or sales associate should be disclosed on every page of a website with ads. Both the sales
associate’s name and the broker’s name should be shown in the ads.
The broker may still be entitled to a commission in which of these situations where a pending property sale did not close?
a. The buyer wanted to add the kitchen appliances to the sale, but the seller refused.
b. The buyer decided not to buy the property.
c. The seller decided not to sell.
d. Financing fell through for the buyer.
The seller decided not to sell.
If the sale is not completed due to the seller’s default (deciding not to sell), then the broker is generally due a commission. Courts may prevent a real estate broker from receiving a
commission if the broker knew that the buyer was unable to perform.
An arrangement to sell one product only if the buyer purchases another product as well is called
a. a tie-in agreement.
b. a fee-for-services.
c. a buydown provision.
d. an allocation of customers.
A tie-in agreement
A tie-in arrangement is an agreement to sell one product only if the buyer purchases another product; the sale of the desired product is tied to the purchase of a second, less-desirable
product. Fee-for-services refers to splitting apart the collection of services that a broker offers. A buydown provision is a financing option. Allocation of customers refers to dividing a
market and refraining from competing.
The primary purpose of the Uniform Electronic Transactions Act (UETA) is to
a. facilitate the use of social media.
b. protect consumers against unwanted email.
c. remove barriers in electronic commerce that would otherwise prevent enforceability of contracts.
d. allow brokers to close more deals.
Remove barriers in electronic commerce that would otherwise prevent enforceability of contracts.
The primary purpose of the Uniform Electronic Transactions Act (UETA) is to remove barriers in electronic commerce that would otherwise prevent enforceability of contracts. UETA sets
forth basic rules for entering an enforceable contract using electronic means.
The name for the current policy of the National Association of REALTORS® that allows all multiple listing service (MLS) members equal rights to display MLS data is the
a. virtual office website.
b. Internet Listing Display Policy.
c. Internet Data Exchange.
d. Open Listing Data Service.
Internet Data Exchange
NAR has adopted the Internet Data Exchange (IDX) policy. The policy allows all MLS members to have equal rights to display MLS data, while also respecting the rights of the property
owners and the brokers who represent them to market the property as they wish.
A consumer placed their phone number on the National Do Not Call Registry, but a real estate professional may call the consumer how many months after the consumer’s last purchase?
a. 3
b. 6
c. 12
d. 18
18
A real estate professional may call consumers with whom there is an established business relationship for up to 18 months after the consumer’s last purchase, delivery, or payment,
even if the consumer is listed on the National Do Not Call Registry. If the consumer specifically asks the company not to call, then the company must stop calling.
An important purpose of the E-Sign Act is to
a. give contracts created electronically the same legal standing as those executed on paper.
b. require stringent security measures for email communication.
c. prevent notarization of electronically transmitted agreements.
d. require all parties to use electronic contracting if the seller prefers it.
Give contracts created electronically the same legal standing as those executed on paper
The E-Sign Act diminishes legal barriers in electronic contracting, but it does not specify required security measures. Notarization is allowed. Parties are not required to use electronic contracting.
