Deck 12: Real Estate Brokerage and Listing Contracts

Question 1

Although the function of commercial brokerage is the same as that of residential brokerage,the activities of commercial brokers usually differ considerably from those of residential brokers due to fundamental differences in these two markets.All of the following statements regarding commercial brokerage are true EXCEPT:

A)Relative to residential transactions,commercial transactions tend to be larger.
B)The parties in commercial mortgage transactions are typically less knowledgeable than those in residential transactions.
C)An important part of the commercial broker's service is to provide the prospective buyer with reports that enable him to complete due diligence for the property.
D)Commercial brokers are often required to lower their commission in order to negotiate compromises between buyers and sellers when they reach an impasse over price.

Answer 1

B

Question 2

In determining the appropriate listing contract to be used,it is important to know whether a multiple listing service (MLS)will be employed.A MLS only accepts which of the following types of listing contracts?

A)Open listing
B)Multiple listing
C)Exclusive agency listing
D)Exclusive right of sale listing

Answer 2

B

Question 3

State licensing laws prescribe behavioral requirements with which licensees must comply to keep their licenses.Licensing laws generally seek to prevent brokers from partaking in all of the following activities EXCEPT:

A)Handling money in trust for clients
B)Taking kickbacks without the employer's knowledge
C)Offering the property at terms other than those specified by clients
D)Failure to submit all offers to the client

Answer 3

A

Question 4

In dual agency,conflicts of interest may arise since a single broker has both the listing contract with the seller and a buyer agency agreement with the purchaser.One way that states have attempted to deal with this issue is to develop a new type of brokerage relationship in which the broker assists the buyer and seller,but does not represent either party.This type of brokerage relationship is commonly referred to as:

A)unintended dual agency
B)universal agency
C)transaction brokerage
D)multiple listing

Question 5

According to the law of agency,real estate brokers are required to observe several duties as they act as an agent for an individual trying to buy or sell a property.Which of the following duties refers to a broker's obligation to be completely open and honest with the principal?

A)Disclosure
B)Confidentiality
C)Loyalty
D)Obedience

Question 6

There are a number of different types of listing contracts that can be used when marketing a property.Which of the following types of listings requires the broker to be paid a commission if any other broker,or even the owner,sells the property during the contract period?

A)Open listing
B)Multiple listing
C)Exclusive agency listing
D)Exclusive right of sale listing

Question 7

All 50 states have licensing laws that regulate persons and companies that engage in the brokerage business.Interpreting and enforcing state licensing laws falls under the responsibilities of which of the following parties?

A)Broker
B)Real estate commission
C)National Association of Realtors
D)Salesperson

Question 8

The importance of brokers in the real estate market is often overlooked.In the absence of a real estate broker,one would expect all of the following to be true EXCEPT:

A)Real estate values would be higher.
B)A seller would most likely rely on a "thinner" market (i.e.the seller has access to fewer prospective buyers).
C)It would be more difficult and costly for an individual to buy or sell a property.
D)Buyers would be more inclined to negotiate prices downward by at least the value of a typical commission.

Question 9

In acting as an agent for another person,the broker carries several special responsibilities,which by law must be adhered here to throughout the transaction process.These responsibilities constitute what is commonly referred to as a:

A)Subagency relationship
B)Dual agency relationship
C)Fiduciary relationship
D)Open listing relationship

Question 10

The recent emergence of discount brokerage services has had a modes effect on the price of brokerage services.The average commission that a broker could expect to receive today would most likely range between:

A)1-2%
B)3-4%
C)5-6%
D)7-10%

Question 11

Modern real estate brokerage normally relies on a multiple listing service (MLS)through which brokers have access to each other's listings.Which of the following types of agency agreements is established with the use of a MLS?

A)Single agency agreement
B)Subagency agreement
C)Dual agency agreement
D)Designated agent agreement

Question 12

Real estate brokers operate under the law of agency,which gives a broker the right to act for a principal in trying to buy or sell a property.Which of the following types of agents is authorized by the principal to act primarily within the confines of a business or employment relationship?

A)Universal agent
B)General agent
C)Special agent
D)Listing agent

Question 13

It is common for real estate firms to identify submarkets,such as property types or particular sections of a city,in which they can specialize and concentrate their transaction activity.This practice is referred to as:

A)internet marketing
B)open listing
C)discount brokerage
D)market segmentation

Question 14

In recent years,many U.S.investors have expanded their purchases of real estate into foreign countries,and many foreign investors have held interests in U.S.real estate.This is an example of what is commonly referred to as ________________ of real estate markets.

A)deregulation
B)globalization
C)disintermediation
D)industrialization

Question 15

Real estate brokers serve as intermediaries by bringing buyers and sellers together in the real estate market.For this service,brokers are paid what is commonly referred to as a:

A)commission
B)licensing fee
C)recovery fee
D)listing fee

Question 16

State licensing laws generally prescribe two levels of real estate brokerage licensing: the broker license and the salesperson license.Which of the following responsibilities is an individual with a salesperson license permitted to do?

A)Own and operate a real estate brokerage business
B)Handle money in trust for clients
C)Negotiate listing contracts or contracts for sale
D)Complete legal documents used in sales and leases in their own name

Question 17

Critical to any listing contract is the question of when the broker becomes entitled to a commission.Traditionally,the broker is still entitled to a commission in all of the following scenarios EXCEPT:

A)If the seller refuses to sell upon being presented with an offer meeting the original terms and conditions.
B)If the seller cannot deliver the property for any reason due to his or her fault.
C)If both the buyer and seller sign a contract but then agree to cancel it.
D)If a contract is contingent upon the buyer obtaining financing and the buyer is unable to do so.

Question 18

Blockbusting,which involves persuading an individual to sell her home by telling her that minority groups are moving into the neighborhood,is one form of discrimination in housing that is prohibited by which of the following acts of Congress?

A)Riegle Community Development and Regulatory Improvement Act
B)Secure and Fair Enforcement for Mortgage Licensing Act
C)Fair Housing Act (Title VIII of the Civil Rights Act)
D)Equal Credit Opportunity Act

Question 19

Federal and state laws prohibit discrimination in housing.However,exemptions do exist depending on the particular type of property that is being considered.All of the following activities could be considered exempt in specific scenarios EXCEPT:

A)Refusing to sell or rent to a person because of race.
B)Refusing to sell or rent based on familial status (i.e.having children).
C)Refusing to sell or rent to persons based on age.
D)Refusing to sell or rent a single-family home based on religion.

Question 20

One of the traditional requirements for individuals who wish to obtain a brokerage license has been to demonstrate financial capacity to cover damage judgments brought against them by clients.In order to address this concern,some states have required licensees to first obtain:

A)Private mortgage insurance (PMI)
B)Errors and omission insurance
C)Deposit insurance
D)Hazard insurance