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Real Estate
Q:
Two buyers purchase a home through a broker. After the close of escrow, the buyers discover a structural problem with the property, which the seller had not disclosed to anyone, including the broker. The buyers attempted to rescind their agreement. If they succeed, what commission is the broker entitled to in this case?
a. Full commission
b. Expenses only
c. None
d. Full commission minus expenses
Q:
If, in showing a property, the salesperson said, "In my opinion, this house is absolutely the greatest in the world," the salesperson
a. could lose his license for fraud.
b. is guilty of misrepresentation.
c. is puffing.
d. is guilty of redlining.
Q:
If a broker is a little short of funds and "borrows" some money from his escrow account to pay monthly bills, this activity is called
a. commingling and is illegal.
b. conversion and is illegal.
c. misrepresentation and may be illegal.
d. shrewd business and is legal.
Q:
If a real estate agent used clients' funds for his own personal use, he would be guilty of
a. commingling.
b. conversion.
c. duress.
d. misrepresentation.
Q:
The purpose of a trust account is to
a. hold money belonging to clients and customers.
b. assure that a broker can be trusted.
c. to act as a neutral depository.
d. convert client's money to broker's account.
Q:
A buyer making an offer on a property writes an earnest money check to the broker. The seller will not be available for 5 days. What should the broker do with the check?
a. Attach it to the offer in the file
b. Mail it with the offer to the seller
c. Hold the check until the contract has been signed by all parties
d. Hold it until the seller returns home
Q:
A salesperson received an earnest money check from a buyer on the listing of a co-op broker. What should the salesperson do with the check?
a. Deposit it into his client trust account
b. Sign it and pass it on to the seller
c. Get it signed by the buyer and the seller and turn it over to his broker
d. Hold the check until the contract has been signed by all parties
Q:
The broker and the seller know of major plumbing repairs needed on the seller's property. They, therefore, sell the house to a buyer "as is" but do not disclose plumbing problems. The buyer discovers the defects after closing and decides to sue the broker and seller. What is the most likely outcome of this decision?
a. The broker and the seller will win because of "caveat emptor"
b. The buyer has no cause because he signed an agreement to purchase "as is"
c. The buyer can collect because "as is" applies to obvious defects only
d. The buyer would probably win because the defects should have been disclosed
Q:
It is the responsibility of the real estate broker to
a. submit only those offers that meet the listing price.
b. decide which offers are in the principal's best interest.
c. quote only the listing price, but present all offers.
d. say whatever is necessary to get an offer.
Q:
The listing salesperson was told by a prospective buyer to present an offer of $150,000 with the promise that he would increase it to $152,000 if the seller rejected $150,000. The salesperson must
a. present the offer and disclose the promise to increase the offer.
b. keep the confidence of his buyer while presenting the $150,000 offer.
c. refuse to present the offer.
d. tell her broker of the verbal part of the offer.
Q:
Once a broker has taken a listing, he can do all of the following EXCEPT
a. allow his sales staff to make an offer on the property without informing the seller of the identity ofthe purchasers.
b. put up a sign.
c. buy it himself.
d. stand on the street corners soliciting buyers for the property.
Q:
The seller has just informed the listing agent that he does not want the property shown to any Orientals or other minority buyers. The agent
a. must obey the request under his fiduciary responsibilities.
b. may take the listing and show the property to anyone who desires to see it, including any minorities.
c. must explain that he cannot take the listing under these circumstances.
d. may take the listing and hope that no one undesirable turns up.
Q:
All of the following are examples of fiduciary relationships EXCEPT
a. trustee-beneficiary.
b. attorney-client.
c. broker-principal.
d. grantor-beneficiary.
Q:
The least appropriate person to choose which title and escrow company to use in closing a real estate sale would be
a. the seller.
b. the listing agent.
c. the buyer.
d. the home builder.
Q:
When a broker takes a listing, he is acting under what kind of agency?
a. General
b. Special
c. Ostensible
d. Implied
Q:
After an earthquake, a property manager had to meet with insurance adjusters to arrange for repairs to several properties which she managed. The property owners had given the manager what kind of agency authority?
a. Universal
b. Special
c. General
d. Power of Attorney
Q:
A property owner wishing to be contacted by persons who want to buy and not by agents who want a listing, would advertise for
a. "principals only".
b. "customers".
c. "clients".
d. "third parties".
Q:
When a listing is taken, the seller would be referred to as
a. the customer.
b. a fiduciary.
c. the client.
d. the agent.
Q:
Traditionally, in residential sales, prior to the emphasis on buyer agency, the broker considers the buyer to be
a. a client.
b. a customer.
c. a principal.
d. a fiduciary.
Q:
When creating an agency relationship, agency authority
a. expects that to become an agent, one must agree to perform and actually be paid for the performance.
b. enables the principal to grant property rights to the agent who may convey them to third parties.
c. can be conferred by acts of the principal to another party.
d. is limited to a few acts within a single trade or business.
Q:
A broker is attempting to collect a commission on a property after his exclusive right to sell listing expires. If he ends up in court, he must prove that he was the procuring cause.
Q:
A licensed salesperson has an open listing with Sara and an exclusive listing with Kelley. One week after both listings expire, Sara and Kelley sell their homes to each other. With no more information available, the licensee would claim a commission from both parties.
Q:
A broker is employed to find a buyer using an exclusive right to sell listing. He finds one at the seller's price and terms. If the seller then refuses to sell, the broker is entitled to a full commission.
Q:
A salesperson worked for broker Barbara when they agreed to take a note from a seller for a deferred commission. The salesperson left the first broker and now works for another broker. When the note is paid, the salesperson is entitled to receive the commission directly from Barbara because she was working for her at the time she earned the commission.
Q:
A properly signed multiple listing agreement is the property of the multiple listing service.
Q:
Under an exclusive authority to purchase agreement, the buyer becomes a principal.
Q:
With a net listing, the sales commission is a fixed dollar amount.
Q:
The property owner is permitted to compete against the real estate broker in searching for a buyer if he signed anexclusive right to sell listing.
Q:
A written, exclusive right to sell listing is most likely to specify that the commission has been earned upon procurement of a full price offer or upon acceptance of an offer by the seller.
Q:
The first thing a licensed broker must prove to recover a commission is that he has competitive commission rates.
Q:
Under the terms of an exclusive right to sell listing, a commission is due the listing broker if a buyer is found by
a. the listing broker.
b. a sales associate employed by the listing broker.
c. another broker.
d. any of the above.
Q:
The amount of commission to be paid the broker for selling a property is
a. set by law.
b. negotiated at the time a buyer is found.
c. set forth in the rules of the state real estate commission.
d. stated in the listing contract.
Q:
A typical exclusive right to sell listing requires the owner to
a. exclude other brokers from advertising or placing a sign on the property.
b. pay a commission if a purchaser is found who agrees to buy at the price and terms stipulated in the listing.
c. both a and b.
d. neither a nor b.
Q:
A listing to find a buyer for each of the following properties will usually be for a period of time ranging from six months to one year EXCEPT
a. farms.
b. commercial properties.
c. residential properties.
d. industrial properties.
Q:
A real estate listing
a. is an employment contract between a property owner and a real estate broker.
b. authorizes a real estate broker to sell and convey title to an owner's real property.
c. both a and b.
d. neither a nor b.
Q:
Broker Alice was to receive 6% on a property she had listed for $170,000. How much commission would she receive if the owner accepted an offer which reduced the price by 4%?a. $8,976b. $9,792c. $10,200d. $17,000
Q:
The broker/manager receives 45% of the commissions on all sales made through her office. What would she receive on monthly sales totaling $252,000 at an average 3.7% commission (rounded to the nearest dollar)?a. $9,324b. $4,196c. $7,527d. $3,765
Q:
A real estate licensee draws $1,000 per month from her broker against future commissions. Last year, she sold $2,000,000 worth of property. If she makes 3% gross commissions on all sales, how much did she earn last year?a. $48,000b. $55,000c. $60,000d. $72,000
Q:
A residence originally listed at $92,000 sold for 7% less than that. If the listing broker gets half of the 6% sales commission and he gives his salesperson 60% of that, how much does the listing salesperson receive? (rounded to the nearest dollar)a. $1,540b. $5,133c. $2,567d. $1,026
Q:
In an area where the multiple listing commission split is 50/50, a broker sells another broker's 6% listing for $105,000. How much commission will the selling broker receive?a. $1,896b. $2,790c. $3,150d. $6,300
Q:
A licensed salesperson is paid 2% commission on all sales that he produces. How much dollar volume of real estate would she have to sell each month to make $3,500 per month?
a. $122,900
b. $135,000
c. $175,000
d. $210,000
Q:
A residence was listed at $100,000 and sold for 92% of that amount. The rate of commission was 6%, and was divided equally between the selling and listing brokers. How much did each broker get?
a. $5,520
b. $3,360
c. $5,510
d. $2,760
Q:
A licensed salesperson participating in a real estate transaction is allowed to accept a commission from
a. the seller.
b. the buyer.
c. his broker.
d. the title company.
Q:
Broker commissions for the sale of real property are usually based on
a. amount of the first written offer.
b. selling price.
c. listed price.
d. loan amount.
Q:
A licensed real estate salesman may lawfully receive a commission from
a. the buyer.
b. the seller.
c. the title company.
d. his broker.
Q:
A licensed real estate salesperson can accept a commission from more than one broker
a. if both brokers are fully informed in writing.
b. when brokers are cooperating through the multiple listing service.
c. at no time.
d. if the salesperson was the procuring cause in each transaction.
Q:
Broker Billy secured a written listing from a large company which owned an unused warehouse. Billy later entered into a verbal agreement to share his commission with cooperating broker, Cynthia. The cooperating broker procured a buyer, but later Billy refused to split the commission at closing. Cynthia could
a. sue to recover her share.
b. not sue because this was only a verbal agreement.
c. ask the real estate commission to arbitrate.
d. forbid her sales agents from ever working with Billy's agents in the future.
Q:
When one broker lists a property, another broker sells it, and they split the commission between them, it is called
a. broker competition.
b. broker cooperation.
c. a pocket listing.
d. a mutual listing.
Q:
Multiple listing organizations typically use
a. an open listing.
b. an non-exclusive listing.
c. a net listing.
d. an exclusive right to sell listing.
Q:
The broker is helping the home buyer obtain the lowest possible price. As agent for the buyer, the broker and the buyer have probably signed an agreement called
a. an exclusive right to sell listing.
b. an exclusive authority to purchase agreement.
c. an open listing.
d. a net listing.
Q:
A broker lists a property and gets a sum from the seller as an advance deposit against the hours he spends marketing the property. This is called
a. a net listing.
b. an exclusive right to sell listing.
c. an advanced fee listing.
d. an open listing.
Q:
The problem with net listings is that
a. the seller is assured of receiving the net amount he specifies.
b. the broker receives a higher than average commission.
c. the broker does not have to submit the offer to the seller if the offer is too low.
d. there could be a conflict of interest if dealing with an inexperienced seller.
Q:
From the broker's point of view, one of the least desirable listings is an
a. net listing.
b. exclusive right to sell.
c. open listing.
d. exclusive agency listing.
Q:
Which of the following listings provides the least protection of the broker's interests?
a. Net listing
b. Exclusive right to sell
c. Open listing
d. Exclusive agency listing
Q:
In an exclusive right to sell listing
a. the broker can claim a commission without presenting an offer.
b. there must be a definite termination date.
c. the broker cannot claim a commission if the seller sells the property herself.
d. there can be an indefinite term of the agreement.
Q:
A listing that does not require the listing agent to show that he or his subagents are the procuring cause in order to earn a commission is
a. an exclusive right to sell listing.
b. an exclusive agency listing.
c. a net listing.
d. illegal.
Q:
A written agreement giving the listing broker the right to collect a commission, no matter who sells the property, within the term of the agreement, is
a. usury.
b. a net listing.
c. an open listing.
d. an exclusive right to sell listing.
Q:
A broker has an exclusive right to sell listing with the sellers. The broker brings an offer to buy at the seller's asking price and terms from a capable buyer. At what point has the broker earned her commission?
a. At the close of escrow
b. Upon presentation of the offer
c. Upon acceptance of the offer
d. Upon qualification of the buyer
Q:
A listing agreement authorizes the broker to
a. find a buyer.
b. sell the property.
c. convey the property.
d. hypothecate the property.
Q:
In whose name does a salesperson take a listing?
a. His broker's
b. His own name
c. The seller's
d. The Real Estate Commission
Q:
A broker who is the primary cause of a transaction is known as the ____________________ cause.
Q:
A listing that gives the broker the nonexclusive right to find a purchaser is a(n) ____________________ listing.
Q:
A listing for which the commission is the difference between the sales price and a minimum price set by the seller is called a(n) ____________________ listing.
Q:
A listing wherein the owner reserves the right to sell the property himself, but agrees to list with no other broker during the listing period is called an exclusive ____________________ listing.
Q:
A ____________________ broker is a full service broker who charges less than the prevailing commission rates in his community.
Q:
A flat-fee broker is an example of a ____________________ broker.
Q:
A listing can be terminated by improper performance or ____________________ by the broker.
Q:
A listing agreement is a(n) ____________________ contract between a property owner and a real estate broker.
Q:
A buyer's broker would use an exclusive right to ____________________ listing agreement.
Q:
A listing that gives the broker the right to collect a commission no matter who sells the property during the listing period is called a(n) ____________________ right to sell listing.
Q:
Under an exclusive authority to purchase agreement, the buyer must pay the real estate commission.
Q:
Under the terms of a multiple listing agreement, if a broker other than the listing broker sells the property, the seller may be responsible for paying two commissions.
Q:
Most brokers are reluctant to accept net listings even when they are permitted to do so.
Q:
An open listing allows the owner to list the property with several brokers at the same time.
Q:
With an exclusive right to sell listing agreement, the owner may sell the property through their personal efforts without liability for a commission.
Q:
An exclusive agency listing permits the owner to sell through their own effort without liability to pay a commission to the listing broker.
Q:
With an exclusive right to sell listing agreement, the broker will receive a commission regardless of whether the property is sold.
Q:
A listing automatically will expire when the listing salesperson dies.
Q:
A listing is automatically terminated upon the death of the seller.
Q:
The broker has an exclusive agency listing with the sellers. The broker shows the home to a buyer who then calls the sellers directly to make an offer to buy the property. The broker has earned a commission because the listing is an exclusive agency listing.