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58 Cards in this Set
- Front
- Back
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Real estate salesperson |
Someone who is employed for compensation by a licensed real estate broker to perform acts that require a real estate license |
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California law requires a broker to have a ________________ with every licensee who works for the broker. |
Written employment agreement |
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From a tax, compensation, and control perspective a salesperson can either be an_______________or an_____________. |
Independent contractor or employee |
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What are the differences between a real estate licensee working as an employee and real estate licensee who is and independent contractor? |
The behavioral control, financial control and type of relationship that exists between a broker and an agent. |
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Most real estate agents are employed as _______________. |
Independent contractors |
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To qualify as an independent contractor, the IRS requires? |
Safe Harbor test |
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What are the three conditions of a safe harbor test? |
The person must be a qualified real estate agent Compensation paid to the real estate agent for services performed must be based on production, not hours worked A written agreement must exist between the independent contractor and the broker |
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What provisions are addressed in most independent contractor agreements? |
Parties and term independent contractor relationship Obligations and duties Associate’s authority Broker supervision Office files and information Compensation Non-employment for Federal tax purposes Employee Benefits Regulatory Compliance Expenses Termination of Agreement Indemnification Disputes and Litigation |
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In California the two most common broker-agent independent contractor agreements user are provided by the California Association of Realtors. What are they? |
Independent Contractor Agreement With Binding Arbitration Option and the Independent Contractor Agreement Without Arbitration |
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What are the main differences between the broker-agent agreements? |
Is how the disputes between the parties in relation to the agreement will be resolved |
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Every real estate transaction involves bringing together a? |
Buyer an a seller or a landlord and a tenant |
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Owner listing |
Authorizes a broker to represent an owner or landlord |
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The most common agreement used with sellers? |
Exclusive Right to Sell, CAR Residential Listing Agreement |
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Buyer agency or tenant representation agreement |
Authorizes a broker to represent a buyer or tenant in the search for a property to rent or purchase. |
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Listing agreement |
A legally-binding contract the creates and agency relationship authorizing a broker to serve as the agent for principal in a real estate transaction. |
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Bilateral employment contracts |
The owner hires the broker and promises to pay a commission in exchange for the broker’s promise to locate a “ready, willing and able” buyer or tenant for the owner. |
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Listing agreements must be _______________ to be enforceable. |
In writing |
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The most widely used agreement is the ________________listing agreement. |
Exclusive right to sell |
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Exclusive right to sell |
This agreement gives a broker the exclusive right to market the property for a specified period of time. |
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Exclusive agency listing agreement |
Gives a broker the right to market and sell a property for a specified time period while the owner retains the right to find a buyer and sell the property without owning the broker a commission. |
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The seller must pay a omission only if? |
The home is sold by the broker or an authorized agent or sub agent of the broker |
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Open listing |
Non-exclusive contract, authorizing a broker to serve as the agent for either the sale or the purchase of property |
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Net listing |
An owner sets a minimum amount that he wants to receive from the sale of the property and lets the broker have as commission any amount above the set minimum. |
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The CAR Residential Listing Agreement addresses these provisions |
Exclusive Right to Sell Listing Price and Terms Compensation to Broker Multiple Listing Service info Seller Representations/Guarantees Broker and Seller Duties Agency Relationships Security and Insurance Photographs and Advertising Use of Lockbox and sign Equal Housing Opportunity Attorney Fees Broker Approval of Agreement Successors and assigns Dispute resolution Ownership, title, authority Acceptance and signatures
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A buyer’s agent should clarify the types of service to be offered including: |
Assisting in determining favorable financing Providing information relating to market values Giving advice during contract negotiations Structuring the offer to purchase Assisting in related services such as insurance |
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What are some key points to consider in buyer’s broker agreements? |
Role of the agent Conflicts of interest Termination date and reasons for termination Exclusivity of representation Compensation |
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Exclusive buyer representation agreement |
Gives the broker the right to exclusively search for a home for a buyer and represent the buyer in the purchase |
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Exclusive agreements are preferred because? |
Brokers prefer since the offer more assurance that the broker will receive compensation Agents know it provides better control over the transaction |
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Procuring cause agent |
The agent who ultimately caused the buyer to purchase the home and earned the commission |
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What are the two representation agreements used between brokers and buyers? |
CAR, Buyer Representation Agreement, Exclusive & Non-Exclusive |
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The Buyer Representation Agreements includes the following provisions: |
Exclusive or Non-exclusive Right to Represent Agency Relationship Compensation to Broker Internet Advertising Broker Authorization and Obligations Scope of Broker Duty Buyer’s Obligation Additional Terms Attorney Fees Entire Agreement Dispute Resolution Acceptance and Signature |
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What type of contract will a new real estate licensee likely first experience ? |
An employment contract with his or her sponsoring broker |
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Although it’s usually easier for brokers to hire licensees as independent contractors rather that employees, what is the trade-off? |
the amount of control brokers have over their licensees |
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List three characteristics of licensees who are independent contractors |
The agent controls his or her schedule, hours, and workload The broker cannot control how the agent performs his or her real estate duties The broker does not withhold any money for the agent’s paycheck. the broker does not offer any company benefits, including health insurance retirement plans, vacation days, and sick days. The agent is paid based on his or her results, not effort of time spent working on real estate activities. The agent covers all of his or her business expenses, including advertising, marketing, transportation etc. |
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What provisions of an independent contractor agreement allows an agent to enter into agency agreements on behalf of the broker? |
The provision that addresses the agent’s authority |
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WHa does a provision discussing employee benefits typically sate in an independent contractor agreement? |
No benefits such as health insurance, retirement, sick days, paid-time off, etch are provided to the agent |
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What are the typical conditions for terminating an independent contractor agreement? |
Either party can terminate the agreement at any time with or without cause |
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What is the main difference between the two CAR Independent Contractor Agreements? |
How dispute between the parties regarding terms of the agreement will be resolved |
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what is and important thing to remember about the enforceability of listing agreements? |
With exclusive right to sell, the broker has the exclusive right to market the property and receive a commission regardless of who procures a the buyer. With exclusive agency, the owner retains the right to find a buyer and sell the property and owe the exclusive broker no commission. |
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Describe an open listing |
A non-exclusive listing that allows a seller to engage and number of different brokers to sell the property. The broker who brings the buyer gets the commission. If the owner sells the property, no commission is owed to any broker. |
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How does a net listing create a conflict of interest for a broker? |
It violates the broker’s fiduciary responsibility of putting the client’s interests above his or her own. |
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How must the listing price be written on the Exclusive Right tot Sell Agreement? |
In both numeric and written form |
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Which specific issues are discussed in the Compensation provision? |
Amount of compensation due When compensation is due Compensation being shared with others When compensation is not due to the broker |
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If the sale of the property is prevented by someone other than the seller, when is compensation due to the broker? |
If and when the seller collects damages for a suit or settlement |
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What does a seller acknowledge of the seller chooses to opt out of MLS? |
Exposure to the property will be limited, which could affect the number of showings and/or offers on the property |
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List the three specific tasks a broker is authorized to perform in order to achieve the duties outlined in the contract |
Order reports and disclosures Advertise and market the property, including using MLS Share information with a licensee regarding offers on the property, including the offer price |
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How many days after an associate enters into an agreement with a seller does the broker have the option to cancel the listing agreement ? |
5 days |
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Wha this the first course of action for the parties to resolve and dispute arising in regards to the compensation terms of the agreement? |
The parties agree to educate any dispute regarding. Compensation before arbitration or court actions |
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What does the Ownership, Title and Authority provision state? |
Seller warrants to having ownership of the property, that no other person has title to the property, and the seller has the authority to execute this agreement |
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The buyer’s agent should mention the potential of other buyer to consult with whom? |
Other expert advisors such as attorney, CPA, etc. |
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Agents know that an exclusive-right-to-sell or exclusive-right-to-buy agreement provides what? |
Better control over the transaciton |
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Define procuring cause agent |
The agent who ultimately caused the buyer to purchase the home |
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List three common misconceptions concerning buyer agency |
must be created by written agreement to be lawful Too complicated for the average buyer or seller to understand Not recognized by lenders Increases the risk of procuring cause disputes Is illegal Prohibited by State laws or MLS rules Does not permit the seller to pay the commission or allow the listing broker to split commissions with the buyer’s agent |
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What does is indicate if section C (2) of the Agency Relationship provision is checked? |
The buyer does not consent to the possibility of a dual agency relationship between broker and buyer. Only a single agency relationship is possible between the parties |
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Describe the Other Potential Buyers section of Paragraph 2 |
Discusses the possibility of the broker having other potential buyers who may be in competition for similar homes as the buyer. |
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According to the Exclusive Buyer’s agreement, what is the definition of buyer? |
Section 3F defines a buyer as any person or entity who act on buyer’s behalf to purchase property |
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List three activities the buyer authorizes the broker to do during the term of the agreement? |
Locate properties Present offers Assist buyer in negotiating Assist buyer through the finance process Provide buyers a list of professionals who reform the services outlined in the buyer’s inspection Advisory Order reports schedule and attend meetings with the buyer Provide guidance through the transaction process Obtain credit report on buyer |
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As outlined in the provisions discussing the buyer’s obligations, what is the buyer expected to do in regard to finding a purchasing a property? |
The buyer agrees to consider and view properties in a timely manner and to act in good faith in the acquisition of a property |
