Reading...
Play button
Play button
Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
46 Cards in this Set
- Front
- Back
|
Real estate listing
|
A contract wherein a broker is employed to find a buyer or tenant.
*Note that the Real Estate Listing contract does not authorize the broker to sell or convey title to the property or to sign contracts. |
|
|
Exclusive right to sell
|
A listing that gives the broker the right to collect a commission no matter who sells the property during the listing period.
*Note that in the agreement, the owner agrees not to list the property with any other brokers, advertise it during listing period or permit other brokers to have a sign on the property. |
|
|
In residential sales, ________________ months is a popular time span compromise
|
three to four
|
|
|
Farm, ranch, commercial, and industrial listings are usually made for ___________________.
|
six months to one year.
|
|
|
Brokerage commissions are NOT set by a state regulatory agency or by local real estate associations. Any effort by brokers to set commission rates among themselves is a
|
violation of federal and state antitrust laws. Can even result in criminal liability.
|
|
|
Even if the owner finds a buyer, the broker is still entitled to a full commission fee because it is after all an "exclusive right to sell". When the owner disregards the promise and lists with another broker who sells the property, the owner is
|
liable for TWO full commissions.
|
|
|
The listing itself is not an offer to sell property. It is strictly a contract whereby the owner employs the broker to find a buyer. Thus, even though a buyer offers to pay the exact price and terms shown in the listing, the buyer
|
does not have a binding sales contract until the offer is accepted in writing by the owner.
Study page 352 |
|
|
If the owner refuses to sell the at the listed price and terms, the broker is still entitled to commission. In the case where the owner does not pay the broker voluntarily, the broker can
|
file a lawsuit against the owner to collect.
|
|
|
Exclusive right to sell or exclusive authorization to sell
|
A listing that gives the broker the right to collect a commission no matter who sells the property during the listing period.
**No matter who sells the property during the listing period, the listing broker is entitled to a commission. |
|
|
The most widely used type of listing in the United States is the
|
exclusive right to sell listing
|
|
|
The advantage to the BROKER in an exclusive right to sell listing is
|
the money and effort the broker expends on advertising and showing the property will be to the broker's benefit.
|
|
|
The advantage to the OWNER in the case of exclusive right to sell listing is
|
the broker will usually put more effort into selling a property if the broker holds an exclusive right to sell than if the broker has an exclusive agency or an open listing.
|
|
|
Exclusive Agency Listing
|
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.
|
|
|
In an exclusive agency listing, this type of listing benefits the owner in what way?
|
the owner has a broker looking for a buyer, but if the owner finds a buyer first, the owner can save a commission fee.
The broker is also less enthusiastic because the broker's efforts can be easily undermined. This leaves the broker expending less effort on advertising and showing the property as much as they would with an exclusive right to sell. |
|
|
Open listings
|
Carry no exclusive rights. An owner can give an open listing to any number of brokers at the same damn time. The owner can still find a buyer himself and avoid commission .
--This gives the owner the greatest freedom of any listing form, but there is little incentive for the broker to expend time and money since the broker has little control over who will be compensated if the property is sold. --The broker's only protection is that if the broker does find a buyer at the listing price and terms, then the broker is entitled to a commission. |
|
|
Net listing
|
A listing agreement that pays the broker an uncertain amount of commission, generating the principal net proceeds from the sale. *Most states avoid prohibit this listing outright from its common misunderstanding.
i.e. If a homeowner asks for a "net $60,000" and the broker sells the home for $65,000, the commission would be $5,000. |
|
|
ADVANCE fee listing
|
Listing in which a broker charges for time by the hour and for out-of-pocket expenses to market a property. Receiving payment in ADVANCE.
|
|
|
Advance cost listing
|
covers only out-of-pocket costs incurred by the broker, such as advertising, multiple listing fees, flyers, mailings, toll calls, survey, soil, report, title report, travel expenses, and food served during open houses.
--In this case, costs and hourly fees are deducted from the commission at closing. |
|
|
Exclusive authority to purchase
|
Listing utilized by buyer's brokers
|
|
|
Multiple Listing Service (MLS)
|
Organization of member brokers agreeing to share listing information and share commissions for a greater market exposure.
|
|
|
"ready, willing, and able buyer"
|
A buyer who is ready to buy at the seller's price and terms (ready and able) and who has the financial capability to do so (able).
|
|
|
An alternate arrangement for a broker compensation in the case of a "ready, willing, and able buyer" case is
|
the broker and owner agrees to a "no sale, no commission" arrangement whereby the broker is not entitled to a commission until the transaction is closed. This is to the owner's advantage.
|
|
|
procuring cause
|
The broker who is the primary cause of a transaction.
|
|
|
Flat-fee broker
|
A broker who charges a preset brokerage fee that is collected whether the property sells.
-- The broker will list a property, suggest market price, write advertising, assist with negotiations, draw up a sales contract, and turn the signed papers over to an escrow company for closing. |
|
|
Under the flat-fee arrangement which is also called self-help brokerage, the homeowner is effectively buying real estate services on an
|
a la carte basis.
|
|
|
Discount broker
|
full-service broker who charges less than the prevailing commission rates in his community. For example, taking 3% instead of 5%.
--Charging less means a discount broker must sell more properties and be careful to take listings only on properties that will sell quickly. |
|
|
Variable rate commission
|
The commission structure retains the lower commission for the bargain broker but allows the commission to increase up to 3% to the other broker in order to give other brokers an incentive to help market their properties
|
|
|
Why do brokers strongly prefer to take exclusive right to sell listings rather than exclusive agency or open listings?
|
An exclusive right to sell listing protects the broker by entitling him to a commission no matter who sells the property.
The exclusive agency listing puts the broker in competition with the owner by allowing the owner to find a buyer and owe no commission. The open listing adds other brokers to the competition as any number of brokers can have the listing simultaneously and the owner can still sell it himself and pay no commission. |
|
|
How are listings terminated?
|
Listings are usually terminated with the completion of the agency objective, namely finding a buyer or a tenant. Lacking a buyer, termination usually results when the listing period expires (which is typically 3-6 months).
A listing can also be terminated if the broker fails to perform as agreed in the listing or if the broker and principal mutually agree to terminate. |
|
|
What are the primary differences between a broker employed by a seller and a broker employed by a buyer?
|
The broker employed by the seller focuses on making the sale, marketing.
The broker employed by the buyer focuses on obtaining the product to suit the buyer's needs and potential uses. |
|
|
Agent
|
Person empowered to act by and on behalf of the principal (owner).
|
|
|
A real estate listing is
|
an employment contract between a property OWNER and a real estate BROKER.
|
|
|
The amount of commission to be paid the broker for selling a property is
|
stated in the listing contract
|
|
|
The broker receives a commission regardless of whether the property is sold under an exclusive right to sell listing. True or False?
|
False. An exclusive right to sell listing entitles the broker to commission if property is sold but NOT regardless of where the property is sold.
|
|
|
An exclusive agency listing
|
permits the owner to sell by his own efforts without liability to pay a commission to the listing broker but does not allow the owner to list concurrently with other brokers.
|
|
|
When a property owner may sell the property during the listing period and not owe a Real estate fee to the broker is an
|
exclusive agency listing.
|
|
|
Under the terms of an exclusive agency listing, the broker showed a property to a prospect and notified the seller of the showing. The prospect then approached the seller directly and bought the property at a lower price using a "straw-man" to hide the buyer's identity from the broker. Can the broker recover a commission on this sale?
|
Yes, because he was the procuring cause of the sale.
|
|
|
When a property under an open listing is shown to a prospect by two different brokers and a sale results, the commission is
|
payable to the broker who actually made the sale.
|
|
|
An agent received a 3% commission on one-fourth of her total sales. On the remainder she received a 6% commission. What was her average commission for all of her sales?
|
3% + 6% + 6% + 6 %= 21% / 4 = 5.25% total commission of all her sales.
|
|
|
Three properties sold for a total of $120,000. The gross commission is 8%. Office policy is to give 10% of all commissions to the office manager. The balance is then divided, giving 45% to the office and the remainder to the salesperson who listed and sold the property. How much did the salesperson earn?
|
$120,000 x 8% = $9,600 total commission
$9,600 x .10 = $960 to the manager $9,600 - $960 = $8,640 remainder $8,640 x 45% to office = $4,752 to agent. |
|
|
A rental agency receives one-third of the first month's rent and 3.5% of each month's rent after that. If the agency leases the apartment for one year at $360 per month, how much does the rental agent get?
|
$360 x 1/3 = $120 first month commission
$360 x 3.5% x 11 month = $138.60 next 11 months $120 + 138.60 = $258.60 total commission |
|
|
A vacant lot was purchased three years ago for $35,000. It was recently listed for sale at a price 20% greater than that. If the seller accepts an offer that is $3,000 below list price, what would she receive after paying the 6% commission?
|
$35,000 x 1.2 = $42,000 list price
$42,000 - $3,000 = $39,000 accepted by seller $39,000 x .94 = $36,660 (< answer) after 6% commission |
|
|
A broker charges 6% on the first $100,000, 5% on the next $100,000, 4% on the next $200,000 and 3% above that. On a $1,000,000 sale, what will be the commission?
|
$100,000 x .06 = $6,000 on first $100,000
$100,000 x .05 = $5,000 on next $100,000 $200,00 x .04 = $8,000 on next $200,000 $600,000 x .03 = $18,000 on bal. $600,000 $37,000 Total commission |
|
|
In order for the seller to net $100,000 after paying a real estate commission of 7%, how much does the property have to sell for?
|
$100,000 / .93 {7% of 100%} = $107,527
|
|
|
A broker listed a house for $120,000 with the seller agreeing to pay a 7% commission. The seller agreed to accept $112,500 and then asked the broker to cut his commission. The broker replied that the seller was already cutting the broker's commission by accepting the lower price sale price. How much less did the broker receive with the lower sale price.
|
$120,000 x .07 = $8,400
$112,500 x .07 = $7,875 $8,400 - $7,875 = $525 |
|
|
How can I get an A on this final exam in shaa Allah?
|
Do the math problems on page 131 of Real Estate study guide.
|
