Real Estate Principles 4-7

Front 1

Conflict of interest

Back 1

Broker or agent is biased and incapable of performing duties owed to their clients

Front 2

What (biased) compensations (instead of pay) must be disclosed to the client?

Back 2

Professional courtesies

Family favors

Preferential treatment

Front 3

ABA

Back 3

Affiliated business arrangement

Front 4

Affiliated business arrangement

Back 4

Referring a client over to a business who shares money with the broker who referred them

Front 5

What is it called when a conflict of interest is created?

Back 5

Agency dilemma

Front 6

Does a conflict of interest go against a broker's fiduciary duties?

Back 6

Yes, unless it is disclosed and the client consents

Front 7

When must a broker disclose their conflict of interest?

Back 7

Immediately (as it will create transparency in the transaction and not cause issues or go against fiduciary duty)

Front 8

Does a disclosure neutralize the inherent bias itself?

Back 8

No but it neutralizes the element of Deceit

Front 9

Dual agency

Back 9

When a broker represents both the buyer and the seller

Front 10

What circumstances are considered a conflict of interest?

Back 10

1. A pre-existing relationship due to: kinship, employment, partnership, religion, Etc

2. a relationship that might hinder their ability to fully represent the needs of the client

Front 11

Can a broker act for more than one participant in a transaction? What is this called?

Back 11

1. Yes, as long as it is disclosed and they have the client's consent

2. Dual agency

Front 12

Do you still have to disclose your interest in a transaction you are brokering if the other broker doesn't ask for it?

Back 12

Yes

Front 13

Do you have to disclose if your bias is indirect?

Back 13

Yes

Front 14

Once the transaction has already started when is it appropriate to disclose the bias?

Back 14

As soon as the conflict arises

Front 15

material fact

Back 15

Something that affects the decisions and process of a transaction

Front 16

If a broker is acting solely as their own principal do they have to disclose their bias?

Back 16

No, because they are not acting on behalf of someone else

Front 17

When a broker is selling their own house and collects a fee on the sale of their own property, what do they subject themselves to?

Back 17

Real estate agency requirements

Front 18

Subagent

Back 18

Individual delegated by the agent, not the client themselves

Front 19

Are you considered an agent of the seller simply by showing buyers properties listed with other brokers?

Back 19

No

Front 20

Listing agreement

Back 20

Authorizes the listing broker to cooperate with other brokers

Front 21

When a broker goes into a listing agreement and cooperates with other brokers what then do they share?

Back 21

1. Property information

2. brokerage fee

Front 22

What do listing agreements not authorize the broker to do?

Back 22

Delegate to other Brokers the authority to act on behalf of their client

Front 23

Describe the difference between a subagency and an associate broker:

Back 23

1. Enlisting another broker to help with a transaction

2. An agent employed by a broker to assist with a transaction

Front 24

MLS

Back 24

Multiple listing service

Front 25

Is a broker in a multiple listing service considered to be a dual agency or a sub agency relationship?

Back 25

No

Front 26

How is an agency created?

Back 26

1. Contract

2. Conduct of a broker

Front 27

Multiple listing service

Back 27

Association of real estate agents pooling and Publishing the availability of their listing properties

Front 28

How can a broker become a sub-agent appointed by the seller's broker?

Back 28

When they're in contact with the buyer, but conduct themselves as the seller's representative through all negotiations with the buyer

Front 29

Opposing parties

Back 29

Buyer vs seller

Front 30

Dual agent

Back 30

Represents both the buyer and the seller

Front 31

What is a broker subject to if they fail to promptly disclose their dual agency?

Back 31

1. Lost of fee

2. liability for their principles money losses

3. disciplinary action by Calbre

Front 32

Confidential pricing information (in regards to dual agency)

Back 32

Information that the broker may not disclose to opposing parties

Front 33

In a dual agency, how is the "best business advantage" prevented from being achieved by the broker?

Back 33

Because the broker cannot take sides during the negotiations

Front 34

Describe the benefits one can receive from having an exclusive agent

Back 34

1. Exclusive agents can negotiate the best price for seller / buyer

2. Dual agents want the best for both sides and therefore are at an impass

Front 35

Who is the legal agent in a transaction?

Back 35

The broker who employs the agents involved in handling negotiations

Front 36

Trust funds

Back 36

Items having a monetary value held by a broker for a client in a transaction

Front 37

What do trust funds generally include?

Back 37

1. Rents and security deposit

2. good faith deposit (advance fees)

3. fees and costs

4. loan payments

5. any other personal property of value

Front 38

What requirements are imposed on Brokers when they receive, transfer or disperse trust funds?

Back 38

Record-keeping and accounting requirements

Front 39

Trust funds come in many forms, including:

Back 39

1. Checks

2. precious metals

3. stocks

4. collectibles

5. notes

6. item with evidence of value

Front 40

General account

Back 40

1. Broker or agent personal or business account

2. not to be co-mingled with trust funds

Front 41

Subaccount Ledger

Back 41

An accounting document identifying the owner of trust funds and the amount held

Front 42

Conversion

Back 42

Unlawful appropriation of another's property (such as trust funds)

Front 43

What must a broker do with a clients trust fund?

Back 43

1. Use it for the agreed services ( such as payment on a loan)

Front 44

Can the bank seize a person's trust fund to offset the Brokers personal debt to the bank?

Back 44

Yes, however the investor is entitled to recover their funds because the bank does not extend to seizure of funds held for others in a broker's trust account

Front 45

What are you supposed to do with trust funds received (cash or check) made payable to the broker?

Back 45

1. Deposit into Brokers trust account

2. held undeposited

3. endorsed and handed to others entitled to the funds

Front 46

What is a non-negotiable type of trust fund? What is a broker to do with non-negotiable types of trust funds?

Back 46

1. Items that can't be deposited such as: gems, coins, notes or personal property

2. Place items in a safe or safe deposit box for safekeeping

Front 47

Owner's statement

Back 47

Provided to the owner of a trust fund explaining the status, expenditure and location of funds

Front 48

How long does a broker have to pay endorse or deposit trust funds?

Back 48

End of 3 business days

Front 49

When can a broker hold a check (trust fund) undeposited?

Back 49

When waiting for an event to occur

(Such as acceptance of an offer)

Front 50

Civil Rights Act

Back 50

Federal law which provides protection to individuals against discriminatory activities

Front 51

Who has the right to rent real estate under the federal civil rights act?

Back 51

All citizens of the United States regardless of race

Front 52

FFHA

Back 52

Federal fair housing act

Front 53

Federal fair housing act

Back 53

A collection of policies designed to prevent discrimination when it comes to housing

Front 54

Dwelling

Back 54

Building occupied or designed to be occupied by one or more families

Front 55

Familial status

Back 55

Status which indicates a household ( includes people under 18)

Front 56

Selective Reduction (in rent)

Back 56

Giving better rates/services to some tenants and not others

Front 57

Steering

Back 57

Real estate agent trying to influence the choice of a buyer or tenant

Front 58

Is Steering legal?

Back 58

No

Front 59

Blockbusting

Back 59

Real estate agent convincing property owner to sell their house because of a changing demographic in their neighborhood

Front 60

Is blockbusting legal?

Back 60

No

Front 61

Aggrieved Individual

Back 61

Individual who claims they have been or they will be injured by a prohibited discriminatory housing practice

Front 62

Mediation

Back 62

Informal negotiations

Front 63

Unruh Civil Rights Act

Back 63

California law prohibits discrimination by business based on sex, race, color, religion, ancestry, etc

Front 64

Is a real estate practice considered a business establishment?

Back 64

Yes

Front 65

Disabled person

Back 65

Anyone who has physical or mental impairment which significantly limits major life activities, has a record of disability, or is regarded as being disabled

Front 66

Is a landlord required to structurally modify existing rental property to meet special needs of disabled tenants?

Back 66

No. Although the landlord is to allow the tenant to make reasonable modifications themselves or pay the landlord to do so

Front 67

When is the only time a landlord can refuse a tenant because they have children under 18?

Back 67

If the property qualifies as senior citizen housing

Front 68

Does a property manager have to disclose any deaths in the potential listing? How many years back?

Back 68

-Yes if it is considered a material fact which might affect the tenants decision to lease

-3 years