Chapter 20—The Principal-Broker Relationship: Employment
MULTIPLE CHOICE
1. 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
2. A listing agreement authorizes the broker to
a.
find a buyer.
b.
sell the property.
c.
convey the property.
d.
hypothecate the property.
3. 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
4. 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.
5. 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.
6. 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.
7. 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
8. 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.
9. 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.
10. 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.
11. 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.
12. 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.
13. 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.
14. 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.
15. 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.
16. A licensed real estate salesman may lawfully receive a commission from
a.
the buyer.
b.
the seller.
c.
the title company.
d.
his broker.
17. 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.
18. 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.
19. 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
20. 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
21. 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.
$1,896
b.
$2,790
c.
$3,150
d.
$6,300
22. 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.
$1,540
b.
$5,133
c.
$2,567
d.
$1,026
23. 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.
$48,000
b.
$55,000
c.
$60,000
d.
$72,000
24. 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.
$9,324
b.
$4,196
c.
$7,527
d.
$3,765
25. 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.
$8,976
b.
$9,792
c.
$10,200
d.
$17,000
26. 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.
27. 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.
28. 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.
29. 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.
30. 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.
TRUE/FALSE
1. The first thing a licensed broker must prove to recover a commission is that he has competitive
commission rates.
2. 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.
3. The property owner is permitted to compete against the real estate broker in searching for a buyer if he
signed an exclusive right to sell listing.
4. With a net listing, the sales commission is a fixed dollar amount.
5. Under an exclusive authority to purchase agreement, the buyer becomes a principal.
6. A properly signed multiple listing agreement is the property of the multiple listing service.
7. 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.
8. 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.
9. 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.
10. 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.
11. 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.
12. A listing is automatically terminated upon the death of the seller.
13. A listing automatically will expire when the listing salesperson dies.
14. With an exclusive right to sell listing agreement, the broker will receive a commission regardless of
whether the property is sold.
15. An exclusive agency listing permits the owner to sell through their own effort without liability to pay a
commission to the listing broker.
16. With an exclusive right to sell listing agreement, the owner may sell the property through their
personal efforts without liability for a commission.
17. An open listing allows the owner to list the property with several brokers at the same time.
18. Most brokers are reluctant to accept net listings even when they are permitted to do so.
19. 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.
20. Under an exclusive authority to purchase agreement, the buyer must pay the real estate commission.
COMPLETION
1. 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.
2. A buyer’s broker would use an exclusive right to ____________________ listing agreement.
3. A listing agreement is a(n) ____________________ contract between a property owner and a real
estate broker.
4. A listing can be terminated by improper performance or ____________________ by the broker.
5. A flat-fee broker is an example of a ____________________ broker.
6. A ____________________ broker is a full service broker who charges less than the prevailing
commission rates in his community.
7. 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.
8. 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.
9. A listing that gives the broker the nonexclusive right to find a purchaser is a(n)
____________________ listing.
10. A broker who is the primary cause of a transaction is known as the ____________________ cause.
MATCHING
Choose the one most appropriate answer for each.
a.
abandonment
k.
exclusive authority to purchase
b.
advance fee listing
l.
exclusive right to sell
c.
advanced cost listing
m.
flat-fee broker
d.
agent
n.
Multiple listing service (MLS)
e.
bargain broker
o.
net listing
f.
broker
p.
open listing
g.
buyer’s broker
q.
procuring cause
h.
discount broker
r.
ready willing and able buyer
i.
employment contract
s.
real estate listing
j.
exclusive agency listing
t.
REBAC
1. a listing that gives a broker a nonexclusive right to find a purchaser
2. a listing that gives a broker the right to collect a commission no matter who sells the property during
the listing period
3. 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
4. a person empowered to act by and on behalf of the principal
5. a listing for which the commission is the difference between the sales price and the minimum price set
by the seller
6. an organization of real estate brokers that exists for the purpose of exchanging listing information
7. the broker who is the primary cause of a transaction
8. a listing where the broker charges for time by the hour and for out-of -pocket expenses to market a
property
9. a broker who charges a preset brokerage fee that is collected whether the property sells or not
10. a real estate listing between a property owner and a real estate broker
11. a listing that covers only out-of-pocket costs incurred by the broker
12. an acronym that describes a division of the National Association of REALTORS® whose members
specialize in buyer agency
13. a broker who represents the buyer in a real estate transaction
14. if a broker acts counter to the principal’s best financial interests, the employment is terminated and no
commission is paid
15. a broker who deviates from the full-service concept of real estate brokerage and thereby charges lower
commissions
16. a full-service broker who charges less than the prevailing commission rates in his community
17. one who, for a fee, acts as an agent for others in negotiating contracts or sales
18. listing utilized by buyer’s brokers
19. a buyer who is ready to buy at the seller’s price and terms and who has the financial capability to do so
20. a contract wherein a broker is employed to find a buyer or tenant