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Unit 6
Unit 6 - Brokerage Agreements
| Question | Answer |
|---|---|
| What is an Exclusive-right-to-sell listing agreements? | One broker is appointed as the seller’s sole agent. The listing broker is given the exclusive right to market the seller’s property. If the property is sold while the listing is in effect, the seller must pay the broker a commission regardless of who sell |
| What is an Exclusive-agency listing agreement? | ne broker is authorized to act as the exclusive agent of the seller-principal. However, the seller retains the right to sell the property without obligation to the broker. If the seller finds a buyer, they are under no financial obligation to the broker. |
| What is an Open listing agreement? | AKA Non Exclusive Listing, seller hires multiple brokers, only the broker who finds a ready, willing, and able buyer gets compensated, but seller also retains the right to find a buyer. |
| What is a Net listing? | A net amount is paid to the seller and the broker is to get the remainder of the sold price as commission. |
| What is an Option listing? | Broker will purchase the property from the seller some time is future, if not sold. Usually runs as long as the listing contract period. |
| What is Multiple Listing? | A membership to MLS, to market properties to others MLS members for wider audience to sell property. A MLS clause can be put in an Exclusive Right to Sell listing. |
| Under Illinois law, if a licensee is working with a buyer, is he also a subagent of the seller? | No. No offer of subagency can be made through an MLS in Illinois today. Illinois law states that a buyer is represented as a client by the licensee with whom she is working unless that consumer chooses not to be. This approach makes it clear to all partie |
| How can listing agreements be terminated? | 1)When the agreement’s purpose is fulfilled. 2) When the agreement’s term expires. 3) If the property is destroyed or its use is changed by some force outside the owner’s control, such as a zoning change or condemnation by eminent domain. 4) If title to |
| What happens when If either the broker or seller dies or becomes incapacitated, or if the sponsored licensee dies or becomes incapacitated? | The brokerage agreement is still valid. |
| In Illinois, what should each agreement have or it's grounds for suspension or revocation of broker's license? | all exclusive brokerage agreements should specify a definite period during which the broker is to be employed. |
| Are automatic extension clauses legal? | No. Not valid in Illinois. |
| What is broker protection clause or safety clause? | A clause that specifies after the listing has expired for certain amount of time and the property is sold to seller that has viewed the property during the listing time. Clause cannot be enforced if the property is relisted under a new contract with anot |
| What is a CMA (Comparative Market Analysis)? | A tool used to gauge a market price of a property. It shows recently closed properties (sold), Properties currently on the market (competition to subject property), and properties that did not sell. |
| What is Market Value? | Most probable price a property will bring in an arm's length transaction under normal conditions and open market. |
| What does a property condition Disclosure show? | Structural, mechanical and other conditions that know about to make an informed purchase decision. The seller should be truthful to avoid litigation of fraudulent or careless misrepresentation. |
| What does Illinois law requires to be included in the listing agreement? | list $$, $$ of commission and the time of payment,length of the agreement, w/ definite termi date , names and signatures of broker and seller. Property ID, duties of the listing broker, statements of nondiscrimination and antitrust |
| What is Disclosure of material facts? | A broker must not withhold material facts concerning a property of which she has knowledge from any purchaser, prospective purchaser, seller, lessee, lessor, or other party to the transaction. |
| What are Material Facts? | Any facts on which a reasonable person would base a contractual decision. |
| What is Disclosure of interest? | A licensee must disclose in writing any fact of direct or indirect interest in the property. If either the buyer or seller is a licensee. |
| What is Disclosure of special compensation? | A broker is prohibited from accepting “3rd party without full disclosure in writing of such receipt to all parties to the transaction.”Sponsored licensees receive any such compensation only through their respective sponsoring brokers. |
| What can be used to show Evidence of ownership? | A warranty deed, title insurance policy, or abstract of title with attorney's opion can be used for proof of title. |
| What is an Exclusive buyer agency agreement? | A buyer is legally bound to compensate the broker whenever the buyer purchases the property of the type describe in the contract. Even if buyer locates property, the broker is entitled to compensation. |
| Exclusive-agency buyer agency agreement? | Exclusive contract between buyer and broker, but limits broker's compensation in which buyer retains right to purchase property if found by buyer with no financial obligation to broker. |
| What is an Open buyer agency agreement? | Non Exclusive buyer agreement when the buyer can enter into many contracts, but only pay the broker that finds the buyer the property to purchase. |
| What are some services buyer's broker provides. | Needs assessment—Determine and evaluate the needs and wants of the buyer. Property selection—Locate the best property —Provide an objective evaluation of the property and show buyers how to compare properties. Disclose material facts.Negotiate—Follow-up. |
| What factors should be taken into consideration when buyer is ready to make an offer by the broker? | Property condition- repairs needed? Length of time on the market—This indicates the selling pace of the market. Supply and demand.Seller’s motivation |
| Termination of Employer agreement either by listing or buying client reasons are: | purpose is fulfilled, term expires without a successful transfer, property is destroyed or changed from some force outside client's control; eminent domain, it title is transferred by operation of law such foreclosure or bankruptcy. mutually agree to end. |
| listing agreement expires on May. Which event would NOT terminate the listing? | The agreement is not renewed after May 2. The broker dies on April 26th. On April 25th, the seller tells the broker that he is dissatisfied with the broker’s marketing efforts and wants a new broker. The seller’s house is destroyed by fire on April 28 |
| The seller has listed his property under an exclusive-agency listing with the broker. If the seller locates a buyer who purchases the property during the term of the listing agreement, the seller will owe the broker | no commission the full commission a partial commission only reimbursement for broker’s costs |
| The final decision on the listing price of a particular property should be decided by the | broker broker and appraiser broker and seller seller based upon the broker’s CMA and advice |
| Under a listing agreement, a broker is entitled to sell a property for any price he chooses, as long as the seller receives $200,000 at closing. The brokers is allowed to keep any amount over $200,000 at closing. This type of listing is called | an open listing an exclusive right-to-sell listing an exclusive agency listing a net listing |
| Which of the following statements describing a listing contract is TRUE? | It is an employment contract for the broker It obligates the seller to convey the property if the broker secures an able buyer It obligates the broker to work diligently for both the seller and buyer It automatically binds the owner, broker, and MLS to |
| A comparative market analysis | uses the same information as an appraisal can help the seller determine the price the property must be completed for each listing taken by law should not be utilized in most situation |
| A property was listed with a broker who belonged to an MLS and was sold by another member broker for $153,500. The total comm is 6% of the sales price. The selling broker received 60% of the commission, and the listing broker kept balance. What is LB com | $3,684 $4,464 $5,526 $36,840 |
| Illinois licensees may | submit a listing to the local MLS refuse to show a property to a specific minority group if the sellers so instruct them advertise in their own name as long as they are an independent contractor never take open listings |
| In Illinois, what brokerage agreements must be in writing? | All brokerage agreements Only listing agreements Exclusive broker agreements Only those approved by the local broker group |
| A seller listed her residence with a broker. The broker brought an offer from a potential buyer who was ready, willing, and able to pay cash for the property. However, the seller changed her mind and rejected the buyer’s offer. The seller | must sell the property regardless of her feelings must pay a commission to the broker is liable to the buyer for specific performance is liable to the buyer for vicarious liabilit |
Created by:
Asimon0722