Real Estate Principles Ch. 13

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  1. MLS
    • Multiple listing service
    • -an arrangement in which brokers share their listings with other brokers in exchange for a share of the commission generated by a transaction.
  2. An agent cannot bind the principal (seller) to contracts for sale or lease of the property.
    -true
  3. Listing agreements in Texas must be in what and must meet what requirements?
    • -must be in writing to be enforceable 
    • -requirements: competent parties, offer and acceptance, consideration, legality of object, agreement in writing and signed, and an accurate legal description.
  4. Both broker and salesperson have the authority to list, lease, and sell property and to provide other services to a principal, the name in which those acts are done by and supervised by, can be either the broker or the salesperson.
    -false, as both can perform those acts, those acts must be done in the name and under the supervision of the broker, never the salesperson.
  5. Listing agreements are
    employment contracts, between broker and principal (seller).
  6. What are the four forms of listing agreements?
    • -exclusive-right-to-sell listing
    • -exclusive-agency listing
    • -Open listing
    • -net listing
  7. If the broker is to be able to collect a commission, what are the two requirements to be done?
    -be in writing and must include the seller's signed promise to pay the commission.
  8. Exclusive-right-to-sell listing
    • -one broker is appointed as sole agent of the seller.
    • -the seller must pay the broker a commission regardless of who sells the property; ex: if the seller finds a buyer on their own without the broker's assistance, the seller still must pay the broker a commission.
    • -best type of listing for broker
  9. Exclusive-agency listing
    • -one authorized agent
    • -broker receives a commission only if the procuring cause was the broker
    • -seller retains the right to sell without obligation
    • -Texas Association of REALTORS has published an addendum that will convert the exclusive-right-to-sell to an exclusive-agency listing; because the exclusive-right-to-sell listings are very popular
  10. Open listing
    • -multiple agents
    • -only the selling agent gets a commission
    • -seller retains the right to sell without obligation
    • -mainly used for developments or big projects
  11. Net listing
    • -the broker is entitled to any amount exceeding the seller's stated net. 
    • -broker's commission is the difference between the sale proceeds and the net amount desired by the owner of the property.
    • -The agreement can take the form of an exclusive-right-to-sell, exclusive-agency, or open listing. 
    • -broker must be knowledgeable of current market where the property is located and compare to other home prices in the area.
  12. What if a prospective buyer is not being represented by an agent or does not what to be represented by an agent? How does commission work as well as counter-offering and paperwork?
    ??????
  13. Listing is an employment contract between who?
    -broker and seller, not salesperson; broker has to sign off on listings
  14. A listing can be for any length of time.
    -true; but usually 90 days
  15. If an seller's agent finds a ready, willing and able buyer who puts up a deposit and the seller backs out at last minute, can the seller's agent sue the seller for commission?
    -yes, because the agent completed their half of the bargin
  16. The seller does not pay the salesperson, the broker does by giving a percent of the commission.
    -true
  17. When you are selling a house and a buyer's agent brings you a ready buyer, how does the buyer salesperson get paid?
    -the sellers broker splits the commission with the buyer broker and the buyer broker gives the buyer agent a percent of that commission; just like with the seller's agent.
  18. Most listings have a specific termination date.
    -true, usually 90 days from signing
  19. Protection Period Clause
    -say you have a listing for 90 days and you find a buyer on the 89th day. They close on the 91st day. This clause allows for a certain time after the expiration date for a broker to close a deal with a buyer they found before the expiration date and claim a commission if the property is sold; 2 weeks
  20. Thinking that he is acting properly regarding the safety clause (Protection Period Clause) in a listing, a broker notifies the owner verbally of a prospective buyer with whom he negotiated.  The day after the listing expires, the buyer purchases the property. Which of the following is correct?

    a. the broker is entitled to a commission
    b. the broker is entitled to half the commission 
    c. the broker is not entitled to a commission
    • c. the broker is not entitled to a commission
    • Why: the broker notified the owner only verbally, it has to be in writing.
    • **if it was in writing then the answer would be A.
  21. Listing with an Option
    • -broker is interested in purchasing the property he or she has listed
    • -needs to be included in the listing agreement
    • -licensee needs to disclose they have a license, disclose it in writing, and disclose profit in the transaction
  22. Which listing agreement allows a broker to either find a prospective buyer or purchase the home him/herself?
    -option listing
  23. Termination dates are not necessary for open listings.
    -true
  24. A broker enters into an open listing with a seller but fails to give a copy of the listing contract to the owner and also fails to include a termination date. The broker then presents an offer which is accepted.

    A. The broker is entitled to the stated commission
    B. neither a or b are correct
    C. The exclusion of a termination date does not matter.
    D. both a and b are correct
    D. it is an open listing
    (this multiple choice question has been scrambled)
  25. When does the broker or salesperson give the seller a written Information About Brokerage Service form?  What is this form?
    • -at the first substantive dialogue meeting with the seller
    • -explains seller representation, subagency, buyer representation, and the intermediary position.
    • -must give to the seller even if the agent is representing the buyer.
  26. Who all should sign the listing agreement?
    • -all legal owners or their authorized agents
    • -listing salesperson and/or broker; the listing salesperson can sign the contract in the brokers name if so authorized by the broker.
  27. Because verifiable written information for the listing agreement is supplied by others it can be a broker's defense in a lawsuit involving the Texas Deceptive Trade Practice Act.  The agent should verify pertinent information such as legal description, lot size, yearly taxes, and tax exemptions against data in public records.
    -true
  28. The broker should require that the owner(s) review the property data and ____ or ____ the completed profile form of the listing agreement.
    -sign or initial
  29. On a listing agreement, when shared on the MLS, can consist of when appropriate...
    • -owners names and addresses (deed)
    • -legal description (deed)
    • -size of lot (survey or plat records)
    • -zoning classification
    • -number and size of rooms
    • -construction and age (appraisal website)
    • -info of neighborhood
    • -current taxes, tax exemptions (appraisal website)
    • -existing financing (note, deed of trust or lender)
    • -utility payments (owner's records)
    • -date of occupancy or possession
    • -possibility of seller financing
    • -personal and real property included and excluded.
  30. What are some reasons an agency relationship can be terminated?
    • -fulfillment of performances by the broker
    • -expiration 
    • -unilateral revocation by the owner or by the broker for just cause, such as abandonment by the broker or noncooperation of the seller for showings (although either party may be liable to the other for damages
    • -mutual agreement
    • -bankruptcy of the seller if title transferred to receiver
    • -death or incapacity of either party
    • -destruction of the property
    • -a change in property use by outside force (change in zoning)
  31. Texas statue prohibits the use of automatic extensions of time in listing agreements.
    -true; all listing must specify a definite period of employment and termination; ???? pg 320
  32. Seller's Disclosure Notice
    • -should be prepared while filling out listing agreement
    • -lists of defects with property
  33. When is a Seller's Disclosure Notice not needed?
    • -sale of a new property by a builder
    • -court order
    • -foreclosure sale
    • -bankruptcy
    • -a mortgagee or beneficiary
    • -a will or trust
    • -one co-owner to another
    • -one spouse to another
    • -a governmental entity
  34. If information is unknown to the sellers on defects of the property, that fact may be indicated on the notice.
    -true
  35. What does not need to be disclosed on a Seller's disclosure Notice?
    • -death by natural causes
    • -suicide 
    • -accident unrelated to the condition of the property occurred on the property 
    • -whether a previous occupant had, may have had, has or may have AIDS, HIV
  36. A Seller's Disclosure Notice should be filled out at the time of the listing agreement, however if it is not, when do the seller's have to disclose this notice?
    -the seller is given a limited time to provide the notice to the buyer.  The buyer may still terminate the contract for any reason within seven days after receiving the notice.
  37. What is a seller's and agent's responsibility when it comes to sex-offender disclosure?
    • -neither party is obligated to disclose sex-offender information.
    • -this should be discussed with the seller during listing on how to handle
    • -agent can advise buyers to check out the Public Safety website
  38. Sellers and landlords of properties built before ____ must disclose to buyers or tenants any knowledge of lead-based paint or hazards on the property.
    1978
  39. What three types of housing exemptions of lead-paint disclose?
    • -housing exclusively for the elderly or handicapped (unless there are children living there)
    • -foreclosure sold homes
    • -properties that have been inspected and found free of lead-based paint
  40. Federal rules require testing, removal and abatement of lead-based paint.
    -false; just disclosure
  41. A TREC-approved Lead-Based Paint Addendum permits sellers or landlords to indicate whether they have knowledge of presence of lead-based paint, records pertaining to lead-based paint, permit the buyer up to 10 days for inspection of lead-based paint and provide buyer/tenant info of the EPA pamphlet. If an inspection is desired, a person certified by the __________________ as a lead inspect must conduct it.
    Texas Department of Health
  42. EPA Renovation, Repair, and Painting (RRP) regulations, require the renovation and repair work of more than 6 sq ft of interior work or more than 20 sq ft of exterior work be carried out by a profession if...
    • -being rented out, if you own the property and living there you will not get into trouble.
    • -fines $150-$37,500 per violation.
  43. Notice of Additional Tax Liability, that may include the TREC Farm and Ranch Contact and the Unimproved Property Contract, provides and states what?
    -alerts the buyer that due to change in ownership or use of land can cause the buyer additional tax liability and may not allow the continued use of special appraisal methods that might previously have valued the land at less than its market value.
  44. A notice for conditions under surface states what..
    alerts the buyer that the under the land there are pipelines for natural gas that could restrict improvements and must disclose the location of the pipes.
  45. Promulgated Addendum for Property Subject to Mandatory Membership in a Property Owners Association is a notice that states the obligations related to membership of a property owners's association.  When does this disclosure have to be given and what does it state?
    • -must be given before the effective date
    • -states that the buyer will be part of a membership of a property owners association which is subject to membership fees and assessments, that if not paid could result in a lien on the property or a foreclosure.
  46. Seller's Disclosure Regarding Potential Annexation (incorportated) states what to the buyer?
    • -that the property may now or in the future become part of the extraterritorial jurisdiction of a municipality and may now or later be subject to annexation by the municipality (city or town)
    • -must give notice before effective date
    • -if buyer wants more info of the annexation they can contact the municipalities located near the property
  47. Addendum for Unimproved Property Located in a Certificated Service Area of a Utility Service Provider, states what?
    • -the purchaser may be obligated to additional expense for a utility provider's service.
    • -before signing the contract
  48. Statutory Tax District states that if a property being sold is located WITHIN a utility district, Section 49.452 of the Texas Water Code requires the seller to furnish a buyer with a statutory notice relating to the tax rate, bonded indebtedness, or standby fee of the district before the final execution of the contract. All in all this states the fees of use for _____.  The licensee should obtain the specific form for each _____ from the county clerk or the district itself for EACH transaction.
    • -MUD (municipal utility district
    • -district
  49. What addendum forms must be given BEFORE the effective date?
    ??
  50. What addendum forms must be given before or on closing?
    "??
  51. If the property is located in a propane gas system service area owned by a distribution system retailer, the Propane Gas System Service Area addendum must be given to the buyer before or on the closing date and specifies what?
    -alerts the buyer that there may be special costs in order to receive propane gas service and there may be a period of time require to build the lines or other faclities.
  52. For properties located in the Gulf Coast counties, an addendum may be necessary. The two addendums are: Addendum for Property Located Seaward of the Gulf Intracoastal Waterway and Addendum for Coastal Area Property.  When are either of these addendums used and what do they state?
    • -Property Located Seaward: prescribe open beaches and the possibility that any structure that might become seaward of the vegetation line as a result of natural processes is subjecct to a lawsuit by the State of Texas for its removal.  Basically for properties close to the beach.  Buyers should determine the rate of shoreline erosion for the property; no later than 10 days prior to closing.
    • -Coastal Area Property: For proporties taht are adjoin or share a common boundary with tidally submerged lands, wetland areas along the coast, notifies the buyer of restrictions on the use and development of the property.
  53. Notice of obligations related to Public Improvement District (PID) states what?
    • -a statement from the seller to the buyer stating that the buyer is subject to a PID assessment; meaning PID assessments cover community improvement and help of expaning affordable housing.
    • -must be given before the effective date of sale
  54. After mold damage to a property has been remediated, the licensed remediation contract issues a __________________.
    • Certification of Mold remediation
    • -must be given to buyer if done within 5 yrs from sale
  55. If a property being sold has a lien on it and the lien will not be released within 30 days after the sale, the seller must provide a notice of the lien to the purchaser.  This notice states what? Who all should be given this disclosure?
    • -identifies all the lienholders, the specifics of the loan secured by each lien, and the amount of any property taxes that are due.
    • -the purchase must be informed that, if the property is conveyed without the consent of the lienholder, the lienholder could demand full payment on the outstanding balance immediately 
    • -The disclosure must be given to the buyer and the lienholders on or before the 7th day before the earlier of the date of closing or the signing of a contract.
  56. A seller of real property that may be subject to a private transfer fee must provide written notice of that obligation to a potential purchaser.
    true
  57. Properties that are listed with a realtor, sell less than properties listed with for sale by owerns.
    false; properties listed with a realtor sell for more and most buyers use them for finding a home
  58. What is the most important marketing tool for realtors?
    Internet
  59. Telephone, fax and email solicitations are allowed but are regulated and have restrictions by both  the federal and state laws.
    true; phone has to be to people not listed on the Do Not Call list and has to be person to person not automated dialing; up to $16,000 fee per call.
  60. A listing agreement that runs for a set period and automatically renews itself for another listing period after the initial period ends is illegal in Texas.
    True
  61. The listing price for a property should be determined by the...
    seller; although the seller should keep in mind the brokers competitive market anaylsis (CMA) and the appraised value when deciding the price.
  62. A listing taken by a real estate salesperson is an agreement between the seller and the...
    broker
  63. A seller hired Nathan, a broker, under the terms of an open listing. While the listing was still in effect, the seller--without informing Nathan--hired Fred under an exclusive-right-to-sell listing for the same property. If Nathan produces a buyer for the property and the seller accepts that offer, then the seller must pay a

    a. full commission only to Nathan
    b. full commission only to Fred
    c. full commission to both Nathan and Fred
    d. half commission to both Nathan and Fred
    c
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320784
Card Set
Real Estate Principles Ch. 13
Description
Listing Agreements
Updated
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