Brokerage Business; Sale Contract

Which of the following business entities is generally prohibited from brokering real estate?

• Sole proprietorship.

• Partnership.

• Corporation for profit.

• Non-profit corporation.

A joint venture may generally broker real estate if the co-venturers

• form a business trust.

• form a co-operative association.

• are properly licensed.

• are limited partners.

A licensed salesperson may work only for

• a client who has signed a listing agreement with a licensed broker.

• a single employing broker who has an active broker's license.

• a client who has signed an authorization broker's license.

• an employer who has an active or inactive broker's license.

Which of the following activities is a licensed salesperson allowed to engage in?

• Accept a listing that is in an associate's name.

• Accept a commission directly from the MLS.

• Offer a property for lease on behalf of the employing broker.

• Sign a contract with a management company on behalf of a client.

If a salesperson has worked on a completed transaction that involved a listing agent, a selling agent, and several subagents for each of these, from whom will the salesperson receive any compensation that is due?

• The listing agent.

• The selling agent.

• The seller.

• The employing broker.

A property has sold for $380,000. The listing agreement calls for a commission of 6.5%. The listing broker and selling broker agree to share the commission equally. What will the listing agent receive if the agent is scheduled to get a 40% share?

• $4,445.

• $5,356.

• $2,667.

• $4,940.

Answer explanation

First calculate the total commission, then the co-brokerage splits, then the agent-broker split. $380,000 x 6.5%= $24,700 total commission. ($24,700 x 50%) = $12,350 total listing broker share. ($12,350 x 40% = $4,940 agent's share.

A real estate salesperson finds a buyer for a For Sale By Owner property. The home sells for $245,000, and the seller agrees to pay a commission of 6%. The salesperson is on a 65% commission schedule with her broker, who pays her 65% minus office expenses of $500. How much will the salesperson receive from this transaction?

• $4,778.

• $4,452.

• $4,278.

• $3,175.

Answer explanation

The total commission is ($245,000 x 3%) = $7,350. The agent gets (65% x $7,350) - 500 which equals $4,278.

The first thing the salesperson must now do is ________.

• make a final pricing determination for the property.

• negotiate the commission with the client.

• complete the signing of the listing.

• explain the agency relationship to the client.

Juan shows a customer a property that is listed by another brokerage firm. He obtains an offer that is $15,000 less than the listing price. How should Juan deal with this offer?

• Advise the buyer that the offer will be rejected.

• Present the offer to the seller at the earliest possible moment.

• Ask the listing broker to lower the listing price.

• Counter the offer.

A broker receives an earnest money deposit from a buyer and signs the check over to the listing agent as a partial commission advance. What is wrong with this procedure?

• Nothing, provided the deposit clears the bank and doesn’t bounce.

• The broker and the agent are guilty of self-dealing.

• The broker has illegally converted security funds for business use.

• The agent may not be able to return the advance if the transaction falls through.

Answer explanation

Conversion is the act of misappropriating escrow funds for the broker's business or personal use.