WorksheetsP1 Ch. 10-12 Review
Total questions: 24
Worksheet time: 12mins
In business brokerage, the notion of goodwill is best defined as
establishing pricing levels that will generate the good will of prospective customers.
the commitment by the agent to expend maximum effort on the listing.
the value or price of the business over and above the value of its other assets.
the portion of the sale price that is depreciable.
In obtaining offers from a buyer, an agent must be careful to
balance the owner's price expectations with the buyer's opinion of value.
pursue only those offers which are at or near the listing price.
avoid completing offers that are beneath market value.
avoid disclosing what price the owner will accept
Two leading agencies jointly agree to raise commissions charged a certain class of client to 8% of the sales price. Which of the following is true?
The brokers have allocated markets.
The brokers have engaged in legal collusion.
This is a perfectly legitimate business practice.
The brokers have illegally fixed prices.
Two real estate companies agree to conjoin their resources for the development and sale of an apartment complex, for which profits will be shared equally. This is an example of
a joint venture.
a limited partnership.
a cooperative association.
a real estate investment trust.
A corporation would like an agent to sell its country grocery store. Included in the sale are the inventory, equipment, and real property. The agent locates a full-price buyer who does not want to acquire any of the business's actual or potential liabilities. To do this transaction, the corporation would most likely
propose an exchange.
propose an asset sale.
enter into a sale-leaseback transaction.
undertake a stock sale.
Pricing property correctly is pivotal to marketing listings, because
underpricing a property does not serve the best interests of a client.
underpriced properties do not require the broker's services.
overpricing a property will lengthen the time required to receive compensation for services.
overpricing a property does not serve the best interests of customers.
Conversion is the act of
appropriating client or customer deposits for use in the agency's business.
mixing escrow funds with the broker's operating funds.
converting escrow funds into equity funds in a property at the closing.
converting an offer into a binding contract.
Which of the following represents the core activity of real estate brokerage?
Buying and selling properties for one's company
Prospecting for and qualifying potential customers
Negotiating sale or lease terms for a client
Procuring customers for clients and effecting transactions
Which of the following characterizes a real estate franchisee?
A national firm which contracts with local franchisors to promote the national identity
A local brokerage owned and operated by a national franchisor
A national brokerage company which charges local brokers fees for membership
A locally-owned brokerage affiliated with a national franchisor for purposes of enhanced image and resources
A syndication is
a group of inactive investors who join with a number of active partners to purchase, manage, and sell properties for a profit.
a group of general partners who invest in and manage real estate for a profit.
In marketing an owner's property, the objective of an agent's marketing plan is to
expose the property to the maximum number of prospects in relation to marketing expenses and efforts.
convince prospects of the property's superiority over other properties.
When a property is "under contract,"
the principals have entered into a sale contract and must satisfy any contingencies prior to closing.
the buyer and the seller are engaged in negotiations to complete a sale contract
The amount of a real estate broker's commission is
established through negotiation with clients.
established among competing brokers.
established by the Board of Realtors.
A client suddenly decides to revoke an exclusive right-to-sell listing midway through the listing term. The reason stated: the client did not like the agent. In this case,
the client may be liable for a commission and marketing expenses.
the client is criminally liable for discrimination on the basis of the cause for cancellation.
the agent can sue the client for specific performance, even if no customer had been located.
The most significant difference between an owner representation agreement and a buyer representation agreement is
the client.
the commission amount.
contract law applications.
A broker is hired to procure a customer for a client. In order to earn compensation, the agent must procure a customer who
is ready, willing, and able to transact.
has completed an acceptable sale or lease contract.
has seen the property and reviewed all documents.
The guardian for a mentally incompetent party enters into an oral contract with another party to buy a trade fixture. This contract
is possibly valid and enforceable.
is valid but unenforceable.
does not meet validity requirements.
must be in writing to be valid.
A contract is discharged whenever
the parties agree to their respective promises.
both parties have signed it.
it is performed.
A buyer submits an offer to a seller. Two hours later, the buyer finds a better house, calls the first seller, and withdraws the offer. Which of the following is true?
The original offer is legally extinguished.
The first seller may sue the buyer for specific performance.
Which of the following contracts must be in writing to be enforceable?
An executory contract.
A six-month lease.
A parol contract.
A two-year lease.
A buyer agrees to all terms of a seller's offer except price. The buyer lowers the price by $1,000, signs the form, and mails it back to the seller. At this point, the seller's offer
is void.
has been accepted.
becomes an executory contract.
Real estate contracts that are not personal service contracts
may be assigned.
are not assignable.
A good example of a unilateral contract is
a listing agreement.
a sale contract.
a personal services agreement.
an option to purchase.
A prospective homebuyer submits a signed offer to buy a house with the condition that the seller pays financing points at closing. The seller disagrees, crosses out the points clause, then signs and returns the document to the buyer. At this point, assuming all other contract validity items are in order, the status of the offer is
a counteroffer.
an accepted offer, therefore a valid contract.
