9: Brokerage Practice Test

What is the most common way to create an agency relationship between a home seller and a broker?

• A. Buyer broker agreement

• B. By implication

• C. Listing Agreement

• D. Oral contract

C

You are currently associated with Ace Realty. They recently changed the commission structure, and so you’re looking for a new employing broker. You decide to go to work for Tip Top Real Estate. On your last day at Ace, you have three active listings. What happens to them?

• A. Ace can agree to sell the listings to Tip Top.

• B. Ace is required by law to revoke the listings.

• C. The listings remain at Ace.

• D. They immediately transfer with you to Tip Top.

C

A listing for a property could be considered a(n) _____.

• A. Offer to sell.

• B. Option to purchase.

• C. Solicitation of offers to buy.

• D. Unilateral promise to sell.

C

Jonah lists his home with PDQ Realty, allowing them to put a sign in the yard, list it in MLS, and advertise it in the local newspaper. During the listing period, Jonah sells the home to his brother and is not obligated to pay PDQ any commission. What type of listing did Jonah have with PDQ?

• A. Exclusive agency

• B. Net listing

• C. Exclusive right to sell

• D. Open listing

A

Of these, which is LEAST LIKELY to be negotiable in a listing agreement?

• A. The broker’s cooperation with other brokers

• B. The commissions

• C. Whether there is an end date

• D. The scope of activities permitted

C

Broker Jeff’s JT Realty earns $18,785 commission on a $289,000 sale. What was the commission rate?

• A. 5.75%

• B. 6%

• C. 6.5%

• D. 7%

C

Tallulah sells her cottage through XYZ Realty, promising to pay a commission of 7 1/4%. Both the listing broker and the selling broker are agents at XYZ Realty, which earns $31,646.25 on the deal. What did the house sell for (rounded to the nearest dollar)?

• A. $221,524

• B. $225,954

• C. $229,435

• D. $436,500

D

A property sells for $236,400. The licensee involved in the transaction receives 40% of her employing broker's 7% commission. How much money does the licensee receive?

• A. $1,158.36
• B. $3,782.40
• C. $5,832.00
• D. $6,619.20

D

The listing agreement provides that the listing broker may make an offer of cooperation to other brokers to assist in finding purchasers willing to buy the seller’s property. A buyer’s agent sees this in the MLS. In this case, the cooperating broker represents the _____.

• A. Buyer.
• B. Buyer and the seller.
• C. Listing broker.
• D. Seller.

A

In the multiple listing service, it states that the listing broker will pay 4% to a buyer’s broker. The buyer’s broker Sue earns a total of $5,660 commission. What was the sales price of the property?

• A. $80,858

• B. $141,500

• C. $186,667

• D. $226,400

B

A property sold for $249,500. The total sales commission is 6% and is divided as follows: Listing brokerage gets 60% of the commission; selling brokerage gets 40% of the commission. The selling agent gets 60% of the selling brokerage commission. How much will the selling agent earn?

• A. $3,592.80

• B. $5,389.20

• C. $5,988.00

• D. $8,982.00

A

Patrick’s home is listed for sale on the MLS by listing broker Abe. There is no offer of compensation mentioned. Broker Jane has a buyer client who is interested in Patrick’s home and presents an offer, which Patrick accepts. Patrick is paying a 7% commission. How much of the commission must Patrick pay Jane?

• A. 7%

• B. 3.5%

• C. Nothing

• D. Impossible to tell

D

Jack knows that his neighbor Peg’s brother is moving to town. He tells Peg that if she gets her brother to buy his house, he’ll give her a 5% commission, even though she’s not a real estate licensee. Peg’s brother buys the house, and Jack doesn’t pay her a dime. What can Peg do to get her commission?

• A. Record a lien against Jack’s property

• B. Submit to an arbitration hearing with the local board of REALTORS®

• C. Sue Jack for breach of contract

• D. Nothing; she is not a licensee and is therefore not entitled to a commission

D

Generally speaking, a broker has earned his or her commission ____.

• A. At the closing table.
• B. When the listing agreement is signed.
• C. When a ready, willing, and able buyer is found on terms acceptable to the seller.
• D. When a sales contract is signed.

C

Licensee Karen of listing agency Diamond Realty has concluded a lengthy and detailed negotiation with licensee Jim of buyer agency Garnet Realty. After the closing of this transaction, which is the most likely scenario?

• A. Karen and Jim will both be paid by Diamond Realty.
• B. Karen and Jim will both be paid by Garnet Realty.
• C. Karen and Jim will both be paid by the seller.
• D. Karen is paid by Diamond Realty and Jim is paid by Garnet Realty.

D

Who are the parties to a property management agreement?

• A. Landlord and property manager
• B. Listing broker and landlord
• C. Tenant and landlord
• D. Tenant, landlord, and property manager

A

In a typical listing agreement, the agent’s consideration is ____.

• A. Delivering a ready and willing buyer.
• B. Due diligence in marketing the property for sale.
• C. Placing the listing in the MLS.
• D. The promise to find a buyer.

A

A real estate licensee will lose the right to a commission if he or she ____.

• A. Did not personally market and sell the listing.
• B. Fails to advertise the property.
• C. Produces a willing buyer.
• D. Was not licensed when a sale occurred.

D

Real estate fees or commissions are ____.

• A. Determined by the local board or association.
• B. Mandated by the states' rules and regulations.
• C. Mandated by statutory law.
• D. Negotiated between the client and broker.

D

Licensee Lyle may accept compensation from ____.

• A. Any other licensee.
• B. Cooperating brokers.
• C. His employing broker.
• D. The seller client.

C

Which situation would NOT require a licensee to disclose his or her compensation arrangement?

• A. A buyer’s agent receives a bonus from the listing agent for submitting an offer by a certain date.
• B. The licensee in a dual agency situation receives compensation from both parties.
• C. The licensee receives a commission split from another broker.
• D. A selling agent gets a bonus from a client for selling above the listing price.

D

What mandates how much a real estate broker can charge for a commission?

• A. Multiple listing service membership regulations
• B. National Association of REALTORS® bylaws
• C. State licensing law
• D. There are no mandates.

D

The listing agent presents a full-price cash offer with no contingencies to the seller during the listing period. The seller refuses to sign the contract because he does not like the buyers. Which statement do you think is TRUE?

• A. No commission can be due unless there is a closing.
• B. The buyer could sue for specific performance.
• C. The listing agency is due a commission.
• D. The listing contract would be automatically terminated.

C

Horace had an exclusive listing on Susie’s house for 9 months. The week after it expired, she sold it to a co-worker. Is there anything that might help Horace collect a commission on this transaction?

• A. Protection Agreement
• B. Protection period clause
• C. Protection waiver
• D. Horace is completely unprotected.

B

From whom may a salesperson or associate broker accept the commission?

• A. Employing broker only
• B. Employing broker or buyer
• C. Employing broker or listing broker
• D. Employing broker or seller

A

A real estate broker is:

• A) A person who assists buyers and sellers in real estate transactions
• B) A person who owns and manages real estate
• C) A person who appraises real estate
• D) A person who lends money for real estate purchases

A

Which of the following activities requires a real estate license in Michigan?

• A) Selling your own property

• B) Managing property for a friend

• C) Negotiating another’s real estate transaction for a fee

• D) Appraising a property you are hoping to purchase

C

A real estate salesperson:

• A) Can operate independently

• B) Must be supervised by a broker

• C) Can only perform appraisals

• D) Can only work with buyers

B

A broker's responsibilities to a client include:

• A) Loyalty

• B) Obedience

• C) Disclosure

• D) All of the above

D

Fiduciary duties are:

• A) Legal obligations owed to a client
• B) Ethical obligations owed to a customer
• C) Responsibilities owed to the public
• D) Responsibilities owed to other licensees

A

Dual agency occurs when:

• A) A broker represents both the buyer and seller in the same transaction
• B) A broker represents two buyers in different transactions
• C) A broker represents two sellers in different transactions
• D) A broker works with a salesperson from another brokerage

A

Designated agency occurs when:

• A) A broker designates a specific salesperson to represent a client
• B) Two agents from the same brokerage represent the buyer and seller in the same transaction
• C) A broker represents both the buyer and seller in the same transaction
• D) A broker works with a customer

B

A transaction coordinator:

• A) Represents the buyer or seller
• B) Provides administrative support in a transaction
• C) Negotiates on behalf of a client
• D) Can operate independently

B

A listing agreement is:

• A) A contract between a buyer and seller
• B) A contract between a broker and seller
• C) A contract between a broker and buyer
• D) A contract between two brokers

B

An exclusive right-to-sell listing agreement:

• A) Allows the seller to sell the property themselves without paying a commission
• B) Guarantees the broker a commission regardless of who sells the property
• C) Allows the seller to list the property with multiple brokers
• D) Is illegal in Michigan

B

A buyer agency agreement:

• A) Is required by law
• B) Establishes the broker's duties to the buyer
• C) Guarantees the buyer will purchase a property
• D) Is a contract between the buyer and seller

B

A broker's compensation is:

• A) Always a percentage of the sale price
• B) Negotiable and determined by the broker and client
• C) Set by the state of Michigan
• D) Paid by the buyer

B

A broker must deposit earnest money:

• A) Into their personal account
• B) Into a trust account
• C) Into the seller's account
• D) Into the lender's account

B

Commingling is:

• A) Mixing client funds with personal funds
• B) Depositing earnest money into a trust account
• C) Sharing commission with another broker
• D) Representing both the buyer and seller

A

Conversion is:

• A) Changing the terms of a listing agreement

• B) Using client funds for personal use

• C) Converting a property from residential to commercial use

• D) Converting a leasehold estate to a freehold estate

B

A broker's advertising must:

• A) Be truthful and accurate

• B) Include the broker's name

• C) Not be misleading

• D) All of the above

D

Antitrust laws prohibit:

• A) Price fixing

• B) Group boycotts

• C) Market allocation

• D) All of the above

D

The Michigan Occupational Code:

• A) Regulates the real estate profession in Michigan

• B) Sets standards for real estate appraisers

• C) Governs mortgage lending practices

• D) Establishes zoning regulations

A

A real estate license can be revoked for:

• A) Fraud
• B) Misrepresentation
• C) Unlicensed activity
• D) All of the above

D

Continuing education is:

• A) Required for all real estate licensees in Michigan
• B) Optional for experienced brokers
• C) Only required for salespeople
• D) Not required in Michigan

A

A broker's responsibility regarding property disclosure includes:

• A) Disclosing known material facts about the property
• B) Conducting a professional home inspection
• C) Guaranteeing the condition of the property
• D) Providing legal advice to clients

A

A latent defect is:

• A) A defect that is obvious upon visual inspection
• B) A defect that is hidden or not readily apparent
• C) A defect that is caused by the buyer
• D) A defect that is not covered by insurance

B

A stigmatized property is:

• A) A property with a known environmental hazard
• B) A property that has been the site of a crime or tragedy
• C) A property with a structural defect
• D) A property that is located in a high-crime area

B

Megan's Law requires:

• A) A public sex offenders registry

• B) Disclosure of lead-based paint hazards

• C) Disclosure of asbestos hazards

• D) Disclosure of radon hazards

A

A broker's responsibility regarding fair housing includes:

• A) Complying with all fair housing laws

• B) Treating all clients fairly and equally

• C) Refusing to discriminate based on protected characteristics

• D) All of the above

D