Unit 5: Real Estate Brokerage

“To recover compensation for brokerage services, a sponsoring broker must be employed as the agent of the seller.” Which of these statements BEST explains this sentence?

A) The seller must have made a written agreement to pay compensation to the sponsoring broker for selling the property.

B) The sponsoring broker must work in a real estate office.

C) The sponsoring broker must have asked the seller the price of the property and then found a ready, willing, and able buyer.

D) The sponsoring broker must have one or more sponsored licensees employed in the office.

A) The seller must have made a written agreement to pay compensation to the sponsoring broker for selling the property.

An Illinois real estate licensee who is engaged as an independent contractor:

A) is considered an employee by the IRS for tax purposes.

B) must be covered by workers’ compensation.

C) must have a employment contract with the sponsoring broker.

D) may work as an independent contractor for two or more sponsoring brokers.

C) must have a employment contract with the sponsoring broker.

In Illinois, the usual “proof” that the listing broker has earned compensation is the:

A) closing of the sale.

B) submission to the seller of a signed offer from a ready, willing, and able buyer.

C) signing of an exclusive listing contract.

D) deposit of the buyer’s earnest money into escrow.

A) closing of the sale.

A broker listed the seller’s home for $300,000. Before the listing contract expired, the broker brought the seller a full-price offer on the seller’s terms, containing no contingencies. The seller then decided not to sell. Which of these statements is TRUE?

A) The broker has no reason to collect a commission in this case.

B) The broker must immediately file suit against the seller.

C) The seller’s only liability is to the buyer.

D) The seller probably is liable for the compensation.

D) The seller probably is liable for the compensation.

Which of the following is an example of price-fixing?

A) “We have an agreement with ABC Brokerage to not practice real estate in our neighborhood.”

B) “In order to buy this new construction home, you must use us as your listing brokerage should you sell it within the next 10 years.”

C) “I’m going to tell every real estate agent I know not to refer “Acme Property Inspectors” to their clients.

D) “This is the same commission that every other real estate company in town charges.”

D) “This is the same commission that every other real estate company in town charges.”

According to the Illinois license law, a sponsored real estate licensee may NOT:

A) represent both buyer and seller.

B) buy or sell real estate for himself.

C) accept compensation from another sponsoring broker unless previously earned at that sponsoring brokerage.

D) engage in dual agency.

C) accept compensation from another sponsoring broker unless previously earned at that sponsoring brokerage.

A sponsoring broker must have a written employment agreement with:

A) all of these.

B) a non-practicing licensee.

C) a licensed managing broker.

D) sponsored brokers.

A) all of these.

Two real estate companies agreed to boycott the services of a title company so that a new title company can take over the corresponding market share. The two real estate companies are violating the:

A) Antiboycotting Act.

B) Sherman Antitrust Act.

C) Illinois Lincoln Antitrust Act.

D) Lincoln Fair Trade Act.

B) Sherman Antitrust Act.

The broker’s commission was $8,200. If the commission rate was 6%, what was the selling price of the property?

A) $132,666.67

B) $136,666.67

C) $154,232.50

D) $175,452.48

B) $136,666.67

A broker received $2,520 as the firm’s 50% share of a commission. If the property sold for $72,000, what was the commission rate?

A) 6%

B) 7%

C) 6.5%

D) 8%

B) 7%

One general rule of the National Do Not Call Registry is:

A) states must maintain separate do-not-call lists.

B) the national registry must be updated once a year.

C) Unless there is an established business relationship, it is illegal to make an unsolicited phone call to a number listed on the national registry.

D) real estate offices are exempt from the laws because they are not considered telemarketers.

C) Unless there is an established business relationship, it is illegal to make an unsolicited phone call to a number listed on the national registry.

Federal regulations on unsolicited email:

A) require prior permission of recipients in order to send email to them.

B) require that email lists be scrubbed every 31 days.

C) exempt phone calls to individuals with whom the real estate office has a prior business relationship.

D) require commercial emails to include a physical address, among other things, for the sender.

D) require commercial emails to include a physical address, among other things, for the sender.

Which statement is TRUE regarding the National Do Not Call Registry?

A) Real estate licensees are not required to search the national registry before making telemarketing calls to solicit listings or to solicit potential buyers.

B) Real estate licensees are exempt from telemarketing laws.

C) Real estate licensees may phone any visitors to an open house for up to three months after that open house.

D) Real estate licensees may not call their current listings for leads.

C) Real estate licensees may phone any visitors to an open house for up to three months after that open house.

Real estate licensees who are paid in a lump sum and who are personally responsible for paying their own taxes are probably:

A) independent contractors.

B) nonexempt.

C) buyer’s brokers.

D) employees.

A) independent contractors.

An active licensee entered into a contract with her sponsoring broker, specifying that she is not an employee. In the past year, 90% of the licensee’s income comes from real estate sales commissions. The IRS would MOST likely classify the licensee as:

A) self-employed.

B) an independent contractor.

C) a part-time real estate licensee.

D) an employee.

B) an independent contractor.

Which of these may a sponsoring broker dictate to an independent contractor?

A) Number of hours the person would have to work

B) Work schedule that the person would need to follow

C) Number of vacation days the person would receive

D) Compensation the person would receive

D) Compensation the person would receive

After a particularly challenging transaction finally closes, the client gives the sponsored broker representing the client a check for $500 “for all your extra work.” Which statement is TRUE?

A) The sponsored broker may receive compensation only from the sponsoring broker.

B) While such compensation is irregular, it is appropriate for the sponsored broker to accept the check.

C) The sponsored broker should accept the check and deposit it immediately in a special escrow account.

D) The sponsoring broker is entitled to 80% of the check.

A) The sponsored broker may receive compensation only from the sponsoring broker.

The amount of compensation paid to a sponsored licensee is determined by:

A) Illinois law.

B) mutual agreement with the sponsoring broker.

C) the local real estate board.

D) mutual agreement with the client.

B) mutual agreement with the sponsoring broker.

A sponsored licensee wants to receive a lump-sum payment, with no withholdings, at the end of each transaction. The sponsored licensee must meet all these requirements EXCEPT:

A) receive 90% of income from the brokerage based on production, not time worked.

B) be free from supervision by the sponsoring broker and/or office manager.

C) hold a current real estate license.

D) have a written agreement with the sponsoring broker stating that the sponsored licensee will not be treated as an employee for federal tax purposes.

B) be free from supervision by the sponsoring broker and/or office manager.

A new sponsored real estate licensee wants to find new business among the firm’s expired listings. Under the National Do Not Call Registry, for how long after the listing has expired may the licensee solicit business from the firm’s previous listings?

A) 30 days

B) 18 months

C) 90 days

D) 6 months

B) 18 months