Real Estate Exam Vocabulary

Commission Calculations

• When a property sells, the sales price is 100% of the money transferred.

• If a broker receives 5% commission, 95% remains for the seller.

Calculating Commission

• Sales Price \times Commission Rate = Commission

• Example: Sales price is 170,000. Commission rate is unknown. We are solving for the commission amount.

Finding Sales Price

• Total Commission \div Commission Rate = Sales Price

Finding Commission Rate

• Commission \div Sales Price = Commission Rate

Example Calculation (Page 186, Question 5)

• A broker sold a residence for 485,000 and received 26,675 commission.
• Commission Rate = 26,675 \div 485,000 = 0.055 (or 5.5%)

Complex Commission Problem

• Two brokers involved, sharing commissions equally.

• One broker receives 4,000.

• Commission rate is 7%.

• What was the sales price?

• Total commission = 4,000 \times 2 = 8,000

• Sales price = 8,000 \div 0.07 = 114,285.71

Seller's Net Amount Problem

• Seller wants 50,000 net.

• Closing expenses are 1,200.

• Total needed: 50,000 + 1,200 = 51,200

• Commission rate is 7%.

• Sales price represents 100% of the money. After 7% commission, 93% remains.

• Sales price = 51,200 \div 0.93 = 55,053.76. Round up to 55,054

Checking the Work

• Commission = 55,054 \times 0.07 = 3,853.78. Round up to 3,854
• Seller's net = 55,054 - 3,854 = 51,200

List Price vs. Sales Price

• List price: 495,000

• Seller received: 420,000

• Commission rate: 5%

• What was the sales price?

• Seller received 95% of the sales price, so 420,000 \div 0.95 = 442,105.26

Checking the work

• 442,105.26 \times 0.05 = 22,105.26 (commission)

• 442,105.26 - 22,105.26 = 420,000 (what the seller received)

• The list price is irrelevant.

• If one agent receives a commission, but the question refers to commissions being split equally, remember to multiply the one agent's commission to find the total commission.

Practice Problems (Page 471)

• Questions 8, 11, 20, 32, and 41.
• Answers and explanations are in the back of the book (page 477).

Chapter 14. Page 275 Closing Cost

• Commission is paid by the seller.

• Example: Sale price is 180,000. Two commission of 5,700 each.

• Total Commission = 5,700\times 2 = 11,400. Commission Rate = 11,400 \div 180,000 = 0.063 or 6.3%

• In general, you have to share commission with other agents. Not always so answer the question.

• You may not always need to split commission with other agents.

• If the listing agent and the buyer agent have different commissions. Calculate both Commissions. Sum them. Then divide that number by the sale price and you have what the seller actually had to pay.

• If you take your commission and divide it by the sale price you will have your commission rate.

Brokers

• If a broker dies with family, the family can come and close the business. Must be closed within 6 months. The family member must have been a licensed agent for 3 years. and can carry that on for 4 years.
• If one owner dies it may or may not terminate. There are multiple cases where the sale wouldn't necessarily have to stop.

Contract Information

• A valid contract has "LOCK".

• L: Legal purpose and legally competent parties

• O: Offer and acceptance

• C: Consideration offer and accept. I accepted give consideration legal give concept and consent

• The 3 essential elements of a contract are offer, consideration, and acceptance.

Reviewing Chapter 11: Contracts

• Valid contract: Has all essential elements.

• Void contract: Missing essential elements, never legal.

• Voidable contract: Appears valid but can be canceled by one party.

• If there is not an essential element. The contract is void. It can't be legal or valid.

• I got my husband drunk so he signed the sales contract is avoidable. Someone has a gun to your back is avoidable. Duress.

• Avoidable contracts have a time frame. The time frame is 3 years statue of limitations.

• A executed contract has been completed. Finished. I gave you this to finish a executed contract that has been completed. Finish, close, everybody's happy exitatory. I haven't closed. I'm an executor. Remember that.

• buyer may revoke the offer any time before it is accepted. I can withdraw the offer before the seller accept it anytime.

• You are not paid anything yet. We have only had the offer. It had not been accepted yet. They can withdraw time is of the essence. This means these items will fall down by the due date.

• the buyer passes the date in the contract the contract it will be a breach of contract. Time of the essence is. We have to meet the due dates.

Example - Credit score is low. Sell says I'll pay you 20,000 and you pay me 2500 a month, what kind of contract is that? That is called, the seller is financing on a financing. Traditional lenders have to be involved in financing the real estate. What does a financing mean? Land contract or instalment contract. That one. The seller is the vendor, the buyer is the vendor. They are going to keep the legal title in their name. You will know the status is for under way under contract and stuff.

Listing Contract Terminations

• The purpose is fulfilled get the property sold relationship is over but there is some other things to keep you do still need to maintain confidential relationship the documentation for 5 years.

• May terminate
  or did the term has expire give you 90 days contract in you weren't able to get it sold

• Property was destroyed

• Operation of law, the bank comes and take it

• mutual agreed to cancel
  *
  There is many sales associates and you were to die. Thousands out there is another real estate broker died the contract is void.

Listing agreements

• Exclusive right to sell - getting paid, regardless of who finds that buyer. If the seller sees it, they have to pay you.
• Exclusive agency means he gets the sales price as long as you don't you get paid by you as long as you don't. They are on competition.
• Open listening, multiple agents. Least amount of protection.
  *Net Listing can never be used.

Nova tion replacing contact contracts badly written replaced it with another one.

Remember. Civil act 1866 pro proprohibiting discriminating of all houses. That does. Today to protected class that are race, color, national origins religions, sex, material status, disability. A display person has the ability right to modify premise. Oh, yeah. At their own expenses and only have seven protected class and three more. What does that?
*You did Maryland have protection

*This one is marital material status, sexual orientation, gender identity. When does the federal one has jurisdiction is the is the same both side. They will leave it in the local house. No more

*Supply equal the property or the house and then the main is all the buyers.

Land Factors

s

• Immovable, indestructible and unique
• Real Estate Land plus Improvement
• personal. Property is the thing you can move and take it to another location what are the two different properties that are important tenant
• Trade fixture is when the stuff you take as as barber chairs and stuff
  *What is title- ownership. A session is when you leave the barber trade property that is called when you turn into the key

Contract Conditions

Do it convey means it will go with the buyerMaria method ability between an agreement.*Supply and demand the more popular the more people employ wages. The more. The real estate the broker has to come in, but this in the client
*When it says something different thing when you have their own when and she's got off to what the rest of the one. Call order
The rest only one there's not a lot of people that the the joint Tennesse comes with the writing of survivorship as who are the only the owners die.If you have joint, then you want your heirs come in the way you can is to change by breaking up the Tennessee or whatever.*A list pittance come on, will they determine we have. Are they effective? It comes that it comes effective by the date of the contract

title- the fact the title is the right of ownership is an artificial is an implement ownership business organization.

Government

• The government. P police power only domain property taxes. It cheat.
• Police is zoning law domain eminent domain is going to take my property from the public is. Cheat one has on well.
• lien on payment by which what is in charge in the property
  lien represent ownership interest. If the lean it's not paid, the lean holder can sell the the foreclosure sale. So priority has been. We get the recorder for tax assessment for take every and all of liens.
  title, the deed by there
  Title Insurance is greatest protection.* * * ** *
  What are the 72 and make it and what what of all of and you. What's a session to make for what if the cell has a change? One the or the seller.
  The broker pay commission is that there still old money. They will show you buyer the same commission. So always go office man