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68 Cards in this Set
- Front
- Back
Conflict of interest |
Broker or agent is biased and incapable of performing duties owed to their clients |
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What (biased) compensations (instead of pay) must be disclosed to the client? |
Professional courtesies Family favors Preferential treatment |
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ABA |
Affiliated business arrangement |
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Affiliated business arrangement |
Referring a client over to a business who shares money with the broker who referred them |
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What is it called when a conflict of interest is created? |
Agency dilemma |
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Does a conflict of interest go against a broker's fiduciary duties? |
Yes, unless it is disclosed and the client consents |
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When must a broker disclose their conflict of interest? |
Immediately (as it will create transparency in the transaction and not cause issues or go against fiduciary duty) |
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Does a disclosure neutralize the inherent bias itself? |
No but it neutralizes the element of Deceit |
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Dual agency |
When a broker represents both the buyer and the seller |
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What circumstances are considered a conflict of interest? |
1. A pre-existing relationship due to: kinship, employment, partnership, religion, Etc 2. a relationship that might hinder their ability to fully represent the needs of the client |
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Can a broker act for more than one participant in a transaction? What is this called? |
1. Yes, as long as it is disclosed and they have the client's consent 2. Dual agency |
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Do you still have to disclose your interest in a transaction you are brokering if the other broker doesn't ask for it? |
Yes |
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Do you have to disclose if your bias is indirect? |
Yes |
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Once the transaction has already started when is it appropriate to disclose the bias? |
As soon as the conflict arises |
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material fact |
Something that affects the decisions and process of a transaction |
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If a broker is acting solely as their own principal do they have to disclose their bias? |
No, because they are not acting on behalf of someone else |
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When a broker is selling their own house and collects a fee on the sale of their own property, what do they subject themselves to? |
Real estate agency requirements |
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Subagent |
Individual delegated by the agent, not the client themselves |
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Are you considered an agent of the seller simply by showing buyers properties listed with other brokers? |
No |
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Listing agreement |
Authorizes the listing broker to cooperate with other brokers |
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When a broker goes into a listing agreement and cooperates with other brokers what then do they share? |
1. Property information 2. brokerage fee |
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What do listing agreements not authorize the broker to do? |
Delegate to other Brokers the authority to act on behalf of their client |
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Describe the difference between a subagency and an associate broker: |
1. Enlisting another broker to help with a transaction 2. An agent employed by a broker to assist with a transaction |
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MLS |
Multiple listing service |
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Is a broker in a multiple listing service considered to be a dual agency or a sub agency relationship? |
No |
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How is an agency created? |
1. Contract 2. Conduct of a broker |
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Multiple listing service |
Association of real estate agents pooling and Publishing the availability of their listing properties |
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How can a broker become a sub-agent appointed by the seller's broker? |
When they're in contact with the buyer, but conduct themselves as the seller's representative through all negotiations with the buyer |
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Opposing parties |
Buyer vs seller |
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Dual agent |
Represents both the buyer and the seller |
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What is a broker subject to if they fail to promptly disclose their dual agency? |
1. Lost of fee 2. liability for their principles money losses 3. disciplinary action by Calbre |
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Confidential pricing information (in regards to dual agency) |
Information that the broker may not disclose to opposing parties |
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In a dual agency, how is the "best business advantage" prevented from being achieved by the broker? |
Because the broker cannot take sides during the negotiations |
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Describe the benefits one can receive from having an exclusive agent |
1. Exclusive agents can negotiate the best price for seller / buyer 2. Dual agents want the best for both sides and therefore are at an impass |
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Who is the legal agent in a transaction? |
The broker who employs the agents involved in handling negotiations |
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Trust funds |
Items having a monetary value held by a broker for a client in a transaction |
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What do trust funds generally include? |
1. Rents and security deposit 2. good faith deposit (advance fees) 3. fees and costs 4. loan payments 5. any other personal property of value |
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What requirements are imposed on Brokers when they receive, transfer or disperse trust funds? |
Record-keeping and accounting requirements |
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Trust funds come in many forms, including: |
1. Checks 2. precious metals 3. stocks 4. collectibles 5. notes 6. item with evidence of value |
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General account |
1. Broker or agent personal or business account 2. not to be co-mingled with trust funds |
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Subaccount Ledger |
An accounting document identifying the owner of trust funds and the amount held |
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Conversion |
Unlawful appropriation of another's property (such as trust funds) |
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What must a broker do with a clients trust fund? |
1. Use it for the agreed services ( such as payment on a loan) |
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Can the bank seize a person's trust fund to offset the Brokers personal debt to the bank? |
Yes, however the investor is entitled to recover their funds because the bank does not extend to seizure of funds held for others in a broker's trust account |
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What are you supposed to do with trust funds received (cash or check) made payable to the broker? |
1. Deposit into Brokers trust account 2. held undeposited 3. endorsed and handed to others entitled to the funds |
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What is a non-negotiable type of trust fund? What is a broker to do with non-negotiable types of trust funds? |
1. Items that can't be deposited such as: gems, coins, notes or personal property 2. Place items in a safe or safe deposit box for safekeeping |
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Owner's statement |
Provided to the owner of a trust fund explaining the status, expenditure and location of funds |
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How long does a broker have to pay endorse or deposit trust funds? |
End of 3 business days |
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When can a broker hold a check (trust fund) undeposited? |
When waiting for an event to occur (Such as acceptance of an offer) |
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Civil Rights Act |
Federal law which provides protection to individuals against discriminatory activities |
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Who has the right to rent real estate under the federal civil rights act? |
All citizens of the United States regardless of race |
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FFHA |
Federal fair housing act |
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Federal fair housing act |
A collection of policies designed to prevent discrimination when it comes to housing |
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Dwelling |
Building occupied or designed to be occupied by one or more families |
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Familial status |
Status which indicates a household ( includes people under 18) |
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Selective Reduction (in rent) |
Giving better rates/services to some tenants and not others |
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Steering |
Real estate agent trying to influence the choice of a buyer or tenant |
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Is Steering legal? |
No |
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Blockbusting |
Real estate agent convincing property owner to sell their house because of a changing demographic in their neighborhood |
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Is blockbusting legal? |
No |
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Aggrieved Individual |
Individual who claims they have been or they will be injured by a prohibited discriminatory housing practice |
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Mediation |
Informal negotiations |
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Unruh Civil Rights Act |
California law prohibits discrimination by business based on sex, race, color, religion, ancestry, etc |
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Is a real estate practice considered a business establishment? |
Yes |
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Disabled person |
Anyone who has physical or mental impairment which significantly limits major life activities, has a record of disability, or is regarded as being disabled |
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Is a landlord required to structurally modify existing rental property to meet special needs of disabled tenants? |
No. Although the landlord is to allow the tenant to make reasonable modifications themselves or pay the landlord to do so |
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When is the only time a landlord can refuse a tenant because they have children under 18? |
If the property qualifies as senior citizen housing |
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Does a property manager have to disclose any deaths in the potential listing? How many years back? |
-Yes if it is considered a material fact which might affect the tenants decision to lease -3 years |