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62 Cards in this Set
- Front
- Back
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Receiving compensation related to the real estate transaction from someone other than the licensee's client without prior written consent from all parties to the transaction.
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Correct answer: dual compensation
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The body of law that determines the rights and duties owed by an agent to a principal.
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Correct answer: laws of agency
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A person who receives services given on behalf of and for the benefit of a client.
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Correct answer: customer
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An agent representing two principals in one transaction.
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Correct answer: Multiple Representation Relationship
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The actual person, within the firm representing the buyer, that procured the buyer.
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Correct answer: buyer's agent
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The person who employs an agent to perform a service on their behalf.
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Correct answer: client
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The business of bringing buyers and sellers together in the marketplace.
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Correct answer: brokerage
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Person who assists a licensee, who is not licensed under chapter 452 or licensed but not employed for the purpose of providing services for which a license is required. This person can perform administrative tasks on another licensee's behalf.
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Correct answer: unlicensed personal assistant
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A person who is authorized by another to act on their behalf.
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Correct answer: agent
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A broker, who works in conjunction with another broker in procuring a buyer for the seller's property.
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Correct answer: cooperating broker
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Any person other than a broker who is employed by a broker to perform any act authorized by chapter 452 to be performed by a broker.
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Correct answer: salesperson
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The firm that has entered into a buyer agency agreement with the buyer indicating that the broker will be representing the interests of the buyer.
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Correct answer: buyer's broker
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Showings of real estate open for public viewing without an individual appointment.
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Correct answer: open house
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The practice of representing either the buyer or the seller but never both in the same transaction.
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Correct answer: single agency
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An agent who works under another agent.
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Correct answer: subagent
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An agreement to keep open for a set period of time an offer to sell or lease real property.
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Correct answer: option to purchase
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Selling one product only if the buyer agrees to purchase another product as well.
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Correct answer: tie-in agreement
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A term used by the DRL to refer to any person licensed or registered under state law to practice real estate.
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Correct answer: licensee
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A way to defer capital gains tax by exchanging like property for like property.
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Correct answer: exchange
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The individual person that is working with the buyer as a customer.
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Correct answer: selling agent
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One who for another, and for a commission, money or other thing of value, promotes the sale, exchange, purchase, option, rental or leasing of real estate or business opportunities
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Correct answer: broker
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Any fact that is relevant to a person making a decision. Agents must disclose all material facts to their clients.
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Correct answer: material fact
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A relationship in which one person acts for or represents another.
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Correct answer: agency
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An individual employed by the listing broker who actually secured the business for the listing firm.
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Correct answer: listing agent
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The purchaser under an option contract.
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Correct answer: optionee
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The sale or lease of the business and good will of an existing business, enterprise, or opportunity, including a sale of the majority of assets or stocks of the business
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Correct answer: business sales
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The seller under an option contract.
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Correct answer: optionor
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Presumptive evidence that a broker's license is required because one has participated in five sales in one year or 10 sales in five years.
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Correct answer: pattern of sales
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An adverse fact that a party indicates is of such significance, or that is generally recognized by a competent licensee as being of such significance to a reasonable party, that it affects the party's decision to enter into a contract or the terms of a contract.
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Correct answer: material adverse fact
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The firm, representing the seller, which procured the buyer for a seller.
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Correct answer: selling broker
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The firm that the seller has employed under a listing contract.
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Correct answer: listing broker
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One placed in a position of trust and confidence, normally responsible for the money and/or property of another.
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Correct answer: fiduciary
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1. Salesperson Julia Short received $1,522.50 as her half of her broker's 7 percent commission on a sale. The sale price was?
a. $22,500 b. $43,500 c. $45,000 d. $90,000 |
The correct answer is b.
Explanation: $1,522.50 x 2 = $3,045. $3,045 / .07 = $43,500. |
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2. Before a broker has the right to act as a listing broker in a real estate transaction all of the following must occur EXCEPT:
a. there must be a valid agency agreement b. agency must have been properly disclosed c. the individual must have a current license d. the broker must have joined the MLS |
The correct answer is d.
Explanation: Wis. Stat. Chapter §452 states that an individual must be licensed in order to collect a commission. Also, There must be a valid agency agreement and agency must have been properly disclosed. There is not a requirement that a broker belong to a MLS. |
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3. Owner Olson gives an exclusive right to sell listing to Broker Bill. During the term of the listing Olson solicits another exclusive right to sell listing from Broker Bauer. Which of the following is correct in this situation?
a. Once a buyer is procured, Olson owes both Bill and Bauer a commission. b. Olson owes only Bill a commission because Bill had the listing first. c. Whichever firm procured the buyer would be paid the commission. d. Bauer and Bill would be required to split the commission. |
The correct answer is a.
Explanation: The language in the exclusive right to sell listing contract requires the seller to pay a commission to the broker if a buyer is procured. If the seller has two valid contracts with two brokers a commission would be owed to both if a buyer were procured. |
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4. If an owner wants to net $80,000 after paying a 7% commission to a broker. What is the commission paid? Use whole numbers.
a. $3,678 b. $5,601 c. $6,022 d. $7,000 |
The correct answer is c.
Explanation: The seller received $80,000 after paying the broker a 7% commission. To determine the commission paid the sales price needs to be determined. $80,000/.93 = $86,022 sales price. $86,021 x .07 = $6,022 commission paid. |
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5. If a broker has an oral listing contract:
a. he can collect only the commission which was orally agreed upon from the seller b. he can collect only to cover for marketing and advertising expenses from the seller c. he has no right to enforce the payment of a commission d. the right to the commission would be protected by the courts because the broker held a license |
The correct answer is c.
Explanation: Oral listing contracts are not enforceable; therefore the broker has no right to claim a commission. |
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6. Broker Reese Stahl, of Happy Valley Realty, recently sold Jack and Jill Hawkins' home for $79,500. Stahl charged the Hawkins 6.5 percent commission. Stahl will pay 30 percent of that amount to the listing salesperson and 25 percent to the selling salesperson. What amount of commission will the listing salesperson receive from the Hawkins sale? Use whole numbers.
a. $1,292 b. $1,550 c. $3,617 d. $5,168 |
The correct answer is b.
Explanation: $79,500 sales price x 6.5 percent commission = $5,168. $5,168 x .30 = $1,550 listing salesperson's commission. |
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7. Which of the following is true regarding the preprinted WB-36 Buyer Agency/Tenant Representation Agreement?
a. It may only create a special agency relationship. b. It may only create a general agency relationship. c. It may terminate when the buyer purchases a property. d. It determines how the buyer's broker is going to be compensated. |
The correct answer is c.
Explanation: A buyer agency agreement may create a general or special agency relationship. On lines 195-196 of the WB-36 the parties choose whether the agreement terminates when a buyer purchases a property. |
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8. In a real estate transaction, procuring cause is:
a. one who works for another b. any fact that is relevant to a person making a decision c. one who originates or starts an action which results in a desired transaction d. one who acts as a trustee or who has a legal duty to act in a confidential manner on behalf of another person |
The correct answer is c.
Explanation: "C" is the definition of procuring cause. |
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9. Seller Mikalsen listed her property with Bigwig Broker for three months. She also listed her property with Smalltown Realty for the same time period. One month later Mikalsen sold her home and doesn't owe either Bigwig Broker or Smalltown Realty a commission. What type of listing contract did she have?
a. Exclusive Right to Sell b. Exclusive Agency c. One-Party Listing d. Open Listing |
The correct answer is d.
Explanation: Mikalsen has an open listing. She had her home listed with two brokers at the same time and then procured the buyer herself. When it sold, she did not owe either broker a commission. |
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10. Sam Seller told Betty Broker that he needed to net $120,000 on the sale of his home. If he pays her a 5 percent commission, what does the property need to sell for? Use whole numbers.
a. $125,468 b. $126,000 c. $126,316 d. $127,000 |
The correct answer is c.
Explanation: Sale price - 5 percent = net price. 100 percent - 5 percent = 95 percent. $120,000 / .95 = $126,316 |
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11. There is a 60/40 split between the listing broker (60 percent) and any co-brokers (40 percent). How much commission is owed to a co-broker if a property sold for $150,000 at a 7 percent commission?
a. $4,200 b. $5,250 c. $6,300 d. $7,200 |
The correct answer is a.
Explanation: Selling price = $150,000 Commission owed = .07 Listing broker retains .60 of commission. Co-broke receives .40 of commission. $150,000 x .07 = $10,500 commission paid to listing broker. $10,500 x .40 = $4,200 of commission received by co-broker. |
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12. To rescind a contract:
a. means to cancel a contract and restore the parties to their original positions b. refers to the compensation recoverable in a lawsuit by a complainant who sustained an injury c. means a contract has been terminated and damages are owed d. shows the public the position of the parties in a real estate transaction |
The correct answer is a.
Explanation: The definition of rescission is to cancel a contract and restore the parties to their original positions. |
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13. A property is sold for $190,000 and nets $160,000 with the seller paying a 7 percent commission. How much did the seller pay in closing costs?
a. $12,800 b. $13,300 c. $16,700 d. $30,000 |
The correct answer is d.
Explanation: $190,000 sales price - $160,000 net = $30,000 paid in closing costs |
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14. Salesperson Judy Moore sells a house for $89,000. This sale is part of a co-brokerage, and the selling firm gets half of the full 7 percent commission paid. Judy receives 40 percent of her broker's share of the commission. What was Judy paid?
a. $1,156 b. $1,246 c. $1,500 d. $2,000 |
The correct answer is b.
Explanation: $89,000 x .07 = $6,230. $6,230 x .50 = $3,115. $3,115 x .40 = $1,246 commission. |
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15. A listing contract is:
a. binding on the buyer b. a promise to pay a commission c. a promise to attempt to procure a ready, willing and able buyer d. both b and c are correct |
The correct answer is d.
Explanation: In the listing contract the seller promises to pay a commission if the broker procures a ready, willing, and able buyer. |
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16. An agency relationship may be terminated by the following means EXCEPT the:
a. owner decides not to sell the house b. broker discovers that the market value of the property is such that he will not make an adequate commission c. owner dies d. broker procures a ready, willing and able buyer for the seller's property, who subsequently purchases the property and receives title |
The correct answer is b.
Explanation: An agency agreement may be terminated by: death or incapacity of the principals, destruction of the property, expiration of the term, mutual agreement, breach, operation of law, or completion. |
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17. Net listings is/are:
a. a good idea because they assure the seller a known amount for their net b. not a good idea because they are illegal in Wisconsin c. a guarantee that the broker will earn a commission d. where a seller's net sheet is filled out to help indicate what the remaining profit after closing will be |
The correct answer is b.
Explanation: Net listings are illegal in Wisconsin. Wis. Admin RL 24 Conduct and Ethical Practices for Real Estate Licensees. |
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18. Morgan receives a monthly salary of $1,000 plus 3 percent commission on all of her listings that sell and 2.5 percent on all her sales. None of the listings that Morgan took sold last month, but she received $4,175 in salary and commission. What was the value of the property Morgan sold?
a. $105,833 b. $122,500 c. $127,000 d. $147,000 |
The correct answer is c.
Explanation: $4,175 - $1,000 salary = $3,175 commission on sales. $3,175 / .025 = $127,000 value of property sold. |
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19. ABC Realty was involved in a co-brokerage with XYZ Realty who listed the property. The firms had agreed to split the commission 50/50. XYZ Realty earned the commission when:
a. ABC submitted an offer to XYZ b. the transaction closed c. a ready, willing and able buyer was procured d. after the buyer's financing contingency was removed |
The correct answer is c.
Explanation: The listing broker earns the commission when the buyer is procured and paid at closing or the date set for closing. |
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20. When completing a buyer agency agreement:
a. a specific description of the property the buyer wishes to purchase is required b. the street address of the property the buyer wishes to purchase is required c. the legal description of the property the buyer wishes to purchase is required d. a general description of the property the buyer wishes to purchase is sufficient |
The correct answer is d.
Explanation: When entering into the buyer agency agreement a general description of the property is typically used because the buyer does not know the specific street address or legal description of the property they will purchase. |
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21. A group of brokers at their weekly breakfast meeting decided that introducing discount brokerage services to the market would be bad for business. They agreed among themselves not to charge any less than 7 percent commission. This informal agreement is all of the following EXCEPT:
a. a violation of anti-trust laws b. price fixing c. punishable by law d. discrimination |
The correct answer is d.
Explanation: An antitrust violation is not considered to be discriminatory behavior. |
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22. A broker's responsibility to his client:
a. extends beyond closing with regard to disclosure b. continues until a WB-22 Agency Termination Agreement is signed c. ceases upon procuring a ready, willing and able buyer d. ceases upon termination of agency |
The correct answer is d.
Explanation: A broker's responsibility to a client ceases upon termination of the agency relationship. There is only one duty that extends beyond closing and that is the duty of confidentiality. |
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23. Which of the following would NOT terminate an agency relationship?
a. Death of the seller. b. Death of the listing broker. c. Death of the salesperson. d. Destruction of the property. |
The correct answer is c.
Explanation: Because agency originates with the broker, the broker and the seller/buyer are the only parties to an agency agreement. If the salesperson dies the agency relationship is not affected. |
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24. Seller Smith has listed his property with Broker Bauer and later decides to terminate the listing because he doesn't want to sell. Broker Bauer has procured Buyer Tolstoy with a mirror-image offer prior to Smith terminating the listing. Seller Smith rejects the offer. In this scenario:
a. to obtain a commission, Bauer may sue Smith b. Bauer may sue Tolstoy for a commission c. Tolstoy may sue Smith for specific performance d. Smith is unaffected |
The correct answer is a.
Explanation: The seller owes a commission if a listing broker procures a buyer according to the terms of the listing contract even if the seller does not accept the offer. Because the offer was not accepted Tolstoy does not have the right of specific performance. |
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25. Broker Bauer lists Jean Hammond's property. Jean becomes disenchanted with Bauer and cancels the listing before the term has expired. In this situation:
a. Jean may not terminate the listing during the listing term b. Jean may terminate, but may owe damages to Broker Bauer c. Bauer will still earn a commission if a buyer is found during the original term of his listing d. Bauer is still Jean's agent |
The correct answer is b.
Explanation: Because agency agreements are viewed as personal service contracts by the courts, the parties cannot sue each other for specific performance. However, the early termination of an agency agreement without cause would be a breach of contract and therefore the damaged party may sue the other for damages. |
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26. Amanda and Doug Brown have an exclusive right to sell listing with the ABC Firm. Two weeks later Lisa and Joe Evans wrote an offer which the Browns accepted. All contingencies were eventually removed, but before closing the sellers backed out of the deal. ABC Firm decided to sue the Browns for the commission. ABC Firm:
a. is within their legal rights to do this because commission is earned upon procurement b. is within their legal right to do this but only if the firm purchases Browns house c. does not have a legal right to do this because the buyer backed out of the contract d. does not have a legal right to do this because commission is earned at closing |
The correct answer is a.
Explanation: Commission is earned upon procurement. The broker promises in the listing contract to procure a buyer, not that the property will close. |
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27. The amount of commission to be paid in a real estate transaction is determined by:
a. the Board/Association of REALTORS b. an agreement between the parties c. the Multiple Listing Service d. statutory requirements |
The correct answer is b.
Explanation: Commission is always negotiable and is negotiated between the broker and the client. |
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28. If a licensee would give a $100.00 gift certificate to a seller as a thank you and the gift had not been previously disclosed, the licensee may be in violation of:
a. fee splitting b. self-dealing c. unlicensed practice d. multiple representation |
The correct answer is a.
Explanation: Wis. Stat. Chapter §452.19, "No licensed broker may pay a fee or a commission or any part thereof for performing any act specified in this chapter or as compensation for a referral or finder's fee to any person who is not licensed or lawfully engaged in the real estate brokerage business in another state, a territory or possession of the United States or a foreign country." |
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29. Two cooperating brokers split the 7 percent commission 50/50 on a sale. Broker Bauer paid his salesperson $2,520 as her 60 percent of Bauer's share. The sale price of the property was?
a. $30,000 b. $60,000 c. $90,000 d. $120,000 |
The correct answer is d.
Explanation: $2,520 / .60 = $4,200 commission paid to Bauer. $4,200 x 2 = $8,400 total commission paid. $8,400 / .07 = $120,000 sales price. |
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30. The best description of a special agent is someone who has the authority to:
a. act as a power of attorney b. to sell a property c. to represent a principal in all matters d. to represent a principal in a specific transaction |
The correct answer is d.
Explanation: A special agent is one who is authorized by a principal to perform one particular act or transaction. |
