FINC 3250 Exam 4 Test Review

FINC 3250 Exam 4 Test Review 1. broker: a person licensed to act independently in conducting a real estate busi- ness -brings together buyers and sellers of real estate, and usually actively participates in the negotiation of a deal between the two -may represent the seller (as is most common), the buyer, or both with proper disclosure -the fee charged for services is usually paid via a commission 2. salesperson: a person employed by a real estate broker to list and negotiate the sale, exchange, or lease of real property for others -technically, then, when a real estate salesperson accepts a listing, they do so in the name of their qualifying broker -most people get a negotiated split of the broker's commission, where the split depends on the productivity -some very productive people pay a flat fee to their broker and keep 100% of the commission they generate -in any case, they can only receive payment from one broker at any one time -for tax purposes, they can either be treated as an employee of the broker or as an independent contractor (this is also negotiated) 3. people who don't need a license to sell property: most of these are common to all states: -an attorney carrying out the regular duties of an attorney -an executor or administrator of an estate -trustee selling foreclosed property for a lender -court-appointed receiver disposing of foreclosed property -federal government employees in the course of their jobs -registered foresters 4. listing agreement: an agreement between the seller of a property and their real estate agent 5. listing: an agreement between an owner and a broker that the broker and his sales staff will try to find a ready, willing, and able buyer or tenant to satisfy the conditions contained in this -there are three main types, one relatively common variation on these three, and two types that are becoming more common -the differentiation between these agreements is how the real estate agent gets paid -most real estate agents get paid a percentage of the sales price (industry standard is 6%) 6. exclusive right to sell listing: a listing where no matter who sells the property during the listing period, the listing broker gets his commission -commission based -even if the owner sells the property themselves, the listing broker still gets paid -the broker will usually expend more effort to sell a property listed through this than any other type of listing, and anything spent to sell the property is to the broker's benefit -these two facts have combined to make this the most common type of listing arrangements in the US 7. exclusive agency listing: a listing that is very similar to an exclusive right to sell, except that the owner can sell the property and not owe a commission -commission based -a broker may not expend as much effort since their actions can be too easily undermined by the owner 8. open listing: a type of listing where an owner can give this to as many brokers as they like -commission based -the broker that sells the property earns the commission -the owner can also sell the property and not owe any commission -as a result of this format, brokers are not inclined to expend a great amount of effort in locating for these 9. net listing: a variation of the three listing arrangements -gross/net based -the owner states how much he wants to receive for the property and agrees to pay the broker any amount above that figure as the commission -some states (including Alabama) prohibit these types of listings and most brokers try to avoid listing properties via these 10. advance fee listing: a listing where the broker gets an advance deposit from the seller to cover a stated hourly fee plus out of pocket expenses -hourly based -this listing type forces the seller to become more realistic about the asking price 11. advance cost listing: a listing that is similar to an advance fee listing, except that only out of pocket expenses are charged against the up front deposit -hybrid based