UNIT 9:

BOBRA TAHAN

HOWARD HARRIS

NATIONAL INTERACTIVE

STUDY GROUP

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Study Group Information

Please refer to your dashboard for the following:

Link to calendar of discussion topics

Links to discussion questions

Use this button on the Learning Management System tab to

access your dashboard:

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Setting up the room3

Setting up the room4

Contact Information

Bobra Tahan and Howard Harris both have access to

this account:

nationalleadinstructor@kaplan.com

Please include the STATE where you will be taking

your exam anytime you reach out to us so we can

find the best resources for you.

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Unit 9:

TOPICS TO BE DISCUSSED:

Your questions

Brokerage relationships

Agency

Listing agreements

Material facts and disclosure

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BROKER RELATIONSHIPS

An agent is someone who represents a principal

and who’s owes the principal fiduciary obligations.

An agent is NOT a job title. You will be a real estate

salesperson or a broker associate. You may or

may not act as a agent depending on your state

law and brokerage firms policy.

The common law of agency is the underlying

foundation for all state law which is then further

defined by each states brokerage relationship law.

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BROKER OF RECORD

The Broker of Record is the AGENT to clients. All

associates in the office represent and are

AGENTS to the Broker of Record.

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BROKER OF RECORD

SALESPERSON ASALESPERSON BBROKER ASSOCIATE CSALES PERSON D

= AGENT TO CLIENTS

(BUYERS AND SELLERS)

ALL CONTRACTS BELONG TO THE B.O.R.

=AGENT TO THE

BROKER OF RECORD

ALL CONTRACTS YOU CREATE BELONG TO THE B.O.R.

O = Obedience

L= Loyalty

D = Disclosure

C = Confidentiality

A = Accounting

R= Reasonable skill and care

FIDUCIARY DUTIES9

QUESTION

Agents owe their principal the fiduciary obligations

of OLD CAR. What does the O in the acronym

stand for?

A. Obedience

B. Obligation

C. Oxymoron

D. Open House

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QUESTION

All listing agreements and buyer representation

agreements are contracts of the principal broker:

True

False

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QUESTION

For a property being sold “as is,” the agent has no

duty to disclose knowledge about a leaking roof:

True

False

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QUESTION

The duty of loyalty requires the agent to place the

principal’s interests above those of all others,

including the agent’s own self-interest:

True

False

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QUESTION

A neighbor tells her neighbor Sue, that she would

like to sell her home. Sue, who is a salesperson,

finds a buyer and calls the neighbor to tell her she

has found someone to buy her home. At this point

Sue:

A. is an implied agent for the neighbor

B. is an express agent for both parties

C. has no brokerage relationship with either party

D. is a general agent for the neighbor

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KEY POINT: CREATION OF AN AGENCY

An express agreement is created by a direct

statement; may be called a fiduciary agreement.

May be oral or written, depending on state laws.

Only written commission agreements are

enforceable

Implied agency is created through an agent’s

actions.

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QUESTION

A customer asks the listing agent for information on

the broker’s listing. The broker owes what obligations

to the unrepresented customer?

A. Disclosure, confidentiality, accounting and

reasonable skill and care.

B. Disclosure, accounting and reasonable skill

C. Fair practices, disclosure and accounting

D. Honesty, fair practice and disclosure

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QUESTION

An agent working for a principal has been given

limited power to bind the principal. The agent is

most likely:

A. A universal agent

B. A general agent

C. A special agent

D. An exclusive agent

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SPECIAL AGENCY

A Special agency is created when an agent is

authorized to perform a particular act without the

ability to bind the principal.

(in an advisory capacity only)

EXAMPLES:

Listing brokerage firm to seller

Buyer brokerage firm to buyer

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GENERAL AGENCY

General agency is created when an agent is

authorized to perform a series of acts associated with

the continued operation of a particular business. The

agent has a limited ability to bind the principal.

EXAMPLES:

Salesperson or broker associate to employing broker

Property manager to property owner

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QUESTION

The brokerage firm has an exclusive agency contract

and has put the property into MLS. A buyer’s agent

brings an offer for the property which is accepted. At

closing who will be paid a commission?

A. Only the listing brokerage

B. Both brokerage firms

C. Only the buyer’s brokerage

D. Neither brokerage firm.

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HOW CO-OP FEES WORK21

The seller of the

Listing Brokerage

has agreed to pay

a 5% fee for selling the home.

Listing firm offers 2.5% Co-op

fee to the buyer brokerage

firms in MLS

At closing

Listing side will receive 2.5%

Buyer side will receive 2.5%

Type of listing

Owner obtains buyer

Co-op agency obtains buyer

Listing agency obtains buyer

Someone else

obtains buyer

Exclusive

right-to-sell

Exclusive

agency

Open

$ $ $ $

$ $ $

$

©2014 Kaplan University School of Professional and Continuing Education 22

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WHEN DOES THE LISTING BROKER GET PAID

QUESTION

The buyer’s agent is being paid by the listing

brokerage via a co-op fee. In this case, the buyer’s

agent owes their fiduciary obligations to the:

A. party who is paying them

B. transaction since they are receive a co-op fee

C. seller and buyer

D. party who has employed them

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QUESTION

Listing contracts must have all of the following

EXCEPT:

A. Names of the parties

B. A negotiated commission clause

C. A liquidated damages or specific performance

remedy clause

D. A definite termination date.

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QUESTION

Sarah, a new salesperson at ABC Realty, has gotten an exclusive-right-to-sell contract for a home in her neighborhood. The contract calls for the brokerage to be an agent for the seller. Under the common law of agency this means

A. The brokerage owns the contract but Sarah will be acting as the agent for the seller, under direction of the principal broker.

B. Sarah owns the contract and has the agency relationship with the seller.

C. The principal broker and Sarah will be the seller’s agent with the rest of the firm acting as dual agents.

D. The firm owns the contract and has the primary agency relationship with the seller.

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QUESTION

A material fact is defined as any fact that might make a party

change his or her mind. Material facts must be disclosed in

real estate transactions. Which of the following is TRUE

about the disclosure?

A. The listing broker and seller are the only parties

responsible for disclosure

B. If the buyer has an inspection there is no need for the

seller to disclose

C. The brokers are responsible for full disclosure of all

facts to all parties

D. The brokers, seller and buyer must disclose all known

material facts

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QUESTION

A listing broker would be puffing if he made which

of the following statements?

A. “This house has the best views in the city.”

B. “The neighborhood is very safe.”

C. “ The schools here are the best in town.”

D. “This area is going to appreciate.”

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CONTACT INFORMATION

Any questions I missed or that you still have?

Remember if you think of something after class you can reach both Bobra Tahan and Howard Harris at:

nationalleadinstructor@kaplan.com

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