Real Estate Agency Agreements
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Questions and Answers

What must be attached to the contract if the buyer is an entity such as a corporation or partnership?

  • Evidence of authority (correct)
  • A list of previous transactions
  • Proof of ownership of the property
  • Financial statements of the business

    • Which of the following circumstances would require disclosure on the contract?

  • The buyer has filed for bankruptcy (correct)
  • The buyer is part of a community group
  • The buyer has recently changed their residential address
  • The buyer has a valid driver's license

    • What is the implication if there are no judgments or liens against the buyer?

  • The buyer can automatically qualify for a loan
  • The buyer is exempt from taxes
  • There is less risk associated with the purchase (correct)
  • The property will increase in value

    • What type of information is included in the additional provisions of the contract?

    <p>Any specific conditions agreed upon by the parties</p> Signup and view all the answers

    What is the main requirement for changes to the terms of the contract?

    <p>A written document signed by all parties</p> Signup and view all the answers

    What is the primary purpose of the exclusive right-to-buy contract?

    <p>To represent the Buyer in acquiring interests in real property</p> Signup and view all the answers

    How long does the Broker's authority as Buyer's Agent last?

    <p>From the specified start time until the property acquisition is completed</p> Signup and view all the answers

    What is a key responsibility of the Broker according to the contract?

    <p>To promote the interests of the Buyer with good faith and loyalty</p> Signup and view all the answers

    What happens if the Buyer wants to submit an offer on property listed by the Broker for a Seller?

    <p>The relationship changes to an Intermediary relationship</p> Signup and view all the answers

    What must the Buyer do during the duration of the contract?

    <p>Tell the Broker of all properties of interest</p> Signup and view all the answers

    What does the term 'vicariously liable' mean in the context of this contract?

    <p>The Buyer may be held accountable for the Broker's authorized actions</p> Signup and view all the answers

    Which type of real property is included in the scope of the exclusive right-to-buy contract?

    <p>Commercial, residential, vacant, and agricultural properties</p> Signup and view all the answers

    What is necessary for the Buyer to enter into an Intermediary relationship with the Broker?

    <p>Signing a Consent Amendment and In-Company Transaction Disclosure</p> Signup and view all the answers

    What must a Broker do if they have an interest in a property selected by the Buyer?

    <p>Disclose the interest immediately to the Buyer</p> Signup and view all the answers

    Under what conditions is a Buyer obligated to pay the Broker's compensation?

    <p>Regardless of how the Broker is compensated</p> Signup and view all the answers

    When is the Broker's compensation due to them?

    <p>Upon closing of the transaction or demand within a certain period</p> Signup and view all the answers

    What is the Broker required to do regarding confidential information obtained from the Buyer?

    <p>Maintain confidentiality but disclose adverse material facts</p> Signup and view all the answers

    What is required for a Broker to order services from outside sources?

    <p>Written authorization and agreement of payment from the Buyer</p> Signup and view all the answers

    What happens if a Seller fails to close due to no fault of the Buyer?

    <p>The Broker's compensation is waived</p> Signup and view all the answers

    What kind of real estate commission or fee is specified in the contract?

    <p>It is set individually by each Broker and may be negotiable</p> Signup and view all the answers

    What occurs if the Buyer contracts to purchase a property within the holdover period?

    <p>The Broker's compensation may still be due</p> Signup and view all the answers

    What must the Broker do when there is a controversy regarding earnest money?

    <p>Interplead if required written instructions are not received from both parties</p> Signup and view all the answers

    What should occur if any party defaults on the contract?

    <p>The non-defaulting party may recover damages and enforce the contract</p> Signup and view all the answers

    What type of discrimination is prohibited in the agreements and covenants?

    <p>Discrimination based on race, color, sex, national origin, and other specified characteristics</p> Signup and view all the answers

    What is the Buyer's obligation regarding the Broker's compensation if they receive partial payment from the Seller or Listing Broker?

    <p>The Buyer must cover the balance of the Broker's commission</p> Signup and view all the answers

    Which of the following statements is true about the Broker's verification of the Buyer's financial capabilities?

    <p>The Broker has no duty to independently verify the accuracy of Buyer’s statements</p> Signup and view all the answers

    The Broker has the authority to negotiate the terms of property acquisition on behalf of the Buyer.

    <p>True</p> Signup and view all the answers

    The Buyer is allowed to conduct negotiations for Property independently without involving the Broker.

    <p>False</p> Signup and view all the answers

    The Intermediary role is the same as that of an agent according to the contract terms.

    <p>False</p> Signup and view all the answers

    The Buyer must inform the Broker about all properties of interest during the contract duration.

    <p>True</p> Signup and view all the answers

    The Broker must promote the Buyer's interests with loyalty and good faith.

    <p>True</p> Signup and view all the answers

    Study Notes

    Parties And Property

    • Buyer enters into an exclusive agency agreement with Broker to assist in acquiring real estate, either through lease or purchase, in a specific geographic area.
    • The property type is defined, and the Buyer specifies a price range they're interested in.

    Exclusive Buyer Agency Contract

    • Buyer agrees to conduct all negotiation for the Property through Broker.
    • Buyer must disclose any properties of interest to the Broker during the contract period.

    Duration Of Contract

    • Broker's representation begins on a specific date and time and continues until the purchase of the property is complete, or the expiration of the contract period.

    Broker’s Representations And Services

    • Broker is acting as Buyer's agent unless Buyer wants to submit an offer on property Broker has listed for the Seller.
    • Broker must make reasonable efforts to find suitable property for Buyer, and promote Buyer's interests with good faith and loyalty.
    • Broker must disclose any interest they hold in any property the Buyer selects.

    Broker's Compensation

    • Buyer agrees to pay Broker a specified percentage of the purchase price or a set dollar amount.
    • Broker is authorized to receive compensation from the Listing Broker or the Seller, but Buyer is ultimately responsible for the balance.
    • Broker's compensation is due upon the purchase of the Property or within seven days of a written demand if the Buyer contracts to purchase any Property within a designated period after the contract expires.

    Costs Of Services From Outside Sources

    • Broker will not obtain or order products or services from outside sources without Buyer's written authorization and agreement to pay for those services.

    Defaults, Remedies And Attorney’s Fees

    • Time is of the essence in this contract, and any party that fails to meet its obligations may be in default.
    • If a party defaults, the non-defaulting party can treat the contract as breached and seek damages.
    • In the event of a default, the defaulting party must pay attorney's fees and costs incurred by the non-defaulting party.

    Agreements And Covenants

    • The parties agree not to discriminate against potential sellers or landlords based on specified characteristics.
    • Broker must inform prospective sellers that they are acting as an agent for the Buyer and are not representing the Seller.

    Additional Provisions

    • This contract may be modified only by a writing signed and executed by all parties.

    Parties & Property

    • Buyer appoints Broker as exclusive agent to represent them in acquiring real property.
    • The property is located in a specific area and is of a particular type (e.g., commercial, residential, agricultural).

    Exclusive Buyer Agency Contract

    • Buyer must conduct all negotiations for the property exclusively through Broker.
    • Buyer is required to inform Broker about all properties they are interested in.

    Duration of Contract

    • Broker's authority as Buyer's Agent begins on a specific date and time.
    • The contract lasts until the earlier of:
      • The specified date and time.
      • The completion of the acquisition of the Property.

    Price

    • Buyer requests to be shown properties within a price range or for a specific amount.

    Broker's Representation & Services

    • Broker will use reasonable skill and care to locate the Property and promote Buyer's interests with loyalty and fidelity.
    • Broker will provide Buyer with information on properties listed in the Multiple Listing Service (MLS) and properties they have knowledge of.
    • Broker will assist in obtaining Seller acceptance of offers and in completing the transaction.

    Broker & Salespeople as Buyer's Agents

    • Unless otherwise agreed upon, Broker and their salespeople act as Buyer's Agents.
    • Broker can change to an Intermediary ("Non-Agency") relationship with Buyer and Seller if both parties agree in writing.

    Broker's Compensation

    • Buyer agrees to pay a specific percentage of the purchase price or a fixed amount as compensation to Broker.
    • Broker's compensation is typically paid upon closing of the transaction but can be paid by the Listing Broker or Seller.
    • Broker's compensation is due upon either:
      • Buyer purchasing the Property during the contract duration.
      • Written demand from Broker to Buyer within seven days if Buyer contracts to purchase Property within a specified "Holdover Period".

    Costs of Services from Outside Sources

    • Broker will not obtain services from outside sources without prior written authorization from Buyer and agreement to pay for the services.

    Defaults, Remedies & Attorney's Fees

    • Time is of the essence, and any party failing to comply with the contract terms will be in default.
    • The non-defaulting party can recover damages and attorney's fees from the defaulting party.
    • Broker may hold earnest money or interplead all parties if they receive no written instructions from Buyer and Seller.

    Agreements & Covenants

    • The parties agree not to unlawfully discriminate against any prospective seller or landlord based on race, color, sex, national origin, familial status, physical or mental handicap, or religion.
    • Broker will inform prospective sellers or their brokers that they are acting as Buyer's agent.

    Acknowledgments

    • The parties acknowledge receipt of a signed copy of the contract.
    • There are no oral agreements modifying the terms of the contract, and any modifications must be in writing and signed by all parties.

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    Description

    This quiz covers the key aspects of exclusive buyer agency agreements, including the roles and responsibilities of the broker and buyer. Understand the importance of contract duration and the broker's duty to represent the buyer's interests in transactions.

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