Real Estate Broker Rights Quiz
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Questions and Answers

Which of the following is true regarding Rick Champion and Jill Avery's situation?

  • Rick is entitled to 50% of his commission even though the property did not sell and may sue Jill if necessary.
  • Rick is entitled to collect his full commission based on the accepted offer price. (correct)
  • Rick is entitled to keep the buyer's deposit.
  • Rick is not entitled to his commission since the transaction never closed.

    • If Jill withdraws her acceptance of the offer, what happens to Rick's commission?

  • Rick is not entitled to his commission. (correct)
  • Rick is still entitled to collect his full commission.
  • Rick is entitled to 50% of his commission.
  • Rick is entitled to keep the buyer's deposit.

    • What is the percentage of commission that Rick is entitled to if the property does not sell?

  • 25%
  • 100%
  • 50% (correct)
  • 75%

    • Can Rick sue Jill to collect his commission if the property does not sell?

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

    What is Rick entitled to keep if Jill withdraws her acceptance of the offer?

    <p>Nothing</p> Signup and view all the answers

    Which of the following is true about equity in a home?

    <p>Equity is the difference between a home's value and the debt owed on it.</p> Signup and view all the answers

    What is principal in the context of a loan?

    <p>The actual amount borrowed.</p> Signup and view all the answers

    What is interest in the context of a loan?

    <p>The cost of borrowing money, stated as an annual percentage.</p> Signup and view all the answers

    How is the total amount of interest on a loan calculated?

    <p>(monthly payment × total payment) - original loan value</p> Signup and view all the answers

    What is the formula to calculate per diem interest on a loan?

    <p>Amount of annual interest ÷ number of days in a year (360 in a statutory year; 365 in a calendar year)</p> Signup and view all the answers

    Study Notes

    Rick Champion and Jill Avery's Situation

    • If Jill withdraws her acceptance of the offer, Rick's commission is forfeited.

    Commission Entitlement

    • Rick is entitled to a percentage of commission if the property sells, but if the property does not sell, he is entitled to 0% commission.
    • Rick cannot sue Jill to collect his commission if the property does not sell.

    Withdrawal of Acceptance

    • If Jill withdraws her acceptance of the offer, Rick is entitled to keep the earnest money.

    Equity in a Home

    • Equity in a home refers to the difference between the market value of the property and the outstanding loan balance.

    Loan Components

    • Principal in the context of a loan refers to the amount borrowed.

    • Interest in the context of a loan refers to the cost of borrowing the principal amount.

    Calculating Interest

    • The total amount of interest on a loan is calculated by multiplying the principal amount by the interest rate over a specific period.

    Per Diem Interest Formula

    • The formula to calculate per diem interest on a loan is: (Outstanding Balance x Interest Rate) / 365 (or 366 in a leap year).

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    Description

    Test your knowledge on the rights of brokers and clients in real estate transactions. Explore a scenario where a broker finds a buyer for a seller's home, only for the seller to later change their mind. Determine the correct statement regarding the broker's entitlement to commission.

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