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 (D)</p> Signup and view all the answers

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

<p>Nothing (A)</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. (B)</p> Signup and view all the answers

What is principal in the context of a loan?

<p>The actual amount borrowed. (D)</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. (C)</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 (D)</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) (C)</p> Signup and view all the answers

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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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