Chapter 11 Section 5

Question 1

showing agreement

Answer 1

-a licensee can use a showing agreement to obtain loyalty from a buyer
-in the showing agreement, the buyer agrees that if they purchase a home shown to them by a licensee, they will make that purchase through the licensee

Question 2

exclusive representation

Answer 2

-this agreement establishes an exclusive representation with the buyer, provides for a retainer fee, and contains a limitation of the licensee’s liability with respect to tax, legal, environmental, engineering, or other specialized advice

Question 3

protection period

Answer 3

-this agreement also includes a protection period whereby the buyer still owes compensation within a certain number of days after the agreement terminates if they purchase a property that the licensee introduced to them during the agreement term

Question 4

option contracts

Answer 4

-an option contract is a right to buy a property during a specified period of time at a specified price
-the right cannot be obtained without some consideration given

Question 5

exercising an option

Answer 5

-once the optionee notifies the optionor of the intention to proceed with the purchase, the option becomes a purchase and sale contract which is binding on both parties

Question 6

requirements for option contracts

Answer 6

-in writing
-price and terms
-length of time
-legal description
-consideration

Question 7

option contracts as listings

Answer 7

-real estate licensees are allowed to obtain options but must also pay a definite valuable consideration, and addition, divest themselves of their identity as licensees