The Basics

Question 1

Errors and Omissions Insurance

Answer 1

Professional liability insurance. Protects people against mistakes made by other people.

Example: An employing broker losing 1000 offer deposit for a client, then causing them to lose 5000 due to identity theft.

Question 2

General Liability Insurance

Answer 2

Covers personal property or property damage that might occur on showings or open houses.
Example: Real estate agent breaking an expensive Tiffany lamp at an open house

Question 3

If you previously held a license what must you do to reinstate it?

Answer 3

1. Write a letter to the Board asking them to reinstate your license
2. Pay a fee
3. Take continuing education

Question 4

Who makes up the Board of Registration of Real Estate Brokers & Salesperson?

Answer 4

3 brokers - (with at least 7yrs experience)
2 unlicensed brokers (normal people)
-One is appointed the chairperson
-All have a five-year unpaid term

Question 5

The principal in a real estate transaction is the:

Answer 5

Client (the person who hires the agent in the transaction and to whom the agent owes fiduciary duties)

Question 6

A real estate salesperson to their client is:

Answer 6

subagent

Question 7

W-2 Employee

Answer 7

Salaried, hourly pay
Employers control what and when you do tasks
Commercial agents, real estate assistant or administration assistant

Question 8

1099

Answer 8

An employee who is paid by the job or commission

sets own schedule can turn down work
considered self employed

Question 9

Why do we have licenses

Answer 9

To protect consumers

if exam talks about why government does something = to protect consumer

Question 10

In addition to state laws

Answer 10

your subject to federal law

Question 11

Salesperson License: main points

Answer 11

• Must affiliate with a broker to practice real estate
• May not accept direct client payments
• (MA) must be 18yrs od, take 40 hr course and pay a fee

Question 12

Broker’s License: main points

Answer 12

• can do everything a real estate salesperson can do, plus may operate indecently
• Accept direct client payments, and handle escrow funds (client deposits)
• Employing brokers or brokers of record have escrow fund handling authority
• Associate brokers or broker associates (those brokers who chose to work under another broker) are not permitted to handle escrow accounts
• Must have 3 years of experience as a salesperson, take 40h class additionally, be bound for $5,000 and pay a fee

Question 13

Associate broker or broker’s associates

Answer 13

Those with brokers licensees who choose to work under another broker
Not permitted to handle escrow accounts

Also known as subagents

Question 14

Employing brokers or brokers of record

Answer 14

Can accept direct client payments, and handle escrow funds

Question 15

REALTORs or (NAR)

Answer 15

Optional membership
largest trade association and one of the most powerful lobbying groups in the US
(MA -optional and can still sell real estate without it)

• Includes people in different associations in real estate like commercial and residential, property managers, appraisers
• Office needs to have all agents associated with REALTOR if it is participating, failure by an agent to become a member results in offices Designated REALTOR

Question 16

Basics of Real Estate Transaction

Answer 16

1. Hired as a listing agent by a seller
2. Prepare property for sale - (highering photographer, advertising, etc.)
3. Listing property on MLS, Zillow, online web
4. Showing to buyer’s, who contact an agent to see property
5. Qualifying buyers will answer questions about needs and timeframe, if they are preapproved, questions ensure it’s a good match.
6. Preapproval
7. Buyer makes an offer
8. Sellers accept it and Purchase and Sale Contract drafted (must be signed within7-14 days)
9. Settlement and Closing when financing and inspections are complete final sale takes place
10. Agents are paid commission

Question 17

Professional Liability Insurance

Answer 17

Protection against the inevitable human mistakes brokers and salesperson make while providing real estate services to clients