One reason why real estate agent licensing should be made more stringent is so agents, and their brokers, and their clients, don’t end up in court. Another reason is that laws vary from state to state — so if you think you know it all in your state and decide to move to another state, you may be setting yourself up (and your client) for a major screwing.
Any professional who favors lower licensing standards, or heaven forbid, no licensing at all for real estate agents (the P.T. Barnum school of marketing) is a dumbass …. legally speaking.
Here’s a little quiz I stumbled upon. Test your knowledge. (Consumers may want to use this test on that fellow parading around with all those designations to make sure he wasn’t sleeping during class. )
1. A broker purchases a house listed with his company and, without the seller’s knowledge, immediately resells it for a profit. This is an example of:
a. undisclosed dual agency
b. breach of fiduciary duty
c. lack of reasonable care and diligence
d. free commerce
2. Seller financing question. Seller thought she held a first mortgage on the house you sold for her. Turns out she was holding a second mortgage (not a first, which was with the buyer’s bank). The buyer defaults in his payments and there is a foreclosure sale. The foreclosure sale proceeds are enough to pay the first mortgage but are insufficient to pay the seller’s second mortgage. Under these facts:
a. you may be liable for failing to advise the seller that her financing did not have priority
b . you are not liable because the loss was due to the buyer’s default
c. you are not liable for the seller’s mistake
d. you are not liable under both b and c.
3. Buyer claims that you, as the selling agent, failed to disclose that the septic system was undersized for her family, which you knew had 10 people in it (was this in Utah?). Under these facts:
a. you may be liable to the buyer for not recommending a septic test, knowing the size of the buyer’s family.
b. you are not liable for the seller’s failure to disclose the septic system capacity
c. you are not liable because the buyer did not ask you about the septic system
d. you are not liable because you don’t know what a septic system is– you just moved from a state that only has sewer systems
4. Name 2 ways an agency relationship may be created
a. express or executory
b. executory or implied contract
c. express or implied contract
d. by a straw man argument or fallacy ad hominem
5. When you listed a house, you suspected defects in the heating and a/c unit. However, the seller said there were no problems with the unit. When asked by the buyer you answer “the unit works fine and has no problems”. If it turns out there was a defect and the buyer sues, who is liable?
a. only the seller for not disclosing the material defect
b. only you for passing on wrong information
c. the seller for failing to disclose a material defect and you for misrepresentation
d. neither you nor the seller are liable because it was an innocent mistake.
6. A buyer wants to see a specific house she saw on Zillow (it was listed for sale by a mortgage guy who saw the yard sign and decided to put his contact info on the home, which had not been claimed by the elderly owner, who did not even own a computer). Despite the ridiculously low zestimate, you believe the house is substantially more than the buyer can finance. Under these facts:
a. advise the buyer she does not qualify for the home based on her prequalification work sheet, and document your file
b. do not show the Zillow listing. Instead, provide a listing of other homes you think are within the buyer’s price range
c. show the buyer the house, go through the prequalification work sheet with her again, and document your file.
d. tell her Zillow is bunk but since they let anyone list a house for sale, even if it is not their listing & the owner objects, this is free marketing for agents. And since free marketing is a good thing, Zillow is a fine company (heck, you might invite them to your next seminar)
7. You get a listing for a house in a flood prone area. The seller assures you the house has never had a flooding related problem. Under these facts, you should
a. say nothing and your ass is covered
b. tell buyers there has been some flood problems in the area but this house has not had any
c. independently verify if the house is in a flood zone. If it is, tell buyers the house is in a flood zone
d. you think flood zones are a conspiracy by the government to reduce the sale of homes in those areas, increase the cost of homes in non-flood zones, and only mental midgets should fear a little water in the basement. (you should also ask for a non-refundable retainer to list any house in a flood zone.)
8. A notice concerning lead based paint hazards is required for
a. any structure built prior to 1978
b. any residence built prior to 1978
c. any commercial structure or residence built before 1978
d. lead based paint hazard notices are another government intrusion into the business affairs of real estate agents. So what if a few unsupervised kids eat paint chips, the government has no right to give us this extra paper work. NAR must be behind this.
Good luck— and no cheating off your neighbor. The answers to this quiz (and the folks who dreamed it up) will be given sometime next week.
Related Posts:
Lightbulbs and Licensing: A Dim Bulbs Guide to Consumer Protection
Real Estate Agent Licensing is No Laughing Matter (a Selltoon post)
Technorati Tags: real estate licensing, real estate laws, quiz, dumbasses
1. B
2. This isn’t a clear question. What the seller ‘thinks’ is irrelevant IF you’ve clearly advised and that advice is in writing that the seller has signed. At the time of the sale, the seller may have understood she was in 2nd position and then later thought she was in first position. If there is nothing in writing showing what you advised the seller, than A is a possibility. If there is clear evidence that the seller was advised appropriately, then D is right.
3. A
4. Very specific to the state. Idaho does not recognize implied contract. The key to your question is ‘created’. An agency relationship is CREATED via an express contract in the state of Idaho (which can then be an executory contract after it is created).
5. I’m sure the answer you are looking for is C, but what is key here is ’suspect’. The agent doesn’t live in the house and is not a professional HVAC person. In my opinion, the right answer is A. Now, if the ‘defect’ was clear and noticable to an untrained HVAC person, that is a different story.
However, should I have a situation that I suspected something and the seller denied it, I would either require a home inspection upon taking the listing or refuse the listing if the seller refuses.
6. Is extremely confusing. #1, in the state of Idaho, unless that ‘mortgage guy’ as an Idaho real estate license, he can’t list the home. #2 it’s not clear if the yard sign is a FSBO sign or a real estate agent. I’d do some research and then go with C.
7. C
8. C
9. B
Something tells me “D” was never a good answer.
The fact that a high school diploma, a 45 hour class, and a simple test is all that is required to be a real estate agent is insane. When I got into real estate, I had no idea of all the legal ramifications attached to everything I say or do. This is a very complex field, and we are dealing with peoples most important investment. They are increasing the appraisal educational requirements, so why not to the same for real estate agents.
Christina
Thanks for taking the quiz.
Sorry I made 6 confusing by throwing Zillow into the question,when the house the buyer wanted to see could have come from anywhere, including a yard sign.
Zillow will allow ANYONE to list a home is for sale even if it is not theirs to market & even if the owner has no idea it is being done– Zillow calls this “coffee house” logic– that is, if the mortgage guy could tell folks in the coffee house that he saw 25 Main Street is for sale, he can do the same on Zillow (plus put his business card on the listing, like some kind of reward for tipping folks to the listing). IMO, it is a clever way around the homeowner (and listing agent’s) right to choose where (and how) a property is marketed. IMO, Zillow is not concerned with these marketing rights — so long as they can get someone to put a for sale sign on their listings, they are happy.
Joseph - Oh ok - thanks - I get what you are saying now. I had heard that about Zillow but just didn’t keep it in the ‘must know’ part of my brain!!
I should have just answered D to all of them
Joe -
Please correct yourself. As you well know you are mischaracterizing the posting and reporting features on Zillow. These are distinct features yet you insist on conflating them despite my numerous corrections of your numerous inaccurate postings. So, here we go again.
It’s incorrect to suggest that anyone can “list”, “market” or “advertise” any listing on Zillow. Listing agents and owners can only “list”, “market” or “advertise” their own listings on Zillow.
There is an entirely separate feature that allows the community to report THAT a home is for sale but that feature does NOT fascilitate “advertising”, “marketing” or “listing” the listing - the user merely reports the fact that the home is for sale and the sales price.
Hi David
Oh yes, the idea that the “community” (in the form of one person)is “reporting” the home is for sale at a given price does not equal “marketing” “advertising” or “listing” a home for sale. I disagree with that characterization. It is my opinion that this IS marketing, advertising and listing a home for sale because it attracts buyers/offers/inquiries– is that not the purpose of advertising? You, and others, are free to disagree with my opinion.
IMO, this “community reporting” is Zillow zemantics for the purpose of doing an “end around” the prohibition of advertsing another’s listing. Clever. But it’s still advertising in my book. It will take a legal case to convince me otherwise. Until then, you know where I stand.
But there is more to the practice I find objectionable– the denial of the homeowner’s right to say “I do not want my home listed as for sale on Zillow”. This could be simply a matter of wanting a “private sale”. If the seller were to object, Zillow, as far as I know (and please correct me if i’m wrong) will NOT prevent the third party from putting what amounts to a “for sale” sign on the home.
And let me ask you this. If it is merely reporting, why is it necessary to ask the reporter attach their contact info– this is an answer i’d love to hear but expect you not to answer. And the reason you will not answer is, IMO, because it looks like the third party is rewarded with free advertising on the home simply by “reporting” it for sale.
If it walks like an ad and quacks like an ad, it’s probably an ad.
Joe, it’s frustrating you haven’t bothered to research this. Contact details are NOT required when reporting a home for sale - where’d you get that? Only agents and owners who advertise their homes for sale on the site are asked for contact details - you really have these features muddled up. Seriously, Joe, considering the time you’ve wasted arguing this issue one would think you’d at least have tried out these features on Zillow by now.
Only an agent / owner can advertise a home for sale on the site. It’s free. You can post up to 50 photo’s / links to virtual tours & agents get free attribution on their listings (photo’s / contact details etc.). Again, this feature is separate from the feature that allows (any)one to report that a home is on the market - something buyers’ agents could consider doing, especially with the foreclosure inventory currently on the market.
Joe. Please. Check it out.
I consider this a debate not an argument. Again, semantics.
Isn’t it a fact that contact details ARE permited when you list/report a home for sale? And isn’t it a fact that contact info is provided to the viewer of the listed/reported home? (Gee I sound like Perry Mason)
I have tried out the feature (when it first launced and again today)
My photo and link to my profile (and contact info) is indicated just under the Home Info in a section called “Reported for sale”
If you click my name, it links to my “Contact Information” (that’s Zillow’s label).
http://blog.sellsiusrealestate.com/wp-content/zillow-profile.gif
Yes, I feel your frustration David.
I have been frustrated by your failure to address issues/questions contained in this post/comments:
http://tinyurl.com/2dvcxf
If you can just answer this one question (please): If a homeowner objects to the listing/reporting of their home for sale because they want a private sale, will Zillow honor that homeowner’s request and remove the reporting/listing? My guess is NO.