Neighboring firms agree that leads in one part of town will all be sent to only one of the firms. What type of antitrust violation is this?
Group boycotting
Market allocation
Price fixing
Tie-in arrangements
As part of its penalty for violating antitrust law, Homes4Cheap, Inc. has been ordered to undergo court-ordered supervision. How long can this supervision last?
10 years
One month
One week
One year
Kerry is the Limitless Realty broker. She has a meeting with her licensees and states, “From now on, we will not charge less than a 5% listing fee.” Is this an antitrust violation?
No
Yes, because it’s group boycotting
Yes, because it’s market allocation
Yes, because it’s price fixing
Why were activities that encourage monopolies to form made illegal?
They are profit-driven.
They increase advertising expenses.
They limit consumer choice.
They reduce advertising expenses.
Which of the following is an example of price fixing?
A brokerage requires all licensees to offer a fair cooperative brokerage fee.
Three brokerages agree to purchase office supplies together to obtain a bulk discount.
Three brokerages determine a standard commission rate.
Three brokerages discuss the compensation of associated independent contractor licensees.
Where can an agent report an antitrust violation?
Citizens Complaint Center of the DOJ’s Antitrust Division
The Department of Housing and Urban Development
The Department of State
The Federal Bureau of Investigation
What type of antitrust violation is an agreement between competitors to establish or adhere to uniform price discounts?
Group boycotting
Market allocation
Price fixing
Tie-in arrangement
Which type of antitrust violation occurs when real estate firms agree to divide their market so they don’t compete with one another?
Group boycotting
Market allocation
Price fixing
Tie-in arrangements
What’s market allocation?
Agreeing with a competing firm on how to split a market
Deciding to own the market with aggressive marketing strategies
Deciding which clients you will work with, and which you won’t
Partnering with a branch office to dominate a market
What’s the longest sentence someone can serve in prison for an antitrust violation?
10 years
30 days
Antitrust violations do not lead to prison sentences, merely fines.
One year
Which of the following is a possible outcome if a brokerage is found guilty of violating antitrust law?
The brokerage may be required to place 10% of its profits in the Sherman Act Foundation for a period of three years.
The brokerage may have to sell its assets to its nearest competitor at below-market rates.
The brokerage may have to undergo court-ordered supervision for up to 10 years.
The brokerage’s listing fees may be limited to 80% of its former charges.
Licensees from different firms are tired of competing for the same listings. They divide up the city into territories so they don’t step on each other’s toes. What type of antitrust violation is this?
Group boycotting
Market allocation
Price fixing
Tie-in arrangements
Which of the following is an example of illegal market allocation?
One brokerage maps out a plan to dominate the eastern part of the city.
Two brokerages agree to divide the city in half, each working its own half.
Two brokerages each discuss with their licensees where the most lucrative deals can be found.
Two brokerages each try to win the million-dollar listings.
Which of these has examples of antitrust violations common to real estate?
Fraud, concealment, and misrepresentation
Profiteering, racketeering, and domineering
Puffery, hyperbole, and exaggeration
Tie-in arrangements, market allocation agreements, and group boycotting
Two firms charge the same commission rates. For this to be price fixing, what must occur?
An agreement between competing firms to standardize commission rates
An agreement between individual licensees in a single firm to fix commission rates
An offer of a cooperating brokerage commission
A public announcement of commission rates charged
A licensee tells a potential client that all licensees in the area charge a 2% commission fee. What antitrust violation does this imply?
A tie-in arrangement
Group boycotting
Market allocation
Price fixing
The Martin Realty broker met with the Able Realty broker. As competitors, they agreed to divide the city: Martin Realty would take the east side, Able, the west. In that way, they wouldn’t be stepping on one another’s toes. Is this legal?
No; this is an example of market allocation
No; this is an example of price fixing
Yes, as long as there is enough business for both of them
Yes, because they’ve left the north and south available for others
In certain cases, antitrust violators may be subject to court-ordered supervision. How long can this supervision last?
10 years
Five years
One month
One year
Which of the following is a true statement about federal antitrust penalties?
Real estate brokers are immune from prosecution.
The first offense results in a warning only.
The maximum fine may be increased to twice the gain or loss involved.
They cannot involve prison sentencing.
What type of antitrust violation is an agreement between competitors to eliminate discounts to certain types of customers?
Group boycotting
Market allocation
Price fixing
Tie-in arrangement
A licensee is found guilty of price fixing. What did the licensee do?
Agreed with a competitor to charge a specific amount.
Charged a fixed commission price her broker asked her to use.
Charged a separate co-op fee for different brokerages.
Deviated from the standard commission rate.
If competitors agree to do this, what action is an antitrust violation?
Increase choices for consumers
Increase the number of competitors in the field
Join a professional association
Restrict choices for consumers
Three brokers meet and agree that all of their listing contracts will have one-year terms. Of which type of antitrust violation is this an example?
Group boycotting
Market allocation
Price fixing
Tie-in arrangement
Two large local brokerage firms agreed to lower their commission rates to the same amount—approximately 1% less than any other firm in town. What about this situation makes it a per se antitrust violation?
The agreement between the two firms
The dollar amount the competitors lost
The marketing efforts the two firms used
The size of the two brokerage firms
Licensee Jamie committed a per se antitrust violation. Which of the following is TRUE?
Jamie’s competitor will be forced out of business.
Jamie’s defense will not be allowed in court.
The violation must have involved market allocation.
The violation must have involved price fixing.
What’s involved with the antitrust violation called market allocation?
Agreeing with a competitor to divvy up a market
Colluding on price with your competitors
Deciding what commission rate to charge, based on location
Lending only in specific areas
Five brokerage firms charge approximately the same listing commission and pay approximately the same cooperating commission to the selling broker. The commission splits within each firm are also similar. Is this an antitrust violation?
No. The similarities between commission rates may be suspect, but the similarity between commission splits doesn’t matter.
Not necessarily. The fact that the firms’ commission rates and splits are similar doesn’t necessarily mean they agreed to fix those values.
Yes. The fact that the firm’s commission rates and splits are so similar is a restraint of trade.
Yes. The firms’ internal commission splits can be the same, but they can’t all charge the same commission rate.
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How is the broker’s commission usually paid out?
All brokers are paid through the joint fund held by the buyer’s lender representative.
Escrow creates checks for both agents’ brokerages, which in turn cut checks to the agents for their commission split.
Only one commission check is cut based on the commission statement and is given to the seller’s representative and disbursed from that brokerage to the cooperating broker.
The licensee representing the seller and the licensee representing the buyer each receive separate checks at the time of the closing.
Which option defines an acceptable fee according to the Real Estate Settlement Procedures Act?
Any fee for nominal or duplicative work performed by the settlement service provider.
Any fee that exceeds the market value of the service being provided by the settlement service provider.
Any flat fee based on actual services disclosed and performed for a client, regardless of the success of the transaction, with the settlement service provider.
Any percentage-based fee that is split with the settlement service provider.
Which of these laws prohibits kickback payments and other fees that drive up consumers’ settlement costs?
Clayton Act
Fair Housing Act
RESPA Section 8
Sherman Act
When is an administrative fee acceptable, according to RESPA?
When it is a required service offered by an affiliated business.
When it is split with the settlement service provider.
When it is undisclosed.
When you are the only one receiving the fee and have actually performed some service in addition to the one provided by the SSP.
What does a broker have to do in order to maintain their right to place a lien on residential property?
Disclose the right in the brokerage agreement
Notify the county clerk of the lien right
Notify the court of their right to lien on the property
Pay a $25 lien fee to the client at the time of signing a brokerage agreement
What must be done for a fee to be considered acceptable under RESPA?
It can only be split 10% with the settlement service provider.
It must adhere to the 80/20 rule.
It must be disclosed to the client.
It must only be between affiliated businesses.
What’s considered a kickback according to the Real Estate Settlement Procedures Act?
Any fee paid for actual services rendered
Any item of value received in return for referring business to a settlement service provider (SSP)
Educational material provided without receiving a referral in exchange
The broker’s commission
Which of the following could you accept from a mortgage company?
$10 tickets to the movies
Nominal promotional materials unrelated to referrals
Rebates on future services
Referral fees for sending it clients
Which of the following describes how brokers/licensees go about obtaining their commission?
Providing the affidavit of title at the closing
Providing the attorney or closing agent with a broker statement that shows how much each broker should receive
Receiving a check directly from their client
Recording the deed in the public records
How may a sales associate receive a commission check directly?
By obtaining permission from the seller and the closing agent
By obtaining written authorization from their broker for each transaction
By setting up a direct deposit with the closing agent to avoid handling the funds
Only through the client
Why would you not be able to accept tickets in exchange for referring business to a settlement service provider?
All exchanges for referral business must be done with cash.
If the tickets cost more than $150, you can’t accept them.
It would be considered a kickback.
Tickets can’t be evenly split between you and the service provider, so they can’t be accepted.
The Commercial Real Estate Sales Lien Act allows brokers to place a lien on ______ in order to collect unpaid commission.
The buyer’s personal property
The commercial property itself
The seller/owner’s net profits from the transaction
The seller/owner’s personal properties
Chaz represents the buyer in a transaction that has just closed. How will he typically be paid?
He will be paid at closing by cashier’s check from the buyer.
He will be paid at closing by cashier’s check from the seller.
He will be paid by the buyer directly, or, if there is a cooperative compensation in place, by the seller directly.
His brokerage will receive a commission check from closing; his broker will compensate Chaz according to the terms of their agreement.
How would you avoid violating RESPA when referring clients to your affiliated settlement service business?
You can only receive payment for the referral of the client to the affiliated business and not any related to the return earned from owning the business.
You must disclose the relationship and cannot require the client to use the affiliated business.
You must not disclose the relationship, as it could bias the client.
You must require the client to use either both services or none.
What conditions must be met to avoid violating RESPA when receiving promotional or educational materials from a mortgage company or other settlement service provider?
The materials are given as compensation for organizing an event the SSP is not publicly sponsoring.
The materials are not given in exchange for a referral and do not defray any cost you would normally have to pay.
The materials cannot be received at all, according to RESPA.
The materials must exceed the value of any service the SSP offers.
Which of the following is considered an unearned fee?
A fee for actual work done
A fee for nominal or duplicative work
A fee for work done set at a flat dollar amount
Any fee paid to a federally backed institution
Under RESPA, which of these would be considered a kickback?
A mortgage company splits the cost of a full-page ad equally with you, and you each take half of the ad space.
A mortgage lender attends a client appreciation party you’re hosting for your past and current clients and gives out his business cards.
A title insurance company buys you dinner to thank you for referring a client.
You receive tickets from a satisfied client you helped with a referral to a local mortgage lender.