Question

Which of the following acts by a real estate broker would not be a violation of the real estate law?

Selections

A. Taking a net listing

B. Failure to put a definite termination date in an exclusive listing

C. Failure to give a copy of the contract to the person who signed it at the time they sign

D. Taking an option on a property and collecting a commission on that option 

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Answer: A

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5 Keys Summary

• Taking a Net Listing is generally not a violation of Real Estate Law in California, provided the broker adheres strictly to disclosure rules.

• To avoid a violation, the broker must provide the seller with a full disclosure of all material facts, including the property’s value and the precise amount of compensation (profit) the broker will receive from the sale, and obtain consent.

• Conversely, the failure to put a definite termination date in an exclusive listing agreement is explicitly listed as a grounds for disciplinary action against a broker’s license.

• Failure to deliver a copy of the contract to the person signing it at the time it is signed is a direct violation of the Real Estate Law.

• A broker taking an option on a property while listing it (listing-option) and collecting a commission or profit requires full disclosure of the profit amount and written consent from the principal before the option is exercised; failure to do so constitutes a secret profit violation.

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