A Real Estate Business MCQ Quiz

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| By Sseveland

Sseveland

Community Contributor

Quizzes Created: 21 | Total Attempts: 27,938

Questions: 12 | Attempts: 354 | Updated: Mar 21, 2023

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Questions and Answers

1.

Real estate brokerage can be best defined as the business process of bringing together the parties who are interested in completing a real estate transaction.
- A.
  
  True
- B.
  
  False
Correct Answer
A. True

Explanation
Real estate brokerage involves the facilitation of real estate transactions by bringing together interested parties. This includes connecting buyers with sellers, landlords with tenants, and facilitating the necessary paperwork and negotiations for a successful transaction. Therefore, the statement that real estate brokerage can be best defined as the business process of bringing together interested parties in a real estate transaction is true.

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2.

According to Pennsylvania law, commission fees for brokers and salespersons are set by the Pennsylvania Real Estate Commission at 6% of the selling price of the property.
- A.
  
  True
- B.
  
  False
Correct Answer
B. False

Explanation
The fee is negotiable between the broker and the client or consumer.

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3.

In an arrangement between the office broker and salespersons in that office, the office broker would not receive a percentage of the commission on a sales transaction, but would instead receive a flat fee per sales agent for any given month, may be best described as a 100% Commission Plan. Under this plan, the sales agent would be responsible for such expenses as advertising, yard signs, and most other expenses.
- A.
  
  True
- B.
  
  False
Correct Answer
A. True

Explanation
This statement is true because in a 100% Commission Plan, the office broker does not receive a percentage of the commission on sales transactions. Instead, they receive a flat fee per sales agent for any given month. This means that the sales agent is responsible for covering expenses such as advertising, yard signs, and most other expenses.

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4.

Independent contractor is a term used by the United States Internal Revenue Service to refer to those persons in the business world who operate autonomously from a traditional employer. Most real estate agents are classified as independent contractors.
- A.
  
  True
- B.
  
  False
Correct Answer
A. True

Explanation
The explanation for the correct answer, True, is that the term "independent contractor" is used by the United States Internal Revenue Service to describe individuals who work independently and are not considered employees of a traditional employer. Since most real estate agents operate autonomously and are not directly employed by a real estate company, they are typically classified as independent contractors. Therefore, the statement is true.

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5.

The McCain-Weldon Antitrust Act of 1990 required that real estate offices act independently in establishing its own office fees and commissions. This could also include collusion or conspiracy among real estate businesses to control the duration of any real estate contract or the type of compensation to agents.
- A.
  
  True
- B.
  
  False
Correct Answer
B. False

Explanation
It was the Sherman Antitrust Act of 1890.

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6.

An example of "Special Use" category of real estate would be shore and mountain vacation property, resort time-share ownership, condos, etc.
- A.
  
  True
- B.
  
  False
Correct Answer
B. False

Explanation
The "Special Use" category would include government owned land and property, churches, synagogues, schools, cemeteries, and libraries.

Shore and mountain vacation property, time-share, etc. would be included in the Vacation/Recreation category.

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7.

Currently all real estate licenses in Pennsylvania are issued by the National Association of Realtors.
- A.
  
  True
- B.
  
  False
Correct Answer
B. False

Explanation
All real estate licenses in Pennsylvania are issued by the Pennsylvania State Real Estate Commission.

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8.

After a Pennsylvania Real Estate Salesperson license is issued the salesperson is then officially known as a REALTOR.
- A.
  
  True
- B.
  
  False
Correct Answer
B. False

Explanation
A salesperson becomes a REALTOR by obtaining membership in the National Assocation of REALTORS, which asks that its members subscribe to a code of ethical standards. NAR also promotes courses, information and services to maximize the professionalism of its members.

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9.

Supply and demand are two initial economic factors that affect real estate transactions.
- A.
  
  True
- B.
  
  False
Correct Answer
A. True

Explanation
Supply and demand are indeed two initial economic factors that have a significant impact on real estate transactions. The supply of available properties and the demand from buyers determine the prices and market conditions in the real estate industry. When there is high demand and limited supply, prices tend to rise, while low demand and excess supply can lead to price decreases. Therefore, understanding and analyzing supply and demand dynamics is crucial for real estate professionals and investors to make informed decisions.

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10.

In the situation when the demand of buyers is high and there are a greater number of buyers than available homes for sale, it is called a "broker's market".
- A.
  
  True
- B.
  
  False
Correct Answer
B. False

Explanation
This situation would be a called a "seller's market".

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11.

In the situation when the supply of available real estate is high and the demand of buyers is average to weak, the price of real estate will drop and the market will be referred to as a "buyer's market".
- A.
  
  True
- B.
  
  False
Correct Answer
A. True

Explanation
When there is a high supply of real estate and a weak demand from buyers, it creates a situation where sellers have to compete for buyers. In order to attract buyers, sellers may lower their prices, leading to a drop in the price of real estate. This type of market is referred to as a "buyer's market" because buyers have more negotiating power and options to choose from. Therefore, the statement is true.

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12.

Between 1998 and including 2005, there was a substantial recession in the United States resulting in a sluggish housing market. The supply of available real estate was high and there was little demand from the buyer, thus, there was a "buyer's market" during these years.
- A.
  
  True
- B.
  
  False
Correct Answer
B. False

Explanation
During 1998-2005, there was a substantial DEMAND by BUYERS for housing with a subsequent increase in prices that signaled a SELLER'S MARKET. Some quality properties sold in just days and buyers were making offers at prices above the listing prices of homes to beat out the competition.

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Current Version
Mar 21, 2023

Quiz Edited by
ProProfs Editorial Team
Aug 28, 2011

Quiz Created by
Sseveland

A Real Estate Business MCQ Quiz

Real estate brokerage can be best defined as the business process of bringing together the parties who are interested in completing a real estate transaction.

According to Pennsylvania law, commission fees for brokers and salespersons are set by the Pennsylvania Real Estate Commission at 6% of the selling price of the property.

Independent contractor is a term used by the United States Internal Revenue Service to refer to those persons in the business world who operate autonomously from a traditional employer. Most real estate agents are classified as independent contractors.

An example of "Special Use" category of real estate would be shore and mountain vacation property, resort time-share ownership, condos, etc.

Currently all real estate licenses in Pennsylvania are issued by the National Association of Realtors.

After a Pennsylvania Real Estate Salesperson license is issued the salesperson is then officially known as a REALTOR.

Supply and demand are two initial economic factors that affect real estate transactions.

In the situation when the demand of buyers is high and there are a greater number of buyers than available homes for sale, it is called a "broker's market".

In the situation when the supply of available real estate is high and the demand of buyers is average to weak, the price of real estate will drop and the market will be referred to as a "buyer's market".

Between 1998 and including 2005, there was a substantial recession in the United States resulting in a sluggish housing market. The supply of available real estate was high and there was little demand from the buyer, thus, there was a "buyer's market" during these years.