67. A 'For Sale by Owner' property owner has offered a flat fee to any licensee who procures a buyer. The owner's terms specify that 50% of the fee is payable upon contract acceptance, with the other 50% payable upon transfer of title. A CORRECT statement about this arrangement is that it is
Answer: A
A 'For Sale by Owner' arrangement is acceptable if the fee is paid to the employing broker.
This arrangement complies with real estate regulations as the fee structure allows for compensation to be directed to the employing broker, which is a standard practice in real estate transactions.
A) acceptable if the fee is paid to the employing broker
This statement is correct because, under real estate laws, it is permissible for a property owner to offer a flat fee to a licensee, provided that the payment is made to the licensee's employing broker. This aligns with the legal framework governing real estate commissions and ensures that the broker is properly compensated for their role in the transaction.
B) acceptable if the fee does not exceed the prevailing commission rate
This choice is incorrect as there is no stipulation that the fee must adhere to the prevailing commission rate for it to be acceptable. The property owner has the discretion to set the fee, and as long as it is paid to the employing broker, it remains compliant with regulations.
C) in violation of license law since all compensation must be paid at closing
This option is incorrect because it misinterprets the timing of compensation. While it is true that closing is a critical point, the arrangement outlined allows for partial payment upon contract acceptance, which is permissible under real estate law as long as the broker receives the fee.
D) in violation of license law since compensation for real estate sales can come only from listed properties
This statement is also incorrect. Compensation for real estate transactions can come from various sources, including 'For Sale by Owner' situations. As long as the arrangement is properly structured and complies with broker regulations, it does not violate the law.
Conclusion
The arrangement described is valid and adheres to real estate laws, particularly because it allows for compensation to be allocated to the employing broker. Other options either misinterpret the legal framework or impose unnecessary restrictions on the fee structure. Thus, the correct answer clearly stands out as the only accurate interpretation of the situation.