Question 67

A 'For Sale by Owner' property owner can offer a flat fee to any licensee who procures a buyer, making it acceptable if the fee is paid to the employing broker.

This arrangement is permissible under real estate regulations as long as the compensation is directed to the licensee's employing broker, aligning with industry practices.

A) acceptable if the fee is paid to the employing broker

This option is correct because real estate licensees must receive compensation through their employing broker. In this scenario, the property owner’s offer to pay a flat fee to the broker complies with the regulations governing real estate transactions.

B) acceptable if the fee does not exceed the prevailing commission rate

This option is incorrect because while the fee structure may be influenced by prevailing commission rates, it does not determine the legality of the payment method. The key factor is not the amount but ensuring that the payment goes through the broker.

C) in violation of license law since all compensation must be paid at closing

This option is incorrect because the timing of compensation is not a violation in this case. The arrangement specified by the property owner allows for partial payment upon contract acceptance, which is legally permissible as long as it is structured correctly.

D) in violation of license law since compensation for real estate sales can come only from listed properties

This option is incorrect because it misinterprets license law. Compensation can be offered for services rendered, such as bringing a buyer to a 'For Sale by Owner' property, regardless of whether the property is listed with a broker.

Conclusion

The arrangement is valid as long as the payment goes through the employing broker, making option A the only correct response. The other options either misinterpret the requirements of real estate law or focus on irrelevant details, reinforcing that proper protocol must be followed in compensation structures within real estate transactions.