Communications & Professional Practice Section#1 Professional Practice Quiz#4

• Question 1

  Needs Grading

  	Describe each of the following terms: - real estate agent - real estate broker - listing agent - selling agent - buyer broker or buyer agent - agency disclosure - agreement of purchase and sale or offer - conditional offer - irrevocable date or expiry date - closing or closing date - firm deal or firm agreement - seller disclosure - substitute disclosure - escrow - waiver - closing adjustments or adjustments on closing - mortgage - equity - mortgage insurance - title insurance - commission - multiple listing service - caveat emptor
  	Selected Answer: Page 111 Correct Answer: - real estate agent: commissioned salespeople involved with homes - real estate broker: the right to operate a real estate brokerage, the actual agent - listing agent: the person who represents the seller - selling agent: the person who works with the buyer and may represent the buyer's or seller's interest - buyer broker or buyer agent: a person who works with buyers and represents their interests - agency disclosure: an obligation to make buyers and sellers aware of whose interests the agent is working in - agreement of purchase and sale or offer: the contract between the buyer and seller, agreeing to transfer the property - conditional offer: an agreement dependent on the outcome of one or more things - irrevocable date or expiry date: the time that a party has to respond to an offer from another party - closing or closing date: this is the date the transaction is completed - firm deal or firm agreement: an agreement that contains no conditional clauses - seller disclosure: a statement by the seller representing the condition of the property and addressing some legal issues typically - substitute disclosure: the seller's right to have someone else represent the condition of the property - escrow: money held in trust by an independent third party - waiver: a written agreement that removes a condition - closing adjustments or adjustments on closing: monies paid by the buyer on closing date to give the seller credit for fuel in tank, property taxes paid in advance, etc. - mortgage: a loan made by a mortgagee (lender) to a mortgagor (home buyer or owner) - equity: the part of the home's value that is controlled by the owner. The excess of the home's value over the mortgage amount. - mortgage insurance: insurance that protects the lender in case the homeowner defaults on the mortgage payments - title insurance: insurance that protects the buyer in case title to the property is not clear - commission: money paid to an agent upon completion of a transaction - multiple listing service: a service in which information about properties for sale are distributed to all real estate companies who are part of the service - caveat emptor: let the buyer beware Response Feedback: [None Given]

• Question 2

  Needs Grading

  	Describe in one sentence each how you would handle each of the following situations: a. The utilities are off. b. The client doesn't show up. c. The agent doesn't show up. d. The client and agent cannot attend. e. Clients have pages of questions. f. A relative who is a building expert attends the inspection. g. The agent or seller disrupts the inspection with constant challenges or distracting stories. h. The client asks you not to speak in the presence of the agent or seller. i. The client has more questions about your insurance than about the house. j. The client wants to audiotape or videotape you. k. The client has heard enough and wants to end the inspection. l. Information on the house listing is wrong. m. You break something. n. There is a life threatening issue.
  	Selected Answer: Page 105 Correct Answer: a. Let the client know about the limitations this creates and decide whether or not to go ahead. b. Try to contact the client or agent. If unsuccessful, wait at the site for roughly 45 minutes. c. Try to contact the agent and discuss with the client whether you should go ahead with the inspection. This is up to the client. d. Try to get your contract signed before the inspection. Contact your client after the inspection. e. Go through your normal routine and ask the client if they have any questions at the end. Do not take the pages of questions. f. Display your technical expertise and try to get the expert on side as an ally. g. Ask permission to perform your part of the work so that they can have their discussions afterward. h.If you are asked questions by the agent or seller, indicate that you've been asked not to discuss the inspection report with anyone other than the client. i. Explain to the client that you are not offering an insurance policy or warranty. j. Allow the client to tape you but keep your presentation brief. k. Client can stop the inspection whenever they want. You may or may not lower the fee as a result. l. If it is brought to your attention, indicate how difficult it is for the layperson to determine this sort of thing. m. Advise the occupant and offer to repair or replace it. n. Notify the occupant of the home. Response Feedback: [None Given]

• Question 3

  Needs Grading

  	Describe in one sentence the purpose of a closing discussion at the end of a home inspection.
  	Selected Answer: The main purpose of the closing discussion is to summarize the major points of the inspection and make sure your client understands those issues.  Correct Answer:   The closing discussion summarizes the major points of the inspection and makes sure the client understands these issues. Response Feedback: [None Given]

• Question 4

  Needs Grading

  	Explain in one sentence why home inspectors do not pass or fail homes as a result of their inspection.
  	Selected Answer: Home inspectors report conditions. Buyer may decide not to buy a home based on the inspection report. This is because the home didn't meet the buyers' expectations in some way.  Correct Answer:   The home inspection is only part of the picture for the client so we cannot pass or fail the home. Response Feedback: [None Given]

• Question 5

  Needs Grading

  	List the 6 steps in the simplified real estate sales process outlined in the text.
  	Selected Answer: 1. Prospective buyer has looked at a house and decided to make an offer.  2. The seller's agent presents the offer to the listing agent and the seller may make a counter offer 3. The buyer can accept the counter offer or make a counter offer again 4. Agree on purchase price.  5. Bring in home inspector 6. The buyer may choose to accept the agreement.  Correct Answer: 1. The buyer prepares an offer. 2. The offer is presented and accepted, rejected, or signed back. 3. The buyer accepts the counter offer, rejects it, or signs back again. 4. A purchase price is agreed upon, along with the closing date and any inclusions in the sale. 5. The offer is conditional on a home inspection. 6. A home inspector prepare his report. 7. The buyer waives the condition or aborts the transaction. Response Feedback: [None Given]

• Question 6

  Needs Grading

  	Write a script for a closing discussion. Assume: - you have not recommended improvements - you use a client questionnaire - the agents and seller are present during eht closing discussion. (Restrict your script to 5-10 sentences.)
  	Selected Answer: Page 104 Correct Answer: Is this a good place to summarize the inspection, Mr. Brown? The roof and furnace will have to be replaced in the next year and we've got some minor electrical and safety cleanup, but overall the systems that we looked at and tested appear to be doing their jobs. These items are detailed in the report, as are a number of the other things we talked about. This is how the report is laid out. We've talked about all the points in the report already and they are included here for your reference. We won't go through all the details again. When you do get a chance to have a look at it, feel free to call us if you have any questions. We've covered a lot of ground in the last two and a half hours, trying to identify the big issues and we've come across some of the small ones. When you move into the home, you'll find some other issues and there will be a few that arise after you get settled in. This is part of home ownership. There are always improvements to be made and unexpected issues crop up regularly in every home. Remember, we didn't get into that crawlspace or the small attic over the rear extension. Once you take possession of the home, you'll wnat to get into those places. Have we answered all your questions? Great. If you ever have any question about anything, please give us a call. We'd be happy to help and there's no fee for this service. Will you be paying by cheque? Very good. I'll fill out the receipt while you do that. I've included a client questionnaire and a postage paid return envelope at the front of the report. It would help us if you'd complete it and mail it to us. We're always looking for ways to improve. Here's your report. Thanks again for choosing us to do your home inspection. I hope things work out very well for you. It was good to meet you, Ms. Jones and Mr. Adams. Thank you very much for your patience. (That's to the agents.) Thank you very much for your cooperation. Goodbye for now. (That's to the seller and the goodbye is to everyone.) Response Feedback: [None Given]