agency

Mark gives Suzanne the authority to sign for him in a real estate transaction. Suzanne is considered, in the eyes of the law, to be:

a. A broker b. An attorney-in-fact c. An attorney-in-trust d. An attorney-at-law answer: B

Which of the following real estate related contracts is considered an employment contract or agreement?

a. A listing agreement b. An offer to purchase c. An option d. None of the above answer: A

Which of the following would NOT be an agent?

a. A real estate salesperson handling only referrals b. A property manager employed by the owner c. A person working for a multiple listing service d. A person holding a power of attorney answer: C

Which of the following agency responsibilities most likely would be limited in dual agency representation?

a. Fairness. b. Reasonable care. c. Disclosure. d. Accounting. answer: C

The broker generally receives a commission:

a. From a customer. b. From a client. c. 5 business days after closing. d. When the sales contract is signed. answer: B

When a real estate broker is retained to perform one specific act for a client, it is known as:

a. General warranty. b. Special agency. c. General agency. d. Special warranty. answer: B

During a listing presentation, a seller asked a salesperson to give them an opinion on the list price, not disclose their pending divorce, contact them at least weekly and give them an opinion on the validity of the title. The salesperson may do all of the following EXCEPT:

a. Give them an opinion on the list price b. Not disclose their pending divorce c. Contact them at least weekly d. Give them an opinion on the validity of the title answer: D

A broker obtains an open listing on a piece of property. In order to collect a commission on the sale of this property, the broker must be able to prove which of the following?

a. He was licensed at the time of the sale b. He was employed at the time of the sale c. He was the procuring cause of the sale d. All of the above answer: D

In the process of taking a listing, a licensee noticed water stains on the ceiling in one of the rooms. What should the licensee do?

a. Ignore it on the theory of caveat emptor b. Ignore it if the stain is old c. Inquire of the owner if there is a leak d. Advise the owner to paint over the stain answer: C

A salesperson receives an earnest money deposit on Monday while working with broker Allan. On Friday, the salesperson goes to work for broker Bob. What should be done with the earnest money deposit?

a. It stays with broker Allan b. It goes to broker Bob c. It should be given to the seller d. It is returned to the buyer answer: A

A broker acts as an agent in all of the following functions EXCEPT:

a. Leasing property b. Selling property c. Appraising property d. Exchanging property answer: C

Which of the following MUST be disclosed by an agent to his client, in a real estate transaction?

a. Minority groups are moving into the area b. The average commission recommended by the local real estate association c. The buyer intends to violate deed restrictions d. The buyer has had previous credit problems which may have an impact on loan qualifications answer: D

Brokers must hold their client's funds in a/an:

a. Office safe. b. Savings account. c. Trust or escrow account. d. Special account managed by the Board of Realtors answer: C

An agent's authority can arise from:

a. Ratification. b. Custom. c. Implication. d. All of these choices. answer: D

A salesperson takes an exclusive-right-to-sell listing on April 1 for 90 days but moves out of the area on May 15 and has his license placed on inactive status on June 1. The listing would:

a. Remain in force b. Terminate on May 15 c. Revert to an open listing d. Terminate on June 1 answer: A

An agency relationship can exist between:

a. Salesperson and employing broker b. Broker and seller c. Broker and buyer d. All of the above answer: D

The client in a listing agreement would be the:

a. Salesperson taking the listing b. Seller of the listed property c. Listing broker d. Buyer answer: B

A salesperson represents the:

a. Seller b. Broker c. Buyer d. Lender answer: B

An owner listed a farm with a broker. Although the owner did not mention it, the broker knew the owner was in poor health. What should the broker tell potential buyers?

a. Tell them of the need to sell to ensure a quick sale b. In order to sell quickly, tell them that the seller is ill because death would cancel the listing c. Tell them of the illness but NOT the need to sell d. NOT tell them because it would reduce the seller's bargaining leverage answer: D

An agent has the responsibility of care, obedience, accountability, loyalty and disclosure to which of the following?

a. The customer b. The broker c. The client d. All of the above answer: C

Upon signing a management contract with an owner, a broker becomes a/an:

a. Trustee. b. Receiver. c. Director. d. Agent. answer: D

If you are showing property you are listing and tell a prospective buyer that "...this property is the best for you," the relationship created could be interpreted as:

a. Universal agency b. Special agency c. Implied agency d. General agency answer: C

When does a broker earn his commission?

a. When the listing is taken b. When the title insurance policy is given to the purchaser c. When closing is complete and title passes d. When the offer to purchase has been signed and accepted by the seller answer: D

A buyer requests the broker take a listed property off the market until his wife sees the property. Should the broker do this?

a. Yes, as long as his wife can see it before the next business day. b. Yes, if the buyer pays the brokerage firm a small fee for this service. c. No, this would violate the agency agreement. d. No, only the local Association of Realtors can approve such an arrangement. answer: C

A buyer's agent was showing a buyer a property that was listed for sale. No dual agency existed on this transaction. The seller would be considered a:

a. client of the buyer's agent b. customer of the buyer's agent c. principal of the buyer's agent d. prospect of the buyer's agent answer: B

A listing broker brought an offer to the seller with a $1,500 promissory note as earnest money which the seller accepted. Before closing, the buyer declared bankruptcy. Concerning the bankruptcy, the listing broker should:

a. let the transaction go through as is b. not tell the seller as this is confidential information c. tell the seller only if the broker knows the buyer won't close d. tell the seller immediately answer: D

If a broker lists a property, she CANNOT be:

a. A dual agent b. A buyer's agent only c. An agent for the seller only d. An agent for both buyer and seller answer: B

A licensed real estate salesperson may legally accept an extra commission for a difficult sale from:

a. An appreciative seller. b. A thankful buyer. c. His or her broker-employer. d. The mortgage lender. answer: C

Which of the following statements BEST describes the difference between an exclusive right to sell listing versus an open or an exclusive agency listing?

a. An exclusive right-to-sell agreement enables the seller to negotiate a commission; the others do not b. An exclusive right-to-sell agreement permits the seller to sell their house without paying a fee; the others do not c. An exclusive right-to-sell appoints only one agent; the others do not d. An exclusive right-to-sell guarantees the broker a commission if sold; the others do not answer: D

All of the following will automatically terminate a listing by operation of law, EXCEPT:

a. Bankruptcy of the client b. Destruction of the property c. Condemnation of the property d. Client's decision answer: D

A broker receives a call from a family that is moving into the area from another state. They advise the broker that they want the opportunity to look over different neighborhoods before making a buying decision, but do need to move soon. How should the broker handle this situation?

a. Find a house for sale with immediate occupancy. b. Put the couple into a rental property with only a one year lease. c. Locate an owner willing to enter into a lease with option to buy. d. Suggest they rent on a month to month basis. answer: B

Who is an intermediary between a buyer and a seller?

a. Lender. b. Mortgage broker. c. Real estate broker. d. FDIC. answer: C

A listing agreement may be terminated by:

a. The seller b. The buyer's broker c. The salesperson that obtained the listing d. Death of the salesperson answer: A

Which of the following actions by a listing agent would be appropriate?

a. Advise the buyer that the seller will take less than the list price b. Advise the buyer that the seller is going through a divorce c. Advise the buyer on the amount of money necessary to assume a loan d. Advise the buyer that the seller's home has been on the market for 180 days Feedback answer: C

A listing broker had a signed sales contract on a house. The broker then noticed a crumbling wall in the basement. Which of the following should the broker inform about the wall?

a. Buyer only b. Seller only c. Both buyer and seller d. Buyer, seller and the mortgage company answer: C

As a property manager, your duties would most likely include all of the following except:

a. Rent collection b. Hiring and firing of maintenance personnel c. Showing units to prospective renters d. Providing legal advice to the property owner answer: D

How can an agency relationship be created?

a. Written document b. Action of the parties c. Words of the parties d. Any of the above answer: D

A person that authorizes another to act for him or her is known as the:

a. Agent b. Client c. Broker d. Customer answer: B

A broker listed a vacant lot zoned for residential use. Later, an adjacent lot was rezoned causing an increase in value. What should the broker do?

a. Buy the listing, have it rezoned, then sell it for a profit b. Tell the seller of the zoning change and advise the seller to consider application for rezoning the property c. Continue to market the property as residential property, according to the terms of the listing d. Offer to terminate the listing agreement answer: B

An escrow account is maintained by a broker for the purpose of:

a. Earning interest for the broker. b. Earning interest for the broker's clients. c. Disposition of money to the buyer. d. Impartial protection of both parties. answer: d

A rental property manager's agreement allowed performance of normal maintenance and repairs. Which of the following acts would require the property manager to obtain the specific approval of the owner to do?

a. Fix a broken window b. Repair the elevator c. Renovate a unit for a tenant d. Paint the outside trim answer: C

Meredith "fell in love" with and made an offer to purchase a beautiful Cape Cod style house. When she learned that the seller had accepted her offer, she was so happy that she agreed to pay the selling agent an extra commission for her effort. How will the sales agent receive her "extra" commission, when the sale is consummated?

a. From the buyer b. From the seller and buyer as agreed c. From the settlement attorney handling the closing d. From her employing broker answer: D

If a listing broker tells a prospective buyer, ".. go ahead and make that offer, I'm sure the seller will accept it...", the broker may have created an agency relationship which would be described as:

a. General agency b. Express agency c. Implied agency d. Unilateral agency answer: C

A client is obligated to her agent for:

a. Indemnification against loss not caused by the agent. b. Reimbursement. c. Performance. d. All of these choices. answer: A

Broker Jane is acting as a dual agent in a real estate transaction and decides to appoint salesperson Sara to represent the seller and salesperson Ben to represent the buyer. Ben and Sara both work in Jane's firm.

a. Jane cannot legally do this. b. Ben and Sara are dual representatives. c. Ben and Sara must be independent contractors. d. Ben and Sara are designated representatives. answer: D

A seller contacted 3 brokers and asked each to suggest the listing price for his property. Broker A said $78,000. Broker B said $79,000. Broker C said $91,000. The seller listed with Broker C and the house later sold for $76,000. Broker C is guilty of violating which of his or her agency responsibilities?

a. Loyalty b. Reasonable care c. Disclosure d. Accountability answer: B

An owner listed a property with Broker Dole on May 1. On July 1 the owner was declared legally insane. The broker brought a full price offer on July 3 to the seller which was accepted. How much commission is Broker Dole due?

a. The full commission as the broker brought in a ready, willing and able buyer b. The full commission as the seller accepted the offer c. No commission since the property was not sold within the protected period d. No commission since the listing was terminated when the owner was declared legally insane answer: D

Which is an example of ostensible agency?

a. The principal showed by actions that the agent's actions were accepted b. A broker was able to sell any or all of an owner's properties c. A broker was able to sell only one of an owner's properties d. A selling broker acting as a subagent of a listing broker answer: A

An agent had a listing which would expire on July 5. On July 1 the agent showed the property to a buyer. The seller plotted with the buyer and sold it to him a few days after the listing expired. Who would the broker sue for the commission?

a. Buyer for the entire commission b. Buyer and seller each for 1/2 of the commission c. The broker could not sue as it sold after the listing expired d. Seller for the entire commission answer: D

Broker Jenkins has presented an offer from buyer Frazer. Before the seller has accepted the offer, Jenkins is informed that Frazer is acting for an unknown purchaser in this transaction. What should Jenkins do in this situation?

a. Inform the seller that the offer is void b. Inform the seller of the existence of an unknown purchaser c. Return the earnest money deposit to Frazer d. Inform Frazer that his offer is illegal answer: B

In agency representation, the employer is called the:

a. Seller. b. Agent. c. Client. d. Broker. answer: C

An owner and tenant signed a one year lease agreement. The owner sold the property to a buyer 4 months later. The buyer wanted to move into the property immediately. The original lease contract signed by the seller and tenant was silent on this point. Can the buyer of the property move in immediately?

a. Yes, because the lease contract was silent on the issue of the owner selling the property, thus giving the buyer immediate rights to the property b. Yes, because the tenant's rights are terminated upon the selling of the property c. No, because the tenant can stay in the property for the duration of the original lease contract d. No, because the tenant has an automatic right of first refusal on the property answer: C

Seller Corcoran is in very poor health and cannot work his farm. Should a broker, who has a listing on the farm, disclose this fact to prospective buyers?

a. Yes, it is a material fact about the farm which Moore must disclose b. Yes, it may help to get at least a low offer and help sell the farm c. No, it may hurt Corcoran's bargaining position and hurt his chances to get a fair price for the property d. No, it would be a violation of Federal Fair Housing Laws answer: C

A seller told a broker during the listing presentation that cash only should be accepted for the earnest money deposit. The broker presented an offer with a check as earnest money but failed to disclose this to the seller. The seller accepted the offer only to find out two days later that the earnest money check was worthless. Did the broker do anything wrong?

a. Yes, the broker did not follow instructions b. Yes, the broker should have cashed the check first c. No, the owner signed and accepted the agreement d. No, because the form of earnest money only has to be disclosed if it is a promissory note answer: A

A broker had an agreement with a buyer to find a home for a flat fee of $5,000. The broker found a special home listed by another broker that the buyer liked and purchased. Is the buyer's broker entitled to receive a commission from both the buyer and the seller?

a. Yes, the brokers automatically split the commission b. Yes, if disclosure was made to all parties in writing c. No, it is illegal to have a dual agency d. No, a seller can only legally pay the listing broker answer: B

Two brothers who each own their own real estate companies agree to divide commissions received equally. Broker A pays for three-fourths of the advertising costs and finds the buyer. Broker B pays one-fourth of the advertising costs. If the total commission on the sale is $4,500, how much does Broker B get?

a. $4,500. b. $1,125. c. $2,250. d. None of the above. answer: C

A broker lists a property. A buyer submits a written offer and the seller accepts the offer. On the day scheduled for closing, the seller refuses to sign any of the papers to close the transaction. The broker is entitled to:

a. A full commission b. One-half of the agreed upon commission c. Out of pocket expenses d. Nothing answer: A

Under the customary listing agreement, the broker, as the agent for the seller, can:

a. Accept or reject offers for the seller b. Place a "For Sale" sign on the property c. Deposit earnest money in the broker's personal account d. Advertise the property at a price lower than the listed price answer: B

A broker can do which of the following?

a. Accept, as binding, a promissory note given as an earnest money deposit. b. Accept, on behalf of the seller, an offer OVER the listed price of the property. c. Buy and sell property in his own name. d. Represent both buyer and seller, with the permission of the buyer. answer: C

Property owner Kilmer, who is living overseas, lists his property with Broker Huff. Later the land is rezoned for a higher use, increasing its value. Huff buys the property herself and sells it six months later. Which of the following is true?

a. As long as Huff informs Kilmer of her intent to buy the property before she does so, her action is above reproach b. Huff can buy the property only after informing Kilmer of the zoning change and the effect that it has on the property c. Huff cannot legally act for someone who is overseas d. When Huff resells the property in six months, she has a legal obligation to inform Kilmer answer: B

Broker Boyd takes a listing on a property owned by Foster at a price of $75,000 with no more than 20% down. Five days later, Boyd secures a written, all cash, offer for $75,000 on the Foster property. Foster refuses the offer. What can Boyd do under the circumstances?

a. Demand that Foster accept the offer b. Demand that Foster pay him a full commission since he secured a full price offer c. Demand that Foster pay at least half commission d. Nothing, since the offer does not meet the terms of the listing contract answer: D

David, an independent broker, dies. His daughter, a licensed broker and only heir, inherits the brokerage business. If she intends to operate the brokerage and keep the listings, it is necessary that she:

a. File legal notice of her intent to assume responsibility for the brokerage business b. Advise the probate court of her intent to assume responsibility for the listing agreements c. Negotiate and receive new listing agreements from each client d. Nothing is required because she is the only heir answer: C

A salesperson took a listing on a property which had a crack in the foundation caused by water seepage. The owner had filled and painted over the crack and advised the sales agent that the seepage problem had been corrected, but it was obvious to the agent that the problem had not been corrected. If the salesperson shows the property without advising potential buyers of the problem, the salesperson would be guilty of:

a. Fraud b. Misrepresentation c. Puffery d. Nothing answer: A

Question text Mr. Gregory has a home for sale with a sign, FOR SALE BY OWNER, in the front yard. Salesperson Gary calls, identifies himself and asks for the key to show the property. Mr. Gregory agrees. Which of the following best describes any agency relationship that may exist?

a. Mr. Gregory is Gary's client. b. Gary is Mr. Gregory's agent. c. Gary's broker is the agent of Mr. Gregory for a reasonable time. d. No agency relationship exists. answer: C

A broker and salesperson owe all EXCEPT which of the following to the purchaser/customer?

a. Negotiation of the lowest possible price. b. Honesty. c. Fairness. d. Disclosure of defects in the property. Feedback ANSWER: A

A buyer and seller entered into a contract for the sale of a house. The buyer applied for and was approved for a loan. At the last minute the seller backed out of the sale. Is the broker due a commission?

a. No, because the buyer did not meet all the personal requirements of the seller b. No, since the sale did not close, the broker did not perform c. Yes, because the buyer was able to perform all of the requirements in the contract d. Yes, anytime a contract is signed the broker has performed and is due a fee answer: C

A seller had a house listed with a broker for $86,000. The broker was working with a buyer who told the broker that the buyer would start by offering $85,000 but would pay $86,000 for the property. What should the broker do?

a. Present the offer and NOT mention that the buyer would raise the offer b. Pressure the buyer to raise the offer c. Present the offer as is and inform the seller of the possible increase d. Refuse to present the offer as it was for less than the seller authorized answer: C

A broker decides to lower the prices of her listings after the properties have been on the market for 120 days. She finds that more buyers are now calling on these listings. Which of the following is true about such a practice?

a. She can do this only with the local Association of Realtors approval b. She can do this only with the owner's approval c. She can do this only after informing all previous buyers d. This an an excellent marketing technique answer: B

A person owned several apartment houses. She hired an agent to sell only two of her apartment houses. What type of agency relationship was established?

a. Special b. General c. Dual d. Universal answer: A

A salesperson wishes to charge a reduced commission to her sister. Where would the salesperson obtain approval for such an arrangement?

a. State Association of Realtors b. Local Association of Realtors c. Real Estate Board or Commission d. None of the above Feedback answer: D

Broker Johnson has listed the property of Cheever and sells it to Brevard for $175,000. Before closing, Johnson finds that the property has a serious structural defect. What should Johnson do?

a. Tell Cheever b. Tell Brevard c. Keep it quiet as it might kill the sale d. Tell both Cheever and Brevard answer: D

The amount of commission or fee that a listing broker is to receive is determined by:

a. The Multiple Listing Service b. The National Association of Realtors c. The seller and the broker d. The Real Estate Board or Commission answer: C

A person owned a house which had been built over underground springs. This was a well-known fact in the area. The broker sold the property to a buyer but did not inform the buyer about the underground springs. Six months later, the back corner of the house was found to have structural damage caused by the springs. Which of the following is true?

a. The agent and seller could be responsible because they did not disclose to the buyer about the house being built over the springs b. The agent and seller could not be responsible because of the time period that had elapsed between the date of the sale and the date of discovery of the damage c. Only the seller could be held responsible for not disclosing about the house being built over the springs d. Only the agent could be held responsible for not disclosing about the house being built over the springs answer: A

An owner lists a home with a broker for $172,000. Two days later, the broker brings an offer for $170,000. At this time, which of the following statements is true?

a. The broker has found a buyer and has earned his commission b. A ready and willing buyer has been found and a commission is due c. A ready and willing buyer has been found, but no commission is owed the broker at this time d. None of the above answer: C

Barry, a sales agent with XYZ Realty lists a property. Helen, also a sales agent with XYZ, presents an offer from one of her clients and the offer is accepted. Which of the following best describes the position of the broker and XYZ in this situation?

a. The broker is an agent for the buyer only. b. The broker is an agent for the seller only. c. The broker is agent of the seller and sub-agent of the buyer. d. The broker is a dual agent. answer: D

Sophie, a licensed salesperson, works for a broker who is representing a buyer. Sophie finds a house for the buyer and the transaction closes. Sophie will receive her commission from which of the following?

a. The broker that holds her license b. The broker that listed the house that Sophie sold c. The settlement attorney handling the closing d. The buyer, per his or her agreement with Sophie answer: A

Carla, through her broker, is representing a buyer. Carla finds a house and the sale is made. Carla will receive her commission from which of the following?

a. The broker that holds her license. b. The broker that listed the house that Carla sold. c. The settlement attorney handling the closing. d. The buyer, per his or her agreement with Carla. answer: A

Chris, a salesperson working for Broker Janet, is assigned to work on a listing that started on January 3, 2019. The listing is a 90 day exclusive right-to-sell agreement. On March 1, 2019, Chris is killed in an automobile accident. What is the status of the listing agreement?

a. The listing becomes an open listing b. The listing terminates by operation of law c. The listing remains valid d. The seller may now list the property with another broker answer: C

When a seller and licensed salesperson agree to a listing, on terms acceptable to the broker, an agency relationship is established between:

a. The seller agent and the seller b. The listing salesperson and the seller c. The listing broker and the buyer d. The listing broker and the seller answer: D

Real estate licensees are required to disclose pertinent information relative to property they list. Which of the following are you NOT required to disclose?

a. The seller is having financial problems and must sell the property to avoid bankruptcy b. The state plans to build a new highway near the property c. The property is subject to seasonal flooding d. The interior of the house is badly in need of painting answer: A

A broker, acting as a dual agent, with the knowledge and consent of all parties, collected one-half the commission from the seller and one-half from the buyer at settlement. Which of the following statements is true concerning this situation?

a. This action is illegal b. The broker needed only the consent of the seller c. The broker needed only the consent of the buyer d. This action is permitted only with the consent of both parties answer: D

When a broker accepts a listing he or she has created an agency relationship. Which of the following is not an agency responsibility?

a. To obey all the instructions of the seller. b. To use care in filling out contract forms. c. To be accountable for documents and funds. d. To be loyal to the seller. answer: A

A listing broker has an agency relationship with his client (the seller). The broker also has a moral and statutory obligation to all prospective customers (buyers). One way to describe the relationship with the buyer would be:

a. To obey the letter of the law. b. To do what is right. c. To do those things that are required. d. To do anything that is asked. answer: B

a. Indemnification against loss not caused by the agent. b. Reimbursement. c. Performance. d. All of these choices.

a. Transact matters of all types for the client. b. Transact the clien'ts affairs in a certain business. c. Perform only specific acts for the client. d. Perform any legal act for the client. answer: B

Wilma lists her house with broker Fred under an exclusive right-to-sell agreement. Fred later abandons the listing. Which of the following is true in this situation?

a. Wilma must maintain the listing with Fred until the expiration date b. Wilma may terminate the listing c. Wilma must wait 90 days before she can list the property with another broker d. Wilma must file a notice of abandonment answer: B

Under Common Law Agency, the listing agent should disclose material facts to the seller AND buyer. Which of the following would NOT be a material fact?

a. Worn carpeting. b. Seasonal flooding in the basement. c. A foundation crack covered with paneling. d. A faulty heating system. answer: A

A seller signs a listing with the provision that any commission will be split between the brokerage firm handling the sale and the seller's unlicensed brother. Is this agreement legal?

a. Yes, as long as the brother has contractual ability b. Yes, if the brother assists in the negotiation c. No, the brother must be a licensed real estate broker to receive a commission d. No, the local board of Realtors must first approve this agreement answer: C

An out of state owner calls a broker wanting to sell a property for $50,000. The broker knows that the zoning has recently been changed and the property is now worth more. The broker buys it personally and six months later sells it for $75,000. Is this legal?

a. Yes, as the broker bought it personally and did NOT put it on the market b. Yes, as the broker got the price the seller was asking c. No, the broker must inform the owner of the zoning change and the increased value before purchasing the property from the seller d. No, the broker can NOT buy listed property as this would be a conflict of interest answer: C

An owner of a large estate told a broker NOT to hold open houses on the estate and to only advertise in a national magazine. Is this allowable?

a. Yes, as the seller is responsible for planning all marketing of the property b. Yes, as the broker works for the seller and must follow instructions c. No, the broker has the right to hold a house open at the broker's discretion d. No, the owner can NOT limit the broker's ability to earn a commission answer: B

A broker desired to charge a flat fee to all sellers in order to collect the same amount for the work, regardless of the list price of the house. The broker could do this only:

a. if the broker applied to the state legislature for approval b. if there was a history of this in that area c. by showing the seller the flat fee versus a percentage of the list price d. by informing the seller prior to the listing and obtaining agreement answer: D