Chapter 26

What is the "15 Minute Rule?" a) 15 minutes after the moving van leaves, a neighbor will be disclosing what the real estate agent should have disclosed. b) an agent should spend no more than 15 minutes with any customer. c) A walk-through should not take longer than 15 minutes. d) It only takes 15 minutes to disclose material defects.

a) 15 minutes after the moving van leaves, a neighbor will be disclosing what the real estate agent should have disclosed.

What happens to agency when the seller declares bankruptcy? a) A judge will take over the property and will decide what will be done with it. b) All agency relationships are transferred to a trust account. c) The agency relationship still remains viable for 30 days after the bankruptcy notice has been filed. d) A judge will take over and pay the listing broker for expenses.

a) A judge will take over the property and will decide what will be done with it.

How should agency disclosure be documented? a) All agency disclosures to be in writing. b) All agency disclosures to be approved by the MLS. c) All agency disclosures to be voice recorded. d) All agency disclosures to be notarized.

a) All agency disclosures to be in writing.

Under what condition can a licensee give legal advice to a client? a) If the licensee holds a separate license to provide legal services b) If the licensee can provide separate case law that supports his or her opinion c) If the client signs an attorney release form d) If all legal statements made by the licensee are signed and witnessed

a) If the licensee holds a separate license to provide legal services

Which of the following situations would require a relationship disclosure by the agent? a) If the seller was the brother of the agent b) If the seller lives in the same neighborhood as the agent c) If the seller bought the house from the agent 10 years ago d) If the seller works in the same office building as the agent

a) If the seller was the brother of the agent

What type of issue might arise when a seller has worked with more than one agent and multiple agents feel entitled to a commission from a sale? a) Procuring cause issue b) Targeted clause issue c) Fiduciary cause issue d) Closing option issue

a) Procuring cause issue

Broker Amanda has a listing agreement with Seller Lucy. About one month into the listing period, Lucy tells Amanda that she does not want her property shown to any African-Americans or Asians. Amanda tries to explain to Lucy that this is against Fair Housing law, but Lucy is insistent. Amanda decides her best course of action is to end the listing. What is this called? a) Renunciation b) Abandonment c) Rejection d) Revocation

a) Renunciation

Typically, what information can be shared with a customer? a) Seller's previous real estate property taxes. b) The lowest sale price that the seller would accept. c) Seller's reason for selling. d) Seller's marital status.

a) Seller's previous real estate property taxes.

Who is liable for any loss that results from a licensee's negligence? a) The licensee b) The principal c) No one d) The cooperating subagent

a) The licensee

Which of the followings statements is TRUE? a) There is no fiduciary relationship between the broker and customer b) The same fiduciary relationship exists between the broker, customer, and client. c) There is a fiduciary relationship between the broker and customer. d) confidentially is the only fiduciary relationship that exists between the broker and the customer.

a) There is no fiduciary relationship between the broker and customer

Brokers a) are required to tell their clients about how a commission will be split. b) are not required to tell their clients about how a commission will be split. c) are required to tell all parties in the transaction how a commission will be split. d) are required to tell the TREC how a commission will be split.

a) are required to tell their clients about how a commission will be split.

Every licensee should always know who he or she is representing and a) be comfortable telling licensees and customers about that representation. b) be comfortable in giving licensees and customers a copy of the agency agreement. c) be guarded in keeping this information confidential. d) be comfortable in giving customers an explanation of the clients financial situation.

a) be comfortable telling licensees and customers about that representation.

The major liability issue when participating in dual agency is a) ensuring the agent remains neutral in the negotiations. b) ensuring the seller remains neutral in the negotiations. c) lack of adequate compensation. d) establishing a closing agent.

a) ensuring the agent remains neutral in the negotiations.

Verbal agency disclosure a) is very common. b) shows proof of disclosure. c) is recommended over a written agency disclosure. d) rarely occurs.

a) is very common.

Anytime a client signs a document with a licensee, a) the client should be given a copy at the first possible opportunity. b) the client should be given the original. c) the licensee should mail the original to the client. d) the client should be given a copy only during the closing process, if appropriate.

a) the client should be given a copy at the first possible opportunity.

An agent for a seller has a duty to disclose a) the purchaser's intention to resell the property for a profit. b) why the seller is selling. c) the financial status of the seller. d) confidential information when ask directly by a buyer.

a) the purchaser's intention to resell the property for a profit.

All lenders require a a) title search and a title insurance policy. b) title record and a title summary. c) title insurance and E&O insurance. d) deed abstract and summary of ownership.

a) title search and a title insurance policy.

Procuring cause is defined as a) "the last interaction in the sale process." b) "the uninterrupted series of causal events that leads to a successful transaction." c) "the interrupted series of events that leads to a successful transaction." d) "marketing actions that brings in an offer."

b) "the uninterrupted series of causal events that leads to a successful transaction."

Which of the following statement is most accurate? a) A dual agent is only allowed to earn compensation from one side in the transaction. b) A dual agent represents both parties and, therefore, will not be working in the best interest of either party. c) A dual agent represents both parties and, therefore, will be working in the best interest of both party. d) A dual agent does not represents either party in the transaction.

b) A dual agent represents both parties and, therefore, will not be working in the best interest of either party.

What does a "reasonable time" clause pertain to? a) Ending a written agency agreement b) Ending an oral agency agreement c) Presenting an agency disclosure form to a client d) Working with buyer clients

b) Ending an oral agency agreement

If a licensee slips up and says the wrong thing to the wrong person, what can happen? a) He or she could be cited for misrepresentation. b) He or she could be accidentally creating an agency relationship. c) The licensee may lose his or her license. d) The licensee could be fined by the Real Estate Board.

b) He or she could be accidentally creating an agency relationship.

Under what circumstance can a licensee provide legal advice? a) If he or she is expressly asked by the client b) If he or she holds an attorney's license c) Under the supervision of a principal broker d) If the response is documented in case law and common law

b) If he or she holds an attorney's license

Which of the following is NOT an obligation that a principal has towards an agent in an agency relationship? a) Indemnity b) Insurability c) Good Conduct d) Good Faith

b) Insurability

Which of the following actions is in the best interest of the seller and licensee? a) A latent defect should never be disclosed. b) It is better to have disclosed too much about the property than not enough. c) It is better to have disclosed too little about the property than too much. d) Buyer's agent should never suggest that a property inspection be conducted.

b) It is better to have disclosed too much about the property than not enough.

Licensee Tom's listing just expired and the seller listed with another broker in town. Licensee Tom just got a call from buyer Fred about the listing. Licensee Tom knows from previous discussions that the seller is willing to take $15,000 less than the asking price. What is licensee Tom's position regarding disclosure of the actual sell price? a) Licensee Tom can disclose the reduced sale price to the licensee who has an agency agreement with the customer. b) Licensee Tom cannot disclose the reduced sale price to the customer. c) Licensee Tom can disclose the reduced sale price to the customer. d) Licensee Tom can disclose the reduced sale price to the customer, if he or she becomes a client.

b) Licensee Tom cannot disclose the reduced sale price to the customer.

Broker Tom has a six-month listing agreement with Seller Matt. Over a period of four months, Matt becomes less and less satisfied with the job that Tom is doing. Matt wants to end the agency relationship. What is this called? a) Rescission b) Revocation c) Rejection d) Refusal

b) Revocation

What is it called when a listing agent gives away information on any of the offers received to someone else who has made an offer? a) Fishing an offer b) Shopping an offer c) Rigging an offer d) Baiting an offer

b) Shopping an offer

Which of the following disclosures should take place when creating agency with a client? a) The client should know the costs of the any deed/title search. b) The client should know where the commission is coming from. c) The client should know how many sales contract riders will be accepted. d) The client should know where the closing will take place.

b) The client should know where the commission is coming from.

Which of the following is NOT a negotiated listing provision? a) The compensation rate b) The indemnification clause. c) Agreement duration. d) Open house dates

b) The indemnification clause.

Who creates agency by implication? a) The licensee and the client b) The licensee c) The client d) The customer

b) The licensee

What happens to agency if the client dies? a) With the death of the owner, agency is transferred to the courts. b) With the death of the owner, agency relationship dies also. c) With the death of the owner, agency still remains. d) With the death of the owner, agency remains for 15 days after an official death notice.

b) With the death of the owner, agency relationship dies also.

Vicarious liability is a) based on the common law of limited distribution. b) a form of secondary liability that is associated with the law of agency. c) a form of secondary liability that is associated with errors and omission. d) based on direct first degree liability.

b) a form of secondary liability that is associated with the law of agency.

In designated dual agency situations, a) the duty of confidentially by the broker is extinguished. b) the broker has an obligation to both parties. c) the broker only has an obligation to the seller. d) the broker does not have an obligation to either party.

b) the broker has an obligation to both parties.

When dual agency occurs, a) the broker is capable of providing both clients with all the typical fiduciary duties owed to them. b) the broker is not capable of providing both clients with all the typical fiduciary duties owed to them. c) the broker must not inform any party of the fiduciary duties owed to them. d) each client must find a new broker.

b) the broker is not capable of providing both clients with all the typical fiduciary duties owed to them.

Which one of the following statements is TRUE? a) An agent can offer advice and counsel to his or her customer. b) An agent can offer advice, but not counsel to his or her principal. c) An agent can offer advice and counsel to his or her principal d) An agent can offer advice, but not counsel to his or her customer.

c) An agent can offer advice and counsel to his or her principal

Which of the following statements is most accurate? a) Clients represent themselves. b) Principals represent themselves. c) Customers represent themselves. d) Transaction agents represent the buyer.

c) Customers represent themselves.

What are the three ways agency can be created? a) Judicial, Civil, Directed b) Dedicated, Verbally, In Writing c) Implication, Verbally, In Writing d) Informed, Verbally, In Writing

c) Implication, Verbally, In Writing

If an agency relationship arises because a licensee representing a seller mistakenly gives advice or information to a customer, what kind of agency has been created? a) Subagency b) Verbal agency c) Implied agency d) Dual agency

c) Implied agency

Broker Fred charges his clients a fee for taking property photograph if the client terminates the agreement prior to the expiration date. This practice would be noted in what section of the listing agreement? a) Ancillary Clause b) Closing Costs c) Reimbursement Clause d) Property Disclosure

c) Reimbursement Clause

Agent Pat and Seller Ron have an agency agreement. What is the best way for both parties to have their agency agreement terminate? a) Pat and Ron agree to end it. b) Ron tells Pat that he is getting a divorce and needs to end the listing. c) Ron's home sale closes. d) The listing expires.

c) Ron's home sale closes.

Which of the following would NOT be classified as a material fact? a) Title cloud b) Property lien c) Rumors d) The presence of Radon

c) Rumors

A seller's agent has a duty to disclose which of the following items? a) The seller's intentions to reinvest any net profit from the sale of the property b) The seller's reason for the sale c) The ability of the purchaser to complete the transaction d) The seller's other real estate holdings

c) The ability of the purchaser to complete the transaction

What should an agent do when more than one offer comes in on the same listing? a) The listing agent must present the offer which is worth the most first. b) The listing agent must return all offers, except the first one received. c) The listing agent must inform all buyers about the existence of the other offers. d) The listing agent must not inform all buyers about the existence of the other offers.

c) The listing agent must inform all buyers about the existence of the other offers.

Agent Paul is bound to inform his client of all facts that might affect the client's interests - both what Paul knows and what he "should have known." Which of these situations would not be something Paul "should know?" a) There is a crack in the basement wall. b) The air conditioner does not work. c) The owner of the property is HIV positive. d) The casement windows have broken seals.

c) The owner of the property is HIV positive.

What should the seller do when receiving multiple offers? a) The seller should make counteroffers to all contracts at the same time. b) The seller should reject all offers at once. c) The seller should deal with one offer at a time. d) The seller should raise the asking price on the property.

c) The seller should deal with one offer at a time.

Which of the following statements is FALSE. a) There is no fiduciary relationship between the broker and customer. b) There is a strong fiduciary relationship between the broker and client. c) There is a strong fiduciary relationship between the broker and customer. d) There are fiduciary duties that a client owes a broker.

c) There is a strong fiduciary relationship between the broker and customer.

Which of the following statements is most accurate? a) There should be undisclosed agency if the client makes a written request.. b) There should always be undisclosed agency. c) There should never be undisclosed agency. d) There should always be undisclosed agency, if the agency agreement allows the practice.

c) There should never be undisclosed agency.

What is the most common manner in which undisclosed agency occurs? a) When a licensee completes a property disclosure form. b) When a licensee gives advice or opinions to a client. c) When a licensee gives advice or opinions to a customer. d) When a agent assigns a real estate licensee duty to a non-license holder.

c) When a licensee gives advice or opinions to a customer.

Almost all transactions that involve a lender will require a) private mortgage insurance. b) a home warranty. c) a title search. d) a seismic engineer's report.

c) a title search.

The best policy for an agent is to a) be more honest with a customer than with a client. b) be more honest with a client than with a client. c) be honest with both the customer and the client. d) avoid honesty with a customer.

c) be honest with both the customer and the client.

A material fact a fact that is a) of little importance to a reasonable person when deciding whether purchase real estate. b) public knowledge. c) important or significant to a reasonable person when deciding whether to purchase real estate. d) only known to the seller.

c) important or significant to a reasonable person when deciding whether to purchase real estate.

Designated dual agency a) is illegal in South Carolina. b) is not dual agency and all appropriate disclosures must be made and agreed to by all parties. c) is dual agency and all appropriate disclosures must be made and agreed to by all parties. d) occurs when two competing licensee's have the same client.

c) is dual agency and all appropriate disclosures must be made and agreed to by all parties.

When a property goes through foreclosure, the agency relationship a) remains intact. b) is extended for 30 days from first foreclosure notice. c) is ended d) is extended for 60 days from first foreclosure notice.

c) is ended

Designated dual agency occurs when a) there is a dual agency relationship between a broker and two principals in the same transaction, but the buyer and seller each have their own designated agent from a different offices. b) there is a dual agency relationship between a broker and one principal in the same transaction, but the buyer and seller each have their own designated agent from different offices. c) there is a dual agency relationship between a broker and two principals in the same transaction, but the buyer and seller each have their own designated agent from the same office. d) there is a dual agency relationship between a broker and two or more principals in the same transaction, but the buyer has his or her own designated agent from a different office.

c) there is a dual agency relationship between a broker and two principals in the same transaction, but the buyer and seller each have their own designated agent from the same office.

When an open listing agreement exists that is not in writing, a) there is a clear ending date. b) the ending date is 60 days from the beginning date of the open listing. c) there is no ending date negotiated between the client and the salesperson. d) the ending date negotiated between the client and the salesperson is open to interpretation.

c) there is no ending date negotiated between the client and the salesperson.

Which duty requires that an agent must be able to account for all monies, documents and other property he or she receives from the principal? a) Obedience b) Care c) Trust d) Accountability

d) Accountability

What happens to agency when the broker dies? a) All relationships remain until a new broker buys the listings. b) All relationships remain and are given to the broker's licensees. c) All relationships are transferred to a trust account. d) All relationships end upon the broker's death

d) All relationships end upon the broker's death

Which of the following is NOT an important characteristic of an agency relationship? a) Granted authority b) Confidential c) Fiduciary d) Attentiveness

d) Attentiveness

Broker Al and Seller Tom have a listing agreement which terminates with the successful closing of Tom's home. Even though the agency agreement has terminated, which fiduciary duty continues to be in effect? a) Care b) Disclosure c) Accounting d) Confidentiality

d) Confidentiality

In a real estate transaction, how long does the duty of confidentiality last? a) Three months after the close b) One year after the close c) Five years after the close d) Forever

d) Forever

Which of the following duties does the principal owe to an agent? a) Care b) Protection c) Friendship d) Opportunity

d) Opportunity

What is it called when the client wants to end the relationship? a) Ratification b) Renunciation c) Rescission d) Revocation

d) Revocation

When you are confronted with a question that you don't know the answer to, what is the best response? a) Ignore the question. b) Tell the client to find out the information for themselves. c) Make up an answer. d) Tell the client that you will find out the answer.

d) Tell the client that you will find out the answer.

Which of the following statements is an example of a protection clause? a) The brokerage is allowed to post for sale yards signs on the property. b) The seller agrees to a listing price of $275, 995. c) The seller agrees to a wireless digital lock box to be placed on the property. d) The brokerage is entitled to commission for up to 60 days after the termination of the listing agreement if the property was sold to anyone who was shown the property by the brokerage during the agreement.

d) The brokerage is entitled to commission for up to 60 days after the termination of the listing agreement if the property was sold to anyone who was shown the property by the brokerage during the agreement.

When should a client be informed that the brokerage does not work with other companies? a) After the first real offer has been made to purchase the property. b) Anytime prior to accepting escrow money. c) When relisting a property. d) When creating agency.

d) When creating agency.

The duty of confidentiality a) does not extend beyond the termination of the relationship b) terminates at the property sale closing date. c) extends to one-year and one- day beyond the termination of the relationship. d) extends beyond the termination of the relationship.

d) extends beyond the termination of the relationship.

Licensees a) should encourage clients not to seek legal advice. b) should only work with clients who also hire a lawyer . c) should have a lawyer review all offers and counter offers. d) should recommend a lawyer to both clients and customers.

d) should recommend a lawyer to both clients and customers.

The licensee should tell a) the seller to repair the roof. b) the broker where he is. c) the customer the client's name. d) the buyer to get a title search.

d) the buyer to get a title search.

The best way to end agency is a) for the time limitation to expire. b) through an oral agreement. c) for a reasonable time to have passed. d) to close the deal.

d) to close the deal.