Law of Agency Practice Test
In a DPTA lawsuit, the court found that an agent knowingly, unintentionally committed the act he was accused of, and said that the plaintiff suffered economic damages of $20,000. How much will the plaintiff be awarded?
60,000
Broker Ashley is the intermediary in a transaction between Buyer Brandi and Seller Candace. The buyer and the seller ask the broker if she would be able to give them advice. What option does the broker have?
Broker Ashley can appoint a separate sales agent or associate broker to represent each party.
Completion of the Notice of Intermediary is needed in which of the following examples?
Delores is representing a buyer who is going to make an offer on a property listed by another agent in her office.
George's buyer client has decided to make an offer on a property that is listed by George's brokerage firm. George's broker's agency policy says he will become an intermediary representative with an appointment to help the buyer. What further action must George take before proceeding?
George must ensure that he has written agreement from both parties to establish an intermediary relationship.
All of the following are true about the Seller's Disclosure Notice EXCEPT:
If the form is never provided, the buyer may terminate the contract at any time up to seven days before closing and the earnest money will be returned
All of the following is true about the IABS notice except:
It must be provided to buyer prospects at an open house.
Buyer Bill buys a home without the broker with whom he is contracted (Broker Matt). Matt decides to pursue payment of commission. For Matt to sue for collection of commission, all of the conditions must be met EXCEPT:
Matt must not be an independent contractor.
Broker Bob does not have a valid license during a transaction. So, Seller Seth refuses to give Broker Bob a commission. Can broker Bob sue?
No, Broker Bob cannot sue because his license had expired.
Mikayla, an agent, advises a client about the validity of a title. Can she do this?
No, this is unauthorized practice of law.
Blake is a broker. He is the listing agent for Derek's house. They sell the house to Whitney (Blake does not represent Whitney). Blake owes ______ to Derek and ________ to Whitney.
OLDCAR; honesty and fairness
Why are agency disclosure laws important?
They disclose who works for whom and what each agent does
What is the goal of the Sherman Antitrust Act?
To promote fair competition on behalf of American consumers.
Broker Phil is acting as an intermediary in a transaction. He know that the owner will accept 10,000 less than the asking price if he has to. Can Phil tell the buyer?
Yes, Phil can disclose this information to the buyer, but only if the owner has authorized him in writing to do so.
Sales Agent Aurora has a client selling his home. The potential buyer is not working with a broker. Aurora is helping the buyer obtain financing. Is this ethical? Why or why not?
Yes, because the seller getting financing furthers her client's best interests
A real estate brokerage advertises that they will list property for a low commission. Later, the seller finds out that he advertised low commission is contingent upon the seller signing a 12-month listing and agreeing to do all of the showings themselves. Is the brokerage guilty of a violation?
Yes, the are guilty of misrepresentation.
A intermediary might also be referred to as:
a broker representing both parties in a transaction
What is arbitration?
a forum where parties and counsel present their positions before an impartial third party who renders a specific award
When is the best time for Broker Bob to disclose whom he represents to a party in a proposed real estate transaction?
at first contact
Susan is showing properties to a prospective buyer. While she is driving, the potential buyer says, "Susan, I hope you will work hard for us to find the perfect property." Susan responds by saying "I will take care of everything." What type of agency relationship have Susan and the buyer formed?
express
Sarah is a listing agent. When talking to a potential buyer, she can do all of the following EXCEPT:
give advise about price negotiation
The broker's office manual may want to address all of the following EXCEPT:
how to be a dual agent
Broker Bitsy is getting ready for a listing appointment with a seller. What four forms should she bring with her to the appointment?
the IABS form, a broker's agency disclosure form, a Seller's Disclosure notice, and a listing agreement
Broker Cameron gives his client a notice which informs them of his minimum duties, the types of license holders, and how a license holder can represent a party in a real estate transaction. What is this notice called?
the Information About Brokerage Services Form
With her seller-client, Broker Melanie discusses compensation (commission), permission to list on the MLS, scheduling of house showings, and expected marketing efforts. What document are they going over?
the listing agreement
Agent Susan is representing a buyer who lives out of the country. The buyer finds the perfect property, but can't make it to the closing. The buyer authorizes Susan to sign all of the necessary documents on her behalf. What type of agency is this a representation of?
universal agency
Angela, a sales agent, has committed a license violation. Diane, her sponsoring broker, is held legally responsible. Diane has been found _________ for Angela.
vicariously liable