Real Estate NY

A couple years after Meredith closed on her first sale—a condo that her buyer client, Derek, bought after a messy divorce that left him virtually penniless—another licensee, Alex, called her up asking about Derek, who'd just hired Alex to help him buy a mansion worth $4.2 million. "Can he really afford it? He's not being forthcoming about his financial history, and I don't want to waste my time." What should Meredith tell him?

"You know you shouldn't be asking me about this, Alex. I can't break my client's confidentiality."

In which of these situations would a listing be most likely to terminate due to listing agreement expiration?

A market with high inventory and low demand

You represent Tom Malley, a buyer who's purchasing a home from Paul Toole. Paul refuses to pay a buyer agent commission. Tom doesn't have the extra savings at this time to pay commission—everything is going toward his down payment. Fortunately, Tom's grandmother offers to pay your commission. In the relationships that follow, determine if agency exists. Does agency exist between you and Tom? Does agency exist between you and Paul? Does agency exist between you and Tom's grandmother?

Agency exists Agency doesn't exist Agency doesn't exist

As a seller's agent, you have a relationship with both the seller and the buyer, but in what capacity? Identify your relationship with both the buyer and seller. Customer

Buyer

You represent a buyer in a transaction that includes a 2% cooperating agent commission to be paid by the seller. Who's your client?

Buyer

As a single agent, what topics can you advise a client on? Real estate

Can advise

Appraisal amount

Cannot advise

Legal items related to the transaction

Cannot advise

Mortgage qualifying

Cannot advise

Joan is representing the buyer, Carlton, and Reggie is representing the sellers, Zeb and Teresa Martin. Carlton's Great Aunt Matilda has agreed to pay any portion of Joan's commission the sellers don't cover. Teresa's father, Teddy, has agreed to pay half of the sales commission that will be owed to the listing agent. Which of these statements is true?

Carlton and the Martins are the agents' principals in this transaction.

Christine listed her house with you. Licensee Tailleur represents the buyer, Rebecca. The seller's mother, Freida, is paying your commission. Which of these factors determines how legal agency is determined in this situation?

Christine listed the property with you.

Although an agency relationship doesn't live on forever, there are some fiduciary duties that continue beyond the relationship. Which two of these duties live on after the agency relationship is over?

Confidentiality Accounting

As a seller's agent, you owe specific duties to your seller. Which of these are duties you owe? Advocate for the seller.

Duty

Inform the buyer that you represent the seller.

Duty

Seek a sale of the property at the best price available or a price acceptable to the seller.

Duty

A licensee must perform which of the following tasks for a buyer client?

Ensure the buyer understands the importance of due diligence, including a professional inspection of the property.

A seller left some storage shelving in the basement after she moved out. She purchased new ones, but then asked the buyers to let her in to retrieve the shelving she left. The buyers refused. The seller threatened to sue, but her lawyer advised her she couldn't.

Estoppel

Prevention of a legal claim that is contrary to the person's own actions

Estoppel

A few years ago you helped Renee buy a new home. Her parents have decided they'd like to downsize now that the kids have moved out. You meet with them to tour the property, but they were so pleased with how you worked with Renee, they signed an agency agreement before you left.

Express

Fresh out of college, a young man walks into the brokerage office. He'd like some help finding a new apartment. After chatting about what he's looking for and how he'd like to work together, he signs an agency agreement then heads out to meet some buddies for lunch.

Express

An agency relationship that exists because you behaved in a way the consumer believes you to be their agent.

Express agency

An agency relationship that is understood and agreed to by both parties.

Express agency

Single agents can advise their clients on any topic related to the transaction.

False

Katy's home that was listed for sale was destroyed by fire. Under which of these methods will her listing agreement terminate?

Force of law

Single agency firms prohibit their licensees from doing what?

From representing the buyer and seller in the same transaction

Erik is acting in a single agency capacity in a transaction. What does this mean?

He's representing (and owes undivided loyalty to) either the buyer or the seller.

You receive a call from a friend of a friend. He'd like you to show him some condos this weekend. After looking at a few options, he decides to make an offer, which you help present to the seller.

Implied

Christy found a property that was For Sale by Owner and made an offer. The seller accepted Christy's offer, but neither of them knew how to proceed. Licensee Zelda helped Christy complete the necessary purchase documents and walked her through the process. What kind of agency exists?

Implied agency

Charlie represents Sue, a buyer, in a transaction. A licensee from another firm represents the seller, Claude. Claude will pay a 6% commission to his listing firm, and that firm will split the commission with Charlie's firm. Charlie will be compensated through his brokerage. What's true about this situation?

In this transaction, Charlie only represents Sue and the other licensee only represents Claude.

The Sanders family is selling their home. They've signed an agreement with James from Town Agency. The sale will pay 5% commission, to be split 50/50 with the buyer's agent, if there is one. You represent the Damons as a buyer's agent with City Realty. The Damons make an offer that the Sanderses happily accept. Shortly after closing, you'll receive your commission check from your broker. Which two of the following relationships represent agency?

James and the Sanderses You and the Damons

Carlton listed his property with an agreement end date of August 31. The property went under contract on May 12 and closed on July 2. When did Carlton's listing agreement officially terminate?

July 2

You represent a seller, Bart, and a former client of yours from a few years back makes an offer on Bart's property. What must you do?

Keep any information learned when representing the buyer confidential from the seller.

Kevin listed his house with you but isn't offering a cooperating agent's commission. Ji-eun represents the buyer, Marta, and Marta's parents, Jean and Tom, are paying Ji-eun's commission. On which of these factors is your agency relationship based?

Kevin signed a listing agreement with you.

As we've mentioned a few times already, an agency relationship is created by an agreement. Which one of these agreements will you use to become the seller's agent?

Listing agreement

Joe signed a listing agreement with Marisa. A week later, Marisa's co-worker, Tina, showed Joe a property that he's interested in buying once his home sells. A week after that, Ross submitted an offer on Joe's property on behalf of his buyer client. Who is Joe's agent?

Marisa

Years ago, you represented Maggie in the purchase of her first home. She purchased the property as a starter home she planned to stay in for about five years. It's five years later, and here we are with the house on the market, but you're not the listing agent. You stumbled upon Maggie's listing while working for a new client looking to buy his first home. Your client loves Maggie's house and makes an offer a bit below list price, knowing he could pay list price if needed. Do you owe it to Maggie to tell her that your client can make a better offer? Let's try this one without your resource.

No

Advocate for the buyer.

Not a duty

Sheree's clients, the Binders, are selling their family home and want to move into a smaller house in an adjacent neighborhood. When the Binders notice a home for sale that belongs to the Ables, they're happy to see Sheree's name on the sign, and they ask Sheree to represent them as buyers of the Ables' home. Sheree tells them she cannot, because the Ables don't want her to act as a dual agent. What might happen?

Nothing. Sheree does not have to represent them as buyers.

Tabitha listed her property for sale, but it's been on the market for several months with no offers. She decides to terminate her listing agreement and rent the property out instead of selling it. Assuming that her listing agent has fulfilled all of his responsibilities under the contract, can Tabitha terminate the contract before its expiration date?

Only if she and the listing agent mutually agree to terminate the agreement.

The listing agreement spells out the scope of your authority and the duties you owe your seller client. But there are some other items worth discussing with your client when you put an agency agreement in place. Which of these items are good to discuss with your seller at the time you both sign the listing agreement, and which are better discussed at another time?

Other agents who show the property may be acting as buyer's agents Good to discuss Arrangements for showing the home (such as leaving the home, opening blinds, days/times to avoid, etc.) Good to discuss Commissions related to the transaction Good to discuss What to do if the house appraises for a different amount than the agreed-upon sale price Another time

A seller agreed to leave a painting the buyer liked. As moving day approached, however, the seller was having trouble parting with her uncle's painting. She contacted her agent to see if she could provide the monetary value of the painting instead of leaving the painting. An addendum to the contract was created, which the buyer signed.

Ratification

Acceptance after the fact, either through paperwork or actions of the parties

Ratification

The buyer you're working with doesn't want to enter into an agency relationship. However, the buyer begins to rely more and more on your advice and, indeed, implied agency has begun! You could have avoided this issue by providing appropriate disclosures, but now that you've created implied agency, what should you do?

Ratify the implied agreement by getting a signed agency agreement.

Karla works for a single-agency firm. Which of these actions is she NOT allowed to take?

Representing both the buyer and the seller in the same transaction

As a licensee, you'll have several tasks you must perform for your buyer client. One of these tasks is to ______.

Review transaction documents with the buyer, clarifying anything that could be confusing, without stepping outside the scope of your license

Which of the following statements best describes a listing that terminates by performance?

Roberto listed a property for Terrence. After two failed offers, the property made it to a successful closing.

We just mentioned that one way to avoid implied agency is to recognize what it is. What is another way to avoid an unwanted implied agency situation?

Secure an agency agreement in writing before performing any acts of an agent.

As a seller's agent, you have a relationship with both the seller and the buyer, but in what capacity? Identify your relationship with both the buyer and seller. Client

Seller

Mavis is a buyer's agent working with Blaine, an unrepresented seller. Mavis's buyer, Cintra, makes an offer on Blaine's property. Mavis assists Blaine with the paperwork. What's Mavis's relationship to the parties?

She's an agent to Cintra, and the seller is her customer.

Elisa agreed to list Simone's house for sale. After the listing contract was signed, Simone lost her job, and her father, George, offered to help Simone by paying Elisa's listing commission. The buyer's agent, Carl, also reduced his commission by a quarter percent to help Simone. Who is Elisa's client?

Simone

There are specific situations that end an agency relationship, but even after the relationship has ended, certain fiduciary duties live on. Indicate the occurrences that terminate an agency relationship. The client's goals were met during the term of the agency agreement (i.e., the sale is completed). The specified term in the agency agreement expires. The client revokes the agreement with cause prior to the agreement's expiration date.

Terminates Terminates Terminates

Alice listed a three-bedroom home for her client, but before she finds a buyer, the home burns to the ground. What happens to the agency agreement that Alice has with her client?

The agency agreement is terminated if the property is destroyed.

Marcus listed his property with Home Sweet Home Realty and one of its listing agents, Ron Savage. About a month later, Ron filed for bankruptcy. Which of the following statements about this situation is true?

The agency agreement only terminates if the broker or the principal declares bankruptcy.

Under which of the following circumstances would the client and agent most likely mutually agree to terminate a listing?

The agent and client don't agree on the best way to price, maintain, and market the property.

Renee listed her property for three months starting on March 13. By August, the property hasn't sold. This is after lots of marketing and effort from the agent, a price adjustment, and several showings. Renee decided to list the property with another firm. Under which of these conditions can Renee list the property with another firm without breaching her agreement?

The listing agreement expired.

Rex has a reputation in the community for being a bit odd. He listed his ranch for sale and insisted on the low price he's placed on it, though his agent told him it's underpriced. Rex's distant family hears of the potential sale, and they go through the courts to present evidence that Rex isn't legally competent to manage his business affairs; the judge agrees. What's the status of the listing agreement?

The listing agreement is terminated by force of law.

Trina's property is listed with Avalon Homes. The market is a little slow, and Trina's listing is a high-end home, where sales are even slower. She's had several showings, but no offers. The term of the listing agreement is nearly over. What happens when the termination date is reached?

The listing expires and is automatically terminated.

If a buyer wants to write an offer and asks for your help but doesn't want to sign an agency agreement with you, who do you represent?

The seller

Who does the agent assisting the buyer in a transaction represent if there's no buyer agency agreement?

The seller

Marcy listed her property with Jennings Homes in March. The market was slow, and Marcy's property isn't in great condition—though she's sure she can get top dollar for it because of its location. Her agent encouraged her to either reduce the price or fix the property up, but she refused. Both Marcy and her agent are frustrated. What's the best option for both of them?

They can mutually agree to terminate the listing.

Licensees can act as buyer's agents in one transaction and seller's agents in a different transaction.

True

The firm's licensees won't represent opposing sides to a transaction.

True

Can a licensee who represented seller Smith in one transaction represent a different seller, Jones, in another transaction where Smith is the buyer?

Yes, but confidential information learned during the former relationship cannot be disclosed.

Today, just a year later, the condo is back on the market with another listing agent. The Radcliffs are renewing their vows and have decided to celebrate their new commitment to one another with a new home. You're working exclusively with a buyer client who's also in love (with the condo, but not with the price). You reassure your buyer that there's room to negotiate. You tell him the property is paid off and the sellers are more concerned with selling fast than making a profit. Did you breach your duties to the Radcliffs?

Yes. You broke the sellers' confidentiality.

You drive over to the house and encounter a police officer leaving as you pull up. "What happened?" you ask the homeowner. "Well, the police say the thieves entered through an unlocked door in the back." You and the homeowner are thinking the same thing: did you lock the door after the showing? No! You were so involved in the conversation that you forgot to lock the back patio door. The homeowner says, "I trusted you with my home. I'm holding you responsible for this." Who is actually responsible for the homeowner's damages and losses?

You. You were acting as the agent and failed to secure the client's property.

Which of the following is NOT true about single agency?

n single agency, one agent represents both the buyer and seller in the same transaction.