STS OR Real Estate Section 2: Agency

Ch2 D7: Obligation to Third Parities 1. A broker owes third parties to a transaction the fiduciary obligation of honesty. 2. A broker has no obligation to third parties.

1. A broker owes third parties to a transaction the fiduciary obligation of honesty.

Ch1 D2: Principal 1. A buyer or seller in a real estate transaction. 2. A broker working under a principal broker assisting a buyer or seller with real estate.

1. A buyer or seller in a real estate transaction.

Ch1 Q8: Which of the following statements is true? 1. A buyer-broker agreement requires a set expiration date. 2. A buyer-broker agreement does not require a definate expiration date. 3. A buyer-broker agreement can be an on-going agreement without beginning or ending dates. 4. A buyer-broker agreement is not binding on any of the parties.

1. A buyer-broker agreement requires a set expiration date.

Ch1 D1: Agency 1. A fiduciary relationship in which an agent is authorized to act on the behalf of a principal. 2. A fiduciary relationship in which a buyer or seller are obligated to be truthful and honest to their broker.

1. A fiduciary relationship in which an agent is authorized to act on the behalf of a principal.

Ch4 D7: Unilateral Revocation 1. A person cannot be forced to work for another. 2. Upon the close of a transaction, a seller could decide not to pay a commission fee, claiming unilateral revocation.

1. A person cannot be forced to work for another.

Ch1 Q1: Implied agency requires which of the following? Implied agency requires which of the following? 1. Actions that imply an intention to create an agency 2. An expectation of agency on the part of the principal 3. Advance payment of commission 4. An agency relationship cannot be implied.

1. Actions that imply an intention to create an agency

Ch2 D8: Fraud 1. An act of deliberately making a false statement, or failing to disclose a false statement. 2. If false information, not given in writing, a broker could not be charged with fraud.

1. An act of deliberately making a false statement, or failing to disclose a false statement.

Ch1 D5: Buyer-Broker Contract 1. An agency agreement giving a broker authority to interact with sellers' or seller's broker on behalf of their buyer. 2. Requires the seller to pay two commissions

1. An agency agreement giving a broker authority to interact with sellers' or seller's broker on behalf of their buyer.

Ch4 D4: Agency Revocation 1. An agency relationship can be revocated by mutual consent, unilateral revocation, or rescission. 2. If a broker and a client revoke their agency relationship, they can never work together again.

1. An agency relationship can be revocated by mutual consent, unilateral revocation, or rescission.

Ch4 D2: Agency Completion 1. An agency relationship terminates upon the completion of a transaction. 2. An agency relationship cannot be completed.

1. An agency relationship terminates upon the completion of a transaction.

Ch2 D1: Fiduciary Duties 1. Broker's fiduciary duties are loyalty, honesty, confidentiality, good faith, and obedience. 2. Fiduciary duties keep buyers and seller honest and truthful.

1. Broker's fiduciary duties are loyalty, honesty, confidentiality, good faith, and obedience.

Ch2 Q1: Which best describes the relationship between common law fiduciary duty and the statutory fiduciary obligations of a broker? 1. Common law fiduciary duty is the basis for the statutory fiduciary obligations. 2. There is no relationship; they are two completely different sets of laws. 3. A broker can choose to follow common law fiduciary obligations or statutory obligations, but does not have to follow both. 4. Statutory obligations are the basis for the common law fiduciary duties.

1. Common law fiduciary duty is the basis for the statutory fiduciary obligations.

Ch1 D4: Express Agency 1. Following Oregon statute of frauds, it is written authorization for a broker to work on the behalf of a buyer or seller. 2. An agency created by the implied actions of the parties involved

1. Following Oregon statute of frauds, it is written authorization for a broker to work on the behalf of a buyer or seller.

Ch2 Q7: Listing broker Liz knew that the roof on a home she had listed needed repairs. When a potential buyer asked her if they should have a roof inspection, she replied that the roof was in great condition and wouldn't want them to pay for an inspection that wasn't needed. Her action is an example of which of the following? 1. Fraud 2. Intentional misrepresentation 3. Negligent misrepresentation 4. Innocent misrepresentation

1. Fraud

Ch2 D5: Good Faith 1. Good faith is a state of mind encompassing all other fiduciary obligations. 2. Good faith is a dollar estimate of a buyer's expenses to purchase a property.

1. Good faith is a state of mind encompassing all other fiduciary obligations.

Ch3 D3: Obligation of Dual Agency 1. Oregon statute allows a broker to represent both a buyer and a seller in the same transaction, with full written agency disclosure to all parties. 2. Dual agency is illegal in Oregon regardless of written acknowledgement.

1. Oregon statute allows a broker to represent both a buyer and a seller in the same transaction, with full written agency disclosure to all parties.

Ch3 Q13: Which of the following is a statutory duty? Which of the following is a statutory duty? 1. Perform truthfully in all dealings with a principal and interested third parties. 2. Perform truthfully in all dealings with a principal but not required to perform duties towards third parties. 3.Accept the burden of truthfulness when absolutely necessary. 4. Accept all instructions from a principal, even if not truthful.

1. Perform truthfully in all dealings with a principal and interested third parties.

Ch3 Q3: When a licensed broker is involved, Oregon's statutory agency law applies to which of the following property types? 1. Residential, commercial, Industrial and farming. 2. Residential, commercial, Industrial and hospitals. 3. Residential, commercial, Industrial and government buildings. 4. Residential, commercial, Industrial and schools.

1. Residential, commercial, Industrial and farming.

Ch3 Q8: Broker Brown and Broker Jones work at the same brokerage firm and the supervising Principal Broker is Broker Smith. Broker Brown has a listing and Broker Jones has a buyer making an offer on the property. Which of the following statements would be correct? 1. The only dual agent is principal broker Smith. 2. Each broker must disclose that they are in a dual agency relationship with the buyer and seller. 3. Broker Brown is a dual agent. 4. Broker Jones is a dual agent

1. The only dual agent is principal broker Smith.

Ch4 D1: Agency Relationship 1. The relationship of trust that exists between sellers, buyers, and their broker. 2. Agency relationships are between a managing principal broker and a client.

1. The relationship of trust that exists between sellers, buyers, and their broker.

Ch4 Q4: Which of the following best describes the completion of a listing agreement? 1. The successful close on the listed property. 2. When an accepted offer is opened into escrow. 3. Once the buyer has shown they are ready, willing and able to purchase the property 4. When the seller accepts an offer and escrow is opened.

1. The successful close on the listed property.

Ch4 Q10: When might an agency relationship be terminated by rescission? 1. When both parties are mistaken as to some necessary element of the contract. 2. When the court determines that the contract violates public policy. 3. When the client hires a new agent. 4. When the property to be listed is destroyed.

1. When both parties are mistaken as to some necessary element of the contract.

Ch1 Q12: Broker Jones is retiring and has closed all of his transactions except one. Broker Jones calls Broker Smith and asks if she would take over the last transaction and work with his client Mr. Brown. Can Broker Jones transfer the transaction to Broker Smith? 1. Yes, an open transaction in escrow can be turned over to another licensed broker if the parties sign an agency disclosure. 2. No, broker Jones is obligated to complete the transaction with Mr. Brown. 3. No, a transaction cannot be transferred to another broker. 4. Yes, as long as the escrow company the transaction was originally opened with handles the closing

1. Yes, an open transaction in escrow can be turned over to another licensed broker if the parties sign an agency disclosure.

Ch3 Q9: The listing broker knows that his client, the seller, would sell the property for $5,000 less than the listing price. If the broker reveals this information to a prospective buyer, the broker 1. has violated his duties as the seller's agent. 2. complies with the law by making full disclosure of material facts to the buyer. 3. offers a fraudulent inducement to buy. 4. is engaging in "puffing."

1. has violated his duties as the seller's agent.

Ch2 D4: Confidentiality 1. Once a transaction is completed, a broker is no longer bound to keeping information confidential. 2. A broker is bound to keep secret all non-public information, unless instructed by their principal to reveal whatever information relevant to a transaction.

2. A broker is bound to keep secret all non-public information, unless instructed by their principal to reveal whatever information relevant to a transaction.

Ch2 D3: Honesty 1. It is all right for a broker to bend the truth if the overall outcome helps their client. 2. A broker is obligated to always be truthful with their client and all interested third parties to a transaction.

2. A broker is obligated to always be truthful with their client and all interested third parties to a transaction.

Ch2 D6: Obedience 1. If a broker can prove a client made them practice outside of the law, they would not be charged with illegal professional practice of real estate activity. 2. A broker must do what the client requires, within the bounds of law. An unlawful act cannot be justified under client obedience.

2. A broker must do what the client requires, within the bounds of law. An unlawful act cannot be justified under client obedience.

Ch2 Q11: Which of the following statement is true? 1. A listing broker does not owe any fiduciary obligations to the buyer. 2. A listing broker is obligated to keep all confidential information confidential, even after the agency relationship has expired. 3. A listing broker may reveal personal information about his client if it helps sell the property. 4. A listing broker owes an obligation to an interested third party to know confidential information about the seller once an offer has been accepted.

2. A listing broker is obligated to keep all confidential information confidential, even after the agency relationship has expired.

Ch1 D6: Disclosed Limited Agency Agreement 1. A broker is limited to representing only one party in a transaction. 2. An agency agreement between one broker, representing the buyer(s), and the seller(s) in the same transaction.

2. An agency agreement between one broker, representing the buyer(s), and the seller(s) in the same transaction.

Ch4 D3: Agency Expiration 1. Due to the obligation of confidentiality, an agency relationship can never terminate. 2. An agency relationship terminates upon the expiration of the contract.

2. An agency relationship terminates upon the expiration of the contract.

Ch4 D6: Mutual mistake 1. A mutual mistake does not require both parties to believe something different. 2. Both parties enter into a contract under the same of different mistaken belief.

2. Both parties enter into a contract under the same of different mistaken belief.

Ch1 Q3: Which of the following actions will not create a real estate agency relationship? 1. Signing a written agency agreement 2. Entering into an oral agency agreement 3. Acting as an agent under the mistaken assumption that a written agency agreement is valid 4. Representing to third parties that there is an agency relationship even where there isn't

2. Entering into an oral agency agreement

Ch3 Q4: Which of the following is a true statement? 1. If a client asks, a broker may agree to waive his affirmative, statutory duty of loyalty. 2. If a client asks, a broker may not waive any affirmative, statutory duties. 3. If a client asks, a broker may agree to waive his affirmative, statutory duty of confidentiality. 4. If a client asks, a broker may agree to waive his affirmative, statutory duty of trustworthyness.

2. If a client asks, a broker may not waive any affirmative, statutory duties.

Ch3 Q1: When should a broker reveal a conflict of interest? 1. Immediately 2. In a timely manner 3. When it seems pertinent. 4. Wait until asked to disclose.

2. In a timely manner

Ch1 Q10: What is 'puffing'? 1. Puffing is when a broker makes statements that make himself seem more experienced than he is. 2. Misstating financial information on a mortgage application to get a bigger mortgage 3. Overstating the qualities of a particular property. 4. Puffing is a landscaping technique used to enhance curb appeal.

2. Misstating financial information on a mortgage application to get a bigger mortgage

Ch2 Q4: If Donna instructs her listing agent to lie about the material condition of her property, should they? If Donna instructs her listing agent to lie about the material condition of her property, should they? 1. Yes, an agent must be obedient to his principal. 2. No, the duty of obedience does not extend to illegal acts. 3. Yes, but only after making full disclosure to the OREA. 4. Yes, but only after warning her that it is unethical to do so.

2. No, the duty of obedience does not extend to illegal acts.

Ch3 D2: Obligations to a Buyer 1. Without a Buyer Broker contract a broker does not owe a buyer any obligations. 2. Oregon statute sets out specific obligations for a broker representing a buyer.

2. Oregon statute sets out specific obligations for a broker representing a buyer.

Ch3 D1: Obligations to a Seller 1. A principal broker is responsible for selecting which seller obligations his associated brokers must follow. 2. Oregon statute sets out specific obligations for a broker representing a seller.

2. Oregon statute sets out specific obligations for a broker representing a seller.

Ch2 D2: Loyalty 1. Loyalty requires a broker to follow a principal's instruction even when legally wrong. 2. Putting a principal's best interest first before the interest of the broker.

2. Putting a principal's best interest first before the interest of the broker.

Ch2 Q2: A potential buyer calls the listing broker about a property he saw on the Internet. The buyer asks why the owner is selling. The broker knows that the owner is anxious to sell because he has been transferred to a job out of the country, and he does not want the hassle and expense of maintaining an American residence. What should the broker tell the buyer? 1. The broker should tell the buyer about the job transfer. 2. The broker should tell buyer that the reason is confidential, but assure the buyer that it has nothing to do with the condition of the house. 3. The broker should make up a reason and tell the buyer that instead. 4. The broker should say that the owner is very motivated to sell, but that they cannot say why.

2. The broker should tell buyer that the reason is confidential, but assure the buyer that it has nothing to do with the condition of the house.

Ch3 Q5: In regards to a broker's affirmative duties and obligations owed to their principal, which of the following would not be considered a duty? In regards to a broker's affirmative duties and obligations owed to their principal, which of the following would not be considered a duty? 1. Under statute obligations, a broker would be obligated to disclose any adverse conditions to the seller's property title. 2. Under statute obligations, a broker would not be obligated to research the condition of the seller's property title. 3. Under statute obligations, a broker would be obligated to research the condition of the seller's property title. 4. Under statute obligations, a broker would be morally obligated to disclose the condition of the seller's property title.

2. Under statute obligations, a broker would not be obligated to research the condition of the seller's property title.

Ch4 D5: Rescission 1. Rescission of a contract is the same as revoking. 2. Undoing a contract, by putting both parties in the same position as if the contract had never been entered into.

2. Undoing a contract, by putting both parties in the same position as if the contract had never been entered into.

Ch1 D3: Apparent Agency 1. When a third party gives a buyer or seller legal advice. 2. When a client's actions cause a third party to reasonably conclude an agency relationship exists.

2. When a client's actions cause a third party to reasonably conclude an agency relationship exists.

Ch1 Q2: What exception might occur for a broker to reveal confidential information about a current or past client? 1. When the information could affect another person's decision to buy or sell a property. 2. When served with a court order or subpoena. 3. When there is greater benefit to others to reveal information instead of remaining silent. 4. Never

2. When served with a court order or subpoena.

Ch1 D8: Disclosed Limited Agency Agreement for Buyers 1. A broker representing a buyer is not allowed to be a dual agent. 2. Written explanation of a broker's disclosed limited agency to a buyer in a real estate transaction.

2. Written explanation of a broker's disclosed limited agency to a buyer in a real estate transaction.

Ch1 D7: Disclosed Limited Agency Agreement for Sellers 1. Disclosed limited agency can be transferred to another party. 2. Written explanation of a brokers' disclosed limited agency to a seller in a real estate transaction.

2. Written explanation of a brokers' disclosed limited agency to a seller in a real estate transaction.

Ch3 Q14: A seller's agent would most likely breach his affirmative duty to a seller if he 1. showed properties owned by other sellers to prospective buyers. 2. advised the seller regarding the best way to structure the sale to limit income and estate tax consequences. 3. stopped advertising the seller's property after an offer, subject to contingency, was accepted by the seller. 4. listed a number of competing properties in the same area.

2. advised the seller regarding the best way to structure the sale to limit income and estate tax consequences.

Ch1 Q5: Which of the following is usually contained in a buyer-broker agreement? 1. An adequate property description 2. A disclosure of dual agency 3. A term allowing the broker to represent the buyer exclusively 4. A term requiring the buyer to pay the broker a flat fee upon signing the contract.

3. A term allowing the broker to represent the buyer exclusively

Ch1 Q10: Broker Brown received a call from Seller Stone. Seller Stone asked Broker Brown to assist Buyer Bean in writing an offer on Seller Stone's property. Broker Brown agreed and met with Buyer Bean and wrote and presented the offer to Seller Stone. Seller stone accepted the offer from Buyer Bean. Which of the following statements is true? 1. Broker Brown violated his fiduciary duties to buyer Bean. 2. Broker Brown violated his fiduciary duties to seller Stone. 3. Broker Brown entered into a dual agency with both seller Stone and buyer Bean. 4. Broker Brown could be reprimanded for his actions

3. Broker Brown entered into a dual agency with both seller Stone and buyer Bean.

Ch2 Q5: What duty does a listing agent have to an unrepresented purchaser? 1. Obedience 2. Loyalty 3. Honest dealing 4. Confidentiality

3. Honest dealing

Ch4 Q6: Which of the following would be a false statement? 1. A listing broker's agency relationship is completed when the seller's property closes in escrow. 2. If a listing agreement expires before a property closes in escrow the broker should extend the listing agreement expiration date. 3. If a listing agreement expires prior to the closing date, a seller is not expected to pay a commission to the listing agent. 4. If a property did not close and the listing agreement has expired, for the broker to continue to represent the seller a new listing agreement must be signed by both parties.

3. If a listing agreement expires prior to the closing date, a seller is not expected to pay a commission to the listing agent.

Ch2 Q3: A broker has a duty to act honestly and without bad intention, faithfully carry out their obligations, and deal fairly with their client. Which of the following is NOT a duty? 1. Good faith 2. Loyalty 3. Legal Advice 4. Obedience

3. Legal Advice

Ch2 Q8: Which of the following is a true statement? 1. Misrepresentation would occur if a broker failed to give a Seller's Disclosure Statement to a prospective buyer. 2. Misrepresentation would occur if a broker failed to include a list of plants to be removed by the seller in the multiple listing. 3. Misrepresentation would occur if a broker failed to disclose an encroachment issue on the seller's property line to a buyer at the time of an offer. 4. Misrepresentation would occur if a broker added more photos to the online listing without getting the seller's permission.

3. Misrepresentation would occur if a broker failed to disclose an encroachment issue on the seller's property line to a buyer at the time of an offer.

Ch4 Q9: Which of the following is a correct statement? 1. Parties to a listing can rescind the agreement by proclaiming mutual mistake 2. Parties to a listing cannot rescind the agreement by proclaiming mutual mistake 3. Parties to a listing can only rescind the agreement by going to court or to an arbitrator. 4. Parties to a listing cannot rescind the agreement without first terminating the listing.

3. Parties to a listing can only rescind the agreement by going to court or to an arbitrator.

Ch3 Q12: When a broker is a buyer's agent, the broker is obligated to do which of the following? 1. Make a continuous, good faith effort to find property for his client, even while his client is subject to a contract to purchase. 2. Would be in breach of an affirmative, statutory duty to his client if he showed properties to other clients when he knows his buyer has an interest in the property also. 3. Represent the buyer to the best of his ability following affirmative and statutory boligations and duties. 4. A buyer's agent is ot obligated to perform affirmative duties and obligations.

3. Represent the buyer to the best of his ability following affirmative and statutory boligations and duties.

Ch4 Q3: If a broker enters into a listing agreement with an expiration date of June 1st., but the closing of the sale for the property is scheduled for May 15, which of the following statements would be correct? If a broker enters into a listing agreement with an expiration date of June 1st., but the closing of the sale for the property is scheduled for May 15, which of the following statements would be correct? 1. The broker may continue to act as the client's agent until June 1st. 2. The broker may continue to act as the client's agent on the property until June 1st. 3. The agreement between the broker and the seller terminates on the date of closing of the property. 4. The broker and seller would have to sign an agreement of termination to legally terminate the agency relationship.

3. The agreement between the broker and the seller terminates on the date of closing of the property.

Ch1 Q7: Whose signature would be found in a listing agreement? 1. An escrow agent closing a transaction. 2. The broker who represents a buyer. 3. The broker who represents a seller. 4. The lender providing funds for the buyer.

3. The broker who represents a seller.

Ch2 Q9: Which of the following statements best describes the duty of confidentiality? 1. A broker does not tell others that her principal broker owns a dog training business. 2. A broker does not reveal to the seller that their daughters go to the same school. 3. A broker does not reveal the financial background of the seller until the seller's property is sold. 4. A broker does not reveal the financial background of the seller anytime.

4. A broker does not reveal the financial background of the seller anytime.

Ch1 Q11: A disclosed dual limited agency agreement would include which of the following? 1. A list of statutory obligations owed by both the broker and the principal. 2. A list of statutory obligations the broker owes the principal. 3. A list of statutory obligations the broker owes his principal broker and the principal, his client. 4. A list of statutory obligations the broker owes the principals and all interested third parties.

4. A list of statutory obligations the broker owes the principals and all interested third parties.

Ch1 Q9: A disclosed dual limited agency agreement would include which of the following? 1. A list of statutory obligations owed by both the broker and the principal. 2. A list of statutory obligations the broker owes the principal. 3. A list of statutory obligations the broker owes his principal broker and the principal, his client. 4. A list of statutory obligations the broker owes the principals and all interested third parties.

4. A list of statutory obligations the broker owes the principals and all interested third parties.

Ch1 Q6: Which of the following is not an act of authorization in listing agreements? 1. Advertise the property for sale. 2. Receive permission to show the property. 3. Collect an earnest money deposit on behalf of the seller. 4. Accept an offer from a purchaser.

4. Accept an offer from a purchaser.

Ch4 Q13: Which of the following terminates an agency relationship? 1. Destruction of the subject property. 2. Mutual consent of the agent and the client. 3. Completion of the duties under the agency agreement. 4. All of the above

4. All of the above

Ch4 Q7: An agency relationship expires when which of the following occurs? 1. A listing agreement has expired. 2. A buyer broker agreement has expired. 3. An offer on the property expires. 4. All of the above actions are ways an agency relationship expires.

4. All of the above actions are ways an agency relationship expires.

Ch4 Q1: Which of the following best describes the time frame of an agency relationship? 1. An agency relationship expires 30 days after an action between the parties has been completed. 2. An agency relationship expires 15 days after an action between the parties has been completed. 3. An agency relationship never expires. The broker must always maintain an agency relationship to the principal. 4. An agency expires once all parties are in agreement that the action requiring the agency relationship has been completed or terminated.

4. An agency expires once all parties are in agreement that the action requiring the agency relationship has been completed or terminated.

Ch4 Q11: Broker Benson's listing agreement with seller Smith may be terminated by which of the following? 1. Destruction of the property, mutual consent or refusing the buyer's offer. 2. Destruction of the property, mutual consent or the seller's refusal to disclose physical defects to the property. 3. Destruction of the property, mutual consent or refusing to disclose future special assessment fees to the buyer. 4. Destruction of the property, mutual consent or completion of the agreement.

4. Destruction of the property, mutual consent or completion of the agreement.

Ch4 Q14: If a broker enters into a listing agreement with a seller, and the seller then dies the next day, what happens to the agency relationship Created by the listing agreement? If a broker enters into a listing agreement with a seller, and the seller then dies the next day, what happens to the agency relationship Created by the listing agreement? 1. The agency relationship remains in effect, as the broker must act as the agent for the seller's estate as the seller's legal successor. 2. The broker cannot accept offers until the seller's estate goes through probate 3. The signed listing agreement means the heirs must sell the property and use the broker services of the listing agent and pay a commission. 4. The agency relationship terminates upon the death of the seller. The estate holds no obligations to the listing agent.

4. The agency relationship terminates upon the death of the seller. The estate holds no obligations to the listing agent.

Ch1 Q2: Agency by ratification occurs when a principal acts in a way that _________ the actions of another person. Rejects Ignores Refuses Accepts

Accepts

Ch4 Q5: A listing agreement must have a(n) _______________ date. Start Expiration Void

Expiration

Ch2 Q6: False statements cannot be made by omission. True False

False

Ch3 Q11: Does Oregon statute require an agent to document the date and circumstances under which the agent gives the disclosure pamphlet to a buyer or seller? No, but it is a good risk management practice to do so. Yes

No, but it is a good risk management practice to do so.

Ch1 Q4: A buyer-broker contract is an agency agreement that gives the broker authority to interact with sellers on behalf of the buyer. True False

True

Ch3 Q6: Under "reasonable care", a broker must do certain diligence items even though they are not required by law. True False

True

Ch4 Q12: If an agency agreement is terminated by bankruptcy, death or mental capacity it cannot be transferred to another party. True False

True

Ch4 Q8: An agency relationship can terminate by revocation or recsission. True False

True

Ch4 Q2: An agency relationship ends upon _____________________. A property sale closing When an agent completes the job for which he/she has been retained.

When an agent completes the job for which he/she has been retained.

Ch3 Q7: Does Agency law allow one agent to represent both parties in a single transaction? Yes No

Yes