Chapter 2 Quiz

tie-in arrangement

1. A contract where one transaction depends upon another is known as a...?

Independent Contractor

1. A person that provides services to another under terms specified in a contract or within a verbal agreement is known as an...?

employee

1. A person who is hired to provide services to a company on a regular basis in exchange for compensation and who does not provide these services as part of an independent business is known as a/an...?

9750

1. A property was sold for $325,000. The total commission for the transaction was 6%. The listing broker and buyer's broker agreed to split the commission 50/50. What is the amount of commission paid to the buyer's broker...?

7245

1. A property was sold for $345,000. The total commission for the transaction was 6%. The listing broker and buyer's broker agreed to split the commission 50/50. If the listing broker's real estate agent was responsible for the sale of the property and receives a 70/30 split with his broker, how much commission is paid to the real estate agent...?

18165

1. A property was sold for $605,500. The total commission for the transaction was 6%. The listing broker and buyer's broker agreed to split the commission 50/50. What is the amount of commission paid to the listing broker...?

19500

1. A property was sold for $650,000. The total commission for the transaction was 6%. The listing broker and buyer's broker agreed to split the commission 50/50. What is the amount of commission paid to the buyer's broker...?

Vicarious Liability

1. A situation in which one party is held partly responsible for the unlawful actions of a third party is known as...?

Agency Disclosure Form

1. A written explanation, to be signed by a prospective buyer or seller of real estate, explaining to the client the role that the broker plays in the transaction is described on the...?

A broker is not allowed to take an extended leave of absence

1. According to NYS law, how long is a broker allowed to take an extended leave of absence from his/her brokerage office...?

Accountability

1. According to an agent's fiduciary duties, the agent must not change or modify the financial terms of a deal. Which of the following fiduciary duties best reflects this...?

disclosure

1. According to an agent's fiduciary duties, the agent must present all offers to his/her client. Which of the following fiduciary duties best reflects this...?

Ratification

1. According to this doctrine, an agency relationship which is created after the fact when the principal agrees to be bound by the actions of the agent who was acting without authority, is known as...?

loyalty

1. According to which fiduciary duty is an agent prohibited from forcing on his or her client a sale, lease or opportunity to buy...?

loyalty

1. An agent enters into an agency relationship with a prospective tenant, and in the process finds a great deal on an apartment that matches his/her client's criteria, but is also a good fit for the agent. According to the agent's fiduciary responsibilities, however, the agent is prohibited from taking the deal without first showing the deal to the client. Which fiduciary duty best describes this scenario...?

Sub-agent

1. An agent of a broker who is already acting as an agent of a principal is known as a...?

Seller's Agent

1. An agent who represents the seller of real property is referred to as the...?

General Agent

1. An agent with the full authority over one property of the principal, such as a property manager, is considered a...?

Market Allocation

1. An agreement between members of a trade to refrain from competition in specific market areas is known as...?

Confidentiality

1. Andrew has accepted a new job in San Francisco and needs to sell his house quickly. Andrew hired a real estate agent to help with the transaction. If the agent reveals this information to a prospective buyer, it would be a breach of which fiduciary duty...?

Show the property

1. As a special agent in a transaction, a real estate salesperson is permitted to do which of the following on behalf of the client...?

General Agent

1. As an agent to a cooperative board, Mark has the authority to enter into contracts with 3rd party vendors to help service the building. This level of authority suggests that Mark is what type of agent...?

Misrepresent facts

1. Both the principal and the agent cannot do what to the customer...?

Undivided loyalty

1. Chris and Mark are real estate agents working for the same broker. Chris is seeking to rent an apartment on behalf of his client, while Mark's client is interested in renting the apartment. If all parties in the transaction agree to dual agency, which fiduciary duty to the principals may be most at risk...?

The Tenant

1. Chris, a real estate broker, has entered into an agreement to lease one of John's apartments. Who is the customer in the transaction...?

market allocation

1. City Brokerage and Town Brokerage entered into an agreement whereby City Brokerage will only do business on the East side of town and Town Brokerage will only do business on the West side of town. What may the two firms be guilty of...?

Independent Contractor

1. Debby is a New York State real estate agent. According to State law, Debby is considered a/an...?

The buyer

1. Even if the buyer's and seller's brokers agree to dual agency, who may reject the arrangement of dual agency in a transaction...?

the seller

1. Even if the buyer's and seller's brokers agree to dual agency, who may reject the arrangement of dual agency in a transaction...?

Tie in agreement

1. If a broker insists his/her client use a mortgage banker as a condition to the sale, the broker has engaged in what unlawful arrangement...?

The fact must be true accurate

1. If a principal or agent provides a customer with a material fact, which of the following must apply...?

Price Fixing

1. If a union of brokers in New York State bound together and agreed to only accept commissions of 9% or higher, far more than the typical 6% in a transaction, what may they be held liable for...?

Withhold income taxes

1. If an independent contractor relationship is breached and the agent is considered an employee according to New York State, what is the broker required to do...?

Group Boycotting

1. If two or more brokerage firms conspire to not do business with another brokerage firm, what may they be liable of...?

Independent contractors

1. In New York State, all real estate agents are considered...?

The agreement must be notarized

1. In addition to the agent signing the independent contractor agreement, what else is required before the agreement can be finalized...?

Written Consent

1. In order to disclose confidential information, the agent must first obtain what from the client...?

The seller

1. Jason, a buyer's broker, found a property for his client on the MLS. By agreeing to the cooperative arrangement of the MLS, who in addition to his client does Jason have an agency relationship with...?

According to the duty of Obedience, Chris should not show John one bedroom houses

1. John is interested in purchasing a two bedroom house and enters into an agency relationship with Chris, a real estate broker, to help him find a house. According to the fiduciary duties Chris owes to John, which of the following is true...?

John's Client

1. John is the seller's broker in a transaction. An associate broker from John's office is interested in showing the property to his client. Who must provide informed consent before the associate broker's client views the property...?

Fiduciary Duties

1. Josh, a real estate broker, is hesitant to enter into a dual agency arrangement as it may affect these duties to his client...?

Sub-agent

1. Justin, a real estate broker representing a buyer in a transaction, found a property for his client on the MLS. By agreeing to the cooperative arrangement of the MLS, Justin will have what type of relationship to the owner of the listed property...?

The sponsoring broker

1. Many brokerages allow in-house referral fees when an agent refers a client to another agent. Who ultimately distributes the referral fee to a referring agent...?

Group Boycotting

1. Marcus is a real estate broker representing a seller. Jason, a buyer's broker, is attempting to do a deal with Marcus that would prevent other broker's from showing their clients Marcus' client's property. In this scenario, what may Jason and Marcus be liable of if they act on this agreement...?

Accountability

1. Mark is a real estate broker who represents a buyer in a transaction. He recommended a mortgage broker to help his client obtain financing for a property. What the client doesn't know is that Mark will receive a referral fee from the mortgage broker if the client obtains a mortgage from the mortgage broker. This is a breach of which fiduciary duty...?

Either Mark and/or City broker

1. Mark is an agent with City Brokers. Mark decides that he wants to leave City Brokers to work with another broker. Who is capable of terminating the independent contractor relationship that exists between Mark and City Brokers...?

Estoppel

1. Michael, a property owner, allowed Andrew, a real estate broker, to show his house to prospective buyers. However, Michael and Andrew do not have a signed agency agreement and instead operated under an implied agency. According to this doctrine, Michael cannot claim that an agency relationship did not exist...?

Loyalty

1. Michael, a real estate broker, is hesitant to enter into a dual agency arrangement as he may compromise this fiduciary duty...?

Agent

1. One who undertakes to transact some business or to manage some affair for another by authority of the latter is known as a...?

Advance Consent to Dual Agency

1. Prior to January 1, 2011, which of the following was NOT permitted under New York State law...?

Self-Dealing

1. The conduct of a trustee, an attorney, a corporate officer, or other fiduciary that consists of taking advantage of his position in a transaction and acting for his own interests rather than for the interests of his clients is known as...?

Reasonable Care

1. The degree of caution and concern for the safety of himself/herself and others an ordinarily prudent and rational person would use in the circumstances is known as...?

principal

1. The employer of an agent or broker is known as a...?

Group Boycotting

1. Town Realty and City Realty created an alliance in an attempt to prevent another brokerage firm from competing in the marketplace. What may Town Realty and City Realty be guilty of...?

Informed consent from all parties

1. Two agents are attempting to create a dual agency with permission from both the buyer and seller. According to New York State law, what must be given in-writing...?

seller

1. When a buyer's broker agrees to the cooperative arrangement of the MLS, he/she becomes a sub-agent to whom...?

Single Agent

1. When an agent represents either the buyer or the seller, but NOT both in a transaction, the agent is considered what...?

Broker

1. Which of the following is NOT considered a principal in an agency relationship...?

THe agent can be employed by another company

1. Which of the following is a typical characteristic of an independent contractor relationship...?

AOnly showing the type/size of house the client is looking for

1. Which of the following is an example of obedience, one of the six fiduciary duties an agent owes his/her client...?

Landlord

1. Which of the following is considered a principal in an agency relationship...?

owner

1. Which of the following is considered a principal in an agency relationship...?

Group Boycott

1. Which of the following is considered an anti-trust violation...?

customer

1. Which of the following may be considered a 3rd party to a transaction...?

Section 442-c

1. Which section of the New York State Real Property Law states that the broker may be liable for the salesperson's actions...?

The buyer or seller

1. Who is required to sign the NYS Agency Disclosure Form...?

Accountability

A mortgage broker offers to give you a referral fee if you refer your buyer to them to obtain a mortgage. This fiduciary duty requires that you disclose the referral fee to the buyer as there can be no hidden profits in the deal

Fiduciary

A person who on behalf of, or for the benefit of another, transacts business or handles money or property not the person's own is known as a...?

25350

A property was sold for $845,000. The total commission for the transaction was 6%. The listing broker and buyer's broker agreed to split the commission 50/50. What is the amount of commission paid to the buyer's broker...?

Refuse to pay a commission to the listing broker

According to the 'In-house Sales' clause in an Exclusive Right to Sell agreement, a seller cannot do which of the following if the listing broker also finds a buyer...?

The seller

According to the Exclusive Right to Sell Agreement, who is liable for any damage, theft or loss attributed to a lockbox...?

Compensate the agent for a successful transaction

According to the duties a principal owes to the agent, the principal commits to doing which of the following...?

Material Information

Although an agent or principal is not obligated to disclose all information in a transaction, it is recommended that what information be revealed, in order to help the customer make an informed decision...?

Expressed Agency

An actual agency created by written or oral agreement between the principal and the broker is known as...?

Confidentiality

An agent's duty to safeguard his/her principal's lawful confidences and secrets is known as...?

Exclusive right to sell

An agreement of employment by a broker under which the exclusive right to sell for a specified period is granted to the broker is known as...?

Exclusive Agency

An agreement of employment of a broker to the exclusion of all other brokers is known as...?

General Agent

As an agent to a cooperative board, Jason has the authority to negotiate contracts with 3rd party vendors to service the building. This level of authority suggests that Jason is what type of agent...?

written contract

As an independent contractor, which of the following must exist between the salesperson and a specific broker...?

44175

Cindy's house was listed at $732,100. The property eventually sold for $736,250. The agreed upon commission was 6%. How much did Cindy pay in commissions at the closing of the property...?

12900

Ely's house was listed for $225,000. The property eventually sold for $215,000. The agreed upon commission was 6%. How much did Ely pay in commissions at the closing of the property...?

Taxes are paid in arrears

How does a salesperson pay taxes on commissions earned...?

John's Client

John, a real estate broker representing the owner, listed his client's property on the MLS. Any buyer's agent will be a sub-agent to whom...?

Justin has a fiduciary duty to the client

Justin, a real estate salesperson, would like to offer his colleague a referral fee for referring him a new client. Before offering the referral fee, however, Justin obtained informed consent from the client. Why must Justin obtain consent from the client...?

Advance Consent to Dual Agency

Only after January 1, 2011 was this permitted, as stated under Section 443 of the NYS Real Property Law...?

Reasonable Care

The 'R' in the acronym 'OLD CAR' refers to which of the agent's six fiduciary duties...?

Obedience

The salesperson must act in accordance to the client's demands and instructions. This is known as

Reasonable Care

The salesperson must be competent and not act in a negligent manner. This is known as

Disclosure of Information

The salesperson must communicate with the client and present all offers. This is known as

Accountability

The salesperson must safeguard any money or property held on behalf of the client. This is known as

Loyalty

The salesperson must work in the best interest of the client. This is known as

Ease of transportation in the neighborhood

Which of the following does an agent NOT have to disclosure to his/her client...?

NYS Property Disclosure Form

Which of the following forms do seller's attorneys often recommend that their client not fill out and instead pay a credit to the buyer...?

Employee

Which of the following is NOT considered one of the six fiduciary duties an agent owes to his/her client...?

Lead Paint Disclosure

Which of the following is a required New York State disclosure for all buildings built prior to 1978...?

Price Fixing

Which of the following is considered an anti-trust violation...?

loyalty

You have a client who is looking for a 2 bedrooms rental apartment in a desirable neighborhood. You find an apartment that matches your client's criteria but the apartment is listed well below market value. Although you personally may want the apartment for yourself, this fiduciary duty requires that you present the apartment to your client first

Obedience

Your client demands that you list her property below market value as she wants to sell the property quickly. Although you can earn a higher commission if the property were sold at market value, this fiduciary duty requires you to follow through with your client's listing price

Confidentiality

Your client is going through a divorce and must quickly sell their house. This fiduciary duty requires that this information remain private, as it may affect a buyer's offer price

Reasonable Care

Your expertise as a salesperson lies in residential rentals. According to this fiduciary duty, you may have to pass on a deal if a client comes to you looking to lease a new 50,000 sq.ft. office space