Chapter One (Agency) - National Exam Concepts

Implied agency arrises when A. A party creates an agency relationship outside of an express agreement B. A principal agrees to all terms of a written listing agreement whether express of implied C. An agent accepts an oral listing D. A principal accepts an oral listing

A. A party creates an agency relationship outside of an express agreement

A licensed broker may work only for A. A single employing broker who has an active principal broker's license B. An employer who has an active or inactive principal broker's license C. A client who has signed a listing agreement with a licensed principal broker D. A client who has signed an authorization agreement with a licensed broker

A. A single employing broker who has an active principal broker's license

In obtaining offers from a buyer, an agent must be careful to A. Avoid disclosing what price the owner will accept B. Balance the owner's price expectations with the buyer's opinion of value C. Avoid completing offers that are beneath market value D. Pursue only those offers which are at of near the listing price

A. Avoid disclosing what price the owner will accept

The standard of care and competence that a principal can expect from an agent is generally that which is A. Comparable to that of other practitioners in the area B. Specified in the agency agreement C. Necessary to earn the promised compensation D. Necessary to procure a customer

A. Comparable to that of other practitioners in the area

One of the agent's fiduciary that continues even after a listing agreement expires is A. Confidentiality B. Obedience C. Disclosure D. Diligence

A. Confidentiality

An owner's agent is showing a buyer a residential property for sale. The buyer notices water stains on the foundation walls and floor, and informs the agent. The appropriate course of action for the agent is to A. Inform the seller B. Suggest the buyer make a lower price offer C. Immediately contract to paint the ceiling D. Immediately contract to repair the roof

A. Inform the seller

The degree of authority granted by a residential brokerage listing agreement generally allows the agent to A. Market, sell and show the property B. Hire inspectors, and other individuals to prepare the property for marketing C. Negotiate the selling price between client and customer D. Create contractual obligations for the client

A. Market, sell and show the property

Real estate contracts that are not personal service contracts A. May be assigned B. Are not assignable C. Must be in writing D. Are exempt from the statue of frauds

A. May be assigned A real estate contract that is not a personal contract for services may be assigned to another party unless stated otherwise. Listing agreements are not assignable because they are personal service contracts. Sales contracts are assignable because they involve the purchase of real property.

An agent is operating as a disclosed dual agent on a transaction. In this case, the agent A. Must not represent one party's interest to the detriment of the other B. Must require that the principals refrain from disclosing any material facts to them C. Must be obedient and loyal to both parties D. Must operate without a listing agreement

A. Must not represent one party's interests to the detriment of the other

Which of the following is a dual agency situation? A. One agent represents both sides in a transaction B. A selling agent from one brokerage works with a listing agent from another brokerage to compete a transaction C. One agent represents two sellers at the same time D. Two agents share the exclusive right to represent the same client on all transactions

A. One agent represents both sides in a transaction

A property seller empowers an agent to market and sell a property on his behalf. This is an example of A. Special B. Universal C. General D. No Agency

A. Special

A principal discloses to her agent that she would sell a property for $500,000. During the listing period, the house is listed and marketed for $530,000. No offers come in and it expires. 3 Weeks later the agent confides to a customer that the seller would have sold for less than the listed price. Which is true? A. The agent has violated the duty of confidentiality B. The agent has created a dual agent situation with the customer C. The agent is violating the duties owed this customer D. The agent has fulfilled all fiduciary duties since the listing is expired

A. The agent has violated the duty of confidentiality

The agency relationship is defined by A. The laws of agency, or in some states, by statute B. the Realtor Code of Ethics C. Agreement between a principal and an agent D. The law of real estate contracts

A. The laws of agency, or in some states, by statute

A transaction broker should disclose their agency relationship to prospective buyers and sellers A. Upon first substantive communication B. Upon completion of the listing agreement C. Immediately prior to closing D. Immediately following completion of any offer

A. Upon first substantive communication

Audrey wants to take a vacation. To do so, she authorizes an agent to conduct the operations of one of her business enterprises. The kind of agency she has established is A. Universal B. General C. Limited D. Special

B. General

An agent informs a buyer that a provision in a contract is very commonplace. After explaining the clause, the agent assures the buyer that the clause does not mean anything significant. If something goes wrong with the transaction, the agent could be liable for A. Misinterpreting the clause B. Practicing law without a license C. Violating duties owned a customer D. Intentional Misrepresentation

B. Practicing Law without a license

When should the characteristics of the agency relationship be disclosed in writing to the seller? A. The agency relationship never needs to be disclosed in writing B. Prior to signing the listing agreement C. Before finding a replacement property but after the listing agreement if signed D. After signing the listing agreement but prior to acceptance of an offer

B. Prior to signing the listing agreement

Real estate sales agents are legally authorized to A. Negotiate and execute contracts for sale on behalf of the client B. Represent their employing principal broker in procuring clients and customers C. Act directly on a clients behalf to discharge the principal broker's listing responsibilities D. Take on the listing responsibilities for other listings in the MLS

B. Represent their employing principal broker in procuring clients and customers

How does the position of an independent contractor licensee (IC) differ from that of an employee licensee? A. The IC must obtain their own training, it is not provided by the principal broker B. The IC is responsible for their own taxes; the principal broker does not withhold C. The employee is not entitled to company benefits D. The IC must abide by all office meeting schedules

B. The IC is responsible for their own taxes; the principal broker does not withhold

An agent enters into a listing agreement with a home seller, but then becomes too busy to professionally fulfill the terms of the agreement. To solve the dilemma, the agent assigns the agreement to another licensee in the office. Which of the following is true about this situation? A. The new listing agent acquires the full set of fiduciary duties owed to the client B. The agent cannot assign the listing agreement C. The new broker has to split any commission that results with the assigning broker D. The original broker has to disclose the assignment to the seller

B. The agent cannot assign the listing agreement *Personal service contracts cannot be assigned

A buyer agent or tenant representative should disclose their agency relationship to the owner's agent A. After the buyer agent negotiates a successful contract with the owner's agent B. Upon initial contact C. Only if the buyer places a deposit on the owner's property D. Never

B. Upon initial contact

Which of the following is true of the connection between compensation and the agency relationship? A. If the agency relationship exists, the agent is entitled to compensation B. the Relationship if independent of any compensation arrangements C. If an agency relationship exists, the principal must provide valuable consideration to the agent D. An agreement to give and receive compensation creates an agency relationship

B. the Relationship if independent of any compensation arrangements The agency relationship does not require compensation or any forms of consideration nor does compensation define an agency relationship

A licensee performing a comparative market analysis must be careful to A. Show a low suggested selling price to avoid a complaint of misrepresenting the value B. Use the term "market value whenever possible in the report C. Avoid creating a false impression that the licensee is a certified appraiser D. Include the results of a certified appraisal in the analysis

C. Avoid creating a false impression that the licensee is a certified appraiser

An agency relationship may be involuntary terminated for which of the following reasons? A. Full Performance B. Renewal of the Agent's License C. Condemnation of the Property D. Mutual Consent

C. Condemnation May terminate due to death, abandonment, condemnation, breach, bankruptcy, revocation of the agent's license, renunciation

When a broker enters into a listing agreement the broker has agreed to accept which of the following? A. Contractual obligations with cooperating brokers B. Fiduciary obligations with the customer C. Fiduciary and contractual obligations with the client D. Fiduciary relationships with client and customer

C. Fiduciary and contractual obligations with the client

When must a listing agent disclose their agency relationship to prospective tenants or buyers? A. Immediately following any offer executed by the customer B. On first contact even if the individual is not seeking representation C. On first contact if the broker is seeking to represent the individual is asking the broker for representation D. Whenever substantive communication is made beyond casual conversation

C. On first contact if the broker is seeking to represent the individual is asking the broker for representation

Which of the following may associate their name or title with the term Realtor? A. Any duty licensed, active agent or principal broker B. Any member in good standing in a properly charted real estate trade organization C. Only members of the NAR D. Any active or inactive principal broker in the country

C. Only members of the NAR

A principal instructs an agent to market a property only to families on the west side of the university campus, which is an illegal instruction based on Fair Housing Law. The agent refuses to comply. In this case A. The agent should obey the instruction to salvage the listing B. The agent has violated fiduciary duty C. The agent has not violated fiduciary duty D. The agent is liable for breaching the listing terms

C. The agent has not violated fiduciary duty

One of the parties to an agency relationship defaults, and the agreement terminates. Which of the following is true? A. All Obligations are extinguished B. Both parties must continue to perform all other obligations of the agreement C. The defaulting party may have a financial consequence D. The damaged party has no claim against the defaulting party

C. The defaulting party may have a financial consequence

If a broker has worked on a completed transaction that involved a listing agent, a selling agent and several subagents of each of these, from whom will the broker receive any compensation that is due? A. The selling agent B. The seller C. The employing principal broker D. The listing agent

C. The employing principal broker

A subagent is A. The seller B. The Customer C. The principal broker who has an agency relationship with a client D. The buyer

C. The principal broker who has an agency relationship with a client

The essential foundation of the agency relationship consists of A. Diligence, results and compensation B. Service, marketing and respect C. Trust, confidence and good faith D. Mutual respect, compensation and confidentiality

C. Trust, confidence and good faith

Agent Michael is showing his new listing to a customer who informs him that he has just inherited 5 Millie dollars. Michael is now bound by fiduciary duty to A. Keep the information in in confidence B. Disclose the information to the buyer's agent C. Verify the buyer's statement before disclosing them to the client D. Disclose the information to his client, the seller

D. Disclose the information to his client, the seller

The duties of a transaction broker or facilitator include A. Preserving the Confidentiality of information received from either party B. Helping the two parties achieve their respective objectives C. Choosing to obey the instructions of one party and informing the other party of the decision D. Disclosing material facts that affect the value of the property to both parties

D. Disclosing material facts that affect the value of the property to both parties

A transaction facilitator in a residential transaction represents A. The buyer B. Both seller and buyer C. The seller D. Neither seller nor buyer

D. Neither seller nor buyer

A licensed broker can do which of the following activities? A. Accept a listing in an associates name B. Accept a commission directly from the MLS C. Sign a contract with a management company on behalf of a client D. Offer a property for lease on behalf of the employing principal broker

D. Offer a property for lease on behalf of the employing principal broker

Among the fiduciary duties imposed on a real estate agent is the requirement to A. Advise a prospect that the principal will not accept the prospect's offer in order to elicit a better offer B. Refuse offers the agent knows will be unacceptable to the principal C. Advise the principal against accepting an offer that is below full price D. Present all offers to the principal regardless of their amount

D. Present all offers to the principal regardless of their amount

Agent Gerry has executed an exclusive buyer broker agreement with the Andersons. The agent subsequently places an offer with Melinda, the exclusive selling agent for the Lincolns, to buy their lakefront property. The offer contains provisions for the Lincolns to pay the brokerage commission, which the Lincolns agree to. Given this set of circumstances, Gerry owes the full set of fiduciary duties to A. Gerry's Broker B. The Lincoln's C. Melinda's Broker D. The Anderson's

D. The Anderson's

In which of the following contact situations would a seller's agent be expected to disclose their agency relationships? A. The agent is showing a potential buyer houses in a certain price range in the multiple listing book B. The agent tells an acquaintance at a party about the clients property C. The agent answers questions about the clients property for a telephone caller responding to a newspaper ad D. The agent is showing the client's property to a prospective buyer

D. The agent is showing the client's property to a prospective buyer

A principal instructs an agent to inform minority buyers that the property for lease was just leased an hour ago and is no longer available. The agent refuses to comply. In this case A. The agent should exercise caution until the listing expired then decline to renew it B. The agent is liable for breaching the listing terms C. The agent may sure the principal for discrimination and misrepresentation D. The principal has proposed an illegal act which should not be obeyed

D. The principal has proposed an illegal act which should not be obeyed