Final Exam - South Carolina Real Estate Principles 2.0 Part 2
All of the following are typically found in a listing agreement EXCEPT
the date the real estate professional will schedule an open house.
Which law has a feature that commercial email messages must include a means by which the recipient can unsubscribe?
CAN-SPAM Act
A buyer's agent, upon learning that the home being purchased is to house a dog-grooming business, didn't check zoning. What fiduciary duty did the buyer's agent violate?
Care
A real estate sales associate represents a buyer. At their first meeting, the buyer reveals plans to operate a dog-grooming business out of the purchased house. The sales associate did not check the local zoning ordinances to determine in which parts of town such a business could be conducted. Which common law duty did the sales associate violate?
Care
Real estate agency relationships are governed by which kinds of law?
Common law, statutory law, and administrative law
Which of the following is a requirement of residential property sellers in many states?
Complete a property condition disclosure form
If you were the broker, how should you respond to Jay's question?
Emphasize that the property will be marketed effectively to the greatest number of prospective buyers
What should the broker have done during the presentation to avoid the question in the first place?
Emphasize the importance of using a competent real estate broker
Which of the following is considered lawful practice in real estate brokerage?
Exaggerated statements about the property
Many trade organizations serve the real estate business. The largest is the National Association of REALTORS® (NAR).
FALSE
Price-fixing, which is the practice of setting prices for products or services rather than letting competition in the open market establish those prices, is legal.
FALSE
States' licensing rules and regulations do NOT have the same force and effect as statutory law.
FALSE
When information is taken from the internet, it is always accurate.
FALSE
Which statement is TRUE of a listing agreement?
It is an employment contract for the professional services of the broker.
The listing agreement on a residential property states that it expires on May 2. Which event would NOTterminate the listing?
On April 15, the owner tells the listing broker that the broker's marketing efforts are not satisfactory.
How should the broker have responded if Jay seemed to favor an open listing?
Point out that in an open listing, Jay wouldn't have any one broker devoted to selling his property
A buyer who is a client of the broker wants to purchase a house that the broker has listed. Which statement is TRUE?
The seller and the buyer must be informed of the situation and agree in writing to the broker's representing both of them.
A real estate broker lists a home for sale for $189,500. Later that same day, a prospective buyer comes into the broker's office and asks for general information about homes for sale in the $130,000 to $140,000 price range but refuses representation by the broker's company at this time. Based on these facts, which statement is TRUE?
The seller is the broker's client; the buyer is a customer.
Which of the following is a similarity between an open listing and an exclusive agency listing?
Under each, the seller avoids paying the broker a commission if the seller sells the property to someone the broker did not procure.
If Ivy later obtains a real estate license, will she still have a problem?
Yes, her conduct prior to being licensed could still be questioned.
Is there any problem with Ivy acting so generously on behalf of family and friends?
Yes, she may be charged with engaging in activities that require a real estate license.
Most states require that a real estate listing agreement contain
a definite contract termination date.
In the common law of agency, the relationship of broker to client is that of
a fiduciary.
The relationship of broker to client in an agency relationship is that of
a fiduciary.
Under the Sherman Antitrust Act, the penalty for a person found guilty of fixing prices or allocating markets is
a maximum $1 million fine and 10 years in prison.
The universal agent's authority to act on behalf of the principal is significantly limited.
false
Personal property included in a sale of real estate may include
fireplace equipment.
Upon discovering a latent defect in a property, the real estate professional should discuss the problem with the seller and then
inform any prospective buyers of the defect.
A real estate broker acting as the agent of the seller
must promote and safeguard the seller's best interests.
When the broker should have known that a statement about a material fact was false, it is considered
negligent misrepresentation.
Before making a listing presentation to a prospective property seller, a real estate sales associate should
prepare a comparative market analysis.
Buyers hire an agent to help them purchase a home and want seller financing because they filed for bankruptcy two years ago. The agent is
required to disclose the information because it is a material fact important to the seller.
Generally, the relationship between real estate broker and seller is
special agency
The laws enacted by a legislature make up
statutory law.
A property owner signed a 90-day listing agreement with a real estate professional. The owner was killed in an accident before the listing expired. Now the listing is
terminated automatically because of the death of the principal.
Last month a broker took a listing on a property The broker learned later that the client has been declared incompetent by the court. The listing now is
terminated.
By executing a listing agreement with a seller, a real estate broker becomes
the agent of the seller.
In a single agency relationship,
the agent represents only one of the parties to a transaction
In a real estate transaction, the term fiduciary typically refers to
the agent's relationship to the principal.
The individual who is authorized and consents to represent the interests of another person in dealings with a third person is
the agent.
A prospective buyer signs an agreement with a broker to find a property for the buyer, and the buyer agrees to work only with that broker. While this agreement is in effect,
the broker can represent other buyers.
In a listing agreement, the broker protection clause describes the circumstances under which
the broker may be entitled to a commission after the termination of the listing.
A property listing taken by a real estate sales associate is technically an employment agreement between the seller and
the broker.
Designated agency is MOST likely to occur when
the buyer and the seller are represented by the same company
The form of listing that is illegal in many states is
the net listing.
The listing agreement that allows the property seller to employ multiple brokers is
the open listing.
A sales associate of a broker told a prospective buyer that the house being shown is "the best house in the area." Because of this statement,
the sales associate was practicing puffing.
A seller gets opinions from a listing agent, appraiser, and attorney about choosing a listing price. In the end, the final decision should be made by
the seller.
A seller sold property to a neighbor without the services of a real estate broker; however, the seller still owes a broker a commission because the seller signed
the seller.
If leased equipment is to be included in the listing agreement terms upon a sale, the lessor must be notified of the change of ownership by
the seller.
The final decision on a property's asking price should be made by
the seller.
A real estate broker working with a seller should
transmit all offers to the seller.
A universal agent is a person empowered to do anything the principal could do personally.
true
An express agreement, in which the parties formally express their intention to establish an agency and state its terms and conditions, may be either oral or written.
true
Before signing a contract, the seller's main concerns typically are the selling price of the property and the net proceeds.
true
If one or more of the owners in a listing agreement is married, the spouse's consent and signature on the contract to release any marital rights is required in most states.
true
In a buyer-agency agreement, just as in any agency agreement, the source of compensation does NOTdetermine the relationship.
true
In an open listing, the seller is obligated to pay a commission to only the broker who successfully produces a ready, willing, and able buyer.
true
In traditional common law, the relationship in which the agent is held in a position of special trust and confidence by the principal is one of a fiduciary.
true
Most states specifically allow a real estate professional to go over the terms of a preprinted contract with a client without risking an accusation of the unlawful practice of law.
true
The real estate professional's duty to a third party (customer) includes disclosure of all facts that the real estate professional knows or should reasonably be expected to know that materially affect the value or desirability of the property.
true
If Erik had hired his own agent and the agent assured him that the property was suitable for his plans, would Erik have a cause for action against his agent?
yes
A seller tells his agent in confidence that he must sell fast and may accept less than the list price. The agent tells a buyer the seller will accept up to $5,000 less than the list price. Which is TRUE?
Disclosure was improper and possibly illegal, regardless of the agent's motive.
Maria tells her agent in confidence that she must sell fast and may accept less than the list price. The agent tells a buyer the seller will accept up to $10,000 less than the list price. Which is TRUE?
Disclosure was improper and possibly illegal, regardless of the agent's motive.
Does it make any difference that Ivy receives no compensation for helping family and friends?
No, not charging does not prevent the real estate Commission from investigating her conduct.
The fundamentals of general agency law have changed dramatically over the past two hundred years.
false
Which of the following is considered dual agency?
A broker acting for both parties in the same transaction
executory contract
A contract that has not yet been fully performed.
Which of the following is a similarity between an exclusive agency listing and an exclusive right-to-sell listing?
Both types of listings give the responsibility of representing the seller to one broker only.
The information required for the listing agreement does NOT include
Social Security number of seller(s).
In MOST situations, the relationship between real estate broker and seller is what type of agency?
Special
The relationship between real estate broker and seller is generally what type of agency?
Special
Group boycotting, allocation of customers or markets, and tie-in agreements are all prohibited acts under the Sherman Antitrust Act.
TRUE
Laws cannot guarantee an ethical or moral marketplace.
TRUE
The Institute of Real Estate Management (IREM) is affiliated with the National Association of Real Estate Brokers (NAREB).
TRUE
The purpose of the Electronic Signatures in Global and National Commerce Act (E-Sign) is to make contracts (including signatures) and records legally enforceable, regardless of the medium in which they are created.
TRUE
Which of the following is NOT a valid reason to terminate an agency relationship?
The buyer wanted to work with a new agent, but the terms of agency had not yet expired and the current agent did not agree to terminate.
A real estate agent's duty of confidentiality usually extends for how long?
The period of time specified in state law
Proof of title to real estate may be provided by a warranty deed, title insurance policy, or
abstract of title with attorney's opinion.
A real estate broker hired by an owner to sell a parcel of real estate must comply with
all lawful instructions of the owner.
What mistakes did Erik appear to make when the property was purchased?
all of these
The individual who is authorized and consents to represent the interests of another person is
an agent.
A buyer signed an agreement with a broker to compensate the broker even if the buyer purchases the property from a relative. This is called
an exclusive buyer representation agreement.
An agreement that is specific in its terms and conditions is considered
an express agreement.
If one or more of a property's owners is married, the spouse's consent
and signature on the contract to release any marital rights is required.
A real estate professional's duties to a customer do NOT include
being primarily responsible to the customer.
A seller hired a broker under the terms of an open listing agreement. While that agreement was still in effect, the seller—without informing the first broker—hired another broker from a separate firm under an exclusive right-to-sell listing for the same property. If the first broker produces a buyer for the property whose offer the seller accepts, the seller must pay a full commission to
both brokers.
In a dual agency situation, if it is permitted by state law, a broker may represent both the seller and the buyer in the same transaction provided
both parties consent in writing to the dual agency.
The rules of a society established by tradition and court decisions are found in
common law.
In an exclusive agency listing, the seller is obligated to pay the broker a commission regardless of who sells the property.
false
In an exclusive buyer representation agreement, the buyer can work with more than one broker.
false
All of the following are valid reasons for terminating a buyer representation agreement EXCEPT
death of the sales associate who worked with the buyer.
All of the following are valid reasons for terminating a listing agreement EXCEPT
death of the sales associate.
The fiduciary responsibilities of an agent to the principal under the common law of agency include
disclosure of material facts that the agent knows.
An express agreement occurs when the actions of the parties indicate that they have mutually consented to an agency.
false
Courts have encouraged the use of automatic extension clauses in exclusive listings.
false
Exaggeration of a property's benefits is called puffing and is illegal.
false
