Level 6 NY Real Estate

Which of the following BEST describes what happens when Broker Bob signs a listing agreement with Seller Sally?

A fiduciary relationship is formed

How can a license holder avoid misrepresentation?

A license holder should point potential buyers to the resources that can help with questions that they shouldn't answer.

All the following applies to a subagent EXCEPT:

A subagent does NOT owe all the fiduciary duties to the principal that the broker representing that principal does

Ostensible agency or agency by estoppel is created when WHO is misled about the agency relationship?

A third party

Which of the following fiduciary duties survive agency termination?

Accounting and Confidentiality

When is agency by estoppel typically created?

After the actions of the agent have already occurred.

Which of the following contain the basic elements of antitrust violation?

An Agreement/ Between competitors/ that imposes restraint/ and the restraint is unreasonable

Which of the following is TRUE of a relationship created between a buyer and an agent?

An agency relationship between a buyer and an agent can be expressly stated or implied.

Which of the following is NOT an example of special agency?

An agent accepting a buyer's offer without the seller's permission

Which of the following is an example of commingling?

An agent storing a principal's title fee funds in the agent's personal bank account.

Salesperson Ralph canvassed a community of luxury homes, telling homeowners about the rumblings of an immigrant settlement coming soon to an adjoining area. He offered to help homeowners sell their property before any of that became common knowledge. What, if anything, is Ralph guilty of?

Blockbusting

Which of the following is true about clients and customers?

Brokers work for clients and with customers.

Agent Clark is working with seller Jean to sell her property. Agent Clark used to go to college with Buyer agent Sally. Clark and Sally meet up for lunch one day, and Clark tells Sally his seller is willing to accept less than the listed price. What is TRUE of this situation?

Clark has violated his duty of loyalty and confidentiality to his client.

By dividing the metropolis of Boomville into evenly sized quadrants, the four big brokerages in town focused on their assigned areas more intensively than they could the whole of Boomville. They freely shared their in-depth knowledge with their clients. So why would this practice be frowned upon?

Competition and choices are suppressed.

What is required for an agency relationship to form?

Consent of the agent and the principal

When one agent can represent both parties (seller AND buyer or tenant AND landlord), what type of agent is operating?

Dual Agent

Which of the following fiduciary duties NEVER terminates?

Duty of confidentiality

Which is NOT one of the required components to form an agency relationship?

Earnest Interest

Broker Blake returned from his honeymoon to announce that his wife has designed day-glow orange blazers that every salesperson in the brokerage must wear during their shifts in the office. Beyond being horrified at the news, what else is probably true of salespersons Percy and Barb?

Employees

Susan is showing properties to a prospective buyer. While she is driving, the potential buyer says, "Susan, I hope you will work hard for us to find the perfect property." Susan responds by saying "I will take care of everything." What type of agency relationship have Susan and the buyer formed?

Express

If Broker Gil signs Seller Audrey to a listing agreement and, then, chooses not to present her with a comparative market analysis because he has decided to buy her property for himself, what could Gil be accused of?

Failure in his fiduciary duty of loyalty and engaging in self-dealing

According to New York Real Estate License Law §175.21, licensed brokers should NOT keep and maintain paper and/or electronic records regarding the amount of commission paid to a broker.

False

A broker who enters into a Listing Agreement with a seller is considered a:

Fiduciary

Some of the 20 factors provided by the IRS can be placed into which of the following categories or buckets?

Financial Control

The factors of significant investment, unreimbursed expenses, and opportunity for profit or loss are all part of what's known as:

Financial Control

Megan quit her job in Manhattan to pursue a freelance career in graphic design. Still working in the city, which law serves to establish and enhance protections for Megan's freelance career?

Freelance Isn't Free act

If Geni (a broker) is Andie's (an agent) supervising broker, who is the principal in their general agency relationship?

Geni (the broker)

Which of the following are non-fiduciary duties?

Honesty and Fairness

Shortly after George and Paul got married, they found out that their "insurance guy" refused to sell them a homeowners policy on their Brooklyn hi-rise condo unless they also purchased flood coverage. In which instance is this likely an example of red-lining?

If other homeowners in the same area are not subject to the same requirements

An individual in a certain profession that offers their services to the general public is classified as which type of worker?

Independent Contractor

According to 1986 additions to New York State Labor and Worker's Compensation laws, as long as real estate salespersons meet certain criteria, they are to be considered:

Independent Contractors

Which of the following are the three most common types of misrepresentation?

Innocent, Negligent, Fraudulent

Jane just signed a listing agreement. Who determined the commission earned by the listing brokerage?

Jane and Jane's Broker

When considering if a worker is an employee or an independent contractor, it's important to:

Look at the entire relationship

When an agent protects their client's best interests, they are modeling which fiduciary duty?

Loyalty

Which of these is an agent's fiduciary duty to put the client's interests first, including over those of the agent?

Loyalty

During a showing of a lakefront cabin, listing agent Susan was effusive in her descriptions of its features, telling buyers Josh and Daisy that the view off the back patio was worthy of a painting and that the fireplace was an instant memory-maker. What, if anything, is Susan guilty of?

Puffing

When an agent decides to end an agency relationship, this is called:

Renunciation

Section 530 of the Revenue Act of 1978 is known as:

Safe Harbor

To a client, what is a broker considered to be?

Special Agent

The passages from Section 201 serves to reinforce what has been laid out (at the federal level) regarding the worker classification of a real estate salesperson operating as a:

Statutory Non-Employee

Given that degree of control is one of the primary factors in determining whether an worker is an independent contractor or employee, why aren't most real estate agents categorized as employees of their sponsoring broker?

The IRS carved out a special "control allowance" that permits those real estate agents to be categorized as independent contractors

Who is the listing agent in most cases?

The agent for the seller

Seller Simone told her agent she received an insurance check for water damage but spent the money on a new car. The damage was never repaired. What should Simone's agent do?

The agent should disclose the information, as it is a material fact about the property

An agent has obtained a buyer representation agreement with a new client. Who owes the client fiduciary duties?

The broker and all sponsored agents in the brokerage

Seller Jerry goes bankrupt. What happens to the previously created agency relationship between Seller Jerry and his agent?

The relationship is terminated

Which of the following statements is true about a salesperson operating as an agent?

The salesperson operating as agent will not be listed as party to any agency agreement.

Broker Bob is a subagent working WITH a buyer. Who does Bob represent?

The seller

Timothy has an agency relationship with Sarah, the purchaser of 4412 Castle Drive. Sarah has also agreed to a contract with Melissa, a licensed real estate inspector, to inspect 4412 Castle Drive. What is the relation of Melissa to Timothy?

Third Party

Commission rates between a broker and a client must always be negotiable.

True

Implied agency is a form of accidental agency.

True

T/F: Subagency is a form of agency that arises when an agent enlists the use of other agents to accomplish the goal of the principal of the agent.

True

T/F: The four primary role players in a typical transaction are: the buyer (or renter), the seller (or landlord), and a license holder representing each party (two total).

True

T/F: The various people involved in a brokerage include the broker, agent, associate broker, and cooperating broker.

True

The two essential components for the creation of an agency are consent and control.

True

When a worker lacks benefits such as pension plans and paid vacation, this does not necessarily mean the worker is an independent contractor.

True

A mutual agreement can be made:

Verbally, in writing, by action

Which of the following potential questions may be illegal to answer?

What is the racial make-up of this neighborhood?

When does an agency relationship start?

When a mutual agreement is reached between the principal and the agent

Which of the following statements BEST describes agency by ratification?

When an agent takes an action outside of what they were explicitly authorized to do but which was accepted AFTER the fact by the client

What is mutual rescission?

When both parties mutually agree to end the agency relationship

What is the best way to create an agency agreement with a seller?

a listing agreement

Expressed agency is:

a type of agency relationship that is created as a result of an explicit oral or written agreement

What is accounting?

an agent's duty to account for all funds and/or property a client has entrusted to them

Which of these is an example of a general agency relationship?

broker and sponsored agent

A general agency relationship is most commonly formed between a ________.

broker and sponsored salesperson

In terms of relationships, fiduciary duties and responsibilities, a tenant's agent is most like:

buyer's agent

For real estate license holders, who is considered "your principal"?

client

A subagent works for the principal and with the:

customer

An express agency agreement can be:

either oral or written

How would a sales agent be classified if paid strictly by salary?

employee

An agent owes a client different fiduciary duties when their agency relationship is formed through an oral agreement.

false

The duties owed by agents to their clients are known as:

fiduciary duties

How many categories can behavioral control factors fall into?

four: degree of instruction, training, evaluation systems, type of instructions given

The most desirable way to terminate agency is through:

fulfillment of purpose

Associated license holders usually have what type of agency relationship with their broker?

general

-the salesperson-broker relationship -the principal is responsible for the acts of their agent as long as the agent is acting within the scope of their duties -holds the broker responsible for actions performed by their sponsored agents

general agency

holds the broker responsible for actions performed by their sponsored agents

general agency

the principal is responsible for the acts of their agent as long as the agent is acting within the scope of their duties

general agency

the salesperson-broker relationship

general agency

The best way to create any agency relationship is to do so:

in writing

If a license holder pays their own business expenses, including mileage, MLS fees, association and licensing fees, they are probably a(n):

independent contractor

A customer is a(n):

individual with whom a license holder has no agency relationship nor fiduciary duties but to whom fairness and honesty are still required

When a principal does nothing to prevent a license holder from giving a third party the impression that the license holder represents the principal, this is known as:

ostensible agency

A single agent refers to a license holder who:

represents only one party to the transaction

-the most limited type of agency -agents are limited in scope and are only authorized to perform acts permitted by their principal -these agents are unable to make decisions that would bind or obligate their principals -the broker-client relationship

special agency

agents are limited in scope and are only authorized to perform acts permitted by their principal

special agency

the broker-client relationship

special agency

the most limited type of agency

special agency

these agents are unable to make decisions that would bind or obligate their principals

special agency

Vicarious liability is a common law concept that:

states a person is liable for the actions of those acting (with authority) on that individual's behalf

What is disclosure?

the act of revealing critical information regarding agency relationships or material facts related to real estate transactions

What are fiduciary duties?

the full sum of obligations owed to the client in an agency relationship that ensure that the agent always acts in the best interest of the client

Who are the four primary role players in a typical real estate transaction?

the seller (or landlord), the buyer (or tenant), the seller's agent, the buyer's agent

Which of the roles below BEST describes the following terms: real estate inspector, loan officer, or the "other principal."

third party

-The most broad type of agency agents have a very broad and general scope of power to act on behalf of the principal -often granted via a general power of attorney -the relationship between a child and a parent as executor of the will

universal agency

agents have a very broad and general scope of power to act on behalf of the principal

universal agency

often granted via a general power of attorney

universal agency

the most broad type of agency

universal agency

the relationship between a child and a parent as executor of the will

universal agency