Real Estate Quiz Chapter 2

Any agreement between firms to charge customers/clients at an agreed rate is, even at the smallest and most local level is which of the following?

A potential violation of the antitrust laws.

As used in the National Association of Realtors (NAR) Code of Ethics which of the following best describes an "agent" in a real estate transaction?

A real estate licensee (including brokers and sales associates) acting in an agency relationship as defined by state law or regulation

In New York real estate, "informed consent" refers to which of the following?

A client or customer being properly provided with the appropriate advance disclosures of agency relationships before committing to an agent or action.

Which of the following situations would be appropriate for a referral fee in New York real estate?

A commercial referral fee where the recipient provided name and number of the referral but no more.

A "cooperating broker" is best described by which of the following?

A cooperating broker is one from another firm working with the listing agent in a transaction

An "open listing" is best described by which of the following?

A listing where the commission will be paid to the agent(s) with the "procuring cause" (the action most directly resulting in the sale) leading to the actual buyer

An agent's "renunciation" of an agency relationship would be most likely to take place in which of the following situations?

A seller refuses to consider buyers of certain religions and the agent wants to withdraw without violating confidentiality.

A cooperating agent is a licensee best described by which?

A subagent to the agent in a real estate agency relationship

If a buyer's agent hasn't made any effort to find a property or a listing agent has done no marketing for a client, the client may consider the agency relationship terminated under which of these concepts?

Abandonment

When a principal and agent openly and consistently conducted business with a third party over a long period of time and then suddenly the principal denies the relationship, including refusal to deliver or to accept payment, which of these legal concepts should prevent the principal from getting away with this?

Agency by estoppel

Which of these forms of disclosure does not pertain to the property?

Agency disclosure

Which of the following is permitted disclosure WITH the authorization of the seller?

All of these

A licensee owes a "customer" which of these duties?

All of these -any legally required disclosures -honesty -fair dealing

Which of these is/are methods of terminating an agency relationship?

All of these -death or incapacity of a party -written agreement -expiration of agreement

Which of the following is an antitrust violation with special concern in the real estate profession?

All of these -group boycotting -market allocation -price fixing

Which of the following are areas of expertise in which a real estate professional has to offer consumers?

All of these. -educating and assisting the client in a major piece of the licensee's role in the real estate transaction process -help with filling out and understanding the listing agreement -explaining terms and numbers that have been inserted in the standard fill-in-the-blanks, e.g., price, dates, contingencies, inspection requested, etc

Which of these actions, if taken, would have been a violation of law, code of ethics, or both?

All of these. -having the listing clients sign a net listing agreement (where agent gets to keep the difference between the actual sales price and the seller's desired price), without explaining it

The "exclusive right-to-sell" listing agreement is BEST defined by which of the following?

An agreement in which the listing agent is entitled to their commission no matter who brings the buyer.

Which of the following is NOT an exception to the "no profit" restriction?

An increased commission percentage from the other party for agreeing to expedite the sale

Which of the following is NOT an exception to the "no profit" restriction?

An increased commission percentage from the other party for agreeing to expedite the sale.

Unless expressly indicated in offers to cooperate, cooperating brokers may not assume that the offer of cooperation includes which of the following?

An offer of compensation

Which of the following statements regarding commissions is NOT accurate?

Any agreement between firms to use the same commission rates must be in writing and signed by all participating firms

Which of the following statements regarding buyer's representation and transaction disclosures is NOT accurate?

At any first contact, the licensee must provide the buyer with the required summary of the duties and obligations associated with real estate agency

Why is the Office of the Counsel General in New York released Legal Memorandum LI12 of particular importance to real estate professionals?

Because it is a warning to consumers regarding dual agency.

Following the successful sale of Client's home by one of Manny Realtor's brokers supervised by Manny, Client refuses to pay. Which of the following scenarios would be necessary for broker to try and collect?

Broker would have to sue Manny and Manny would have to sue Client to collect.

Which of these is an agent that cooperates or is engaged by another agent (but does not work for the same firm as the agent) to assist the agent in servicing their client?

Broker's agent

A real estate licensee who is engaged by a buyer to represent the buyer's interests in a prospective real estate transaction.

Buyer's agent

The most common methods for termination of real estate relationship agreements is best summarized by which of these?

Completion and expiration

When a buyer and a seller both wish to engage the services of the same broker or brokerage firm, a broker may appoint one licensee to represent the buyer and other licensee to represent the seller which is known as which of the following?

Designated agency

Which of the following is described as a licensed real estate salesman or associate broker, working under the supervision of a real estate broker, who has been assigned to represent a client when a different client is also represented by such real estate broker in the same transaction?

Designated agent

Real Property Law 443 governs what import aspect of the real estate profession?

Disclosure of agency relationships

An agency relationship that is established when a third party reasonably believes, and has relied on the idea that an agent has acted on behalf of a principal even though no such agreement existed.

Estoppel

Which of the following is a permissible action by a real estate professional who is not licensed in another profession?

Explaining the terms and numbers that have been inserted in the standard fill-in-the-blanks, e.g., price, dates, contingencies, inspections requested, etc.

Which of these terms originates from the Latin word for trust that applies to the duties of an agent?

Fiduciary

Which of these relationships, none of which have been reduced to writing, BEST fits in the description of an "implied agency" agreement?

For many years, agent has received a 25% discount on their brokerage's monthly rent for every new client they referred to landlord and now may have the right to go to court to enforce it for any more.

Which of these offer is most likely to be considered by a client looking for the best price within the limited window that they have to move to another town for a new job?

Full cash offer; no contingencies

The property that buyer was seeking, as it turns out, is for their business partnership. Which of the following action is their best option?

Fully disclose their personal interest in the outcome of the transaction to Sponsor and any party participating or considering participating in the transaction, and acquire signed acknowledgements of the disclosure.

Which of the following sets of duties does Broker, as the property manager, owe to the tenants?

Honesty and fair dealing

In which of these circumstances would an agent not be required to be obedient to the principal?

If the principal's directive is illegal

How long does the Standards of Practice in the National Association of Realtors (NAR) Code of Ethics First Article say realtors are required to keep a client's information confidential unless released by the client or required by law?

In perpetuity (forever, it can never be used against them)

The tenant that abandoned their apartment with the rent overdue was a member of a protected class. Landlord does not want any more members of that class in their apartments and does want to be sure that the advertising is carefully crafted to send that message without being too obvious. Which of these would be the best of these option for broker?

Inform landlord that this is a violation of the law and that because of Broker's duty as a realtor, broker cannot participate in it, then recommend a different and legal course of action

Which of the following statements regarding the National Association of Realtors (NAR) Code of Ethics First Article is accurate?

It states that realtors pledge themselves to protect and promote the interests of their client

For many years without fail, Landlord gave Agent a break in their rent for every referral of a new tenant. When Landlord refused to exempt Agent from an across-the-board rent increase, Agent began to bad-mouth Landlord and even discouraged a couple potential tenants from applying. When Landlord found out, they sued Agent for violating their agency relationship. Which of these outcomes has the strongest argument in its favor?

Landlord should be able to prove that there was an implied agency based on their longstanding custom and habit and Agent's actions were clearly a violation of their duty of loyalty.

Which of these clauses in a listing agreement can protect the real estate professional from losing their investment into the listing if the principal should suddenly choose to terminate without cause?

Liquidated damages

Which of the following is NOT an acceptable option for a licensee pertaining to communicating with parties not involved in a transaction?

Lying to avoid divulging confidential information.

Manny is managing broker of Manny Realty with two other brokers and two salespersons who all are supervised by Manny. One of the brokers and salesperson team up and bring in a $1 million listing, but are arguing; who owns the listing?

Manny

If four realty brokerages decided to break up their market into even divided quarters, with one taking each, they could be found guilty of which of these antitrust violations?

Market allocation

A "best practices" approach to any referral requested by a client, whether it is for a mortgage, inspector, lawyer, accountant, repair person, etc., is to provide them with which of the following?

No less than three choices for any one specific task or skill and let the client choose from those ... or anyone else, so long as it's their uninfluenced choice

An agent acting on behalf of the seller must continue to market the property until which of these occurs?

Once an offer has been accepted

Regulation 175.7 and RPL Section 443 are closely related laws pertaining to real estate representation in New York. Which of the following best describes a major distinction in the roles of the laws?

One calls for an explanation of agency roles in general and one also requires that the licensee disclose their role in the transaction

Which of the following is not a way in which a real estate professional can provide services not available to the common consumer?

Placing on social media

The authority to provide or deny "license" to engage in a regulated profession is one of which "powers" granted to the government?

Police

Which of the following would a licensee need to disclose to a buyer who has viewed a property for themselves?

Previous repair for a cracked foundation

Which of the following is not a common agency relationship encountered by non-managing licensees?

Principal-agent with the client

Any change in compensation offered for cooperative services must be communicated to the other realtor(s) by which of these following points?

Prior to the time that the realtor submits an offer to purchase/lease the property

As used in the National Association of Realtors (NAR) Code of Ethics which term means a purchaser, seller, tenant or landlord who is not subject to a representation relationship with the realtor or their associated firm?

Prospect

When one party (Agent) acts on behalf of another (Principal) without prior authorization, but Principal accepts Agent's actions and the consequences and/or benefits of the actions, it is referred to as forming an agency by which of the following processes?

Ratification

Which of the following statements regarding the Standards of Practice in the National Association of Realtors (NAR) code of ethics article 3 is not accurate?

Realtors may provide access to listed property on terms they feel best suited to the listing broker.

Which of the following statements regarding the Standards of Practice in the National Association of Realtors (NAR) code of ethics article 3 is not accurate?

Realtors, acting as listing brokers, do not have an affirmative obligation to disclose the existence of dual or variable rate commission agreements.

Realtors who are employed to maintain or manage a client's property shall exercise due diligence and make reasonable efforts to protect it against which of these?

Reasonably foreseeable contingencies and losses.

Generally, prior to a client's acceptance of a subsequent offer which of these following actions should the agent take?

Recommend that the client obtain the advice of legal counsel.

An agent deciding to withdraw from an agency relationship because they are concerned about legal issues or their ability to serve is said to engage in with of the following actions?

Renunciation

Which of the following best completes the phrase beginning with "competently manage the property of clients with due regard for the"?

Rights, safety, and health of the tenants

For most of the history of the real estate industry, which of these types of agency was the norm?

Seller

A broker who represents the buyer or seller, as an agent in a fiduciary relationship, but not both in the same transaction is which type of agent?

Single

The fiduciary obligation of "no profit" is best described by which of the following?

That an agent must not profit from the transaction beyond that agreed with their principal.

Which of the following must be shown to establish an "agency by estoppel?"

That the agent had some authority on behalf of the principal to begin with

Which of these pairs do not have a direct agency relationship, that is, do not have privity of contract?

The agent assisting the broker in the transaction and the client.

Which of the following options would best describe elements key to establishing a "gratuitous agency" situation?

The agent will receive no compensation, but will be held to fiduciary duty standards just the same

A "Blanket Unilateral Offer of Subagency" is an act such as which of the following?

The authorized listing of a real property on a multiple listing system effectively recruiting cooperation of others

Which of the following statements regarding broker's agents in New York is NOT accurate?

The broker's agent has a direct relationship with the principal/client

Which of the following situations would most likely involve a universal agency relationship?

The guardian of a child

Which of the following statements regarding real estate agency relationship disclosure should licensees keep in mind when explaining their roles to a client or customer?

The less-informed consumer is going to be given greater latitude in their knowledge of the situation than the one (licensee) who is the professional in the situation

Which of the following situations would be most likely to be found as a punishable misrepresentation?

The licensee said the roof was 2 years old when it was 20 based on the unconfirmed word of the seller.

(Start of Chapter 2, Quiz 2) Which of the following statements regarding the use of a cooperating brokers is not accurate?

The listing broker and cooperating broker are prohibited from entering into a voluntary agreement to change cooperative compensation

Which of the following statements regarding variable commission rate is not accurate?

The listing firm's percentage can never be equal to or higher than that for another firm

In an exclusive representation agreement, the listing broker gets a commission unless the buyer is brought by which of these parties?

The owner/seller

Which of the following statements regarding "reasonable care" by a licensee is not accurate?

The reasonable care standard does not take into consideration such things as whether the actions were taken by an expert.

Who generally is responsible for the commission of the agents?

The seller as a percentage of the price is most common, but there is no single rule

Which of the following statements regarding the principal-agent relationship in real estate is NOT accurate?

The supervising broker cannot be held liable for any legitimate mistake made by a licensee in their approved duties.

In response to inquiries regarding other offers on a transaction, if the client has authorized sharing, which of these is not required to disclose?

The terms of the other offers

In an exclusive right-to-sell representation agreement, the listing broker gets a commission unless the buyer is brought by which which of these parties?

They get paid no matter who brings the buyer

Which of the following BEST describes the overall purpose of the antitrust laws?

To prevent any unfair restraints on trade

What is the most common cause for an agency by necessity?

To protect another party or another party's property

The term(s) first substantial contact or first substantive contact pertain to what real estate licensee duty?

To provide consumers with information regarding agency relationships.

Sponsor could be held liable for Broker's actions even if sponsor was unaware of broker's actions

True

Which of the following statements regarding "cooperating brokers" and compensation for cooperating brokers is not accurate?

Unless expressly indicated in offers to cooperate, cooperating brokers may assume that the offer of cooperation includes an offer of compensation.

What is the term for liability for the actions of another party for whose actions one holds some responsibility?

Vicarious

The standards of Practice in the National Association of Realtors (NAR) Code of Ethics First Article do not require which of the following?

When acting as listing broker, realtors shall continue to submit to the seller/landlord all offers and counter-offers until an offer has been accepted.

When does the Standards of Practice in the National Association of Realtors (NAR) Code of Ethics First Article say realtors are allowed to stop presenting offers and counter-offers in a timely manner?

When the client has waived the privilege in writing.

Which of the following would best describe the contract term "ratification?"

Where one party acted for another with no formal agency agreement, but the principal accepts the actions of the apparent agent (particularly where the principal accepts the benefits of the relationship)

"Self dealing" is best described by which of the following?

Where the agent in an agency-principal relationship places their own interests ahead of the principal's to profit or otherwise benefit for themselves.

Which of the following statements regarding general agency is NOT accurate?

Without contractual agreements, a principal cannot be held legally responsible for the actions of an agent

One who cooperates with or is engaged by a listing agent, buyer's agent, or tenant's agent (but not employed by the same firm as the listing agent, buyer's agent, or tenant's agent.

broker's agent

"Express agency" is an agency relationship that is best described by which of these options?

clear and generally granted in writing to eliminate any question

Any consumer with whom an agent interacts in a real estate transaction, or potential transaction, with whom the licensee does not have a contractual relationship or obligation.

customer

One appointed by the real estate broker who represents both parties as a dual agent assigned to represent directly and exclusively the buyer or the seller.

designated sales agent

When broker took actions for the LA client with no more than presenting papers for them to sign, what important element of a proper agreement were they overlookng?

informed consent