Agency and Contracts

A lease for a period of years that is held by the lessor is an example of: a. freehold estate b. personal property c. real property d. none of these

B. Personal property (The tenant has a "right to possession" per the lease agreement, which is considered personal property of the lessor (landlord).)

What is an agent required to do if a client refuses to sign an agency disclosure form? A. Terminate relationship B. Create record of refusal in writing C. Continue without record of the refusal D. Take legal action against the client

B. create record of refusal in writing

What is an agent required to do if a client refuses to sign an agency disclosure form? A. Terminate relationship B. Create record of refusal in writing C. Continue without record of the refusal D. Take legal action against the client

B. Create record of refusal in writing (agents are required to keep all records on file)

What term is used to describe the document attached to an original contract? A. Addendum B. Signed Agreement C. Delta D. Supplemental Document

A. addendum

A salesperson unlawfully takes kickbacks in connection with licensed real estate activities. The employing broker finds out about the kickbacks, fires the salesperson, and warns others in the office not to do this. Under these circumstances: A. both the salesperson and broker could be disciplined by the commissioner B. Only the salesperson could be disciplined by the commissioner C. a court could revoke the salesperson's real estate licensee. D. only the broker could be disciplined by the commissioner.

A. both the salesperson and broker could be disciplined by the commissioner (In 1974, the Real Estate Settlement Procedures Act (RESPA) was created to stop kickbacks between service companies and real estate agents. This regulation made kickbacks illegal.)

Which of the following will terminate an agency in a broker-seller relationship? A. The owner declares bankruptcy B. The broker gets assistance from another broker to help sell the property C. The owner moves out of the property D. All of the above

A. the owner declares bankruptcy (three ways a listing agreement can be terminated are included but not limited to : death, insanity, bankruptcy)

A licensee who is guilty of "conversion" is one who is: A. misrepresenting B. misappropriating the funds of clients C. failing to make disclosure D. commingling

B. Misappropriating the funds of clients (conversion is the act of withholding or unauthorized use of property that rightfully belong to another person)

The listing agreement whereby a principal lists property for sale with a number of brokers is known as a(n): a. Exclusive agency b. Open listing c. Exclusive- right-to-sell d. Net listing

B. open listing (In an open listing, the principal may employ any number of brokers and need pay a commission only to that broker who successfully procures a ready, willing and able buyer.)

The most common listing agreement allows the Broker to: A. convey title B. find a purchaser, obtain an offer, and bind the principal to the offer. C. find a purchaser, fill out the deposit receipt, obtain an offer, and present the offer. D. guarantee the purchaser will accept

C. Find a purchaser, fill out the deposit receipt, obtain an offer, and present the offer. ( as a listing agent/broker, these are the following steps that lead to the sale of a property)

A listing agreement between a principal and broker is a(n): a. implied contract. b. breach of contract. c. express contract. d. discharge of contract.

C. express contract (A listing agreement is an express contract (exchange of promises) between the principal and broker that names the broker as a fiduciary representative (agent) of the principal.)

When an agreement of the parties is demonstrated by their acts and/or conduct, this is known as what type of contract? a. Express b. Voidable c. Implied d. Unilateral

C. implied

n order to be valid, all exclusive listings must include: A. Permission for the listing broker to appoint subagents. B. A dragnet clause. C. An automatic renewal clause. D. A definite date of expiration.

D. A definite date of expiration.

Which listing agreement allows the owners of the listed property to sell the property on their own and not have to pay commission to the listing broker A. Open listing B. Options listing C. Exclusive agency listing D. Both A and C

D. Both A and C (neither an open or exclusive agency guarantees a commission; if SELLER is responsible for procuring a willing and able buyer, no commission is given) Open listing: non-exclusive listing that a seller uses multiple real estate agents to find potential buyers Exclusive agency: grants broker/agent to be the only representative in selling the property, however, if seller procures the buyer than the buyer does not have to pay commissions

Which listing agreement allows the owner of the listed property to sell the property on their own and not have to pay commission to the listing broker? A. Open listing B. Option listing C. Exclusive agency listing D. Both A and C

D. Both A and C Neither an open or exclusive agency guarantees a commission; if SELLER is responsible for procuring a willing and able buyer, no commission is given Open Listing: Non-exclusive listing that a seller uses multiple real estate agents to find potential buyers Exclusive Agency: Grants broker/agent to be the only representative in selling the property, however, if seller procures the buyer than the buyer does not have to pay commission

Which of the following is a common- law fiduciary duty? A. Care B. Accounting C. Confidentiality D. All of the above

D. all of the above

Which of the following is a common-law fiduciary duty? A. Care B. Accounting C. Confidentiality D. All the above

D. all the above ( an agent has 5 duties to his/her principal: "COALD"- Care, obedience, accounting, loyalty, disclosure)

It is improper for a salesperson to: A. submit verbal offers to the principal B. tell its principal that the principal has the nicest farm in the county C. show the property only on sunny days D. keep the client's secret that the property has a leaky roof

D. keep the client's secret that the property has a leaky roof (the purpose of disclosure is to provide details about a property's condition that might negatively affect its value)

Which option best describes an exclusive- right-to sell listing? a. The listing agent will be paid a commission only if he/she procures the buyer. b. The agent who procures the buyer will be compensated. c. The listing agent only receives commission if the property sells for a certain amount. d. The listing agent will be paid the commission no matter who procures the buyer.

D. the listing agent will be paid the commission no matter who procures the buyer.

Ryan is an agent working for a broker named Donald but recently became an agent under another broker named Karla. Ryan had five listings he brought to Donald prior to transferring. What happens to the five listings? a. The listings transfer to Karla b. The listings are terminated c. The listings would be split between Donald and Karla d. The listings stay with Donald

D. the listings stay with Donald

A voidable contract is: A. enforceable B. enforceable C. illegal D. valid until some action is taken to void it

D. valid until some action is taken to void it

A buyer is interested in a property. Buyer calls Broker to see if she has a listing on the property. Broker says no, but that the owner is a client. Broker calls the owner to secure a listing and to let the owner know that she has a buyer. The owner says the property is not for sale. Two weeks later, the owner sells the property to the buyer. a. Broker is not entitled to a commission for her efforts b. Broker is entitled to 50% of the commission for her efforts c. Broker is entitled to all of the commission for her efforts d. Broker must share commission with buyer, who found the property on their own.

a. Broker is not entitled to a commission for her efforts

The listing agreement whereby a principal lists property for sale with a number of brokers is known as a(n): a. Exclusive agency b. Open listing c. Exclusive- right-to-sell d. Net listing

b. Open listing Explanation: In an open listing, the principal may employ any number of brokers and need pay a commission only to that broker who successfully procures a ready, willing and able buyer.

What is the document that is used to transfer legal rights to act in the interest of a person? a. disclosure form b. power of attorney c. pro forma statement d. deed

b. power of attorney

What is the document that is used to transfer legal rights to act in the interest of a person? a. disclosure form b. power of attorney c. pro forma statement d. deed

b. power of attorney Explanation: A legal document that gives legal authority to make decisions on property and real estate on behalf of principal.

When a buyer revokes an offer prior to acceptance by the seller: a. the broker may sue the buyer for specific performance b. the broker must refund the buyer any earnest money deposit c. the seller may sue the buyer for specific performance d. the broker is entitled to one half of the earnest money deposit

b. the broker must refund the buyer any earnest money deposit (The buyer can revoke an offer before the seller communicates acceptance due to property condition, can't acquire loan, or the appraisal can't meet the sales price, etc.)

When a buyer revokes an offer prior to acceptance by the seller: a. the broker may sue the buyer for specific performance b. the broker must refund the buyer any earnest money deposit c. the seller may sue the buyer for specific performance d. the broker is entitled to one half of the earnest money deposit

b. the broker must refund the buyer any earnest money deposit The buyer can revoke an offer before the seller communicates acceptance.

When an agreement of the parties is demonstrated by their acts and/or conduct, this is known as what type of contract? a. Express b. Voidable c. Implied d. Unilateral

c. Implied

Certain contracts to be held enforceable in court under the statute of frauds must be in writing. Which of these would be required to be in writing? a. employment of a real estate broker to find a business to purchase b. employment of a real estate broker to sell stock-in-trade and goodwill of a business c. any agreement not to be performed within 1-year d. employment of a real estate broker to negotiate one year leases on business property

c. any agreement not to be performed within 1-year

A listing agreement between a principal and broker is a(n): a. implied contract. b. breach of contract. c. express contract. d. discharge of contract.

c. express contract. Explanation: A listing agreement is an express contract (exchange of promises) between the principal and broker that names the broker as a fiduciary representative (agent) of the principal.

Which option best describes an exclusive- right-to sell listing? a. The listing agent will be paid a commission only if he/she procures the buyer. b. The agent who procures the buyer will be compensated. c. The listing agent only receives commission if the property sells for a certain amount. d. The listing agent will be paid the commission no matter who procures the buyer.

d. The listing agent will be paid the commission no matter who procures the buyer.

Ryan is an agent working for a broker named Donald but recently became an agent under another broker named Karla. Ryan had five listings he brought to Donald prior to transferring. What happens to the five listings? a. The listings transfer to Karla b. The listings are terminated c. The listings would be split between Donald and Karla d. The listings stay with Donald

d. The listings stay with Donald Explanation: An agency agreement is created with the broker and the principle. Since Ryan is an independent contractor under Donald's brokerage, he is only a representative of Donald's brokerage

Ryan is an agent working for a broker named Donald but recently became an agent under another broker named Karla. Ryan had five listings he brought to Donald prior to transferring. What happens to the five listings? a. The listings transfer to Karla b. The listings are terminated c. The listings would be split between Donald and Karla d. The listings stay with Donald

d. The listings stay with Donald Explanation: Since Ryan listed five properties while he was an agent to Donald, Donald can keep the listings because he is the true agent of the sellers.

A licensed real estate salesperson takes a listing that does not authorize her to make a deposit. The salesperson finds a buyer, however, who gives her a personal check as a deposit with an offer on the property. With regard to the deposit, the salesperson's broker would be: a. required to place the check in escrow b. the agent of the seller c. the agent of the bank d. the agent of the buyer

d. the agent of the buyer (there was an implied agency with)