Chapter 2 Practice Test

A property was sold for $525,000. The total commission for the transaction was 6%. The listing broker and buyer's broker agreed to split the commission 50/50. What is the amount of commission paid to the listing broker...? A.30,500 B.31,500 C.7,875 D.15,750

D. 15,750

What is a common breach of the fiduciary duty of accountability...? A.Showing the client a two bedroom house when they clearly stated they are looking for a three bedroom house B.Revealing confidential information C.Working in a capacity outside of your expertise D.Being negligent with the client's money

D. Being negligent with the client's money

Andrew has accepted a new job in San Francisco and needs to sell his house quickly. Andrew hired a real estate agent to help with the transaction. If the agent reveals this information to a prospective buyer, it would be a breach of which fiduciary duty...? A.Reasonable Care B.Obedience C.Loyalty D.Confidentiality

D. Confidentiality

The legal duty of a fiduciary to act in the best interests of the beneficiary is known as...? A.Obedience B.Loyalty C.Confidentiality D.Fiduciary Duty

D. Fiduciary Duty

The first contact or meeting by a licensee when some detail and information about the property is shared with parties who express some interest in the real estate transaction is known as...? A.Notice B.Meet and Greet C.Connection D.First Substantive Contact

D. First Substantive Contact

According to an agent's fiduciary duties, the agent must act in accordance to his/her client's demands and instructions. Which of the following fiduciary duties best reflects this...? A.Accountability B.Loyalty C.Reasonable Care D.Obedience

D. Obedience

Which of the following is considered a principal in an agency relationship...? A.Associate Broker B.Agent C.Broker D.Owner

D. Owner

The degree of caution and concern for the safety of himself/herself and others an ordinarily prudent and rational person would use in the circumstances is known as...? A.Tenacity B.Disclosure C.Diligence D.Reasonable Care

D. Reasonable Care

An agent who represents the seller of real property is referred to as the...? A.General Agent B.Buyer's Agent C.Principal's Agent D.Seller's Agent

D. Seller's Agent

David's house was listed at $465,000. The property eventually sold for $485,000. The agreed upon commission was 6%. How much did David pay as a commission at the closing of the property...? A.29,100 B.27,000 C.14,550 D.27,100

A. 29,100

Abby, a real estate salesperson, successfully sold her client's house. Who receives the commission from the transaction...? A.Abby's Broker B.Abby herself C.An escrow agent D.The client's attorney

A. Abby's Broker

Mark is a real estate broker who represents a buyer in a transaction. He recommended a mortgage broker to help his client obtain financing for a property. What the client doesn't know is that Mark will receive a referral fee from the mortgage broker if the client obtains a mortgage from the mortgage broker. This is a breach of which fiduciary duty...? A.Accountability B.Loyalty C.Reasonable Care D.Obedience

A. Accountability

John is a real estate salesperson for City Realty, a local brokerage company. John has been hired by Josh, a homeowner seeking to sell his house. As a sub-agent to the transaction, which of the following fiduciary duties applies to John...? A.All of the above B.Obedience C.Loyalty D.Reasonable Care

A. All of the above

In a typical agency structure, a real estate salesperson is a sub-agent to whom...? A.Broker B.Client C.Customer D.Principal

A. Broker

An agent who represents the buyer of real property is referred to as a...? A.Buyer's Agent B.Seller's Agent C.Client D.Broker

A. Buyer's Agent

According to the duties a principal owes to the agent, the principal commits to doing which of the following...? A.Compensate the agent for a successful transaction B.Provide advice to the agent C.Provide future exclusive listings for the agent D.Provide the agent with a minimum salary for hours worked in the transaction

A. Compensate the agent for a successful transaction

According to this doctrine, a principal cannot claim that an implied agency relationship did not exist...? A.Estoppel B.Disclosure C.Exclusivity D.Sub-agency

A. Estoppel

The principle which precludes a person from asserting something contrary to what is implied by a previous action or statement of that person, or by a previous pertinent judicial determination, is known as...? A.Estoppel B.Disclosure C.Consent D.Misrepresentation

A. Estoppel

An agreement of employment of a broker to the exclusion of all other brokers is known as...? A.Exclusive Agency B.Dual Agency C.Implied Agency D.General Agency

A. Exclusive Agency

Mark, a property owner, signed an agency agreement with Andrew, a real estate broker, to sell his house. What type of agency was created between Mark and Andrew...? A.Expressed Agency B.Implied Agency C.Inherit Agency D.Written Agency

A. Expressed Agency

If a property owner seeking to sell his house knows that an agent is showing his house to prospective buyers, but does not have an agency agreement with the agent, what type of agency relationship may arise...? A.Implied Agency B.Expressed Agency C.Inherent Agency D.Trust Agency

A. Implied Agency

Mr. and Mrs. Smith are seeking to sell their two bedroom house. Mark is a real estate broker and a family friend of the Smiths. The Smiths allowed Mark to show their house to prospective buyers but did not actually sign an agency agreement. Under this scenario, what type of agency relationship may arise...? A.Implied Agency B.Expressed Agency C.Inherent Agency D.Trust Agency

A. Implied Agency

According to this concept, the principal must act to defend the agent in the event the agent is sued while acting on behalf of the principal...? A.Indemnification B.Hold harmless C.Caveat Emptor D.Disclosure

A. Indemnification

An agreement to do something or to allow something to happen only after all the relevant facts are disclosed is known as...? A.Informed Consent B.Estoppel C.Confidentiality D.Exclusive Right to Sell

A. Informed Consent

A person who has oral or written authority, either express or implied, to act for or on behalf of a landlord is known as...? A.Landlord's Agent B.Tenant's Agent C.Buyer's Agent D.Seller's Agent

A. Landlord's Agent

Sandy is a real estate agent who has entered into an agency relationship with Jim, a homeowner, to sell Jim's house. They agreed upon a flat fee for Sandy as compensation for a successful transaction. What other means of compensation may be agreed upon between the two...? A.Percentage of the sales price B.Percentage of the listing price C.The difference between the sales price and the listing price D.Percentage of the appraised value

A. Percentage of the sales price

The 'R' in the acronym 'OLD CAR' refers to which of the agent's six fiduciary duties...? A.Reasonable Care B.Reliability C.Resilient D.Reconciliation

A. Reasonable Care

The broker, as a franchisee of a national brokerage, is considered what to the national brokerage...? A.Sub-agent B.Associate Broker C.Agent D.Principal

A. Sub-agent

Which of the following may be considered a 3rd party to a transaction...? A.Customer B.Client C.Principal D.Broker

A. customer

The release of relevant information about a property that may influence the final sale, especially if it represents defects or problems is known as...? A.Disclosure B.Estoppel C.Reasonable Care D.Self Dealing

A. disclosure

As a special agent in a transaction, a real estate salesperson is permitted to do which of the following on behalf of the client...? A.Show the property B.Negotiate the terms of the contract C.Enter into contract on behalf of the owner D.Consummate a sale of the property

A. show the property

If a principal or agent provides a customer with a material fact, which of the following must apply...? A.The fact must be true and accurate B.The fact does not have to be accurate C.The agent should not disclose material facts D.The fact must at least state a version of the truth

A. the fact must be true and accurate

Mr. Smith's house was listed at $325,000. The property eventually sold for $365,000. The agreed upon commission was 5%. How much did Mr. Smith pay in commissions at the closing of the property...? A.16,250 B.18,250 C.14,250 D.9,125

B. 18,250

A property was sold for $750,000. The total commission for the transaction was 6%. The listing broker and buyer's broker agreed to split the commission 50/50. If the buyer's broker's real estate agent was responsible for the sale of the property and receives a 40/60 with his broker, how much commission is paid to the real estate agent...? A.18,000 B.9,000 C.22,500 D.11,250

B. 9,000

A property was sold for $325,000. The total commission for the transaction was 6%. The listing broker and buyer's broker agreed to split the commission 50/50. What is the amount of commission paid to the buyer's broker...? A.19,500 B.9,750 C.12,750 D.15,750

B. 9,750

Abby is a real estate broker who has entered into an agency relationship with Mark, a landlord looking to lease one of his apartments. Abby brings Andrew, a prospective tenant, to Mark with an offer to rent Mark's apartment. Which of the following statements is correct...? A. Abby is the Agent, Mark is the Customer, and Andrew is the Client B. Abby is the Agent, Mark is the Client, and Andrew is the Customer C. Abby is the Client, Mark is the Customer, and Andrew is the Agent D. Abby is the Customer, Mark is the Agent, and Andrew is the Client

B. Abby is the Agent, Mark is the Client, and Andrew is the Customer

One who undertakes to transact some business or to manage some affair for another by authority of the latter is known as a...? A.Client B.Agent C.Customer D.Attorney

B. Agent

Which of the following is NOT considered a principal in an agency relationship...? A.Landlord B.Agent C.Tenant D.Owner

B. Agent

A selling agent or participating agent is referred to as the...? A.Exclusive Agent B.Cooperating Agent C.Buyer Agent D.Designate Sales Agent

B. Cooperating Agent

Justin, a real estate salesperson with City Brokerage, recently met a client who is looking to purchase a condo in Manhattan. Since Justin specializes in Brooklyn rentals, he decides to refer the client to a colleague of his at City Brokerage and instead receive a referral fee. If Justin's client closes a deal with the other salesperson, who ultimately pays Justin his referral fee...? A.Justin's colleague B.Justin's sponsoring broker C.The client D.None of the above

B. Justin's sponsoring broker

Which of the following is considered a principal in an agency relationship...? A.Agent B.Landlord C.Broker D.Associate Broker

B. Landlord

Andrew is a real estate agent specializing in condo sales. However, he tries to facilitate the sale of a commercial office building, only to find that he is not familiar with commercial leases. Under which fiduciary duty can he be sued for negligence, if a party in the transaction loses money...? A.Loyalty B.Reasonable Care C.Accountability D.Obedience

B. Reasonable Care

A real estate salesperson is typically what type of agent...? A.General Agent B.Special Agent C.Legal Agent D.Trust Agent

B. Special Agent

A property was sold for $220,000. The total commission for the transaction was 5%. The listing broker and buyer's broker agreed to split the commission 50/50. What is the amount of commission paid to the listing broker...? A.6,600 B.11,000 C.5,500 D.13,200

C. 5,500

The 'A' in the acronym 'OLD CAR' refers to which of the agent's six fiduciary duties...? A.Agent B.Accounting C.Accountability D.Appropriation

C. Accountability

Which of the following is NOT considered a principal in an agency relationship...? A.Tenant B.Landlord C.Broker D.Owner

C. Broker

An actual agency created by written or oral agreement between the principal and the broker is known as...? A.Dual Agency B.Implied Agency C.Expressed Agency D.General Agency

C. Expressed Agency

As an agent to a cooperative board, Jason has the authority to negotiate contracts with 3rd party vendors to service the building. This level of authority suggests that Jason is what type of agent...? A.Universal Agent B.Specific Agent C.General Agent D.Unlimited Agent

C. General Agent

As an agent to a cooperative board, Mark has the authority to enter into contracts with 3rd party vendors to help service the building. This level of authority suggests that Mark is what type of agent...? A.Unlimited Agent B.Specific Agent C.General Agent D.Universal Agent

C. General Agent

An agreement between members of a trade to exclude other members from fair participation in the trade is known as...? A.Misrepresentation B.Market Allocation C.Group Boycott D.Price Fixing

C. Group Boycott

John is a real estate broker and wants to enter into an agency relationship with Steve, a property owner. What document must John and Steve execute in order to enter into an agency relationship...? A.Lease Agreement B.Sales Contract C.Listing Agreement D.Letter of Intent

C. Listing Agreement

An agent's duty to place the client's interest above those of all others, including the agent's own self-interest, is known as...? A.Reasonable Care B.Obedience C. Loyalty D.Confidentiality

C. Loyalty

An agreement between members of a trade to refrain from competition in specific market areas is known as...? A.Group Boycott B.Price Fixing C.Market Allocation D.Buyout

C. Market Allocation

Which of the following is considered a principal in an agency relationship...? A.Broker B.Agent C.Tenant D.Associate Broker

C. Tenant

In order to disclose confidential information, the agent must first obtain what from the client...? A.The agent does not need to obtain anything from the client B.Oral consent C.Written consent D.Both written and oral consent

C. Written consent