Chapter 6B: Brokers, Salespeople, and the Agency Relationship (And Module 4 Exam - Chapter 6B)
b. at the open house, if the buyer wants to write an offer on the home. (Typically, a buyer attending an open house does not receive a Consumer Guide to Agency Relationships, since that is typically not perceived to a substantive contact. However, a licensee must provide a buyer with the form no later than discussing making an offer to buy real property with the buyer, so if this were to occur at an open house, the buyer should have been given the form before he writes an offer. )
A buyer's agent must give a Consumer Guide to Agency Relationships to the buyer a. after the buyer's offer is presented. b. at the open house, if the buyer wants to write an offer on the home. c. at the same time a listing agreement is entered into. d. immediately after marketing or showing the property.
c. prior to marketing or showing the property. (The Agency Disclosure form is initiated by the buyer's agent when the buyer indicates a desire to write an offer on a property.)
A buyer's agent must give an Agency Disclosure Statement to a buyer a. at the same time a listing agreement is signed. b. before the buyer's offer is written. c. prior to marketing or showing the property. d. upon initiating a pre-qualification evaluation.
c. Yes, because he knowingly made a potentially untrue statement that could be seen as an inducement to buy. (The broker can be held liable because his statements to the buyer were possibly fraudulent and could be looked upon as an inducement to enter into the purchase agreement.)
A buyer's broker has actual knowledge of structural damage to the floor boards of a home due to termite infestation. He informs his client that there are no termites in the home. The buyer signs a contract to purchase the property. Could the broker be susceptible to claims of fraud? a. No because he is protected by the "as is" clause in the purchase agreement. b. No, because he said there were no termites, which could be true at present. c. Yes, because he knowingly made a potentially untrue statement that could be seen as an inducement to buy. d. Yes, unless there are visible signs of termites, the broker is justified in indicating that there are no termites within the property's structure.
d. obedience (You may feel uncomfortable doing this, and you may mention to your clients that such a drastic price cut is unusual, but you must honor the wishes of the client you're representing as long as it's a legal request.)
A house is listed at $180,000 and your buyer client wants to offer $125,000. Which fiduciary duty are you following by presenting the offer to the seller or the seller's agent? a. accounting b. confidentiality c. disclosure d. obedience
designated
A licensee assigned by a broker to represent a buyer or a seller in a transaction, usually in an in-company dual agency situation, is referred to as a __________ agent.
1. Initiating a pre-qualification evaluation to determine if buyer has financial ability to buy/lease particular property 2. requesting specific financial information 3. showing property to buyer 4. discussing making an offer to buy real property with buyer 5. submitting an offer to buy/lease real property on behalf of buyer
A licensee must provide the buyer with the Consumer Guide to Agency Relationships form at the first substantive contact, but no later than before:
d. disciplinary action by the Ohio Real Estate Commission. (The Real Estate Commission does not impose penalties on licensees for breach of duty. That authority belongs to the Ohio Division of Real Estate and Professional Licensing. An aggrieved party could file a civil lawsuit against a licensee, and the licensee could also face criminal charge. In addition, a licensee who is a member of professional association, such as the National Association of REALTORS®, could face sanctions. )
A licensee who breaches his fiduciary duties to a client would NOT be subject to a. civil lawsuits filed by the client. b. criminal charges. c. disciplinary action by the Ohio Division of Real Estate and Professional Licensing. d. disciplinary action by the Ohio Real Estate Commission.
"As Is" Clause
A provision in a purchase agreement stating the buyer accepts the property in its present condition.
Fiduciary Responsibility
A relationship of trust and confidence in which one party owes the other (or both parties owe each other) loyalty and a higher standard of good faith than they owe to third parties
a. all known latent defects in the property, whether or not the buyer asks about them. (A licensee must tell buyers—clients and customers—about latent (hidden) defects, even if not directly asked. Because of the caveat emptor rule, however, they usually do not have to tell buyers about patent defects that could be discovered by a reasonably thorough inspection.)
A salesperson who is NOT an agent of the buyer is responsible for telling the buyer a. all known latent defects in the property, whether or not the buyer asks about them. b. all known patent defects in the property, whether or not the buyer asks about them. c. everything, since the agent has the duties of good faith and fair dealing. d. nothing, since a fiduciary relationship does not exist.
c. prior to showing a buyer the property. ( A licensee working as a seller's agent must give the seller a Consumer Guide to Agency Relationships form prior to marketing or showing the seller's property)
A seller's agent must give a Consumer Guide to Agency Relationships to a seller a. at the same time a listing agreement is signed. b. before the buyer's offer is presented. c. prior to showing a buyer the property. d. upon initiating a pre-qualification evaluation.
c. mutual agreement. (A principal cannot revoke an agency coupled with an interest, nor can such a relationship be terminated by death, incapacity, or bankruptcy of the principal. Such an arrangement can only be terminated by mutual agreement. )
Agency coupled with an interest should be terminated by a. bankruptcy of the principal. b. death of the principal. c. mutual agreement. d. revocation by the principal.
b. action by NAR if either party is a member. (The National Association of REALTORS® does not have the authority to terminate an agency relationship. Agency can be terminated by accomplishment of purpose, expiration of agency agreement, operation of law, mutual agreement, renunciation by agent, or revocation by principal. Remember R-O-A-M-E-R. )
Agency may NOT be terminated by a. accomplishment of purpose. b. action by NAR if either party is a member. c. renunciation by the agent. d. revocation by the principal.
a. applies to patent defects in the purchase of residential real estate. (Such as clause applies to patent, or visible, defects. The seller has a duty to disclose latent defects in the property whether or not an "as is" clause is used in the contract. Nor does an "as is" clause protect the seller or agent if they commit fraud and deliberately conceal a defect from the buyer.)
An "as is" clause in a purchase agreement a. applies to patent defects in the purchase of residential real estate. b. gives a buyer no recourse for problems with the property. c. is a defense against a fraud lawsuit. d. protects the seller from liability for nondisclosure of a latent defect.
compensatory damages
An agent can be forced to pay _______ damages, which pay the injured party for any monetary loss resulting from the breach of duty.
punitive damages
An agent can be forced to pay _______ damages, which punish the wrongdoer and attempt to deter others from similar acts.
Negligence
An unintentional breach of duty
Opinion: "Compared to the sale prices for other homes in the neighborhood, this one appears to be an excellent buy." Prediction: "Historically, property values have gone up 4% a year, and there is currently no reason to believe this will change for this area." Puffing: "Look at this backyard!"
As a general rule, a seller or agent cannot be sued for misrepresentation if the agent's statements were merely opinions, predictions, or puffing. (See reverse side for examples of each)
b. Dual Agency in All In-House Transactions (The Consumer Guide describes Dual Agency in All In-House Transactions this way: "When (brokerage) lists property for sale, all agents in the brokerage represent the seller. Likewise, when a buyer is represented by a (brokerage) agent, all of the agents represent that buyer." If ABC practiced one of the variations of split agency, licensees who are not involved in the transaction would not be considered agents of the clients. )
At ABC Brokerage, ALL licensees in the company represent the seller client, and ALL licensees represent the buyer client in a real estate transaction. Which Consumer Guide should ABC Brokerage use? a. Exclusive Seller Agency Only b. Dual Agency in All In-House Transactions c. Split Agency & Dual Agency d. Split Agency but No Dual Agency
d. Split Agency but No Dual Agency (The Consumer Guide for Split Agency but No Dual Agency indicates that the brokerage will allow different licensees to represent a buyer client and a seller client in the same transaction, known as split agency, but will not allow the same licensee to serve as a dual agent and represent both clients. )
At XYZ Brokerage, agent Amy represents the seller. Amy has a buyer client interested in the seller's house, but XYZ policy will not allow Amy to represent both buyer and seller in the same transaction. Which Consumer Guide does XYZ Brokerage use? a. Exclusive Buyer Agency Only b. Dual Agency in All In-House Transactions c. Split Agency & Dual Agency d. Split Agency but No Dual Agency
d. negligent misrepresentation. (Constructive fraud is an unintentional or negligent concealment or omission of a material fact.)
Constructive fraud is also known as a. actual misrepresentation. b. breach of contract. c. intentional fraud. d. negligent misrepresentation.
First Substantive Contact
Being no later than the occurrence of certain events, depending on whether a licensee is working with sellers, buyers, or both in a particular transaction
d. Bill can rescind the contract after closing if Sally never gave him the form. (Sally is supposed to give him the Residential Property Disclosure Form BEFORE they enter into a purchase agreement. But if she does not, Bill does have some rights of rescission. Once they go to closing, however, Bill cannot rescind the purchase contract even if Sally never gave him the form. The other statements are true. )
Buyer Bill and seller Sally have a signed purchase contract. Which statement about the Residential Property Disclosure Form is FALSE? a. Bill can rescind the contract within 3 days of receiving the form. b. Bill can rescind the contract if Sally does not give him the form within 30 days after they sign the contract. c. Bill can rescind the contract if Sally does not give him the form before closing. d. Bill can rescind the contract after closing if Sally never gave him the form.
latent defects
Defects in property that are not visible or apparent
1. Seeking a purchase offer at a price and with terms acceptable to the seller 2 accepting delivery of any purchase offer and presenting it to the seller in a timely manner, even if the property is subject to a contract of sale, lease, or letter of intent to lease 3. answering the seller's questions and providing information to the seller regarding any offers or counteroffers 4. assisting the seller in developing, communicating, and presenting offers or counteroffers 5. Answering the seller's questions regarding the steps the seller must take to fulfill the terms of any contract (within the scope of knowledge required for real estate licensure)
Duties that may be waived by a seller include:
1. seeking a property at a price and with purchase or lease terms acceptable to the buyer 2 presenting any offer to purchase or lease to the seller to the seller's agent in a timely manner and accepting delivery of and presenting any counteroffers to the buyer 3. answering the buyer's questions and providing information to the buyer regarding any offers or counteroffers 4. assisting the buyer in developing, communicating, and presenting offers or counteroffers 5. Answering the buyer's questions regarding the steps the seller must take to fulfill the terms of any contract (within the scope of knowledge required for real estate licensure)
Duties that may be waived by the buyer include:
Failure to comply with the Consumer Guide to Agency Relationships or the Agency Disclosure requirements will be deemed prima facie evidence of misconduct on the part of the licensee in violation of Ohio Agency Law. Failure to comply could also subject the licensee to a citation issued by the Superintendent of the Ohio Division of Real Estate and Professional Licensing.
Failure to comply with the Consumer Guide to Agency Relationships or the Agency Disclosure requirements will result in:
Disclosure
Fiduciary duty in which the agent does not conceal anything from the principal especially with regards to: true property value; all offers to purchase; identity of the other party; customer's financial condition; any relationship between the other party and the broker/agent; and any commission-splitting arrangements with other brokers
Confidentiality (forever)
Fiduciary duty in which the agent does not disclose information given by the client or gained from other sources to outside parties.
Reasonable Care
Fiduciary duty in which the agent is held to a minimum standard of competence and care
Loyalty
Fiduciary duty which holds that the agent must put the principal's interest above all others, including the agent's own.
Obedience
Fiduciary duty which means the agent must follow the (legal) directions of the principal, comply with the restrictions of the agency relationship, and not stray beyond the scope of their authority.
Accounting
Fiduciary duty which recognizes that money received in an agency relationship belongs to the principal, not the agent; money must be place into a separate non-interest bearing trust account so as not to commingle the principal's funds with those of the brokerage
Residential Property Disclosure Form
For reseidential real estate purchase contracts for one- to four-unit dwellings, Ohio Real Estate Law (Ohio Revised Code 4302.30) requires the delivery of a _________ _________ ___________ _________ to the buyer prior to an offer to purchase.
a. latent defect; must disclose (This is a latent, or hidden, defect. If Bob knew about it but does not disclose it, he could be held liable, and Henry might be able to recover damages. Either way, Henry would most likely be able to rescind the contract.)
Henry is buying Bob's farm. On the back of the property is an underground storage tank that is not apparent from a normal inspection of the land. What type of defect would this be considered, and is Bob required to disclose it? a. latent defect; must disclose b. latent defect; not required to disclose c. patent defect; must disclose d. patent defect; not required to disclose
Fraud
Intentional or negligent misrepresentation or concealment of material facts
c. Jane is not obligated to advise and assist Maggie during contract negotiations. ( If Maggie didn't sign a purchaser agency agreement, she is simply a customer. No one in Evan's agency has an obligation to provide Maggie with the services due a client, such as assisting in negotiations. )
Jane and Paul are licensees who are working for broker Evan. Buyer Maggie has no purchaser agency agreement. Jane shows a house to Maggie, then submits Maggie's offer to purchase to Paul, who is the designated agent for the seller. Which of these statements is TRUE? a. Broker Evan is a dual agent. b. Jane can tell Maggie that the seller is desperate to sell. c. Jane is not obligated to advise and assist Maggie during contract negotiations. d. Jane must protect the best interests of her client Maggie.
Caveat emptor
Latin phrase for "Let the buyer beware"
a. fairness ( Even though Jake is not Lucy's agent, he still owes her fairness and good faith as a customer.)
Licensee Jake was hosting an open house for a seller client of his brokerage. Lucy went to the open house. She expresses interest in the property but declines to enter into an agency relationship. What duty does Jake owe to buyer customer Lucy? a. fairness b. loyalty c. obedience d. none, she is not his client
b. He must disclose this information as it is a material fact. (The buyer's financial situation could jeopardize the entire transaction and is a material fact. If the seller turned down another offer with the expectation of Patrick getting a mortgage, and the deal falls through, Ken will have breached his duty of disclosure, which he owes to clients and customers.)
Licensee Ken has worked long hours with buyer client Patrick to negotiate an agreement to buy Jordan's house. A day before closing, Patrick tells Ken that he just lost his job, and he's sure that the mortgage won't close. However, he doesn't want to abandon the deal yet, "just in case." What should Ken do? a. He cannot disclose this information without breaching his fiduciary duty of confidentiality. b. He must disclose this information as it is a material fact. c. He must follow his client's lawful orders and let things stand for the time being. d. Ask his broker to terminate the agency agreement with Patrick.
a. disclose the defect to any interested buyers. (An agent's duty of obedience only applies to lawful instructions. Latent defects must be disclosed. Phil might decide, however, that he is not willing to work with this client, though he's not obligated to walk away.)
Listing agent Phil is told by client Susan not to disclose the fact that during heavy rains, water seeps into the basement through some small cracks in the walls. Phil must a. disclose the defect to any interested buyers. b. give up the listing. c. not disclose the defect, due to the duty of obedience. d. only show the property on sunny days.
b. Marsha should again suggest some improvements to the seller, and then make all necessary disclosures and have forms signed in regard to Ron as a potential buyer of the property. (Marsha is obligated to disclose her relationship with prospective buyer Ron, since it could be considered a conflict of interest. She should also make another attempt to inform her client about minor repairs that could affect the property value. )
Marsha is a broker at Johnson Realty and has listed a rundown property. The owner has not made any effort to fix it up over the years and has ignored Marsha's suggestions. Ron, one of Marsha's non-management-level licensees, wants to buy the property. Which statement is TRUE? a. Marsha does not need to do anything as long as she keeps any confidential information she received from the seller confidential. b. Marsha should again suggest some improvements to the seller, and then make all necessary disclosures and have forms signed in regard to Ron as a potential buyer of the property. c. Marsha should again suggest some improvements to the seller, but nothing else. d. Since Ron is a non-management-level licensee, Marsha does not need to make any further disclosures to the seller.
d. The seller dies before the listing period ends. (When a party to a contract—in this case, a listing agreement—dies, the agency relationship terminates as an operation of law. )
Of these, which agency termination is due to operation of law? a. The listing broker abandons the seller before the listing period ends. b. The listing broker does not find a buyer before the listing period ends. c. The listing broker sells the house. d. The seller dies before the listing period ends.
c. "Great bargain on the most prestigious street in town" (Puffing is generally considered to be an opinion that is not necessarily intended to be a statement of fact. The use of an adjective such as "stunning" is not necessarily puffing. Calling a street the "most prestigious in town," however, would qualify as puffing.)
Of these, which is MOST LIKELY to be considered an example of puffing? a. "Beautifully-maintained colonial located in historic district" b. "Country charm on this 5-acre beauty" c. "Great bargain on the most prestigious street in town" d. "Stunning lakefront views from this modern condominium"
a. confidentiality. (With this breach of confidentiality owed to her client, the seller, Jan is acting in the buyer's best interest at this point by divulging this information about her seller client. She is also breaching the duty of loyalty. )
Ollie shows a property to his buyer client. Jan, the listing broker, calls Ollie to ask for feedback. She asks, "Is the buyer interested in making an offer?" Ollie tells Jan his client is still in the process of looking at other properties. Jan replies, "I can tell you, my seller is really desperate for an agreement." At this point, Jan is violating the duty of a. confidentiality. b. disclosure. c. accounting. d. obedience.
a. No, Tom's negotiations with the seller are confidential. (The details of client Tom's negotiations with the seller are confidential information. That fiduciary obligation never ends unless Rick is given written permission to divulge that. )
Rick was the buyer's agent for Tom, whose offer for Jim's house was countered at $5,000 below list price. This was still more than Tom wanted to pay. Tom finds another house and buys that instead. Now Rick is a buyer's agent for Harry, who wants to make an offer on Jim's house. Can Rick tell Harry that Jim would accept $5,000 below list? Why or why not? a. No, Tom's negotiations with the seller are confidential. b. Yes, Rick has no fiduciary obligation to seller Jim. c. Yes, Rick must act in Harry's best interest. d. Yes, Rick's relationship with Tom was over when he found another house.
c. Gary must sign Betty's Agency Disclosure Statement before Tom presents Betty's offer. This is the correct answer. (Tom would not help Betty write an offer; that task belongs to Betty's agent, Alice. Alice must give Betty's signed Agency Disclosure Statement to seller agent Tom, not to Gary. Tom would give it to his client Gary and explain it to him. Gary must then sign it before Tom can present Betty's offer.)
Seller Gary listed his property with agent Tom. Agent Alice's client, Betty, is ready to make an offer on Gary's house. Which statement is TRUE? a. Alice must explain the Agency Disclosure Statement options to Gary before presenting the offer. b. Alice must present Betty's signed Agency Disclosure Statement to Gary before presenting the offer. c. Gary must sign Betty's Agency Disclosure Statement before Tom presents Betty's offer. d. Tom must present an Agency Disclosure Statement to Betty before helping her write an offer.
c. Steve renounces Bob's authority to represent him. (A client may revoke—or withdraw—the authority he gives to an agent, but he cannot renounce it. Renunciation means that someone who was granted authority rejects it, so it would be agent Bob who would renounce the relationship. The relationship can also be terminated by accomplishment of purpose (the property sells), mutual agreement, or operation of law, which includes destruction of the property or the death or bankruptcy of either party.)
Seller Steve has a listing agreement with broker Bob. Which is NOT a way in which their agency relationship could be terminated? a. The listing agreement expires. b. The property sells. c. Steve renounces Bob's authority to represent him. d. Steve's house burns to the ground.
d. The roof may be an issue depending on how visible it was to prospective buyers; the well is actual fraud by Shane; the termite issue is actual fraud by Eve. (The leaks should probably be disclosed by the seller and the listing agent, even if the problems are clearly visible on a reasonable examination. If the problem is visible, however, Shane and Eve would have no liability if they chose not to disclose. The seller Shane intentionally did not disclose the known problem with the well, which is a material fact. Therefore, this is an incident of actual fraud by Shane. Since agent Eve knew about the hidden termite damage and chose not to disclose that, she, too, could be accused of actual fraud.)
Shane lists his home with Eve, a real estate agent, and tells her about the leaks in the roof because he thinks a new buyer will likely see them. Shane does not tell Eve that the house will also need a new well because the old one is not deep enough. Eve has the home inspected and discovers Shane's house also has termites. Months later, Eve has shown the house to 13 buyers with no interest. Eve decides not to tell her new prospect about the leaky roof because she thinks that it is easy to spot, but also decides not to mention the termites because the inspection report was not required and the new prospect never asked her about it. Are any of these items considered to be actual fraud or constructive fraud? a. All three items represent actual fraud for both Shane and Eve. b. All three items represent constructive fraud. c. The roof is a non-issue; the well is actual fraud by Eve; the termite issue is constructive fraud by Shane. d. The roof may be an issue depending on how visible it was to prospective buyers; the well is actual fraud by Shane; the termite issue is actual fraud by Eve.
Fiduciary
Someone in a position of trust, held by the law to high standards of good faith and loyalty
c. indicate who works for whom in a specific real estate transaction. (The Consumer Guide merely explains the available agency relationships. It must be given to prospective buyers and sellers at first substantive contact, and It must be acknowledged. It is the Agency Disclosure Statement that discloses the actual agency relationship that will result in a property specific transaction and lets the buyer and seller know exactly who is working for whom in a particular transaction.)
The Consumer Guide to Agency Relationships does NOT a. apply to sellers of real estate, only buyers. b. describe the types of agency relationships a brokerage practices. c. indicate who works for whom in a specific real estate transaction. d. require a prospective buyer to acknowledge its receipt.
buyer: when buyer asks licensee to write an offer but before actual offer is written; seller: before receipt of offer; signed and dated: prior to the signing of any offers
The brokerage (agent) must make the dual agency disclosure to the buyer, when? The seller? When must it be signed and dated?
1. Permissible types of agency relationships in Ohio 2. The brokerage's policy regarding representation of buyers and sellers; dual agency; and split agency, including if the broker offers compensation to, or seeks compensation from cooperating brokerages 3. A statement that a brokerage with a buyer as a client represents the buyer's interests, even though the seller's brokerage or seller may compensate the buyer's agent 4. The brokerage policy on customers who are not represented 5. A statement that Ohio law requires the Consumer Guide to Agency Relationships be presented to and acknowledged by the customer 6. The brokerage's name, fair housing language, and logo
The following disclosures must be included in a brokerage's Consumer Guide
Fiduciary Duties
The highest level of law in real estate relationships
latent; patent
The seller or seller's agent are required to disclose ______ defects; but are not required to disclose ______ defects to the buyer.
both buyer and seller
To whom does a dual agent owe fiduciary duties?
a. find a suitable buyer as quickly as possible, even if this means Ed must make less of a commission on the deal than he had anticipated. (The duty of loyalty requires Ed to put his client's needs ahead of his own. He should find a buyer quickly, even if it impacts the commission he could earn. Unless she gives him permission to disclose her motivation for selling, he must keep that fact confidential. He must present all offers to his client, because it's up to her to decide what's acceptable. Finally, if he has a friend buy that house without disclosing the relationship, Ed would also be violating his fiduciary duty to Trisha. )
Trisha wants to sell her house quickly because her new job in another city begins the first of next month. She tells Ed to do whatever it takes to sell her house. Ed's fiduciary duty requires him to a. find a suitable buyer as quickly as possible, even if this means Ed must make less of a commission on the deal than he had anticipated. b. have his friend buy the house at a lower price because he feels that Trisha's primary interest is in selling the house quickly, not the price. c. tell prospective buyers that Trisha wants her house sold as quickly as possible because he must follow all instructions of the client. d. weed out offers that seem unreasonable or for which Ed knows the buyers cannot obtain financing to keep Trisha from wasting her time.
- Delivering or communicating an offer, counteroffer, or proposal - Discussing or reviewing the terms of any offer, counteroffer, or proposal - Facilitating communication regarding an offer, counteroffer, or proposal and preparing any response as directed
Under Ohio Law, the definition of "negotiate" includes:
b. disclosure (A licensee has a duty to disclose the property's true value. The licensee's behavior is regarded as self-dealing. The licensee also breached the duties of loyalty and reasonable care.)
Upon arrival to a listing appointment, the licensee dealing with an elderly lady realizes that she would be happy receiving an offer for much less than market value. The licensee decides to make a cash offer for the list price that the seller chooses. The licensee then sells the property for market value. Which duty has the licensee breached? a. confidentiality b. disclosure c. obedience d. no breach has occurred
•Referrals from one licensee to another, •Open houses (unless an offer is written), •Residential property that is rented or leased for a term of 18 months or less, and •Transactions dealing with foreign real estate or cemetery interment rights.
What are the four exemptions from having to provide an Agency Disclosure Statement?
1. Disciplinary action by professional associations 2. Action by the Ohio Division of Real Estate and Professional Licensing 3. Civil lawsuits filed by injured parties 4. The filing of criminal charges against the agent (in very serious cases)
What are the four major consequences to an agent that can occur if they breach their fiduciary duties?
1. Accomplishment of Purpose 2. Expiration 3. Operation of Law (death, bankruptcy, property destroyed, agent loses license) 4. Mutual Agreement 5. Renunciation (Agent) 6. Revocation (Client)
What are the six ways in which agency may be terminated?
1. Transactions involving two agents from different brokerages 2. Transactions involving two agents from the same brokerages 3. Transactions involving only one agent
What are the three sections of the Agency Disclosure Statement?
c. a recommended offer price (Information or advice about negotiating terms of the transaction is off limits to a dual agent. The other information can certainly be shared as part of a dual agent's services to his clients. )
What is a dual agent NOT allowed to share with his clients in a real estate transaction? a. closing costs that each should expect to pay b. a description of real estate closing procedures c. a recommended offer price d. sale prices of comparable properties
The Consumer Guide to Agency Relationships (First Form) provides information to consumers on the possible types of agency relationships they may encounter under Ohio Law, the Agency Disclosure Statement discloses the actual agency relationship that will result in a property specific transaction and lets the buyer and seller know exactly who is working for whom in a particular transaction.
What is the difference between the Consumer Guide to Agency Relationships and the Agency Disclosure Statement?
a. Has anyone ever died on the property? (A seller is not required to disclose whether or not someone has died on the property. The seller is required to disclose material facts about the condition of the property, including mold, smoke damage, insects, issues with mechanical systems, presence of hazardous materials, and issues related to the location of the property, such as a flood plain or homeowners association. )
What issue is NOT included on the Ohio Residential Property Disclosure Form? a. Has anyone ever died on the property? b. Has there been a mold inspection? c. Is the property located in a flood plain? d. Is there any smoke damage?
1. Actual fraud (INTENTIONAL) 2. Constructive fraud (NEGLIGENT)
What two categories can fraud fall into?
Dual Agency
When a licensee represents both buyer and seller in a transaction
Limited Service Agent
When a seller or buyer waives certain duties that would normally be owed to them by an agent, the agent may be termed as a:
By the buyer's agent when the buyer indicates a desire to write an offer
When and by whom is the Agency Disclosure Statement initiated?
b. before the buyer's offer is presented (The seller must receive a copy of a buyer's signed Agency Disclosure Statement before an offer is presented.)
When must a buyer's agent give an Agency Disclosure Statement to a seller? a. at the same time a listing agreement is signed b. before the buyer's offer is presented c. immediately after marketing or showing the property d. It is not required unless the agent requests confidential information from the buyer.
b. A licensee is dealing with both the buyer/customer and seller/client in the same real estate transaction. (There is always a dual agency situation with an in-house transaction involving a seller client and a buyer client. Even when separate licensees are representing buyer and seller, the broker or management-level licensee would be a dual agent. If one of the parties to the transaction is merely a customer, there is no dual agency.)
Which is NOT dual agency? a. A brokerage represents both the buyer and seller as clients in the same real estate transaction. b. A licensee is dealing with both the buyer/customer and seller/client in the same real estate transaction. c. The only manager in the company represents a client in an in-company real estate transaction. d. Two licensees in the same company represent their own individual clients in the same transaction.
a. Alex is a disclosed dual agent, representing both buyer and seller. (Dual agency should not be a conflict of interest if it is disclosed and the licensee adheres to the agency law provisions regarding the duties of a dual agent. Alex is obligated to remain completely neutral in this transaction, however. )
Which situation is LEAST LIKELY to represent a conflict of interest? a. Alex is a disclosed dual agent, representing both buyer and seller. b. Kaye is a buyer's agent whose commission is based on the sales price of the home. c. Paul is showing his buyer client a house that is owned by his co-worker. d. Susan is negotiating the purchase of a home for her client, who is also her sister.
b. XYZ's broker (In a split agency situation, the broker is always a dual agent. The difference between "Split Agency but No Dual Agency" and "Split Agency & Dual Agency" is whether or not a single licensee can represent both buyer and seller. In either variation of split agency, the associated licensees who are not involved in the transaction are not considered dual agents. This occurs only with the "Dual Agency in All In-House Transactions" model.)
XYZ Brokerage uses the Split Agency but No Dual Agency business model. Agent Amy represents the seller and agent Bob represents the buyer in the same transaction. Who, if anyone, is a dual agent? a. Amy and Bob b. XYZ's broker c. XYZ's broker and all other licensees d. no one
c. designated seller's agent and a designated buyer's agent. (If your employing broker has a listing agreement with Marilyn, as well as a buyer agency agreement, and you are designated to represent her in both transactions, you are both a designated seller's agent and a designated buyer's agent. You're not a dual agent unless you represent both buyer and seller in the same transaction.)
Your brokerage practices split agency. You bring in a listing for Marilyn's house. She also asks you to represent her in her search to find a new house, signing a purchaser agency agreement. This makes you a a. designated buyer's agent only. b. designated seller's agent only. c. designated seller's agent and a designated buyer's agent. d. dual agent.
patent defects
defects in property that are visible and would be discovered in a reasonably thorough inspection