RE Agency
Agency A broker who is employed by the seller is liable to the buyer if: he acts under a power of attorney for seller. he acts in excess of the terms of his contract. the offer is accepted but the contract is not performed. the listing agreement has no termination date.
Correct answer is (b). A broker's contract ordinarily makes him the agent of the seller. If he performs an act which his contract does not authorize him to do, he is the agent of the other party, the buyer.
Agency Broker Jones secured an agency listing in writing from the Johnson Co. on a commercial building that had been vacant for some months. The listing broker entered into a verbal agreement to share his commission with a cooperating broker. The cooperating broker procured a buyer, but broker Jones refused to split the commission. The cooperating broker: may recover his share in court. may not recover his share in court because this was only a verbal agreement. should ask the Commissioner to arbitrate the dispute. should go to the Labor Commissioner.
Correct answer is (a). The Statute of Frauds does not require an agreement between brokers to split a commission to be in writing to be enforceable. If the cooperating broker can prove his case, he can recover his share in court.
Agency When a broker is representing the buyer exclusively under a buyer agency contract, which of the following is true? The buyer's broker has no liability for acts of the listing broker The buyer's broker is responsible for his own and the listing broker's acts The buyer's broker has a fiduciary duty to the buyer and seller The buyer's broker must represent both parties
Correct answer is (a). The buyer's broker owes a fiduciary duty to his principal, the buyer, only.
Agency What kind of agency is a listing? A special agency A general agency An executive agency A dual agency
Correct answer is (a). A special agency is called upon to perform a specific task such as listing (a contract between an owner of real property and an agent who is authorized to obtain a buyer).
Agency Broker Bob collected rents from an apartment house under agreement with the owner. He had been collecting rents on the 1st of each month for several months and as of July 1, he had collected all but one. On July 2 the owner died. On July 3 the broker went to collect the last rental but the tenant refused to give the rent to the broker on the grounds that the owner had died and, therefore, the agency between broker and the owner was terminated. Which of the following is correct? The tenant is correct The broker has the right to collect rents until an executor has been appointed The death of the owner did not terminate the agreement Under the law of agency, the broker has the right to continue collecting rents but he must place all monies received in a neutral trust account until the court appoints someone else to collect the rents
Correct answer is (a). Agency terminates upon death of either party.
Agency The relationship of a real estate salesperson to his or her broker is as: an employee. an independent contractor. a special agent. either (a) or (b)
Correct answer is (a). As far as the Real Estate Law is concerned, a salesperson is an employee of the broker. For IRS purposes, the salesperson usually is an independent contactor.
Agency In describing an agency contract, which is most nearly correct? Most multiple listings are exclusive listings An open listing without a termination date is unenforceable Often multiple listings are net listings An exclusive agency need not contain a termination date
Correct answer is (a). Choice (a) is the most nearly correct answer because most multiple listing groups require exclusive right to sell listings, which is a type of exclusive listing.
Agency Fiduciary applies to the relationships between people in many different positions. It does not apply to which of the following? Trustor to beneficiary Attorney-in-fact to principal Attorney to client Agent to seller
Correct answer is (a). Fiduciary is an agency relationship. Trustor to beneficiary is borrower to lender.
Agency Fiduciary applies to the relationships between people in many different positions. It does not apply to which of the following? Trustor to beneficiary Attorney-in-fact to principal Attorney to client Agent to seller
Correct answer is (a). Fiduciary is an agency relationship. Trustor to beneficiary is borrower to lender.
Agency Under Article 3, Section 10176, of the California Real Estate Law, a broker could not be disciplined for which of the following? Acting for more than one party in a transaction with the knowledge and consent of all parties thereto Making any substantial misrepresentation Making any false promises of a character likely to influence Any conduct whether of a same or different character than specified in this Section which constitutes fraud
Correct answer is (a). The Real Estate Code permits a broker to act for two parties, provided he has advised both and received their consent.
Agency Which of the following forms must be completed before an offer can be written? Agency disclosure Deposit receipt Real estate transfer disclosure Listing
Correct answer is (a). The law requires that an agent supply a written document, called Disclosure Regarding Real Estate Agency Relationships, explaining the nature of agency. This disclosure must be made prior to taking a listing or writing an offer.
Agency California Real Estate Law imposes upon a real estate agent the highest obligation of undivided interest and loyalty to his principal. This relationship is comparable to that of a: lessee to the lessor. trustee to the beneficiary. vendor to the purchaser. salesman to his or her broker.
Correct answer is (b). A fiduciary relationship exists between the agent and his principal. The trustee is the agent and the beneficiary is the principal.
Agency California Real Estate Law imposes upon a real estate agent the highest obligation of undivided interest and loyalty to his principal. This relationship is comparable to that of: a lessee to the lessor. a trustee to his beneficiary. a vendor to the purchaser. a salesperson to his broker.
Correct answer is (b). A fiduciary relationship exists between the agent and his principal. The trustee is the agent and the beneficiary is the principal.
Agency An agent who acts exclusively as the agent for the buyer may: present offers to the seller only. present offers to the seller with the seller's agent present. present offers to the seller's agent only. is acting illegally.
Correct answer is (b). An agent who is the exclusive agent for the buyer may present offers to the seller with the seller's agent present, unless the seller states otherwise in writing.
Agency In regards to a listing contract, a fiduciary relationship exists between the broker and: the buyer. the seller. both buyer and seller. all of the above
Correct answer is (b). The two parties involved in a listing are the broker and owner (seller) and the broker is working in a position of trust (fiduciary) for the seller.
Agency An agency relationship is created by all of the following except: agreement. ratification. specific performance. estoppel.
Correct answer is (c). A real estate agency can be created by express agreement, ratification, and estoppel.
Agency Exam 1. A broker acting as agent for a principal has as much authority as: a. other parties believe the agent to possess. b. the agent chooses to accept. c. the principal actually or ostensibly confers upon him. d. he chooses to accept as limited by the Statute of Limitations. 2. Broker Bob collected rents from an apartment house under agreement with the owner. He had been collecting rents on the 1st of each month for several months and as of July 1, he had collected all but one. On July 2 the owner died. On July 3 the broker went to collect the last rental but the tenant refused to give the rent to the broker on the grounds that the owner had died and, therefore, the agency between broker and the owner was terminated. Which of the following is correct? a. The tenant is correct b. The broker has the right to collect rents until an executor has been appointed c. The death of the owner did not terminate the agreement d. Under the law of agency, the broker has the right to continue collecting rents but he must place all monies received in a neutral trust account until the court appoints someone else to collect the rents 3. Fiduciary applies to the relationships between people in many different positions. It does not apply to which of the following? a. Trustor to beneficiary b. Attorney-in-fact to principal c. Attorney to client d. Agent to seller 4. California Real Estate Law imposes upon a real estate agent the highest obligation of undivided interest and loyalty to his principal. This relationship is comparable to that of: a. a lessee to the lessor. b. a trustee to his beneficiary. c. a vendor to the purchaser. d. a salesperson to his broker. 5. An agency relationship is said to create a fiduciary relationship between principal and agent. Of the following relationships, which illustrates a fiduciary responsibility? a. Any trustee to a beneficiary b. Real estate broker to his client c. Both (a) and (b) d. Neither (a) nor (b) 6. Which of the following statements about escrow procedures is true? a. A broker can never escrow a transaction b. When the escrow requirements have been met, the escrow agency changes from a dual agency to a separate agency c. When the escrow holder receives signed instructions, it is said to be a complete escrow d. The purpose of escrow is to have the escrow officer act as an arbitrator of disputes between the buyer and seller 7. A fiduciary relationship may be terminated by: a. agreement. b. revocation. c. death. d. all of the above. 8. Which of the following is true of a buyer's agent? a. They are illegal in California b. They are not entitled to a commission c. They do not form an agency relationship d. Compensation may not necessarily come from the buyer 9. Agency is referred to as the relationship between the agent and his principal. All of the following statements are correct about agency, except: a. agency may be an expressed contract. b. the principal must pay money to the agent to create an agency relationship. c. agency may be an implied contract. d. an agreement that may be in writing or verbal. 10. What event does not terminate an agency? a. Death of listing agent (not broker) b. Full performance c. Expiration of term d. Destruction of listed property 11. A person designated in a written power-of-attorney, to legally act for another in his stead is typically called a(n): a. fiduciary. b. principal. c. attorney-in-fact. d. agent. 12. Which of the following is not required of a licensee under the current agency disclosure law? a. Disclosure b. Election c. Confirmation d. Representation 13. Broker White obtained a deposit from buyer Farley. The seller did not accept the offer, however, and broker would not return deposit. Farley contacted the Real Estate Commissioner. The Commissioner can: a. act only as mediator. b. investigate as required by real estate law. c. not act on this since it involves a real estate license. d. not act on this since it involves civil court action. 14. When may a real estate broker, acting as agent for the seller, refuse to submit a buyer's offer? a. When the owner has already accepted an offer b. When the owner has already accepted a better offer c. When the owner has given broker express instructions not to submit any further offers d. Never, all offers must be presented 15. A broker who is employed by the seller is liable to the buyer if: a. he acts under a power of attorney for seller. b. he acts in excess of the terms of his contract. c. the offer is accepted but the contract is not performed. d. the listing agreement has no termination date. 16. Fiduciary applies to the relationships between people in many different positions. It does not apply to which of the following? a. Trustor to beneficiary b. Attorney-in-fact to principal c. Attorney to client d. Agent to seller 17. By accepting the actions of an agent, even though there is no contract, a seller may create an agency by: a. estoppel. b. express agreement. c. ratification. d. collaboration. 18. Which of the following is not essential to the creation of an agency relationship? a. Consent of the principal b. Competency of the principal c. A fiduciary relationship d. Agreement to pay consideration 19. The real estate listing is classified as an employment contract under whose terms the owner of the property appoints and authorizes a real estate broker to act as his agent. Which of the following statements is correct? a. An owner is liable for a commission if he sells his property himself during the term of an exclusive agency listing. b. The owner is liable for a suit for specific performance if he refuses a buyer's offer that meets the exact terms of an exclusive right to sell listing. c. A broker has an enforceable right to a commission in an open listing if he is the "procuring cause" even if the owner sells through another broker. d. Death terminates an exclusive agency listing, but not an exclusive right to sell listing. 20. When a real estate agent acts exclusively as a buyer's agent, he can do all of the following except: a. present offers directly to the seller. b. present offers to the seller and seller's agent. c. withhold confidential information about the buyer from the seller. d. act as an exclusive agent of the seller. 21. In regards to a listing contract, a fiduciary relationship exists between the broker and: a. the buyer. b. the seller. c. both buyer and seller. d. all of the above 22. Ms. Seller had been showing homes to a young, newly married couple for quite some time and finally found one which they wanted to buy. But even with the best loan available, they did not have enough cash for the down payment. They felt that they could raise the additional money they needed by borrowing against their automobile and other sundry personal property. Under these circumstances, the broker should: a. advise against it. b. tell them it is their decision to make, but point out the pitfalls of this kind of financing. c. advise them to go ahead because real estate always appreciates in value. d. tell them nothing and let them make their own decision. 23. Broker Jones had signed an agreement to locate some property for her principal. Having found a property which suited the principal, Broker Jones determined that it could be purchased for less than her principal was willing to pay. She then bought the property and later sold it to her principal at the higher figure and kept the difference for herself. This would be called: a. commingling. b. conversion. c. divided agency. d. secret profit. 24. The fiduciary relationship between an agent and the principal is comparable to the relationship of a: a. trustor to beneficiary. b. mortgagor to mortgagee. c. trustor to trustee. d. trustee to beneficiary. 25. "A" has given "B" the impression that "X" is "A"'s agent even though "X" was never given the authority to represent "A". From "B"'s standpoint, the agency is: a. power-of-attorney. b. constructive agency. c. ostensible. d. rectified agency. 26. Acting for more than one party in a transaction: a. is illegal. b. is unethical. c. is within the law. d. makes the transaction void. 27. In describing an agency contract, which is most nearly correct? a. Most multiple listings are exclusive listings b. An open listing without a termination date is unenforceable c. Often multiple listings are net listings d. An exclusive agency need not contain a termination date 28. The relationship of a real estate salesperson to his or her broker is as: a. an employee. b. an independent contractor. c. a special agent. d. either (a) or (b) 29. The person who gives authority to an agent to represent his or her interests in dealing with a third party is the: a. client. b. Real Estate Commissioner. c. principal. d. escrow agent. 30. Which of the following would not be essential in order to create an agency relationship? a. A fiduciary relationship b. The agreement of the party to the agency c. An agreement to pay commission d. A competent principal 31. An agency relationship, such as in a listing, may be terminated by all of the following methods except: a. resignation of the agency by the real estate broker. b. mutual termination by agreement of both the agent and the seller. c. destruction of the property with which the agency is concerned. d. revocation by the principal if the agent has an interest in the subject matter of the agency. 32. Which of the following is closest to the same relationship as between a broker and seller: a. trustee and beneficiary. b. broker and salesman. c. mortgagor and mortgagee. d. vendor and vendee. 33. All of the following statements concerning agency relationships are correct, except: a. most broker-seller relationships are expressed agencies. b. the seller of a home is responsible for the misrepresentations of his real estate broker as long as the broker is acting within the scope of his authorized duties. c. the real estate broker is not responsible for losses suffered by a buyer who acted upon misrepresentations of the seller passed on to him by the broker as long as the broker was unaware of the seller's misrepresentations. d. net listings are encouraged in California, because they avoid conflicts of interest in the agency relationship. 34. What kind of agency is a listing? a. A special agency b. A general agency c. An executive agency d. A dual agency 35. When a real estate agent acts as a dual agent for both the buyer and seller in a 1031 exchange, and does not disclose his dual agency to both parties, he may: a. provide grounds for either party to rescind the purchase agreement. b. be prevented from receiving any commission. c. be disciplined by the Real Estate Commissioner. d. any of the above 36. If a broker dies after he or she has taken a listing, what happens to the agency relationship it created? a. The listing remains in effect until the property is sold. b. Another broker from the firm will work with the seller. c. The agency immediately terminates. d. The agency will terminate when the seller lists the property with another broker. 37. The relationship of loyalty and trust that exists between a principal and agent most nearly resembles the relationship between: a. broker and salesperson. b. trustee and beneficiary. c. lessor and lessee. d. optionor and optionee. 38. Michelle, a real estate broker, sold a condo that was listed by a broker from another company. What is her relationship to the listing broker? a. Principal b. Third party c. Co-agent d. Selling broker 39. California Real Estate Law imposes upon a real estate agent the highest obligation of undivided interest and loyalty to his principal. This relationship is comparable to that of a: a. lessee to the lessor. b. trustee to the beneficiary. c. vendor to the purchaser. d. salesman to his or her broker. 40. Which of the following is closest to the same relationship as between a broker and seller? a. Trustee and beneficiary b. Broker and salesperson c. Mortgagor and mortgagee d. Vendor and vendee 41. When acting as a listing agent, a real estate broker is liable to third parties for: a. only written contracts made in the name of his or her principal. b. actions of a cooperating broker who is the authorized subagent of the seller. c. his or her own torts. d. torts committed by his or her principal in the transaction. 42. An agency relationship is created by all of the following except: a. agreement. b. ratification. c. specific performance. d. estoppel. 43. An agent who pays part of the commission to the buyer: a. must inform the seller. b. is subject to criminal prosecution. c. is subject to discipline by the Real Estate Commissioner. d. is subject to a civil lawsuit by the seller, even if he disclosed everything to the seller. 44. Broker Jones secured an agency listing in writing from the Johnson Co. on a commercial building that had been vacant for some months. The listing broker entered into a verbal agreement to share his commission with a cooperating broker. The cooperating broker procured a buyer, but broker Jones refused to split the commission. The cooperating broker: a. may recover his share in court. b. may not recover his share in court because this was only a verbal agreement. c. should ask the Commissioner to arbitrate the dispute. d. should go to the Labor Commissioner. 45. Under Article 3, Section 10176, of the California Real Estate Law, a broker could not be disciplined for which of the following? a. Acting for more than one party in a transaction with the knowledge and consent of all parties thereto b. Making any substantial misrepresentation c. Making any false promises of a character likely to influence d. Any conduct whether of a same or different character than specified in this Section which constitutes fraud 46. When a broker is representing the buyer exclusively under a buyer agency contract, which of the following is true? a. The buyer's broker has no liability for acts of the listing broker b. The buyer's broker is responsible for his own and the listing broker's acts c. The buyer's broker has a fiduciary duty to the buyer and seller d. The buyer's broker must represent both parties 47. To which of the following does a real estate agent owe a fiduciary duty? a. Third party b. Principal c. Escrow agent d. Customer 48. An agent has only a duty of honesty and fairness in dealing with: a. third parties. b. principals. c. attorneys. d. city officials. 49. Which of the following forms must be completed before an offer can be written? a. Agency disclosure b. Deposit receipt c. Real estate transfer disclosure d. Listing 50. An agent who acts exclusively as the agent for the buyer may: a. present offers to the seller only. b. present offers to the seller with the seller's agent present. c. present offers to the seller's agent only. d. is acting illegally. 51. A licensee who misrepresents property to the buyer while acting as an agent of the seller, is subject to: a. discipline. b. civil lawsuits. c. criminal penalties. d. all of the above
Answer key Question Correct answer Your answer 1. c a 2. a 3. a 4. b 5. c 6. b 7. d 8. d 9. b 10. a 11. c 12. d 13. b 14. c 15. b 16. a 17. c 18. d 19. c 20. d 21. b 22. b 23. d 24. d 25. c 26. c 27. a 28. a 29. c 30. c 31. d 32. a 33. d 34. a 35. d 36. c 37. b 38. d 39. b 40. a 41. c 42. c 43. a 44. a 45. a 46. a 47. b 48. a 49. a 50. b 51. d
Agency Which of the following is closest to the same relationship as between a broker and seller? Trustee and beneficiary Broker and salesperson Mortgagor and mortgagee Vendor and vendee
Correct answer is (a). A broker is the agent and the seller is the principal he works for. A trustee is also an agent who works for a beneficiary (the principal). Broker-salesperson (employer-employee relationship); mortgagor-mortgagee (borrower-lender relationship); vendor-vendee (seller-buyer relationship).
Agency Which of the following is closest to the same relationship as between a broker and seller: trustee and beneficiary. broker and salesman. mortgagor and mortgagee. vendor and vendee.
Correct answer is (a). A broker is the agent and the seller is the principal he works for. A trustee is also an agent who works for the beneficiary who is the principal. Broker--salesman is employer--employee relationship. Mortgagor and mortgagee is borrower--lender relationship. Vendor--vendee is seller--buyer.
Agency An agent who pays part of the commission to the buyer: must inform the seller. is subject to criminal prosecution. is subject to discipline by the Real Estate Commissioner. is subject to a civil lawsuit by the seller, even if he disclosed everything to the seller.
Correct answer is (a). An agent may pay part of the commission to the buyer if he informs the seller.
Agency What event does not terminate an agency? Death of listing agent (not broker) Full performance Expiration of term Destruction of listed property
Correct answer is (a). Since the broker owns the listing, only the death of the listing broker, not the listing agent, would terminate the listing.
Agency An agent has only a duty of honesty and fairness in dealing with: third parties. principals. attorneys. city officials.
Correct answer is (a). The agent has an obligation always to act fairly and honestly with third parties.
Agency To which of the following does a real estate agent owe a fiduciary duty? Third party Principal Escrow agent Customer
Correct answer is (b). The agent owes the principal certain fiduciary duties.
Agency Ms. Seller had been showing homes to a young, newly married couple for quite some time and finally found one which they wanted to buy. But even with the best loan available, they did not have enough cash for the down payment. They felt that they could raise the additional money they needed by borrowing against their automobile and other sundry personal property. Under these circumstances, the broker should: advise against it. tell them it is their decision to make, but point out the pitfalls of this kind of financing. advise them to go ahead because real estate always appreciates in value. tell them nothing and let them make their own decision.
Correct answer is (b). The broker has certain obligations to the buyers but she must be careful not to give legal advise of this importance. To say nothing might imply consent.
Agency A person designated in a written power-of-attorney, to legally act for another in his stead is typically called a(n): fiduciary. principal. attorney-in-fact. agent.
Correct answer is (c). Any person may give another the authority to act on his or her behalf. The legal document that does this is called a power of attorney. The person holding the power of attorney is an attorney-in-fact.
Agency A fiduciary relationship may be terminated by: agreement. revocation. death. all of the above.
Correct answer is (d). Answers (a), (b), and (c) all terminate a fiduciary relationship.
Agency Which of the following is not required of a licensee under the current agency disclosure law? Disclosure Election Confirmation Representation
Correct answer is (d). The three steps required under the agency disclosure law are: disclose, elect, and confirm.
Agency When a real estate agent acts exclusively as a buyer's agent, he can do all of the following except: present offers directly to the seller. present offers to the seller and seller's agent. withhold confidential information about the buyer from the seller. act as an exclusive agent of the seller.
Correct answer is (d). When the licensee is the exclusive agent of the buyer, he may not be the exclusive agent for the seller.
Agency Agency is referred to as the relationship between the agent and his principal. All of the following statements are correct about agency, except: agency may be an expressed contract. the principal must pay money to the agent to create an agency relationship. agency may be an implied contract. an agreement that may be in writing or verbal.
Correct answer is (b). Answers (a), (c), and (d) are correct statements applicable to an agency relationship. Answer (b) is false. An agency relationship does not require the payment of money.
Agency Which of the following statements about escrow procedures is true? A broker can never escrow a transaction When the escrow requirements have been met, the escrow agency changes from a dual agency to a separate agency When the escrow holder receives signed instructions, it is said to be a complete escrow The purpose of escrow is to have the escrow officer act as an arbitrator of disputes between the buyer and seller
Correct answer is (b). Escrow agents are dual agents for both buyer and seller until the close of escrow. After close, they become the separate agent of either party.
Agency Broker White obtained a deposit from buyer Farley. The seller did not accept the offer, however, and broker would not return deposit. Farley contacted the Real Estate Commissioner. The Commissioner can: act only as mediator. investigate as required by real estate law. not act on this since it involves a real estate license. not act on this since it involves civil court action.
Correct answer is (b). The law states that, "The Commissioner...shall, upon the verified complaint in writing of any person, investigate the actions...."
Agency The relationship of loyalty and trust that exists between a principal and agent most nearly resembles the relationship between: broker and salesperson. trustee and beneficiary. lessor and lessee. optionor and optionee.
Correct answer is (b). The trustee holds the title in trust for the benefit of the beneficiary.
Agency When may a real estate broker, acting as agent for the seller, refuse to submit a buyer's offer? When the owner has already accepted an offer When the owner has already accepted a better offer When the owner has given broker express instructions not to submit any further offers Never, all offers must be presented
Correct answer is (c). A broker must present all offers unless they are frivolous or unless seller has expressly instructed broker to submit no further offers.
Agency "A" has given "B" the impression that "X" is "A"'s agent even though "X" was never given the authority to represent "A". From "B"'s standpoint, the agency is: power-of-attorney. constructive agency. ostensible. rectified agency.
Correct answer is (c). A good example of this would be watching a friend's store for him while he goes to lunch. Making a sale to a customer that comes in believing you to be the owner, you are "ostensibly" the owner's agent.
Agency The person who gives authority to an agent to represent his or her interests in dealing with a third party is the: client. Real Estate Commissioner. principal. escrow agent.
Correct answer is (c). A principal is one of the main parties to a transaction (i.e. the buyer and the seller are principals in the purchase of real property). In a fiduciary relationship, the person who hires a real estate broker to represent him or her in the sale of property is a principal.
Agency An agency relationship is said to create a fiduciary relationship between principal and agent. Of the following relationships, which illustrates a fiduciary responsibility? Any trustee to a beneficiary Real estate broker to his client Both (a) and (b) Neither (a) nor (b)
Correct answer is (c). A trustee is an agent to the beneficiary (the principal). A real estate broker is an agent to his client (the principal).
Agency A broker acting as agent for a principal has as much authority as: * other parties believe the agent to possess. * the agent chooses to accept. * the principal actually or ostensibly confers upon him. * he chooses to accept as limited by the Statute of Limitations.
Correct answer is (c). An agent has as much authority as his principal actually or ostensibly confers upon him.
Agency Which of the following would not be essential in order to create an agency relationship? A fiduciary relationship The agreement of the party to the agency An agreement to pay commission A competent principal
Correct answer is (c). Definition of what is Agency.
Agency By accepting the actions of an agent, even though there is no contract, a seller may create an agency by: estoppel. express agreement. ratification. collaboration.
Correct answer is (c). Definition: Ratification means acceptance of an act already performed. Ratification of an agency relationship is created by approving acts after they are done.
Agency Acting for more than one party in a transaction: is illegal. is unethical. is within the law. makes the transaction void.
Correct answer is (c). Failure to disclose dual agency is a violation of real estate law.
Agency The real estate listing is classified as an employment contract under whose terms the owner of the property appoints and authorizes a real estate broker to act as his agent. Which of the following statements is correct? An owner is liable for a commission if he sells his property himself during the term of an exclusive agency listing. The owner is liable for a suit for specific performance if he refuses a buyer's offer that meets the exact terms of an exclusive right to sell listing. A broker has an enforceable right to a commission in an open listing if he is the "procuring cause" even if the owner sells through another broker. Death terminates an exclusive agency listing, but not an exclusive right to sell listing.
Correct answer is (c). In an exclusive agency listing the owner maintains the right to sell the property himself. The owner is not liable for a suit for specific performance until he has entered into the purchase contract with the buyer. Death terminates exclusive listings.
Agency If a broker dies after he or she has taken a listing, what happens to the agency relationship it created? The listing remains in effect until the property is sold. Another broker from the firm will work with the seller. The agency immediately terminates. The agency will terminate when the seller lists the property with another broker.
Correct answer is (c). Incapacity or death of either the client or the broker terminates an agency relationship because agency is a contract for personal services. A listing agreement is a personal services contract in that a licensed real estate broker agrees to provide services for a seller. If the broker were to lose his or her license, the broker would not legally be able to perform under the terms of the listing agreement.
Agency When acting as a listing agent, a real estate broker is liable to third parties for: only written contracts made in the name of his or her principal. actions of a cooperating broker who is the authorized subagent of the seller. his or her own torts. torts committed by his or her principal in the transaction.
Correct answer is (c). The acts, errors and/or omissions (negligence) of a cooperating broker who is the authorized subagent of the seller may be imputed to the seller. Equally, when the cooperating broker is not the authorized subagent of the seller, but rather the authorized agent or subagent of the listing broker, the negligent acts of the cooperating broker may be imputed to the listing broker and the listing broker may be subject to liability to third parties under the legal theory of respondeat superior. [DRE, Chapter 10, page 168]
Agency Which of the following is not essential to the creation of an agency relationship? Consent of the principal Competency of the principal A fiduciary relationship Agreement to pay consideration
Correct answer is (d). Agency does not require consideration. A broker could act as an agent without getting paid.
Agency When a real estate agent acts as a dual agent for both the buyer and seller in a 1031 exchange, and does not disclose his dual agency to both parties, he may: provide grounds for either party to rescind the purchase agreement. be prevented from receiving any commission. be disciplined by the Real Estate Commissioner. any of the above
Correct answer is (d). Agents must obtain the knowledge and consent of both parties to act as dual agent. Failure to do so may result in any or all of the choices in (a), (b), and (c).
Agency All of the following statements concerning agency relationships are correct, except: most broker-seller relationships are expressed agencies. the seller of a home is responsible for the misrepresentations of his real estate broker as long as the broker is acting within the scope of his authorized duties. the real estate broker is not responsible for losses suffered by a buyer who acted upon misrepresentations of the seller passed on to him by the broker as long as the broker was unaware of the seller's misrepresentations. net listings are encouraged in California, because they avoid conflicts of interest in the agency relationship.
Correct answer is (d). All the other answers are correct statements.
Agency Which of the following is true of a buyer's agent? They are illegal in California They are not entitled to a commission They do not form an agency relationship Compensation may not necessarily come from the buyer
Correct answer is (d). An executed sale would make the buyer's agent now the procuring cause and now will be referred to as the selling agent. Commission is distributed through listing agreement with seller.
Agency Michelle, a real estate broker, sold a condo that was listed by a broker from another company. What is her relationship to the listing broker? Principal Third party Co-agent Selling broker
Correct answer is (d). It is common that the listing broker will split any commission received with the broker who procures the buyer for the property. The broker who cooperates with the listing broker to procure a buyer is known as the selling broker. The selling broker may be acting as a subagent of the seller, an agent of the listing broker, or may be performing as the exclusive agent of the buyer. (DRE Reference Book, page 159)
Agency A licensee who misrepresents property to the buyer while acting as an agent of the seller, is subject to: discipline. civil lawsuits. criminal penalties. all of the above
Correct answer is (d). Licensees who make misrepresentations are subject to discipline, civil lawsuits, and/or criminal penalties.
Agency Broker Jones had signed an agreement to locate some property for her principal. Having found a property which suited the principal, Broker Jones determined that it could be purchased for less than her principal was willing to pay. She then bought the property and later sold it to her principal at the higher figure and kept the difference for herself. This would be called: commingling. conversion. divided agency. secret profit.
Correct answer is (d). The details of the story do not indicate if fraud was involved in this transaction but certainly secret profit was.
Agency The fiduciary relationship between an agent and the principal is comparable to the relationship of a: trustor to beneficiary. mortgagor to mortgagee. trustor to trustee. trustee to beneficiary.
Correct answer is (d). The trustee is the agent for the beneficiary under a deed of trust.
Agency An agency relationship, such as in a listing, may be terminated by all of the following methods except: resignation of the agency by the real estate broker. mutual termination by agreement of both the agent and the seller. destruction of the property with which the agency is concerned. revocation by the principal if the agent has an interest in the subject matter of the agency.
Correct answer is (d). When the agent has an interest in the subject matter of the agency; for example the broker is a co-owner of the property, the agency cannot be revoked by the principal.