unit 15- agency definitions & relationships

A broker accepts a listing from a seller. In the agreement, the seller stipulates that the broker shall list the property on two different MLS directories. The broker only lists the property on one, but receives three offers within the first week. Under these circumstances, which of the following statements is correct? The broker is committed to finding a ready, willing and able buyer and has compiled with the agency agreement The broker has violated his fiduciary responsibility The broker has exercised appropriate discretion The broker by agreement with the mls may not advertise listings in more than on mls directory

The broker has violated his fiduciary responsibility Remember, licensees have an agency duty to follow all lawful instructions of the client.

Agents only owe honest ministerial acts and disclosures to who? Landlords Customers Clients Tenants

customers

Allison is a broker who knowingly stated a false material fact. The purpose was to cause the customer milton to act in a way that results in a personal loss. Allison is guilty of Inducement Fraud Misrepresentation Larceny

fraud This is fraud because Allison actually knows that the statement is false. Further, the licensee intends for the buyer/seller to rely upon that information to his detriment (which was probably meant to benefit the licensee).

Licensee that assists an underrepresented customer or a customer represented by a limited service agent is only liable for wrongdoing if his conduct is Negligent Considered a felony Grossly negligent Unintentionally wrong

grossly negligent

Carla the salesperson places her license on inactive status in july. In october carla purchases a house from a FSBO. what if anything is carla required to tell the seller of the property Advise the seller in the written offer that she is licensed Nothing because carla is an inactive licensee Advise the seller that she was once an active relaestate agent Nothin because the property is not listed with a broker

Advise the seller in the written offer that she is licensed Disclosure of license status applies to both active and inactive licensees. The fact that your license is on inactive status doesn't mean that you are not licensed--only that you are not affiliated with a broker

Before discussing property with an unrepresented non-client, licensees must disclose whom they represent, if anyone, that has an interest in the property at issue. This disclosure may be oral until what point after which it will need to be in writing? Prior to showing a physical property Prior to discussing sales prices Prior to signing of a lease All of above

All of above Disclosures may be oral when triggered (qualified discussion, non-client, unrepresented), but must be written before any "specific real estate assistance" is provided. Showing a property and discussing sales prices would both be considered real estate assistance. A licensee must make written disclosure to an unrepresented landlord/tenant in all lease applications, or in the lease itself (whichever occurs first).

Which of the following are examples of misrepresentation/omission Using bait and switch tactics Failing to disclose all material adverse facts Failing to timely present all offers and count-offers to the client All of the above

All of the above All licensees (salesperson or broker, active or inactive) are prohibited from making any misrepresentation or omission related to a transaction, including: bait and switch tactics, failing to disclose or concealing material facts, failing to present offers in a timely manner, disclosing confidential information, omitting material information in contracts, failing to identify persons holding deposits, making material misrepresentations, and making false statements.

What so agents who represent seller clients owe to unrepresented prospective buyers Honesty Disclosure of all known material adverse facts Disclosure of brokerage relationship All of the above

All of the above Standard agents representing seller clients must treat all prospective buyers honestly and shall not knowingly provide false information. Standard agents representing seller clients shall disclose in writing to prospective buyers all material adverse facts which are actually known to the licensee about to the physical condition of the property Standard agents representing seller clients must properly disclose their brokerage relationship to an unrepresented buyer

Buyer Wallack gives a $3,000 check to Salesperson Huber as a deposit on the sale of a property owned by Mr. Browning. It would be IMPROPER for Huber to withhold what information from Mr. Browning (his client)? Wallack has insufficient funds to cover the check The check is post dated Huber has agreed to hold the check for a few days before turning it over to his broker for deposit All of the above

All of the above Through his broker, Huber is an agent of the seller (Mr. Browning). He must therefore keep the seller informed of all matters concerning the transaction. Insufficient funds or a postdated check make the item a non-negotiable instrument (which cannot be deposited promptly into escrow). In addition, Huber must also relay the exact terms and conditions of any offer to his client

Dual agency (one agent represents both buyer and seller) is legal as long as: As long as both buyer and seller agree it's okay As long as the agent has at least 5 years experience As long as both buyer and seller consent in writing There are no other agents available to take on another client

As long as both buyer and seller consent in writing

Sarah Smith sees an ad from Broker Mark for a custom built home with mountain views, hardwood floors, a theater room, and a professional kitchen. She goes to the address and finds that the listed property is actually a motorhome. Mark is guilty of: Commingling Bait and switch Conversion None of the above

Bait and switch This is an example of a "bait and switch" misrepresentation, which is prohibited for all licensees (salesperson or broker, active or inactive). Bait and switch is an unethical practice in sales whereby the actual product for sale differs substantially from its advertised quality or other attributes

A licensed real estate salesperson may receive money to manage real property from Any broker A friend, relative, or builder His or her broker Any property owner

His or her broker A salesperson may ONLY receive a commission or other valuable consideration for acts of real estate brokerage (including property management) from his or her employing broker

Salesperson lynch recieves a referral check from an out of town broker kirks for sending him a prospective buyer. What is the first thing lynch should do Inform his employing broker Write a thank you note to kirks Deposit the check and say nothing Endorse the check and give it to his employing broker

Endorse the check and give it to his employing broker Lynch should endorse the check and give it to his employing broker. Receiving a commission or valuable consideration from anyone other than an employing broker is a violation of the Real Estate Board Regulations.

Julia the salesperson obtained a listing. Several days later julia meets prospective buyers at the property and remarks that since she is the listing agent she is very familiar with the property. Under the circumstances described, julia Has disclosed her agency relationship with the seller Has failed to properly disclose her agency relationship Is in violation of board regulations because she cannot sell her own listing Has created a dual agency which is in violation of board regulations

Has failed to properly disclose her agency relationship The problem with this disclosure is that it is not written. Such disclosures must be made upon having substantive discussions about specific property, and they must be written before providing any specific real estate assistance.

It's the day before closing, seller Silas informs his agent when he woke up there was no hot water in the house. Silas stated that he ran all the faucets and tried to shower but never got more than lukewarm water and feels there may be something wrong with the water heater. What should the agent do with this information? He should disclose if the buyers notice anything during a final walk through He must disclose as it is required to disclose all known material defects He shouldn't worry about disclosing since the water is still getting lukewarm He should tell the seller it won't be your problem much longer

He must disclose as it is required to disclose all known material defects The agent must disclose the information about the water/water heater to all parties of the contract otherwise he will be guilty of misrepresentation/omission. All licensees are prohibited from making any misrepresentation or omission related to a transaction, including: bait and switch tactics, failing to disclose or concealing material facts, failing to present offers in a timely manner, disclosing confidential information, omitting material information in contracts, failing to identify persons holding deposits, making material misrepresentations, and making false statements

A broker is holding an open house for one of her listings. According to Virginia License Law, the broker must provide agency disclosure. In the situation described, this disclosure must be made Verbally when the broker has general discussions about the property with a prospective buyer In writing when the broker has substantive discussions about the property with a prospective buyer Verbally to every person looking at the property In writing to every person looking at the property

In writing when the broker has substantive discussions about the property with a prospective buyer Agency disclosure must be made in writing upon having a substantive discussion about the property with an unrepresented buyer. This disclosure may be verbal when triggered, but it needs to be in writing as soon as possible (before specific real estate services are provided). There's a potential for many substantive conversations during an open house, so the agent should already have copies of the disclosure form on hand.

With the permission of his broker, a salesperson is representing a buyer. The salesperson goes to a showing for a listed property and properly advises the listing broker that he is representing the buyer. This situation: Would create a dual agency which is illegal Allows the salesperson to collect full commissions from both buyer and seller Is legal because proper disclosure has been made Is legal but violates the REALTOR code of ethics

Is legal because proper disclosure has been made The question tells us that the listing broker was advised of the buyer/broker arrangement, therefore this is legal.

Landon got an immediate job transfer so he gave a power of attorney to his brother brandon authorizing brandon to sell his home. Will brandon need a license to sell the home No as long as he does not receive any compensation for the transaction No as long as brandon only receives compensation from landon Yes all sales of real property require a real estate license Yes because he is selling as an attorney in fact he will need a license

No as long as he does not receive any compensation for the transaction Persons and firms do not require a license solely because they sell their own property or act without compensationunder a power of attorney

Its Friday and Salesperson Gary has just finished having his seller client sign the offer documents submitted by the buyer. Gary has to leave for an out of town trip for the weekend so he will delivery the signed offer to the buyer on Monday. Will the delivery of the offer documents be within the required time frame allowed by license law? Yes because it is within 5 days of signature Yes because it is within 3 days of signature No but because it is over a weekend its ok No the documents must be delivered asap

No the documents must be delivered asap No, Gary should deliver the signed offer documents to the buyer asap. The signed offer should be delivered to the buyer prior to Gary leaving for his out of town trip. All licensees (salesperson or broker, active or inactive) must deliver copies of all signed documents as soon as practical, notify all parties of any material changes to documents, and return any held documents upon request.

A listing broker receives a low offer from one of his prospects he also receives a full price offer from a cooperating broker he may Present only the full priced offer Present only his prospects offer Present both offers Present his offer first then the full price offer if not accepted

Present both offers The broker must present and receive all offers in a timely manner. It would be a breach of fiduciary duty to postpone deliverance of the full price offer (and not in the seller's best interests). Once presented, only the seller can decide whether to accept or reject an offer.

The virginia license law does not describe a dual agency relationship as illegal. However if such a relationship should exist it Must be disclosed in writing to all parties at the time of cosing Must be disclosed in writing to the buyer Must be disclosed in writing to the seller Requires that all parties to the transaction have agreed to the relationship in writing prior to the signing of any contract

Requires that all parties to the transaction have agreed to the relationship in writing prior to the signing of any contract Prior knowledge and agreement of the relationship is required from ALL parties. As with all things in real estate, this should be in writing and hard copies should be provided to everyone involved.

When a salesperson takes a listing the commission amount is determined by the Seller and salesperson Salesperson's employing broker Salesperson Seller and broker

Seller and broker License Law and Board Regulations are silent on the amount of a commission. Since the broker (agent) is employed by the seller (principal), commission is determined by what the seller is willing to pay and what the broker is willing to accept as a basis for the broker's agency.

Owner Chaney tells Broker Fowler that she will list her property if he guarantees that she will receive $38,500 cash once the sale is complete and all expenses have been paid. Fowler may have anything over that amount as commission. Broker Fowler should tell Owner Chaney That she is describing an exclusive agency listing That she has an unrealistic opinion on the value of the property That he cannot accept the listing That she is describing an open listing

That he cannot accept the listing This describes a "net" listing, where the owner specifies a specific amount of return on the sale after all the expenses are paid. The Regulations specifically prohibit this type of listing

When a broker is acting as buyers agent he may disclose all of the following items to the buyer except That the current owner of the property has AIDs Information that the broker knows about the financial circumstances of the seller Deed restrictions that might affect the buyers intended use of the property None of the above

That the current owner of the property has AIDs Disclosing a person's HIV/AIDS status would violate the Virginia Fair Housing Act, and potential federal privacy laws

_____ agents are only held to the duties listed in the brokerage agreement Standard Limited service Independent contractor B and c

b and c

In which of the following scenarios would an agency relationship continue? The seller is not happy with the offers coming in Seller decided to pull his house off the market and continue to live in it Buyers refuse to be part of a dual agency relationship Mutually agreed upon termination date arrives

The seller is not happy with the offers coming in

Gene, an independent broker, lists a property. Susan, also an independent broker, sells the property. Gene agrees to split the commission with Susan, but neither one advises the seller or the buyer of their agreement. According to Virginia regulations The seller must be informed of any such payment prior to signing the listing agreement Neither susan nor gene is in violation of the law Susan is guilty of accepting money from someone other than her employing broker Gene is guilty of paying valuable consideration to another party thereby creating a dual agency

The seller must be informed of any such payment prior to signing the listing agreement While it is within the license law for brokers to split commissions with other brokers, prior to entering into any brokerage relationship, a licensee shall advise the prospective client of the type of brokerage relationship proposed and the broker's compensation. The licensee must also disclose whether the broker will share such salary or compensation with another broker who might have a brokerage relationship with another party to the transaction.

A postal employee has a friend, Berry, who is a real estate salesperson. Every once in a while, she gives Berry information about people leaving the area so he can contact them as potential clients. When this information leads to a sale, Berry pays her $100 for the tip. Which of the following statements is true? This is a questionable business practice and may constitute mail fraud This is a violation of virginia license law This is permitted since it is only done occasionally This is not permissible because the $100 fee must be paid to smith through berry's employing broker

This is a violation of virginia license law Paying valuable consideration to an unlicensed person for an act of real estate is a violation. Even if Berry's broker paid the fee, it would still be a violation of the law.

A salesperson works for a broker that has listed a really nice property. He purchases the subject property one day after the exclusive right-to-sell agreement expires. Which of the following statements is true? This is proper provided the seller does not find out about the salespersons license status This is proper provided the salesperson reveals his license status and relationship with the broker This is improper unless the salesperson obtains his brokers approval This is improper because it is prohibited by law

This is proper provided the salesperson reveals his license status and relationship with the broker A licensee buying or selling real property in his own name must disclose his license status to the other party in the transaction

According to virginia license law and the regulations of the board a salesperson may accept a net listing With a written consent from the owner only If the owner is nonresident of virginia By written contract between the owner and the principal broker Under no circumstances

Under no circumstances Net listings are illegal in Virginia. As such, a salesperson may never legally accept a net listing.

Which is not a reason a virginia real estate agency relationship terminates VA agency relationships terminate by mutual agreement VA agency relationships terminate after 120 days VA agency relationships terminate by agent after client denial of dual agency VA agency relationships terminate by default of a party

VA agency relationships terminate after 120 days Virginia real estate agency relationships terminate when completed or the earlier of: a mutually agreed upon expiration date (90 days if parties do not specify a date), a mutually agreed upon termination at any time, a default by a party, or if the agent wishes to terminate after a client refuses to consent to a disclosed dual representation.

Listing agreements should be specific about their exact terms. Under what conditions may the listing be altered With written permission from the listing broker To encourage a prospective buyer to make an offer With the knowledge and written consent of the owner If the changes are reasonable

With the knowledge and written consent of the owner The only time that a salesperson or a broker could change (alter) a listing agreement is with the permission of the seller. This should also be in writing.

The duties of a licensee depend on The type of agent The type of person the agent represents The commission rate A and B

a and b

At what point is an agency relationship established? As soon as the client engages the licensee With written consent of the client in a brokerage agreement As soon as the licensee performs an act of brokerage for a person A or b

a or b

One of the agent duty is to promote the seller's interest which means the agent must Set the sales price according to the seller request Timely present the seller with all written offers Establish strategies to accomplish sellers objectives All of the above

all of the above

An agent is asked to list a property for sale on the Multiple Listing Service (MLS). The rest of the duties to promote the seller's interest (marketing, negotiating, offers etc.) are listed as exclusions in the brokerage agreement. What type of agency is this? Standard agent Designated agent Limited service agent Independent contractor

limited service agents Limited service agents owe the same duties to clients and customers as standard agents, except the brokerage agreement can specifically eliminate one or more of the standard agent's mandatory duties. Engaging an agent to merely list the property on the MLS, and then have no further involvement with the transaction, is the most common use of limited service agency in Virginia.

A broker may not accept which of the following listings Open listing General listing Net listing Neither b or c

net listing Net listings (where a licensee keeps all proceeds over certain amount) are prohibited in Virginia. Therefore, accepting a net listing is a violation of the licensing law. An open listing is an agency agreement between a seller and any number of brokers, wherein the seller promises to compensate the broker if the broker sells the property. Note that a general listing is the same thing as an open listing.

Louise was license but let her license expire. She decides to sell her own home. What must louise do Nothing Apply to have her license reinstated Disclose her status to all prospective buyers Notify the board

nothing When a license expires, it is no longer valid. The VA License Law treats a person with an expired license the same as a person who was never licensed. That is, only those who are licensed must disclose their license status. Contrast an inactive license with an expired license. A person with an inactive license must disclose their license status because they are licensed, but not affiliated with a broker.