Chapter 5: Unit 2 - Agency Relationships and Disclosures (Quiz)

Why would a tenant enter into an agency agreement with a broker?

A tenant could choose to employ a broker to locate property that will meet his or her specific needs, such as retail or office space.

What is the arrangement called when the agent is accountable only to the buyer? A) Buyer's agent B) Seller's agent C) Broker's agent D) Assigned agent

A) Buyer's agent

A seller can agree to accept or reject which of these options when he or she signs the listing contract? A) Subagency B) Facilitator C) Disclosure D) Non-agency

A) Subagency

When a seller gives permission to a broker to submit the property to the MLS, the seller is authorizing the broker to make a blanket unilateral offer of what to all the other members of that MLS? A) Subagency B) Designated agency C) Dual agency D) Non-agency

A) Subagency

Which of the following would be deemed an advantage of a subagency arrangement? A) Subagency is an easy way for the cooperating broker to share in the commission. B) Subagency relieves the seller and the listing broker from liable for the actions of the subagents. C) Subagency requires a written agreement from the buyer. D) Subagency allows the subagent to act like a buyer's agent without the risk of undisclosed dual agency.

A) Subagency is an easy way for the cooperating broker to share in the commission.

What is the definition of a single agent?

An agent who represents only one person in the transaction, either the buyer or the seller.

When the agency relationship has been terminated, the licensee is no longer considered the principal's agent and does not owe any further duties to the principal, except for the following? A) Loyalty B) Accounting C) Obedience D) Care

B) Accounting

What do we call an agent who represents a seller exclusively in a real estate transaction? A) Exclusive agent B) Single agent C) Subagent D) Broker agent

B) Single agent

Revocation of a broker's license results in A) reassignment of the relationship. B) termination of the relationship. C) extended agreement. D) open offer agreement relationship.

B) termination of the relationship

Before a buyer broker shows a property, what must he or she disclose to the seller? A) Seller agency relationship B) Subagency relationship C) Buyer agency relationship D) Dual agency relationship

C) Buyer agency relationship

When the agency relationship has been terminated, the licensee is no longer considered the principal's agent and does not owe any further duties to the principal, except for the following A) Loyalty B) Obedience C) Confidentiality D) Care

C) Confidentiality

If a cooperating broker accepts the offer of subagency from a listing broker, to whom does the cooperating broker owe fiduciary duties? A) Listing broker B) Buyer C) Seller D) No one

C) Seller

What condition occurs when dual agency is not disclosed and agreed to in writing? A) Non-disclosed dual agency B) Agency by association C) Undisclosed dual agency D) Dual agency by design

C) Undisclosed dual agency

Which type of compensation is more likely to be used in a commercial rather than a residential transaction? A) Kick-back B) Percent of sale C) Margin payment D) Retainer

D) Retainer

List four ways an agency agreement can be involuntarily terminated.

Death or incapacity of either party Condemnation of the property Destruction of the property through fire, vandalism or natural disaster Bankruptcy

What is designated agency and why is it important?

Designated agency means that a broker may designate one or more licensees to act exclusively as the agent of the seller or landlord, and designate one or more licensees to act exclusively as the agent of the buyer or tenant in the same transaction. This arrangement must also be disclosed to both parties and the broker must obtain the written consent of both the buyer and the seller. This is important because it can eliminate the potential conflict involved in a consensual dual agency arrangement.

Under what circumstances will most states allow dual agency and what is it called?

Dual agency is allowed with disclosure and informed consent. This is known as consensual dual agency.

What is dual agency?

Dual agency is the situation that exists when a real estate firm or a real estate licensee represents both the seller and the buyer or the landlord and the tenant in the same transaction.

How does a cooperating broker accept a unilateral blanket offer of subagency?

If a unilateral offer of subagency is in place, the cooperating broker accepts it by showing the property to a buyer customer.

What is meant by single agency?

In a single agency relationship, the agent can represent only one party - either the buyer or the seller - in a single transaction, but never both.

How is subagency created?

Subagency is created by the agreement of the people who are involved in the transaction.

What are three advantages to entering into a buyer agency agreement?

The buyer can tailor the agreement to reflect his or her specific needs or wants. The broker will be willing to search in a wider market area than just in-house and local MLS listings. The buyer will be in a stronger negotiating position.

What obligations does a subagent of the seller owe to the seller and what obligations does the subagent owe to the buyer?

The subagent owes the seller the same fiduciary responsibilities he or she would owe to any client. The subagent owes customer level services to the buyer - honesty, fair dealing and the proper disclosure of pertinent facts that affect the value of the property.

What is undisclosed dual agency and what happens in this situation?

Undisclosed dual agency is a dual agency relationship that is not disclosed and agreed to in writing. If this situation occurs, the agent has breached his or her fiduciary responsibilities to the client.