Chapter 7 Quiz

A provisional broker sells another firm's listing for $150,000. The commission is 6.5 percent of the sales price. Of this amount, 55 percent goes to the listing broker, and the remaining 45 percent belongs to the cooperating broker. If the provisional broker receives 60 percent of any commission that he generates for the office, he is entitled to receive a. $2,632.50. b. $3,217.50. c. $4,387.50. d. $5,850.00.

A

A real estate broker was responsible for a chain of events that resulted in the sale of one of his client's properties. This is referred to as a a. pro forma. b. procuring cause. c. private offering. d. proffered offer.

B

All of the following could legally be considered fraudulent EXCEPT a. deceitful or dishonest practices. b. exaggerated opinions about the property. c. omitted statements of material fact. d. misstatements about the property.

B

Opinion statements by an agent exaggerating the benefits of a property are called a. polishing. b. puffing. c. prospecting. d. marketing.

B

An example of a stigmatized property is a a. four-bedroom house with only one bathroom. b. house plumbed with polybutylene pipes. c. listing where a past owner died in the house. d. building with synthetic stucco siding.

C

The relationship of a broker to a client is that of a. a trustee. b. a subagent. c. a fiduciary. d. an attorney in fact.

C

Which of the following is NOT a material fact in North Carolina? a. A leak around the flashing of the chimney b. A cracked heat exchange in the heating system c. The imminent widening of the road in front of the property to four lanes d. Polybutylene pipes that have never leaked

D

Which of the following would NOT be considered a stigmatized property in North Carolina? a. A tenant committed suicide in the basement. b. Local people consider the house to be haunted. c. The elderly owner died peacefully in her bedroom. d. The property was flooded during a hurricane.

D

As an agent for the seller, a real estate broker can a. guarantee a prospective buyer that the seller will accept an offer at the listed price and terms. b. solicit an offer to purchase the property from a prospective buyer. c. advise a prospective buyer of the best manner of taking title to the property. d. change the terms of the listing contract on behalf of the seller.

B

The listing and selling brokers agree to equally share a 7 percent commission on a $95,900 sale. The listing broker gives the listing licensee 50 percent of the firm's commission and the selling broker gives the selling licensee 65 percent of that firm's commission. How much does the selling licensee earn from the sale? a. $1,678.25 b. $2,181.73 c. $3,356.50 d. $4,363.45

B

If a real estate licensee will be treated as an employee, the employing broker must do all the following EXCEPT a. provide a W-2 that reflects all monies paid to the employee. b. withhold appropriate local, state, and federal employment taxes. c. specify work hours and task requirements. d. provide employee benefits.

D

Which of the following BEST describes a designated agency transaction? a. The listing firm appointing an agent to represent the seller b. The selling firm appointing an agent to represent the buyer c. Some agents in the same firm representing buyers exclusively and other agents in the same firm representing sellers exclusively d. A broker-in-charge appointing one agent to exclusively represent the seller as the client and appointing a different agent to exclusively represent the buyer as a client while the firm remains in dual agency

D

A real estate agent working for a brokerage firm lists a unit for sale in a condominium building. In this transaction, the agent a. is now personally obligated as the seller's agent. b. is acting on behalf of the brokerage firm, the seller's agent. c. is representing the condominium association. d. must personally find a buyer for the unit in order for the firm to earn a commission.

B

To be entitled to collect a real estate commission, a North Carolina broker must meet all of the following criteria EXCEPT a. the broker had an active North Carolina real estate broker's license. b. the broker was a procuring cause for the transaction. c. the broker was employed to perform certain activities in the transaction. d. the broker was an active member of the local Realtor® board.

D

A broker lists a property for sale at $100,000 with a 5 percent commission. The broker obtains a verbal offer to purchase the property from a prospective buyer. The seller indicates to the broker that the offer would be acceptable if submitted in writing. Before it can be put into writing, the buyer withdraws the verbal offer. In this situation, the broker would be entitled to a. a commission of $5,000. b. only a partial commission. c. no commission. d. sue the buyer for breach of contract.

C

A broker who is the agent of the buyer should a. disclose to the buyer that the seller is a member of a minority group. b. disclose to the seller the maximum price the buyer is willing to pay. c. present to the seller only the offer(s) containing a price and terms recommended by the agent. d. advise the buyer, if in the agent's opinion, the listing price of a listed property is unrealistic.

D

Which of the following describes designated agency in North Carolina? a. Designated agency is optional, not mandatory. b. Designated agency does not eliminate dual agency. c. Designated agents cannot have prior confidential knowledge of the other party to the transaction. d. All of the above

D

A North Carolina broker verbally agrees to represent a prospective buyer even though the buyer declined to sign a buyer agency agreement. The broker neglected to revisit the agency issue before showing the buyer a suitable property. Therefore, while showing property, the agent has a fiduciary duty to a. the seller. b. the buyer. c. no one. d. the public.

B

If the broker-in-charge (BIC) is to act as one of the designated agents on a North Carolina in-house transaction, which of the following may be appointed as a designated agent for the other party to the transaction? a.An actively licensed provisional broker within the firm, as long as disclosure is made to both clients. b.A licensed broker within the firm who has no prior confidential knowledge of the party that the BIC will represent. c.A broker-in-charge cannot be appointed as a designated agent. d.A licensed broker who has prior confidential knowledge about the party that the BIC will represent.

B

Which of the following BEST defines the common law of agency? a. The disclosure requirement by the agent to third parties no later than first substantial contact b. Case law establishing the responsibilities of a person who acts for another c. The Code of Ethics prescribed by the local trade association d. State license law and rules

B

The amount of compensation due to a salesperson licensee from the brokerage firm is determined by the a. state real estate regulator to ensure the public the most protection from incompetent licensees. b. local real estate board's minimum wage guarantee to agents. c. in-house employment contract. d. listing agreement.

C

A broker is permitted to represent both the seller and the buyer in the same transaction when a. the broker decides principals will benefit from the dual representation. b. the broker is a subagent rather than the agent of the seller. c. commission is paid by the seller. d. both parties have been informed and agree to the dual representation.

D

The North Carolina Working with Real Estate Agents brochure must be given a. to property owners upon initial contact. b. to all consumers prior to first substantial contact. c. only to buyers in a real estate transaction. d. to all consumers in a sales transaction no later than first substantial contact.

D

A North Carolina provisional broker may accept compensation a. from his employing broker. b. directly from his consumer-principal. c. from another licensee representing the broker. d. all the above.

A

Which of the following statements is TRUE about types of agency? a. A property manager usually acts as a special agent of the landlord. b. A listing agent usually acts as a general agent of the seller. c. A real estate licensee usually acts as a general agent of an affiliated firm. d. A buyer's agent usually acts as a universal agent for the buyer.

C

A licensee is an actively licensed real estate broker who has a written contract with his firm that specifies that he will not be treated like an employee. The licensee's entire income is from sales commissions rather than an hourly wage. Based on these facts, the licensee will be treated by the IRS as a. a real estate assistant. b. an employee. c. a subagent. d. self-employed.

D

A seller has listed a home with a broker for $90,000, and the broker suggests to a prospective buyer-customer to submit a low offer because of the seller's urgent need to sell. The buyer offers $85,000, and the seller accepts it. In this situation, a. the broker has violated his agency relationship with the seller. b. the broker's action was acceptable since the seller accepted the offer. c. the broker acted properly to obtain a quick offer on the property. d. any broker is encouraged to solicit such bids for the property.

A

The real estate broker's fiduciary responsibility to keep the principal informed of all facts that could affect a transaction is the duty of a. skill, care, and diligence. b. disclosure. c. obedience. d. accounting.

B

A real estate broker acting as the agent of the seller a. is obligated to render faithful service to the principal. B. is allowed, but not required, to disclose the seller's minimum price. c. should present to the seller only the highest offer for the property. d. can accept an offer on behalf of the seller.

B

If a North Carolina firm is to practice designated agency, which of the following is TRUE? a. Designated agents must be licensed as nonprovisional brokers. b. A comprehensive firm policy is required by Commission Rule. c. Designated agents must be members of the local real estate trade association. d. The broker-in-charge cannot be designated as one of the agents.

B

It is the duty of an agent to disclose to a buyer client all the facts and conditions pertaining to the transaction involving the client because the a. amount of commission may be adjusted based upon the agent's efforts. b. agent has fiduciary obligations to the principal. c. the local Realtor® board strongly endorses full disclosure. d. terms of the purchase contract require the agent to do so.

B

A listing agent is showing a house to a prospective buyer customer. The seller told the listing agent that during the past 10 winters, the sellers have been unable to rid the house of rodents. The seller has hidden rodent damage by the strategic placement of a large sofa. Which of the following statements is TRUE? a. This information may be withheld since the agent never saw any evidence of infestation or damage. b. Disclosing the information could create a fiduciary relationship with the buyer and, thereby, create an unauthorized dual agency situation. c. Withholding the information prevents an informed buyer decision. d. Disclosing the information violates the agency duties with the seller.

C

All of the following situations will terminate a listing EXCEPT a. mutual agreement of the parties. b. breach by either party. c. death of the individual listing licensee. d. destruction of the listed property.

C

The listing broker tells a prospective buyer that the seller is on the verge of bankruptcy. The broker's actions are a. acceptable since they may promote an offer from the buyer. b. acceptable as long as the broker does not disclose any additional specific financial information concerning his client's credit history. c. unacceptable unless there are multiple offers on the property. d. unacceptable unless the seller has authorized the broker to share the information with potential buyers.

D

Which of the following statements is TRUE about the North Carolina Working with Real Estate Agents brochure? a. The consumer must sign the acknowledgment panel before a licensee can begin to provide brokerage services. b. Buyer agency has been created once the buyer consumer signs the acknowledgement panel. c. The brochure's use is mandatory in all real estate transactions. d. The real estate agent must review the agency options in the brochure with the consumer.

D

A firm that represents both the buyer and the seller in the same transaction is a. a designated agent. b. a dual agent. c. in violation of license law and Commission Rules unless they have a comprehensive written agency policy. d. primarily representing the seller as they normally pay the commission.

B

A buyer-client has instructed the agent to show only properties where the seller is willing to pay the buyer agent's commission. The agent contacts an owner selling property without the assistance of a real estate agent with the hope that the seller would be willing to pay her commission if the buyer decided to purchase the seller's property. In order to comply with North Carolina Real Estate Commission Rules, the agent must do all of the following EXCEPT a. obtain permission from her buyer-client in order to receive compensation from the seller. b. disclose her agency status to the seller at initial contact. c. convince the seller to list with her and authorize dual agency. d. review the Working with Real Estate Agents brochure with the seller.

C

A real estate firm practices all legal forms of agency allowed in North Carolina. If a firm's buyer-client is interested in buying property listed with the firm, the firm must a. decline to act as dual agent and refer the buyer to another firm. b. require both clients to sign agency agreements prior to the close of the transaction. c. disclose the agency options available and obtain written consent from both clients to act as dual agent. d. act as a facilitator rather than a fiduciary.

C

An agent employed by a listing broker told a prospective buyer customer that the listed house was "the best house in the area." This statement would be considered a. fraud on the part of the individual agent. b. fraud on the part of the broker-in-charge because the employing broker is responsible for the actions of any agent representing the firm. c. legal puffing. d. fraud only if the buyer purchased the house based on the statement.

C

If a real estate licensee is an independent contractor affiliated with a real estate brokerage firm, the licensee is solely responsible for all of the following EXCEPT a. paying local, state, and federal income taxes. b. determining daily and weekly work hours. c. violations of state licensing law. d. setting individual business goals.

C

In a typical agency relationship between a broker and client, the broker's commission is determined by a. state law. b. the local real estate board. c. mutual agreement. d. minimums based on the property type.

C

Unless some other written agreement has been made, the broker will usually receive the sales commission from the seller when a. the purchaser takes possession of the property. b. the seller lists the property with the broker. c. the transaction is closed. d. an offer is procured from a ready, willing, and able buyer.

C

Upon discovering a latent defect in the property, the listing agent should discuss the problem with the seller and then a. inform the seller that the defect must be repaired. b. arrange for the repairs himself or herself as required by the terms of a typical listing contract. c. inform any prospective buyers of the defect. d. contact the city building inspector about the defect.

C

A real estate licensee who is an independent contractor with a real estate brokerage firm usually receives a. a monthly salary or hourly wage. b. company-provided health insurance. c. a company-provided automobile. d. negotiated commissions on transactions.

D

A listing agent has an obligation to disclose to the seller a. only offers that meet the seller's specifications. b. if the buyer intends to resell the property quickly for a profit. c. the name and nationality of the purchaser. d. the in-house commission split between the firm and the listing licensee.

B

A parcel of vacant land 80 feet wide and 200 feet deep was sold for $200 per front foot. How much money would an individual agent receive for a 60 percent share of the 10 percent commission earned? a. $640 b. $960 c. $1,600 d. $2,400

B

In North Carolina, oral buyer agency a. must be non-exclusive and have no expiration date. b. must be reduced to writing prior to writing an offer to purchase on behalf of the buyer. c. allows the details of the agency arrangement to be delayed until written agency occurs. d. can not include dual agency options.

A

Which of the following situations is considered to be a material fact in North Carolina? a. Nearby land is being considered for a landfill b. House is rumored to be haunted c. Criminal activity occurred on the property d. Convicted sexual offender lives in the neighborhood

A

A North Carolina provisional broker may advertise a property only if the broker a. personally listed the property. b. uses the employing broker's name or the firm name in the advertisement. c. personally pays for the advertisement. d. is an active member of the local real estate board.

B

A broker was told by his seller-principal not to advertise her property in the newspaper, which was just across the state line. The broker must comply with the seller's wishes because he a. is required to comply with the Interstate Land Sales Full Disclosure Act. b. must obey the lawful instructions of his principal. c. only has an advertising contract with another newspaper. d. is allowed to advertise only in local newspapers.

B

A developer subdivides acreage and offers individual lots for sale. A broker member of the local trade association lists and sells several of the lots. The developer refuses to pay the promised commission. Using his best efforts to obtain the earned commission, the broker should a. report the developer to the state real estate commission. b. file a mortgage against the developer's remaining lots. c. file a complaint with the local Realtor® board. d. file a civil suit against the developer for breach of contract.

D

Which of the following would be dual agency? a. A broker-in-charge assisting a buyer client in the purchase of a property that was listed by a provisional broker of the firm b. A provisional broker and a broker licensee from firms that are cooperating in a transaction c. A firm that represents buyers and sellers d. A broker finding a buyer for a property the broker personally listed

A