Section 3 Chapter 2

The correct answer is: Client's decision.

All of the following will automatically terminate a listing by operation of law, EXCEPT: Select one: a. Bankruptcy of the client. b. Destruction of the property. c. Condemnation of the property. d. Client's decision.

The correct answer is: The client.

An agent has the responsibility of care, obedience, accountability, loyalty and disclosure to which of the following? Select one: a. The customer. b. The buyer. c. The client. d. All of these choices.

The correct answer is: Ben and Sara are designated representatives.

Broker Jane is acting as a dual agent in a real estate transaction and decides to appoint salesperson Sara to represent the seller and salesperson Ben to represent the buyer. Ben and Sara both work in Jane's firm. Select one: a. Jane cannot legally do this. b. Ben and Sara are dual representatives. c. Ben and Sara must be independent contractors. d. Ben and Sara are designated representatives.

The correct answer is: Tell both Cheever and Brevard.

Broker Johnson has listed the property of Cheever and sells it to Brevard for $175,000. Before closing, Johnson finds that the property has a serious structural defect. What should Johnson do? Select one: a. Tell Cheever. b. Tell Brevard. c. Keep it quiet as it might kill the sale. d. Tell both Cheever and Brevard.

The correct answer is: True

If a broker accepts a promissory note or post-dated check as a deposit on an offer, that information must be disclosed to the seller. Select one: a. True b. False

The correct answer is: Reasonable care and due diligence.

Licensee Larry has held a real estate license for many years and has completed many residential transactions but never any commercial transactions. His neighbor owns a small strip mall and asks Licensee Larry to sell the property. Licensee Larry should be especially careful to consider which of the following duties to the client? Select one: a. Disclosure. b. Accounting. c. Confidentiality. d. Reasonable care and due diligence.

The correct answer is: Escrow funds.

Money or trust instruments received, accepted or held pending consummation or termination of a real estate transaction are: Select one: a. Commissions. b. Down payments. c. Escrow funds. d. Anticipated profits.

c. special agent

Sara Seller hired Larry Licensee to sell her home under specified terms. Larry Licensee would most likely be a(n): Select one: a. Subagent. b. Universal agent. c. Special agent. d. General agent.

Availability

Since the agent has limited authority, the client needs to be available to make decisions as needs arise. A licensee cannot act without instructions from the client, and the client's instructions may change due to market conditions.

The correct answer is: A power of attorney.

The instrument authorizing one person to act for another person is: Select one: a. An attorney in fact. b. A power of attorney. c. An estoppel certificate. d. A certificate of no defense.

The correct answer is: special agency.

When a real estate broker is retained to perform one specific act for a client, it is known as: Select one: a. general warranty. b. special agency. c. general agency. d. special warranty.

The correct answer is: When the offer to purchase has been signed and accepted by the seller.

When does a broker earn his commission? Select one: a. When the listing is taken. b. When the title insurance policy is given to the purchaser. c. When closing is complete and title passes. d. When the offer to purchase has been signed and accepted by the seller.

Common law

is a body of laws based on social traditions and common practices that were modified by English court cases.

fiduciary

is a person who is placed in a position of trust to act for someone else's benefit. The licensee placed in this position must act in the best interests of the client and must do nothing to harm the client.

special agent

is authorized to perform a particular act or transaction. In most brokerage transactions, the broker is a special agent with limited authority

general agent

is authorized to perform many different services within one general field.

agency relationship

is created when one person (the client) delegates to another (the agent) the right to act on his behalf in a business transaction.

universal agent

is given the legal power to transact matters of all types on behalf of the principal. An unlimited power of attorney would be an example of this type of agency.

Commingling

is the act of mixing or mingling personal funds with funds that should be held in trust for others in a separate escrow account.

subagent

is the agent of an agent. Under certain circumstances agents have the legal authority to appoint subagents who then perform tasks for the primary agent's clients.

escrow agent

is the special and impartial agent of both parties to the transaction. In many states brokers may act as escrow agents.

The correct answer is: Negotiation of the lowest possible price

A broker and salesperson owe all EXCEPT which of the following to the purchaser/customer? Select one: a. Negotiation of the lowest possible price b. Honesty c. Fairness d. Disclosure of defects in the property