Chapter 5.1 National Brokerage

The Criminal Antitrust Penalty Enhancement and Reform Act increased the maximum criminal penalty for individuals to what amount? $350,000 $1 million $2 million $10 million

$1 million

Matt Bower is a developer. Will Jones is a builder. Matt agrees to sell Will a lot, but he conditions the sale by insisting that Will agree to list the property with him after the home is built. What is this called? Market allocation Price fixing Coercion Tie-in arrangement

Tie-in arrangement

Puffing is best characterized as which of the following Fraud Subjective opinion Objective opinion Misrepresentation

Subjective opinion

After listing a home with a broker, the seller told the broker NOT to disclose a major structural defect in the house. What should the broker do? Refrain from telling prospective buyers because of the fiduciary responsibility to the seller. Refrain from telling the prospective buyers because that is the brokers responsibility to the seller. Tell the buyer only if he asks about it. Tell the buyer of the defect prior to the writing of an offer or refuse the listing.

Tell the buyer of the defect prior to the writing of an offer or refuse the listing.

An agency relationship is created in each of the following situations EXCEPT which? A broker agrees to sell an un-licensed friend's home for no compensation. A client authorizes a broker to sell, exchange, and manage his property for 1 year. A broker and seller sign a listing agreement for 3 months. A broker shows a tenant an apartment.

A broker shows a tenant an apartment.

What is special about a universal agent? A universal agent has power of attorney. A universal agent has veto power. universal agent has unilateral power. A universal agent has statutory powers.

A universal agent has power of attorney.

Which of the following best defines the term procuring cause? Actions that demonstrate the unbroken efforts of an agent that are responsible for the buyer making a decision to complete the sale Being involved at some point in the transaction Scheduling and conducting open house tours Establishing a marketing plan for the listing

Actions that demonstrate the unbroken efforts of an agent that are responsible for the buyer making a decision to complete the sale

Agent Sam told a buyer that the fence line also marked the property line. Agent Sam knew that the property line did not extend to the fence line. Agent Sam's actions are an example of what? Passive fraud Unintended fraud Active fraud Puffing

Active fraud

What are the three primary areas of disclosure? Limits, conditions, and funding Relationships, performance history, investment value Agency, property condition, and environmental hazards Fiduciary, accounting, and feedback

Agency, property condition, and environmental hazards

Which of the following is NOT a form of agency? Express agency Implied agency Closed agency Ostensible agency

Closed agency

The principles of an agency relationship include all of these factors except which one? Mutual consent Authorization Compensation Fiduciary duties

Compensation

Which of the following duties is NOT owed to a customer? Confidentiality Honesty Reasonable care and skill Proper disclosure

Confidentiality

When the real estate agent has produced a buyer who is ready, willing and able, the agent has generally done what? Accounted to the principal Earned a commission Consummated the sale Established personal competence

Earned a commission

An actual agency created by written or oral agreement between the principal and the agent. Through this agreement the principal authorizes a person to act as the principal's agent. For example, a written listing agreement between a seller of real estate and broker is this.

Express agency

Which of the following types of information can a licensee legally provided to both a principal and a customer? Counsel Facts Legal Advice

Facts

Which of the following best defines negligent misrepresentation? Intentionally misrepresenting facts Providing false information as facts Failure to use ordinary or reasonable care in a situation Manipulation of facts to direct a favorable outcome

Failure to use ordinary or reasonable care in a situation

Which of the following duties best describes what an agent owes customers? Fairness, care and honesty Obedience, confidentiality and accounting Diligence, care, and loyalty Honesty, diligence and skill

Fairness, care and honesty

In which situation can a licensee give legal advice? If the licensee is knowledgeable in the subject area If the licensee has attended real estate law classes If the licensee has practiced real estate for more than 10 years If the licensee has a separate attorney license

If the licensee has a separate attorney license

An agency created from the conduct of the principal and agent. It is generally inferred by circumstances that imply an intention to create an agency relationship. A(n) ______ is an actual agency, and is a fact to be proved by deductions or inferences from other facts.

Implied agency

An agent's duties to a principal include all of the following except which? Loyalty Accounting Notice Legal advice

Legal advice

Which of the following is a common complaint buyers have against brokers? Excessive paper work Compensation fees Misrepresentation of the facts Failure to respond to questions

Misrepresentation of the facts

Under what conditions can an agent provide advice and counsel to the customer? Upon a verbal request by the customer Upon a written request by the customer. When the request benefits the agent's client Never

Never

Broker Freehand and Broker Getrich make a deal that Freehand will take all the listings on the north side of town, which are located near his office and Broker Getrich will take all the listings on the south side near his office. They have agreed not to cross into each other's territories or allow their salespeople to do this. They have also agreed to set their rates at 7% so that the sellers will all pay the same fee. Is this acceptable? Yes, it is good business to map out a service area. Yes, the public should be allowed to all pay the same fee. No, the real estate commission sets the commission rates. No, this is violation of Sherman Antitrust.

No, this is violation of Sherman Antitrust.

Which duty requires that the agent act in good faith and obey the principal's directions? Honesty Care Accounting Obedience

Obedience

What is a form of implied agency relationship created by the actions of the parties involved rather than by written agreement? Defined agency Ostensible agency At-Large agency Non-Facto agency

Ostensible agency

A person who has been given the appearance of being an employee or acting (an agent) for another (principal), which would make anyone dealing with the _______ reasonably believe he/she was an employee or agent.

Ostensible agent

The authority to act for another person in specified or all legal or financial matters.

Power of attorney

"Everyone charges the same so you might as well list with me" is an example of what? Price fixing Boycott Market allocation Tying agreement

Price fixing

A person who hires an agent to represent his or her interests is known as what? Customer Referral Advocate Principal

Principal

Which of these is not a violation of Sherman Antitrust laws? Boycott Price Fixing Redlining Market allocation

Redlining

What do we call the unreasonable restriction of business activities that results from conspiracy among members of a trade? Market allocation Group boycott Restraint of trade Tie-in arrangement

Restraint of trade

Obedience of the agent to the principal means what? The agent may disobey those instructions in good faith if the agent feels it is necessary The agent must follow all the instructions of the seller even if they violate state law The agent must follow those instructions regardless of personal feelings about them, as long as they do not violate the state or federal laws. The agent must follow all those instructions regardless of the consequences.

The agent must follow those instructions regardless of personal feelings about them, as long as they do not violate the state or federal laws.

Which of the following statements best defines agency? The fiduciary relationship between the agent and the principal The fiduciary relationship between the agent and the broker The fiduciary relationship between the agents The fiduciary relationship between the agent and the customer

The fiduciary relationship between the agent and the principal

Agent Paul is bound to inform his client of all facts that might affect the client's interests - both what Paul knows and what he "should have known." Which of these situations would not be something Paul "should know?" There is a crack in the basement wall. The air conditioner does not work. The owner of the property is HIV positive. The casement windows have broken seals.

The owner of the property is HIV positive.

Misrepresenting facts to a buyer might result in an extended contract and protracted compensation federal sanctions loss of a business license a voided contract and loss of commission

a voided contract and loss of commission

What are the two forms of fraud? Active and passive Direct and nondirective Major and minor Primary and secondary

active and passive

Agent Sam told a buyer that the fence line also marked the property line. Agent Sam knew that the property line did not extend to the fence line. Agent Sam's actions are an example of what? Passive fraud Unintended fraud Active fraud Puffing

active fraud

An agency relationship is based on compensation commission authorization and mutual consent contact and access

authorization and mutual consent

A contract in which an owner hires a broker to market the property creates an agency relationship between buyer and seller. buyer and broker. broker and seller. broker, buyer, and seller.

broker and seller

An agency relationship can occur through implication (what you might say or do) without a written contract always require a written contract is always derived by express act is better accomplished through implication or ratification

can occur through implication (what you might say or do) without a written contract

A special agent is also known as a single or solo agent. directed or assigned agent. limited or specific agent. general or area agent.

limited or specific agent.

Antitrust laws prohibit market allocation. trade unions. market coops. volume discounting

market allocation.

Paul Shafer is acting as the agent of David Smith. He can agree to a change in price without Smith's approval. may share his commission with a licensed attorney. must report all offers to Smith. can make a profit in addition to his commission.

must report all offers to Smith.

Which duty requires that the agent act in good faith and obey the principal's directions? Honesty Care Accounting Obedience

obedience

An agent is one who is the source of another's authority one who represents and acts for another one who has conferred authority to another one who has been paid a commission by another

one who represents and acts for another

Agent Fred fronts his cousin Norm money to buy a client's house. Shortly after the closing, Agent Fred flips the house and realizes a substantial profit. Agent Fred's actions might be describe as across the table. arms length. direct intent. self-dealing.

self-dealing.