Cp7:Brokerage and Agency - Chapter Quiz

A broker listed a house knowing that the basement was subject to periodic flooding during the springtime. Should the broker advise prospective buyers of this fact? A. Yes, because he owes a fiduciary responsibility to the buyer B. Yes because the concealment of a vital fact from the buyer is prohibited by law C. No because the buyer may back out of the contract and the broker's primary duty is to the seller D. No, because of the principle of "caveat emptor."

B

A broker may represent and collect a commission from both the buyer and the seller as long as: A. he has the prior knowledge and agreement of the seller, who is his principal responsibility. B. He has the prior knowledge and agreement of both parties in such a transaction. C. He has the prior knowledge and agreement of the buyer. D. under no circumstances.

B

In listing a property for sale, which item is NOT necessary for a valid exclusive listing agreement? A. Date of listing B. Address of property C. legal description D. listing period

B

Murphy does not know about the leaking basement so he proceeds to make an offer. Should the broker have told Murphy about the defect? A. No. Caveat emptor would apply in this case. B. Any defects known to the broker should have been disclosed to Murphy. C. Since the broker is an agent for the seller, he should not mention the basement unless he is asked. D. None of the above.

B

The Federal Fair Housing Act may be enforced by bringing complaints to: A. Federal Housing Administration B. Department of Housing and Urban Development C. U.S. Court of Appeals. D. U.S. Department of Commerce.

B

The amount of a broker's commission is: A. Based upon standard rates established in the area B. Established by an agreement between the broker and the seller C. Established by the real estate board. D. 6% or 7% for single-family residences depending on the area.

B

The law generally provides for a termination of a listing under all of the following conditions EXCEPT: A. Death of the broker B. Firing of the broker C. Death of the Principal D. Bankruptcy of broker of principal

B

The unauthorized withdrawal of any portion of an earnest money deposit from a broker's trust account before the sale is consummated or otherwise terminated, regardless of the intended use, is considered: A. Constructive fraud. B. Commingling. C. Negligent misrepresentation. D. None of the above.

B

When a reale state broker is retained to performed one specific act for a principal, it is known as: A. General warranty B. Special Agency C. General Agency D. Special Warranty

B

Which form of listing does NOT allow the seller to sell his/her listed property by himself without paying the listing broker a commission? A. open listing B. exclusive right-to-sell listing C. multiple listing D. exclusive agency listing

B

A broker and salesperson bothe owe all but which of the following to the purchaser? A. Negotiation of the lowest possible price B. Honesty C. Fairness D. Disclosure of effects

A

The primary purpose of a listing agreement is to: A. Serve as a contract of employment between the owner and the broker. B. List all improvements and amenities of the property C. Serve as a guide for a sales contract. D. None of the above

A

When a licensed salesperson advertises property for sale: A. the name of the broker must be mentioned B. only the salesperson's name must be mentioned C. the name of the property owner must be revealed D. the price must not be mentioned

A

A statement of exaggeration which a reasonable person would recognize as UNTRUE is an example of: A. Misrepresentation. B. Actual Fraud. C. Puffing. D. Innocent Misrepresentation.

C

In some cases, a broker's commission can be earned if he can prove he set in motion a series of events which resulted in the sale. To do so means he: A. Had an exclusive right to sell listing B. Secured the buyer's signature on the sales contract. C. Was the procuring cause of the sale. D. Showed the property to the buyer.

C

The amount of a broker's commission is determined by: A. the broker B. Real Estate Board C. the broker and seller D. local board of Realtors

C

The term "blockbusting" means: A. making telephone calls to seek prospective buyers or sellers. B. Offering property for sale only to persons of a certain race. C. Promoting homeowners to sell their properties due to the entry of minority persons in the neighborhood. D. None of the above.

C

Which type of listing agreement gives the broker maximum protection ? A. An open listing. B. A net listing. C. An exclusive right-to-sell. D. An exclusive agency listing.

C

A principal is obligated to his agent for: A. Indemnification against loss not caused by the agent. B. Reimbursement. C. Performance. D. All of the above.

D

A broker's license is suspended for six months. Salespersons whose licenses are held by this broker: A. may apply to transfer their licenses to another broker B. must place their licenses on inactive status for six months C. also lose their licenses for six months D. may continue to operate the broker's business

A

A cooperating broker finds a buyer for a home listed with ABC Realty Company, Inc. The selling broker represents: A. The seller B. The buyer. C. Both the buyer and the seller. D. Neither the buyer nor the seller.

A

Acting as a dual agent with out the consent of all parties is a breach of a broker's duty of: A. Loyalty B. Personal performance C. Due Care D. Accountability

A

Commingling, one of the major reasons for revocation of real estate licenses, would occur when the licensee: A. Puts earnest money deposits in his personal account. B. Engages in blockbusting. C. Fails to indicate an agency relationship. D. Uses unlicensed people to solicit business.

A

The Law that requires that all transfer of ownership rights to real estate be in writing is the : A. statute of frauds B. statute of limitations C. parol evidence rule D. statute of liberties

A

Under an open listing: A. Any number of brokers may be employed to find a buyer. B. Only the seller may attempt to sell the property. C. Only one broker is employed. D. Seller cannot offer to sell the property for a lesser price than for what was listed.

A

Which of the following is a characteristic of an exclusive right to sell listing? A. It may allow more than one broker to share a commission paid by the seller. B. The seller may sell the property himself without being obligated to pay a broker's commission C. The seller must sell to a ready, willing, and able buyer found by the broker. D. The broker may sign a contract of sale on behalf of the seller.

A

Which of the following statements concerning a power of attorney is INCORRECT? A. The document must always be recorded. B. When used in regard to real estate transactions, the document must always be in writing. C. Authorization to act for the principal is granted to an attorney-in-fact. D. The formality with which the document must be executed is governed by the equal dignities rule.

A

If a listing agreement does not authorize a broker to accept and hold an earnest money deposit on behalf of the seller, then the: A. Deposit must be turned over to the seller immediately. B. Purchaser cannot be required to pay a deposit. C. Broker has implied authority to accept such deposits. D. Broker must obtain power of attorney from a prospective purchaser to hold his deposit.

C

In an agency relationship, the employer is called the: A. seller B. agent C. principal D. broker

C

The Fair Housing Law of 1968 does which of the following? A. Builds equal housing for all people. B. Guarantees separate but equal housing for everyone in the United States. C. Provides fair housing opportunity for everyone in the United States. D. Guarantees elimination of prejudices in the United States.

C

When a salesperson performs his duties as a licensee, he does so: A. On behalf of himself. B. As a special agent for the seller. C. As a general agent for his broker. D. On behalf of the buyer.

C

When may a salesperson legally refuse to show houses to an Asian prospect? A. When the seller has indicated a desire not to have Asians own the property. B. When the seller has indicated a desire to have Asians with children own the property. C. When the seller says the property is not to be shown while the seller is out of town. D. Never

C

Which of the following constitutes a general agency agreement? A. An owner lists his business with a broker B. A buyer asks a broker to present an offer on a house which another broker listed C. An investor asks a broker to find real property for his portfolio D. a salesman lists a farm for his employees broker

C

Which of the following instructions from a seller may NOT be complied with by a real estate broker? A. not put up a "for sale" sign in yard B. not show the property after 6 p.m. C. not show the property to persons who do not speak English D. not show property on religious holidays observed by seller

C

Which of the following is NOT a breach of the broker's duty to the seller? A. Selling to an undisclosed straw purchaser. B. Accepting a secret profit. C. Appointing a sub agent without written permission from the seller. D. Receiving a fee from a lender for referring the buyer.

C

Which of the following is NOT required to be included in a listing contract? A. Definite termination date B. Specific sales price C. Items of personal property D. The Commission rate

C

Which of the following is an example of blockbusting? A. Refusal to sell or rent to prospects because of race. B. refusal to lend within a designated area. C. soliciting listings based on fear of racial change in the area. D. Directing people to areas based on race.

C

Which of the following statements about the appointment of sub agents is true? A. The listing broker may appoint a sub agent if the subagent requests it. B. The listing broker may appoint salespersons within his company to act as subagents. C. The seller may prohibit the listing broker from appointing a sub agent. D. A sub agent is appointed to take over the listing broker's duties to the seller.

C

All of the following would be included in a listing agreement EXCEPT: A. legal description of the property. B. expiration date of the listing agreement. C. Commission basis D. An agreement not to sell the property to a member of a minority group.

D

An agent's authority can arise from: A. Ratification. B. Custom. C. Implication. D. All of the above.

D

Baker gives able his power of attorney. Able is called a/an: A. agent in place B. real estate broker C. lawyer D. attorney-in-fact

D

A broker received two offers on the same property at the same time. He/she should: A. reject both offers B. submit both offers to the property owner C. submit the better offer while trying to improve the other one D. submit the better offer and reject the other one

B

A general agency empowers the agent to: A. Transact matters of all types for the principal B. Transact the principal's affairs in certain business. C. Perform only specific acts for the principal. D. An automatic renewal clause.

B

A seller who wishes to retain the right to sell his home should NOT sign which of the following types of listings? A. open listing B. exclusive right-to-sell C. exclusive agency listing D. general listing

B

A seller wishes to list his property with a broker but does NOT desire to pay a commission if he finds a buyer before the broker does. In this instance, the seller should NOT give the broker which of the following types of listing? A. Open B. Exclusive right-to-sell C. multiple agency D. general

B

An agent who is authorized to bind his employer in a trade or business is: A. A special agent. B. A general agent. C. An exclusive agent. D. A principal agent.

B

An exclusive agency may NOT be terminated: A. Before its expiration date B. By the principal when the broker is making the principal's payments to avoid foreclosure C. if the broker has been using diligent effort. D. Unilaterally by agent or principal.

B

Broker A lists a home for $140,000. The seller is anxious to sell and advises the broker that he willlaccept all offers for at least $120,000. Broker tells a prospective buyer who offers $121,000.The seller accepts the offer and subsequently finds out that the broker had informed the buyer of his willingness to accept the lower amount. IN this instance, the seller could do which of the following? A. void the contract B. sue the broker for damages C. sue the broker and the buyer for damages D. sue the buyer for damages

B

If a contract for sale provides that the owner is selling his home in an "as is" condition, then: A. Caveat emptor applies B. Latent defects must still be disclosed to the purchaser. C. The owner is generally immune from liability. D. The broker must assist the buyer in making a thorough inspection.

B

If the Commission in a listing contract is arranged such that the broker receives all of the purchase price in excess of a certain figure, the listing is a/an: A. open listing B. net listing C. gross listing D. multiple listing

B

If the expiration date is inadvertently left off the listing agreement, when will it expire? A. 60 days from the date of signing. B. 90 Days from the date of signing. C. 180 Days from the date of signing. D. Listing is not considered valid.

B

The Equal Housing Opportunity Poster must be conspicuously displayed: A. by any broker who has been found guilty of discrimination. B. In Each brokerage office. C. By brokers who do not have minority salespersons. D. As evidence of nondiscrimination.

B

When a minority prospect calls or visits the office and makes a general inquiry as to the availability of homes in a certain price range, the person servicing the prospect is required by law to: A. Show the prospect at least six listings. B. Show the prospect the same number of homes that would be shown to any other person making the same inquiry. C. Show the prospect an equal number of listings in white or minority (or changing) neighborhoods. D. Ask the prospect whether he wants to seek homes located in white residential neighborhoods.

B

Broker sam was showing a tract of land with irregular boundaries. When asked about a boundary, the broker indicated that it ran from the edge of the stone wall to the creek. Broker sam knew that this was not exactly correct. After the buyer purchased this property, he was shown a survey by his neighbor which reflected the true boundary. With respect to the above, was the broker guilty of misrepresentation? A. No, verbal statements are not binding B. No the buyer was responsible for having the property surveyed C. Yes, the broker was responsible for verifying the official bounds D. Yes, the broker knew his statement was not completely accurate.

D

Concerning the Federal Fair Housing Law, which of the following is correct with respect to the definition of "minority"? A. Any group or member of a group that can be identified by race, color, sex, religion, or national origin. B. Any group or member of a group that can be identified by any other characteristic on the basis of which discrimination is prohibited by federal , state, or local fair housing law. C. Has nothing to do with numbers. D. All of the above.

D

If two rival brokers claim a commission under an open listing, who should the commission go to? A. the broker who listed the property. B. the broker who obtained the first offer C. the broker who advertised the property D. the broker who was procuring cause of the sale

D

Owner Brewer authorized broker Owens to sign a contract of sale for him. This authorization was granted by: A. A special provision in the exclusive right-to-sell listing. B. Making Owens a general agent C. Making Owens an ostensible agent D. Executing a power of attorney.

D

Real estate broker's commissions usually are set by: A. the local Board B. the laws of the state C. agreement with other brokerage firms D. agreement between property owner and broker

D

The Agent in power-of-attorney is the: A. lawyer B. real estate broker C. trustee D. attorney-in-fact

D

The provision in a listing agreement that extends the period of the agency on those prospects to whom the broker introduced the property prior to expiration is called: A. An automatic renewal clause. B. An estoppel clause. C. An equal dignities clause. D. A safety clause.

D

Under which of the following conditions may a listing be assigned? A. Only if it is for more than 90 days B. Only if it is an MLS type of listing C. Only if it is an open listing D. A listing can never be assigned

D

Under which of the following would a broker NOT be entitled to a commission for the sale of property which he has listed? A. He finds a ready, willing, and able buyer on the terms of the owner as reflected by the existence of a sales contract B. He finds a buyer. Seller accepts the offer and subsequently agrees with the buyer to rescind the contract C. He finds a buyer. Seller accepts the offer. Buyer backs out be cause the seller is unable to deliver a marketable title D. He finds a ready and willing buyer and the seller refuses to accept the offer

D

Exclusive listings must include: A. A dragnet clause. B. Permission for the listing broker to appoint sub agents. C. A definite date of expiration. D. An automatic renewal clause.

C

A broker knowingly misstates the location of a property boundary line when asked about it's location by a prospective purchaser. This is an example of: A. misrepresentation B. puffery C. poor business practice D. loyalty to seller

A

A broker has a listing, the terms of which allow him to earn a commission only if he finds a buyer before the seller or another broker does. This is an example of: A. Open listing B. exclusive right-to-sell listing C. multiple listing D. exclusive agency listing

A

Brokers often hold funds belonging to others. They must keep these funds in a/an: A. office safe to which only the broker has the combination B. savings account in the name of the person whose money it is C. trust or escrow account D. special account managed by the state

C

A couple bought a house listed by broker A with salesperson of A's firm handling it. A salesperson of Broker B's firm sold it to the couple. After the closing, the driveway was found to be encroaching on adjacent property. Who would the buyers probably sue? A. both brokers B. both salespersons C. both brokers and salespersons D. listing broker

C

A real estate broker's agency relationship to a seller is a/an: A. general agent B. attorney-in-fact C. special agent D. agent provacateur

C

A sales person is embloyed by a broker to sell Mr. Smith's farmland. As a result of this agreement, the salesperson has his fiduciary relationship with: A. Mr. Smith only B. Broker only C. Mr. Smith and the broker D. none of the above

C

As the seller's agent, a broker may: A. reject an offer on behalf of the seller B. work to get the buyer the best possible price C. solicit offers for the seller's listing price D. try to negotiate better terms before submitting an offer.

C

Bill Buyer signs an offer to purchase agreement and gives the broker a $1000 earnest money deposit. The next day, before the broker has had a chance to present the offer, the buyer finds he needs the $1000. What should he do? A. Ask the broker to return his money B. nothing because he is bound to go through with the offer C. Withdraw his offer and ask the broker for his money D. Give the broker $500 for letting him out of the contract.

C

A broker listed property for $78,000. He receives an offer for $76,000. Which of the following is/are true? A. The broker is entitled to a full commission B. the broker has found a ready, willing and able buyer on the terms of the owner C. the broker is entitled to a commission based on the lower offer D. the broker is not entitled to a commission at this time

D

A broker receives a check for earnest money from a buyer and deposits the money in an escrow account. He does this to protect himself from the charge of: A. novation B. anti-trust C. discrimination D. comminging

D

A broker whose negligence in preparing a sales contract which allows the purchaser to void the agreement, has breached his duty of: A. Personal performance. B. Obedience. C. Accountability D. Due care.

D

A buyer is interested in a neighborhood where there have been incidents of racial violence. The agent should: A. tell the buyer B. say "you may not like living here. There has been trouble. It is not a good neighborhood." C. say nothing D. suggest that the buyer investigate the neighborhood

D