General Principles of Agency

An exclusive right-to-sell agreement must include ______.

A start and end date for the listing period

Which of the following is true regarding the definition of agency?

Agency describes the relationship between the real estate professional and the person or persons being represented

Which of the following is an example of single agency?

An agent from one firm acts as the agent for the buyer

Which of these questions can an agent in a dual agency transaction answer without breaching her duties to either client?

Are you aware of any structural issues with the property?

Assuming that dual agency is legal where these scenarios occur, and the licensees' brokerages permit it, which of these situations demonstrates illegal dual agency?

At an open house Tom is holding for his client, Rod, a buyer says she wants to make an offer. She details her situation; Tom waits until she finishes and then suggests that she offer a non-refundable earnest money deposit to strengthen her offer.

Specifically, what does the fiduciary duty of disclosure relate to?

Conflicts of interest, material facts, and adverse material facts

Which of the following is an example of a universal agent?

Conservator

In a real estate transaction, which two parties are owed the same duties?

Customers and other parties

You represent the buyer and seller in the same transaction. What type of agency relationship do you have with your clients?

Disclosed limited agency

You represent the buyer, and another licensee from your brokerage represents the seller in the same transaction. What type of agency relationship do you and the other licensee have with your clients?

Dual-license dual agency You and the other licensee from your firm are in a dual-licensee dual agency relationship. The broker is the dual agent and has designated you to represent the buyer and the other licensee to represent the seller.

Roxanne just finished making a buyer presentation to Fred and Regina Jones. Now that they understand the difference between being customers and being clients, they're anxious to be represented. What is one of Roxanne's duties to them as their buyer's agent?

Finding properties to show to Fred and Regina

Which of the following is an example of an agent exercising the duties owed to customers and other parties?

Francine disclosed information about the flooding basement to the buyer and buyer's agent.

Ginnie's Aunt Becca listed the old family mansion with Ginnie. Ginnie put it on the market for Becca, but then she and her cousins talked with Becca and decided they wanted to keep the property in the family. What's the best way to terminate the agreement?

Ginnie and Becca can mutually agree to terminate the agreement.

Homestead Realty had a listing agreement with Gertrude. The listing expired, and Gertrude moved the listing to another firm. Another licensee at Homestead Realty has a buyer client who's interested in Gertrude's property. What restrictions are in place for Homestead Realty?

Homestead may represent the buyer, must disclose material facts about the property, and must maintain Gertrude's confidentiality.

Which of the following duties are owed to customers and other parties to a real estate transaction?

Honesty and fairness

You represent Ember as her listing agent. Ashley is the buyer, and Trinity represents her. What duties do you owe Trinity?

Honesty and fairness

To protect your commission, a listing agreement should be ______.

In writing

Jason is the seller's agent. His seller has a leaky roof he'd rather keep secret from buyers. What should Jason do?

Inform the seller that the roof leak is a material fact that he is obligated to disclose to buyers.

Which of the following is an example of the duty of disclosure?

Informing parties to the transaction of material facts related to the transaction

In which of these situations is Ronna's fiduciary duty of reasonable skill and care at odds with her duty of obedience?

Jefferson insists that Ronna interpret the implications of him breaching his contract with a buyer.

Carlton listed his property with an agreement end date of August 31. The property went under contract on May 12 and closed on July 2. When did Carlton's listing agreement officially terminate?

July 2

Which of the following is an example of sub-agency?

Kayla is a licensee with ABC Realty and lists a property for seller Devon. Maurice is a salesperson with XYZ Realty Group and brings a buyer to the table, but owes fiduciary duties to the seller.

Which type of agent is an escrow officer?

Limited agent

While hosting an open house, Liza speaks with prospective buyers. They're interested in the house, but think the listing price is a little high. They ask her what other incentives they could include in their offer to get the seller to come down on their price. If Liza helps them, what duty may she be breaching?

Loyalty

Which of the following scenarios best describes a net listing?

Maeve wants to get at least $350,000 when she sells her property and tells her listing agent, Stan, that he can keep anything above that amount.

Melissa signed a six-month listing agreement with Greg on February 12. Her property is very specialized, and Melissa was adamant about the sales price. By September, the property still hadn't sold. Melissa expressed her displeasure with Greg for his inability to sell the property. What's the status of the listing agreement?

Melissa and Greg's agreement expired in August.

Frank is representing Jonathan in the sale of his home. A buyer approaches Frank at Jonathan's open house, and Frank agrees to represent her in purchasing Jonathan's house. What must Frank do to avoid an illegal dual agency situation?

Obtain dual agency consent from all parties.

What is an open listing agreement?

One in which only the person who finds the buyer gets paid

When representing the seller, what duty do you owe a buyer?

Present offers from the buyer to your seller.

Which of the following is an example of the duty of loyalty?

Putting the client's interest first

Which of these is a NOT a reason why agency disclosure is mandated?

Real estate transactions aren't covered by consumer protection laws; agency law and disclosures provide the only protections.

Tristan refused to let Marla list his property on the MLS, even though Marla told him that more exposure to the property would generate more potential buyers. Which two fiduciary duties are at odds in this situation?

Reasonable skill and care and obedience

Which of the following is a buyer's agent's task or duty?

Representing the buyer's interests

Which of these tasks that Jenna performs does NOT represent the fiduciary duty of accounting?

She discloses the terms of the listing agent's compensation to her client.

Marcus listed his property with Home Sweet Home Realty and one of its listing agents, Ron Savage. About a month later, Ron filed for bankruptcy. Which of the following statements about this situation is true?

The agency agreement only terminates if the broker or the principal declares bankruptcy.

Candace and Phil Tolson listed their home for sale with Trent Richards, the broker for Richards Homes. Sadly, Trent became incapacitated due to a car accident. What's the status of the listing agreement?

The agreement terminates by operation of law.

In which of the following listing agreement terminations is there LEAST likely to be a penalty for terminating the agreement?

The client and agent mutually agree to terminate the listing.

A client terminates a listing agreement before its expiration date. What happens now?

The client may owe a commission anyway.

Renee listed her property on March 13. After several months, lots of marketing and effort from the agent, a price adjustment, and several showings but no offers, Renee decided to list the property with another firm. Based on this situation, under which of these conditions can Renee list the property with another firm without breaching her agreement?

The listing agreement expired.

Trina's property is listed with Avalon Homes. The market is a little slow, and Trina's listing is a high-end home, where sales are even slower. She's had several showings, but no offers. The term of the listing agreement is nearly over. What happens when the termination date is reached?

The listing expires and is automatically terminated.

Which of the following best describes a net listing?

The seller specifies a desired price for the property and agrees to pay the broker any amount received that's more than that price.

Which of the following actions would result in the legal termination of an agency agreement?

The term specified in the agency agreement expired.

Charlie represents Sue, a buyer. Charlie is being paid by Claude, the seller, through his brokerage. What's true about this situation?

This doesn't change the agency relationships.

Ned is a listing agent who has learned of a material fact related to the transaction. To whom and when must he disclose this information?

To all parties as soon as possible

What responsibility does a seller's agent have to the buyer?

To inform the buyer that the agent represents the seller

Managing broker Todd is often extremely busy supervising his brokerage and training new licensees. He doesn't have time for his own clients, so he frequently sends his wife Cindy to meet with clients to sign transactional paperwork. Cindy doesn't hold a real estate license but she does have a power of attorney (POA) for Todd. All fees are paid to Todd. What is the issue with Todd doing this?

Todd is prohibited from allowing anyone to use his principal broker's license in order to perform real estate activities.

In a real estate transaction in which you represent the seller, your duty to other parties is to ______.

Treat them honestly and fairly

Savvy's buyer client made an offer on a property but is having second thoughts. Savvy tells her client that she'll ask the seller's agent for an extension on the inspection period "to gather more bids," and use that time to look at other properties to avoid losing out on the current property. Savvy's client found a property she liked better, so they made an offer. The offer was accepted, so Savvy contacted the first property's agent to terminate that offer. Is this wrong?

Yes, she did not treat the other party honestly, or act in good faith.

You represent a seller as a listing agent. Do you owe any duties to buyer agents?

Yes, the duty to cooperate on showings

Kennedy tends to be rather informal about her real estate business. Her daughter's teacher, Matthew, tells Kennedy that he'd like her help selling his house. Kennedy agrees and tells Matthew she'll perform all the tasks she'd perform for any listing, though she has no written agency agreement with Matthew. Do Matthew and Kennedy have a legal agreement?

Yes. Express agreements may be verbal or written.