Section III - Chapter 2

Which of the following would NOT be an agent?

A person working for a multiple listing service.

If a seller learns, after he has entered into a valid contract with a buyer, that the broker was representing the buyer, the seller has the right to:

Cancel the contract, without obligation to either buyer or broker.

If a seller has delivered a deed into escrow, but dies before the closing of the sale, the deed is not considered to have been delivered, and the sale need not be consummated. T/F

False

Broker Bob represents both the seller and the buyer as agent in the same transaction. Which of the following statements is correct?

This arrangement is only legal with the informed consent and written permission of both the buyer and the seller.

Broker Macro was showing a tract of land with irregular boundaries. When asked about a boundary, Macro indicated that it ran from the edge of the stone wall to the creek. Macro knew this was not exactly correct. After the buyer contracted for the property, he was shown a survey which reflected the true boundary. Was Macro guilty of misrepresentation?

Yes, because Macro knew his statement was not completely accurate.

Broker escrow accounts must be:

designated and labeled as "escrow"

A salesperson lists a home. The house burns down prior to receiving an offer. Which of the following is true in this situation?

the listing automatically terminates

Brokers must hold their client's funds in a/an...

trust or escrow account

Escrow records must be kept only until the transaction closes. T/F

False

Property owner Kilmer, who is living overseas, lists his property with Broker Huff. Later the land is rezoned for a higher use, increasing its value. Huff buys the property herself and sells it six months later. Which of the following is true?

Huff can buy the property only after informing Kilmer of the zoning change and the effect that it has on the property.

What is the purpose of earnest money being part of a real estate contract?

It shows the seller that the buyer is serious about following through with the contract.

A real estate broker wishes to deposit an earnest money check in his business operating account until settlement, so the purchaser can earn a higher rate of interest on his funds. Can he legally do this?

No, these funds must be placed in a separate escrow account

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. T/F

True

Unless agreed to in writing by all the parties, the broker is not entitled to a commission until the transaction has been consummated. T/F

True

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.

ben and Sara are designated representatives

In agency representation, the employer is called the...

client

All of the following will automatically terminate a listing by operation of law, EXCEPT:

clients decision

Money or trust instruments received, accepted or held pending consummation or termination of a real estate transaction are:

escrow funds

If a listing broker tells a prospective buyer, "...go ahead and make that offer, I'm sure the seller will accept it...", the broker may have created an agency relationship which would be described as:

implied agency

A seller contacted 3 brokers and asked each to suggest the listing price for his property. Broker A said $78,000. Broker B said $79,000. Broker C said $91,000. The seller listed with Broker C and the house later sold for $76,000. Broker C is guilty of violating which of his or her agency responsibilities?

reasonable care

The loan contingency contained in an offer to purchase will contain all of the following EXCEPT:

the name of the financial institution

A listing agreement may be terminated by:

the seller

Licensee Laurie makes a listing presentation to Seller Steve. Steve agrees to give Laurie a listing and agrees to pay her a commission upon sale, but refuses to sign any written contract. How was this agency relationship created?

this is an expressed agency

A general agency empowers the agent to...

transact the client's affairs in a certain business.