Unit 10 Exam
A buyer's agent, upon learning that the home being purchased is to house a dog-grooming business, didn't check zoning. What fiduciary duty did the buyer's agent violate?
Care
Real estate agency relationships are governed by which kinds of law?
Common law, statutory law, and administrative law
The individual who is authorized and consents to represent the interests of another person in dealings with a third person is the
agent.
The individual who is authorized and consents to represent the interests of another person is
an agent.
When considering whether or not to reveal information regarding a stigmatized property, a real estate professional should be aware of
any relevant state laws.
A broker is permitted to represent both the seller and the buyer in the same transaction when
both parties have been informed and agree in writing to the dual representation.
A broker performing as a property manager who deposits the rent into his operating account is an example of
commingling
A broker receives a check for earnest money from a buyer and deposits the money in the broker's personal interest-bearing checking account over the weekend. This action exposes the broker to a charge of
commingling.
The rules established by tradition and court decisions are found in the
common law that is a legacy of British rule.
The rules of a society established by tradition and court decisions are found in
common law.
Evidence of an agency relationship can be found in the
conduct of the parties.
An agent owes the principal all of the following EXCEPT
consideration.
Some states allow two sales associates in the same brokerage to represent opposing sides to a transaction without creating a dual agency by using a(n)
designated agency.
The fiduciary responsibilities of an agent to the principal include
disclosure of material facts that the agent knows. The agent must exercise a reasonable degree of care, which should be superior to that of the average person. The agent must obey all lawful instructions of the principal that are in accordance with the contract and place the principal's interests above the agent's.
A real estate broker is employed by a buyer, as an agent. When the broker finds a property the buyer might be interested in buying, the broker is careful to find out as much as possible about the property's owners and why the property is on the market. The broker's efforts to keep the buyer informed of all facts that could affect a transaction is the duty of
disclosure.
Misrepresentation or omission might result in broker liability
even if unintentional.
An agreement that is specific in its terms and conditions is considered a(n)
express agreement.
Statements of opinion are permissible
if there is no intention to deceive.
A broker may unintentionally establish an agency relationship by means of an
implied agreement.
Every state now requires
mandatory agency disclosure.
When the broker should have known that a statement about a material fact was false, it is considered
negligent misrepresentation.
A facilitator functions as a(n)
nonagent
The functions of a facilitator or intermediary are those of a(n)
nonagent.
Buyers hire an agent to help them purchase a home and want seller financing because they filed for bankruptcy two years ago. The agent is
required to disclose the information because it is a material fact important to the seller.
In a real estate brokerage,
sales associates are agents of the broker.
Generally, the relationship between real estate broker and seller is
special agency. A broker serves a client—either a buyer or a seller—usually by performing the specific brokerage act spelled out in the employment contract (representation agreement). A specific assignment creates a special agency.
A real estate agent's duty of confidentiality usually extends for the period of time
specified in state law.
The federal legislation known as Megan's Law has promoted the establishment of
state registries of residential information on sex offenders.
Properties that society has found undesirable because of events that occurred there or because a known sex offender lives in the area are considered
stigmatized properties.
A bankruptcy of the principal to an agency representation agreement will
terminate the agency by operation of law.
Which of the following is considered dual agency?
A broker acting for both parties in the same transaction
Which of the following is considered dual agency?
A real estate professional's acting for both the buyer and the seller in the same transaction
Maria tells her agent in confidence that she must sell fast and may accept less than the list price. The agent tells a buyer the seller will accept up to $10,000 less than the list price. Which is TRUE?
Disclosure was improper and possibly illegal, regardless of the agent's motive.
A real estate professional's duties to a customer do NOT include
The answer is being primarily responsible to the customer. Even though an agent's primary responsibility is to the principal, the agent also has duties to third parties. Any time a real estate professional works with a third party, or customer, the real estate professional is responsible for adhering to state and federal consumer protection laws, as well as the ethical requirements imposed by professional associations and state regulators. In addition, the real estate professional's duties to the customer include reasonable care and skill in performance, honest and fair dealing, and disclosure of all facts that the real estate professional knows or should reasonably be expected to know that materially affect the value or desirability of the property.
In MOST situations, the relationship between real estate broker and seller is what type of agency?
The answer is special. A broker serves a client—either a buyer or a seller—usually by performing the specific brokerage act spelled out in the employment contract (representation agreement). A specific assignment creates a special agency.
The laws enacted by a legislature make up
The answer is statutory law. Statutory law consists of the laws enacted by the legislature.
How long does a real estate agent's duty of confidentiality extend?
The answer is the period of time specified in state law. In addition, a real estate licensee who is a member of the National Association of Realtors® must observe the duty of confidentiality forever.
A seller, anxious to sell, listed her home for $190,000 and signed an agency agreement with a broker who then told a buyer to submit a low offer. The buyer offered $175,000 and the seller accepted. Which of the following statements is TRUE?
The broker has violated the agency relationship with the seller.
Which of the following is NOT a valid reason to terminate an agency relationship?
The buyer wanted to work with a new agent, but the terms of agency had not yet expired and the current agent did not agree to terminate.
A buyer who is a client of the broker wants to purchase a house that the broker has listed. Which statement is TRUE?
The seller and the buyer must be informed of the situation and agree in writing to the broker's representing both of them.
In an agency relationship, the relationship of broker to client is that of
a fiduciary.
The relationship in which the agent is held in a position of special trust and confidence by the principal is
a fiduciary.
In a single agency,
the agent has only one client.
The listing broker and the seller find a small roof leak in the attic. Because the property is being sold "as is,"
the seller and the broker must both disclose this material fact.