Authorized Relationships, Duties, and Disclosures

Which of the following is the most serious consequence of treating a customer as a client?

Breaching your duty to your actual client

In general, what is the term for a person who's been placed in a position of loyalty and trust?

Fiduciary

When working with a client on a real estate sale, a real estate licensee is usually acting as which type of agent?

Special

Stacey, a buyer, is working with licensee Rebecca in a state that doesn't recognize or permit implied agency. Rebecca doesn't represent Stacey, however, and is performing only ministerial tasks for her. Which of these statements about this situation is correct?

Stacey is Rebecca's customer.

Ricky is working for Matt, a buyer client, who is interested in a property at which the listing agent offers compensation to cooperating agents. The listing agent has offered Ricky or any cooperating agent additional compensation if the transaction closes within 40 days. Is this ethical?

Yes, but only if all of the involved parties have full knowledge and provide consent.

While explaining the benefits of representation to a potential buyer, the buyer asks if you can help get a good rate on a mortgage. How should you respond?

"Sorry, that's outside the scope of my expertise."

Jenny is selling her property and has hired Larry as her agent. After the property's listed, Jane brings her client, Andrew, to see the property, and he decides to make an offer. Who is Jane in this scenario?

A buyer's agent

Which of the following is true about inadvertent misrepresentation?

A false statement was made.

Which of the following statements about dual agency in Florida is true?

A licensee can't act as a fiduciary for a buyer and a seller in the same transaction.

Which one of the following statements about dual agency in Florida is true?

A licensee can't act as a fiduciary for a buyer and a seller in the same transaction.

In Florida, which of these describes self-dealing?

A licensee sells her own property for personal use without the knowledge of the principal broker.

According to the Code of Ethics, which of these statements is most accurate when accepting compensation?

A licensee shall not accept compensation from more than one party to a transaction without the full knowledge and consent of all parties.

Which of the following statements is true of a material fact in Florida?

A material fact would cause a reasonable person to either act or not act, if that fact were known.

Which of the following is true about positive misrepresentation?

A principal was harmed by the misstatement.

Beverly, a real estate licensee, doesn't represent either party to a specific real estate transaction. She merely helps the parties handle the paperwork. What role is Beverly taking in this transaction?

A transactional broker

What's the term for someone who's been given the authority to act on behalf of someone else?

Agent

According to the NAR Code of Ethics, which statement most accurately describes a licensee's responsibility related to written offers on a listing?

All formal written offers the licensee receives must be presented to the owner until closing or execution of a lease unless the client waives this obligation in writing.

April and Wayne are the buyer and seller of a condo in Port St. Lucy, respectively. April is represented by Steve. Wayne is represented by Wanda. Name the principal(s) in this transaction.

April and Wayne

Kennedy lists Heather's home. He noticed evidence of termites, and asked Heather about it. She said a pest control company came in and solved the problem. What can Kennedy do to reduce the risk of misrepresentation?

Ask for the pest control company report from Heather.

Which one of the following statements about disclosing single agency is true?

Before a licensee may act as a fiduciary at a showing, the single agent notice must be fully explained and disclosed in writing.

Which one of the following specifies the forms that must be used to provide notice of single agency or non-representation?

Brokerage Relationship Disclosure Act

You represent a buyer in a transaction that includes a 2% cooperating agent commission to be paid by the seller. Who's your client?

Buyer

Which of the following is NOT true regarding Florida's transition to transaction broker disclosure?

Buyers may not ask their single agent to switch to the role of a transaction broker.

What acronym can licensees remember to recall the fiduciary duties while conveying the benefits of representation to a potential client?

COLD

Agency Relationship, licensee agree to uphold fiduciary duties

COLD C: Confidentiality O: Obedience L: Loyalty D: Disclosure

Cam is a broker. His licensees, Jane and John, represent two sides in a single transaction. Jane represents the seller; John represents the buyer. What relationship does Cam have to the buyer and the seller?

Cam is a dual agent to both the buyer and seller.

Which of these phrases means "let the buyer beware"?

Caveat emptor

You have a listing agreement with Sam. Because of this, what's Sam's relationship to you?

Client

Cara has been working as a sales associate in Tallahassee for the last two years and has decided she wants to become a broker. To take the real estate broker examination, what must she do first?

Complete the 72-hour approved pre-licensing course for a broker license.

Which of the following duties are among those owed by a designated sales associate?

Confidentiality, obedience, loyalty, and full disclosure

You're holding an open house for Brenda. Walt and Mary walk in and ask you for a flyer that gives details about the property. At this point, what's your relationship with Walt and Mary?

Customers

The THREE duties owed to all customers and clients are

DAD D: Dealing honestly and fairly A: Accounting for all funds D: Disclosing all known facts that materially affect the value of the property

Florida transaction brokers have SEVEN duties

DAD + PUMA D: Dealing honestly and fairly A: Accounting for all funds D: Disclosing all known facts that materially affect the value of the property P: Presenting in all offers and counter-offers in a timely manner, unless a party has previously directed the licensee otherwise in writing U: Using skill, care, and diligence in all transactions M: Maintaining confidentiality, which is limited confidentiality unless waived in writing. Licensees must not disclose information about a customer;s motivations for selling or buying property or the terms on which they are willing to negotiate. They must also not do or say anything to damage either party's negotiating power. A: Any additional duties that are entered into written agreement

NINE duties of the single agent

DAD + UP + COLD D: Dealing honestly and fairly A: Accounting for all funds D: Disclosing all known facts that materially affect the value of the property U : Use skill, care, and diligence P : Present all offers and counter offers C: Confidentiality O: Obedience L: Loyalty D: Disclosure

You've entered into a no-broker relationship with an unrepresented buyer who wants to see one of your listings. What duties do you owe to that customer?

Deal honestly and fairly, account for all funds, and disclose material facts.

You've entered into a nonrepresentation relationship with a buyer who wants to see one of your listings. What duties do you owe to that customer?

Deal honestly and fairly, account for all funds, and disclose material facts.

Which of the duties owed in any authorized relationship is missing from this string? Account for all funds, deal honestly and fairly, and ______.

Disclose all material facts

Which duty is missing from the following string of duties owed by Florida licensees in a "no-brokerage" relationship with a real estate customer? Deal honestly and fairly, account for all funds, and ______.

Disclose material facts

Which one of the following examples of disclosure falls into the category of "full" disclosure, which is legally required by a single agent but not a transaction broker?

Disclosing that the other party is willing to accept different terms

According to the NAR Code of Ethics, the following characteristics must not be used to discriminate: race, national origin, religion, color, familial status, disability, sex, sexual orientation, color and _________.

Gender identity

Paulo is a property manager for several large properties. Which type of agent is he in relation to the landlord/client?

General

Nancy just hired her sister, Florida real estate licensee Grace, to list her property. Jason schedules a showing for his client, who's interested in Nancy's property. What needs to take place?

Grace needs to disclose in writing to Jason and his client that the property is owned by a family member.

What is a code of ethics?

Guidelines fo conduct

In order for misrepresentation to occur, what must happen to the person who relied upon it?

He must be harmed.

Charles, a real estate professional, has just finished touring a property he'd like to list for sale. When talking with the owner about the property and comparing it to other properties recently sold in the area, he tells the owner he appraises the property at a value of $350,000. What, if anything, did Charles do wrong?

He referred to his opinion on the value of the property as an appraisal.

Your client, Harper, asks you the purpose of the Brokers' Relationship Disclosure Act. What do you tell Harper?

It is intended to clarify the relationship of brokers to sellers and buyers.

What is particular about the duty of confidentiality as it's owed by transaction brokers?

It is limited

Betsy is buying a home from Joe. Joe's listing agent is Keri, and Betsy has no representation. Which of these statements is true about this transaction?

Joe is Keri's client, and Betsy is Keri's customer.

Which of the following best indicates that Harold is Kelsey's seller client?

Kelsey and Harold have a signed agency agreement.

In which of these situations does the licensee have a disclosable ownership interest in the property?

Kennedy is representing his LLC in the purchase of a commercial building.

When pitching the benefits of full representation to a potential client, you can list which of the following duties as exclusive to a single agent relationship?

Loyalty

Which of the following is a specific fiduciary duty that agents owe in Florida?

Loyalty

You're speaking to a potential buyer client who thinks agents just drive up the price of the house in order to increase their commission. Which fiduciary duty should you mention when explaining why that wouldn't happen in an agency relationship?

Loyalty

Which duties owed by a transaction broker are missing from this list: deal honestly and fairly; account for all funds; present all offers; disclose material facts; and use skill, care, and diligence.

Maintain limited confidentiality.

A licensee stating that a property is "guaranteed to increase in value over the next five years" is an example of _______.

Misrepresentation

Florida broker Joseph tells his client that a property is zoned as residential, even though he knows it's zoned as commercial. This violation is an example of ______.

Misrepresenting or omitting

A Florida licensee stating that property is "guaranteed to increase in value over the next five years" is an example of ______.

Misrepresntation

How many duties are owed by a designated sales associate?

Nine

Landon is the listing agent for Maury's property in Key Largo. Maury is moving out of state for a new job, so the house will be vacant for some time, depending on how long it takes to sell. Maury is pretty adamant about not having a sign in his yard, especially after he moves. Landon follows Maury's wishes, but a month after Maury moved, there hasn't been any movement on the property. Landon places a sign in the yard, hoping it will drum up some interest. Is this okay?

No, Landon shouldn't place a sign on Maury's property without Maury's written permission.

Elliott is a 19-year-old real estate sales associate in Florida who would like to get his broker's license so he can open his own office. Is he qualified to become a licensed real estate broker in Florida?

No, because he has not been licensed for two years.

Gracen has a sales associate license in Florida. He's completed the FREC-approved 72-hour pre-licensing course for brokers and has no previous experience. Is he qualified to obtain a real estate broker license?

No, he needs to have had a real estate license for at least 2 years.

Alison has disclosed in writing that she has no brokerage relationship with Zsa Zsa, who is selling her home to her daughter and needs assistance with the sales contract. What type of relationship has Alison established?

Non-representation

Alison has disclosed, in writing, that she has no brokerage relationship with Zsa Zsa, who is selling her home to her daughter and needs assistance with the sales contract. What type of relationship has Alison established?

Non-representation

Brokers may assign the designated sales associate method of representation when the transaction is ______ and the buyer and seller each have assets of $1 million or more.

Non-residential

Customer

Pays for a product. A real estate licensee works with customers but does not represnt them.

Clients or Principals

Pays for service. An agent can only represent a client. A client or principal for whom the agent acts is owed fiduciary representation.

What is the difference between positive misrepresentation and inadvertent misrepresentation?

Positive means intentional; inadvertent means it wasn't intentional.

Which of the following actions is against the NAR Code of Ethics?

Preparing a written agreement that falsely states a purchase price

Which two duties of the transaction broker are shared with the single agent?

Present all offers and use skill, care, and diligence.

Your study buddy for the licensing exam tells you that transaction brokers owe the duties of presenting all offers and counter-offers; using skill, care, and diligence; providing full disclosure; and performing any additional duties agreed to in writing. Which of these duties would you point out as incorrect?

Providing full disclosure

Jennifer is selling her property and hired Larry as her agent. Jane brings her client, Andrew, a prospective buyer, to see Jennifer's property. What is Larry's role in this scenario?

Seller's agent

Elisa agreed to list Simone's house for sale. After the listing contract was signed, Simone lost her job, and her father, George, offered to help Simone by paying Elisa's listing commission. The buyer's agent, Carl, also reduced his commission by a quarter percent to help Simone. Who is Elisa's client?

Simone

Which one of the following authorized brokerage relationships includes fiduciary duties?

Single Agency

If Alison has agreed in writing to represent the fiduciary interests of Bruce, who is ready to buy his first home, she has agreed to act as a _______.

Single agent

Stacey, a buyer, is working with Rebecca, a licensee, in a state that doesn't recognize or permit implied agency. Rebecca doesn't represent Stacey, however, and is performing only ministerial tasks for her. Which of the following statements about this situation is correct?

Stacey is Rebecca's customer.

Samantha is a real estate licensee. She's showing her client a property. The client asks about some spots on the ceiling and wonders if they're an indication of a roof leak. What should Samantha do?

Suggest that her client contact a roofing expert to make a determination.

Jasmine is in the market for a new property for her, her partner, and their young child. Tanner is Jasmine's agent and has shown her several properties. Even though several properties meet the criteria his client is seeking, Tanner has intentionally weeded out properties close to the local college campus, because he doesn't think the location would be suitable for a family with young children. What, if anything, has Tanner done wrong?

Tanner has discriminated against Jasmine using familial status as a reason for not showing her properties.

Which of the following is true of the harm caused to a person relying on false information?

The harm can be physical or monetary.

One element of intentional misrepresentation is that ______.

The person making the false statement knew it was false (or should have known)

Which of these is an example of a material fact?

The seller would not have accepted an offer had he or she known the fact.

Simon is a buyer represented by Peter. Peter shows Simon several homes currently on the market. What is Peter's relationship to the sellers, if he doesn't represent them?

The sellers are Peter's customers.

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.

How many duties are owed in a "no brokerage" relationship in Florida?

Three

Alison is providing limited representation to Jeremy, a buyer, and Susie, a seller, in a single residential transaction. What role has she taken on?

Transaction brokerage

Alison is providing limited representation to buyer Jeremy and Susie, the seller in a single residential transaction. What role has Alison taken on?

Transaction brokerage

How many years of experience must a licensed sales associate in Florida have before applying for a broker license?

Two

What's the minimum amount of real estate industry experience that Kirk, a sales associate licensee in Kissimmee, must have to qualify for a broker license?

Two years

Which of the following isn't an element of intentional misrepresentation?

When it's witnessed or validated by multiple people.

When must a buyer client give written consent for a licensee to transition to a transaction broker role?

When the buyer is in a single-agency relationship with the licensee