Chapter 4
Broker Brenda with Aloha Realty is working with George on a customer basis. She shows him numerous properties in the area and price range that George indicated he wished to see. George has decided to make an offer on a property. Which remark by Brenda would NOT be appropriate considering her subagency relationship with the seller?
The answer is "let me prepare a comparative market analysis for you to see if the list price is reasonable for this subdivision."
Betsy is a broker who represents a buyer of a new home under a written buyer representation agreement. The builder has offered to pay Betsy a referral fee, and the buyer has agreed to pay Betsy's commission. What is Betsy required to tell the buyer about the referral fee?
The answer is Betsy is required to disclose the fee and obtain the buyer's consent to receive it.
Jordan is a sales agent at Best Brokers, a brokerage firm that engages in exclusive seller agency. Finius has found two properties on the internet that he is interested in. Jordan has the listing on one and the other is listed by A-1 Realty. If Finius approaches Jordan about both properties, will Jordan be able to represent Finius as an agent in the purchase of either property?
The answer is Jordan cannot serve as Finius' agent in the purchase of either property.
Ruby is a sales agent in a brokerage firm that engages in exclusive seller agency. She represented Martin in sale of an investment property she had been leasing to a tenant for several years. Since the first property worked out so well, Martin wants to buy another investment property listed by Ruby's firm. Ruby did such a great job selling the rental house, Martin now wants Ruby to represent him in the purchase of the property. What is the best course of action for Ruby?
The answer is Ruby should explain that she cannot represent Martin in the purchase of the new property.
Sonya is a sales agent in a brokerage firm that engages in exclusive seller agency. Sonya's neighbor, Clarence, is currently renting and wants to buy a house. He asks Sonya to help him and even offers to pay her if the owner of the house he eventually buys does not pay Sonya's commission. Sonya really needs the money and has several properties listed by her firm that fill Clarence's needs. What should Sonya tell Clarence?
The answer is Sonya should explain that her firm represents sellers only and she can help Clarence buy a house as a customer and not a client.
Tomas is an associate broker at Tramway Realty, a brokerage firm that engages in exclusive seller agency. Clarissa owns one of the listed properties. Tomas sells Clarissa's property quickly and effortlessly, and Clarissa now wants him to help her buy another property. Tomas has a couple of properties in mind—one owned by Georgia and listed by Tramway and another owned by Sally listed by A-1 Brokers. What are the present agent/subagent relationships among Tomas, Clarissa, Georgia, and Sally if Tomas helps Clarissa purchase the property listed by Tramway or A-1?
The answer is Tomas is Georgia's agent, and he is a subagent for Sally. Since his firm has an exclusive seller agency policy, he is Georgia's agent and Sally's subagent; Clarissa is a customer in the purchase of either property. Although he represented Clarissa previously, if he sells Sally's property to Clarissa, he is not Clarissa's subagent; he is a subagent of Sally.
Jerry, a sales associate with Cervantes Realty, has been showing an investor numerous properties over the past few months. The investor is knowledgeable about the real estate industry and the local market and prefers to represent himself. Property listed in the MLS would be ideal for the investor; however, Bay Realty, the listing office, does not offer subagency. Which alternative is available to Jerry?
The answer is agree to provide Bay Realty the name of the customer in exchange for a referral fee should the customer purchase the property.
Which of the following is TRUE regarding an agent representing a seller rather than the seller selling her property on her own?
The answer is an agent must maintain the confidentiality of your information unless it is required to be disclosed by another law.
Nancy is a sales agent sponsored by Best Brokers. A-1 Brokers has a property owned by Whit, which is listed in MLS, that Ginny is interested in. Ginny has approached Nancy about helping her view the property. Nancy represented Ginny when Ginny bought her first home. In what capacity can Nancy work with Ginny and Whit?
The answer is as a buyer's agent for Ginny or as a subagent for Whit.
Seller Mark insisted on having an open listing for his home. As a result, he can continue to seek potential buyers on his own and
The answer is avoid paying a commission.
The MOST common disputes between brokers working under informal subagency agreements concern
The answer is commissions.
After concluding a business transaction that involves exclusive seller agency, how long must an agent keep business information confidential?
The answer is confidential information remains confidential even after an agency relationship is terminated.
Broker A has a listing agreement with a seller. The seller finds the buyer. What type of listing is this if the seller is not required to pay Broker A an agreed-upon fee or commission?
The answer is exclusive agency listing.
A seller listed his property exclusively with Saldivar Realty. Even though the property sold during the period of the listing, if the seller was not required to pay a commission to Saldivar Realty, what type of listing agreement probably existed between the seller and Saldivar Realty?
The answer is exclusive agency.
What form of agency describes a relationship where the broker represents the seller/landlord, but the broker never represents the buyer?
The answer is exclusive seller agency. In an exclusive seller agency relationship, a broker or his associates may represent sellers, but never the buyers.
Bruce is buying his first home. He met with Linda, a license holder with an exclusive seller agency. After answering several general questions, Linda realized that Bruce needed a license holder who could provide him with advice about selecting a property and making an offer. To help Bruce, Linda should
The answer is explain that she represents the interests of sellers and encourage him to get a buyer's broker.
Which of the following is a benefit to a seller who chooses to work with an exclusive seller agency?
The answer is full loyalty and confidentiality.
What duties does a subagent owe to a customer?
The answer is honesty, fairness, and disclosure of material facts.
A reason to disclose upon the first meeting with buyers that a brokerage only engages in seller agency is to
The answer is lessen the chance that the buyers will later claim that the brokerage also represents the buyers.
A subagent is considered which of the following?
The answer is like an agent of the client with fiduciary duties.
A seller agrees to list his property with Firth of Clyde Realty. The broker's commission will be anything remaining from the proceeds of the sale once the seller's loan balance and closing costs are paid. The seller and Firth of Clyde Realty have what type of listing agreement?
The answer is net.
In an exclusive seller agency, brokers can offer representation services to buyers
The answer is never, as they only represent sellers.
Ashley owns property that she has listed with Jason, a sales agent with AAA Realty. Jason has marketed the property intensively and Jamie, a sales agent with TNT Realty, has found a buyer, Mason, for Ashley's property. Ashley is leery of other sales agents representing her as a subagent, so she has elected not to offer compensation to subagents in her listing agreement with Jason. Mason doesn't want representation, so he is Jamie's customer only. Will Jamie be able to show the property to Mason?
The answer is no, because Ashley has not offered compensation to subagents.
Under the Real Estate License Act, is a seller liable for a subagent's misrepresentations or concealment of a material fact?
The answer is no, the seller is not liable unless the seller knew of the falsity of the misrepresentation or concealment and failed to disclose her knowledge of it.
How many brokers can be involved with an in-house sale?
The answer is one.
How many brokers are involved in an in-house sale?
The answer is one. In-house sales involve only one broker, although several associates from the same brokerage firm may participate.
Broker A and Broker B each have a listing agreement with a seller. What type of listing agreement is it if the seller agrees to pay the broker who is the procuring cause for the sale of the property an agreed-upon fee or commission?
The answer is open listing.
Jed Nelson is selling his home on his own but is having problems finding a buyer. Jed is tired of the hassle and would like to offer a commission to any broker that brings him a buyer, but wants to reserve the right to find his own buyer. License holder Chico Rodriguez has a buyer who is eager to move into Jed's community, and the home looks like a perfect fit. What is the name of the agreement Jed can use to allow Chico to show the home to his buyer that would allow Chico to earn a commission if the buyer purchases Jed's home?
The answer is open listing.
When a brokerage practices exclusive seller agency, the first step in establishing a client relationship with the seller is to conduct a counseling session. What is NOT covered during this session?
The answer is securing the client's permission to use intermediary brokerage if the client becomes a party to a transaction to which another client is a party.
Kathy is a sales agent who represents the seller under a listing contract. Kathy is working with the buyer, but the buyer is not Kathy's client—the buyer is unrepresented. In what ways can Kathy help the buyer when negotiating the contract?
The answer is she cannot give the buyer her advice or opinions, but she must disclose material defects.
Which of the following statements is TRUE regarding subagency?
The answer is subagency may be created expressly or by implication.
Which statement is TRUE concerning exclusive seller agency?
The answer is the broker will never work for the buyer and for the seller.
If a broker is talking with a customer buyer, he may wish to avoid conflicts of interests by showing the customer
The answer is the firm's listings.
What happens when a selling broker accepts the listing broker's offer of subagency through MLS?
The answer is the subagent broker and the subagent broker's sales agents owe full fiduciary duties to the seller.
Why might a broker practicing exclusive seller agency treat a buyer as a customer?
The answer is to take advantage of earning an undivided commission.
What is the difference between an exclusive agency listing and an exclusive right-to-sell listing?
The answer is under an exclusive right-to-sell listing, the seller pays regardless of who sells the property. The exclusive right-to-sell listing offers the broker the greatest amount of protection and security, and, generally, offers the seller the greatest amount of service. Under this agreement, the broker is entitled to the contractually agreed fee or commission no matter who sells the property—even if it is the seller.
Net listings relate to the
The answer is way the broker is paid.
In what kind of situation can a broker file a lawsuit on an oral listing agreement?
The answer is when someone tortuously interferes with the parties to the agreement.