CHAPTER 9 QUIZ - Real Estate Agency

17. Which of the following is an example of dual agency?

A. A broker who represents both parties in the same transaction B. Two brokerage firms that work together C. A broker who represents more than one principal D. A broker listing a property and then selling it after it has been relisted with another broker.

4. An agent puts a house on the market for $189,500. A potential buyer walks into the broker's office later that day looking for information on homes in the $130,000 to $140,000 price range, but without wanting representation at this time. Which of the following is TRUE considering the information provided?

A. Both the seller and the potential buyer are the broker's customers. B. The seller is the broker's client; the buyer is a customer. C. The broker owes certain fiduciary duties to both seller and buyer. D. If the buyer later asks for buyer representation by the broker's firm, it is not possible because of the firm's earlier agreement with the seller.

14. A buyer is represented by a real estate sales associate. During their first meeting, the buyer discloses plans to run a dog grooming business out of the newly purchased home. The sales associate did not check the local zoning ordinances to determine in which parts of town such a business could be conducted. Which common law duty did the sales associate violate?

A. Care B. Obedience C. Loyalty D. Disclosure

12. What does the phrase the law of the agency is a common law doctrine mean?

A. It is a legal doctrine that is not unusual. B. It is one of the rules enacted by legislatures and other governing bodies. C. It is part of a body of law established by tradition and court decisions. D. It may not be superseded by statutory law.

2. The relationship between a real estate broker and seller is generally what type of agency?

A. Special B. General C. Implied D. Universal

9. Which is NOT a legally acceptable reason to end an agency relationship?

A. The agent found a particular home for a buyer to purchase, and the transaction was completed. B. The property was condemned. C. The buyer wanted to work with a new agent, but the agency terms had not yet expired, and the current agent did not agree to terminate. D. The buyer went bankrupt.

10. A seller confidently tells his agent that he must sell fast and may accept less than the list price. The agent tells a buyer the seller accepts up to $5,000 less than the list price. Which is TRUE?

A. The agent has not violated any agency responsibilities to the seller. B. The agent should have disclosed this information, regardless of its accuracy. C. Disclosure was improper and possibly illegal, regardless of the agent's motive. D. The relationship between the agent and the seller ends automatically if the purchaser submits an offer.

6. In a broker-seller relationship, which event terminates an agency?

A. The broker discovers that the market value of the property is insufficient to earn an adequate commission. B. The owner files for personal bankruptcy. C. The owner abandons the property. D. The broker appoints other brokers to assist in selling the property.

15. "This home has the most beautiful river view," a broker tells a buyer. The view includes the river and the back of a shopping center. Which one is TRUE?

A. The broker has committed fraud. B. The broker is guilty of negligent misrepresentation. C. The broker is guilty of intentional misrepresentation. D. The broker is merely puffing.

3. Which statement is TRUE regarding a Real estate broker acting as the seller's agent?

A. The broker is required to demonstrate loyalty to the seller. B. If it increases the likelihood of a sale, the broker may disclose confidential information about the seller to the buyer. C. The broker can agree to a price change without the approval of the seller. D. The broker may accept a commission from the buyer without the approval of the seller.

11. A buyer who is a client of the broker wishes to purchase a home that the broker has listed. Which of these statements is TRUE?

A. The broker may proceed to write an offer on the property and submit it. B. The broker should refer the buyer to another broker to negotiate the sale. C. The seller and the buyer must be informed of the situation and agree in writing to the broker representing both. D. The buyer should not have been shown a house that the broker listed.

18. The relationship of the broker to the client in an agency relationship is that of

A. a trustee. B. a subagent. C. a fiduciary. D. an attorney-in-fact.

16. A real estate broker's responsibility to keep the principal informed of all the facts that might affect a transaction is a duty of

A. care. B. disclosure. C. obedience. D. accounting.

13. A broker assists the buyer and the seller with paperwork but does not represent either party. This is an example of

A. dual agency. B. illegal in all states because a broker must always represent one party. C. a transactional brokerage D. a designated agency

5. If dual agency is permitted by state law, a broker may represent both the seller and the buyer in the same transaction, provided that:

A. either the buyer or the seller is informed of this fact. B. the buyer and seller share a familial or marital relationship. C. both parties give written consent to the dual agency. D. Attorneys represent both parties.

19. A real estate broker acting as the seller's agent

A. must promote and safeguard the seller's best interests. B. can disclose the seller's minimum price. C. should only present to the seller the highest offer on the property. D. can accept an offer on behalf of the seller.

8. A real estate broker hired by a certain owner to sell a parcel of real estate must comply with

A. the common caw of agency in the state where the property owner lives. B. a prospective buyer's instructions. C. the concept of caveat emptor. D. all lawful instructions of the owner.

20. A broker may represent both the seller and the buyer in the same transaction when:

A. the principals are unaware of such action. B. The broker acts as a subagent rather than acting as the seller's agent. C. broker's commissions are collected from both parties. D. both parties have been informed and agreed in writing to the dual representation.

1. In a Real estate transaction, the term fiduciary typically refers to

A. the sale of real property. B. the people who give someone else the legal power to act on their behalf C. the person with the legal power to act on behalf of another. D. the agent's relationship to the principal.

7. Designated agency is MOST likely to occur when:

A. there is a client-buyer and a customer-seller. B. The seller and the buyer are represented by different firms. C. Both the buyer and seller are customers. D. The buyer and seller are both represented by the same company.