General Principles of Agency
How does a buyer become a client of a broker? A » By signing an agency agreement with a broker B » By looking at a broker's in-house listings C » By writing a sales contract with a broker D » By looking at other companies' listings with a broker
A » By signing an agency agreement with a broker
A buyer was considering purchasing a new home that the listing broker was aware had been built on a toxic waste dump. What duty does the listing broker owe to the buyer? A » Disclosure B » Accountability C » Loyalty D » Obedience
A » Disclosure
If a salesperson showed several houses to a buyer and told the buyer one home in particular was the best buy, what type of agency might have been created? A » Implied B » Expressed C » General D » Universal
A » Implied
A seller's agent would be guilty of a breach of fiduciary obligation by doing which of the following? A » Telling the buyer that the seller is in bad financial shape and would take less for the property than the asking price B » Telling the buyer about property defects C » Taking a full priced offer of a friend to the seller D » Taking a full priced offer from the seller's agent himself with full disclosures of all material and fiduciary facts
A » Telling the buyer that the seller is in bad financial shape and would take less for the property than the asking price
A seller called a salesperson asking the salesperson to list the seller's home for sale. The salesperson did so and submitted the listing to the MLS after the salesperson's broker approved the listing. Another Broker within the MLS cooperated with the listing broker and found a buyer for the house. Which of the following best describes the relationship of the parties involved? A » The selling broker is an agent of the listing broker B » The selling salesperson is a subagent of the listing broker C » The selling broker is a subagent of the listing salesperson D » The selling broker is a contractor of the seller
A » The selling broker is an agent of the listing broker
Three agents made listing proposals to a seller. The first agent did a market analysis and came up with a price of $179,000. The second agent did a market analysis and came up with a price of $181,000. The third agent did not do a market analysis and told the seller it should sell for around $198,000. The third agent did get the listing, but the property sold for $174,000. The third agent violated the duty of: A » care B » loyalty C » notice D » accounting
A » care
An agent wanting to represent both sides of a transaction and be a dual agent would need to: A » have written informed consent from both parties B » have payment from both parties C » make sure both parties see an attorney D » make sure both parties receive an agency broch
A » have written informed consent from both parties
An agent owes care, obedience, accounting, loyalty, disclosure and confidentiality to: A » principals B » lenders C » brokers D » customers
A » principals
A seller and buyer are awaiting closing on a real estate transaction. The listing agent learns that a zoning change has just taken place on the property. What should the listing agent do? A » Tell the seller only as the seller is the principal B » Tell the seller and then see if the seller wants this information to be given to the buyer C » Don't tell anyone if the agent deems this information unnecessary D » Disclose this to all parties in the transaction
D » Disclose this to all parties in the transaction
Which type of relationship is established between a principal and a broker? A » Trustor B » Trustee C » Blanket D » Fiduciary
D » Fiduciary
An exclusive right to sell listing is given by an owner to a broker. Which of the following would be required of the owner? A » To convey the property if a buyer offers full list price B » To put the listing in the multiple listing service C » Pay the broker a commission only if the broker can prove procuring cause D » Pay the broker a commission upon completion of the sale of property
D » Pay the broker a commission upon completion of the sale of property
An agent, in trying to obtain a listing from a seller, notices that there are water stains on the ceiling. The seller tells the agent NOT to disclose to anyone about the water stains. What should the agent do? A » List the property and follow the seller's instructions B » Tell the seller to paint over the water stains and then list C » Advise all buyers to get inspections done before purchasing D » Refuse to take the listing
D » Refuse to take the listing
As a buyer's agent, which of the following would the agent NOT have to disclose to a seller? A » The buyer's ability to complete the contract B » The agency relationship between the agent and buyer C » Any change in the buyer's financial ability that would affect the contract D » The buyer was willing to pay more for the property than the offer price
D » The buyer was willing to pay more for the property than the offer price
In which of the following cases might a broker still be owed a commission on an unexpired listing? A » Destruction of property B » Death of the seller C » Foreclosure on the property D » The principal terminates the listing agreement
D » The principal terminates the listing agreement
Which of the following would a seller's agent have to disclose to a buyer? A » The seller had lived there for one year making no improvements to the property B » The seller had been convicted of a felony one year ago but has been clean ever since C » A mental institution was located one mile away D » The roof on the seller's property is in bad condition
D » The roof on the seller's property is in bad condition
A listing broker has to exercise all the following duties to a seller EXCEPT: A » due care B » accountability C » obedience D » management
D » management
An agency agreement can always be terminated by: A » the seller unilaterally B » the broker unilaterally C » the salesperson and seller D » mutual agreement by all parties to the contract
D » mutual agreement by all parties to the contract
One who engaged another to act for him or her in transactions is a(n): A » testator B » agent C » trustee D » principal
D » principal
A salesperson included a protective period clause in a listing agreement with a seller. To protect the salesperson under this clause, what must the salesperson do? A » Verbally tell the seller about any interested buyers B » Before listing expires, give a list of all buyers who have seen the property to the seller C » Before listing expires, give a list of all buyers who have seen the property to the broker D » See an attorney close to the expiration date of the listing
B » Before listing expires, give a list of all buyers who have seen the property to the seller
Broker A enters a listing in the multiple listing service under the rules of sub-agency. Broker B, a member of the multiple listing service, finds a buyer and shows the house under the rules of sub-agency. Which of the following statements best describes the relationships of the parties? A » The buyer was an agent of Broker B B » Broker B was an agent of Broker A C » Broker B was an agent of the buyer D » Broker B was an agent of the seller
B » Broker B was an agent of Broker A
An agent takes a listing on a commercial property. The agent finds a buyer for the property and the buyer and seller both sign a contract for the purchase. Prior to closing, the agent learns that the city plans on putting in a ramp on the back of the property. What should the agent do? A » Not disclose to the seller so the seller has no liability B » Disclose to the seller so the buyer can be informed C » Disclose to the seller and then let the seller determine whether or not to disclose to the buyer D » Disclose to the buyer only
B » Disclose to the seller so the buyer can be informed
Which of the following terms best describes a fiduciary obligation to a client? A » Subrogation B » Disclosure C » Estoppel D » Liquidity
B » Disclosure
What is the relationship between a property manager and an owner? A » Universal agency B » General agency C » Specific agency D » Ostensible agency
B » General agency
What does a person have who can sign legal papers for another person? A » Attorney-in-fact B » Power of attorney C » Ostensible agency D » Attorney at law
B » Power of attorney
Broker L was the listing agent. Broker S was the selling agent. Both were members of a multiple listing service. L did not know the buyer and S did not have any contact with the seller. No buyer agency agreement existed. Which of the following is the MOST likely agency relationship? A » L is a subagent of S B » S and L both represent the seller C » L is an agent of the buyer D » S is an agent of the buyer .0
B » S and L both represent the seller
A listing agent is showing the listed property to a prospective buyer. The buyer tells the listing agent that a favorable zoning is coming with regard to the listed property. What should the listing agent do? A » Call the broker for help B » Tell the seller because of the fiduciary obligation to the seller C » Don't tell the seller as this violated confidentiality to the buyer D » Don't tell anyone as the buyer could sue the agent for damages if the information was disclosed
B » Tell the seller because of the fiduciary obligation to the seller
Is it normally legal for an agent to be a dual agent representing both buyer and seller in a real estate transaction? A » No, this is not legal anywhere B » Yes, as long as all parties agree C » Yes, but only if both parties pay the commission D » No, only attorneys can act as dual agents
B » Yes, as long as all parties agree
A buyer's agent presents an offer to a seller. The buyer's agent is not acting as a dual agent. In relation to the buyer's agent, the seller would be a(n): A » client B » customer C » principal D » prospect
B » customer
A listing agent was showing a buyer customer a property listed by the agent. While showing the property, the agent noticed a crack in the basement wall that was covered by some boxes. The agent should: A » not disclose this fact to the buyer as the agent is a seller's agent B » disclose this material fact to the buyer C » disclose this fact to the seller and then see if the seller wants to tell this to the buyer D » call the broker for help
B » disclose this material fact to the buyer
A seller lists a property with one broker but reserves the right to sell it herself without paying a commission. This is an example of a(n): A » exclusive right to sell listing B » exclusive agency listing C » open listing D » net listing
B » exclusive agency listing
A for-sale-by-owner lists a property with a broker. The broker puts the listing in the multiple listing service. The seller continues to advertise the property themselves. The seller then finds a buyer for their own property but still owes a commission to the broker. This must have been a(n): A » exclusive agency listing B » exclusive right to sell listing C » open listing D » net listing
B » exclusive right to sell listing
A listing agent presents a contingency offer from a buyer to the seller. The offer contains language that says if the seller accepts the offer, the buyer will put their own home on the market within 24 hours. This is: A » considered to be a unilateral contract B » good for the seller as this would expose the buyer's property on the market within a short time frame C » a contingency that puts the buyer in the strongest position D » not allowed by law
B » good for the seller as this would expose the buyer's property on the market within a short time frame
An agreement between a seller and a broker where a broker is hired to sell the seller's property is referred to as a(n): A » option contract B » listing agreement C » buy sell agreement D » offer to purchase contract
B » listing agreement
A listing agent is showing property to a prospective buyer. The listing agent should disclose to the buyer that the agent: A » represents both the seller and buyer B » represents the seller only C » represents neither the seller nor the buyer D » is merely a consultant for both parties
B » represents the seller only
XYZ listed a property for sale and put the listing in the multiple listing service (MLS). ABC, working with a prospective buyer, cooperated through the MLS and showed the property. What is true? A » XYZ represents the sellers and buyers B » XYZ represents the buyers only C » ABC is a subagent of XYZ D » XYZ is a subagent of ABC
C » ABC is a subagent of XYZ
A salesperson flagrantly misrepresents something in the sale of a property. Which of the following statements would be true? A » Only the buyer can sue the salesperson, not the seller B » The salesperson can plead ignorance and would not be liable C » Any party to the contract could sue the salesperson if damages occur because of the misrepresentation D » Only the broker could be sued because a salesperson's statements cannot be held against the salesperson
C » Any party to the contract could sue the salesperson if damages occur because of the misrepresentation
A salesperson, while in the process of trying to obtain a listing, notices stains on the ceiling of the property. What should the salesperson do? A » Tell the seller to paint over it B » Tell the seller the appraiser will have to lower the value C » Ask the seller about roof leaks D » Ignore the stains
C » Ask the seller about roof leaks
Who does a salesperson owe loyalty to? A » Buyer B » Seller C » Broker D » Bank
C » Broker
A broker signs an exclusive right to sell listing with an owner. The next day, the owner talks to another broker about listing the same property. What should be the broker's response to the owner? A » I can list it concurrently with the other broker and put it in MLS B » I can list it with the other broker's permission C » I cannot list the property while another broker has a current exclusive listing D » I can't list the property, but I'll bring buyers directly to you
C » I cannot list the property while another broker has a current exclusive listing
A salesperson, while showing two different houses to a buyer, advised the buyer that one of the houses would be a better buy. Which type agency may have been created? A » Expressed B » Exclusive C » Implied D » Executory
C » Implied
An agent gathering information on a listing should gain as much information as possible for which of the following reasons? A » In order to list more properties B » To reduce the odds of being sued C » In order to have as much information as possible when showing the house D » In order to sell more properties
C » In order to have as much information as possible when showing the house
An agent took a listing in which the seller said to sell it in "as is" condition. The agent then found a major structural flaw in the property. Which of the following BEST describes what the agent should do? A » Tell the buyer the property is sold "as is" B » NOT reveal the flaw unless asked by the buyer C » Inform the buyer of the flaw D » NOT reveal the flaw as the agent is a fiduciary of the seller
C » Inform the buyer of the flaw
Which of the following types of listings would give the broker the LEAST protection for receiving commission? A » Exclusive agency B » Exclusive right to sell C » Open D » Net
C » Open
Which statement made by a seller's agent to a prospective buyer would be a breach of fiduciary obligation to the seller? A » Telling the buyer about a roof leak B » Advising the buyer to see an attorney on how to take title C » Telling the buyer that the seller was desperate to sell D » Advising the buyer to obtain inspections
C » Telling the buyer that the seller was desperate to sell
Under a listing agreement, who would be the client? A » The salesperson B » The broker C » The seller D » The buyer
C » The seller
Mrs. J signed a listing contract on August 15. When she signed the listing, she told the broker that some major repairs had just been completed on termite damage. The broker should: A » tell her not to tell any other brokers about this B » pay for the repairs himself C » be sure to inform all buyers of this fact D » cancel the listing agreement
C » be sure to inform all buyers of this fact
An agency agreement between a seller and broker is normally created with an: A » implied agreement B » offer and acceptance agreement C » expressed agreement D » option agreement
C » expressed agreement
A listing contract with a seller is about to expire. The broker has a buyer who is interested in the property but is not quite ready to make an offer. If the broker wants to be protected as far as earning commission if this buyer wants to purchase the property at a later date, the broker would need to do all of the following EXCEPT: A » make sure there is a protective period clause in the listing B » make sure the protective period clause covers a certain number of days C » give a notice in writing to the buyers that the buyers are on a protective period list D » give in writing to the sellers the names of all buyers who have looked at the property through the broker
C » give a notice in writing to the buyers that the buyers are on a protective period list
A broker talks to a seller about listing the property for sale. The seller won't list just with this one broker, but tells the broker that if he finds a buyer for the property, the seller will pay a commission. This would be a(n): A » exclusive right to sell listing B » exclusive agency listing C » open listing D » net listing
C » open listing
A seller lists a property with Broker A. However, the listing provides that if any other broker sells the property, Broker A does NOT receive a commission. This type of listing would be called a(n): A » exclusive agency B » exclusive right to sell C » open listing D » net listing
C » open listing
