Principles Q5

An agent who represents both the buyer and the seller in a transaction is known as a: a. dual agent. b. special agent. c. bilateral agent. d. double agent.

a

In an exclusive listing, as a matter of law, a listing between the broker and seller: a. must have a definite termination date. b. is three months. c. is 90 days after the listing agreement is signed. d. has no specified term.

a

An agent who represents both the buyer and the seller in a transaction is known as a: a. dual agent. b. special agent. c. bilateral agent. d. double agent.

a. dual agent A dual agent is a broker acting as agent for both the seller and the buyer in the same transaction.

A broker receives a commission in a(n) __________ listing regardless of who sells the property. a. exclusive right-to-sell b. exclusive agency c. open d. ostensible

a. exclusive right to sell In the exclusive right-to-sell listing agreement, the broker is entitled to a commission regardless of who sells the property.

An enforceable listing contract for the sale of real property must be: a. in writing. b. acknowledged and recorded. c. in writing and recorded. d. in writing, acknowledged, and recorded.

a. in writing A real estate agreement must be in writing to be enforceable in a court of law. This includes listing agreements. However, listing agreements are not recorded, and therefore not acknowledged.

Seller Jordan signs a memorandum for an open listing with a broker authorizing the sale of her house for $65,000. The broker expends considerable time and money advertising and showing the house and obtains several offers. However, Jordan rejects the offers and instead sells the house to a friend. The broker: a. is not entitled to a commission because of the open listing. b. would be entitled to half the agreed commission. c. could probably collect the full commission in a civil lawsuit. d. should file for arbitration with the Real Estate Commissioner.

a. is not entitled to a commission because of the open listing. In an open listing, the seller may sell the property without paying the broker a commission.

The term, __________, refers to a broker who produces a buyer "ready, willing, and able" to purchase the property for the sale price and on the terms specified by the seller, regardless of whether the sale is completed. a. procuring cause b. producing cause c. safe cause d. safety cause

a. procuring cause Procuring cause refers to a broker who produces a buyer ready, willing, and able to purchase the property for the price and on the terms specified by the seller, regardless of whether the sale is completed.

In a real estate transaction the customer is considered the: a. third party. b. broker. c. agent. d. principal.

a. third party In a real estate transaction the principal (buyer or seller), agent (real estate broker), and third party (customer) are bound together in a legal relationship, with all the duties and rights that go with that connection.

Statements not known to be false at the time they are made are called _____ misrepresentations. a. fraudulent b. innocent c. accidental d. negligent

b

Which of the following is not a listing agreement typically used in California? a. Exclusive agency listing b. Exclusive net agency listing c. Exclusive right to sell listing d. Open listing

b. Exclusive net agency listing In California, the commonly used listing agreements are exclusive right to sell listing, exclusive agency listing, and open listing.

An agency relationship may be terminated by all of the following, except: a. a fire destroying the property that is the subject of the agency contract. b. the principal's refusal of an offer to purchase that was presented in the name of a third party. c. mutual agreement of both the principal and the agent before the original term expires. d. the renunciation of the agency by the agent.

b. the principal's refusal of an offer to purchase that was presented in the name of a third party. At any time during the agency, the principal or agent may terminate the agency, except in an agency coupled with an interest. An agency is also terminated by the destruction of the property or by the parties to terminate the agency. In Choice (b) the seller's refusal to accept an offer does not terminate the agency.

An agent must supply a written Agency Disclosure: a. only if the principal asks for it. b. to a seller before listing a property or to a buyer before writing an offer. c. upon the close of escrow. d. only if the broker asks for it.

b. to a seller before listing a property or to a buyer before writing an offer. As of January 1, 1988, the Agency Relationship Disclosure Act became effective in an attempt to clarify the agency relationships among sellers, agents, and buyers. It applies to every residential property transaction of one-to-four units. The law requires that an agent supply a written document, called Disclosure Regarding Real Estate Agency Relationships, explaining the nature of agency. This disclosure must be made prior to taking a listing or writing an offer.

What must occur before a broker decides to exercise an option during an option listing? a. The buyer must agree to it in writing b. The seller must agree to it in writing c. The local government must approve the option. d. The federal government must approve the option.

b.The seller must agree to it in writing An option listing gives the broker the right to purchase the property that is listed. A broker with an option is acting as a principal as well as an agent. Prior to exercising the option, the seller must be informed of the full amount of the broker's profit and agree to it in writing.

A licensed broker obtained an exclusive right-to-sell listing from an owner. During the listing period, the broker found a buyer who made an offer on the property that was accepted by the seller. Neither the offer nor the escrow instructions mentioned: (a) the broker as the agent, or (b) terms for payment of a commission. Under these circumstances the broker: a. has no legal right to a commission. b. must prove that the broker was the procuring cause to be able to collect a commission. c. is legally entitled to a commission. d. is subject to disciplinary action by the Real Estate Commissioner for negligence.

c

Which of the following is not a way to create an agency? a. Agreement b. Ratification c. Act of law d. Estoppel

c

Which of the following is not a way to create an agency? a. Agreement b. Ratification c. Act of law d. Estoppel

c. Act of law An agency relationship is created between an agent and principal, by agreement, ratification, or estoppel.

A listing broker is relieved of the obligation to present an offer to purchase real property to his or her principal when the: a. offer contains more than three contingency clauses. b. offer is for the purchase of nonresidential property. c. broker is acting on written instructions from the principal or the offer is patently frivolous. d. broker notifies the seller in writing of his or her decision not to present the offer.

c. broker is acting on written instructions from the principal or the offer is patently frivolous. A listing agent must present all written offers to the owner before closing unless expressly instructed otherwise or unless the offer is patently frivolous (not a serious offer).

An agent receives an offer. The agent gives the offer to the seller, who asks to consider it for 24 hours. At 6 p.m. the same day, the agent receives two more offers. The agent believes the seller will not accept any of the three offers. The agent should: a. not convey the two new offers. b. convey the two new offers by 10 a.m. the next day. c. convey the two new offers at the same time. d. hold the offers for 24 hours before conveying them to the owner.

c. convey the two new offers at the same time. The agent must act in the best interests of the seller and must present all offers, unless patently frivolous. It is best to present them at the same time.

A person who authorizes another to act in his or her place in regard to relations with third persons is the: a. broker. b. agent. c. fiduciary. d. principal.

d

Which of the following is a way to create an agency relationship? a. Eradication b. Expiration c. Establishment d. Estoppel

d. Estoppel An agency relationship is created between an agent and principal by agreement, ratification, or estoppel.

A person who authorizes another to act in his or her place in regard to relations with third persons is the: a. broker. b. agent. c. fiduciary. d. principal.

d. principal Agency is a legal relationship in which a principal authorizes an agent to act as the principal's representative when dealing with third parties.