Quiz 4
A salesperson sells buyer Fred property listed by another brokerage firm in the Multiple Listing System. The salesperson has been working with Fred for many months but does not have an agency contract with him. This salesperson has fiduciary obligations to: a) The seller b) The buyer c) No one d) The public
b
As an agent for the seller a real estate broker can: a) Guarantee a prospective buyer that the seller will accept an offer at the listed price and terms b) Solicit an offer to purchase the property from a prospective buyer c) Advise a prospective buyer as to the best manner of taking title to the property d) Change the terms of the listing contract on behalf of the seller
b
Broker Imelda's newest salesperson, Sam, lists a unit in a condominium building for sale. In this transaction, Sam: a) Has a direct contractual relationship with owners of the unit b) Acts on behalf of Imelda, her broker c) Acts on behalf of the condominium association d) Must personally find a buyer for the unit to obtain a share of the commission
b
Broker Santos, in the course of selling a home to customer Iwalani, told her that the foundation was as "solid as a rock" when he knew for a fact that it was slowly sinking into the landfill upon which it was built. Now that the sale is completed, which of the following is LEAST likely to happen to Santos? a) Revocation of his license for failure to disclose a material fact b) Successful defense against all charges based on loyalty to his client-seller c) Being charged with intentional misrepresentation d) Suit to recover money damages experienced by Nancy due to basement leakage
b
If a broker establishes an account to hold money belonging to others which of the following is correct? a) The account cannot be in the same bank as the client's personal checking account b) The broker must keep accurate and detailed records for at least three years c) The broker must keep accurate and detailed records for at least seven years d) An individual account is required for each transaction
b
In Hawaii, a broker may do which of the following and not have his or her license suspended or revoked? a) Be declared mentally incompetent b) Deposit earnest money into the firm's escrow account c) Memorize questions on the licensing exam in order to sell them to another person taking the exam d) Display a "For Sale: sign on a property without the owner's written consent
b
In a newspaper advertisement the licensee must include the: a) Licensee's residence phone number b) Name of the brokerage firm c) Address of the listed property d) Price of the property
b
It is the duty of an agent to disclose to the principal every material step taken in the transaction of the principal's business. Why is this? a) Commissions can be adjusted upward or downward depending on the agent's efforts b) The agent has the fiduciary obligations to the principal c) Terms of the listing contract require the agent to do so d) Terms of the purchase contract require the agent to do so
b
Statements by a real estate licensee exaggerating the benefits of a property are called: a) Polishing b) Puffing c) Prospecting d) Marketing
b
The phrase "Principals Only" excludes: a) Disinterested buyers b) Real estate brokers c) Prospective buyers d) Financially weak buyers
b
Which of the following best defines the law of agency? a) The selling of a person's property by a licensed brokerage company b) The rules of law that apply to the responsibilities of a person who acts as agent for another c) The principles that governs one's conduct in business d) The rules and regulations of the licensing agency of a state
b
Which of the following would be considered lawful practice in real estate brokerage? a) Deceitful or dishonest practices b) Exaggerated statements about the property c) Omitted statements of material fact d) Misstatements about the property
b
A salesperson that represents the seller is showing a house to a prospective buyer-customer. The salesperson knows that the house has water problems in its basement which of the flowing is true? a) Withholding the information properly protects the confidence of the seller b) Disclosing the information could create a fiduciary relationship with the buyer c) Withholding the information prevents the buyer from making an informed decision d) Disclosing the information violates the salesperson's fiduciary duty to the seller
c
A salesperson who is employed by a broker told a prospective buyer that the house she was looking at is "the best house in the area". Because of this statement: a) The salesperson was guilty of fraud b) The broker was guilty of fraud because the employing broker is responsible for the actions of the salesperson c) The salesperson was practicing puffing d) The salesperson would be guilty of fraud only if the buyer purchased the house
c
Broker Medeiros shows properties listed for sale with her company to prospect Keola. Keola has refused buyer representation. Keola is Broker Medeiros': a) Client b) Principal c) Customer d) Fiduciary
c
It is unethical practice for a broker representing a seller to do which of the following? a) Advise the seller of the highest price a prospective purchaser may be willing to pay b) Suggest to the buyer that the full asking price is an appropriate offer c) Advise a prospective purchaser of the lowest price the seller is willing to accept d) Encourage a broker from another company to try to sell the property
c
The commission rate for the sale of real estate is determined by: a) A silent agreement among brokers in a local area b) Fixed schedules approved by the state licensing commission c) Negotiation between the broker and the seller d) Scarcity of real estate for sale
c
The position of trust assumed by the broker as an agent for the principal is described most accurately as a: a) Trustor relationship b) Trustee relationship c) Fiduciary relationship d) Confidential relationship
c
The prime obligation of an agent to the principal is: a) Mutual trust b) Reverence c) Loyalty d) Thrift
c
The relationship between property owner and broker is that of a) Seller and purchaser b) Attorney and client c) Principal and agent d) Optionor and optionee
c
The relationship of a broker to his or her client is that of a(n): a) Trustee b) Subagent c) Fiduciary d) Attorney in fact
c
A broker has obtained an offer to purchase a residence that is listed with his firm. After the buyers sign a purchase contract and the broker receives their earnest money deposit the broker must: a) Immediately provide the buyers with a copy of the offer and a receipt for the deposit b) Deposit the earnest money in the broker's personal checking account for safe-keeping until closing c) Hold the offer until all offers on the property are received and present them all to the sellers from which to make their choice d) Inform any buyer who calls on the property that the property is sold
a
A broker received a buyer's earnest money check for $5,000 and immediately cashed it. At closing the broker handed the seller a personal check drawn on the broker's own personal bank account for $5300 representing the original earnest money plus 6% interest. The broker: a) Should have deposited the money in a special bank account and should have discussed the interest with the parties b) Should have deposited the money in a special non-interest-bearing bank account c) Properly cashed the check but should have kept the interest d) Should have deposited the money in his personal bank account and would have been entitled to keep the interest as a service fee
a
A real estate broker acting as the agent of the seller a) Is obligated to render faithful service to the principal b) Can disclose the seller's minimum price c) Should present to the seller only the highest offer for the property d) Can accept an offer on behalf of the seller
a
A seller has listed her home with a broker for $100,000. The listing broker tells a prospective buyer to submit a low offer because the seller is desperate to sell. The buyer offers $80,000 and the seller accepts it. In this situation: a) The broker has violated his agency relationship with the seller b) The broker was unethical but it was okay because the seller sold his property c) The broker acted properly to obtain a quick offer on the property d) Any broker is authorized to encourage such bids for the property
a
After showing the property a number of times and not securing an acceptable offer the broker decides to buy the property himself. He must do which of the following: a) Make his true position known to the seller b) Wait until the listing expires and then make an offer to purchase c) Wait until he receives an offer and then offer a higher price d) Wait for at least 30 days and then offer the full asking price
a
All but which of the following would be considered dual agency? a) A broker acting for both the buyer and the seller in the same transaction b) Two brokerage firms working with each other to sell a property listed by one of them c) A broker representing more than one principal d) A broker listing a property and an agent in the same firm selling that listing
a
Before obtaining a listing on a property that shares a driveway with an adjacent house, the owner insists that the broker not mention this fact to any prospect. The broker should: a) Refuse the listing if he cannot persuade the owner to disclose the shared driveway b) Do as the seller asks since he has a duty of obedience to his client c) Inform the seller that the fact must be disclosed to any prospect but do as the seller asks d) Not mention this fact unless the buyer asks
a
Commissions earned by a broker in a real estate sales transaction: a) Are determined by agreement of the broker and his or her principal b) May be shared with an unlicensed person provided that such person aided the broker in bringing the buyer and seller together c) May be deducted from the earnest money deposit and claimed by the broker as soon as the buyer and seller execute the purchase and sale agreement d) Are based on a schedule of commission rates set by the Hawaii Real Estate Commission
a
Mr. Watanabe's house has been listed for sale for more than one year and he is very anxious to move into a retirement community. Salesperson Fumiko, who works for a brokerage that is a subagent of the seller, tells a prospective buyer to make a low offer because she is sure that the seller will accept it. Regarding Fumiko's conduct, which of the following would NOT be true? a) She acted appropriately to get the seller's property sold b) She violated her fiduciary duty to Mr. Watanabe c) Her conduct implies she is representing the buyer d) She should not assume that an anxious seller will accept a lower offer
a
A broker inspected the seller's house and discovered it was 600 square feet larger than the tax records had shown. The extra area was an addition built without a building permit. The broker should tell the client all of the following EXCEPT that: a) The government could force the seller to remove the addition b) Because the addition has already been completed it is no longer relevant to disclose that fact c) The new buyers should be informed that they could be forced to tear down the illegal improvement d) The seller should disclose this fact to any prospect to avoid any claim of misrepresentation
b
A broker received an earnest money deposit from a buyer. Under Hawaii law the broker should: a) Open a special separate escrow account that will contain funds for this transaction separate from funds received in any other transaction b) Deposit money in an existing escrow account in which all earnest money received from buyers may be held at the same time and separately accounted for c) Deposit the funds in the broker's operating account by the next business day d) Hold the earnest money deposit in a secure place in the broker's real estate brokerage office until the offer is accepted
b
A real estate broker's responsibility to keep the principal informed of all of the facts that could affect a transaction is the duty of: a) Care b) Disclosure c) Obedience d) Accounting
b
Two salespersons working for the same brokerage obtained offers on a property listed with their firm. The first offer was obtained early in the day and the second offer for a higher purchase price was obtained in the afternoon. The broker presented the first offer to the seller that evening and did not inform the seller about the second offer so as not to confuse the seller. Which of the following is true? a) The broker's actions are permissible provided the commission is split between the two salespeople b) After the first offer was received the broker should have told the sales persons that no additional offers would be accepted until the seller makes a decision on the offer c) The broker has no authority to withhold any offers from the seller d) The broker was smart to protect the seller from getting into a bidding war over two offers
c
Upon discovery of a latent defect on a property, Broker Wong should discuss the problem with seller Puhi and: a) Tell him that the defect has to be repaired b) Arrange for the repairs to be completed herself c) Inform any prospective buyers of the defect d) Contact the county building inspector about the defect
c
When a property is advertised "principals only," which of the following groups is EXCLUDED? a) People who are willing and able b) Persons wanting to live on the property c) Agents d) Financially capable brokers interested as buyers
c
Which of the following is true about a fiduciary? a) Is a disinterested third party b) Must be an employee of the broker c) Looks after the best interest of the principal d) Must be paid a fee
c
A broker cannot legally collect commissions from both the seller and buyer without: a) Notifying both parties of this fact orally after the sale has closed b) Notifying both parties of this fact in writing after the sale has closed c) Having exclusive listing agreements signed by both the seller and buyer d) Having the prior knowledge and written consent of the buyer and seller both
d
A broker has an exclusive-right-to-sell listing on a building. The owner is out of town when the broker gets an offer from a buyer to purchase the building, providing the seller agrees to take a Purchase Money Mortgage. The buyer insists on a commitment from the seller before the seller's scheduled return. Under these circumstances: a) The broker may enter into a binding agreement on behalf of the seller b) The broker may collect a commission even if the transaction falls through because of the seller's absence c) The buyer is obligated to keep the offer open until the seller returns d) The broker must obtain the signature of the seller to affect a contract
d
A broker is permitted to represent both the seller and the buyer in the same transaction when: a) The principals are not aware of such action b) The broker is a subagent rather than the agent of the seller c) Commissions are collected from both parties d) Both parties have been informed and agree to the dual representation
d
A broker who is the agent of a buyer should do which of the following: a) Disclose to the seller that the buyer is a minority person b) Disclose to the seller the maximum price the buyer is willing to pay c) Present to the seller only offers that are acceptable d) Advise the buyer if the listing price of the seller's home is unrealistic
d
A broker who represents a seller under an exclusive agency listing receives two offers for the property at the same time, one from one of his sales persons and one from the salesperson of a cooperating broker. What should the broker do? a) Submit the offer from his salesperson first b) Submit the offer from the other salesperson first c) Submit the higher offer first d) Submit both offers at the same time
d
A listing broker receives an offer that fully matches the listing terms. Before presenting the offer the broker receives two more offers, one for less than the listing price but for cash and one for more than the listing price but seller to take back a mortgage. What is the best approach for the listing broker? a) Present each offer at a separate appointment in the order received b) Present only the offer for the highest price c) Present the all cash offer first d) Present all offers at the same time
d
A real estate office has a listing for $100,000. A buyer makes an offer for $110,000. The listing office can do which of the following? a) Offer to buy the property through a nominee for $100,000 and not present the buyer's offer b) Suggest that the buyer reduce the offer to $100,000 c) Buy directly from the seller for $100,000 and the next day resell to the original buyer for $110,000 d) Present the $110,000 offer to the seller
d
All funds received by a broker on behalf of his or her principal must be deposited in an Escrow or trust account within: a) Three days of receiving the offer b) Three days of obtaining all signatures for the contract c) Five working days of receiving the offer d) One business day after receipt
d
In Hawaii which of the following is legal and not grounds for revoking a broker's license? a) A licensee attempts to represent a real estate broker other than his or her own broker b) A salesperson accepts commissions from someone other than his or her employing broker c) A salesperson pays a referral fee to another licensed salesperson d) Accepting commissions from a buyer and a seller with their informed consent
d
The broker is in a hurry so he persuades the seller to sign a blank listing agreement so she can fill it out later when she has more time. This is a: a) Violation of the labor laws b) Commonly accepted business practice c) Valid contract d) Bad business practice
d
The listing broker owns a direct fiduciary responsibility to whom? a) The listing salesperson b) The buyer c) The buyer's broker d) The seller
d
The responsibilities of a real estate sales agent in a listing agency relationship include all of the following EXCEPT: a) Exercise of due care b) Accountability c) Obedience d) Repair of defects
d
Which of the following statements is true? a) A listing broker can refuse to transmit an offer to the seller if she thinks it is too low b) A listing broker can tell a prospective buyer that the seller will accept less than the asking price if the seller will, in fact, accept the lower offer c) A listing broker receives two offers. He should present the first offer, then wait until it is accepted or rejected before presenting the other offer d) a broker must present all offers when he receives them
d