Real Estate Chapter 11: Agency
something that is known to the seller, but not to the purchaser and not readily discoverable by inspection. If the seller or the broker is aware of such a defect, he/she must disclose this to the buyer. Failure to disclose this is misrepresentation and the buyer may rescind the contract. Example: If a licensee is aware that the basement in the property leaks, this information must be disclosed to a potential purchaser regardless of an agency relationship that exists. a. latent defects b. proof of defects c. material defects d. estate erosion
a
An agency relationship in which the agent is given an estate or interest in the property. The principal cannot revoke this type of agency, nor is it terminated upon the death of the principal. For example, a broker may supply the financing for a new home development provided the builder agrees to give the broker an exclusive listing to sell the homes that will be built. what is this? a. net listing b. open listing c. exclusive agency d. agency coupled with an interest
d
California law requires that all real estate agents provide a written disclosure to the buyer and the seller, regardless of which party to the transaction the agent represents. this is known as a. disclosure regarding real estate client trust form b. disclosure regarding real estate provisions c. disclosure regarding real estate client services d. disclosure regarding real estate agency relationships form
d
Collusion between brokers and salespeople with competing companies to set commission rates is illegal. "Everyone charges the same; so you might as well list with me," would be an illegal statement and a violation of the Sherman Antitrust Law. what is this? a. misinformation b. division of markets by location or price c. group boycotts d. price fixing
d
4 ways agency is created: a. written or expressed; implied; ostensible agency; ratification b. written; expressed; ratification; ostensible agency c. expressed; documented; legalized agency; ramification d. written or expressed; voluntary; ostensible agency; ratification
a
A person who is empowered by contract to represent the interest of someone called a _________. what is this? a. agent;principal b. broker;customer c. sales associate;realtor d. realtist;patron
a
As a result of the _______ v. __________ case, Listing and selling brokers have the responsibility to conduct a "reasonably competent and diligent inspection" of the residential property listed for sale, and to disclose to prospective purchasers all facts materially affecting the value or desirability of the property that such an investigation would reveal. a. easton v. strassburger b. martin v. strassburger c. weston v. easton d. easton v. kintish
a
Has the principal to the transaction agreed to allow the listing broker (the principal's agent) to delegate part of his responsibility to another agent? If the principal agrees to such a delegation, then the listing broker may appoint another agent, with either the express or implied authority of the principal. Who is this? a. sub agent b. principals agent c. brokers agent d. cooperating agent
a
If the parties are not aware that the agency (or licensee) is representing both parties, then an "__________ Dual Agency" is created, which violates agent's duty of loyalty. "__________Dual Agency" is illegal and could be cause for revocation of license, a lawsuit by the parties involved, and possibly a recession of the transaction. a. undisclosed b. disclosed c. illegal d. manipulative
a
In regards to Procuring Cause, the commission can be a: a. percentage of sale price; flat fee or salary; a combination b. percentage of home value; flat fee; all of the above c. percentage of commission base; sakary; a combination of the above or any other amount as set forth
a
Only one broker is allowed to act on behalf of the principal; however, if the owner sells the property him/herself, no commission is paid to the broker. Again, the selling broker will look to the listing broker for compensation. The seller can sell the property him/herself and pay no commission under this what is this? a. exclusive agency b. net listing c. exclusive right to sell d. agency coupled with an interest
a
Price fixing, bid rigging, and market allocation by companies and individuals are felonies punishable by a fine of up to $___ million for corporations and a fine of up to $___ million or ten years imprisonment (or both) for individuals. a. 100;1 b.50;5 c.10;1 d. 100;50
a
Sherman Antitrust Act prohibits: a. price fixing; group boycotts; division of markets by location or price b. price fixing; protests; division of markets by home equity c. price fixing; group boycotts; division of markets by cheap labor
a
The California Real Estate Commissioner requires that ALL broker's and salesperson's records be maintained for a MINIMUM of ___ years. (This period begins at the date of the closing of the transaction, OR from the date of listing, if the transaction wasn't consummated.) These records include copies of all listings, canceled checks, deposit receipts, trust fund records, and any other documents either executed by the broker OR received by the broker in connection with a real estate transaction. a. 3 b. 5 c. 4 d. 2
a
The relationship between an agent and a principal is called an ___________ and the agent is called a ________. a. agency relationship;fiduciary b. trust;representative c. agency relationship;associate d. legal statute; customer representative
a
one who attempts to find a buyer for the other broker's listing and THEN to act as the buyer's agent, RATHER THAN the subagent of the seller. a. cooperating agent b. sub-sub agent c. subtle agent d. net agent
a
A legal doctrine by which a person is prevented from asserting rights or facts that are inconsistent with a previous position or representation made by act, conduct, or silence. a. estate protection b. affirmative legislation c. brothel d. estoppel
d
Handles multiple transactions of a client. The best example in real estate would be property management. who is this? a. universal agent b. general agent c. special agent d. dual agent
b
Seller retains the right to hire any number of brokers to sell his property. Whoever provides seller with a ready, willing, and able purchaser is entitled to a commission. If the seller sells the property without the aid of a broker, he/she pays no commission. what is this? a. exclusive agency b. open c. net listing d. agency coupled with an interest
b
When the real estate licensee is a partner in the ownership of the property. This type of agency does not allow for cancellation of listings as other types do. Example: I own 50 acres of ground that I will sell to a builder with the understanding that I will list his/her properties for sale until they are all sold. I cannot be fired, and, if I die, my estate will be entitled to any fees earned from the remaining sales. In most states, including California, any listing agreement must have a definite ending date. In this case, the listing would have to be for the time period estimated to sell all the properties. what is this? a. general agent b. agency coupled with an interest c. single agent d. dual agent
b
Who is responsible for their own FICA and Social Security?
brokers and salespeople
"Why don't you take the south side of town and our company will take the north side," is another statement that would also violate the Sherman Antitrust Law. what is this? a. price fixing b. group boycotts c. division of markets by location or price d. blockbusting
c
A copy of all real estate-related agreements and documents, including listing agreements, agency relationship statements, and transfer disclosure statements, must be given to the signing party immediately after the document is signed, under the ________. a. real estate trust regulations b. customer service regulations c. commissions regulations d. state regulations
c
A real estate broker who acts as an agent to ONLY the seller or ONLY the buyer. a. universal agent b. general agent c. single agent d. dual agent
c
Handles one transaction for one seller of one property. The best example would be a licensee who is hired to sell one property for a client. who is this? a. universal agent b. general agent c. special agent d. agency coupled with an interest
c
ILLEGAL IN MOST STATES (Frowned upon in others.) Listing which states that seller is to receive a certain amount of money from the sale and any amount over this will be paid to the broker as a commission. Check the State section of this course to determine the rules in your area. what is this? a. exclusive agency b. open listing c. net listing d. agency coupled with interest
c
In CALIFORNIA, there are 3 ways to create agency: a. implicit; granted; estoppel b. agreement; ratification; legal order c. agreement; ratification; estoppel
c
An agent owe's his/her principal COALN. What is COALN?
care ;obedience ;accounting; loyalty; notice
A real estate agent that represents both the buyer and the seller in the SAME transaction. a. universal agent b. special agent c. single agent d. dual agent
d
Fulfillment of the purpose of the listing (performance) - The broker sells the property and the property transfers. Expiration of time as stated in the agreement - The seller agreed to a three-month listing and the property did not sell. Breach or cancellation by one of the parties (renunciation by the broker or revocation by the principal). While either party may cancel a contract there may be some obligations that must be fulfilled. Since this is a contractual agreement, if the seller cancels, the broker may decide to sue for damages (expenses, etc.). Transfer of title to the property as operation of law, such as bankruptcy or foreclosure. If the seller loses the property due to one of these causes, the listing is automatically cancelled. Mutual consent. The broker (salesperson) and the seller mutually agree that it is in the best interest of all parties to cancel the listing. Death or incapacitation of either party. (Seller or the broker dies.) Destruction of the property or a change in property use by outside forces (such as a change in zoning, condemnation, house burns down) these are? a. agency listing requirements b. listing regulations c. listing procedures d. termination of listings
d
Handles all delegated business of principal. Has Power of Attorney, which is sometimes called an Attorney-in-Fact. An example would be a person who is hired or appointed by an estate to handle the real estate affairs of a deceased individual. who is this? a. single agent b. special agent c. general agent d. universal agent
d
Licensees should never "get together" and boycott a company because of their business practices. "Let's not do business with AVC Real Estate Company; they discount their commissions," would also be a statement in violation of the Sherman Antitrust Law. what is this? a. license regulations b. division of markets by location or price c. price fixing d. group boycotts
d
Listing broker is always entitled to a fee, regardless of who procures the buyer. Offers the most protection to the broker. Owner of the property must pay a commission to the listing broker, regardless of who sells the property. A selling broker will be compensated by the listing broker. Brokers cooperate through the MLS (Multiple Listing Service) and agree to split commission upon bringing a ready, willing, and able buyer to the seller. The cooperating license should make his/her agency or non-agency relationship clear when calling for an appointment (Buyer agent, Transaction broker, Sub-agent of the seller or dual agent). Listing must have a definite Beginning & Ending date. All listings expire at midnight of the date of expiration. what is this? a. exclusive agency b. open c. net listing d. exclusive right to sell
d
This statement must be provided by both the seller and the broker, and must be given to the prospective buyer as soon as is practicable - before OR within 3 days after the deposit receipt is signed. a. rights of provision statement b. eminent domain statement c. selling agreement statement d. transfer disclosure statement
d
a non-listing BROKER who also works to sell the listed property, much the same as a cooperating agent. these salespersons and brokers represent THE BUYER, IF this has been disclosed to all parties in the transaction. a. licensed broker b. net broker c. cooperating sales person d. cooperating broker
d
is an exaggeration or superlative comment. While this can be unethical, it is legal. SUBJECTIVE OPINION - Example: "The transportation, shopping, and schools in this area are terrific." a. latent b. opinion c. fraud d. puffing
d
Emergency Broadens Authority: California law says that in an emergency, an agent DOES NOT have expanded authority, which may include the power to disobey instructions IF it is clearly in the interests of the principal, AND in situations in which there is no time to obtain instructions from the principal. An example of this authority occurs in the relationship between a property manager and an owner when an immediate repair or replacement is required to protect the property and to provide necessary services to the tenant. True or False?
false
Remember that agreements between brokers do need to be in writing. On the other hand, an agreement between a broker and a salesperson must ALWAYS be in writing. True or False?
false
If you are going to represent a buyer in a real estate transaction, then the buyer would be your client (owed "COALN"), and the seller would be your customer. (owed "HAD"). What is HAD?
honesty; accuracy ;disclosure of defects
individual will not be considered an employee for ______ income tax purposes if: -The individual is licensed by the Department of Real Estate and is performing brokerage services as a real estate licensee on a commission basis; -Substantially all remuneration for such services is related directly to sales rather than the number of hours worked; -The real estate services are performed pursuant to a written agreement between the individual and the supervising broker.
state
An agency relationship is created by the written agreement between either the seller/landlord or the buyer/tenant and the broker. Salespeople are compensated by the broker in an amount usually determined in a mutual agreement between the broker and his/her salespeople. Salespeople should have a written independent contractor or employment agreement with their broker. True or False?
true
In California, dual agency IS legal, but only with the knowledge and consent of both parties. Dual agencies are common in California, but are considered by many attorneys as a conflict of interest True or False?
true
When one person is empowered by another to represent him in any type transaction, it is called an agency relationship. The issue is not money, but rather the relationship of the parties. True or False?
true
