real estate practice test 4
What is a multiple listing? A listing shared by a listing agent and a selling agent. A listing that a listing agent delegates to a subagent. A listing that is entered in a multiple listing service to enable cooperation with member brokers. A listing that authorizes a listing agent to market more than one property for a seller.
A listing that is entered in a multiple listing service to enable cooperation with member brokers.
A salesperson, without an oral or written listing agreement, brings potential buyers to the seller. The seller says, "You can bring me buyers if you want, but I'm not paying you a commission." The salesperson then continues to direct buyers to the property. Which of the following is true about this situation? There is no agency relationship, and therefore the seller will owe no commission if one of the salesperson's buyers buys the property. An implied agency may have been created, with obligations to perform for both seller and agent. The seller and agent have an illegal, undisclosed agency relationship. The agent has an open exclusive agency listing with no commission agreement, and therefore owes no fiduciary duties to the seller.
An implied agency may have been created, with obligations to perform for both seller and agent.
When a broker enters into a listing agreement, the broker has agreed to accept which of the following? Fiduciary and contractual obligations with the client. Fiduciary relationships with client and customer. Contractual obligations with cooperating brokers. Fiduciary obligations with the customer.
Fiduciary and contractual obligations with the client.
Which of the following is a dual agency situation? Two agents share the exclusive right to represent the same client on all transactions. One agent represents both sides in a transaction. A selling agent from one brokerage works with a listing agent from another brokerage to complete a transaction. One agent represents two sellers at the same time.
One agent represents both sides in a transaction
Agent Peter has an open listing with Frank. Paul is Peter's broker. Agent Perry's customer buys Frank's house. Patrick has a commission agreement with Frank. Who is most likely to be compensated in this scenario? Peter, since he has a written listing agreement. Paul, since he is Peter's broker Perry, since he found the customer. Patrick, since he has a commission agreement.
Perry, since he found the customer.
A broker obtains an exclusive listing to sell a house, but after two months, he abandons the listing because the seller is too demanding and hot-tempered. What can the seller do in this situation? Have the licensees license revoked for negligence. Sue the broker for money damages. Sign a listing agreement with another broker and force the first broker to pay the commission. Force the broker to perform the contract without compensation.
Sue the broker for money damages.
An agent enters into a listing agreement with a homeseller, but then becomes too busy to professionally fulfill the terms of the agreement. To solve the dilemma, the agent assigns the agreement to another licensee in the office. Which of the following is true about this situation? The agent cannot assign the listing agreement. The new listing agent acquires the full set of fiduciary duties owed to the client. The new broker has to split any commission that results with the assigning broker. The original broker has to disclose the assignment to the seller.
The agent cannot assign the listing agreement.
A principal discloses that she would sell a property for $500,000. During the listing period, the house is listed and marketed for $530,000. No offers come in, and the listing expires. Three weeks later, the agent confides to a customer that the seller would have sold for less than the listed price. Which of the following is true? The agent has violated the duty of confidentiality. The agent has fulfilled all fiduciary duties, since the listing has expired. The agent is violating the duties owed this customer. The agent has created a dual agency situation with the customer.
The agent has violated the duty of confidentiality.
In which of the following contact situations would a seller's agent be expected to disclose his agency relationships? The agent is showing the client's property to a prospective buyer. The agent tells an acquaintance at a party about the client's property. The agent answers questions about the client's property for a telephone caller responding to a newspaper ad. The agent is showing a potential buyer houses in a certain price range in the multiple listing book.
The agent is showing the client's property to a prospective buyer.
Which of the following conditions is necessary for a customer to qualify as "ready, willing, and able" in the context of a commissionable transaction? The customer's offer must be accepted. The customer must be legally competent to undertake the transaction. The customer must have a commitment from a lender. The customer must have no business relationship with the agent.
The customer must be legally competent to undertake the transaction.
One of the parties to an agency relationship defaults, and the agreement terminates. Which of the following is true? All obligations are extinguished. Both parties must continue to perform all other obligations of the agreement. The defaulting party may have a financial consequence. The damaged party has no claim against the defaulting party.
The defaulting party may have a financial consequence.
Which of the following is true of the connection between compensation and the agency relationship? An agreement to give and receive compensation creates an agency relationship. If an agency relationship exists, the principal must provide valuable consideration to the agent. The relationship is independent of any compensation arrangement. If an agency relationship exists, the agent is entitled to compensation
The relationship is independent of any compensation arrangement.
A multiple listing authorization gives a broker what authority? To list the owner's property in a multiple listing service. To sell several properties for the owner at once. To represent both seller and buyer, if necessary, in selling the property. To delegate the listing responsibilities to other agents.
To list the owner's property in a multiple listing service.
When must a listing agent disclose his or her agency relationship to prospective tenants or buyers? Immediately prior to the initial contact. Upon initial contact. Whenever substantive contact is made beyond casual conversation. Immediately following any offer executed by the customer.
Whenever substantive contact is made beyond casual conversation.
A subagent is the agent of the seller. the buyer. a broker who has an agency relationship with a client. the client's and the customer's agents.
a broker who has an agency relationship with a client
implied agency arises when an agent accepts an oral listing. a principal accepts an oral listing. a party creates an agency relationship outside of an express agreement. a principal agrees to all terms of a written listing agreement, whether express or implied.
a party creates an agency relationship outside of an express agreement
The standard of care and competence that a principal can expect from an agent is generally that which is specified in the agency agreement. necessary to earn the promised compensation. necessary to procure a customer. comparable to that of other practitioners in the area.
comparable to that of other practitioners in the area.
An agency relationship may be involuntarily terminated for which of the following reasons? Condemnation of the property. Mutual consent. Full performance. Renewal of the agent's license.
condemnation of the property
One of the agent's fiduciary duties that continues even after a listing agreement expires is obedience. diligence. confidentiality. disclosure.
confidentiality
Agent Michael is showing his new listing to a buyer who informs him that he has just inherited five million dollars. Michael is now bound by fiduciary duty to keep the information in confidence. disclose the information to the buyer's agent. verify the buyer's statements before disclosing them to the client. disclose the information to the seller.
disclose the information to the seller.
The duties of a transaction broker or facilitator include preserving the confidentiality of information received from either party. helping the two parties achieve their respective objectives. disclosing material facts that affect the value of the property to both parties. choosing to obey the instructions of one party and informing the other party of the decision.
disclosing material facts that affect the value of the property to both parties.
An owner agrees to pay a broker for procuring a tenant unless it is the owner who finds the tenant. This is an example of a(n) exclusive right-to sell agreement. exclusive agency agreement. open listing. net listing.
exclusive agency agreement
From an agent's point of view, the most desirable form of listing agreement is a(n) exclusive agency. exclusive right to sell. open listing. net listing.
exclusive right to sell
Audrey wants to take a vacation. To do so, she authorizes an agent to conduct the operations of one of her business enterprises. The kind of agency she has established is limited. general. universal. special.
general
The essential foundation of the agency relationship consists of mutual respect, compensation, and confidentiality. diligence, results, and compensation. service, marketing, and respect. good faith, trust and confidence.
good faith, trust and confidence
An owner's agent is showing a buyer a residential property for sale. The buyer notices water stains on the foundation walls and floor, and informs the agent. The appropriate course of action for the agent is to immediately contract to paint the ceiling. immediately contract to repair the roof. suggest the buyer make a lower-price offer inform the seller
inform the seller
The degree of authority granted by a residential brokerage listing agreement generally allows the agent to create contractual obligations for the client. negotiate the selling price between client and customer. hire inspectors, and other individuals to prepare the property for marketing. market, sell and show the property.
market, sell and show the property.
An agent is operating as a disclosed dual agent on a transaction. In this case, the agent may not represent one party's interests to the detriment of the other. must operate without a listing agreement. must be obedient and loyal to both parties. must require that the principals refrain from disclosing any material facts to him
may not represent one party's interests to the detriment of the other.
A property owner agrees to pay a broker an open-ended commission as the difference between the sale price and a net amount, provided the owner receives a minimum amount of proceeds from the sale at closing. This is an example of a(n) exclusive right-to sell agreement. exclusive agency agreement. open listing. net listing.
net listing
Although a listing broker may delegate listing tasks to an employed licensee, the broker may not delegate the authority to obtain and distribute compensation. provide cooperating brokers with information about the property. advertise the property. inspect the property for hazardous substances
obtain and distribute compensation.
A landlord promises to compensate a broker for procuring a tenant, provided the broker is the procuring cause. This is an example of a(n) exclusive right-to rent agreement. exclusive agency agreement. open rental listing. net lease listing.
open rental listing.
An agent informs a buyer that a provision in a contract is very commonplace. After explaining the clause, the agent assures the buyer that the clause does not mean anything significant. If something goes wrong with the transaction, the agent could be liable for violating duties owed a customer. misinterpreting the clause. intentional misrepresentation. practicing law without a license
practicing law without a license
Among the fiduciary duties imposed on a real estate agent is the requirement to refuse offers the agent knows will be unacceptable to the principal. present all offers to the principal regardless of their amount. advise the principal against accepting an offer that is below full price. advise a prospect that the principal will not accept the prospect's offer in order to elicit a better offer.
present all offers to the principal regardless of their amount.
The meaning and salient characteristics of the agency relationship should be disclosed to the client prior to completing a listing agreement. prior to or upon completion of an offer. upon the initial contact with the person. prior to showing properties.
prior to completing a listing agreement.
A property seller empowers an agent to market and sell a property on his behalf. The kind of agency represented is general. special. universal. no agency.
special
A principal instructs an agent to market a property only to families on the west side of the university campus. The agent refuses to comply. In this case, the agent has violated fiduciary duty. the agent has not violated fiduciary duty. the agent is liable for breaching the listing terms. the agent should obey the instruction to salvage the listing
the agent has not violated fiduciary duty.
Agent Gerry has executed an exclusive buyer broker agreement with the Andersons. The agent subsequently places an offer with Melinda, the exclusive selling agent for the Lincolns, to buy their lakefront property. The offer contains provisions for the Lincolns to pay the brokerage commission, which the Lincolns agree to. Given this set of circumstances, Gerry owes the full set of fiduciary duties to the Andersons. the Lincolns. Gerry's broker. Melinda's broker
the andersons
In the context of agency law, the legal difference between an owner representation agreement and a buyer representation agreement is the client. the commission amount. fiduciary duties. regulatory approvals.
the client
The agency relationship is defined by the Realtor Code of Ethics. the laws of agency, or in some states, by statute. the law of real estate contracts. the agreement between a principal and an agent.
the laws of agency, or in some states, by statute
A buyer agent or tenant representative should disclose his or her agency relationship to the owner's agent immediately prior to the initial contact. upon initial contact. immediately prior to substantive contact. immediately following any offer executed by the landlord.
upon initial contact.
