Unit 9

a transactional brokerage

A broker helps a buyer and a seller with paperwork but does not represent either party. This relationship is A) prohibited in all states because a broker must always represent one party. B) a designated agency. C) dual agency. D) a transactional brokerage.

The broker is merely puffing.

A broker tells a buyer, "This home has the most beautiful river view." In fact, the view includes the river and the back of a shopping center. Which is TRUE? A) The broker has committed fraud. B) The broker is guilty of intentional misrepresentation. C) The broker is merely puffing. D) The broker is guilty of negligent misrepresentation.

a special agent

A broker was hired to represent the seller, to market the seller's property, and to solicit offers to purchase. The broker is called A) a special agent. B) a facilitator. C) a nonagent. D) a general agent.

Care

A buyer's agent, upon learning that the home being purchased is to house a dog-grooming business, didn't check zoning. What fiduciary duty did the buyer's agent violate? A) Loyalty B) Disclosure C) Care D) Obedience

nonagent

A facilitator functions as A) an agent B) a fiduciary. C) a nonagent. D) a principal.

latent defects

A house built years ago over a ditch covered with decaying timber or a house with ceilings that were improperly attached to the support beams are examples of A) conditions that need not be disclosed. B) environmental hazards. C) latent defects. D) stigmatized properties.

avoid conflicts of interest

A key element of an agent's fiduciary responsibility of loyalty is to A) reveal relevant information or material facts. B) obey the principal's instructions in accordance with the contract. C) avoid conflicts of interest. D) report the status of all funds received from or on behalf of the principal.

must promote and safeguard the seller's best interests

A real estate broker acting as the agent of the seller A) can disclose the seller's minimum price. B) can accept an offer on behalf of the seller. C) must promote and safeguard the seller's best interests. D) should present to the seller only the highest offer for the property.

all lawful instructions of the owner

A real estate broker hired by an owner to sell a parcel of real estate must comply with A) a prospective buyer's instructions. B) all lawful instructions of the owner. C) the concept of caveat emptor. D) the common law of agency in the state in which the property owner lives.

sales associates are agents of the broker

In a real estate brokerage, A) a licensed personal assistant of a sales associate is the agent of the sales associate. B) the broker always acts as the agent of a client or customer. C) sales associates are agents of the broker. D) sales associates are agents of the licensing authority.

consideration

In the common law of agency, an agent owes the principal all of the following EXCEPT A) consideration. B) disclosure. C) loyalty. D) obedience.

a fiduciary

In the common law of agency, the relationship of broker to client is that of A) a trustee. B) an attorney-in-fact. C) a fiduciary. D) a subagent.

Disclosure was improper and possibly illegal, regardless of the agent's motive.

Maria tells her agent in confidence that she must sell fast and may accept less than the list price. The agent tells a buyer the seller will accept up to $10,000 less than the list price. Which is TRUE? A) Disclosure was improper and possibly illegal, regardless of the agent's motive. B) The agent should have disclosed this information, regardless of its accuracy. C) The relationship between the agent and the seller ends automatically if the purchaser submits an offer. D) The agent has not violated any agency responsibilities to the seller.

even if unintentional

Misrepresentation or omission might result in broker liability A) even if unintentional. B) unless it was considered puffing. C) only if intentional. D) unless unintentional.

stigmatized properties

Properties that are considered undesirable because of events that occurred there or because a known sex offender lives in the area are considered A) stigmatized properties. B) stagnant properties. C) unmarketable properties. D) unstable properties.

Common law, statutory law, and administrative law

Real estate agency relationships are governed by which kinds of law? A) Common law and representative law B) Administrative law and canonical law C) Contract law, common law, and business law D) Common law, statutory law, and administrative law

a designated agency

Some states allow two sales associates in the same brokerage to represent opposing sides to a transaction without creating a dual agency by using A) a designated agency. B) an undisclosed dual agency. C) a facilitator relationship. D) a disclosed dual agency.

if there is no intention to deceive

Statements of opinion are permissible A) if there is no intention to deceive. B) even if they are considered a "harmless white lie." C) if they are only part of puffing. D) never.

If there is no intention to deceive

Statements of opinion are permissible A) never. B) even if they are considered a "harmless white lie." C) if there is no intention to deceive. D) if they are only part of puffing.

a state registries of residential information on sex offenders

The federal legislation known as Megan's Law has promoted the establishment of A) local registries of residential information on sex offenders. B) state registries of residential information on sex offenders. C) a federal registry of residential information on sex offenders. D) a criminal registry that is maintained by state real estate offices.

Disclosure of material facts that the agents knows

The fiduciary responsibilities of an agent to the principal under the common law of agency include A) disclosure of material facts that the agent knows. B) care and skill in representing the principal equivalent to that of the average person. C) obedience to all instructions of the principal. D) loyalty to the principal's interests unless they conflict with the agent's interests.

a nonagent

The functions of a facilitator or intermediary are those of A) an agent. B) a nonagent. C) a fiduciary. D) a principal.

the agent

The individual who is authorized and consents to represent the interests of another person in dealings with a third person is A) the client. B) the agent. C) the principal. D) the customer.

Statutory Law

The laws enacted by a legislature make up A) judicial law. B) statutory law. C) common law. D) administrative law.

the seller and the broker must both disclose this material fact

The listing broker and the seller find a small roof leak in the attic. Because the property is being sold "as is," A) if the buyer's inspector finds a problem, the seller does not have to disclose. B) the seller and the listing broker do not have to disclose anything. C) the seller must disclose, but the broker has no obligation to disclose. D) the seller and the broker must both disclose this material fact.

special

The relationship between real estate broker and seller is generally what type of agency? A) General B) Implied C) Universal D) Special

the common law

The rules established by tradition and court decisions are found in A) the statutory law that is enacted by the legislature. B) the common law. C) the codified law that is a legacy of French rule. D) the administrative law created by real estate agencies as authorized by the legislature.

common law

The rules of a society established by tradition and court decisions are found in A) administrative law. B) legislative law. C) common law. D) statutory law.

Fraudulent Misrepresentation

The seller's agent is aware that a new landfill has been approved for development on an adjacent property but does not disclose this information to a buyer. This could be an example of A) negligent misrepresentation. B) fraudulent misrepresentation. C) unnecessary disclosure. D) a latent defect.

Inform any prospective buyers of the defect

Upon discovering a latent defect in a property, the real estate professional should discuss the problem with the seller and then A) personally arrange for the repairs. B) contact the city building inspector about the defect. C) tell the seller that the defect must be repaired. D) inform any prospective buyers of the defect.

It is part of a body of law established by tradition and court decisions

What does the phrase the law of agency is a common law doctrine mean? A) It is part of a body of law established by tradition and court decisions. B) It is a legal doctrine that is not unusual. C) It may not be superseded by statutory law. D) It is one of the rules enacted by legislatures and other governing bodies.

All information about material defects that the agent knows or should know

What is a seller's agent required to disclose to prospective buyers about material defects in the property? A) Both information the seller has provided the agent, and material defects that the agent has personally observed B) Only information about material defects that the agent has personally observed C) All information about material defects that the agent knows or should know D) Only information about material defects the seller has provided the agent

Commingling and Conversion

When a broker places trust funds of others into the company's operating account and then withdraws funds for the firm's use, what illegal practice has taken place? A) Commingling and conversion B) Asset-liability management C) Escrowing D) DBA accounting

Any relevant state laws

When considering whether or not to reveal information regarding a stigmatized property, a real estate professional should be aware of A) and disclose all facts concerning the property. B) any relevant state laws. C) the desire of a potential buyer or tenant to know the information. D) the possible reaction of potential buyers or tenants.

The owner declares personal bankruptcy.

Which event will terminate an agency in a broker-seller relationship? A) The broker discovers that the market value of the property is such that an adequate commission will not be earned. B) The owner abandons the property. C) The owner declares personal bankruptcy. D) The broker appoints other brokers to help sell the property.

A special agent represents the principal for one certain transaction only

Which of the following is TRUE about the difference between a special agent and a general agent? A) Both types are limited agents. B) Only a special agent has duties to the principal. C) A general agent represents the principal for one certain transaction only. D) A special agent represents the principal for one certain transaction only.

Some states allow it, with certain conditions.

Which of the following is TRUE regarding dual agency? A) Some states allow it, with certain conditions. B) It does not require an agency agreement. C) It is legal in all states. D) It is illegal in all states.

A real estate professional's acting for both the buyer and the seller in the same transaction

Which of the following is considered dual agency? A) A real estate professional's listing and then selling the same property B) A real estate professional's representing more than one principal C) Two brokerage companies cooperating with each other D) A real estate professional's acting for both the buyer and the seller in the same transaction

Exaggerated statements about the property

Which of the following is considered lawful practice in real estate brokerage? A) Exaggerated statements about the property B) Deceitful or dishonest practices C) Misstatements about the property D) Omitted statements of material facts

"The uneven floors just mean that the building dates to colonial times."

Which of these statements could be negligent misrepresentation? A) "The uneven floors just mean that the building dates to colonial times." B) "I think these low doorways are a charming part of the Cape Cod style." C) "The size of the bedrooms makes them wonderfully cozy and perfect for your children." D) "The simple design is uncluttered and offers many possibilities for decorating."

The broker is obligated to render loyalty to the seller

Which statement is TRUE of a real estate broker acting as the agent of the seller? A) The broker can accept a commission from the buyer without the seller's approval. B) The broker is obligated to render loyalty to the seller. C) The broker can disclose confidential information about the seller to a buyer if it increases the likelihood of a sale. D) The broker can agree to a change in price without the seller's approval.

Whoever hired the agent

Who is the agent's principal? A) Person who pays the commission B) Buyer C) Seller D) Whoever hired the agent

The seller is the broker's client; the buyer is a customer

A real estate broker lists a home for sale for $189,500. Later that same day, a prospective buyer comes into the broker's office and asks for general information about homes for sale in the $130,000 to $140,000 price range but refuses representation by the broker's company at this time. Based on these facts, which statement is TRUE? A) The broker owes fiduciary duties to both seller and buyer. B) The seller is the broker's client; the buyer is a customer. C) Both the seller and the potential buyer are the broker's customers. D) If the buyer later asks for buyer representation by the broker's firm, it will not be possible because of the firm's earlier agreement with the seller.

disclosure

A real estate broker's responsibility to keep the principal informed of all the facts that might affect a transaction is the duty of A) obedience. B) care. C) disclosure. D) accounting.

Being primarily responsible to the customer

A real estate professional's duties to a customer do NOT include A) care and skill in performance. B) honest and fair dealing. C) being primarily responsible to the customer. D) disclosure of all facts that the real estate professional knows or should reasonably be expected to know that materially affect the value or desirability of the property.

being primarily responsible to the customer

A real estate professional's duties to a customer do NOT include A) disclosure of all facts that the real estate professional knows or should reasonably be expected to know that materially affect the value or desirability of the property. B) care and skill in performance. C) being primarily responsible to the customer. D) honest and fair dealing.

The sales associate was practicing puffing

A sales associate of a broker told a prospective buyer that the house being shown is "the best house in the area." Because of this statement, A) the sales associate is guilty of fraud only if the buyer purchases the house. B) the sales associate was guilty of fraud. C) the broker was guilty of fraud because he is responsible for actions of the sales associate. D) the sales associate was practicing puffing.

Disclosure was improper and possibly illegal, regardless of the agent's motive.

A seller tells his agent in confidence that he must sell fast and may accept less than the list price. The agent tells a buyer the seller will accept up to $5,000 less than the list price. Which is TRUE? A) Disclosure was improper and possibly illegal, regardless of the agent's motive. B) The relationship between the agent and the seller ends automatically if the purchaser submits an offer. C) The agent should have disclosed this information, regardless of its accuracy. D) The agent has not violated any agency responsibilities to the seller.

The broker has violated the agency relationship with the seller.

A seller, anxious to sell, listed a home for $190,000 and signed an agency agreement with a broker who then told a buyer to submit a low offer. The buyer offered $175,000 and the seller accepted. Which of the following statements is TRUE? A) Any broker is authorized to encourage such bids for the property. B) The broker has violated the agency relationship with the seller. C) The broker acted properly to obtain a quick offer on the property. D) The broker was unethical, but the seller did get to sell the property.

All of these

Agency relationships in real estate are regulated by which kind of law? A) Common law B) All of these C) Statutory law D) Administrative law

an offer made on the property

All of these will terminate an agency relationship EXCEPT A) the death of either party. B) the destruction of the property. C) an expiration of the agreement. D) an offer made on the property.

listing agreement

An agency relationship between a seller and a broker is usually created by a written employment contract called a A) listing agreement. B) implied agreement. C) disclosure agreement. D) buyer representation agreement.

an express agreement

An agreement that is specific in its terms and conditions is considered A) an express agreement. B) an implied agreement. C) an agency. D) a nonagency.

Required to disclose the information because it is a material fact important to the seller

Buyers hire an agent to help them purchase a home and want seller financing because they filed for bankruptcy two years ago. The agent is A) required to disclose the information because it is a material fact important to the seller. B) required to disclose the information under the Fair Credit Registry Act. C) not required to disclose the information because the seller might reject the offer. D) not required to disclose the information because the agent has no agency relationship with seller.

When, how and to whom agents must reveal for whom they provide client based services.

Every state has mandatory agency disclosure laws that stipulate A) restrictions on disclosure of confidential information. B) how a customer is differentiated from a client. C) when, how, and to whom agents must reveal for whom they provide client-based services. D) how an implied agency may occur.

mandatory agency disclosure

Every state now requires A) release of information regarding a transaction two years following closing. B) mandatory agency disclosure. C) all real estate licensees to be real estate brokers. D) all client information to be kept confidential forever.

A special agency

Generally, the relationship between real estate broker and seller is A) implied agency B) general agency C) special agency D) universal agency.

special

In MOST situations, the relationship between real estate broker and seller is what type of agency? A) Universal B) General C) Implied D) Special

both parties consent in writing to the dual agency

In a dual agency situation, if it is permitted by state law, a broker may represent both the seller and the buyer in the same transaction provided A) the broker informs either the buyer or the seller of this fact. B) both parties are represented by attorneys. C) the buyer and the seller are related by blood or marriage. D) both parties consent in writing to the dual agency.