Welcome to Section 4, Unit 5: Agent Duties in Georgia
Why is errors and omissions insurance recommended for real estate licensees? Select three valid reasons. Real estate transactions are becoming more complex. Litigation is rising. E&O insurance helps manage risk. E&O insurance provides coverage for all situations.
Real estate transactions are becoming more complex. Litigation is rising. E&O insurance helps manage risk.
Which type of coverage does errors and omissions insurance provide? Coverage for all situations Coverage for bodily injury on a property Coverage for deliberate mistakes Coverage for licensees who make inadvertent mistakes
Coverage for licensees who make inadvertent mistakes
A broker can legally perform ministerial duties for which group of people? Select all that apply. Third parties Clients Other brokers
That's right! Ministerial duties can be performed for any parties if requested or required. ALL 3 answers
true or false Brokers are legally liable for any false information given to parties to the transaction.
false
true or false The broker isn't required to be loyal to the client.
false
true or false? All E&O insurance covers real estate commission claims.
false
true or false? E&O insurance provides coverage for all risks inherent in real estate activities.
false
Fiduciary Duty Not a Fiduciary Duty Which of these duties do agents owe their clients? accounting
fiduciary
Fiduciary Duty Not a Fiduciary Duty Which of these duties do agents owe their clients? obedience
fiduciary duty
Fiduciary Duty Not a Fiduciary Duty Which of these duties do agents owe their clients? confidentiality
fiduciary duty
Fiduciary Duty Not a Fiduciary Duty Which of these duties do agents owe their clients? disclosure
fiduciary duty
Fiduciary Duty Not a Fiduciary Duty Which of these duties do agents owe their clients? loyalty
fiduciary duty
covered or not covered? Which of the situations would likely be covered by errors and omissions insurance? A broker is sued because she failed to disclose that she knew about the presence of lead paint in her listing.
(E&O insurance usually doesn't cover bodily injury or intentional fraud.) not covered
covered or not covered? Which of the situations would likely be covered by errors and omissions insurance? A visitor to an open house sues after a fall on an icy sidewalk.
(E&O insurance usually doesn't cover bodily injury or intentional fraud.) not covered
Which entity sells errors and omissions insurance to licensed real estate professionals and brokers? State real estate commissions Commercial insurers Large brokerages State or federal government
(Hint: Government and quasi-governmental agencies don't sell E&O insurance.) Commercial insurance companies sell E&O insurance.
Brokers are required to disclose adverse neighborhood conditions if they know about them. Which of the following statements about neighborhood disclosures is true? The disclosure requirement applies only to a one-mile radius. Disclosure of neighborhood issues that can be found on websites, such as municipal zoning changes and state sex offender registries, is required. Brokers must disclose all adverse conditions in a neighborhood; not knowing about an issue is not a valid excuse.Submit
(That's right! A "neighborhood" only covers a one-mile radius from the property.) The disclosure requirement applies only to a one-mile radius.
Linda is checking the MLS to find Jeff a home. There's no express agreement stating that Linda represents Jeff. Linda sees an interesting house and calls Juan, the broker at another brokerage, about his listing. Before showing the property to Jeff, Linda discloses to Jeff that, as the seller's sub-agent, she represents the seller's interests in this transaction, and that Jeff should not tell her anything that he wouldn't want the seller to know. Jeff agrees. Linda shows Jeff the property and helps him submit an offer to Juan. Is Linda a dual agent? Yes No
(Way to go! Linda disclosed to the buyer that she was the seller's sub-agent, so it's clear she's not representing the buyer and isn't a dual agent.) NO
What two things does the law say about brokers giving false information to parties to a real estate transaction? Brokers shouldn't knowingly give false information. Brokers are responsible for all false information Brokers are not responsible for false information they didn't know was false.
Brokers are not responsible for false information they didn't know was false. and Brokers shouldn't knowingly give false information. (Brokers are only responsible for knowingly giving false information)
Broker Adeline's firm has a listing for a condo downtown. Maurice is a cooperating agent. What does this mean? He doesn't mind working with other brokers. He's from another brokerage and brings a potential buyer for the listing. He's the listing agent for the condo and also represents a buyer interested in the condo. He works at Adeline's firm and is helping to market the condo listing.
He's from another brokerage and brings a potential buyer for the listing.
Which of the following duties are owed to customers and other parties to a real estate transaction? Fairness and loyalty Honesty and fairness Honesty and obedience Obedience and loyalty
Honesty and fairness
What can be said about a fiduciary relationship in Georgia? It's illegal. It's compulsory. It's separately determined.I t's automatic
It's separately determined. Yes. A fiduciary relationship is outside the brokerage engagement and must be agreed to separately.
Suppose you represent the seller. Which four of the following duties are owed to other parties in the transaction? Make clear whom you represent. Disclose all material facts. Advise buyers to have title abstract examined. Behave honestly and fairly. Be loyal. Provide signed copies of documents.
Make clear whom you represent. Disclose all material facts. Behave honestly and fairly. Provide signed copies of documents.
A house inspection didn't mention the roof leak that your seller client told you about. What do you do? Make sure the roof leak is disclosed to all parties. Maintain client confidentiality about the roof leak. Pay for a new inspection.
Make sure the roof leak is disclosed to all parties.
Zeke represents a seller and receives an offer through another agent. The offer is higher than the listing price. The property is already listed at a very high price, and no other offers have been received. Is Zack obligated by his duties to the other party to disclose that the offer is too high? No, but Zeke should honor his duty to all parties by asking his client to decline the offer. No, his duty is to his own client. The buyer's agent must be responsible for advising on a fair price for the property. Yes, Zack must be honest and fair with all parties in the transaction. Zack can request that both parties consent to dual agency so that he can negotiate an honest price that will be fair to all.
No, his duty is to his own client. The buyer's agent must be responsible for advising on a fair price for the property.
When working an open house for one of her listings, Keira meets a young couple. They're not looking to purchase anything right now, but are trying to get a sense for how much house their money will buy in different areas of town. Keira tells them about a few listings she knows about and the listing prices compared to house size and amenities. They also ask about financing a new home and what's the best way to save money for a down payment when they have other debt and how much they should save. She tells them they should have about 20% of the sale price saved for a down payment and that other debt will factor into the ability to obtain financing, so they should pay off anything they can. She also tells them that fixed rate mortgages are better than adjustable rate mortgages. Was Keira's discussion with the couple within the scope of her expertise?
No. She should not have given the couple advice related to specific mortgage types.
What acronym can be used to remember an agent's fiduciary duties? CARE OF DUE CARE FAR GONE OLD CAR
OLD CAR
Why is errors and omissions insurance recommended for real estate licensees? Select three valid reasons. Real estate transactions are becoming more complex. Litigation is rising. E&O insurance helps manage risk. E&O insurance provides coverage for all situations.
Real estate transactions are becoming more complex. Litigation is rising. E&O insurance helps manage risk. (Hint: E&O insurance provides coverage for many situations, but not all.)
Susie is a licensee accompanying her buyer client, Jeff, to an open house. The seller's agent approaches her and introduces herself. "Hi, I'm Helen, the listing broker, representing Elite Realty." Susie shakes her hand and says, "Hello there. I'm Susie. Great house! I was just talking to Jeff here about all that great closet space. And that backyard is to die for! Jeff has three dogs, so he's very excited about that." What, if anything, has Susie done wrong? She has complimented the house She has identified Jeff as a potential buyer. She has not identified herself as the buyer's agent. She has told the seller's agent that Jeff has dogs and likes the backyard.
She has not identified herself as the buyer's agent.
Let's say that you're the Smiths' listing broker. A potential buyer approaches you at the open house and asks the following questions. Assuming that you know the answer to each question, indicate whether you can answer each one without breaching your duties to your client. Has this house been on the market very long? Did that other couple that was here make an offer? Will the seller come down on price? How motivated are the sellers? Why is the house for sale? If we pay cash, will the seller drop the price 10%?
The only question you can answer without compromising the seller's negotiating power or revealing confidential information is how long the house has been on the market. That's publicly available information. 1. yes 2. no 3. no 4. no 5. no 6. no
A legal fiduciary relationship can occur in Georgia if ________. The broker would like there to be one. The parties agree to it in writing. The broker gets court approval
The parties agree to it in writing.
Many E&O insurance policies have ownership exclusions. What does that mean? If the insured individual owns the property, it cannot be excluded from coverage. If the insured individual's spouse owns the property, it cannot be excluded from coverage. The policy covers all exposures. The policy doesn't cover claims related to property that the insured or a related party owns or has a financial interest in.
The policy doesn't cover claims related to property that the insured or a related party owns or has a financial interest in.
Why did Georgia decide to limit a real estate licensee's fiduciary duties? Carrying out fiduciary duties is expensive, and the state wants to curtail costs. Fiduciary duties require skill and ability, and real estate licensees don't have skill or ability. The state wants to protect licensees from being held to an unreasonable standard. Fiduciary duties involve client services that could be considered illegal or unethical.
The state wants to protect licensees from being held to an unreasonable standard. (Yes. Fiduciary duties require extraordinary skill and knowledge, and the state wants to protect licensees from having to meet an unreasonable standard.)
In a real estate transaction in which you represent the seller, your duty to other parties is to ______. Be honest in all matters that do not affect your client's interests Be polite and courteous Maintain the confidentiality of all matters that other parties disclose to you Treat them honestly and fairly
Treat them honestly and fairly
Keira's sellers have decided to list their home at $300,000. They say they don't have much wiggle room on the price and ask to not even be bothered with an offer less than $290,000. After a few weeks on the market, an offer comes in at $280,000. Keira thinks for a minute about what to do, then calls the buyer's agent back to tell him that his clients need to bring the offer up; the listing price is $300,000. Did Keira break any fiduciary duties? No, she obeyed the client's request not to present offers less than $290,000. No. She did not divulge confidential information that the sellers are willing to accept $290,000. Yes. She must present every offer to the client, regardless of their instructions, and she did not. Yes. She negotiated on the seller's behalf by telling the buyer's agent to bring the offer up.
Yes. She must present every offer to the client, regardless of their instructions, and she did not. (You got it! All offers, whether too low or too late, must be submitted. In this situation, Keira should explain to the clients ahead of time that she has an obligation to present any and all offers. As her sponsoring broker, you need to ensure Keira is fulfilling her fiduciary duties and staying within real estate law.)
One of Keira's buyer clients writes an earnest money check. She follows proper procedures for handling it, demonstrating (BLANK) . disclosure obedience accounting
accounting
It's important to know what cooperating brokers are, because you'll be working with them all of the time. Review the resource to learn about cooperating brokers and then determine which of the following scenarios involves them. You're holding an open house for a home located on Iroquois Avenue near downtown. While there, you meet a couple of real estate agents from another firm who have an interested buyer.
cooperating broker
cooperating broker or not a cooperating broker? You just received a call from Stephanie. She doesn't work at your agency, but you run in similar circles, so you frequently bump into one another. She has a listing on Handover Avenue that may work for one of your buyers.
cooperating broker
cooperating broker or not a cooperating broker? You've been seeing a lot of interest in your listing for ABC Realty on Champaign Road. This afternoon, Adam from Hastings Real Estate is showing the property to a young couple he mentioned to you last week.
cooperating broker
covered or not covered? Which of the situations would likely be covered by errors and omissions insurance? A buyer claims his broker was negligent because she failed to successfully negotiate for a property during a bidding war.
covered
covered or not covered? Which of the situations would likely be covered by errors and omissions insurance? A seller sues an agent after her property sells well below asking price.
covered
Keira's seller clients would prefer not to mention to any prospects that they sometimes get water in their basement because it only happens when the rain is very heavy for prolonged periods of times. By advising her clients to notify prospective buyers about the water issue, Keira is demonstrating the duty of (BLANK)
disclosure
Of the fiduciary duties an agent owes to a client, which one was left out of the following string: loyalty, care, obedience, confidentiality, accounting? Disclosure Disobedience Lawfulness Skill
disclosure
Performs ministerial acts as needed by tenants. Landlord's broker Seller's broker Tenant's broker Buyer's broker
landlord's broker
`Which fiduciary duty requires agents to put their client's interests ahead of all others? Confidentiality Disclosure Loyalty Reasonable skill and care This is a description of the fiduciary duty of loyalty
loyalty
Errors and omissions insurance is an important way to do what? Increase commissions Manage cash flow Manage risk Prevent risk
manage risk
cooperating broker or not a cooperating broker? You have a new listing on Cleveland Street. Bradley, a fellow agent at your brokerage, has a potential buyer and schedules a time to show the property.
not a cooperating broker
Fiduciary Duty Not a Fiduciary Duty Which of these duties do agents owe their clients? right to profit
not a fiduciary duty
Keira's clients are only open to showing their property weekday evenings from 5 to 7 p.m. and weekends from noon to 7 p.m. She advises them that this may limit the number of showings, but they insist. Keira demonstrates the duty of (BLANK) by complying. disclosure obedience accounting
obedience
Presents all offers to and from the seller. Landlord's broker Seller's broker Tenant's broker Buyer's broker
seller's broker
Seeks a rental property with acceptable terms and price. Landlord's broker Seller's broker Tenant's broker Buyer's broker
tenant's broker
Who does a licensee who's cooperating with the listing agent represent? The brokerage The buyer The buyer and the seller The seller
the seller
The duties required in a brokerage engagement are outlined in the Brokerage Relationships in Real Estate Transactions Act. Which of the following statements about those duties are true? true or false The law outlines broker duties to buyers, sellers, landlords, and tenants.
true
true or false The client relationship isn't fiduciary unless the parties agree that it is.
true
true or false Fiduciary duties are owed to the client in a generic, not broad, sense.
true
true or false? All real estate licensees should have an E&O policy in place.
true
true or false? E&O insurance is a good way to minimize risks inherent in the practice of real estate.
true
true or false? Some E&O policies have personal interest and ownership exclusions.
true
