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Unit 9 Quiz

Terms in this set (20)

In a real estate transaction, the term fiduciary typically refers to
A. The sale of real property
B. The people who give someone else the legal power to act on their behalf
C. The person who has legal power to act on behalf of another
D. The agent's relationship to the principal
D. The agent's relationship to the principal
The relationship between real estate broker and seller is generally what type of agency?
A. Special
B. General
C. Implied
D. Universal
A. Special
Which statement is TRUE of a real estate broker acting as the agent of the seller?
A. The broker is obligated to render loyalty to the seller
B. The broker can disclose confidential information about the seller to a buyer if it increases the likelihood of a sale
C. The broker can agree to a change in price without the seller's approval
D. The broker can accept a commission from the buyer without the seller's approval
A. The broker is obligated to render loyalty to the seller
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. Both the seller and the potential buyer are the broker's customers
B. The seller is the broker's client; the buyer is a customer
C. The broker owes fiduciary duties to both seller and buyer
D. If the buyer later asks for buyer representation by the broker's firm, it will not be possible because the firm's earlier agreement with the seller.
B. The seller is the broker's client; the buyer is a customer
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. The buyer and the seller are related by blood or marriage
C. Both parties consent in writing to the dual agency
D. Both parties are represented by attorneys
C. Both parties consent in writing to the dual agency
Which events 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 declares personal bankruptcy
C. The owner abandons the property
D. The broker appoints other brokers to help sell the property
B. The owner declares personal bankruptcy
Designated agency is MOST likely to occur when
A. There is a client-buyer and a customer-seller
B. The seller and the buyer are represented by different companies
C. Both the buyer and the seller are customers
D. The buyer and the seller are represented by the same company
D. The buyer and the seller are represented by the same company
A real estate broker hired by an owner to sell a parcel of real estate must comply with
A. The common law of agency in the state in which the property owner lives
B. A prospective buyer's instructions
C. The concept of caveat emptor
D. All lawful instructions of the owner
D. All lawful instructions of the owner
Which of the following is NOT a valid reason to terminate an agency relationship?
A. The agent found a home for a buyer to purchase, and the sale closed
B. The property was condemned
C. The buyer wanted to work with a new agent, but the terms of agency had not yet expired and the current agent did not agree to terminate
D. The buyer went bankrupt
C. The buyer wanted to work with a new agent, but the terms of agency had not yet expired and the current agent did not agree to terminate
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 and seller will accept up to $5,000 less than the list price. Which is TRUE?
A. The agent has not violated any agency responsibilities to the seller
B. The agent should have disclosed this information, regardless of its accuracy
C. Disclosure was improper and possibility illegal, regardless of the agent's motive
D. The relationship between the agent and the seller ends automatically if the purchaser submits an offer
C. Disclosure was improper and possibility illegal, regardless of the agent's motive
A buyer who is a client of the broker wants to purchase a house that the broker has listed. Which statement is TRUE?
A. The broker may proceed to write an offer on the property and submit it
B. The broker should refer the buyer to another broker to negotiate the sale
C. The seller and the buyer must be informed of the situation and agree in writing to the broker's representing both of them
D. The buyer should not have been shown a house listed by the broker
C. The seller and the buyer must be informed of the situation and agree in writing to the broker's representing both of them
What does the phrase the law of agency is a common law doctrine mean?
A. It is a legal doctrine that is not unusual
B. It is one of the rules enacted by legislatures and other governing bodies
C. It is part of a body of law established by tradition and court decisions
D. It may not be superseded by statutory law
C. It is part of a body of law established by tradition and court decisions
A broker helps a buyer and a seller with paperwork but does not represent either party. This relationship is
A. Duel agency
B. Prohibited in any states because a broker must always represent one party
C. A transactional brokerage
D. A designated agency
C. A transactional brokerage
A real estate associate represents a buyer. At their first meeting, the buyer reveals plans to operate a doggrooming business out of the purchased house. The sales associate did not check the local zoning ordinances to determine in which parts of town such a business could be conducted. Which common law duty did the sales associate violate?
A. Care
B. Obedience
C. Loyalty
D. Disclosure
A. Care
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 negligent misrepresentation
C. The broker is guilty intentional misrepresentation
D. The broker is merely puffing
D. The broker is merely puffing
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. Care
B. Disclosure
C. Obedience
D. Accounting
B. Disclosure
Which of the following is considered dual agency?
A. A broker acting for both parties in the same transaction
B. Two brokerage companies cooperating with each other
C. A broker representing more than one principal
D. A broker listing a property and then, after it is relisted with another broker, selling the same property
A. A broker acting for both parties in the same transaction
The relationship of broker to client in an agency relationship is that of
A. A trustee
B. A subagent
C. A fiduciary
D. An attorney-in-fact
C. A fiduciary
A real estate broker acting as the agent of the seller
A. Must promote and safeguard the seller's best interests
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. Must promote and safeguard the seller's best interests
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 in writing to the dual representation
D. Both parties have been informed and agree in writing to the dual representation
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