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Chapter 1 Quiz
Terms in this set (33)
Which of the following statements INCORRECTLY describes a multiple representation relationship?
A:The firm owes both parties the duty of confidentiality.
B:All parties must consent in writing to a firm representing multiple parties in a transaction.
C:A firm must disclose multiple representation to all parties in writing.
D:The firm owes loyalty to the party who first signed an agency agreement with the firm.
The firm owes loyalty to the party who first signed an agency agreement with the firm.
Wis. Stat. § 452.134 If a firm's client in a multiple representation relationship does not consent to designated agency or withdraws consent to designated agency, the firm and any licensees associated with the firm may not place the interests of any client ahead of the interests of any other in the negotiations.
Which activity requires a real estate license?
A:A sheriff conducting a foreclosure sale
B:An individual negotiating the terms of another's business sale
C:An attorney representing a client in a real estate transaction
D:A loan officer completing a loan application
An individual negotiating the terms of another's business sale
Wis. Stat. § 452.01(3)(a)(b)(f)(h) A broker does not include 1) receivers, trustees, administrators, executors, guardians or other persons appointed by or acting under the judgment or order of any court; 2) public officers while performing their official duties; 3) attorneys licensed to practice in this state while acting within the scope of their attorney's license; 4) any lender when engaged in the transaction of business within the scope of its corporate powers as provided by law.
What must occur when a licensee terminates association with a firm?
A:The licensee must send termination paperwork to all former clients of the licensee.
B:The licensee must surrender the person's real estate license to the DSPS within 10 days of terminating association with firm.
C:The licensee must send termination paperwork to the licensee's firm 10 days before the date of termination.
D:The licensee must notify the DSPS in writing of the termination within 10 days.
The licensee must notify the DSPS in writing of the termination within 10 days.
Wis. Stat. § 452.30 A licensee that ceases to be associated with a firm shall, through the use of a form prescribed by the department, send written notice to the department within 10 days after the date on which the licensee ceases to be associated with the firm.
How does multiple representation with designated agency affect clients?
A:If both parties consent to designated agency in writing, each designated agent negotiates on behalf of the agent's client, even if negotiation places the interests of one client ahead of another.
B:If a client consents to designated agency, the firm and the firm's licensees must remain neutral.
C:After a client consents to designated agency, the client cannot withdraw consent unless the other client agrees because clients' agency choices must match.
D:If a client consents to designated agency, a licensee may place the firm's interest ahead of the client's.
If both parties consent to designated agency in writing, each designated agent negotiates on behalf of the agent's client, even if negotiation places the interests of one client ahead of another.
When both parties consent to designated agency, a firm assigns each party an agent who negotiates on behalf of the agent's client even if the negotiation places the interests of one of the firm's client's ahead of the other. If the clients do not consent to designated agency, the firm must remain neutral in the negotiation. A client can withdraw consent to designated agency at any time.
Which of the following statements INCORRECTLY describe a firm's supervision responsibilities?
A:The firm must ensure licensees associated with a firm are properly licensed.
B:The firm must provide reasonable review of all documents and records related to transactions.
C:The firm must provide licensees associated with a firm with a written statement of office procedures for handling transaction documents.
D:The firm cannot delegate supervision to a supervising broker.
The firm cannot delegate supervision to a supervising broker.
A firm's supervision responsibilities include reasonable review of all documents and records relating to transactions, ensuring all licensees associated with the firm are properly licensed, and providing all licensees associated with the firm a written statement of office procedures on handling transaction documents. A firm can delegate supervision responsibilities to a supervising broker.
When can a client waive the duty of negotiation?
A:Only if the firm agrees to reduce the commission on a transaction
B:The waiver is in writing and a firm provides mandatory disclosure of the effect of a waiver of the duty of negotiation
C:As long as the client waives it before a firm advertises a property
D:The client waives the duty fully and hires an attorney for settlement services
The waiver is in writing and a firm provides mandatory disclosure of the effect of a waiver of the duty of negotiation
A client can waive the duty of negotiation in full or in part. The written waiver must contain a copy of the text of the duty the client is waiving, a statement that the firm will not have a legal duty to negotiate, and a warning that the client may need to hire an attorney or other service provider because of the waiver.
What is a fiduciary?
A:A set of laws that describe the responsibilities and obligations of a person who acts for another
B:A person who starts an action that fulfills the goals of a principal
C:A set of principles that govern how a firm cooperates with other firms
D:A person who is responsible for the property of another
A person who is responsible for the property of another
A fiduciary is a person who is responsible for the property of another. Fiduciary duties are the set of laws that describe the responsibilities and obligations of a person who is a fiduciary for another.
What or who does the seller hire with an agency agreement?
A:The selling licensee
B:The listing licensee
C:The selling firm
D:The listing firm
The listing firm
The listing firm is the agent of the seller. The seller hires the firm with a listing contract. The listing firm engages licensees as the firm's agents.
A homeowner is selling a residential property without listing it to a buyer who is not working with a firm. What do the seller and the buyer need to do to fill out the state-approved offer to purchase?
A:One party needs to obtain a real estate license
B:The seller or the buyer must hire an attorney to complete the form
D:The seller or the buyer must hire a licensee to complete the form
Buyers and sellers can complete state-approved real estate forms without the assistance of a licensee or an attorney. Individual buyers and sellers do not need a real estate license to complete the forms or the transaction.
When can a firm collect compensation from both a buyer and a seller?
When can a firm collect compensation from both a buyer and a seller?
A:The firm holds a Wisconsin real estate license
B:The firm's client consents
D:The buyer and the seller are related
The firm's client consents
Wis. Admin. Code REEB § 24.05(1) A licensee acting as an agent in a real estate or business opportunity transaction may not accept any fee or compensation related to the transaction from any person, other than the licensee's client, principal firm, or firm the licensee is associated with without prior written consent from all parties to the transaction.
Which agreement gives a buyer the right to acquire a property at a fixed price for a period of time?
B:An offer to purchase
C:An option to purchase
An option to purchase
An option to purchase is an agreement between a buyer and a seller where the buyer has the right to purchase a property for a fixed period of time.
A firm operates a home staging company. The firm takes a listing for a seller and the firm wants to offer home staging services to the seller. Can a licensee associated with the firm contact the seller and offer home staging services?
A:No, it is an illegal tie-in arrangement to offer a different service to a client seeking real estate services.
B:No, the firm must conduct real estate and home staging transactions from two separate offices and cannot mix business or contacts between the two operations.
C:Yes, the firm can offer home staging services to the seller as long as the firm discloses the firm's interest in the home staging business.
D:Yes, the firm can offer home staging services to the seller as long as the firm has an unlicensed personal assistant contact the seller and no licensee discusses home staging services.
Yes, the firm can offer home staging services to the seller as long as the firm discloses the firm's interest in the home staging business.
Wis. Admin. Code REEB § 24.05(1)(b) A licensee acting as an agent in a real estate or business opportunity transaction may not recommend or suggest to a party to the transaction the services of another individual or entity from which the licensee may receive compensation for a referral or in which the licensee has an interest, unless the licensee, prior to or at the time of referral, discloses to the party in writing the fact that he or she may receive compensation for the referral or that he or she has an interest in the individual or entity providing services.
Unlicensed individuals working in a real estate office may:
A:be paid on commission
B:be employed by licensed salespeople
C:show properties to buyers
D:conduct open houses
be employed by licensed salespeople
A licensee associated with a firm, prior to retaining an individual to serve as an unlicensed personal assistant, shall enter into a written agreement with the licensee's firm, setting forth the duties of the unlicensed personal assistant, the manner in which the unlicensed personal assistant will be compensated for his or her services, and the responsibilities of the licensee and the firm with respect to supervision of the unlicensed personal assistant's activities.
A listing firm lists a property. A buyer's firm successfully writes the offer on the property. How do you describe the firms?
B:Multiple representation firms
When two firms are engaged in a transaction, they are called cooperating firms.
A firm lists a property for a husband and wife for $157,000. The wife's employer transferred her position to another state and the couple needs to sell quickly. To assist the couple and entice some offers for the couple to consider, the listing licensee decides to tell a buyer that the couple will probably accept slightly below list price. The buyer wrote an offer that the sellers accepted. What did the licensee do?
A:Protected the sellers' interest by generating offers for the sellers to review
B:Fulfilled agency obligations under the contract by finding a buyer
C:Violated the duties to a client
D:Violated the duties to all parties in a transaction by not telling the buyer that the sellers needed to sell quickly
Violated the duties to a client
The licensee violated the duties to a client even though the licensee's action may have benefited the sellers by enticing buyers to submit offers. Unless the sellers authorized the licensee to reveal that they might take less than list price because they needed to sell quickly, the licensee violated the duty of confidentiality and loyalty.
A buyer executes an option to purchase with a seller. Which of the following statements is true?
A:The seller must sell if the buyer chooses to buy.
B:The buyer must purchase the property.
C:The buyer is the optionor.
D:The seller is the optionee.
The seller must sell if the buyer chooses to buy.
The seller (the optionor) must sell the property if the buyer (the optionee) chooses to purchase the property.
A builder owns several lots in a subdivision. The builder sells a lot contingent on the buyer's agreement to use the builder to construct a home on the lot. Can the builder do this?
A: No, it is an illegal tie-in arrangement that violates Wisconsin administrative rules.
B: Yes, it is a legal tie-in arrangement according to Wisconsin administrative rules.
C: No, it is an illegal tie-in arrangement that violates antitrust laws.
D: Yes, it is a legal tie-in arrangement as long as the builder offers a home warranty.
Yes, it is a legal tie-in arrangement according to Wisconsin administrative rules.
Wis. Admin. Code REEB § 24.075(3)(a) Licensees shall not condition the sale of vacant real estate owned by the licensee or whose sale is effectively controlled by the licensee upon the buyer's agreement to employ one or more specific builders to make improvements on the real estate unless the builder owns a bona fide interest in the real estate and there is full disclosure.
A licensee's son wants to list property with the licensee's firm. What are the licensee's ethical obligations?
A:The licensee can list it as long as the licensee notifies the DSPS of the relationship.
B: The licensee must disclose the relationship between the licensee and the seller.
C:The licensee must refuse to list the property because of the potential conflict of interest.
D:The licensee can list it as long as the licensee does not accept a commission when the property sells.
The licensee must disclose the relationship between the licensee and the seller.
The licensee can list it as long as the licensee discloses the relationship to the parties. Wis. Admin. Code REEB § 24.05(2) A licensee acting as an agent in a real estate or business opportunity transaction may not act in the transaction on the licensee's own behalf, on behalf of the licensee's firm, on behalf of any member of the licensee's immediate family or any combination of members of the licensee's immediate family, or on behalf of any other organization or business entity in which the licensee has an interest without the prior written consent of all parties to the transaction. For the purpose of this subsection, a licensee shall obtain the written consent in the offer to purchase, option, lease or other transaction contract.
What must a licensee do for the licensee's client?
A:Fulfill all seller requests and put the seller's interest ahead of all other parties
B:Disclose confidential information if it is beneficial to the client
C:Refuse to present offers unless the seller will net sufficient proceeds on the sale
D:Fulfill the requirements of the agency agreement
Fulfill the requirements of the agency agreement
The licensee must fulfill the requirements of the agency agreements. The licensee cannot refuse to present offers based on the licensee opinion of the offer. A licensee cannot disclose confidential information even if it would be beneficial to the licensee's client. A licensee should fulfill a client's requests, except in the case of unlawful requests or where fulfilling the request requires the licensee to engage in unlawful conduct, such as housing discrimination. The licensee cannot put the seller's interests ahead of all other parties in the transaction because if a duty to the client conflicts with a duty to all parties, the licensee must comply with the duties to all parties.
A licensee wants to write an offer on a property listed with the licensee's firm. What duty to the client is the licensee in danger of violating?
If a licensee tried to purchase a property listed with the licensee's firm, the licensee's own interests are competing with the interests of the seller, which would prevent the licensee from placing the seller's interests ahead of the licensee's interests. This violates the licensee's duty of loyalty to the seller.
What should a salesperson do if the DSPS suspends the licensee's firm's license?
A:Amend all agency agreements to remove the firm's name and replace it with the licensee's name
B:Conclude all transactions within the 10-day grace period
C:Notify all buyers and sellers before the two-week conclusion period
D:Stop participating in any real estate transactions
Stop participating in any real estate transactions
A salesperson can only practice real estate when associated with a firm and under the supervision of a supervising broker. There is no grace period and if the salesperson is no longer associated with a firm, the salesperson must stop participating in all real estate transactions.
How long does a salesperson have to close transactions if the salesperson is no longer associated with a firm?
A:10 days from the date the salesperson sends a notice to the DSPS
B:The DSPS will notify the salesperson of the grace period for closing transactions
D:A salesperson cannot practice real estate unless associated with a firm
A salesperson cannot practice real estate unless associated with a firm
If a salesperson is no longer associated with a firm, the salesperson must stop practicing real estate until associated with another firm. There is no grace period during which a salesperson can conclude transactions, even if the salesperson is without fault in the situation.
Which of the following statements is true of a licensee's agency disclosure duties?
A:The licensee must provide agency disclosure before giving information about a property to a buyer.
B:The licensee does not have to provide agency disclosure in non-residential transactions.
C:The licensee must provide agency disclosure and request acknowledgment from the recipient of the disclosure when listing a single-family home.
D:A licensee only needs to provide agency disclosure to customers.
The licensee must provide agency disclosure and request acknowledgment from the recipient of the disclosure when listing a single-family home.
A licensee must provide agency disclosure in all real estate transactions. For a client, the licensee must provide it when entering into the agency contract and for customers, the licensee must provide it prior to negotiations. Just providing a customer with information about a property is not negotiations. A licensee only has to ask for acknowledgement of receipt of agency disclosure in transactions involving residential properties with one-to-four dwellings units.
To whom does a licensee owe the duties of providing brokerage services fairly and honestly, providing accurate market conditions, safeguarding trust funds, using reasonable skill and care, disclosure of all material adverse facts, confidentiality, and objectively presenting offers?
A:All parties to the transaction
C:The selling firm
All parties to the transaction
Wis. Stat. § 452.133(1) A firm providing brokerage services to a party to a transaction owes all of the following duties to the party:
(a) The duty to provide brokerage services honestly and fairly.
(b) The duty to provide brokerage services with reasonable skill and care.
(c) The duty to timely disclose in writing all material adverse facts that the firm knows and that the party does not know or cannot discover through reasonably vigilant observation, unless the disclosure of a material adverse fact is prohibited by law.
(d) The duty to keep confidential any information given to the firm in confidence, or any information obtained by the firm that the firm knows a reasonable person would want to be kept confidential, unless the information must be disclosed by law or the person whose interests may be adversely affected by the disclosure specifically authorizes the disclosure of particular information. The firm shall continue to keep the information confidential after the transaction is complete and after the firm is no longer providing brokerage services to the party.
(e) The duty to provide accurate information about market conditions that affect the transaction, within a reasonable time after a request for such information by the party, unless disclosure of the information is prohibited by law.
(f) The duty to safeguard trust funds and other property held as required by rules promulgated under s. 452.13 (5).
(g) When the firm is negotiating on behalf of a party, the duty to present contract proposals in an objective and unbiased manner and disclose the advantages and disadvantages of the proposals.
When must a licensee inform a client about multiple representation relationships?
A:Before commission is paid
B:When presenting the closing statement
D:Prior to or at the time of entering into the agency agreement
Prior to or at the time of entering into the agency agreement
A firm must disclose agency to clients prior to or at the time of entering into an agency agreement. A client chooses whether to consent to multiple representation relationships when executing an agency agreement. A firm must provide agency disclosure to customers before negotiations.
Who is NOT acting as a licensee?
B:An unlicensed personal assistant who holds a valid real estate license
D:A property manager who signs leases on behalf of the landlord
An unlicensed personal assistant who holds a valid real estate license
A firm can hire a person who holds a real estate license to do unlicensed work for the firm. In this case, the person is functioning as an unlicensed personal assistant even though the person holds a real estate license.
Which of the following statements is true of multiple representation relationships with designated agency?
A:One party cannot withdraw consent to designated agency unless the other party also withdraws consent.
B:Both the buyer and the seller may be represented by the same salesperson.
C:Both the buyer and the seller are customers of the same firm in the same transaction.
D:Clients that select designated agency must consent in writing.
Clients that select designated agency must consent in writing.
When a buyer and a seller are clients of the same firm in the same transaction, the firm is representing multiple parties and the parties must consent in writing. Because they have agency agreements, the buyer and the seller are not customers and because they chose designated agency, the firm must assign an agent for each party. Either party can withdraw consent to multiple representation with or without designated agency at any time.
Which of the following describes the relationship when a seller lists a property with a firm?
A:The firm is the selling firm
B:The seller is the firm's customer
C:The seller is a fiduciary of the firm
D:The seller is the firm's client
The seller is the firm's client
The listing contract is an agency agreement, making the seller the firm's client.
What is a licensee's deadline for providing agency disclosure to a client?
B:Before negotiating on the client's behalf
C:Before or at the time of entering into an agency agreement with the client
D:Before writing the offer
Before or at the time of entering into an agency agreement with the client
A licensee must provide agency disclosure to a client before or at the time of entering into an agency agreement with the client.
A seller executes a listing contract with a licensee for the listing firm. Which of the following statements INCORRECTLY describes the parties' relationship?
A:If the listing licensee dies, the agency agreement terminates.
B:The listing licensee and the listing firm owe fiduciary duties to the seller.
C:The listing firm is the seller's agent.
D:The listing licensee is the firm's agent.
If the listing licensee dies, the agency agreement terminates.
The agency relationship is between the firm and the client so the unfortunate death of the listing licensee does not change the agency relationship between the firm and the seller.
Which activity can an unlicensed personal assistant NOT do?
A:Create marketing pieces for the licensee's listings
B:Complete an approved form at the direction of the licensee
C:Conduct an open house with a licensee present
D:Negotiate an offer on behalf of a licensee's buyer
Negotiate an offer on behalf of a licensee's buyer
Wis. Stat. § 452.34 states that an unlicensed personal assistant can perform clerical duties on behalf of a salesperson including creating marketing pieces and filling in the blanks on an approved form. An unlicensed personal assistance could not conduct an open house unless a licensed person supervises the event and could not negotiate an offer on a buyer's behalf.
When can a licensee draft an offer for a family member?
B:The licensee discloses the relationship and the buyer and the seller consent
C:The licensee refuses to sign a buyer agency agreement with the buyer
D:The licensee does not disclose it
The licensee discloses the relationship and the buyer and the seller consent
Representing family members in a real estate transaction is permitted as long as there is consent and disclosure to all parties.
What is presumptive evidence of a pattern of sales?
A:10 sales in one year or five sales in five years
B:Five sales in one year or 10 sales in five years
C:10 sales in five years or one sale in 10 years
D:Five sales in five years or 10 sales in 10 years
Five sales in one year or 10 sales in five years
Wis. Stat. § 452.01(2)(b) A broker is engaged wholly or in part in the business of selling or exchanging interests or estates in real estate or business, including businesses' goodwill, inventory, or fixtures, whether or not the business includes real property, to the extent that a pattern of sales or exchanges is established, whether or not the person owns the real estate or business. Five sales in one year or 10 sales in five years is presumptive evidence of a pattern of sales or exchanges.
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