Agency Relationship & Broker Responsibilities Flashcards
1
Q
the legal relationship resulting from an agreement that the agent is authorized by a
principal to perform certain acts on behalf of the principal in dealing with a third party.
The fiduciary relationship between the principal and the agent in which the agent represents the
principal in a transaction.
A
Agency
2
Q
one who engages the professional advice and services of a licensee as his agent. the principal in a real estate transaction who is being represented by an agent.
A
Client
3
Q
a person who is not being represented by a licensee but for whom the licensee is
performing ministerial acts. the third party, that is, the party in the transaction whom the agent does not represent. May be represented by a separate agent.
A
Customer
4
Q
acts that a licensee may perform for a
person that are informative in nature.
A
Ministerial acts
5
Q
Responding to phone inquiries by persons as to the availability and pricing of brokerage services.
Responding to phone inquiries from a person concerning the price or location of property.
Conducting an open house and responding to questions about the property from a person.
Setting an appointment to view property.
Responding to questions from persons walking into a licensee’s office concerning brokerage services
offered or particular properties.
Accompanying an appraiser, inspector, contractor, or similar third party on a visit to a property.
Describing a property or the property’s condition in response to a person’s inquiry.
Completing business or factual information for a person represented by another licensee on an offer
or contract to purchase.
Showing a person through a property being sold by an owner on his or her own behalf.
Referral to another broker or service provider.
A
Examples of Ministerial Acts
6
Q
the individual who is authorized and consents to represents the interests of another person. The
sales associate is a representative of the sponsoring broker. The broker shares the responsibility to the
client with the sales agent.
A
Agent
7
Q
the agent of an agent. The agent is the subagent of the broker. A selling agent may be a
subagent of the listing broker.
A
Subagent
8
Q
the party who hires the agent, normally the buyer or the seller or the landlord or tenant. Person delegates to the agent the responsibility of representing the person’s interests.
A
Principal
9
Q
The fiduciary relationship between the principal and the agent in which the agent represents the principal in a transaction.
A
Agency
10
Q
The principal in a real estate transaction who is being represented by an agent.
A
Client
11
Q
The third party, that is, the party in the transaction whom the agent does not represent. The _________ may be represented by a separate agent.
A
Customer
12
Q
the broker who finds the buyer
A
Co-operating Broker
13
Q
someone who assists the buyer and seller, or landlord and tenant, in a transaction without
representing either party, also known as a facilitator. What a broker is sometimes considered a when
assisting a customer.
A
Nonagent
14
Q
The agent represents only one of the parties to a transaction. The agent gives advice to
the client and owes fiduciary duties to the client only.
A
Single Agency
15
Q
An agent works ____ a client giving ________, and _______ a customer giving only _____________________.
A
FOR
ADVICE
WITH
INFORMATION
16
Q
The relationship between agent and principal is governed by a body of laws and customs known as the ___ of ______. Legally, agency is said to exist whenever a principal contracts with an agent to act on his behalf. There are three types of agency
A
THE LAW OF AGENCY
17
Q
authorizes an agent to handle matters of all types for the principal. This type of
agency requires a power of attorney. A court appointed guardian would be an example.
A
Universal Agency
18
Q
authorizes an agent to transact a broad range of matters concerning a specific area of business for the principal, for example, managing several investment rental properties. A property manager is an example.
A
General Agency
19
Q
authorizes an agent to perform a specific act or to handle a specific business matter
for the principal, for example, finding a buyer for a specific piece of property. What a real estate broker is usually. Does not have the power to bind the principal to a contract.
A
Special Agency
20
Q
based on a formal agreement between the parties in which the parties express (either written or oral) the establishment of an agency and state the terms and conditions, for example, a listing agreement. A listing agreement is an express agreement between a real estate broker and a seller in which the seller hires the broker to find a buyer/tenant for his property.
A
Express Agency
21
Q
An express agency relationship can also be created between a broker and a buyer and is known as a _____ ______________ _________.
A
Buyer Representation Agreement
22
Q
occurs when the parties act in such a way as to indicate that they have agreed to an
agency. Also occurs when the parties behave as though there is an agency agreement.
Agency can be created inadvertently or accidentally, without intention, by the parties’ actions. The
licensee may be held liable for his or her actions if it can be shown that an agency existed. The licensee may also be denied compensation because there was no written agreement as required by law.
A
Implied Agency
23
Q
To not be held liable due to implied agency and comply with law the licensee must have all parties sign and date this form.
A
Agency Disclosure Informational Pamphlet or Agency Disclosure Form
24
Q
The principal-agent relationship is a ________ ____________, that is, a relationship based on trust and confidence. Can also be formed by the principal giving power of attorney to the
agent.
A
Fiduciary Relationship
25
_____ __ ________ is a document that gives another person the power to act on one's behalf.
Power of attorney
26
The person to whom power of attorney is given is called an ________-__-____.
Attorney-in-fact
27
The broker obeys all the legitimate instructions of the principal, for example, when he may show the property. The agent must represent the client in good faith to the best of his abilities at all times.
However, the agent may NOT obey the client when the instructions are illegal or unethical.
Example of breach: If your seller client asked for no open house, you would breach that duty if you went ahead and advertised an open house.
Obedience
28
The broker is faithful to his principal and works for no other interested party without the principal's knowledge or permission. The agent must put the client’s interests above his own and must be careful to avoid situations that might involve a conflict of interest.
For example, Broker Jones has listed Smith's property. A third party offers Broker Jones $1,000 to persuade Smith to lower his price by $3,000. If Broker Jones accepts this offer without the informed
consent of Smith, he is in violation of the fiduciary relationship.
Example of breach: If your seller client set a price below market value and you bought it at that price rather than advising him to raise the price, you would be disloyal.
Loyalty
29
The agent must disclose any relevant information to the client that might affect the transaction. The duty of disclosure involves disclosure of material facts as well as non-material information. The seller’s agent is required by law to disclose any material defects in the property even though such disclosure may seem to violate the duty of loyalty to the client. Any information obtained by the seller’s agent as to the buyer’s ability to qualify for the loan or complete the sale should be disclosed to the seller by the seller’s agent
Disclosure
30
The agent is bound to keep any personal information which the client discloses to him confidential, for example, that the client is getting a divorce and must sell quickly. Even if the agency relationship is terminated, the fiduciary duty is never terminated and extends beyond the agency relationship.
Confidential information can only be disclosed to others if:
The client permits the disclosure by word or conduct.
The disclosure is required by law or would reveal serious defect.
The information becomes public from a source other than the licensee.
Example of breach: If a seller client confides to you that he is desperate to sell because he is
getting a divorce and being transferred, you would breach that confidence by sharing it with anyone.
Confidentiality
31
The broker is strictly accountable for any of the principal's assets coming into his hands and must take care to handle them responsibly. For example, using a client's deposit for personal
needs would be a violation. ____________ these funds with the broker’s personal or business funds is illegal. __________ is the practice of using commingled funds as the broker’s own money.
Example of breach: You receive a deposit from a client with a purchase offer. Rather than put it into an escrow account, you commingle it with the general operating funds of your real estate agency.
Accountability
Commingling
Conversion
32
The broker is always mindful of the principal's interests and concerns, for example,
acting to secure the highest possible price for his client's property.
Example of breach: As a seller’s agent you fail to ask a buyer’s mortgage ability and accept an
offer contingent upon obtaining a mortgage. Or, as a buyer’s agent you fail to look into the mortgage ability of a home for the offered price. The broker must notify the principal within a reasonable period of time of any information he may receive concerning his property or interests. For example, a client tells a broker that he wants to sell his house for $40,000. The broker knows that the house is really worth $60,000, but does not inform the client. The real estate business is a service industry, and emphasis
should be on service to the client and to the public.
Reasonable Care
33
Duties Owed to the Customer: The duties owed to the customer, the person you do not represent, by the agent are those of _______ and ____________.
Honesty
Truthfulness
34
An ______ _______ ____ __ ________ is an agency relationship in which the agent is given an interest in the subject of the agency, such as the property being sold. An ______ _______ ____ __ ________ is a non-revocable agency. An ______ _______ ____ __ ________ cannot be revoked by the principal alone and is not terminated upon the death of the principal.
agency coupled with an interest
35
A __________ ______ is a person authorized by the broker to act as the agent of a specific principal. This agent is the only agent in the company who has fiduciary responsibilities to the principal. This makes other agents in the company free to act as agents for the other party in a transaction. Therefore, two
salespersons from the same company can represent different parties in the same transaction. However,
in this situation the broker may be considered a dual agent and disclosure is required. In Louisiana, if you
have the listing you represent the seller. If someone else sponsored by the same broker shows the house, they represent the buyer and does not constitute a dual agency. In Mississippi, it would be
considered dual agency.
designated agent
36
______ ______ is one in which the agent represents only one party in any single transaction, and only owes fiduciary duties to that party, whether it is the buyer or the seller.
Single Agency
37
______ __ _________: When a seller contracts with a broker to market the seller’s property, the broker becomes an agent of the seller and the seller is said to be the client or principal of the broker. A fiduciary relationship is established.
Seller as Principal
38
_____ __ _________: When a buyer contracts with a broker to find and purchase property, the buyer is the principal or client of the broker, and the broker is the agent of the buyer. The seller becomes the customer. There is a fiduciary relationship between the broker and the buyer.
Buyer as Principal
39
______/_____ ____________: An agency relationship also exists between the sponsoring broker and the sales associate. The associate is authorized to represent the broker in real estate transactions and owes
the same fiduciary duties to the broker as to the client. The broker is therefore a principal of the sales associate.
Broker/Agent Relationship
40
____________ are general agents of the broker, and therefore owe fiduciary duties to the broker. Because the broker is an agent of the principal, and the ___________ is an agent of the broker, & is considered a subagent of the principal. A co-operating broker may also be a subagent of a listing broker.
Salespersons
41
While the broker is an independent businessman, the salesperson is not. He works only under the supervision of a sponsoring broker, and only at those tasks to which he has been assigned. The salesperson may function either as an ________ or as an ___________ __________ of the broker. As an
employee, the salesperson may work on a commission basis or a salaried basis.
employee
independent contractor
42
In Louisiana, the law states that, unless there is a written agreement to the contrary, the agent represents the person he is with. An ______ __________ ________ must be signed by the client and the agent at the first substantive contact.
agency disclosure brochure
43
"___________ _______" means that point in any conversation where confidential information is solicited or received. This includes any specific financial qualifications of the consumer or the motives or objectives in which the consumer may divulge any confidential, personal, or financial information, which, if disclosed to the other party to the transaction, could harm the party's bargaining position. This includes any electronic contact, electronic mail, or any other form of electronic
transmission.)
Substantive Contact
44
__________ ______ means a contractual relationship between a broker and a client under which one or more licensees affiliated with the broker are designated as agents to a client.
Designated agency
45
____ ______ is the act of representing two principals to a transaction at the same time and requires equal loyalty to both.
Dual agency
46
Dual agency is a violation of a fiduciary relationship unless both buyer and seller are informed of the dual agency AND both agree to it __ _______.
in writing
47
___________ _____ ______: representing two principals to a transaction without the knowledge and consent of both. It is usually illegal & may occur unintentionally by either carelessness or misunderstanding. Giving the customer any specific advice on
how much to offer can lead him to believe that the agent is representing his interests and acting as his agent, thereby creating an implied agency.
Undisclosed dual agency
48
_________ ____ ______: Representing both the buyer and the seller in the same transaction with the informed consent of both. Disclosure minimizes the risk to the broker and alerts the clients to the
inherent dangers in dual representation. In a dual agency transaction the duties of disclosure and confidentiality may be limited or compromised.
Disclosed dual agency
49
_ ________ ____ ___ ________ confidential information that the licensees may know about either client, without permission.
the price or terms the seller or landlord will take other than the listing price, without permission of the seller or landlord. the price or terms the buyer or tenant is willing to accept without permission of the buyer or tenant.
A licensee must not disclose
50
The creation of agency is _________, either by a listing agreement or by power of attorney.
expressed
51
death or incapacity of either party
destruction or condemnation (expropriation) of the property
expiration of the terms of the agency
by mutual agreement
renunciation by the agent or revocation by the principal
bankruptcy of the principal
fulfillment of the purpose for which the agency was created
Termination of Agency
52
While an open listing may have no specific expiration date, exclusive agency and exclusive right to sell agreements must. A listing is generally considered to have terminated automatically upon the arrival of the expiration date. However, a ______ ______ may be included which extends the broker's right to claim a commission for an additional period of time beyond the contract's term if the property is sold to someone he showed the property to, and thus the broker was the "procuring cause" of the sale.
safety clause
53
An agent must fully disclose to a prospective buyer all pertinent material facts and defects that he knows
to be present in the property that he is showing. When representing the seller, the agent should inform his
principal of the importance of disclosing any defects in the property he is offering for sale. A ______ ______ is a hidden structural defect that would not be discovered by ordinary inspection. Failing to disclose a
known defect is a violation of the fiduciary relationship. He may also be liable for damages.
The common law doctrine of ______ ______ means “let the buyer beware” and was the rule in the past.
latent defect
caveat emptor
54
_______ ___ is a federal law which establishes a statewide registry containing information on sex offenders. Many states require real estate agents to provide buyers and lessees with the website which provides information on sex offenders and where they live. The website, www.fbi.gov/scamssafety/registry provides access to every state’s offender registry.
Megan's Law
55
A _______ _________ is the way in which the sellers of property furnish the real estate brokers and salespeople with their inventory. It is also an employment contract, that is, employment of the broker by the principal to find a ready, willing and able buyer for his property. The listing agreement forms a special agency relationship between the broker and seller in that it authorizes the broker to represent the principal's property for sale, solicit offers and submit the offers to the principal.
listing agreement
56
____ _______: The seller retains the right to employ as many brokers as he wants to try to sell his property, but is only obligated to pay a commission to the one who actually finds a ready, willing and able buyer. If the seller sells his property himself, he is not obligated to pay a commission.
Open listing
57
_________ ______: Only one broker is hired to act as the exclusive agent of the principal. The seller, however, can still sell his property himself and not pay a commission to the broker.
Exclusive agency
58
_________ _____ __ ____: Only one broker is hired as the agent in this type of listing agreement and he is given the exclusive right to sell the property. Regardless of who actually sells the property, the seller
must pay the broker a commission. This is the most common and popular type of listing agreement for
brokers and sellers alike.
Exclusive right to sell
59
_________ _____ ______ _________: The buyer engages a single licensee to search for a suitable
property, and the licensee is entitled to compensation no matter who finds the property, including the buyer.
Exclusive buyer agency agreement
60
_________-______ _____ ______ _________: The buyer engages the licensee to search for a
suitable property and that licensee is entitled to compensation if anyone other than the buyer finds a
suitable property.
Exclusive-agency buyer agency agreement
61
____ _____ ______ _________: This agreement is nonexclusive and allows the buyer to employ an unlimited number of brokers. The buyer compensates only the broker who actually locates the property purchased.
Open buyer agency agreement
62
When several brokers become involved in a sale, there is sometimes a question as to which of them has
found the buyer, that is, which has initiated the sale. In a real estate transaction, the _________ _____ is considered to be the person whose actions are the primary reason for a sale taking
place. Courts have generally considered the one who actually secures the buyer's signature on the sales
contract to be the _________ _____. Multiple listing services, on the other hand, sometimes regard the first agent to show the property to the eventual buyer as the _________ _____.
Procuring Cause
63
Once a seller accepts a _____, _______, and ____ _____, the broker is entitled to a commission. _____, _______, and ____, means a buyer who is prepared to buy on the seller’s terms and has the means.
ready, willing, and able buyer
Ready, willing and able
64
The broker's compensation for a sale generally takes the form of a __________. It is a percentage of the total sales price of a property, usually paid by the principal to the broker after the sale has been made. They are always negotiable. The exact rate, generally specified in the listing agreement, is determined by mutual agreement. No local boards or government agencies may set rates. The amount of a broker's compensation is found by multiplying the sales price by the percentage charged. If there is a listing broker and a selling broker, the __________ is usually shared between the
two brokers.
Commission
65
United States Department of Justice forbids any form of collusion among brokers or real estate boards in the fixing of commission rates, or _____ ______.
price fixing
66
When a commission is shared between the listing broker and the selling broker, this is known as ______ __________ and the selling broker is known as the ___________ ______. All payments of any kind to an agent must be made through the sponsoring broker; this includes gifts or fees for services in addition to the compensation. Compensation does not determine agency! The licensee does not necessarily represent the person who is paying. Any written agency agreement should state how the licensee is to be compensated, whether the agent is representing the buyer or the seller.
Any fees paid to an agent for services must be paid to the broker and disclosed to all parties to the transaction.
broker cooperation
cooperating broker
67
The amount of compensation a salesperson receives is set by mutual agreement between the broker and the salesperson. Only the sponsoring broker can pay the salesperson. In cooperating sales where an agent from another brokerage company represents one party to the transaction, the fee must be paid from the listing broker to the cooperating broker who then pays his salesperson.
Sharing commissions
68
The listing agent is obligated to present all offers to purchase to the seller as soon as possible. If more than one offer is received by the agent, they should all be presented as soon as possible, and at the same time. In Common Law states (all states except Louisiana) an offer is revocable by the offeror until it is signed and accepted by the offeree. In Louisiana, once an offer is made it s not revocable by the offeror and must remain until the time of expiration on the contract, or until rejected by the offeree.
Presentation of Offers
69
The broker is responsible for negotiating a satisfactory agreement between the buyer and seller, for filling out routine sales contracts, etc. He is not able to give legal advice concerning the rights of buyers and sellers, or to prepare legal documents relating to property transactions. These should be performed by a competent attorney. A broker may not employ an attorney to represent either the buyer or the seller-however, he may recommend several lawyers if the client does not already have one.
Responsibilities of the Broker
70
Giving false information about a property, whether intentionally or unintentionally is _________________. If damage results of any type, the agent may be held liable.
Misrepresentation
71
_____ is the intentional
misrepresentation of a material fact. This includes making false statements and withholding pertinent information.
Fraud
72
_________ _________________ occurs when the agent should have known that a statement
about a material fact was false. Ignorance is no excuse.
Negligent misrepresentation
73
_________ ________ occurs when the agent accidentally fails to perform some act, such as delivering a counteroffer.
Negligent omission
74
_______ is exaggerating a
property’s benefits such as views or landscaping. It is always an opinion. An example, would be the statement, “This is the most beautiful house in the city!”
Puffing
75
To qualify as an independent contractor in the eyes of the Internal Revenue Service the agent must be ________, must have a _______ _________ with the broker specifying that the licensee is an independent
contractor, and at least __% of his income must be based on sales commissions.
licensed
written agreement
90
76
__________ __ _____________ _______, which can render properties not salable, may be required. Licensees should consult local authorities responsible for environmental regulation whenever toxic waste, contaminated soil or water, nearby chemical or nuclear facilities, radon, asbestos, lead-based paint or
other health hazards are involved.
Disclosure of environmental hazards
77
_____________ of asbestos is often safer than removal.
Encapsulation
78
_____ is a colorless and odorless radioactive gas that is produced by the natural decay of other radioactive substances. It can occur anywhere, but some areas are known to have unusually high amounts. When trapped in buildings in high concentration, it can cause serious health problems. It is
often found in the soil and can enter buildings through the basement or flooring and become trapped in
the building if there is poor ventilation.
Radon
79
____ _____ _____ was used before 1978 and is often found in older houses. It was banned in 1978 because of the danger of lead poisoning from peeling or flaking paint that small children may put in their mouths. Lead from paint or other sources can result in damage to the brain, nervous system, kidneys and blood. The results range from mental retardation to death. Purchasers must be informed
of the dangers and its possible presence in houses built before 1978.
Lead Based Paint
80
*The ____-_____ _____ __________ ________ allows for buyers to waive a lead-based paint inspection.
lead-based paint disclosure addendum
81
In ____ the EPA and the Department of Housing and Urban Development (HUD) issued the final regulation on lead-based paint. The regulation requires the disclosure of the presence of any known lead-based paint hazard to potential buyers or renters. There is no requirement, however, in the federal law for testing for the presence of lead-based paint.
1996
82
Licensees must provide buyers and renters with the HUD pamphlet "_______ your _______ from ____ in your____." Licensees must also disclose to renters or buyers any prior test results or knowledge of any lead paint products within a building. Only buyers' agents who are paid entirely by the buyer are exempt under the federal law.
Protect Your Family from Lead in Your Home
83
________ is a naturally occurring material that was once widely used in building materials because it is fire-resistant and has some insulating properties. ________ is a highly friable material. This means that as it ages its fibers very easily break down into tiny filaments that can appear to be dust, which are easily breathed into the lungs. The results are serious and deadly lung diseases that can take decades to appear after the material is initially inhaled.
Asbestos
84
_________ is the method by which an environmental hazard is reduced.
Abatement
85
Although not a hazard, land that is classified as "________" should also be disclosed as such to any prospective buyer.
wetlands
86
A __________ ____ is a property wherein the expansion, redevelopment, or reuse of which may be complicated by the presence-or potential presence - of hazardous substance, pollutant, or contaminant. An example might be a site that was formerly a gas station, repair shop, or industrial site.
Brownfield site
87
The EPA's ___________ and ____ ______________ _______, begun in 1995, provides seed money to empower communities to develop programs to clean up and redevelop brownfield sites.
Brownfields and Land Revitalization Program
88
______ (_____________ _____________ ________, ____________ and ________ ___ of ____) is informally called Superfund. It allows the EPA to clean up contaminated sites. It also forces the parties responsible for the contamination to either perform cleanups or reimburse the government for EPA-led cleanup work. When there is no viable responsible party, Superfund gives EPA the funds and authority to clean up contaminated sites.
CERCLA (Comprehensive Environmental Response, Compensation, and Liability Act of 1980)
89
_____ are multicellular fungi that live on plant or animal matter and live in indoor or outdoor environments. _____ are very common in buildings and homes and grow in places with dampness. ____ disclosure is not required by law. If mold is suspected, the licensees should provide prospective buyers with mold information. The EPA is the official source for mold information.
Mold
90
Summary Disclosures:
material facts and defects that are known to exist in the property being shown.
dual agency
agency coupled with interest
environmental hazards (radon etc)
must present the customer or client some form of written disclosure stating whom they represent
Must Disclose
91
Summary Disclosures
Confidential information
unless permission is given by the client
info becomes public knowledge
info is required by law to be disclosed
info is required to defend a lawsuit
Must Not Disclose
92
Summary Disclosures
Psychologically impacted property (murder, suicide, haunted etc)
burglary on property
These MAY be disclosed- but you need written permission if you represent the seller or are a dual agent.
Not Required to Disclosed
93
Agent Annie knows that a house she recently listed was built on a landfill. Other houses in the neighborhood have had foundation problems. Annie notices an uneven area in the floor and cracks along
the corner of one wall. What are Annie’s obligations in this situation?
a. She should not mention this to prospective buyers because she owes a fiduciary duty to the seller and doing so might compromise the sale of the property.
b. She is required by law to disclose any material defects to prospective buyer.
B. She is required by law to disclose any material defects to prospective buyer.
94
When showing an average house to a potential buyer, the agent describes it as gorgeous and the best
house in the neighborhood. What is this an example of?
a. intentional misrepresentation
b. puffing
B. Puffing
95
Broker Bill lists a house on Easy Street. A prospective buyer, Polly, that Bill has been working with sees the sign and tells Bill she wants to make an offer. Polly is on a tight budget and asks Bill for advice on a likely price range. What are broker Bill’s responsibilities to the seller and to the buyer. What is Bill’s best course of action?
a. Bill should take this opportunity to suggest a price to the buyer because not doing so might cause the
seller to lose the sale.
b. Bill represents the seller and cannot offer advice to the buyer without compromising the seller’s position and risking becoming an undisclosed dual agent.
b. Bill represents the seller and cannot offer advice to the buyer without compromising the seller’s position and risking becoming an undisclosed dual agent.
*Unless Bill has both parties sign a dual agency disclosure form, his fiduciary duties are to his client, the seller. He must hold his client's interest above any others and only owes the buyer honesty and truthfulness.
96
Nancy tells her neighbor Bob, who is a real estate agent, that she is thinking about selling her house. Bob mentions the house to several buyers that he is working with and one of them immediately makes an offer
on the house. Bob presents the offer to Nancy and she accepts. No formal agency agreement was entered into. What is Bob’s relationship with the buyer and the seller?
a. Bob cannot expect a commission on the sale because he did not have a listing agreement with the
seller.
b. By accepting the offer presented by Bob, the seller has created an implied agency relationship. However, any commission must be stated in the contract.
b. By accepting the offer presented by Bob, the seller has created an implied agency relationship. However, any commission must be stated in the contract.
97
A seller tells the listing agent that he does not want his house shown to any minorities. Under the fiduciary duty of obedience, is the agent required to follow the seller’s instructions?
a. Yes.
b. No, because to do so would be a violation of the Fair Housing law
b. No, because to do so would be a violation of the Fair Housing law
98
Bonnie Buyer submits an offer for $150,000 through Agent Annie on a property listed by Agent Al. The seller counters at $152,000. Bonnie accepts the counteroffer in the presence of Annie only. One hour later Al delivers to Betty a written revocation of the counteroffer, and the seller accepts an offer of
$155,000 from another buyer. Is the seller obligated to sell to Bonnie?
a. Yes, always.
b. No, (except for Louisiana). In the other 49 states an offer is revocable until it is accepted by the seller.
In Louisiana, an offer is irrevocable until it is rejected by the seller, or the time expires.
b. No, (except for Louisiana). In the other 49 states an offer is revocable until it is accepted by the seller.
In Louisiana, an offer is irrevocable until it is rejected by the seller, or the time expires.
99
1. An owner agrees to pay a commission if his property is sold but doesn’t want to sign a listing
agreement. What type of contract is this?
a. express b. implied
c. written d. illegal
express
100
An agent tells a prospective buyer that a problem with the foundation has been corrected knowing that it has not. This would be an example of:
a. puffing b. mistake of fact
c. misrepresentation d. following the owners instructions
misrepresentation
101
Which of the following is an agent required to disclose to a potential buyer?
a. a person was murdered in the house.
b. a person living in the house has AIDS.
c. the property has been burglarized several times.
d. the property has contains asbestos insulation.
d. the property has contains asbestos insulation.
102
A vendor wants to give you, the agent, a gift for services. What should you do?
a. Accept it.
b. Not accept it.
c. Tell your broker.
d. Accept it, but disclose to the buyer.
c. Tell your broker
103
A protection clause in a listing agreement allows for:
a. a 30 day extension on the listing if the property has not sold at the end of the contract term.
b. 2 weeks for the listing agent to sell without competition from other brokers.
c. payment of the commission if the buyer was secured by the broker even if the sale takes place after the expiration of the contract.
d. a six month minimum listing.
c. payment of the commission if the buyer was secured by the broker even if the sale takes place after the expiration of the contract.
104
Under subagency, or common law agency, a salesperson working for the seller with a cooperating broker has a fiduciary relationship to all EXCEPT:
a. the seller b. the buyer
c. the cooperating broker d. the listing broker
b. the buyer
105
An agent showing trust and confidentiality to the client is an example of what type of relationship?
a. brokerage b. fiduciary
c. customer d. special
b. fiduciary
106
All of the following are example of agency relationship EXCEPT:
a. listing agreement b. purchase agreement
c. property management agreement d. broker/salesperson agreement
b. purchase agreement
107
Which duty is easiest to perform as a dual agent?
a. obedience b. disclosure
c. loyalty d. care
b. disclosure
