Ch.6 HW Agency

Question 1

The law will act to end a listing agreement if…

Answer 1

if the owner declares bankruptcy.
by supervening illegality.
if the home is destroyed by fire.

Question 2

A broker whose negligence in preparing a sales contract allows the purchaser to void the agreement breaches his/her duty of:

Answer 2

due care.

Question 3

According to Georgia law, a listing agent must voluntarily disclose to a buyer customer:

Answer 3

latent defects.

Question 4

Mario is showing a buyer client houses in a residential subdivision. He knows that there is a parcel of vacant land 3,500 feet to the north of these homes where an owner recently received permission to operate a waste disposal facility. Must Mario disclose this fact to a prospective purchaser?

Answer 4

Yes, because Mario owes absolute duty to the buyer

Question 5

According to the law of agency, a fiduciary relationship exists between the:

Answer 5

listing broker and seller.

Question 6

Regarding real estate, what are the characteristics of a power of attorney?

Answer 6

1. When used in regard to real estate transactions, the document must always be in writing.
2. Authorization to act for the principal is granted to attorney-in-fact.
3. The formality with which the document must be executed is governed by the equal dignities rule.

Question 7

Salesperson Andrews receives an offer to purchase that is accompanied by a $2,000 earnest money deposit in the form of a personal note. Which of the following is true?

Answer 7

The offer should indicate the deposit is in the form of a note.

Question 8

A cooperating broker (subagent) finds a buyer for a home listed with ABC Realty Company, Inc. The selling broker represents:

Answer 8

the seller.

Question 9

True/False

Under “BRRETA,” a listing agent is required to present ALL OFFERS to the seller

Answer 9

True

Question 10

Agent Norris is working with a buyer prospect who chooses to be a customer. The prospect wants to see a listing on Pine Street, but the listing company has indicated it will not offer subagency.

Answer 10

Your Answer: A. Norris can show the house as a “transaction broker.”

Question 11

A broker engaged by a seller who performs such acts as locating lenders, inspectors, attorneys, surveyors, and schools for the purchaser would be performing:

Answer 11

ministerial acts.

Question 12

Prior to entering into brokerage engagement relationships, a broker must:

Answer 12

A. advise the prospective client of the types of brokerage relationships available through the broker.
B. advise the prospective client of any other brokerage relationships held by the broker that would conflict with any interests of the prospective client actually known to the broker.
C. advise the prospective client as to the broker’s compensation and whether the broker will share such compensation with other brokers who may represent their parties to the transaction.

Question 13

In a typical listing contract, the relationship established between the property owner and the listing broker is that of:

Answer 13

principal and agent.

Question 14

The listing contract is a contract between:

Answer 14

seller and broker.

Question 15

The listing salesperson can sign the listing contract on behalf of his/her company if:

Answer 15

the salesperson has written authorization from the broker.

Question 16

When a prospective purchaser comes to an “open house” being held by the listing salesperson, the prospect should be treated as:

Answer 16

a customer.

Question 17

A broker might choose to have salespeople in an employer/employee relationship because:

Answer 17

the broker would have more control over the agent’s activities.