Chapter 1 Vocabulary

Question 1

Customer:

A. A person who receives services given on behalf of and for the benefit of a client.
B. Borrower
C. The purchaser under an option contract.
D. A promise made to purchase a seller’s property under certain terms.

Answer 1

A. A person who receives services given on behalf of and for the benefit of a client.

Question 2

Single agency:

A. A classification of property ownership in Wisconsin.
B. The practice of representing either the buyer or the seller but not both in the same transaction.
C. Selling. One product only if the buyer agrees to purchase another product.
D. A one-sided agreement where one party makes a promise to another and is bound by the promise.

Answer 2

B. The practice of representing either the buyer or the seller but not both in the same transaction.

Question 3

Licensee:

A. Only a broker
B. A salesperson, broker or licensed business entity under Chapter 452 of the Wisconsin Statutes.
C. Only a salesperson
D. A timeshare salesperson

Answer 3

B. A salesperson, broker or licensed business entity under Chapter 452 of the Wisconsin Statutes.

Question 4

Salesperson:

A. The person who employs an agent to perform a service on the client’s behalf.
B. Person not licensed under Chapter 452 or licensed but not employed for the purpose of providing services for which a license is required.
C. Any individual who is associated with a firm, other than a broker or a person who is not required to to have a license.
D. An independent person trained to provide an unbiased estimate of value for a fee.

Answer 4

C. Any individual who is associated with a firm, other than a broker or a person who is not required to have a license.

Question 5

Buyer’s licensee:

A. The purchaser of realty under a land contract.
B. The licensee who takes a listing.
C. The person with the buyer’s firm who produced the buyer.
D. Tenant

Answer 5

C. The person with the buyer’s firm who procured the buyer.

Question 6

Business sale:

A. The document pledging real estate as security for the repayment of a debt.
B. A legally enforceable promise or set of promises that must be performed, and for which, if a breach occurs, the law provides a remedy.
C. A sale in which a listing firm is the only firm in the transaction.
D. The sale or lease of a business and the business’ good will, enterprise or opportunity, including a sale of the majority of assets or stocks of the business.

Answer 6

D. The sale or lease of a business and the business’ good will, enterprise or opportunity, including a sale of the majority of assets or stocks of the business.

Question 7

Buyer’s firm:

A. A firm that lists a property for a seller but that does not have a buyer agency agreement with a buyer.
B. A person who is authorized to act on behalf of another.
C. A firm that has entered into a buyer agency agreement with the buyer indicating that the firm will be representing the interests of the buyer.
D. A firm that writes an offer for a buyer-customer on a property listed by another firm.

Answer 7

C. A firm that has entered into a buyer agency agreement with the buyer indicating that the firm will be representing the interests of the buyer.

Question 8

Listing Firm:

A. The firm that a buyer-client uses to write an offer.
B. An agency relationship created between parties by their actions.
C. The firm that the seller has employed under a listing contract.
D. A party who is conveying an interest in real property.

Answer 8

C. The firm that the seller has employed under a listing contract.

Question 9

Principal firm:

A. A firm engaged by another firm to provide brokerage services but is not associated with that firm.
B. The seller of realty under a land contract.
C. A firm representing the buyer who is writing an offer on a property listed with another firm.
D. A firm that engages a sub agent to provide brokerage services in a transaction.

Answer 9

D. A firm that engages a sub agent to provide brokerage services in a transaction.

Question 10

Cooperating firm:

A. A licensee associated with a firm engaged to provide services for a listing firm.
B. One who holds an estate in land for the period of the tenant’s own life or the life of another person.
C. The body of law that determines the rights and duties owed by an agent to a principal.
D. A firm that works in conjunction with another firm in procuring a buyer for the seller’s property.

Answer 10

D. A firm that works in conjunction with another firm in procuring a buyer for the seller’s property.

Question 11

Exchange:

A. A written or oral contract between parties.
B. A way to defer capital gains tax by exchanging like property for like property.
C. A legal process used when a borrower defaults on a debt.
D. The right held by a property owner or lessee to keep others from using a property.

Answer 11

B. A way to defer capital gains tax by exchanging like property for like property.

Question 12

Listing licensee:

A. A service permitting firms to pool their listings and offer to cooperate and compensate other firms.
B. The licensee associated with the listing firm that acquired the listing.
C. A listing that specifies a particular buyer.
D. Any individual who is associated with a firm, other than a broker or a person who is not required to have a license.

Answer 12

B. The licensee associated with the listing firm that acquired the listing.

Question 13

Agent:

A. The purchaser under an option contract.
B. A party who is conveying an interest in real property.
C. A person who is authorized to act on behalf of another.
D. Borrower

Answer 13

C. A person who is authorized to act on behalf of another.

Question 14

Subagent:

A. The practice of representing either the buyer or the seller but not both in the same transaction.
B. A firm engaged by another firm to provide brokerage services in a transaction but that is not associated with the firm.
C. A firm representing a buyer with a buyer agency agreement.
D. Any individual who is associated with a firm, other than a broker or a person who is not required to have a license.

Answer 14

B. A firm engaged by another firm to provide brokerage services in a transaction but that is not associated with the firm.

Question 15

Selling licensee:

A. The seller under an option contract.
B. A person who receives services given on behalf of and for the benefit of a client.
C. The licensee within the selling firm who found the buyer.
D. One who transfers undeveloped land into parcels ready for construction.

Answer 15

C. The licensee within the selling firm who found the buyer.

Question 16

Designated agency:

A. A firm that has entered into a buyer agency agreement with the buyer indicating that the firm will be representing the interests of the buyer.
B. A relationship in which one person acts for or represents another.
C. A multiple representation relationship in which both the buyer and the seller are clients of the same firm in the same transaction, and each client receives negotiation services from an agent of the firm.
D. An agency relationship created through spoken or written words.

Answer 16

C. A multiple representation relationship in which both the buyer and the seller are clients of the same firm in the same transaction, and each client receives negotiation services from an agent of the firm.

Question 17

Agency:

A. An element found in soil and rock that is thought to increase the likelihood of several types of cancers.
B. A relationship in which one person acts for or represents another.
C. Ordinances specifying minimum standards of construction.
D. A written employment agreement that creates an agency relationship between a firm and buyer.

Answer 17

B. A relationship in which one person acts for or represents another.

Question 18

Selling firm:

A. The firm that found the buyer-customer for a property listed with another firm.
B. A disinterested or neutral third party who coordinates the closing activities.
C. A firm that represents the buyer as a client.
D. One who is authorized to conduct all of a principal’s affairs within the context of an agency contract.

Answer 18

A. The firm that found the buyer-customer for a property listed with another firm.

Question 19

Option to purchase:

A. An agreement. To keep open, for a set period, an offer to sell or lease real property.
B. The rights of a government to limit private ownership of property for the general welfare of the community.
C. The right held by a property owner to lease, sell or will the property away.
D. A component of binding acceptance.

Answer 19

A. An agreement to keep open, for a set period, an offer to sell or lease real property.

Question 20

Material adverse fact:

A. An adverse fact that a party indicates is of such significance, or that is generally recognized by a competent licensee as being of such significance to a reasonable party, that it affects the party’s decision to enter into a contract or the terms of a contract.
B. Any fact that is relevant to a person making a decision.
C. Any statement of fact by one person to another, either by words or actions, that is not in accordance with the facts.
D. The uninterrupted chain of events that lead to a sale.

Answer 20

A. An adverse fact that a party indicates is of such significance, or that is generally recognized by a competent licensee as being of such significance to a reasonable party, that it affects the party’s decision to enter into a contract or the terms of a contract.

Question 21

Multiple representation relationship:

A. A way for a seller to negotiate with multiple buyers.
B. Mutual assent or agreement between the parties to a contract regarding the substance of the contract.
C. Two or more persons holding title to real property who are named on the same deed and share an undivided possession of the property.
D. A relationship between a firm and two or more of the firm’s clients where the clients are parties in the same transaction.

Answer 21

D. A relationship between a firm and two or more of the firm’s clients where the clients are parties in the same transaction.

Question 22

Broker:

A. One who is authorized to conduct all of a principal’s affairs within the context of an agency contract.
B. One who for another person, and for commission, money or other thing of value, negotiates or offers or attempts to negotiate a sale, exchange, purchase or rental of or the granting or acceptance of an option to sell, exchange, purchase or rent and interest or estate in real estate; one who shows real estate or a business or its inventory; or one who promotes the sale, exchange, purchase, option, rental or leasing of a real estate, a timeshare, or a business or its goodwill, inventory or fixtures.
C. The purchaser under an option contract.
D. An independent person trained to provide an unbiased estimate of value for a fee.

Answer 22

B. One who for another person, and for commission, money or other thing of value, negotiates or offers or attempts to negotiate a sale, exchange, purchase or rental of or the granting or acceptance of an option to sell, exchange, purchase or rent and interest or estate in real estate; one who shows real estate or a business or its inventory; or one who promotes the sale, exchange, purchase, option, rental or leasing of a real estate, a timeshare, or a business or its goodwill, inventory or fixtures.

Question 23

Fiduciary:

A. A property owner who leased property to a tenant.
B. The seller under an option contract.
C. One who is placed in a position of trust and confidence, normally responsible for the money or property of another.
D. A borrower

Answer 23

C. One who is placed in a position of trust and confidence, normally responsible for the money or property of another.

Question 24

Client:

A. One who transfers undeveloped land into parcels ready for construction.
B. One who is authorized to conduct all of a principal’s affairs within the context of an agency contract.
C. The person who employs an agent to perform a service on the client’s behalf.
D. A person who is authorized to act on behalf of another.

Answer 24

C. The person who employs an agent to perform a service on the client’s behalf.