Chapter 11

Question 1

A real estate broker acting as the agent of the seller:

Answer 1

Is obligated to render faithful service to the principal

Question 2

The relationship of a broker to his or her client is that of a(n):

Answer 2

Fiduciary

Question 3

A broker is permitted to represent both the seller and the buyer in the same transaction when:

Answer 3

Both parties have been informed in writing and have agreed to the dual representation

Question 4

Which of the following best defines the “law of agency”?

The selling of another’s property by an authorized agent

The rules of law that apply to the responsibilities of a person who acts for another

The principles that govern one’s conduct in business

The rules and regulations of the state’s licensing agency

Answer 4

The rules of law that apply to the responsibilities of a person who acts for another

Question 5

Upon discovering a latent defect in the property, the licensee should discuss the problem with the seller and then:

Answer 5

Inform any prospective buyers of the defect

Question 6

A Licensee sells a buyer a property listed by another brokerage firm on the MLS. The Licensee has been working with the buyer for many months, but does not have an agency contract with the buyer. This Licensee has fiduciary obligations to:

Answer 6

The buyer

Question 7

The real estate broker’s responsibility to keep the principal informed of all of the facts that could affect a transaction is the duty of:

Answer 7

disclosure.

Question 8

All of the following could be considered fraudulent EXCEPT:

Answer 8

exaggerated statements about the property.

Question 8

Which of the following would be considered dual agency?

The sponsored licensee acting for both the buyer and the seller in the same transaction:

Sponsoring Brokers cooperating with each other

The Sponsoring Broker representing different principals

The Sponsoring Broker listing and selling the same property

Answer 8

The sponsored licensee acting for both the buyer and the seller in the same transaction:

Question 9

All of the following could be considered fraudulent:

Answer 9

deceitful or dishonest practices, negligent misstatements about the property, omitted-statements of material fact.

Question 10

As an agent for the seller, a real estate broker can:

Answer 10

solicit an offer to purchase the property from a prospective buyer.

Question 11

A seller has listed her home with a broker for $290,000, and the broker tells a prospective buyer to submit a low offer because the seller is desperate to sell. The buyer offers $285,000 and the seller accepts it. In this situation:

Answer 11

the broker has violated his agency relationship with the seller.

Question 12

When Broker Harold was told by his principal not to advertise her property in the XYZ newspaper, which was out of the area. Broker Harold complied because he:

Answer 12

must obey the lawful instructions of his principal.

Question 13

It is the duty of an agent to disclose to the principal every step taken in the transaction of the principal’s business. This is because the:

Answer 13

agent has fiduciary obligations to the principal.

Question 14

A latent defect:

Answer 14

is considered to be a hidden structural defect that cannot be discovered by an ordinary inspection.

Question 15

A broker who is the agent of the buyer should do which of the following?

Disclose to the seller that the buyer is a minority person

Disclose to the seller the maximum price the buyer is willing to pay

Present to the seller only offers that are acceptable

Advise the buyer if the listing price of the sellers house is unrealistic

Answer 15

Advise the buyer if the listing price of the sellers house is unrealistic

Question 16

Which of the following best describes the status of the common law of agency in Illinois as it relates to broker/client relationships?

It governs all broker-client relationships.

It has been replaced by statutory rules.

While superseded by statute, it still applies to certain transactions.

It has been replaced by local ordinances.

Answer 16

It has been replaced by statutory rules.

Question 17

An agent who represents the seller is showing a house to a prospective buyer. The agent knows that the house has a wet basement. Which of the following is true?

Withholding the information protects the confidence of the seller.

Disclosing the information could create a fiduciary relationship with the buyer.

Withholding the information prevents the buyer from making an informed decision.

Disclosing the information violates the fiduciary duty to the seller.

Answer 17

Withholding the information prevents the buyer from making an informed decision.

Question 18

Under Illinois law, the person who receives brokerage services, but who is not represented by the broker is referred to as a:

Answer 18

consumer.

Question 19

Illinois law required brokers to deliver true copies of all documents to the parties within how many hours of their signing?

Answer 19

24

Question 20

Which of the following would be ILLEGAL in an Illinois agency agreement?

A specific termination date

An automatic extension clause

A designated agency relationship

A clause that would allow the licensee to act as a dual agent.

Answer 20

An automatic extension clause

Question 21

All of the following relationships are legal in Illinois:

Answer 21

designated agency, buyer agency, single agency.

Question 22

All of the following relationships are legal in Illinois, EXCEPT:

Answer 22

undisclosed dual agency.

Question 23

Under Illinois law, a licensee owes a third party all of the following duties:

Answer 23

disclosure of all adverse facts about the property’s physical condition, honest treatment, disclosure of all material information.

Question 24

Under Illinois law, a licensee owes a third party all of the following duties, EXCEPT:

Answer 24

disclosure of all relevant confidential communications from the principal.

Question 25

Law of agency:

Answer 25

defines the rights and duties of the principle and the agent