Chapter 3: Agency and Other Mandatory Disclosures Flashcards
When is an agency relationship created?
An agency relationship is created when a person (the principal) delegates to another person (an agent) the right to act on his or her behalf in business transactions with third parties.
What exception exists to the duty of obedience when working with a client?
An agent is not bound by the duty of if the principal’s directions are not legal.
An agent’s fiduciary responsibilities to a client usually end when the transaction closes. This is not true of which duty?
Confidentiality. This duty extends beyond the termination of the relationship. No personal information gained during the term of the agreement can ever be disclosed to another party except the broker.
Amanda calls broker Tim to schedule a showing of one of his listings. Amanda loves the home and wants to make an offer. What should Tim do next?
Tim must disclose to Amanda his agency relationship with the seller and get her written permission for a dual agency arrangement. He must also inform the seller of his agency relationship with Amanda and get the seller’s written permission for the dual agency arrangement. If both parties agree to dual agency, they can proceed. If not, Amanda will have to find other representation.
When must a licensee provide an agency disclosure to a prospective client?
The listing agent must provide the disclosure to the seller prior to securing the listing agreement.
The selling agent must provide the disclosure to the seller “as soon as practicable” prior to presenting a purchase offer.
The selling agent must provide the disclosure to the buyer” as soon as practicable” prior to the execution of the buyer’s offer to purchase.
What is the Real Estate Transfer Disclosure Statement and who is responsible for providing it?
It is a statement that describes the condition of the property in detail. The seller must complete it, sign it and provide it to the buyer, but there is a section on page three of the form that the seller’s agent (if there is one) must complete and sign.
Agent Jim needs to do a visual inspection of his listing. What kinds of things should he be looking for?
Structural defects, deterioration, water damage and insect damage.
Why should agent Grace give her client a Combined Hazards Book?
This book contains three booklets which meet the seller’s and agent’s requirements for disclosure of earthquake hazards, lead-based paint and other environmental hazards.
What required disclosure is a result of Megan’s Law?
California requires that every sales contract or lease contain a notice which states that information about sex offenders registered under Megan’s Law is available to the public on an Internet web site maintained by the Department of Justice.
Which disclosures are NOT required to be made when selling residential property?
Natural deaths, unnatural deaths occurring more than three years prior to the sale and information about residents having AIDS or dying from AIDS.
What is a public report and when must it be provided?
A public report is a statement from the Bureau of Real Estate that discloses to prospective buyers pertinent facts about a subdivision. Purchasers must sign a receipt indicating that they have received and accepted the report before they enter into the purchase transaction.
What does the TRID require of lenders?
That they provide a give a copy of the booklet, “Your home loan toolkit” to every person at the time of application for a loan, a Loan Estimate of closing costs within three days of the loan application; that they let the borrower know in writing if they expect someone else to service the loan; that they give the Closing Disclosure to the buyer at least three business days before settlement.
Which booklet is not part of the Combined Hazards Book?
The Residential Environmental Hazards Guide
Protect Your Family From Lead In Your Home
The Homeowners Guide to Earthquake Safety
Consumer Guide to Disclosure for Buyers
Consumer Guide to Disclosure for Buyers
The principles of an agency relationship include all of these factors except which one?
Mutual consent
Authorization
Compensation
Fiduciary duties
Compensation
Which of the following is not a fiduciary duty an agent owes to his or her principal?
Loyalty
Confidentiality
Accountability
Blind obedience
Blind obedience
If an agent does not comply with the requirement of conducting a visual inspection of a property, how long after possession does the buyer have to file a suit?
6 months
12 months
24 months
36 months
24 months
Which of the following types of agency is not allowed in California?
Dual agency
Buyer’s agency
Single agency
Designated agency
Designated agency
Agent Paul is bound to inform his client of all facts that might affect the client’s interests - both what Paul knows and what he “should have known.” Which of these situations would not be something Paul “should know”?
There is a crack in the basement wall.
The owner of the property is HIV positive.
The air conditioner does not work.
The casement windows have broken seals.
The owner of the property is HIV positive.
When must a listing agent present the Disclosure Regarding Real Estate Agency Relationships to the seller?
Prior to bringing an offer to purchase.
Prior to accepting the listing.
As soon as possible.
Prior to conducting any showings.
Prior to accepting the listing.
Which disclosure is required by the Real Estate Settlement Procedures Act?
Good faith estimate
Finance charges and annual percentage rate
Transfer of the loan collection
Rights regarding discrimination
Good faith estimate
Which disclosure form gives detailed information about the property’s condition?
Real Estate Transfer Disclosure Statement
Agency Disclosure
Natural Hazard Disclosure Statement
Mello-Roos Report
Real Estate Transfer Disclosure Statement
Timeshare buyers have the right to rescind a transaction within what timeframe after signing the purchase contract?
1 day
3 days
7 days
Never
7 days
