Chapter 3 (Class) Quiz: Agency

Question 1

A broker tries to sell a listed property through his or her own company’s agents for several days or more before putting it on the Multiple Listing Service. The principal instructed that the property be placed on MLS. The broker’s conduct causes this listing to be called a:

a. secret profit
b. subagency
c. multiple deception
d. pocket listing

Answer 1

d. pocket listing

Question 2

The best way to create an agency relationship is:

a. by written agreement
b. by handshake
c. by using the MLS service
d. by creating a dual agency

Answer 2

a. by written agreement

Question 3

With the exception of the mortgage disclosure form, which must be kept longer, transaction files of most of the important broker and salesperson documents concerning a property must be kept for how long?

a. one year
b. two years
c. three years
d. there is no time requirement

Answer 3

c. three years

Question 4

A copy of the listing agreement must be given to the signing party:

a. within 3 days of being signed
b. at the discretion of the listing broker
c. before the escrow is opened
d. immediately after it is signed

Answer 4

d. immediately after it is signed

Question 5

When a real estate salesperson mixes his/her personal funds with a bidder’s good faith deposit money, it’s called:

a. commingling
b. commission
c. secret profit
d. contingency

Answer 5

a. commingling

Question 6

The best term to describe the relationship between the broker and the principal is:

a. disclosure
b. fiduciary
c. nurturing
d. implied

Answer 6

b. fiduciary

Question 7

A salesperson working with/for a listing broker is an agent of:

a. the bidder/buyer
b. the owner/seller
c. the lender
d. the courts

Answer 7

b. the owner/seller

Question 8

When you authorize a broker to have acted for you after he or she has already done so, it’s known as:

a. estoppel
b. confirmation
c. ratification
d. acceptance

Answer 8

c. ratification

Question 9

A real estate auction where the property must be sold to the highest bidder, no matter how low the final bid, is called a(n):

a. no-sale auction
b. illusory auction
c. bidders market auction
d. absolute auction

Answer 9

d. absolute auction

Question 10

A broker who knowingly makes a statement he or she knows is false at the time has probably done the following:

a. innocent misrepresentation
b. negligent misrepresentation
c. fraudulent misrepresentation
d. all of the above

Answer 10

c. fraudulent misrepresentation

Question 11

Which of the following is FALSE concerning real estate commissions?

a. commissions are negotiable
b. a real estate license is required to receive a commission for conducting a real estate transaction
c. a salesperson receives compensation (her or her commission) directly from the principal
d. all of the above

Answer 11

c. a salesperson receives compensation (her or her commission) directly from the principal

the broker distributes the funds according to the commission split

Question 12

In order for a broker to collect a commission which the principal doesn’t want to pay, a listing agreement:

a. must be recorded
b. must be notarized
c. must be in writing
d. must have an expiration date

Answer 12

c. must be in writing

Question 13

In order to receive a commission, the broker must find a buyer who is:

a. ready
b. willing
c. able
d. all of the above

Answer 13

d. all of the above

Question 14

A special power of attorney allows the authorized person to:

a. transact all of the principal’s business
b. transact one specific act or handle one transaction (such as: market your house for sale)
c. maintain a trust account for the principal
d. all of the above

Answer 14

b. transact one specific act or handle one transaction (such as: market your house for sale)

Question 15

A licensee is required to tell the parties involved whom he or she represents:

a. as soon as possible
b. after the loan is funded
c. after the escrow instructions are filed
d. after the offer has been accepted

Answer 15

a. as soon as possible

Question 16

Federal discrimination laws evolved from:

a. Jones vs. Mayer
b. Title VIII of Civil Rights Act of 1968
c. 13th Amendment to the U.S. Constitution
d. all of the above

Answer 16

d. all of the above

Question 17

In a typical real estate transaction, there is an agency relationship between:

a. the seller (principal) and the listing broker (agent)
b. the seller (principal) and the buyer (agent)
c. the seller (agent) and the buyer (principal)
d. the buyer (principal) and the listing broker (agent)

Answer 17

a. the seller (principal) and the listing broker (agent)

Question 18

In order to alleviate confusion among buyers and sellers regarding agency representation issues, many states, including California, enacted laws that:

a. require agents to disclose which part or parties they are representing in a transaction
b. prohibit agents from representing buyers in residential transactions
c. require brokers to be licensed as either seller’s agents or buyer’s agents
d. require agents to act as seller’s agents if they are members of a multiple listing service

Answer 18

a. require agents to disclose which part or parties they are representing in a transaction

Question 19

When a salesperson works as an independent contractor, it means:

a. the salesperson has his own office and deals directly with buyers and sellers
b. the salesperson has an associate broker’s license
c. the salesperson is not accountable to his broker
d. none of the above

Answer 19

d. none of the above

Question 20

If a principal gives approval after the fact to unauthorized actions, an agency relationship is established by:

a. ratification
b. estoppel
c. implication
d. implied actual authority

Answer 20

a. ratification