Chapter 3: South Carolina Agency Relationships and Issues (10 Questions)

Question 1

Which of the following would be considered dual agency?

a. A broker’s acting for both the buyer and the seller in the same transaction
b. Two brokerage companies’ cooperating with each other
c. A broker’s representing more than one principal
d. A broker’s listing and then selling the same property

Answer 1

a. A broker’s acting for both the buyer and the seller in the same transaction

Question 2

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

a. trustee
b. subagent
c. fiduciary
d. attorney in fact

Answer 2

c. fiduciary

Question 3

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

a. the principals are not aware of such action
b. the broker is a subagent rather than the agent of the seller
c. commissions are collected from both parties
d. both parties have been informed and agree to the dual representation

Answer 3

d. both parties have been informed and agree to the dual representation

Question 4

A broker cannot legally collect commissions from both the seller and the buyer without

a. notifying both parties of this fact orally after the sale has closed
b. notifying both arties of this fact in writing after the sale has closed
c. having exclusive listing agreements signed by both the seller and the buyer
d. having the prior knowledge and written consent of both the seller and the buyer

Answer 4

d. having the prior knowledge and written consent of both the seller and the buyer

Question 5

Which of the following best defines the law of agency?

a. The selling of another’s property by a properly licensed brokerage company
b. The rules of law that apply to the responsibilities of a person who acts as agent for another
c. The principles that govern one’s conduct in business
d. The rules and regulations of the state’s licensing agency

Answer 5

b. The rules of law that apply to the responsibilities of a person who acts as agent for another

Question 6

Broker Joan shows properties listed for sale with her company to prospect Karl. Karl has refused buyer representation. Karl is Joan’s

a. client
b. principal
c. customer
d. fiduciary

Answer 6

c. customer

Question 7

In SC, when may an agent divulge client confidential information?

a. never, since client confidentiality must be preserved indefinitely
b. when a relationship with a client is limited
c. in a disclosed dual agency situation
d. if required by law

Answer 7

d. if required by law

Question 8

A buyer prospect is interested in seeing a house listed with the real estate company, but does NOT wish to enter into a buyer agency agreement. A salesperson from the real estate company can show the buyer an in-house listing if the

a. salesperson obtains the seller’s permission
b. buyer verbally agrees to buyer agency
c. buyer wishes to remain a customer
d. salesperson provides the buyer with a dual agency consent form

Answer 8

c. buyer wishes to remain a customer

Question 9

How is a broker’s commission determined in a real estate sales transaction?

a. it must be stated in the listing agreement and is negotiated between the broker and seller
b. it is determined according to the standard rates set by agreement of local real estate brokers
c. if under dispute, it will be determined through arbitration by the SC Real Estate Commission
d. It must be paid with cash or a cashier’s check upon closing

Answer 9

a. it must be stated in the listing agreement and is negotiated between the broker and seller

Question 10

The dual agency contract needs to be signed by

a. the seller at the time of listing
b. both parties before closing
c. the seller after the offer is presented
d. both parties before a specific transaction

Answer 10

d. both parties before a specific transaction

Question 11

A sales agent has a buyer-client that wishes to put in an offer on a property that the company has listed. Both the seller and the buyer want full representation. Which type of agency would satisfy this request?

a. disclosed dual agency
b. designated agency
c. buyeragencyonly
d. selleragencyonly

Answer 11

b. designated agency

Question 12

A buyer who is a client of a salesperson in an office wants to purchase a house that another salesperson in that office has listed for sale. Which of the following statements is TRUE?

a. if the listing salesperson and selling salesperson are two different people, there is no problem
b. the selling salesperson should refer the buyer to another company to negotiate the sale
c. the seller and buyer must be informed of the situation and agree to limited representation
d. the buyer should not have been shown a house listed by that office

Answer 12

b. the selling salesperson should refer the buyer to another company to negotiate the sale

Question 13

Disclosed Dual Agency would most likely occur in a

a. company that does not provide customer-level
b. services company that only practices buyer agency
c. cooperative sale situation
d. it would not occur because it is prohibited by SC law

Answer 13

a. company that does not provide customer-level

Question 14

What types of agency are recognized in SC?

a. seller, buyer, undisclosed, dual
b. subagency, disclosed, dual, seller
c. seller, buyer, disclosed dual, subagency
d. seller, buyer, full, fiduciary

Answer 14

c. seller, buyer, disclosed dual, subagency

Question 15

A broker has a house listed and one of the sales agents has a buyer client who is interested in the property. That sales agent must

a. refer the client to another real estate company to avoid problems
b. tell the client that he or she must agree to become a customer
c. get prior consent from both buyer and seller to participate in either dual or designated agency

d. let the seller know of the agency relationship with the buyer simply as a
courtesy

Answer 15

c. get prior consent from both buyer and seller to participate in either dual or designated agency

Question 16

Agency disclosure requirements apply in all of the following transactions EXCEPT

a. resale of foreclosed properties
b. commercial leases
c. new construction
d. multifamily sales

Answer 16

b. commercial leases

Question 17

Consent to disclosed dual agency

a. can be withheld by either party before a specific transaction
b. results in limited representation to one principle, not the other
c. is not permitted in SC
d. is a blanket authorization for all transaction

Answer 17

a. can be withheld by either party before a specific transaction

Question 18

In SC, a buyers agent may

a. not provide ministerial assistance to other parties to the transaction
b. not represent a buyer in a transaction in which the agent’s company has the listing
c. offer properties the client has interest in to other potential purchasers
d. accommodate a client’s request to steer buyer to neighborhoods comprised of certain ethnic groups

Answer 18

c. offer properties the client has interest in to other potential purchasers

Question 19

Commissions earned by a broker in a real estate sales transaction

a. are determined by agreement of the broker and his or her principal
b. may be shared with an unlicensed person, provided that such person aided the broker in bringing the buyer and seller together
c. must be paid by the seller in each transaction

d. are based on a schedule of commission rates set by the SC Real Estate
Commission

Answer 19

a. are determined by agreement of the broker and his or her principal

Question 20

A buyer is interested in seeing a house with XYZ Realty but does NOT wish to enter into an agency relationship. A salesperson from LMN Realty can show the buyer the house if

a. XYZ Realty obtains the seller’s written consent to subagency
b. XYZ Realty obtains LMN Realty’s consent to subagency
c. The buyer verbally agrees to buyer agency
d. This cannot occur

Answer 20

a. XYZ Realty obtains the seller’s written consent to subagency

Question 21

Confidentiality can be breached in all of the following situations EXCEPT when

a. the principal grants consent to disclose
b. the local association of REALTORS accuses an agent of wrongful conduct
c. a court of law requires the information
d. another client may benefit

Answer 21

d. another client may benefit

Question 22

Which of the following is NOT a valid basis for termination for a listing agreement?

a. sale of the property
b. death of the salesperson
c. agreement of the parties
d. destruction of the premises

Answer 22

b. death of the salesperson

Question 23

A building sold for $157,000. The broker charged 6 percent commission and divided it as follows: 10 percent to the salesperson who took the listing, one-half of the balance to the salesperson who made the sale, and the remainder to the broker. What was the listing salesperson’s commission?

a. $239
b. $942

C. $1,570

d. $4,239

Answer 23

b. $942

Question 24

The type of listing agreement that provides for payment of a commission to the broker even though the owner makes the sale without the broker’s aid is called an

a. exclusive-right-to-sell listing
b. open listing
c. exclusive-agency listing
d. option listing

Answer 24

a. exclusive-right-to-sell listing

Question 25

Some property owners list their property for sale with a broker. During the listing negotiations, they tell the broker that they want $138,000 for the property, and anything above that amount the broker can keep as a commission. A listing with this type of provision is known as a

a. gross listing
b. net listing
c. open listing
d. nonexclusive listing

Answer 25

b. net listing

Question 26

Under which of the following listing agreements can owners of listed property sell the property on their own without having to pay the listing broker a commission?

a. exclusive-right-to-sell listing
b. exclusive-agency listing
c. open listing
d. both b and c

Answer 26

d. both b and c

Question 27

A property owner signed a 90 day listing agreement with a broker. The owner was killed in an accident before the listing expired. Now the listing is

a. binding on the owner’s spouse for the remainder of the 90 days
b. still in effect as the owner’s intention was clearly defined
c. binding only if the broker can produce offers to purchase the property
d. terminated automatically because of the death of the principal

Answer 27

d. terminated automatically because of the death of the principal

Question 28

A listing contract in which payment of the commission is contingent on the broker’s being able to produce a buyer before the property is sold by the owner or another broker is called a (n)

a. open listing
b. net listing
c. exclusive-right-to-sell listing
d. exclusive-agency listing

Answer 28

a. open listing