Chapter 4 Flashcards by dana prihadash

When must a written No Brokerage relationship (non-representation) notice be provided to customers?
A. immediately upon signing of a listing agreement
B. at an open house when providing a brochure containing information about the property
C. before showing showing homes that are listed
D. in every real estate transaction

D. in every real estate transaction

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A broker has an exclusive right of sale listing to sell an owner's property, with no other authority granted. What type of agency does the broker have with the principal?
A. general agency
B. special agency
C. universal agency
D. trusteeship

D. trusteeship

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Complete the statement. A transaction broker _____.
A. owes full disclosure to both parties
B. owes limited confidentiality to both parties
C. must be compensated by both parties
D. cannot work in a residential transaction

D. cannot work in a residential transaction

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In which service of real estate must a licensee disclose the agency relationship and the responsibilities of that relationship to the public?
A. residential sales
B. residential listings
C. real estate appraisals
D. real estate auctions

A. residential sales

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A real estate broker has entered into a single agency relationship with the sellers of a three- bedroom, two-bath house. One of the agents in that broker’s office has found an investor wanting to hire the brokerage firm as a single agent. For the investor to be shown this seller’s house:
A. the broker can work as a dual agent for both the buyer and the seller
B. this would be legal as long as the broker assigns a designated agent for each party
C. the seller must be informed that the brokerage firm is representing the buyer
D. both the seller and the investor must agree to transition to transition to transaction broker status

D. both the seller and the investor must agree to transition to transition to transaction broker status

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What must be given to a seller who is about to enter into a fiduciary relationship with a brokerage firm?
A. single agency notice
B. transition to transaction broker notice
C. transaction broker notice
D. no brokerage relationship notice

A. single agency notice

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Which form requires the signatures of all parties?
A. no brokerage relationship notice
B. transaction broker notice
C. single agent notice
D. transition to transaction broker

D. transition to transaction broker

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In which instance must the agency disclosure forms developed by the state be used?
A. commercial leasing
B. residential leasing
C. residential sales
D. residential auctions

C. residential sales

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Which duty does a broker owe to a customer?
A. full disclosure
B. avoid adverse interests
C. obedience
D. disclose known facts affecting the value of residential property

D. disclose known facts affecting the value of residential property

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Mr. White referred his sister to a real estate broker, and she purchased a $200,000 home. What may the broker do to show his thanks?
A. take Mr. White to dinner
B. give Mr. White a bottle of wine
C. send a thank you note to Mr. White 
D. pay a referral fee

C. send a thank you note to Mr. White

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Who is the principal, or employer?
A. the buyer
B. the seller
C. the one who engages the broker in a single agency relationship
D. the one who pays the broker

C. the one who engages the broker in a single agency relationship

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Sales associate John attends a cocktail party with his friend Bill, where he introduces Bill to another friend, Jack. It turns out that Jack has a house for sale, and Bill agrees to purchase it. Sales associate Jack makes it clear that he wants no commission, but John’s broker demands a commission. Which statement is correct?
A. the broker is the procuring cause and is entitled to a commission
B. the broker should reduce his commission because of John’s friendship
C. the broker is not entitled to a commission
D. the broker is entitled to a referral fee only

C. the broker is not entitled to a commission

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A broker, while looking for a deal for his best friend, gets a listing. The seller must sell because of a family emergency. What should the broker say to his best friend?
A. say nothing about the seller, and ask the buyer to make an offer
B. tell the buyer that the seller must sell quickly so that he would probably accept any reasonable offer
C. give the buyer only the suggestion that the seller is motivation
D. tell the buyer that a dual agency exists

A. say nothing about the seller, and ask the buyer to make an offer

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If an oral offer is made to a broker on a property the broker has listed, what should be the broker’s response?
A. demand that the offer be in writing
B. inform the buyer that the offer violates the statute of frauds
C. ask for a substantial deposit
D. submit the offer to the seller

D. submit the offer to the seller

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If a broker is aware of a construction lien on a piece of property, what should he or she do?
A. make the buyer aware
B. tell the buyer before the closing
C. not disclose the lien
D. tell the buyer before going to contract

D. tell the buyer before going to contract

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Which of the following limits the actions of brokers?
A. certificate of estoppel
B. statute of frauds
C. law of agency
D. all of the above

C. law of agency

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A brokers principal is away on vacation. The broker receives an offer of $75,000 for his principal’s property. Before the principal returns, the broker receives a second offer of $72,000. What should the broker do?
A. refuse the second offer since it is not as good as the first offer
B. submit the offer they feel is best
C. hold the second offer pending acceptance of the first offer
D. submit both offers to the principal

D. submit both offers to the principal

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Broker Brown lists Smith’s property for $20,000. Broker Brown hears from a friend on the planning commission that they are intending to put a highway right next to Mr. Smith’s property, making his lot a corner lot. He tells another friend about what he has heard, and the friend buys the property for $20,000. Which statement is correct?
A. broker Brown’s license may be suspended for not telling Smith
B. broker Brown is not obligated to pass on rumors to the seller
C. broker Brown has done nothing wrong
D. broker Brown is guilty of culpable negligence

A. broker Brown’s license may be suspended for not telling Smith

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A seller lists a property at $75,000 but tells the broker he will go as low as $72,000. Which statement is correct?
A. The broker cannot tell the buyer of the lower price
B. The broker must tell the buyer of the lower price
C. the broker can accept a $72,000 offer for the seller
D. either b or c

A. The broker cannot tell the buyer of the lower price

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Complete the sentence. A fiduciary relationship is one of:
A. trust
B. confidence
C. trust and confidence
D. trust and confidence when accepted

D. trust and confidence when accepted

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Can a broker be entitled to two commissions when consummating an exchange?
A. no, as this would be a conflict of interest
B. yes, providing both parties are advised and approve
C. yes, but only if both brokers agree
D. no, since a broker can only have one principal

B. yes, providing both parties are advised and approve

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A seller-listed property at a price that the broker knew was below market value. The broker has his wife buy the property in her maiden name and subsequently resold the property at a profit. What could the broker be charged with?
A. nothing
B. concealment and fraud
C. alienation and affection
D. culpable negligence

B. concealment and fraud

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In a real estate transaction, what type of relationship can a buyer and seller expect to have?
A. fiduciary relationship
B. a relationship of trust
C. an arm's length relationship
D. a relationship of confidence

C. an arm’s length relationship

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What is a licensee with full representation to both parties in the same transaction referred to as?
A. transaction broker
B. single agent
C. dual agent
D. sub agent

C. dual agent

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Which of the following documents not only recommends that the principal sign it, but requires it? A. consent to transition to transaction broker B. notice of non representation C. single agent notice D. transaction broker notice

A. consent to transition to transaction broker

An Illinois corporation is transferring its employees to Florida. The firm retained a Florida broker to find homes for its employees. The attorney representing the Illinois corporation, notifies the Florida broker that in the state of Illinois, an attorney is recognized as a real estate broker. Therefore, the attorney wants a referral fee. What should the Illinois attorney do? A. produce a certified statement to the Florida broker that Illinois attorneys are recognized as brokers B. not expect a referral from the Florida broker C. notify FREC prior to expecting any referral fee D. expect to receive a referral fee because he is recognized as a broker in Illinois

D. expect to receive a referral fee because he is recognized as a broker in Illinois

A discount broker has opened an office in town. Two sales associates from full-price, full-service offices agree not to show the discount broker's listings. This practice is: A. illegal because it constitutes discrimination against the discount broker B. acceptable because sales associates may show any properties they choose C. required because discount brokerage is illegal D. illegal because it constitutes price fixing among the sales associates

D. illegal because it constitutes price fixing among the sales associates

``` What should a new sales associate expect his broker to provide? A. salary B. business cards C. training D. health insurance ```

C. training

In pursuit of an unpaid commission, a broker hires an attorney to attempt to obtain a judgment lien against the seller. In the course of the action, and on the advice of the attorney, the broker filed a lis pendens against the seller's property. What action may be taken against the broker? A. none, since no violation has occurs B. FREC could fine the broker up to $10,000 C. FREC could impose a criminal penalty D. the broker's license may be suspended or revoked

D. the broker's license may be suspended or revoked

A seller refuses to accept an offer submitted by a broker on behalf of a buyer. The offer meets the terms of the listing contract. To what is the listing broker entitled? A. no compensation because offer was rejected B. 25% of the full commission C. 50% of the full commission D. 100% of the full commission

D. 100% of the full commission

``` Florida has established three authorized brokerage relationships. Unless otherwise established by agreement, what is the broker's relationship with the public? A. non-representation B. single agency C. dual agency D. transition brokerage ```

D. transition brokerage

``` Under specific circumstances, real estate law allows a broker to appoint one sales associate to represent the seller and another to represent the buyer. What term is used for a sales associate who meets all the qualifications of these circumstances? A. dual agent B. transaction broker C. designated sales associate D. special agent ```

C. designated sales associate

In order for a broker to appoint designated sales associates to represent the buyer and seller, all of the following conditions must be met, EXCEPT: A. it is a residential transaction B. it is a nonresidential transaction C. the buyer and seller must sign statements D. the buyer and seller must have assets of at least 1 million dollars

A. it is a residential transaction

All of the following activities would be considered fraudulent EXCEPT: A. a selling agent and a buying agent agree to split a commission with permission by all parties to the transaction B. an agent for the buyer develops a scheme with the selling agent to obtain a contract with a higher purchase price C. a buyers agent chose not to inform the buyer about a planned airport extension adjacent to a prospective property D. a broker arranged to collect commission from both parties in a transaction without informing the seller

A. a selling agent and a buying agent agree to split a commission with permission by all parties to the transaction

Ernie is a licensed broker in Chicago who had a customer for a condominium in Tampa. Ernie accompanied the customer to Tampa and introduced him to a broker Dora, a licensed Florida broker. Ernie went to the beach while Dora showed the customer condominiums and was successful in obtaining a contract. Ernie returned to Dora's office a short time later and demanded a share of the commission. Which is correct? A. Ernie violated the license law by accompanying the prospect to Florida B. both Ernie and Dora are in violation of F.S. 475 C. if Dora pays Ernie a commission, she would be in violation of the license law D. Dora may pay Ernie a commission

D. Dora may pay Ernie a commission

Which statement is correct regarding a broker acting as a transaction broker? A. the broker has fiduciary duties to both parties B. the broker has fiduciary duties to the seller, but not to the buyer C. both parties must give their prior written consent before the broker may act as a transaction broker D. the broker must treat both parties with honesty and fairness

D. the broker must treat both parties with honesty and fairness

501. A broker has a listing on a seller's house. The seller goes on vacation. During this time the broker gets an offer for $78,000 and another for $80,000. What should the broker do? A. present the $80,000 offer upon the seller's return B. accept the $80,000 offer on behalf of the seller C. reject the $78,000 offer D. present both offers upon the seller's return

D. present both offers upon the seller's return

A broker gave a number of business cards to a hotel registration clerk and asked the clerk to refer customers to him. For each customer the clerk refers, the broker promises to pay a fee of $20. What will happen if this fee is paid? A. the broker will be in violation of the law B. the hotel clerk will not be in violation of the law C. neither the broker not the clerk will be in violation of the law D. both the broker and the clerk will be in violation of the law

D. both the broker and the clerk will be in violation of the law

What would be considered an arm's length transaction? A. mr. Ajax to the Ajax corporation B. mr. Smith to Mrs. Smith (husband and wife) C. Mr. Black to Mrs. Jones (not related) D. Gateway Corporation to ABC investment (Gateway owns 15 shares of ABC)

C. Mr. Black to Mrs. Jones (not related)

``` What relationship does a transaction broker have with his or her employer? A. non-representation B. caveat emptor C. full fiduciary D. limited representation ```

D. limited representation

``` Real estate brokerage commissions are based on which of the following? A. MLS rule B. custom C. the seller's equity D. the actual sales price ```

D. the actual sales price

How does the Sherman Antitrust Act relate to real estate brokerage? A. equal opportunity brokerage B. the fixing of commission rate C. the fixing of interest rates D. disclosure of the true annual percentage rate

B. the fixing of commission rate

``` Real estate brokers usually represent customers as what type of agent? A. universal agent B. general agent C. special agent D. quasi-agent ```

C. special agent

``` A broker is in a full representation relationship with a principal. What is the name for this relationship? A. general agency B. transactional brokerage C. dual agency D. single agency ```

D. single agency

A Georgia broker and a Florida broker form a joint venture to sell a Florida property that a friend of the Georgia broker owns. The Georgia broker comes down to assist the Florida broker in the sale of the property. The Florida broker: A. may share the commission with the Georgia broker B. cannot pay the Georgia broker part of the commission C. can pay the Georgia broker only a referral fee D. can pay the Georgia broker only for expenses and travel

B. cannot pay the Georgia broker part of the commission

``` Brokers Tony and Gail agree to cooperate on the sale of Jackie's house. The deal is closed and Jackie pays the full commission to Troy, the listing broker. Troy refuses to pay Gail her share. Of what may Troy be guilty? A. concealment B. poor judgment C. failure to account and deliver D. misrepresentation ```

C. failure to account and deliver

A seller and a broker make an agreement that the broker may receive 100% of the deposit if the buyer defaults. In this locality, a 50/50 split of forfeited deposits is customary. What may the broker do? A. take only 50% B. take 100% C. take only his or her customary commission D. nothing, but they may be disciplined for unfair business practice

B. take 100%

Broker Pat shows a home to a prospect. Pat offends the prospect by telling a dirty joke. The prospect advises Pat that he or she will not deal through them and goes to broker Terry who shows the prospect the very same house and closes the deal. The home was an open listing. Which statement best applies? A. pat can collect a full commission B. Terry must split the commission 50/50 with Pat C. Pat cannot collect a commission D. neither Pat nor Terry is entitles to a commission

C. Pat cannot collect a commission

In the course of listing the seller's house, the sales associate noticed that minor repairs were necessary. The sales associate suggested that the sellers use ABC contractors, Inc., to handle the repairs. ABC forwarded the sales associate 10% referral fee. Which statement applies? A. this is common in the industry and therefore legal. B. this is illegal, as the referral fee should have been paid to the broker C. this is unethical, but legal D. this is a violation of real estate license law

D. this is a violation of real estate license law

Mr. Black listed his farm "Blackacre" as being 20 acres with broker Bob for sale at $200,000. Bob obtained an offer from Joe to purchase at $10,000 per acre. The survey showed the farm contained only 18 acres, and since Mr. Black had accepted the offer, the transaction was closed at an $180,000 sales price. Mr. Black is: A. liable for a commission on the listed price B. liable for the full and customary percentage on the selling price C. not liable for the commission since the amount of the commission was not agreed upon, and broker bob did not check the acreage D. liable for the commission, but not the full and customary percentage, since the sale was $20,000 less than the listed price

B. liable for the full and customary percentage on the selling price

An office policy manual typically contains all of the following, EXCEPT: A. commission splits B. office procedures C. telephone usage D. salary ranges for independent contractors

D. salary ranges for independent contractors

A California broker refers a prospect to a Florida broker. The Florida broker sells the prospect a property in Boca Raton. Even though the California broker did not participate directly in the sale, and in fact was never even in the state, the Florida broker sends half the commission as a referral fee. This is: A. legal only if the California broker attends the closing B. a violation since the California broker had no direct participation C. legal D. a violation since the California broker is not licensed in Florida

C. legal

A sales associate agrees to give part of his commission to the seller, provided that the seller agrees to send the sales associate at least one hot buyer prospect. This is: A. a violation, because the the sales associate did not check with the broker B. a violation, because F.S. 475, prohibits compensating unlicensed individuals for referrals C. not a violation as the compensation does not exceed $1,000 D. not a violation

B. a violation, because F.S. 475, prohibits compensating unlicensed individuals for referrals

A Georgia broker accompanies his prospects to Florida and shows them three homes. After finding a home that the prospects like, the Georgia broker finds a Florida broker to give the deal to. The Georgia broker requests 50% of the commission as a share for assisting in the sale. Which statement applies? A. if the Florida broker pays the Georgia broker, both will have violated F.S. 475 B. The Georgia broker can be paid, provided it is no more than 50% C. if the Florida broker pays the Georgia broker, no laws will be broker D. provided that the check is mailed to Georgia, there is no violation

A. if the Florida broker pays the Georgia broker, both will have violated F.S. 475

``` A broker sold an $85,000 house, charging the seller a 6% commission. Due to extenuating circumstances, the buyer defaulted on the contract and forfeited his 10% deposit. Based on custom, how much commission should the broker receive? A. $2,550 B. $3,400 C. $4,250 D. $5,100 ```

C. $4,250 Half of the 10% deposit

A sales associate helps her aunt rent an apartment. To show her gratitude, the aunt gives her niece a $250 commission. What should the sales associate do with the $250? A. give it back to her aunt B. give it to her broker C. keep it D. keep it, but only with her aunt's permission

B. give it to her broker

A broker has a friend in Michigan who refers prospects from time to time. The broker reimburses the friend for any expenses but does not pay the friend a commission or referral fee. Which statement applies? A. this is an unlawful practice B. this is a lawful practice C. this is lawful so long as the friend does not come to Florida D. this is unlawful unless expenses are supported by receipts

A. this is an unlawful practice

With whom can a broker share a commission? A. a New Jersey broker who has not violated any Florida laws B. a person who gave a referral C. an attorney D. an auctioneer

A. a New Jersey broker who has not violated any Florida laws

``` What is the principal of a broker also known as in the agency form of business? A. employer in a single agency B. the one paying the commission C. seller D. buyer ```

A. employer in a single agency

``` A broker's responsibilities to the principal include securing which of the following? A. the highest price B. the best price C. the lowest price D. any price ```

B. the best price

``` Two brokers are working on an exchange. The commission agreement for each property is the same percentage. The properties are of unequal value, and the brokers decide to combine their commissions and split 50/50. What must the brokers do first to make this legal? A. nothing B. tell the owners C. tell the owners and get them to agree D. notify the FREC in writing ```

C. tell the owners and get them to agree

``` A broker's legal duty to the principal includes all of the following EXCEPT: A. obeying all instructions B. acting in good faith C. obtaining the best price D. disclosing all material facts ```

A. obeying all instructions

Chapter 4 Flashcards

Authorized Relationships: Duties and Disclosures