Section 4 Test Questions Flashcards
Which of the following is true of the connection between compensation and the agency relationship?
The relationship is independent of any compensation arrangement
Which of the following conditions is necessary for a customer to qualify as “ready, willing, and able” in the context of a commissionable transaction?
The customer must be legally competent to undertake the transaction
A property seller empowers an agent to market and sell a property on his behalf. The kind of agency represented is
special
An agent informs a buyer that a provision in a contract is very commonplace. After explaining the clause, the agent assures the buyer that the clause does not mean anything significant. If something goes wrong with the transaction, the agent could be liable for
practicing law without a license
One of the parties to an agency relationship defaults, and the agreement terminates. Which of the following is true?
The defaulting party may have a financial consequence
The meaning and salient characteristics of the agency relationship should be disclosed to the client
prior to completing a listing agreement
An agency relationship may be involuntarily terminated for which of the following reasons?
Condemnation of the property
A landlord promises to compensate a broker for procuring a tenant, provided the broker is the procuring cause. This is an example of a(n)
open rental listing
If an agent has an exclusive listing to sell a property, and the property is then taken by eminent domain, what is the status of the listing?
It may be terminated against the agent’s will
What is a multiple listing?
A listing that is entered in a multiple listing service to enable cooperation with member brokers.
When a broker enters into a listing agreement, the broker has agreed to accept which of the following?
Fiduciary and contractual obligations with the client.
When must a listing agent disclose his or her agency relationship to prospective tenants or buyers?
whenever substantive contact is made beyond causal converstation
The duties of a transaction broker or facilitator include
disclosing material facts that affect the value of the property to both parties.
Audrey wants to take a vacation. To do so, she authorizes an agent to conduct the operations of one of her business enterprises. The kind of agency she has established is
general
Among the fiduciary duties imposed on a real estate agent is the requirement to
present all offers to the principal regardless of their amount.
An agent enters into a listing agreement with a homeseller, but then becomes too busy to professionally fulfill the terms of the agreement. To solve the dilemma, the agent assigns the agreement to another licensee in the office. Which of the following is true about this situation?
The agent cannot assign the listing agreement.
A property owner agrees to pay a broker an open-ended commission as the difference between the sale price and a net amount, provided the owner receives a minimum amount of proceeds from the sale at closing. This is an example of a(n)
net listing
A salesperson, without an oral or written listing agreement, brings potential buyers to the seller. The seller says, “You can bring me buyers if you want, but I’m not paying you a commission.” The salesperson then continues to direct buyers to the property. Which of the following is true about this situation?
An implied agency may have been created, with obligations to perform for both seller and agent.
A broker obtains an exclusive listing to sell a house, but after two months, he abandons the listing because the seller is too demanding and hot-tempered. What can the seller do in this situation?
Sue the broker for money damages.
The degree of authority granted by a residential brokerage listing agreement generally allows the agent to
market, sell and show the property.
A buyer agent or tenant representative should disclose his or her agency relationship to the owner’s agent
upon initial contact.
A principal instructs an agent to market a property only to families on the west side of the university campus. The agent refuses to comply. In this case,
the agent has not violated fiduciary duty.
Which of the following is a dual agency situation?
One agent represents both sides in a transaction
The standard of care and competence that a principal can expect from an agent is generally that which is
comparable to that of other practitioners in the area.
Agent Peter has an open listing with Frank. Paul is Peter’s broker. Agent Perry’s customer buys Frank’s house. Patrick has a commission agreement with Frank. Who is most likely to be compensated in this scenario?
Perry, since he found the customer.
In which of the following contact situations would a seller’s agent be expected to disclose his agency relationships?
The agent is showing the client’s property to a prospective buyer.
Implied agency arises when
a party creates an agency relationship outside of an express agreement
One of the agent’s fiduciary duties that continues even after a listing agreement expires is
confidentiality
A subagent is the agent of
a broker who has an agency relationship with a client
Agent Gerry has executed an exclusive buyer broker agreement with the Andersons. The agent subsequently places an offer with Melinda, the exclusive selling agent for the Lincolns, to buy their lakefront property. The offer contains provisions for the Lincolns to pay the brokerage commission, which the Lincolns agree to. Given this set of circumstances, Gerry owes the full set of fiduciary duties to
the andersons
From an agent’s point of view, the most desirable form of listing agreement is a(n)
exclusive right to sell
In the context of agency law, the legal difference between an owner representation agreement and a buyer representation agreement is
the client
An owner’s agent is showing a buyer a residential property for sale. The buyer notices water stains on the foundation walls and floor, and informs the agent. The appropriate course of action for the agent is to
inform the seller
The essential foundation of the agency relationship consists of
good faith, trust and confidence
Agent Michael is showing his new listing to a buyer who informs him that he has just inherited five million dollars. Michael is now bound by fiduciary duty to
disclose the information to the seller.
A multiple listing authorization gives a broker what authority?
To list the owner’s property in a multiple listing service.
An agent is operating as a disclosed dual agent on a transaction. In this case, the agent
may not represent one party’s interests to the detriment of the other.
A principal discloses that she would sell a property for $500,000. During the listing period, the house is listed and marketed for $530,000. No offers come in, and the listing expires. Three weeks later, the agent confides to a customer that the seller would have sold for less than the listed price. Which of the following is true?
The agent has violated the duty of confidentiality.
An owner agrees to pay a broker for procuring a tenant unless it is the owner who finds the tenant. This is an example of a(n)
exclusive agency agreement
Although a listing broker may delegate listing tasks to an employed licensee, the broker may not delegate the authority to
obtain and distribute compensation.
