UNIT 2

Question 1

What is the definition of a single agent?

Answer 1

An agent who represents only one person in the transaction, i.e., either the buyer or the seller.

Question 2

How is subagency created?

Answer 2

Subagency is created by the agreement of the people who are involved in the transaction.

Question 3

How does a cooperating broker accept a unilateral blanket offer of subagency?

Answer 3

If a unilateral offer of subagency is in place, the cooperating broker accepts it by showing the property to a buyer customer.

Question 4

What obligations does a subagent of the seller owe to the seller and what obligations does the subagent owe to the buyer?

Answer 4

The subagent owes the seller the same fiduciary responsibilities they would owe to any client.

The subagent owes customer level services to the buyer: honesty, fair dealing, and the proper disclosure of pertinent facts that affect the value of the property.

Question 5

What is dual agency?

Answer 5

Dual agency is the situation that exists when a real estate firm or a real estate licensee represents both the seller and the buyer, or the landlord and the tenant, in the same transaction.

Question 6

What is undisclosed dual agency and what happens in this situation?

Answer 6

Undisclosed dual agency is a dual agency relationship that is not disclosed and agreed to in writing. If this situation occurs, the agent has breached their fiduciary responsibilities to the client.

Question 7

Under what circumstances will most states allow dual agency and what is it called?

Answer 7

Dual agency is allowed with disclosure and informed consent. This is known as consensual dual agency.

Question 8

What is designated agency and why is it important?

Answer 8

Designated agency means that a broker may designate one or more licensees to act exclusively as the agent of the seller or landlord, and designate one or more licensees to act exclusively as the agent of the buyer or tenant, in the same transaction. This arrangement must also be disclosed to both parties and the broker must obtain the written consent of both the buyer and the seller.

This is important because it can eliminate the potential conflict involved in a consensual dual agency arrangement

Question 9

What is meant by single agency?

Answer 9

In a single agency relationship, the agent can represent only one party—either the buyer or the seller—in a single transaction, but never both.

Question 10

Why would a tenant enter into an agency agreement with a broker?

Answer 10

A tenant could choose to employ a broker to locate property that will meet their specific needs, such as retail or office space.

Question 11

What are three advantages to entering into a buyer agency agreement?

Answer 11

The buyer can tailor the agreement to reflect specific needs or wants.
The broker will be willing to search in a wider market area than just in-house and local MLS listings.
The buyer will be in a stronger negotiating position.

Question 12

List four ways an agency agreement can be involuntarily terminated.

Answer 12

Death or incapacity of either party
Condemnation of the property
Destruction of the property through fire, vandalism, or natural disaster
Bankruptcy

Question 13

When a seller gives permission to a broker to submit the property to the MLS, the seller is authorizing the broker to make a blanket unilateral offer of what, to all the other members of that MLS?

Answer 13

Subagency

Question 14

Revocation of a broker’s license results in

Answer 14

Termination of the relationship.

Question 15

What is the term given to an agent who is acting as a buyer’s and seller’s agent in the same transaction?

Answer 15

Dual agent

Question 16

If a cooperating broker accepts the offer of subagency from a listing broker, to whom does the cooperating broker owe fiduciary duties?

Answer 16

Seller

Question 17

Which of these is not a way a buyer’s agent might receive compensation?

Answer 17

Agent gets everything above the net price set by the seller.

Question 18

In most states, at what point must licensees give potential sellers or buyers a written disclosure form for all residential transactions?

Answer 18

At first substantive contact

Question 19

Which of the following are common types of agency relationships?
Single agency
Each of these
Consensual dual agency
Seller/Landlord agency

Answer 19

Each of these

Question 20

Designated agency means the clients do not have the full level of fiduciary duties available to them that they would have if they were fully involved in seller agency or buyer agency. In this situation, the client gives up the fiduciary duty of undivided what?

Answer 20

Loyalty

Question 21

Licensee Jim listed a property and Licensee Sally sold the property to her client. Jim and Sally work for the same brokerage. This type of sale is known as what?

Answer 21

In-house sale

Question 22

Sally is a subagent working for Seller Pat. What does Sally owe to Buyer Brad?

Answer 22

Honesty and fair dealing

Question 23

Which of the following is an example of involuntarily termination of agency?

Answer 23

Bankruptcy

Question 24

Which of the following types of agency is not allowed in most states?

Answer 24

Undisclosed dual agency