Unit 3.4 - Agency in Sales Transactions (LTP Quiz) Flashcards
If authorized, designated agency could be practiced between all the following licensees EXCEPT:
Choose only ONE best answer.
A
Two provisional brokers affiliated with the same real estate firm.
B
The broker-in-charge and a non-provisional broker in the same real estate firm.
C
Two non-provisional brokers affiliated with different real estate firms.
D
A provisional broker and a non-provisional broker in the same real estate firm.
C
Two non-provisional brokers affiliated with different real estate firms.
If the two brokers are in different firms, this is not any form of dual agency, much less designated dual agency. Remember that dual agency of any type involves one firm representing two clients.
A house which is owned by Bob is listed for sale with National Realty and placed in the MLS. Jill, a newcomer to the area, goes to Jack, a provisional broker with World Realty, for assistance in buying a home. World Realty does not practice buyer agency. Jill submits an offer to purchase the home through Jack and the offer is accepted by Bob. Which party to the transaction does Jack represent in the transaction?
Choose only ONE best answer.
A
Bob
B
National Realty
C
World Realty
D
Jill
A
Bob
Jack cannot offer to represent Jill as his firm World Realty does not practice buyer agency.
Since there are two firms involved here, we are not talking about dual agency. That leaves only one choice for Jack and World Realty…they must be representing the seller.
Jack can act as a subagent of the seller, write up an offer for the buyer, owing his allegiance is to the seller, Bob.
A provisional broker receives a call from a prospective buyer on a property that he has listed. The buyer and provisional broker meet at the property. The provisional broker realizes that they left the Working with Real Estate Agents Brochure at the office. The provisional broker orally explained the brochure and the buyer consented to representation and authorized dual agency. Is the provisional broker’s actions lawful?
Choose only ONE best answer.
A
No. The Working with Real Estate Agent’s Brochure must be provided in writing at first substantial contact.
B
No. A buyer cannot consent to oral buyer agency unless the Working with Real Estate Agent’s Brochure has been signed by the prospective buyer.
C
Yes. The provisional broker has met the disclosure responsibility and the buyer can enter into oral buyer agency agreement.
D
Yes. The provisional broker may orally explain the Working with Real Estate Agent’s Brochure, however must send the buyer a copy of the brochure within 3 calendar days.
D
Yes. The provisional broker may orally explain the Working with Real Estate Agent’s Brochure, however must send the buyer a copy of the brochure within 3 calendar days.
A broker must explain the Working with Real Estate Agent’s Brochure at first substantial contact. If it is not reasonable to deliver a copy of the form in person, or if in this instance the broker does not have a copy available, they must still explain the brochure and then have 3 calendar days to send a copy to the prospective client / customer.
A client that has not signed the form may still consent to oral buyer’s agency and authorize dual/designated agency.
A buyer decides not to sign an Exclusive Buyer Agency Agreement with a firm, and still wants to see property without representation. The agent must:
Choose only ONE best answer.
A
Have the buyer sign Non-exclusive Buyer Agency Agreement prior to showing any property.
B
Reduce the oral buyer agency relationship to writing no later than closing.
C
Prepare a comparative market analysis detailing a probable sales price range.
D
Disclose all facts that are deemed material regarding the transaction.
D
Disclose all facts that are deemed material regarding the transaction.
When a broker does not represent the buyer, they can act as a seller’s subagent or agent of the seller. A broker must represent at least 1 party in the transaction. The broker has a duty to discover and disclose material facts to all parties in the transaction. When a broker represents the seller they are not permitted to prepare a comparative market analysis and can only recommend the listing price if an unrepresented buyer asks how much they should offer.
Designated Agency can be practiced within the same firm in all of the following situations EXCEPT:
Choose only ONE best answer.
A
Provisional broker working with a non-provisional broker in the office
B
Broker-in-charge working with a provisional broker in the office
C
Non-provisional broker working with another non-provisional broker in the office
D
Provisional broker working with another provisional broker in the office.
B
Broker-in-charge working with a provisional broker in the office
Even when designated agency is practiced by the firm and authorized by both the buyer and seller, it cannot be practiced by the broker in charge and a provisional broker within the office. All other combinations of provisional broker and non-provisional broker will be permitted to practice designated agency unless they have personal or confidential information about the other party. The BIC will appoint the brokers (PB or Non-PB) that will act as designated agents.
Samir is a nonprovisional broker affiliate of XYZ Realty and is holding an open house at his new listing of 540 Oakmont Street in Knightdale. Candace, a potential buyer, tours the property during the open house and has a relatively long discussion with Samir regarding the home, its features, and the surrounding neighborhood. Which of the following statements is accurate regarding this interaction?
Choose only ONE best answer.
A
Samir should disclose to Candace his agency relationship with the seller before Candace gives any motivating information regarding her potential home purchase.
B
Samir must give Candace the Working With Real Estate Agents brochure and explain agency options to her (including a warning that he represents the seller) when Candace first enters the open house
C
Samir need not make any disclosure to Candace regarding Agency since his relationship is with the sellerÂ
D
Samir must obtain Candace’s signature on the Working With Real Estate Agents brochure if Candace gives any personal/confidential information that might harm her in the transaction.
A
Samir should disclose to Candace his agency relationship with the seller before Candace gives any motivating information regarding her potential home purchase.
When representing a seller and speaking with a buyer, the licensee does not have to disclose their agency relationship immediately at the beginning of the conversation. They must do so at or before “first substantial contact”, which is the moment the buyer gives any personal/confidential information that might harm them in the transaction. Statement #4 is incorrect because consumers are never required to sign the Working with Real Estate Agents Brochure
Which of the following would create an agency relationship between a brokerage and a seller?
Choose only ONE best answer.
A
When an agent of the firm prepares a comparative market analysis.
B
When the seller orally agrees to representation by the firm so long as it is reduced to writing prior to an offer.
C
By written agreement between the seller and the firm.
D
When an agent presents the Working with Real Estate Agents Brochure and the seller signs it.
C
By written agreement between the seller and the firm.
Agency is formed by agreement between the client and the firm. A listing agreement must be in writing from inception – provide for a definite end date, contain non-discriminatory language and disclosure of the broker’s license number. A broker should prepare a CMA to present to the seller during the listing process, however it does not create agency. The Working with Real Estate Agents Brochure must be presented a first substantial contact, which explains the various forms of agency, however does not create an agency relationship. A buyer agency agreement may be oral so long as it is non-exclusive and open ended, and must be reduced to writing prior to presentation of an offer.
Which of the following statements is true regarding a dual agency transaction in North Carolina?
Choose only ONE best answer.
A
Brokers and firms who sign a buyer agency agreement after first showing the property to the buyer as a subagent of the seller are dual agents.
B
The firm in a dual agency transaction will represent both clients but may not seek the best possible outcome for either of the clients.
C
Both of the above are true
D
Neither of the above are true
C
Both of the above are true
In statement I, the broker shows the property as a “subagent of the seller”. This means the broker is affiliated with the listing firm….they work for the firm who represents the seller and therefore they personally also represent the seller. If they later (subsequently) execute a buyer agency agreement with the same buyer on that same property, the firm would then be representing both the seller and the buyer in the transaction….this creates dual agency. Statement II is correct of all true dual agency transactions. Because the firm represents both seller and buyer, it is impossible in dual agency to seek the best possible outcome for one without harming the other.
Suzy, a licensee with All Stars Realty, is the on-site agent at Babbling Brook subdivision. She held a busy open house on Sunday with 25 visitors attending. The following day a potential buyer comes to the sales center without an agent and wants to be shown all currently available listings. What, if anything, must Suzy give them?
Choose only ONE best answer.
A
Disclosure to Buyer from Seller’s Agent or Subagent
B
Babbling Brook’s brochure regarding service offered
C
Working With Real Estate Agents Disclosure
D
Nothing is required
C
Working With Real Estate Agents Disclosure
When a brokers holding open house there is no obligation to disclose the Working with Real Estate Agents Brochure unless the conversation shifts from facts about the property to personal / confidential information. When a buyer is requesting an individual showing, this is considered first substantial contact and therefore the broker must disclose the Working with Real Estate Agents Brochure and determine the type of agency that will be practiced.
Connie Cautious wishes to buy a property listed with Delta Realty. Company policy allows dual agency but Connie insists upon exclusive buyer’s representation. She still wants to purchase the property. Delta Realty
Choose only ONE best answer.
A
May act as an exclusive buyer’s agent in the purchase of the property
B
Should explain that Connie must go to another firm for exclusive buyer’s representation
C
Should tell her she can get the same representation with disclosed dual agency as she can with exclusive buyer’s agency
D
May represent both the buyer and the seller exclusively so long as one of the brokers in not on provisional status
B
Should explain that Connie must go to another firm for exclusive buyer’s representation
When a brokerage represents both the buyer and seller in a transaction dual agency arises. The brokerage cannot act as an exclusive agent to the buyer when the already represent the seller. If the buyer only wants exclusive buyer representation, then they should refer the buyer to another firm.
All of the following statements are true of the Working With Real Estate Agents Disclosure form in North Carolina EXCEPT:
Choose only ONE best answer.
A
The WWREA disclosure is properly presented to any potential client no later than the time that person first shares personal and confidential information about themselves.
B
Should a seller refuse to sign the WWREA disclosure, the broker and their affiliated firm may still be engaged through an Exclusive Right to Sell Listing to represent that seller in a transaction
C
There is a separate location on the WWREA disclosure where a buyer can be made aware that the broker working with them is functioning as a “subagent of the seller”
D
Working With Real Estate Agents is a Commission-provided form appropriate for use in all real estate transactions in North Carolina
D
Working With Real Estate Agents is a Commission-provided form appropriate for use in all real estate transactions in North Carolina
Statements A, B, and C are all correct. Statement D is not true because the Working With Real Estate Agents Disclosure is only used in sales transactions. You really need to stop and think about that rule. This will absolutely show up on a license exam and it’s silly to miss it. If there is property being SOLD, then the WWREA disclosure should be used. It does not matter whether the licensee is talking to a buyer or a seller or who the licensee represents. If a real estate licensee in North Carolina is talking with a buyer or a seller and has “first substantial contact” by receiving confidential information about that buyer or seller, the licensee must present the WWREA disclosure and explain it. The form is NOT used in all real estate transactions…..that would include leases and property management, which is incorrect.
Ann Agent is working with Bob Buyer and knows that Bob is willing to pay the asking price of a property listed with her firm. She must keep this confidential if
Choose only ONE best answer.
A
she is a Dual Agent
B
she is a Seller’s Subagent
C
she is a Non-Provisional Agent representing the Seller
D
she used to represent Bob under a buyer’s agency agreement
A
she is a Dual Agent
When an agent is aware of personal / confidential information that could weaken a client’s bargaining position they are obligated to keep it private (conceal the info), unless it rises to the level of material fact. A broker that is representing the seller exclusively or as a designated agent, and becomes aware of the fact that the buyer would pay more, they have an obligation to disclose it to their client. When an agency agreement terminates, the broker is no longer obligated to keep the clients information confidential if they are involved in a transaction where they represent the seller.
A prospective buyer is approached by Billy of HPW Real Estate. The buyer introduces himself and inquires generically about properties for sale in a particular neighborhood wanting to know square footage and list price. Abruptly the buyer takes a cell phone call and walks away ending the conversation. Based on this interaction, which of the following is true?
Choose only ONE best answer.
A
Billy’s interaction with the buyer probably would not represent first substantial contact and thus would not trigger a disclosure of Billy’s relationship to the transactions.
B
HPW Real Estate would be required to have a signed copy of the Working With Real Estate Agents disclosure in this situation.
C
Should Billy wish to represent this buyer in the future, he would not need to formally present the Working With Real Estate Agents disclosure.
D
Having discussed personal or motivating information regarding this particular buyer, Billy is operating outside of license law by not presenting the Working With Real Estate Agents brochure.
A
Billy’s interaction with the buyer probably would not represent first substantial contact and thus would not trigger a disclosure of Billy’s relationship to the transactions.
Billy has likely not had “first substantial contact” with this buyer because no personal/motivating information has been shared by the buyer about themselves. If and when the buyer does go further and disclose something personal/motivating about themselves, Billy and HPW would need to present the WWREA disclosure at that time.
In co-brokered residential real estate sales transactions where the selling agent is a subagent of the seller, which agent owes his primary loyalty to the buyer?
Choose only ONE best answer.
A
Listing agent
B
Selling agent
C
Both the listing and selling agent
D
Neither the listing nor the selling agent
D
Neither the listing nor the selling agent
Remember that the “ing” words (listing, selling) talk about actions. The listing broker brings the listing to the market. The selling broker brings the buyer to the transaction.
A selling broker brings the buyer but does not always represent that buyer. All buyer’s agents are selling agents but not all selling agents are buyer’s agents.
The seller’s agent (listing agent) represents the seller. The selling agent in this case is acting as subagent – which means that they represent the seller as well.
Therefore the buyer is not represented.
A North Carolina real estate firm consists of just a broker-in-charge and one provisional broker. The broker-in-charge is the listing agent for a residential property. The listing agreement authorizes dual agency. The provisional broker enters into a written buyer agency agreement with a potential buyer authorizing dual agency. The provisional broker shows buyer the listed property and the buyer decides to make an offer. The provisional broker’s relationship with the buyer is
Choose only ONE best answer.
A
buyers agent.
B
designated agent.
C
dual agent.
D
seller sub-agent.
C
dual agent.
Since the same firm is representing both the buyer and the seller in this transaction, it must be a form of dual agency. This particular case CANNOT be designated dual agency because that would be a Broker in Charge designated against a provisional broker under their supervision. That leaves dual agency as the only possible choice here.
Bob Broker is BIC of XYZ Realty and has listed Mr. Smith’s property. Sue is a provisional licensee with XYZ Realty and has been representing a buyer who now wants to buy Mr. Smith’s property. XYZ offers all forms of agency allowable in North Carolina. Which of the following best describes Sue?
Choose only ONE best answer.
A
Subagent of Seller
B
Buyer Agent
C
Dual Agent
D
Designated Agent of Buyer
C
Dual Agent
When both the buyer and seller are represented by the same brokerage firm, dual agency arises. The next question would be – does the firm practice dual/designated agency and have the buyer and seller agreed to both. There are two things that will prevent designated agency even when both the buyer and seller have agreed – PB and BIC and already possessing personal / confidential information. A provisional broker and the broker in charge cannot act as designated agents – they can act as dual agents.
A North Carolina buyer’s agent who is a provisional broker makes an appointment to show her buyer-client a property listed by a cooperating firm. After having made the appointment but before showing the property, the buyer’s agent learns that the listing firm is offering a $500 incentive bonus to any agent who procures the sale of the property. Given these circumstances, how must the buyer’s agent disclose the incentive bonus to her buyer-client?
Choose only ONE best answer.
A
Written disclosure must be made prior to showing her buyer-client the property.
B
Written disclosure must be made before the buyer-client makes an offer to purchase the property.
C
Oral disclosure is sufficient because the bonus did not influence the brokerÂ’s decision to select the property for showing.
D
Oral disclosure prior to showing the property is sufficient because the bonus amount is considered nominal.
B
Written disclosure must be made before the buyer-client makes an offer to purchase the property.
Buyers must always be informed of all commissions, bonuses, payments, etc in a transaction before they are allowed to make an offer. This disclosure must be made in writing.
A prospective buyer arrives to view a North Carolina residential property during an open house. The broker on duty must
Choose only ONE best answer.
A
disclose his/her agency status immediately before answering any questions from the prospective buyer.
B
disclose his/her agency status before the conversation moves from information about the property to personal information about the prospective buyer.
C
explain the North Carolina Real Estate Commission’s Working with Real Estate Agents publication before providing any information about the house to the prospective buyer.
D
explain his/her agency status only if the prospective buyer requests more information after walking through the house.
B
disclose his/her agency status before the conversation moves from information about the property to personal information about the prospective buyer.
This is a question regarding when we present the Working With Real Estate Agents brochure, which we do at “first substantial contact”. This happens when a buyer or seller gives personal/motivating information (why they want to buy or sell, how much they would pay, they are in a hurry, etc) about themselves.
Which of the following statements regarding Designated Dual Agency in North Carolina is correct?
Choose only ONE best answer.
A
A Broker in Charge of a firm may lawfully appoint any two nonprovisional brokers to represent the buyer and seller individually and while providing advice so long as the brokers have no knowledge of the competing side of the transaction.
B
A provisional broker may not be appointed as a Designated Dual Agent unless they are also assigned a nonprovisional broker to supervise them in the transaction.
C
Both I and II
D
Neither I nor II
A
A Broker in Charge of a firm may lawfully appoint any two nonprovisional brokers to represent the buyer and seller individually and while providing advice so long as the brokers have no knowledge of the competing side of the transaction.
Statement I is true. Any two nonprovisional brokers (even if one is the BIC) can be appointed in a transaction as long as they do not know confidential information about the opposing party before being designated. Statement II is false. Provisional Brokers can be designated dual agents in the exact same way as nonprovisional brokers with only one exception. A provisional broker cannot be designated against (on the opposite side of) their Broker in Charge.
All of the following statements are true of Buyer Agency in North Carolina EXCEPT:
Choose only ONE best answer.
A
An oral buyer agreement may exist binding the firm and client to one another exclusively so long as the agreement is reduced to writing at a later time
B
Oral buyer agency is an option available to both provisional and nonprovisional brokers prior to presentation of an offer on behalf of the buyer
C
Should the firm execute a Buyer Agency Agreement with a buyer interested in one of the firm’s listings, that Agreement should provide for the firm’s functioning as a dual agent
D
Exclusive Buyer Agency agreements must have an expiration date just as Exclusive listing agreements do.
A
An oral buyer agreement may exist binding the firm and client to one another exclusively so long as the agreement is reduced to writing at a later time
Oral buyer agency is never binding on either the client or the firm. It cannot tie the two together in any way or for any period of time. In order for the agreement to be binding, it MUST be put into writing.
Agency Disclosure should be made no later than the moment confidential information is shared with a licensee by a buyer or seller in all of the following situations EXCEPT
Choose only ONE best answer.
A
Bobby the BIC is giving a listing presentation to a seller who is considering hiring Bobby’s firm and the seller states that they are relocating due to family emergency and need to sell quickly.
B
Larry the listing agent is holding an open house and is told by a visitor that they aren’t really interested in making an offer because they have poor credit due to bankruptcy
C
Betty broker who is emailing properties to a potential new buyer client first hears that the buyer needs to purchase quickly due to a work relocation
D
Salesperson Sam who is working as a buyer’s agent reaches out to Lisa the listing agent to schedule an appointment to view the listed property.
D
Salesperson Sam who is working as a buyer’s agent reaches out to Lisa the listing agent to schedule an appointment to view the listed property.
In this context, “agency disclosure” means giving the buyer or seller the Working With Real Estate Agents brochure. This is done in all sales transactions whenever a buyer or seller gives confidential information. It can be done sooner, but there is no requirement to do it sooner. There is ONE EXCEPTION to this rule. When a licensee/agent/broker/salesperson is representing a buyer as a buyer’s agent and that licensee is reaching out to a seller or seller’s agent, agency disclosure must be made at first contact. This is a key distinction that will absolutely show up on the state side of the exam. MAKE SURE YOU KNOW IT.
Herb Smith listed his house with Sam Shepherd, a provisional broker with ABC Realty. ABC offers all types of agency allowed in North Carolina. Sam also represents Barb Buyer. Barb now wants to see Herb’s house. Can Sam represent both parties in the transaction?
Choose only ONE best answer.
A
Yes, if he acts as a subagent of the seller
B
Yes, if he acts as a dual agent for both
C
No, he must be authorized as a designated dual agent.
D
No, he must refer either the buyer or seller to a different agency
B
Yes, if he acts as a dual agent for both
When one a broker represents both the buyer and the seller in a transaction, the only option is dual agency. The broker is not permitted to advocate for one party over the other and cannot disclose personal / confidential information about the buyer to the seller or the seller to the buyer, unless it rises to the level of material fact.
Jack is working with Sally of Keller Williams Cary as he purchases his new home. Sally has shown him several listings and eventually Jack agreed to sign a buyer agency agreement with KW Cary for the transaction. Upon inquiring about the home at 123 Main Street, he found that Sally is affiliated with the listing firm of the property. Based on this new information, what is the most likely course of action that will need to be taken by Sally?
Choose only ONE best answer.
A
Since the property in question is listed by Sally’s firm, she will automatically be considered a dual agent and no further action is required.
B
Sally must obtain written authorization for dual agency prior to showing Jack the property listed by her firm
C
Sally should disclose the status of the listing and explain the implications of dual agency before obtaining the verbal permission of the buyer and seller to show the property
D
Since the seller has previously agreed to dual agency, the buyer need only be disclosed the status and give their permission before they make an offer on the listed property.
B
Sally must obtain written authorization for dual agency prior to showing Jack the property listed by her firm
Sally and KW Cary are Jack’s buyer agent. Sally and KW Cary are also the listing firm for this home. This is dual agency. A firm needs permission from BOTH THE BUYER AND THE SELLER in order to practice dual agency. This permission needs to come from both before the property can even be shown to the buyer. The question is whether that permission must be in writing or can it be oral? When getting permission from a buyer or seller for dual agency, the buyer and/or seller may give oral permission for dual agency in order to show the property if the buyer has an oral buyer agency agreement. Stop and read that again! If the buyer has an ORAL agreement, then permission for dual agency showings (from both seller and buyer) can be ORAL. If the buyer has a written buyer agency agreement, the permission must be from BOTH parties IN WRITING prior to even showing the property. Since Jack has a written buyer agency agreement with KW Cary and KW Cary is the listing firm of the property he is interested in seeing, written permission must be obtained from both Jack (buyer) and the seller before Jack can be shown the property by anyone affiliated with KW Cary.
The doctrine of “caveat emptor” still applies to some extent to the relationship between
Choose only ONE best answer.
A Seller and broker B Buyer and broker C Listing broker and selling broker D Seller and buyer
D
Seller and buyer
Caveat emptor, meaning let the buyer beware, applies to the seller and the buyer. The agent or agents have a duty to disclose material facts – disclosing what they know or reasonably should have known.
