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Real Estate Exam! > Unit 4: Authorized Relationships, Duties, and Disclosure > Flashcards

Unit 4: Authorized Relationships, Duties, and Disclosure Flashcards

1
Q

Judge-made law manifested in decrees and judgments of the courts (case law), as opposed to statutory law.

A

Common Law

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2
Q

Law created by the enactment of legislation, as opposed to law created by judicial decisions (common law).

A

Statutory law

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3
Q

The body of law created by administrative agencies in the form of rules, regulations, orders, and decisions.

A

Administrative Law

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4
Q

The party employing the services of a real estate broker; amount of money borrowed in a mortgage loan, excluding interest and other charges.

A

Principal

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5
Q

A representative; one who is authorized to act on behalf of another.

A

Agent

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6
Q

A person in a position of trust and confidence with respect to another person.

A

Fiduciary

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7
Q

Conducting negotiations on one’s own behalf without being subject to the other party’s control or influence.

A

At Arm’s Length

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8
Q

Latin for “let the buyer beware.”

A

Caveat Emptor

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9
Q

A representative authorized by the principal to perform only acts related to a business or to employment of a particular nature.

A

General Agent

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10
Q

One authorized by a principal to perform a particular act or transaction, without contemplation of continuity of service as with a general agent.

A

Special Agent

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11
Q

True/False A general agent is authorized by the principal to handle a specific business transaction.

A

False. A general agent is authorized by the principal to perform acts associated with the continued operations of a certain business of the principal.

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12
Q

True/False Administrative law consists of rules and regulations created by the FREC to govern real estate practice in Florida.

A

True. Administrative law is a body of law created by administrative agencies in the form of rules, regulations, orders, and decisions.

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13
Q

True/False A person who gives or delegates authority to another is called the agent, while the person who accepts the authority is called the principal.

A

False. The opposite is true: a person who gives or delegates authority to another is called the principal; the person who accepts the authority is called the agent.

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14
Q

True/False Nonrepresentation is one of three types of brokerage relationship options.

A

True. There are three brokerage relationship options. They are: nonrepresentation (no brokerage relationship), single agency, and transaction broker.

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15
Q

True/False The appropriate type of brokerage relationship is determined by the customer.

A

False. The appropriate type of brokerage relationship is determined by the broker.

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16
Q

One with whom the broker or sales associate hopes to be successful in accomplishing the purpose of employment. Per Section 475.01, F.S., a member of the public who is or may be a buyer or a seller of real property and may or may not be represented by a real estate licensee in an authorized brokerage relationship.

A

Customer

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17
Q

True/False The duty to account for all funds is a duty in a no brokerage (nonrepresentation) relationship.

A

True. The duty to account for all funds is a no brokerage relationship duty. In fact, the duty to account for all funds is a duty in all three brokerage relationships.

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18
Q

True/False The duty to disclose all known facts that materially affect the value of residential real property that are not readily observable to the buyer is a duty of all three types of brokerage relationships.

A

True. The duty to disclose all known facts that materially affect the value of residential real property that are not readily observable to the buyer is a single agent duty, a transaction broker duty, and a no brokerage relationship duty.

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19
Q

Per Section 475.01, F.S., a broker who represents, as a fiduciary, either the buyer or the seller but not both in the same transaction.

A

Single Agent

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20
Q

True/False The seller, in a single agent relationship, is the principal.

A

True. In a single agent relationship with the seller, the seller is the principal and the broker is the agent of the principal.

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21
Q

True/False A single agent is defined as a broker who represents, as a fiduciary, the buyer or the seller but NOT both in the same transaction.

A

True. A single agent is a broker who represents, as a fiduciary, the buyer or the seller but not both in the same transaction.

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22
Q

True/False Confidential information learned during the course of the single agency cannot be divulged by the broker until the transaction has concluded and the agent-principal relationship has ended.

A

False. Confidential information learned during the course of the single agency cannot be divulged before or after the transaction has concluded and the agent-principal relationship has ended.

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23
Q

A broker who provides limited representation to a buyer, a seller, or both in a real estate transaction, but does not represent either in a fiduciary capacity or as a single agent.

A

Transaction Broker

24
Q

Transaction brokers provide a limited form of nonfiduciary representation to a buyer, a seller, or both in a real estate transaction.

A

Limited Representation

25
Q

True/False The transaction broker relationship requires that the licensee exercise limited confidentiality, including not divulging the sellers’ motivation for selling their property.

A

True.

26
Q

True/False The transaction broker relationship includes the duty of obedience.

A

False. Obedience is a single agent duty.

27
Q

True/False Brokers must account for all funds entrusted to them with regard to a real estate transaction.

A

True

28
Q

A written agreement to gain the principal’s permission to a change in brokerage relationship.

A

Consent To Transition

29
Q

True/False A real estate brokerage company has entered into a single agent buyer broker relationship with the buyer. In order to show this buyer property that is listed with the same brokerage company, both the seller and the buyer must transition to a transaction broker relationship before the buyer can be shown the seller’s property.

A

True.

30
Q

True/False A single agent relationship may be changed to a transaction broker relationship at any time during the relationship between the agent and the principal, provided the agent first obtains the principal’s verbal consent to the change in relationship.

A

False. A single agent relationship may be changed to a transaction broker relationship at any time during the relationship between the agent and principal, provided the agent first obtains the principal’s written consent to the change in relationship.

31
Q

True/False Real estate brokers are required to retain buyer brokerage agreements for a period of five years.

A

True.

32
Q

True/False Residential sales are defined as the sale of improved residential property of two or fewer units, the sale of unimproved residential property intended for use as two or fewer units, or the sale of agricultural property of five or fewer acres.

A

False. Residential sales are defined as the sale of improved residential property of four (not two) or fewer units, the sale of unimproved residential property intended for use as four (not two) or fewer units, or the sale of agricultural property of 10 (not 5) or fewer acres.

33
Q

True/False Licensees must fulfill the duties of a transaction broker when that form of representation is selected.

A

True

34
Q

Designated Sales Associates

A

Two real estate licensees designated to represent the buyer and the seller as single agents in a nonresidential transaction. The buyer and the seller must have assets of $1 million or more and sign disclosures stating that their assets meet the required threshold.

35
Q

True/False The broker serves as an advisor to the buyer and the seller in certain nonresidential transactions.

A

False. The broker serves as an advisor to each designated sales associate—not to the buyer or the seller.

36
Q

True/False Designated sales associates may only be used for certain nonresidential transactions.

A

True.

37
Q

True/False The designated sales associate disclosure notice includes the duties of a single agent.

A

True.

38
Q

True/False An agency relationship between a principal and a broker may be terminated by the principal for any reason.

A

False. A principal is not free to revoke an agency relationship in all circumstances. The principal may revoke an agency if the agent breaches one or more of the fiduciary duties. Several other events could terminate an agency relationship, such as the fulfillment of the agency’s purpose, mutual agreement to terminate the agency, or bankruptcy of the principal.

39
Q

True/False Bankruptcy of a prospective buyer may terminate a buyer broker relationship.

A

True

40
Q

A person who delegates authority to another is the

A

principal

41
Q

A person who accepts the authority is the

A

agent.

42
Q

The agency relationship creates a ***** relationship with the principal. An agent is authorized to represent and act for the principal.

A

fiduciary

43
Q

True/False A dual agent is a broker who represents both the buyer and the seller as a fiduciary.

A

True

44
Q

True/False Licensees may not operate as dual agents.

A

True

45
Q

sale of improved residential property of four or fewer units, the sale of unimproved residential property intended for use as four or fewer units, or the sale of agricultural property of 10 or fewer acres.

A

residential sale transaction

46
Q

Is a broker required to retain the brokerage relationship disclosure documents, and if so, for how long, if a written nonresidential transaction that used designated sales associates fails to close?

A) The broker must retain the disclosure documents for 90 days to give ample opportunity for the parties to close the deal.
B) The broker must retain the disclosure documents for five years even if a nonresidential transaction that used designated sales associates fails to close.
C) The broker must retain the disclosure documents for two years even if a nonresidential transaction fails to close.
D) The broker is required to retain disclosure documents only for contracts that go to title closing.

A

B) The broker must retain the disclosure documents for five years even if a nonresidential transaction that used designated sales associates fails to close.

47
Q

Which brokerage relationship duty applies to all three types of brokerage relationships?

A) Using skill, care, and diligence
B) Confidentiality
C) Accounting for all funds
D) Loyalty

A

C) Accounting for all funds

48
Q

Which action does NOT terminate a single agent brokerage relationship with the seller?

A) Bankruptcy of the principal
B) Withdrawal of an offer to purchase
C) Death of a seller’s broker
D) Fulfillment of the brokerage relationship’s purpose

A

B) Withdrawal of an offer to purchase

49
Q

Which brokerage relationship duty applies only to a single agent relationship?

A) Full disclosure
B) Exercise limited confidentiality
C) Deal honestly and fairly
D) Account for all funds

A

A) Full disclosure

50
Q

In commercial real estate transactions that meet specific criteria, a real estate brokerage may use one sales associate to work as a single agent of the buyer and another sales associate to act as a single agent of the seller. Which criteria must be met?

A) The buyer and the seller must agree to sign the Irrevocable Consent to Service Agreement.
B) The buyer and the seller must agree to sign the Transition to Two Single Agents Notice.
C) The broker must serve as a neutral party and not give guidance or representation to the buyer and the seller.
D)The buyer and the seller must each have assets of at least $2 million.

A

C) The broker must serve as a neutral party and not give guidance or representation to the buyer and the seller.

51
Q

Which type of transaction requires that the parties to the transaction receive brokerage relationship disclosures?

A) Auctions of residential real estate
B) Agricultural property of 10 or fewer acres
C) Appraisals of residential real estate
D) Business opportunities that include five or more residential units

A

B) Agricultural property of 10 or fewer acres

52
Q

The brokerage relationship disclosure requirements in Chapter 475 apply to which transaction?

A) Sale of a coffee shop in a residential neighborhood
B) Sale of three vacant lots zoned for single-family use
C) Lease of a single-family home
D) Sale of a 150-unit condominium complex

A

B) Sale of three vacant lots zoned for single-family use

53
Q

Which information must be disclosed to a prospective buyer regarding a particular property?

A) The property is located in a flood zone area that requires flood insurance coverage.
B) The property owners are selling their home because they have filed for divorce.
C) The public K-12 schools assigned to the neighborhood’s district have a particular student-teacher class ratio.
D) Neighborhood residents comprise several ethnic groups.

A

A) The property is located in a flood zone area that requires flood insurance coverage.

54
Q

Which brokerage relationship duty applies only to a transaction broker relationship?

A) Exercise limited confidentiality
B) Full disclosure
C) Deal honestly and fairly
D) Account for all funds

A

A) Exercise limited confidentiality

55
Q

In Florida, which type of brokerage relationship is presumed?

A) Single agent
B) No brokerage
C) Transaction broker
D) General

A

C) Transaction broker

56
Q

On Sunday at an open house, a sales associate receives two offers on a home listed for $300,000. One offer is for $250,000 cash at closing. The second offer is for $295,000 contingent upon the buyer securing a mortgage for 90% of the sale price. What action should the sales associate take?

A) Present both offers, explaining the details of each contract to the seller.
B) Present the higher-priced offer first, and if declined, present the second offer.
C) Present only the higher-priced offer because it will result in the highest commission.
D) Present the offer received first, and if declined, present the second offer.

A

A) Present both offers, explaining the details of each contract to the seller.

57
Q

Which statement is unique to the transaction broker relationship?

A) The agent is obligated to a duty of obedience.
B) The buyer or the seller must give written consent to enter into the brokerage relationship.
C) The customer is not responsible for the acts of the licensee.
D)The licensee must disclose all known facts that materially affect the value of the real property.

A

C) The customer is not responsible for the acts of the licensee.

Real Estate Exam! (20 decks)

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