Unit 7 Flashcards
In 1995, the Edin case prompted North Carolina Real Estate Commission (NCREC) to
a. prohibit dual agency.
b. revise its agency rule to require licensees to provide specific agency disclosures in writing.
c. require that brokers act as single agents only.
d. limit liability for brokerage firms who practice dual agency.
b. revise its agency rule to require licensees to provide specific agency disclosures in writing.
The term principal is synonymous with the term
a. client
b. prospect
c. broker
d. seller
a. client
A real estate broker acting as the agent of the seller
a. is obligated to render faithful service to the seller.
b. has a fiduciary duty to the buyer.
c. can agree to a change in price without the seller’s approval.
d. can accept a bonus from the buyer without the seller’s approval.
a. is obligated to render faithful service to the seller.
Fiduciary refers to
a. the independent contractor status of a broker.
b. the relationship of trust between the agent and the principal.
c. the seller’s subagent that is working with the buyer.
d. the principal in an exclusive agency relationship.
b. the relationship of trust between the agent and the principal.
While in the employ of a real estate broker, a provisional broker has the authority to
a. act as an agent for the seller.
b. assume responsibilities assigned by the broker.
c. accept a commission from another broker.
d. advertise a property on his or her own behalf.
b. assume responsibilities assigned by the broker.
The legal relationship between broker and seller is usually a
a. universal agent.
b. special agent.
c. dual agent.
d. general agent.
b. special agent.
Designated agency
a. is a form of dual agency.
b. is prohibited under North Carolina law.
c. permitted if the broker-in-charge represent the seller and a provisional broker represents the buyer.
d. is more like to be handled properly with a small firm with a few agents rather than a large firm with many agents.
a. is a form of dual agency.
A real estate firm who engages brokers as independent contractors must
a. withhold income tax from all commissions they earn.
b. provide insurance plans offered to firm employees.
c. withheld Social Security from all commissions they earn.
d. still supervise the brokers and remain civilly liable for the brokerage activities of the brokers.
d. still supervise the brokers and remain civilly liable for the brokerage activities of the brokers.
Single agency occurs when a real estate agent
a. represents only one party in a transaction.
b. represents both the buyer and the seller in a transaction.
c. chooses to be a designated dual agent.
d. has both the listing and the sale sides of a transaction.
a. represents only one party in a transaction.
An agent who breaches the fiduciary duties may be subject to all of the following EXCEPT
a. a civil lawsuit.
b. disciplinary actions by the state Real Estate Commission.
c. suspension of licensure by the Association of REALTORS.
d. criminal prosecution.
c. suspension of licensure by the Association of REALTORS.
The principal owes the agent
I. the duty of acting in good faith.
II. payment of compensation.
a. I only
b. II only
c. Both I and II
d. Neither I nor II
c. Both I and II
In North Carolina, the doctrine of caveat emptor
a. has been completely replaced by case law and consumer protection laws.
b. is still intact for pretty owners in real estate transactions.
c. is applicable only if the agent acts as a dual agent.
d. is overridden by agents’ disclosure laws.
b. is still intact for pretty owners in real estate transactions.
Under the common law of agency, a real estate broker owes all of the following duties to the principal EXCEPT
a. care.
b. obedience.
c. disclosure.
d. novation.
d. novation.
An agency relationship may be legally terminated by all of the following means EXCEPT
a. the owner decides not to sell the house.
b. the broker discovers that list price will not yield and adequate commission.
c. the owner dies.
d. the broker secures a ready, willing, and able buyer for the seller’s property.
b. the broker discovers that list price will not yield and adequate commission.
A broker represents the seller at an open house. When should she disclose her agency relationship to a potential buyer at the open house?
a. After answering questions for the buyer about the house.
b. As soon as the buyer enters the open house.
c. When preparing an offer for the buyer.
d. At first substantial contact.
d. At first substantial contact.