Unit 7 Real Estate Brokerage and the Law of Agency Flashcards
In 1995, the Edina case prompted the 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 prohibited under North Carolina law.
C permitted if the broker-in-charge represents the seller and a provisional broker represents the buyer.
D is more likely 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 withhold 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 sales 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 action 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 property 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 property 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 an 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 an 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