South Dakota Real Estate
Exam Questions and Answers 100%
PASS
How do you create agency? - CORRECT ANSWER-An agency relationship can
be established either by means of an agreement between the parties, an agent and a
principal (client), or by means of the actions of the two individuals.
What is express agency? - CORRECT ANSWER-Express agency is created by
either an oral or a written agreement between the principal and the agent. It
indicates their express intent for this representational status.
In real estate, agency is normally created by either a written listing agreement with a
seller, or a buyer agency agreement with a buyer. Some states allow verbal
agreements, but most do not.
What is implied agency? - CORRECT ANSWER-It is also possible to create an
agency relationship by the actions of the parties. If a real estate agent takes on
responsibilities that are normally those of an agent, but hasn't signed an agency
,agreement, she may still be considered an agent via implied agency. By the same
token, if the customer asks the agent for advice or actions that are normally those
in agency, then an implied agency could be created.
Some states have created specific legislation that states that no agency can exist
without a written agency agreement. This helps to avoid accidental implied agency.
What is dual agency? - CORRECT ANSWER-Dual agency is when you represent
both the buyer and seller, with their consent.
What is divided agency? - CORRECT ANSWER-When you represent both the
buyer and seller, and they are unaware of the situation. It is illegal in most states.
What is agency by estoppel? - CORRECT ANSWER-An agency by estoppel is
created when a principal doesn't stop an agent from going beyond the agent's
normal duties, which thus gives the impression that an agency relationship has
been established.
Say you're the owner of a building and you tell your agent to show an apartment to
a possible tenant. The agent goes ahead and negotiates a lease even though you
didn't give the agent any direct authority to do so. The tenant assumes the agent
has the authority and an agency by estoppel has been created.
© 2026 Copyright. All Rights Reserved. This document is
protected by copyright law
, What is agency by ratification? - CORRECT ANSWER-An agency by ratification
is created by accepting circumstances that created the agency after the fact.
Suppose a real estate agent, without authorization and without ever speaking to the
seller, negotiates a deal for a house that's for sale by the seller. One day the agent
arrives with a completed contract simply awaiting the seller's signature and
acceptance of the deal.
An agency by ratification probably has been created when the seller ratified what
the agent had been doing by accepting the deal. The word "probably" is used here
because the agent wants a fee for his services and may have to sue the seller to
collect. When that's the case, the courts determine whether an agency relationship
existed from the beginning of the negotiations.
What is an agency coupled with interest? - CORRECT ANSWER-An agency
coupled with an interest is a situation in which an agent has some kind of interest
in the property that's being sold.
For example, suppose a part-time broker is also an architect. The broker/architect
agrees to design some houses for a builder who's giving the broker/architect the
listings for the sale of the finished houses. In essence the broker/architect made an
investment in the project, so the builder can't cancel the agency agreement.
Exam Questions and Answers 100%
PASS
How do you create agency? - CORRECT ANSWER-An agency relationship can
be established either by means of an agreement between the parties, an agent and a
principal (client), or by means of the actions of the two individuals.
What is express agency? - CORRECT ANSWER-Express agency is created by
either an oral or a written agreement between the principal and the agent. It
indicates their express intent for this representational status.
In real estate, agency is normally created by either a written listing agreement with a
seller, or a buyer agency agreement with a buyer. Some states allow verbal
agreements, but most do not.
What is implied agency? - CORRECT ANSWER-It is also possible to create an
agency relationship by the actions of the parties. If a real estate agent takes on
responsibilities that are normally those of an agent, but hasn't signed an agency
,agreement, she may still be considered an agent via implied agency. By the same
token, if the customer asks the agent for advice or actions that are normally those
in agency, then an implied agency could be created.
Some states have created specific legislation that states that no agency can exist
without a written agency agreement. This helps to avoid accidental implied agency.
What is dual agency? - CORRECT ANSWER-Dual agency is when you represent
both the buyer and seller, with their consent.
What is divided agency? - CORRECT ANSWER-When you represent both the
buyer and seller, and they are unaware of the situation. It is illegal in most states.
What is agency by estoppel? - CORRECT ANSWER-An agency by estoppel is
created when a principal doesn't stop an agent from going beyond the agent's
normal duties, which thus gives the impression that an agency relationship has
been established.
Say you're the owner of a building and you tell your agent to show an apartment to
a possible tenant. The agent goes ahead and negotiates a lease even though you
didn't give the agent any direct authority to do so. The tenant assumes the agent
has the authority and an agency by estoppel has been created.
© 2026 Copyright. All Rights Reserved. This document is
protected by copyright law
, What is agency by ratification? - CORRECT ANSWER-An agency by ratification
is created by accepting circumstances that created the agency after the fact.
Suppose a real estate agent, without authorization and without ever speaking to the
seller, negotiates a deal for a house that's for sale by the seller. One day the agent
arrives with a completed contract simply awaiting the seller's signature and
acceptance of the deal.
An agency by ratification probably has been created when the seller ratified what
the agent had been doing by accepting the deal. The word "probably" is used here
because the agent wants a fee for his services and may have to sue the seller to
collect. When that's the case, the courts determine whether an agency relationship
existed from the beginning of the negotiations.
What is an agency coupled with interest? - CORRECT ANSWER-An agency
coupled with an interest is a situation in which an agent has some kind of interest
in the property that's being sold.
For example, suppose a part-time broker is also an architect. The broker/architect
agrees to design some houses for a builder who's giving the broker/architect the
listings for the sale of the finished houses. In essence the broker/architect made an
investment in the project, so the builder can't cancel the agency agreement.
