Module 3: Michigan Real Estate Agency UPDATED
ACTUAL Questions and CORRECT Answers
Marcus owns a large apartment building and hires Lisa as the new property manager. Marcus has allowed previous
property managers to approve expenditures for maintenance of the property up to $100,000. Even though Marcus never
told Lisa that she could authorize expenditures at that level, do you think Lisa has that authority? - CORRECT
ANSWER - Yes. By giving Lisa the position of Property Manager, Marcus has, by implication, given Lisa the
authority to expend company funds on maintenance items up to $100,000
Fiduciary responsibilities
OLDCAR - CORRECT ANSWER - Obedience
Loyalty
Disclosure
Confidentiality
Accountability
Reasonable care
How long must an agent keep confidential information obtained from the client? - CORRECT ANSWER - This
duty never ends even when the relationship does
George wants to move and he contacts with Broker Dan to sell his house. Lynne sees the house and tells Dan she wants to
make an offer on it. Does Dan owe any fiduciary responsibility to Lynne, his customer? - CORRECT ANSWER -
No, fiduciary responsibilities extend only to his or her client, or principal. Although Lynne is not Dan's client, she should
expect to be treated fairly and honestly, and Dan should exhibit integrity and professionalism
Karen contracts with broker Jim to sell her house. Who is the principal in this traditional agency relationship? -
CORRECT ANSWER - Karen, she has contracted with Jim
In a seller agency relationship with a subagent, who represents the buyer? - CORRECT ANSWER - No one- The
subagent also represents the client of the agent with whom they have a relationship. Therefore, no one represents the best
interests of the buyer in this scenario. The buyer would need to sign a buyer broker contract with a broker to create a
buyer's agency relationship
Margaret is a salesperson for broker Gary. Her client is seller Diana. Paul is also a salesperson for broker Gary. His client
is buyer Hal. Do you think this presents a potential dual agency situation? - CORRECT ANSWER - Yes, both
Diana and Hal are clients of broker Gary, even though they may be working with two different salespeople. Since Gary
has fiduciary obligations to both the buyer and the seller, he could be a dual agent
What type of agent do you think a slaesperson is in the broker-slaesperson relationship? - CORRECT ANSWER -
General agent- Real estate salespersons and associate brokers are usually considered to be general agents in their
relationship to their brokers
To whom does a salesperson have a fiduciary duty? - CORRECT ANSWER - Both the broker and the client, but
the broker should be the highest priority
A licensee who is a seller's agent but who also finds the buyer for that listing could potentially assume which of these
agency relationships? Select all that apply:
Buyer's agent
Dual agent
Transaction coordinator - CORRECT ANSWER - Buyer's agent
Dual agent
A transaction coordinator must be a totally disinterested third party with no knowledge of confidential information
Pam is the listing broker for Brian's house. Mary sees the house on Rob's website and calls Greg, a salesperson for Rob, to
see if he'll show her the house. Greg has a fiduciary responsibility with all these people except:
, Rob, his broker
Pam, the listing broker
Brian, Pam's client
Mary, his customer - CORRECT ANSWER - Greg owes fiduciary duty first and foremost to the client, Brian. Rob
is Greg's employing broker, so that is another fiduciary relationship. And Greg's fiduciary obligation extends to Pam
because Rob is a subagent. Greg does not have fiduciary obligation to his customer Mary, however.
Bruce signs a buyer broker contract with Ursula of Penny Realty, a designated buyer representative agency. Harold, an
associated broker for Penny Realty, has never met Bruce. Does Harold have a fiduciary responsibility to Bruce? -
CORRECT ANSWER - No, since Harold is not representing Bruce, they have no relationship
Joe's real estate brokerage practices designated agency. One of his agents enters into a listing agreement with a seller.
Another one of his agents has a broker buyer contract with a potential buyer for that property. As a supervising broker,
what type of relationship does Joe have with the seller? - CORRECT ANSWER - Dual agent- In a brokerage that
practices designated agency, the supervising broker becomes a consensual dual agent as a result of the contracts his
agents have signed with the seller and the buyer
Patricia contracts with broker Ben to sell her house. Ben has found great success selling homes in Patricia's neighborhood
by placing ads with photos in the local weekly newspaper, but Patricia was surprised to open her paper on Thursday and
see a picture of her house. What authority, if any, did Ben have to publish pictures of Patricia's home? - CORRECT
ANSWER - Implied authority
Which type of agent has the greatest authority? - CORRECT ANSWER - Universal agent- has the authority to do
everything that a principal could do by himself. Real estate agents are rarely universal agents
Lisa is looking for someone to sell her house, and she speaks to several potential brokers. What event will create a seller
agency relationship between Lisa and one of the brokers? - CORRECT ANSWER - Lisa signs a listing agreement
What acronym can be helpful for remembering the basic fiduciary obligations? - CORRECT ANSWER - OLD
CAR
Which of these is a fiduciary disclosure that an agent owes to a seller client? Select all that apply:
True property value
All offers to purchase
Relationship between the buyer and broker
Identify the financial condition of prospective buyer, if known - CORRECT ANSWER - ALL
T or F: The principal in traditional agency relationship is the buyer - CORRECT ANSWER - False, only the seller
was represented in a traditional agency
If he had wanted to, could broker Mike represent both the buyer and the seller in a real estate transaction? - CORRECT
ANSWER - Yes, a broker can create a dual agency relationship to take on both the buyer and the seller as clients
As a customer, if Jerry wanted to work with a non-partisan licensee to conclude this sale, who would he and Mike need to
involve? - CORRECT ANSWER - A transaction coordinator
Homeowner Joe wants to sell his house. Which document will he sign to create an agency relationship with broker Todd?
- CORRECT ANSWER - Listing agreement
T or F: Louise is interested in contracting with a broker to assist in her search for a new home in her specific price range.
Her first step is to call several brokers that she finds listed in the yellow pages. The agents with whom she speaks are
required to disclose the agency relationship over the telephone. - CORRECT ANSWER - True
June, a small business owner, is moving out of state and needs to sell her home as well as her store property. Licensee
Harold tells seller June that he will take a lower commission on the sale of her house if she lists her commercial property
with him. Must Harold disclose his arrangement with June to the buyer of her house? - CORRECT ANSWER - No
Carlos is planning to sell his house. He signs a 90-day exclusive listing agreement with Anna, a real estate broker. To
weeks later, Carlos starts dating a real estate agent and decides to change the listing to her brokerage. Carlos tells Anna
ACTUAL Questions and CORRECT Answers
Marcus owns a large apartment building and hires Lisa as the new property manager. Marcus has allowed previous
property managers to approve expenditures for maintenance of the property up to $100,000. Even though Marcus never
told Lisa that she could authorize expenditures at that level, do you think Lisa has that authority? - CORRECT
ANSWER - Yes. By giving Lisa the position of Property Manager, Marcus has, by implication, given Lisa the
authority to expend company funds on maintenance items up to $100,000
Fiduciary responsibilities
OLDCAR - CORRECT ANSWER - Obedience
Loyalty
Disclosure
Confidentiality
Accountability
Reasonable care
How long must an agent keep confidential information obtained from the client? - CORRECT ANSWER - This
duty never ends even when the relationship does
George wants to move and he contacts with Broker Dan to sell his house. Lynne sees the house and tells Dan she wants to
make an offer on it. Does Dan owe any fiduciary responsibility to Lynne, his customer? - CORRECT ANSWER -
No, fiduciary responsibilities extend only to his or her client, or principal. Although Lynne is not Dan's client, she should
expect to be treated fairly and honestly, and Dan should exhibit integrity and professionalism
Karen contracts with broker Jim to sell her house. Who is the principal in this traditional agency relationship? -
CORRECT ANSWER - Karen, she has contracted with Jim
In a seller agency relationship with a subagent, who represents the buyer? - CORRECT ANSWER - No one- The
subagent also represents the client of the agent with whom they have a relationship. Therefore, no one represents the best
interests of the buyer in this scenario. The buyer would need to sign a buyer broker contract with a broker to create a
buyer's agency relationship
Margaret is a salesperson for broker Gary. Her client is seller Diana. Paul is also a salesperson for broker Gary. His client
is buyer Hal. Do you think this presents a potential dual agency situation? - CORRECT ANSWER - Yes, both
Diana and Hal are clients of broker Gary, even though they may be working with two different salespeople. Since Gary
has fiduciary obligations to both the buyer and the seller, he could be a dual agent
What type of agent do you think a slaesperson is in the broker-slaesperson relationship? - CORRECT ANSWER -
General agent- Real estate salespersons and associate brokers are usually considered to be general agents in their
relationship to their brokers
To whom does a salesperson have a fiduciary duty? - CORRECT ANSWER - Both the broker and the client, but
the broker should be the highest priority
A licensee who is a seller's agent but who also finds the buyer for that listing could potentially assume which of these
agency relationships? Select all that apply:
Buyer's agent
Dual agent
Transaction coordinator - CORRECT ANSWER - Buyer's agent
Dual agent
A transaction coordinator must be a totally disinterested third party with no knowledge of confidential information
Pam is the listing broker for Brian's house. Mary sees the house on Rob's website and calls Greg, a salesperson for Rob, to
see if he'll show her the house. Greg has a fiduciary responsibility with all these people except:
, Rob, his broker
Pam, the listing broker
Brian, Pam's client
Mary, his customer - CORRECT ANSWER - Greg owes fiduciary duty first and foremost to the client, Brian. Rob
is Greg's employing broker, so that is another fiduciary relationship. And Greg's fiduciary obligation extends to Pam
because Rob is a subagent. Greg does not have fiduciary obligation to his customer Mary, however.
Bruce signs a buyer broker contract with Ursula of Penny Realty, a designated buyer representative agency. Harold, an
associated broker for Penny Realty, has never met Bruce. Does Harold have a fiduciary responsibility to Bruce? -
CORRECT ANSWER - No, since Harold is not representing Bruce, they have no relationship
Joe's real estate brokerage practices designated agency. One of his agents enters into a listing agreement with a seller.
Another one of his agents has a broker buyer contract with a potential buyer for that property. As a supervising broker,
what type of relationship does Joe have with the seller? - CORRECT ANSWER - Dual agent- In a brokerage that
practices designated agency, the supervising broker becomes a consensual dual agent as a result of the contracts his
agents have signed with the seller and the buyer
Patricia contracts with broker Ben to sell her house. Ben has found great success selling homes in Patricia's neighborhood
by placing ads with photos in the local weekly newspaper, but Patricia was surprised to open her paper on Thursday and
see a picture of her house. What authority, if any, did Ben have to publish pictures of Patricia's home? - CORRECT
ANSWER - Implied authority
Which type of agent has the greatest authority? - CORRECT ANSWER - Universal agent- has the authority to do
everything that a principal could do by himself. Real estate agents are rarely universal agents
Lisa is looking for someone to sell her house, and she speaks to several potential brokers. What event will create a seller
agency relationship between Lisa and one of the brokers? - CORRECT ANSWER - Lisa signs a listing agreement
What acronym can be helpful for remembering the basic fiduciary obligations? - CORRECT ANSWER - OLD
CAR
Which of these is a fiduciary disclosure that an agent owes to a seller client? Select all that apply:
True property value
All offers to purchase
Relationship between the buyer and broker
Identify the financial condition of prospective buyer, if known - CORRECT ANSWER - ALL
T or F: The principal in traditional agency relationship is the buyer - CORRECT ANSWER - False, only the seller
was represented in a traditional agency
If he had wanted to, could broker Mike represent both the buyer and the seller in a real estate transaction? - CORRECT
ANSWER - Yes, a broker can create a dual agency relationship to take on both the buyer and the seller as clients
As a customer, if Jerry wanted to work with a non-partisan licensee to conclude this sale, who would he and Mike need to
involve? - CORRECT ANSWER - A transaction coordinator
Homeowner Joe wants to sell his house. Which document will he sign to create an agency relationship with broker Todd?
- CORRECT ANSWER - Listing agreement
T or F: Louise is interested in contracting with a broker to assist in her search for a new home in her specific price range.
Her first step is to call several brokers that she finds listed in the yellow pages. The agents with whom she speaks are
required to disclose the agency relationship over the telephone. - CORRECT ANSWER - True
June, a small business owner, is moving out of state and needs to sell her home as well as her store property. Licensee
Harold tells seller June that he will take a lower commission on the sale of her house if she lists her commercial property
with him. Must Harold disclose his arrangement with June to the buyer of her house? - CORRECT ANSWER - No
Carlos is planning to sell his house. He signs a 90-day exclusive listing agreement with Anna, a real estate broker. To
weeks later, Carlos starts dating a real estate agent and decides to change the listing to her brokerage. Carlos tells Anna
