Laws of Agency Summary Answered
a general agency empowers the agent to:
1. transact matters of all types for the client
2. transact the client's affairs in a certain business
3. perform only specific acts for the client
4. perform any legal acts for the client
transact the client's affairs in a certain business
all of the following are examples of dual agency except:
1. broker representing buyer and seller, with consent of both
2. escrow agents
3. broker representing both buyer and seller, without consent of either
4. two salespersons in a firm represent a different buyer and seller
two salespersons in a firm represent a different buyer and seller
bill, a broker with xyz realty, sells a property listed by gene, an independent broker. in this
transaction, what is the relationship between bill and gene?
1. bill is the agent; gene is the principal
2. bill is the trustee; gene is the trustor
3. bill is the subagent; gene is the agent
4. either 1 or 3 could be correct
bill is the agent; gene is the principal
a woman offers to buy property listed by her sister (a broker). however, she does not want
her sister to tell the seller of their relationship. the sister should:
1. tell the seller that the prospective buyer is a relative
2. let another person buy the property and turn the deed over to her sister
,3. sell the property without disclosing the relationship
4. find another listing agent to avoid conflict of interest
tell the seller that the prospective buyer is a relative
what is NOT a fiduciary duty that an agent has towards his client?
1. to use care in completing contracts
2. to obey all client instructions
3. to be loyal to the client
4. to be accountable for documents and funds
to obey all client instructions
an owner is listing his rental property with a broker. based on past experience, the owner
thinks that females cause less damage. he therefore tells the broker that he only wants to
rent to females. what should the broker do?
1. advise the owner that this restriction is illegal
2. follow the owner's instruction in order to protect the client's interest
3. accept the listing and give preferential treatment to female applicants
4. follow the owner's instruction because of the fiduciary relationship
advise the owner that this restriction is illegal
all of the following persons may act as escrow agents except:
1. brokers
2. neutral third persons
3. salespersons
4. attorneys
salespersons
A buyer's broker presents an offer for property listed by another broker. Proper agency
disclosures have been made. Prior to acceptance, the listing broker discovers a zoning
change that will affect the value of the property. He tells the buyer and the offer is
withdrawn. Which of the following statements is correct?
,1. the listing broker has violated his fiduciary relationship with the seller
2. the listing broker has exercised due care and loyalty to his principal
3. the buyer may not withdraw his offer
4. disclosure of this info violates state licensing authorities
the listing broker has exercised due care and loyalty to his principal
a buyer broker agreement may arise by all of the following means, except:
1. express agreement
2. ostensible agreement
3. custom
4. none of the above are valid
custom
what is the highest commission rate that a real estate broker may charge for marketing a
farm property?
1. 10%
2. 15%
3. 25%
4. none of the above
none of the above
A broker represents a buyer. While showing a property to his client, the broker learns
something that might influence the sale. Nevertheless, the broker may NOT disclose which
of the following items to his client?
1. that the current owner has HIV
2. that the seller is in poor financial condition
3. that the seller will not accept an offer based on VA financing
4. the broker is unrestricted because he represents the buyer
that the current owner has HIV
which of the following actions would create an agency relationship?
, 1. a broker accepts the listing to sell a friend's home and agrees to a reduced commission
2. an individual gives written authority for a broker to buy, sell, or exchange his real
property for a one year period
3. a duplex owner signs a listing agreement which authorizes a broker to market the
property for one year
4. all of the above
all of the above
smith dies and his real property is sold. what determines the amount of commission paid to
the broker who handles the sale?
1. the state real estate board
2. the local bar association
3. the listing agreement
4. the state association of realtors
the listing agreement
when does a broker earn commission?
1. when the listing is taken
2. when the purchaser signs the title insurance policy
3. when closing it is complete and the title passes
4. when the offer to purchase has been signed and accepted by the seller
when the offer to purchase has been signed and accepted by the seller
in order for a dual agency to be legal, it must be:
1. disclosed orally prior to negotiations
2. disclosed in writing and agreed upon prior to negotiations
3. disclosed in writing after negotiations
4. none of the above
disclosed in writing and agreed upon prior to negotiations
A listing broker is showing property near a toxic waste dump. The broker does not tell a
prospective buyer about the dump. By withholding this information, the broker is negligent
a general agency empowers the agent to:
1. transact matters of all types for the client
2. transact the client's affairs in a certain business
3. perform only specific acts for the client
4. perform any legal acts for the client
transact the client's affairs in a certain business
all of the following are examples of dual agency except:
1. broker representing buyer and seller, with consent of both
2. escrow agents
3. broker representing both buyer and seller, without consent of either
4. two salespersons in a firm represent a different buyer and seller
two salespersons in a firm represent a different buyer and seller
bill, a broker with xyz realty, sells a property listed by gene, an independent broker. in this
transaction, what is the relationship between bill and gene?
1. bill is the agent; gene is the principal
2. bill is the trustee; gene is the trustor
3. bill is the subagent; gene is the agent
4. either 1 or 3 could be correct
bill is the agent; gene is the principal
a woman offers to buy property listed by her sister (a broker). however, she does not want
her sister to tell the seller of their relationship. the sister should:
1. tell the seller that the prospective buyer is a relative
2. let another person buy the property and turn the deed over to her sister
,3. sell the property without disclosing the relationship
4. find another listing agent to avoid conflict of interest
tell the seller that the prospective buyer is a relative
what is NOT a fiduciary duty that an agent has towards his client?
1. to use care in completing contracts
2. to obey all client instructions
3. to be loyal to the client
4. to be accountable for documents and funds
to obey all client instructions
an owner is listing his rental property with a broker. based on past experience, the owner
thinks that females cause less damage. he therefore tells the broker that he only wants to
rent to females. what should the broker do?
1. advise the owner that this restriction is illegal
2. follow the owner's instruction in order to protect the client's interest
3. accept the listing and give preferential treatment to female applicants
4. follow the owner's instruction because of the fiduciary relationship
advise the owner that this restriction is illegal
all of the following persons may act as escrow agents except:
1. brokers
2. neutral third persons
3. salespersons
4. attorneys
salespersons
A buyer's broker presents an offer for property listed by another broker. Proper agency
disclosures have been made. Prior to acceptance, the listing broker discovers a zoning
change that will affect the value of the property. He tells the buyer and the offer is
withdrawn. Which of the following statements is correct?
,1. the listing broker has violated his fiduciary relationship with the seller
2. the listing broker has exercised due care and loyalty to his principal
3. the buyer may not withdraw his offer
4. disclosure of this info violates state licensing authorities
the listing broker has exercised due care and loyalty to his principal
a buyer broker agreement may arise by all of the following means, except:
1. express agreement
2. ostensible agreement
3. custom
4. none of the above are valid
custom
what is the highest commission rate that a real estate broker may charge for marketing a
farm property?
1. 10%
2. 15%
3. 25%
4. none of the above
none of the above
A broker represents a buyer. While showing a property to his client, the broker learns
something that might influence the sale. Nevertheless, the broker may NOT disclose which
of the following items to his client?
1. that the current owner has HIV
2. that the seller is in poor financial condition
3. that the seller will not accept an offer based on VA financing
4. the broker is unrestricted because he represents the buyer
that the current owner has HIV
which of the following actions would create an agency relationship?
, 1. a broker accepts the listing to sell a friend's home and agrees to a reduced commission
2. an individual gives written authority for a broker to buy, sell, or exchange his real
property for a one year period
3. a duplex owner signs a listing agreement which authorizes a broker to market the
property for one year
4. all of the above
all of the above
smith dies and his real property is sold. what determines the amount of commission paid to
the broker who handles the sale?
1. the state real estate board
2. the local bar association
3. the listing agreement
4. the state association of realtors
the listing agreement
when does a broker earn commission?
1. when the listing is taken
2. when the purchaser signs the title insurance policy
3. when closing it is complete and the title passes
4. when the offer to purchase has been signed and accepted by the seller
when the offer to purchase has been signed and accepted by the seller
in order for a dual agency to be legal, it must be:
1. disclosed orally prior to negotiations
2. disclosed in writing and agreed upon prior to negotiations
3. disclosed in writing after negotiations
4. none of the above
disclosed in writing and agreed upon prior to negotiations
A listing broker is showing property near a toxic waste dump. The broker does not tell a
prospective buyer about the dump. By withholding this information, the broker is negligent
