Chapter 9 Quiz Flashcards

Chapter 9 Quiz Flashcards

• the broker is merely puffingA broker tells a buyer,"This home has the most beautiful

river view." In fact, the view includes the river and the back of a shopping center. Which is TRUE?a. the broker has committed fraudb. the broker is guilty of negligent misrepresentationc. the broker is guilty of intentional misrepresentationd. the broker is merely puffing

• disclosureA real estate broker's responsibility to keep the principal

informed of all the facts that might affect a transaction is the duty ofa. careb. disclosurec. obedienced. accounting

• the seller and the buyer must be informed of the situation

and agree in writing to the broker's representation of both of them A buyer who is a client of the broker wants to purchase a home that the broker has listed. Which statement is TRUE?a. the broker may proceed to write an offer on the property and submit itb. the broker should refer to buyer to another broker to negotiate the salec. the seller and the buyer must be informed of the situation and agree in writing to the broker's representation of both of themd. the buyer should not have been shown a house listed by the broker

• the buyer and the seller are represented by the same

company Designated agency is MOST likely to occur whena. there is a client-buyer and a customer-sellerb. the seller and the buyer are represented by different companiesc. both the buyer and the seller are customersd. the buyer and the seller are represented by the same company

• the seller is the broker's client; the buyer is a customerA real estate broker lists a home for sale for $189,500.

Later that same day, a prospective buyer comes into the broker's office and asks for general information about homes for sale in the $130,000 to $140,000 price range but refuses representation by the broker's company at this time. Based on these facts, which statement is TRUE?a.both the seller and the potential buyer are the broker's customersb. the seller is the broker's client; the buyer is a customerc. the broker owes fiduciary duties to both the seller and the buyerd. if the buyer later asks for buyer representation by the broker's firm, it will not be possible because of the firm's earlier agreement with the seller

• a transactional brokerageA broker helps a buyer and a seller with paperwork but

does not represent either party. This relationship isa. dual agencyb. prohibited in all states because a broker must always represent one partyc. a transactional brokeraged. a designated agency

• a broker acting for both parties in the same transactionWhich of the following is considered dual agency?a. a

broker acting for both parties in the same transactionb. two

brokerage companies cooperating with each otherc. a broker representing more than one principald. a broker listing a property and then, after it is re-listed with another broker, selling the same property

• disclosure was improper and possibly illegal, regardless

of the agent's motive A seller tells his agent in confidence that he must sell fast and may accept less than the list price. The agent tells a buyer the seller will accept up to $5,000 less than the list price. Which TRUE?a. the agent has not violated any agency responsibilities to the sellerb. the agent should have disclosed this information, regardless of its accuracyc.disclosure was improper and possibly illegal, regardless of the agent's motived. the relationship between the agent and the seller ends automatically if the purchaser submits an offer

• specialThe relationship between real estate broker and seller is

generally what type of agency?a. specialb. generalc.impliedd. universal

• the agent's relationship to the principal In a real estate transaction, the term fiduciary typically

refers toa. the sale of real propertyb. the people who give someone else the legal power to act on their behalfc. the person who has the legal power to act on behalf of anotherd. the agent's relationship to the principal

• the buyer wanted to work with a new agent, but the

terms of the agency had not yet expired and the current agent did not agree to terminate Which of the following is NOT a valid reason to terminate an agency relationshipa. the agent found a home for a buyer to purchase, and the sale closedb. the property was condemnedc. the buyer wanted to work with a new agent, but the terms of the agency had not yet expired and the current agent did not agree to terminated. the buyer went bankrupt

• must promote and safeguard the seller's best interestsA real estate broker acting as the agent of the sellera. must

promote and safeguard the seller's best interestsb. can disclose the seller's minimum pricec. should present to the seller only the highest offer for the propertyd. can accept an offer on behalf of the seller

• all lawful instructions of the ownerA real estate broker hired by an owner to sell a parcel of

real estate must comply witha. the common law of agency in the state in which the property owner livesb. a prospective buyer's instructionc. the concept of caveat emptord. all lawful instructions of the owner

• the broker is obligated to render loyalty to the seller.Which statement is TRUE of a real estate broker acting as

the agent of the seller?a. the broker is obligated to render loyalty to the seller.b. the broker can disclose confidential information about the seller to a buyer if it increases the likelihood of a salec. the broker can agree to change in price without the seller's approvald. the broker can accept a commission from the buyer without the seller's approval

• a fiduciaryThe relationship of the broker to the client in an agency

relationship is that ofa. a trusteeb. a subagentc. a fiduciaryd. an attorney-in-fact

• the owner declares personal bankruptcy Which event will terminate an agency in a broker-seller

relationship?a. the broker discovers that the market value of the property is such that an adequate commission will not be earnedb. the owner declares personal bankruptcyc.the owner abandons the propertyd. the broker appoints other brokers to help with the property

• it is part of a body of law established by tradition and

court decision What does the phrase the law of agency is a common law doctrine meana. it is a legal doctrine that is not unusualb. it is one of the rules enacted by legislation by tradition and court decisionsc. it is part of a body of law established by tradition and court decisiond. it may not be superseded by statutory law

• both parties consent in writing to the dual agencyIn dual agency situation, if it is permitted by state law, a

broker may represent both the seller and the buyer in the same transaction provideda. the broker informs either the buyer or the seller of this factb. the buyer and the seller are related by blood or marriagec. both parties consent in writing to the dual agencyd. both parties are represented by attorneys

• both parties have been informed and agree in writing to

the dual representation A broker is permited to represent both the seller and the buyer in the same transaction whena. the principals are not aware of such actionb. the broker is a subagent rather than the agent of the sellerc. commissions are collected from both partiesd. both parties have been informed and agree in writing to the dual representation

• careA real estate associate represents a buyer. At their first

meeting, the buyer plans to operate a dog grooming business out of the purchased house. The sales associate did not check the local zoning ordinates to determine in which parts of town such business could be conducted.Which common law duty did the sales associate violate?a.careb. obediencec. loyaltyd. disclosure