Real Estate Agency Test Questions Flashcards

Real Estate Agency Test Questions Flashcards Sergio is a real estate agent who is assisting Henrik in finding a new home. They find a house together and Henrik tells Sergio that if he buys this house, he won't have any money left to hire an attorney. Sergio, who is not an attorney, tells Henrik, "Don't worry, I'll draft all of the legal documents for you." What fiduciary obligation has Sergio most likely violated?Reasonable care.John is a landlord and owns several properties that are currently vacant. John makes a list of all of the vacant properties and stops by each real estate office in the area to drop off the list of vacant apartments available. Shortly after the list is dropped off, the agents begin working to market the properties on their website. Has an agency relationship been created?Yes, because John dropped off the list and the agents started to advertise the properties in order to find tenants, an Implied Agency was created.

Listing contracts are governed by:The Law of Agency

Nick's house has roof damage and a noisy dog next door.He is selling the home as is. His agent must disclose which of the following to prospective buyers?The roof damage.Selling a home as is does not relieve real estate agents of any disclosures. The agent must therefore disclose the roof damage since it is a material defect, but not the noisy dog since it is not rooted in the land.Samara sees a gorgeous condo while browsing online and sends a message to the agent who's picture appears next to the listing. The agent, Jamie, responds to Samara's request to tour the home. When Samara arrives at the property, Jamie is there, along with another agent, Richie who is the listing agent. The three walk into the home and Samara tours, while pulling Jamie aside to give her feedback privately. After the tour, Samara asks to return to Jamie's office to write up an offer. Samara and Jamie look at comparable sold properties in the area and together, create a very competitive offer. It is accepted and Samara moves forward with the purchase. The type of agency

displayed between Jamie and Samara is:

Implied Agency.when the authority for agency exists because of the principal and agent's actions, even though it is never directly stated.Who is required to disclose known facts that materially affect the property?Both seller's and buyer's agents are required to inform the buyer of any material defects impacting the subject property that they are aware of, even if the seller wants to keep the defects confidential.Which best describes the relationship between broker and client?Fiduciary.Real estate agents (both brokers and salespersons) owe fiduciary obligations (obligations of trust) to their clients. Remember the acronym OLD CAR for the specific obligations.

An agent shows up at a listing appointment and opens the door to let the buyer's agent and their client inside. The agent proceeds to answer questions about the home and when the tour is over, the agent locks the front door and offers to stay in touch if the buyer's agent has any additional questions. The agent does not have any verbal or written listing agreement with the seller and the seller never authorized the showing. Based on the agent's actions, what type of agency exists?Apparent agency.Apparent or ostensible agency is when authority does not exist, but appears to. Here, the agent appears to be the listing agent, even though there has been no authority given (verbal or written) by the seller to this agent.Jeanie works for Mansion Realty and specializes in helping sellers and marketing mansions for sale. June runs Mansion Realty and hires licensees to help buyers and sellers.What is Jeanie's agent relationship to June?Salesperson George and Betty are friends. Betty has accepted an offer on her home brought to her by Nick, a local broker and her listing agent. George recently became licensed and suggest to Betty that she break her contract with Nick, put the home back on the market, and list with him. Has George risked his license?Yes.Massachusetts law prohibits real estate agents and brokers from encouraging clients to break a real estate contract when it is for the agent's personal gain.The following must be disclosed affirmatively: The buyer's plans to file for bankruptcy.The buyer and buyer's agent have a duty to disclose information about the buyer that will adversely impact the buyer's ability to purchase the property.Which of the following best describes the relationship between a broker and his principal?Fiduciary.Derek is representing his client, Anne, in the purchase of a home. When Anne is filling out her offer form, she is confused about the mortgage contingency clause. Derek explains to Anne that the clause will allow her to back out of the sale if she doesn't receive financing, and that it is critical to include the clause in her offer so that she doesn't lose her deposit if she doesn't get financing. Has Derek acted correctly?Derek has not acted correctly, because he should have had Anne speak to an attorney A real estate broker who has listed a property is:Special agent.Brokers are the special agent to the transaction (the agent hired by the seller to conduct a specific transaction).What does a real estate licensee owes their client?Obedience, loyalty, disclosure, confidentiality, account, and reasonble care. Fiduciary obligations are obligations of trust.If a licensee meets a customer at an open house, it is required that which of the following be given?Honesty.The fiduciary responsibilities of OLDCAR are not required when someone is a customer. A customer is a person who has not hired a licensee to represent them.Licensees are still required to act fairly and honestly with customers and provide necessary disclosures.

An associate broker working at Homes Realty receives an exclusive right to sell a property located at 101 Main Road.

The listing belongs to:

Homes Realty Armando visits Amy's open house at 25 Rockhill Drive.Amy answers all of Armando's questions about the home and provides a marketing brochure with her contact info on the back. Armando does not have a real estate agent.What are Amy's fiduciary responsibilities to Armando?Amy must deal fairly and honestly with Armando.In this case, Armando is a customer not a client. Real estate licensees are not required to give the fiduciary responsibilities of OLDCAR with customers, because they do not represent those people. Licensees are still required to deal fairly and honestly with customers, as well as follow fair housing and licensing laws.

Under Megan's Law, you cannot:Misrepresent the sex offender registry

Compensation payable to a real estate buyer's agent

comes from:

Employing broker.The buyer's agent usually isn't paid by the buyer directly, and is instead compensated via a split of the listing agent's commission, though nothing precludes an agreement to pay a buyer's broker directly. A salesperson's commission always comes to them through their employing broker.Serena is preparing a stately Dutch Colonial home for sale when she learns that the neighboring home is being taken over by eminent domain in anticipation for a new commuter rail line that has been approved by the town and is being built on that street. What is Serena's responsibility regarding disclosure in this situation?She must disclose what she knows since it is a material fact.Neighboring construction projects, special tax districts, land contamination, etc. are thus considered material facts, and must be disclosed.Fernando verbally hires Rachel to sell his home, located at 17 River Road. He promises to only list the property with Rachel to incentivize her to get top dollar for his listing.

Rachel and Fernando's relationship is best described as:

Fiduciary.Rachel has an agency relationship with Fernando, which means this is a fiduciary relationship (a relationship of trust). It is not exclusive because it is verbal (exclusive listings must be written), and it is an enforceable agreement (listings may be verbal, and are not subject to the Statute of Frauds).Martha hosts an open house at a stunning home in a pricey suburb. When buyers arrive, Martha greets them and answers all of their questions about the home. Afterwards, Martha meets the homeowner, Matthew, at a local coffee shop to return his key and provide feedback from the open house. If Martha does not have a verbal or written listing agreement with the seller, what type of agency relationship do they likely have?Implied Agency.An implied agency relationship is one in which authority exists because both parties are acting as though it exists.