Real Estate Material Fact, Seller Property Other Mandated

Real Estate (Material Fact, Seller Property & Other Mandated

Disclosures Warranties: New and Resale) Flashcards

All the following statements concerning the listing agent's responsibility to the seller under a listing agreement are

true EXCEPT:o o o othe listing agent must not reveal any

confidential information about the principal's financial condition.the listing agent should be able to account for all the principal's money entrusted to her.the listing agent must disclose all known materials facts, even if they have a negative effect on the seller.the listing agent is responsible for any losses to the principal.The answer is the listing agent is responsible for any losses to the principal. The listing agent would only be responsible for losses the agent caused. Listing agents must account for all funds they are given, must disclose all material facts, and may not share confidential information without the written permission of the principal.If the seller provides inaccurate information related to material defects of the property, and the listing agent unknowingly passes this inaccurate information on to the potential buyer and identifies the seller as the source of the information, who can be held liable?o o o oThe sellerBoth the seller and listing agentThe buyer under ""civet emptor""The listing agent The answer is the seller. The listing agent should do a visual inspection of the property, looking for material defects. However, the seller, if being untruthful in disclosure, would be liable to the buyer.A buyer's agent in the middle of negotiations just overheard the listing agent and seller discussing that the seller will accept $5,000 less than the asking price if necessary. What should the buyer's agent do with this information?o o o oKeep the information to herself, because if the buyer pays more she will earn more.Tell the listing agent and pledge not to share the information with anyone.Immediately inform the seller, buyer, and listing broker.Immediately tell the buyer and no one else.The answer is immediately tell the buyer and no one else.The buyer's agent represents the buyer and is obligated to share any information that would improve the buyer's negotiation.A property which is under contract was impacted by a hail storm. The seller has informed the listing agent. What is the next step the listing agent should recommend?o o o oDoing nothing until after the buyer completes the inspection.Calling the insurance company and filing a claim.Informing the buyer's agent and buyer and discussing how to proceed.Wait to see if the buyer finds anything.The answer is informing the buyer's agent and buyer and discussing how to proceed. The damage is a material fact that must be disclosed immediately to all parties.A buyer's agent may negotiate the sale of listed property

for a relative or friend:o o o oat any time.only with

permission from the buyer.only if disclosed to the seller and listing agent.under no circumstances.The answer is only if disclosed to the seller and listing agent. The seller and listing agent should be given full disclosure of who the buyer's agent is representing.When a property is sold ""as-is,"" who is liable for

disclosing any known defects in the property:o o o othe

seller only.the listing broker.the buyer.the seller and the listing broker.The answer is the seller and the listing broker. It is the seller's job to disclose all known material facts and the listing broker's job to make sure the seller fully understands the obligation to disclose. If the seller does not disclose

material facts and fails to inform the listing broker, the seller is liable.

When a property is sold ""as-is,"" the seller must disclose:o

• o oany defects covered by the ""as-is"" clause.no defects,

since it is an ""as is"" sale.any known material defects.any obvious defects.The answer is any known material defects. All sellers, regardless of the terms of sale, are obligated to disclose all known material defects.Nonmaterial information that would damage the seller's

bargaining position can be disclosed to the buyer:o o o

oonly with the seller's written permission.under no circumstances.only if not material to the sale.only if requested by the buyer.The answer is only with the seller's written permission.Buyers and sellers must give written permission to the agent representing them before the agent can disclose anything about the sellers' or buyers' position on price, terms, or motivations.A buyer tells her agent that she has cash to purchase the property. The buyer's agent tells this to the listing agent when delivering the offer. The seller accepts the buyer's offer, over other offers, based on her having the cash to close quickly. When the buyer is asked to produce proof of having the cash to close, she cannot and tells the agent she does not have the cash. Who is responsible for the buyer's actions?o o o oThe buyer and both agents.The buyerThe buyer and the buyer's agentThe broker The answer is the buyer. The lied to all parties and is the party who is responsible for making a false offer. In this case, the seller would most likely keep the earnest money, since the buyer acted in bad faith.

A broker representing the seller must:o o o ohelp the buyer

determine an offer.tell the buyer about the seller's motivation.work with the buyer to locate other property.avoid giving false information to a buyer.The answer is avoid giving false information to a buyer.The broker should not tell the buyer the seller's motivation unless the seller allows that information to be disclosed.The broker is not required to work with the buyer or help determine a sales price.When a property is sold ""as-is,"" the salesperson is

responsible for disclosing to the buyer:o o o oall known

defects.only those defects disclosed by the seller.any obvious defects.no defects, since it is sold ""as-is"".The answer is all known defects. All sellers, regardless of the terms of sale, are obligated to disclose all known material defects. A real estate professional is required to give the buyer the seller's disclosure and disclose any other defects the professional has knowledge of.What hidden defects should be disclosed in the Seller's Property Disclosure statement?o o o oOnly items that are clearly visibleThose that would not damage a seller's positionAny that would affect the buyer's decisionOnly those requested by the buyer The answer is any that would affect the buyer's decision.Sellers and all real estate professionals involved in the transaction must disclose all material facts immediately.Sellers, in particular, are only responsible for disclosing hidden defects they know about, such a broken sewer line.A builder's new home warranty would cover all of the

following EXCEPT:o o o ofaulty appliances.poor

workmanship.roof failure.structural damage caused by flooding.The answer is structural damage caused by flooding. No warranty covers damage caused by natural disasters.Adding a home warranty to the purchase contract for a

resale home can do all of the following EXCEPT:o o o

olessen the seller's liability if an appliance or system fails after closing.lessen the liability of the seller and broker for items that may fail after closing.add a new home warranty of habitability.give the buyer peace of mind if a system fails after closing.The answer is add a new home warranty of habitability.New home warranties are available only on new homes.Home warranties give buyer's peace of mind and may lesson the liability of the seller and broker if an item fails after closing.

The broker working for the buyer must tell the seller:o o o

oof the buyer's interest in other properties.of the buyer's criminal history.the buyer's place of employment.if the buyer cannot qualify for a loan.The answer is if the buyer cannot qualify for a loan. The buyer's broker is not required to share any information with the seller, and may not share confidential information without the buyer's written permission. Failure to qualify for a loan is a material fact that must be disclosed to all parties.The property manager working for the landlord must notify

the potential tenant of:o o o othe landlord's minimum

rate.her opinion of the property.environmental contamination.the landlord's profit on the property.The answer is environmental contamination. All real estate professionals must disclose known material defects in the sale or leasing of real estate.The listing agent working for the seller must tell the buyer

of any:o o o ofinancial problems of the seller.material or

latent defects.potential price reductions.similar competing properties.The answer is material or latent defects. The seller and listing agent must disclose all known material defects, particularly latent or hidden defects. The listing agent would not divulge information about a potential price change, the competition, or the seller's confidential information.A seller mentions over the phone to the listing agent that she is willing to take less then the current sales price. The

listing agent tells a REALTOR marketing group: ""Bring any

offer. The seller will take less than the asking price."" Did the agent break her fiduciary duties?o o o oYes, the seller did not give the agent written permission to share confidential information.Yes, the seller must amend the listing contract in order for the agent to make such a statement.No, it is standard business practice to share confidential information at REALTOR marketing sessions.No, the agent was only repeating what the seller told her.The answer is yes, the seller did not give the agent written permission to share confidential information. To verify that the seller has given informed consent to share confidential information, the agent should have the consent in writing.An email would meet the requirement; it is not necessary to amend the listing contract.When the seller sold her home, she was unaware that the house was infested with termites. This was later discovered

by the buyer. The seller was guilty of:o o o oplanned

mistake.innocent misrepresentation.fraud.duress.The answer is innocent misrepresentation. Since the seller had no knowledge, it was an innocent misrepresentation.

When a property is sold ""as-is,"" the seller is:o o o

orequired to disclose and repair all know material defects.not required to disclose any defects.allowed to give an oral disclosure of known defects.required to disclose all known material defects.The answer is required to disclose all known material defects. All sellers, regardless of the terms of sale, are obligated to disclose all known material defects. The seller is not required to make repairs. Disclosures, such as all real estate paperwork, should be in writing.

A broker representing the buyer must:o o o owithhold

financial information about the buyer.not share the buyer's confidential information with the seller.also represent the seller.tell the seller the buyer's ethnicity.The answer is not share the buyer's confidential information with the seller. Agents must maintain the confidential information of the parties they represent. If the buyer is unable to obtain or qualify for a loan, this becomes a material fact that the buyer's agent will have to disclose.A broker lists a home for sale. The seller and broker are both aware that the roof leaks but conceal this information from the buyer. After the buyer moves in, she discovers the leaking roof. The actions of the seller and broker represent