Unit 7: Real Estate Brokerage and the Law of Agency Flashcards

Unit 7: Real Estate Brokerage and the Law of Agency Flashcards

The amount of compensation due to a broker licensee from the brokerage firm is determined byA)the state real estate regulator to ensure the public the most protection from incompetent licensees.B)the in-house employment contract.C)the listing agreement.D)the local real estate board's minimum wage guarantee to agents.

• the in-house employment contract.A broker is entitled to

the amount of compensation dictated in the employment contract between the licensee and the brokerage firm. The licensee's compensation is not determined by any outside entity or agreement.An agent who breaches the fiduciary duties may be subject to all of the following EXCEPTA)a civil lawsuit.B)disciplinary action by the state Real Estate Commission.C)criminal prosecution.D)suspension of licensure by the Association of REALTORS®.

• suspension of licensure by the Association of

REALTORS.

In a fiduciary relationship, the broker, by law, owes the principal specific duties. What does the acronym OLD CAR stand for?Obedience, loyalty, disclosure of information, confidentiality, accounting, and reasonable skill, care, and diligence.It is discovered after a sale that the land parcel is 10% smaller than the owner represented it to be. The broker who passed the erroneous information on to the buyer isA)not liable if the buyer actually inspected what she was getting.B)not liable as long as she only repeated the seller's data.C)liable if the broker knew or should have known of the discrepancy.D)not liable if the misrepresentation was unintentional.

• liable if the broker knew or should have known of the

discrepancies.When a conversation between a broker and a consumer shifts from facts about the property to possible confidential information about the consumer's needs, wishes, and abilities or when the consumer or broker begins to act as if

there is a fiduciary relationship: it is known as what?

First substantial contact The North Carolina Real Estate Commission (NCREC) require licensees at first substantial contact with a client to perform one action. What is this action?A)To provide a business card featuring the name of their broker-in-chargeB)To provide clients with their full name and birthdateC)To provide an unsigned offer to purchase as an exampleD)To provide specific agency disclosures in writing

• to provide specific agency disclosures in writing.

the third party for whom some level of service is provided by an agent of another party, but who is not represented by

the agent:

Customer A buyer wishes to purchase a property listed with a real estate firm. The buyer comes to the listing firm for the purchase and insists on exclusive buyer representation and

absolutely refuses dual agency. The listing firmA)should work with the buyer as a subagent of the seller.B)may act as an exclusive buyer's agent.C)should explain that the buyer will get the same representation with disclosed dual agency as with exclusive buyer agency.D)should explain that the buyer must go elsewhere for exclusive representation.

• should explain that the buyer must go elsewhere for

exclusive representation.North Carolina Real Estate

Commission Rule A.0104 states: "A real estate broker

representing one party in a transaction shall not undertake to represent another party in the transaction without the written authority of each party." A North Carolina broker wishes to consummate a transaction where he represents neither the buyer nor the seller. This relationshipA)can be lawful if the buyer and seller provide consent in writing.B)is prohibited in North Carolina.C)is similar to designated dual agency.D)is termed single agency.

• is prohibited in NCA facilitator/transaction broker is a

real estate licensee who assists buyers and sellers in reaching an agreement in a real estate transaction without representing interests of either party. The licensee treats both parties as customers. This nonagency relationship is not allowed in NC.An agent is representing the seller. The agent shows the house to his cousin and she is very interested in buying it.The agent presents his cousin's full price offer to the seller, who eagerly accepts it. Both the seller and the buyer are very happy with the transaction. Which statement is TRUE?A)The seller cannot complain about the agent's actions because the offer was for the full listing price.B)The agent has done nothing wrong; he was not required to disclose his relationship with the buyer.C)The agent has violated his fiduciary duties to the seller by failing to disclose his relationship with the buyer and could be subject to disciplinary action.D)Because both parties are happy with the transaction, it doesn't matter whether the agent disclosed his relationship with the buyer to the seller.

• the agent has violated his fiduciary duties to the seller by

failing to disclose his relationship with the buyer and could be subject to disciplinary action.Termination of agency may be accomplished byA)completion or performance of the purpose of the agency.B)destruction or condemnation of the property.C)all of these.D)mutual agreement of the parties.

• all of theseAn agency agreement may be terminated at

any time for any of the following reasons: completion or

fulfillment of the purpose for which the agency was created; expiration of the terms of the agency; mutual agreement to terminate the agency; breach by one of the parties, by operation of law; destruction or condemnation of the property; and death or incapacity of either party.The fiduciary relationship between the principal/client and the agent is the description forA)fiduciary.B)agency.C)subagency.D)agent.

• agency

If a broker's misrepresentation causes loss or financial injury to a buyer customer, which of the following could be found liable?I. PrincipalII. BrokerA)II onlyB)Neither I nor IIC)I onlyD)Both I and II

• Both I and II.

A broker for ABC Realty has listed a home on Ash Street.Another agent at ABC has shown a buyer customer the listing on Ash. The buyer wants to make an offer. Which of the following is TRUE under North Carolina license

law?A)If the buyer shares any confidential information with the second agent, that agent is obligated to share the confidential information with the listing broker.B)ABC Realty is a dual agent.C)The agent that showed the house to the buyer is a buyer's agent.D)The broker is a dual agent.

• if the buyer shares any confidential info with the second

agent, that agent is obligated to share the confidential information with the listing broker.