CHAPTER FIVE QUIZ

Question 1

Who acts as the principal to the listing broker?

Answer 1

The seller

Question 2

Which term is NOT an example of how an agency relationship can be created in real estate?

Answer 2

Double agency

Question 3

Which is an example of implied agency?

Answer 3

Franz has been so helpful for Frank and Pat in finding the house of their dreams. He’s shown them houses that are on the MLS listed with other agencies as well as listings he has in his office. When Frank and Pat talk about how stressful the search is, Franz says “don’t worry, I’ve got your back.” Frank and Pat believe Franz is working for them, but they’ve never discussed it directly.

Question 4

Which is true of a single agent?

Answer 4

When they represent a principal, they do not represent any other principals who have competing interests.

Question 5

Which is true about an agency relationship?

Answer 5

It can be created in writing, verbally or by implication.

Question 6

What is a special agent when referring to the real estate industry?

Answer 6

An agent who is granted limited authority on behalf of the principal. Almost all real estate agents are acting as special agents.

Question 7

If a broker represents both the seller and buyer, they operate as a …………….agent.

Answer 7

Dual

Question 8

Which statement is true about dual agency?

Answer 8

It must always be disclosed to the competing principals

Question 9

Dougie owns a 16-unit rental building and goes into a real estate brokerage that has been recommended to him. He speaks to the broker, Tara, and explains what services he would like from the brokerage. He wants someone who will choose new tenants, set the rental rates based on market value and relevant laws, and sign all the leases on his behalf, as well as hiring anyone needed to conduct maintenance and repairs. Basically, Dougie is moving to Florida, and he doesn’t want to have to worry about the rental property anymore. Which response of Tara’s makes the most sense:

Answer 9

Tara will happily provide that service as her office offers property management. In that capacity, she will be a general agent to Dougie for that property, she will bill him a set fee for this service every month.

Question 10

Julie is a real estate affiliate broker who has been trying to sell a home for their brokerage’s client for 6 months. Her very good friend, Jenny, mentions she’s looking to buy and Julie thinks the house will be a great match for her friend. Her friend does love the house and wants to put an offer in at asking price. Which statement is true

Answer 10

Julie should very carefully explain that she represents the seller’s interest in this transaction, and while Jenny is her friend, her loyalty must be to the seller’s interests in all things related to this transaction.

Question 11

What does the acronym OLDCAR stand for?

Answer 11

Obedience, Loyalty, Disclosure, Confidentiality, Accounting and Reasonable Care

Question 12

An exclusive ………… is expected to prepare themselves through education and to competently stand up for the buyer at all times. Please fill in the blank with the best answer based on the definition given.

Answer 12

Buyer’s Agent

Question 13

Which term below goes with the following definition? The seller or buyer of real property who benefits from a fiduciary relationship with a real estate agent or broker.

Answer 13

Principal

Question 14

Remy Pascal is a broker representing seller Carl Smith. Remy decides that the property is a great candidate for a quick flip and makes an offer on the home. Immediately after purchasing the home, Remy resells it for a profit. In this case, Remy has not acted appropriately to safeguard Carl’s interest above his own. Which fiduciary duty has Remy violated?

Answer 14

Loyalty

Question 15

The people who sign the listing contract include which of the following?

Answer 15

Principal/seller and the broker

Question 16

Marie Sanchez is a real estate agent. Her neighbor, Ayako Aki, asks Marie to put her house on the market. Marie prepares the listing agreement, but she cannot sign it. Who is the legal owner of the relationship with the seller (and must sign the contract)?

Answer 16

Marie’s broker

Question 17

Which of the following are part of a listing contract?

Answer 17

Duration of the listing contract, sales price, and commission.

Question 18

Which of the following is the desired price of the seller, which should reflect a realistic amount a buyer would be willing to pay?

Answer 18

Listing Price

Question 19

In an exclusive-right-to-sell contract, the broker receives a ………… even if another broker, or the owner finds a buyer for the property.

Answer 19

commission

Question 20

Are verbal listing contracts legally binding?

Answer 20

No, listing contracts must be written to be valid.

Question 21

In this agreement, the seller employs a broker as the sole agent for the seller of real property. In this role, the broker will receive a commission if the property is sold through another broker, but the broker receives no commission if the sale is negotiated by the owner without the services of an agent?

Answer 21

Exclusive Agency

Question 22

After entering into an Exclusive Agency agreement with ZYX brokerage firm, Ameer Muppidi decided to sell his property to his cousin, Sri. Sri found out about the house being available for sale from Ameer’s daughter at a family event and did not speak to the listing broker or any other brokerage regarding the listing. Will Ameer have to pay a commission?

Answer 22

Ameer will probably not have to pay any commission, since the buyer was procured through his own effort.

Question 23

A ………… means two parties agree that services will be performed, but more than one party may be contracted to perform the same services.

Answer 23

Non-exclusive agreement

Question 24

If the agent receives a low purchase offer too close to the net price, they can receive little or no commission for their efforts. This presents a temptation not to present the offer to the seller. This is a danger for what type of listing contract?

Answer 24

Net listing

Question 25

Which of the following best describes an agency relationship?

Answer 25

An agent represents the principal to a third party.

Question 26

A termination clause states that if an agent has brought a buyer who is willing and able to close to the table, she has earned her commission at that time. So, if the seller unreasonably turns down an offer…?

Answer 26

The seller could be liable to pay the commission anyway.

Question 27

As an agent, your buyer will rely on your expertise in specific neighborhoods to help guide their decision. Which statement best represents how you should manage this relationship?

Answer 27

There should always be an honest assessment of the relative pros and cons of an area.

Question 28

Namita Muppidi, goes to an open house and gushes to the seller’s agent about how much they love the house and need to buy soon. Namita is expecting the family’s second child, and the lease on their tiny apartment is running out. The excited mother-to-be divulges all this to the last person she should be telling. It is likely that the seller’s agent wished her luck and left hastily to tell his seller not to budge on the price, they had a buyer on hand whose clock was ticking. What is your advice to Namita when the deal goes south?

Answer 28

To remember that she is the customer and not the client of the listing agent.

Question 29

While you are conducting a walk-through of a condo with your buyer, the owner, Jeff Fox, pulls you aside and mentions that there is a leak in the bathroom from the upstairs unit. The owner of the upstairs unit has refused to fix the issue, and the condo association won’t get involved. Jeff asks that you keep this to yourself, since he cannot remedy the situation, and that he will make it worth your while. You thank Jeff for his candor and finish the tour quickly. This is not a situation you want to put your buyer into. Of course, since you are acting in a fiduciary role for the buyer, you tell him about Jeff’s comments and apologize for wasting his time. This is an example of:

Answer 29

Disclosure of Material Defects

Question 30

Which of the following is not a material defect?

Answer 30

Ugly paint

Question 31

You are a broker representing buyers of real property. Prior to the sale, you collect $300 for an inspection of the property. You are legally required to keep this money in a separate account set aside for the transaction. You cannot commingle this money with any personal or business accounts unrelated to the sale. To do so would be a breach of the fiduciary duty of …………, which you owe to the buyer, your client.

Answer 31

Accounting

Question 32

You are obligated to do anything you can to lawfully win an advantage for your buyer. This is an example of which fiduciary duty?

Answer 32

Loyalty

Question 33

Your client falls in love with a vacation home that is priced $20,000 over market price. Your client lives overseas and wants to close as soon as possible. They are paying cash, so financing is not an issue. After advising them of the market value and the unlikelihood of getting back their original investment upon resale, your job is to follow your client’s instructions and make an offer at the exorbitant asking price. Your client tells you privately that they spend thousands on hotels whenever they come to the area for business, and so to them, the investment pays off in the end. This is an example of:

Answer 33

Obedience

Question 34

If you cannot answer a client’s question, you should refer them to…?

Answer 34

A subject matter expert such as an architect or lawyer

Question 35

A buyer’s agent may sign which of the following agreements with their client?

Answer 35

Buyer Representation Agreement