National Section Practice Exam - Appendix A

Which of the following would terminate a residential sales agreement?

• A. death of the seller
• B. legal declaration of insanity of the seller
• C. the sale of the property
• D. an assignment

Which of the following statements is NOT correct?

• A. A principal is responsible for acts of his agent while engaged in activities concerning the agency.
• B. An agent is in a fiduciary relationship to her principal.
• C. The agent has no duties to third parties in a transaction.
• D. The principal owes cooperation to the agent.

On the broker's recommendation, a seller accepted an offer that was 8% below the listed price. The broker did not disclose to the listing seller that the buyer was the broker's brother-in-law. Which of the following is correct?

• A. The broker violated his obligations as agent of the seller.
• B. The fact that the buyer is related to the broker does not need to be divulged to the seller.
• C. The broker would only be obligated to disclose this relationship if the buyer had hired the broker as a buyer agent
• D. There is no violation since the seller was in agreement with the terms of the buyer's offer.

An agent's responsibilities and duties to a third person include:

• A. not to disclose personal information regarding the third party.
• B. disclosure of all material facts the agent knows or reasonably should know.
• C. disclosure of personal information about the principal.
• D. obedience to the lawful instructions of the third party.

An agent, based upon statements made by the seller, tells her buyer that all mechanical systems are in "good working order:" The agent did not personally verify this information. The buyer decided not to have the property inspected since the seller had indicated they were selling "as is:" After the closing, the furnace is found to be defective and must be replaced.

• A. The agent is not liable because the buyer opted to not have it inspected.
• B. The agent is not liable since he relied upon representation made by the seller.
• C. The agent is guilty of an innocent omission of material fact.
• D. The agent is guilty of a negligent misrepresentation of material fact.

A real estate agent is typically considered to be in what form of agency relationship?

• A. special agency
• B. general agency
• C. universal agency
• D. exclusive agency

Allison is an agent with Miller's Creek Realty that has a buyer client who wishes to see a listing obtained by her firm. The broker at Miller's Creek Realty appoints Allison to represent only the interests of the buyer and the listing agent to represent only the interests of the seller. This type of arrangement is an example of:

• A. implied agency
• B. express agency
• C. special agency
• D. designated agency

A contract that has no legal standing because it does not meet the minimum standards for a legally enforceable agreement is:

• A. unenforceable
• B. valid
• C. void
• D. voidable

A substitution of one contract for another where the original contract is voided is:

• A. exchange
• B. novation
• C. voidable
• D. unilateral

A contract in which one party makes a promise of compensation if another party renders a service in return is which of the following?

• A. unilateral
• B. multilateral
• C. trilateral
• D. bilateral