unit 4

the agency relationship is defined by

• the realtor code of ethics

• the laws of agency, or in some states, by statute

• the law of real estate contracts

• the agreement between a principal and an agent

which of the following if true of the connection between compensation and the agency relationship?

• an agreement to give and receive compensation creates an agency relationship

• if an agency relationship exists, the principal must provide valuable consideration to the agent

• the relationship is independent of any compensation arrangement

• if an agency relationship exists, the agent is entitled to compensation

one of the parties to an agency relationship defaults, and the agreement terminates. which of the following is true?

• all obligations are extinguished

• both parties must continue to perform all other obligations of the agreement

• the defaulting party may have financial consequences

• the damaged party has no claim against the defaulting party

among the financial duties imposed on a real estate agent is the requirement to

• refuse offers the agent knows will be unacceptable to the principal

• present all offers to the principal regardless of their amount

• advise the principal against accepting an offer that is below full price

• advise a prospect that the principal will not accept the prospects offer in order to elicit a better offer

one of the fiduciary duties that continues even after a listing agreement expires is

• obedience

• diligence

• confidentiality

• disclosure

the standard care and competence that a principal can expect from an agent is generally that which is

• specified in the agency agreement

• necessary to earn the promised compensation

• necessary to procure a customer

• comparable to that of other practitioners in the area

agent michael is showing his new listing to a buyer who informs him that he has just inherited 5 million dollars. michael is not bound by fiduciary duty to

• keep the information in confidence

• disclose the information to the buyers agent

• disclose the information to the seller

• verify the buyers statements before disclosing them to the client

agent gerry has executed an exclusive buyer broker agreement with the andersons. the agent subsequently places an offer with melinda, the exclusive selling agent for the lincolns, to buy their lakefront property. the offer contains provisions for the lincolns to pay the brokerage commission, which the lincolns agree to. given this set of circumstances, gerry owes the full set of fiduciary duties to

• the andersons

• the lincolns

• gerrys broker

• melindas broker

the subagent is the agent of

• the seller

• the buyer

• a broker who has an agency relationship with a client

• the clients and the customers agents

the duties of a transaction broker or facilitator include

• preserving the confidentiality of information received from either party

• helping the 2 parties achieve their respective objectives

• disclosing material facts that affect the value of the property to both parties

• choosing to obey the instructions of one party and informing the other party of the decision