Chapter 2 Quiz Answers (Real state)

What is an example of a statutory law?

• Case law

• Ordinances

• Judges' interpretation of law

• Both answers a. and b. – Statutory law includes codified laws and ordinances.

What is an example of common law?

• Codified laws

• Judges' interpretation of an existing law

• Judgments based on prior cases

• Both answers b. and c. – Common law includes a judges’ interpretation of an existing law and judgments based on prior cases.

Property managers are an example of what type of agency?

• Special agency

• General agency – a general agent is an individual who is authorized by their client to perform all acts associated with the on-going operation of a business.

• Universal agency

• No agency

A licensee who has a listing agreement with a seller is an example of what type of agency?

• General agency

• Universal agency

• Special agency – this is created when the relationship is expected to last only a short period of time and the agent only needs limited authority to perform a set of specific acts such as sell property.

• No agency

When does a client become a principal?

• When the agent receives an offer

• When the client signs a contract

• When the agent is paid

• When the licensee has entered into a single agent relationship with the client. – The client is your “principal” or primary responsibility.

What is a real estate customer?

• A party to a real estate transaction who receives information or services but has no contractual relationship with the agent.

• The agent’s client

• The seller

• The buyer

If an agent does not create an agency agreement with their buyer, which of the following is true?

• The agent represents the buyer

• The agent represents the seller

• The agent has no responsibility

• All of the above.

8. If a seller or a buyer does not want to be represented by a real estate agent, they need to establish the following brokerage relationship:

• Single agency

• No brokerage relationship

• Transaction brokerage

• Dual agency

What brokerage relationship offers buyers and sellers the highest level of fiduciary responsibility?

• Nonrepresentation or No Brokerage Relationship – This relationship creates the least responsibility to the client.

• Single Agency Relationship – This is the highest form of representation and creates a fiduciary relationship between the agent and their client.

Your agency relationship must be disclosed to all parties and customers in a real estate transaction.

• True

• False