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WorksheetsCH 07 - Laws and Regulations Governing Brokerage Relationships
Total questions: 33
Worksheet time: 1hrs 6mins
The real estate broker's fiduciary responsibility to keep the principal informed of all facts, including property condition and issues that affect a seller's willingness to sell and a buyer's willingness to buy, is the duty of:
skill, care and diligence
disclosure
obedience
accounting
Designated agency in North Carolina is considered:
I. A form of dual agency
II. Mandatory if you practice dual agency
I only
II only
Both I and II
Neither I nor II
Designated agency can be practiced: I. Between two firms II. Between a broker-in-charge and a provisional broker licensee in their office
I only
II only
Both I and II
Neither I nor II
Designated agency is never practiced between two firms. It occurs when the same firm represents both the buyer and the seller.
True
False
A broker-in-charge and a provisional broker can never be designated agents in the same transaction.
True
False
An agent must have the buyer sign a written agency agreement by what specific point in time?
l. At the time of first substantial contact
ll. Prior to the submission of an offer on the buyer’s behalf
lll. At the time the agent attempts to limit the buyer’s ability to work with another agent
l only
l and ll only
ll and lll only
l, ll and lll
Under the general principles of agency, when a licensee is acting on behalf of a client and acts improperly who is liable for the acts of the licensee?
only the client
only the licensee and the broker-in-charge
only the client and the licensee
the client, the licensee, the firm and or the broker-in-charge
A disclosure of agency status should be made by a buyer’s agent to the seller: l. With a written confirmation in the offer to purchase and contract ll. At the initial contact with the seller’s agent, orally or in writing
l only
ll only
Both l and ll
Neither l nor ll
The amount of compensation due to a licensee from the brokerage firm is determined by:
state real estate regulators to ensure the public the most protection from incompetent licensees
local real estate board's minimum wage guarantee to agents
in-house employment contracts
listing agreements
Which of the following would be dual agency?
a broker-in-charge assisting a buyer client in the purchase of property that was listed by a provisional broker of another firm
a provisional broker and a broker licensee from firms that are cooperating in a transaction
a firm that represents buyers and sellers
a broker having a buyer client for a property the broker personally listed
A real estate broker was responsible for a chain of events that resulted in the sale of one of his client's properties. This is referred to as:
chain of title
procuring cause
private offering
ready, willing and able buyer
This concept allows for a licensee to be entitled to a commission when they are involved in a chain of events that resulted in the sale, even if the client eventually purchased through another licensee or firm.
chain of title
procuring cause
private offering
ready, willing and able buyer
A parcel of vacant land 80 feet wide and 200 feet deep was sold for $200 per front foot. How much money would an individual agent receive for a 60% share of the 10% commission earned?
$640
$960
$1,600
$2,400
All of the following could legally be considered fraudulent, EXCEPT:
deceitful or dishonest practices
generalized exaggerated opinions about the property
omitted statements of material fact
misstatements about the property
A seller has listed a home with a broker for $90,000, and the broker suggests to a prospective buyer-customer that they submit a low offer because of the seller's urgent need to sell. The buyer offers $85,000, and the seller accepts it. In this situation:
the broker has violated his agency relationship with the seller
the broker's action was acceptable since the seller accepted the offer
the broker acted properly to obtain a quick offer on the property
any broker is encouraged to solicit such bids for the property
Upon discovering a latent defect in the property, the listing agent should discuss the problem with the seller, and then:
inform the seller that the defect must be repaired
arrange for the repairs himself or herself as required by the terms of a typical listing contract
inform any prospective buyers of the defect
contact the city building inspector about the defect
A provisional broker sells another firm's listing for $150,000. The commission is 6.5% of the sales price. Of this amount, 55% goes to the listing broker and the remaining 45% belongs to the cooperating broker. If the provisional broker receives 60% of any commission that he generates for the office, he is entitled to receive:
$2,632.50
$3217.50
$4,387.50
$5,850
Which of the following BEST describes the common law of agency?
the disclosure requirement by the agent to third parties no later than first substantial contact
case law establishing the responsibilities of a person who acts for another
the Code of Ethics prescribed by the local trade association
state license laws and statutes
A buyer-client has instructed the agent to show only properties where the seller is willing to pay the buyer agent's commission. The agent contacts an owner selling a property without the assistance of a real estate agent with the hope that the seller would be willing to pay her commission if the buyer decided to purchase the seller's property. In order to comply with North Carolina Real Estate Commission Rules, the agent must do all of the following, EXCEPT:
obtain permission from her buyer-client in order to obtain compensation from the seller
disclose her agency status to the seller at initial contact
convince the seller to list with her and authorize dual agency
provide the Working with Real Estate Agents brochure to the seller
The listing broker tells a prospective buyer that the seller is on the verge of bankruptcy. The broker's actions are:
acceptable since they may promote an offer from the buyer
acceptable as long as the broker does not disclose any additional specific financial information concerning his client's credit history
unacceptable unless there are multiple offers on the property
unacceptable unless the seller has authorized the broker to share the information with potential buyers
A listing agent is showing a house to a prospective buyer customer. The seller told the listing agent that during the past 10 winters, they have been unable to rid the house of rodents. The seller has hidden rodent damage by the strategic placement of a large sofa. Which of the following statements is TRUE?
This information may be withheld since the agent never saw any evidence of infestation or damage.
Disclosing the information could create a fiduciary relationship with the buyer and, thereby, create an unauthorized dual agency situation.
Withholding the information prevents the disclosure of a material fact.
Disclosing the information violates the agency duties with the seller.
Which of the following BEST describes a designated agency transaction?
the listing firm appointing an agent to represent the seller
the selling firm appointing an agent to represent the buyer
some agents in the same firm representing buyers exclusively and other agents in the same firm representing sellers exclusively
a broker-in-charge appointing one agent to exclusively represent the seller as the client and appointing a different agent to exclusively represent the buyer as a client while the firm remains in dual agency
If the broker-in-charge (BIC) is to act as one of the designated agents on a North Carolina in-house transaction, which of the following may be appointed as a designated agent for the other party to the transaction?
an actively licensed provisional broker within the firm, so long as disclosure is made to both clients
a full broker within the firm who has no prior confidential knowledge of the party that the BIC will represent
a broker-in-charge cannot be appointed as a designated agent
a licensed broker who has prior confidential knowledge about the party that the BIC will represent
Which of the following describes designated agency in North Carolina?
designated agency is optional, not mandatory
designated agency does not eliminate dual agency
designated agents cannot have prior confidential knowledge of the other party to the transaction
all of the above
The North Carolina Working With Real Estate Agents brochure must be given:
to property owners upon initial contact
to all consumers prior to first substantial contact
only to buyers in a real estate transaction
to all consumers in a sales transaction no later than first substantial contact
The North Carolina Working With Real Estate Agents brochure must be given:
to all consumers no later than first substantial contact
to all consumers prior to first substantial contact
All of the following situations will terminate a listing, EXCEPT:
mutual agreement by the parties
breach by either party
death of the individual listing licensee
bankruptcy of the firm
All of the following situations will terminate a listing, EXCEPT:
mutual agreement by the parties
breach by either party
death of the individual listing licensee
bankruptcy of the firm
A licensee is an actively licensed real estate broker who has a written contract with his firm that specifies that he will not be treated like an employee. The licensee's entire income is from sales commissions rather than an hourly wage. Based on these facts, the licensee will be treated by the IRS as:
a real estate assistant
an employee
a subagent
an independent contractor
All of the following are TRUE regarding the North Carolina Working With Real Estate Agents brochure, EXCEPT:
the consumer is not required to sign the brochure
if the first substantial contact is by phone, the brochure must be provided within 3 calendar days
the brochure's use is mandatory in all real estate transactions, including residential sales, commercial transactions and property management
the brochure must be given in all sales transactions at first substantial contact
All of the following are TRUE regarding the North Carolina Working With Real Estate Agents brochure, EXCEPT:
the brochure's use is mandatory in residential sales
the brochure's use is mandatory in commercial transactions
the brochure's use is mandatory in property management
the brochure's use is mandatory in sales of suburban homes
Jack is a NC real estate licensee. He has decided to sell his own house which he is doing outside of his brokerage as a For Sale by Owner. Jill, a prospective buyer has approached Jack at one of his open houses and has expressed an interest in buying the home. Which of the following is a proper course of action for Jack?
Exclusively represent Jill, but only after full disclosure of his interest in the property.
Enter in a dual agency relationship where Jack represents himself as the seller and also represents Jill as the buyer.
Fully disclose his interest in the property and treat Jill as a customer.
Represent Jill, but do so only on a non-exclusive basis since he has an interest in the property.
Rite Stuff Realty is a NC real estate firm that buys and flips homes. All of the homes that Rite Stuff handles are owned by the firm entity. In regard to the listing and sale of these homes, which of the following is a correct statement?
Rite Stuff may offer exclusive buyer representation, dual agency or designated agency to prospective purchasers of their homes
Rite Stuff must act as dual agents in the sale of their homes because they are the owners
None of the agents of Rite Stuff may act as representatives of buyers and must treat all buyers as customers since the firm owns the properties
The North Carolina Real Estate Commission is not concerned with whom Rite Stuff represents so long as agency is properly disclosed
