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Multiple Choice
Identify the letter of the choice that best completes the statement or answers the question.

A contract by which a seller employs a broker to find a buyer is most known as a:

a.	contract of sale.	c.	selling contract
b.	listing.	d.	buyer contract

An agency relationship exists between the:

a.	principal and broker.	c.	principal and salesperson
b.	seller and salesperson.	d.	client and salesperson

A listing is also known as:

a.	an agency agreement.	c.	an offer to list
b.	an offer to sell.	d.	a marketing contract

The relationship of trust between a principal and agent is known as:

a.	fiduciary.	c.	common law
b.	substitution.	d.	rights of contract

A listing is also known as:

a.	a contract of sale.	c.	a listing contract
b.	an employment contract.	d.	an offer to sell

A listing is a contract between the seller and the:

a.	principal.	c.	salesperson
b.	broker.	d.	customer

Who is liable if a broker obeys the seller's instructions to hide defects?

a.	both the seller and broker	c.	only the seller
b.	only the broker	d.	neither if they do not get caught

When asked by a client about a defect, the broker remained silent even though the broker knew of the defect. This is:

a.	a breach of the law of agency.	c.	okay
b.	misrepresentation	d.	fraud

When asked by a customer about a defect, the broker remained silent even though the broker knew of the defect. This is:

a.	a breach of the law of agency	c.	okay
b.	misrepresentation.	d.	fraud

10.

A broker is careless and misrepresents property. Who is liable?

a.	Only the broker.	c.	only the seller since the broker is his agent
b.	Both the broker and seller.	d.	no one is liable

11.

An agent owes a customer/prospect which duties?

a.	honesty, no misrepresentation, disclosure of defects
b.	disclosure of all confidential information
c.	disclosure of the clients personal business
d.	just a good deal

12.

An E & O (errors and omissions policy) covers.

a.	negligence.	c.	fraud
b.	theft of earnest money by a property manager.	d.	misrepresenation

13.

If a broker receives multiple offers, the broker should present:

a.	all offers.	c.	only the offers he likes
b.	only the best offer.	d.	offers that are cash only

14.

An agent owes the principal the duties of:

a.	loyalty, diligence, obedience, confidentiality, care.	c.	honor and a good job
b.	compensation and reimbursement.	d.	doing anything the agent deems necessary

15.

The principal owes the agent the duties of:

a.	compensation and indemnification.	c.	honor and humility
b.	obedience and loyalty.	d.	advertising and signage

16.

The listing broker may purchase the listed property:

a.	if full disclosure of the purchase is made to the seller.
b.	only if the real estate board gives its permission.
c.	if he has the money he does not have to do anything
d.	only if the local association of realtors gives its permission

17.

If the buyer makes an offer but discloses to the listing broker a willingness to pay more than the offered price, the listing broker should:

a.	respect the buyer's confidentiality.	c.	tell the seller only if asked
b.	inform the seller.	d.	tell the seller only with the buyer’s permission

18.

If the buyer asks about the seller's financial condition, the listing broker should reveal the financial condition:

a.	if it will motivate the buyer to make an offer.	c.	always
b.	only if the seller grants permission.	d.	never

19.

If the seller directs the listing broker to place any earnest money into the seller's personal account, the broker should:

a.	obey because the broker must obey the seller's instructions.
b.	refuse the illegal instruction.
c.	obey, because the broker works for the seller
d.	obey, if the board of realty says its okay

20.

A seller's agent may tell the buyer about:

a.	perceived defects in the property.	c.	a seller’s bottom dollar price
b.	the seller's motivation for selling.	d.	anything that will help the sale

21.

After receiving written agency disclosure, a buyer indicates to a seller's agent that the buyer is willing to pay more than the listed price, the seller’s agent should:

a.	respect the buyer's confidentiality.	c.	get the buyer’s permission to tell the seller
b.	violate the buyer's confidentiality.	d.	tell the buyer what the seller;s lowest price is

22.

A property manager collects the commission from the:

a.	owner.	c.	owner’s bank
b.	tenants.	d.	only those tenants that the owner agrees to

23.

If the buyer is one of the listing broker's relatives, the broker should:

a.	inform the seller.	c.	only disclose the information if asked
b.	only disclose this information after closing.	d.	never disclose the information

24.

A broker who fails to submit to the seller any offers below the asking price violates the:

a.	fiduciary duties.	c.	rules of good business
b.	statute of frauds.	d.	golden rule

25.

The listing broker should tell the seller:

a.	that it is legal to conceal material defects in the property.
b.	if the neighbor’s house next door sold for much less than the listed price of the seller's property.
c.	that the seller does not have to sell the property to racial groups that he does not want to sell to
d.	anything to get the listing

26.

Theft of money is covered by:

a.	surety bonds.	c.	the police force
b.	e & o insurance.	d.	civil court

27.

The obligation of compensation is generally owed by the:

a.	principal to the agent.	c.	customer to the agent
b.	agent to the principal.	d.	agent to the customer

28.

If the broker receives an offer but anticipates several more offers, the broker should:

a.	wait.	c.	present the offer and say nothing
b.	present the offer and tell the seller that more offers are likely.	d.	ask the seller to accept the presented offer immediately

29.

A broker who, for personal use, takes money from the trust account is guilty of:

a.	conversion.	c.	good business practices
b.	defeasance.	d.	comingling of funds

30.

The seller asks about the race of the buyer. The broker refuses to answer. The broker:

a.	violated the fiduciary obligation to answer.
b.	did not violate any fiduciary obligation because the buyer's race is not material.
c.	should have told the seller what he wanted to know
d.	should ask the board of realty regualtions permission

31.

A broker takes a listing but does not try to market the property. The broker violates the:

a.	fiduciary relationship.	c.	laws of business
b.	Statute of Frauds.	d.	blue sky laws

32.

If the buyer asks if the seller will take less than the $200,000 listed price, the broker should respond:

a.	It is listed for $200,000 but I will take all offers to the seller.
b.	Properties usually sell for significantly less than the listed price.
c.	That he thinks the seller will come down some.
d.	That he guarantees that the seller will take a lower offer

33.

An agent who doesn't make even a reasonable effort to find a buyer violates the duty of:

a.	due diligence.	c.	honesty
b.	obedience.	d.	good manners

34.

The owner wants to list at $60,000 but the broker knows that the property is worth much more. The agent should:

a.	Disclose the property^'s value to the owner.	c.	keep what he know secret and buy the property himself
b.	Insist that an appraisal be done.	d.	quickly find a freind to buy the property

35.

A salesperson may refuse to show a listed property to a buyer if:

a.	The salesperson knows that another buyer is more interested in the property.
b.	The listing price is substantially above the amount the buyer is able to pay.
c.	The salesperson has an offer coming in
d.	The salesperson has a friend who wants to buy the property

36.

If a property manager learns that a tenant is dealing in illegal drugs, the property manager should:

a.	cancel the property management contract.	c.	keep quiet so he does not have a problem with the tenant
b.	disclose this information to the owner.	d.	get a kickback from the tenant to keep quiet

37.

A broker must disclose to the principal that:

a.	the buyer (who needs seller financing) has a bad credit history.
b.	the buyer intends to violate the neighborhood's zoning.
c.	the buyer is going to rent the property
d.	the buyer is going to run a real estate office out of the house

38.

A salesperson should disclose to the buyer which of the following:

a.	the particular race of the neighbors.
b.	the neighbor's house is contaminated by asbestos.
c.	the neighbors are planning to sell to a minority race
d.	the neighbors don’t like their neighbors

39.

A broker must disclose:

a.	the property taxes.	c.	that the property has been on the market for months
b.	that the property is in the floodplain.	d.	the street address

40.

Defects which are not apparent are:

a.	latent defects.	c.	patents defects
b.	ignored.	d.	not important

41.

An “as is" clause in a contract of sale indicates that:

a.	the seller will correct all defects.	c.	that the property has a lot of defects
b.	there are no warranties regarding defects.	d.	that there are no defects

42.

A broker learns about a zone change which may have a substantial affect on the property's value. Must the broker inform the seller?

a.	yes	c.	only if asked
b.	no	d.	only if he thinks it is important

43.

Although a broker has a full price offer, the seller lacks marketable title. The buyer was unable to obtain financing. Will the broker get a commission?

a.	No because the closing wasn't held.	c.	Yes, because the broker tried
b.	No because the broker failed to procure a ready, willing, and able buyer.	d.	Maybe if the seller is a nice person

44.

A salesperson's payment is determined by

a.	a contract with the employing broker.	c.	the board of realty regulation
b.	state law.	d.	the local association of realty rules

45.

Two real estate firms agree to divide the market with one firm taking only residential sales and the other taking only commercial sales. This agreement violates:

a.	antitrust laws.	c.	good business practices
b.	fair housing laws.	d.	blue sky laws

46.

A salesperson may only collect her commission from:

a.	her employing broker.	c.	the seller
b.	the listing broker	d.	the buyer

47.

If a broker wants to charge a flat fee commission.

a.	This is legal.
b.	The seller must be allowed to choose the type of commission to be utilized.
c.	This is illegal
d.	This can only be done with the approval of the board of realty regulation

48.

Commissions are set by the:

a.	seller and broker.	c.	listing agent and broker.
b.	seller and principal.	d.	listing agent and principal

49.

A salesperson who both lists and sells a home:

a.	may receive compensation from either the buyer and seller.
b.	may only be compensated by her employing broker.
c.	may only receive commission from the buyer
d.	may only receive commission from the seller

50.

A broker found a ready, willing, and able buyer at the listed terms but the seller would not accept the buyer's offer unless the buyer agreed not to build a tennis court on the property. The buyer refused. Can the broker collect the commission?

a.	Yes because the listing was written.
b.	Yes because the broker met all of the terms of the listing.
c.	No because the closing did not occur
d.	No because the board of realty regulation did not agree

51.

Which of the following is not in a listing agreement?

a.	an agreement as to the compensation for the agent
b.	a carry-over or extension provision specifying that the broker will receive a commission even if the seller and buyer close the deal after the listing terminates.
c.	a place for the broker and salesperson to sign
d.	a power of attorney authorizing the broker to accept offers from buyers.

52.

A buyer makes a full price and terms offer.

a.	The seller must sell to the buyer.
b.	The broker who listed the property is entitled to a commission.
c.	The buyer can force the seller to sell
d.	The seller is not obligated to do anything

53.

A broker presents a full terms offer to the seller but the seller refuses to sell. The broker should:

a.	sue under the listing contract.
b.	file an agent's lien against the property.
c.	contact the state board of realty regulation for their help
d.	contact the local association of realtors for their help

54.

A listing will specify the commission to be paid:

a.	or the reimbursement to the agent for expenses if the property does not sell
b.	by the listing broker to a cooperating broker.
c.	the amount of money that is to be paid to the broker’s agent
d.	by the seller if the property is sold.

55.

A listing specifies that the seller wants no more than 50% cash at closing. The broker found a buyer who made a full price all cash offer. The seller refused the offer. Is the broker entitled to a commission?

a.	Yes because the broker has a ready, willing, and able buyer.
b.	Yes because of the Statutes of Fraud
c.	No because the broker failed to comply with the listing terms.
d.	Yes because anything over a 50% payment in cash at closing must be accepted

56.

The seller listed a property for $110,000 and accepted an offer for $100,000 but then decided to sell to a relative for $90,000. The broker is entitled to a commission based on the:

a.	the lisitng price of $110,000	c.	original $100,000 contract.
b.	$90,000 contract with the seller's relative.	d.	no commission since the property did not sell for the listing price

57.

A broker has two separate listings from different owners. The commission on one of the listings provides for a $5,000 commission, the other a $7,000 commission. If the parties exchange properties, the broker will be entitled to:

a.	$12,000 the total commission agreed to.	c.	$6,000. (1/2 of each listing)
b.	$5,000 - the lesser of the two commissions.	d.	$7,000 - the greater of the two listings.

58.

After a listing broker finds a buyer whose offer is accepted by the seller, the seller decided not to sell. The broker should sue the seller for:

a.	at least half of the commission	c.	anything he can get
b.	the commission.	d.	specific performance.

59.

A broker showed a listed property to a buyer who purchased the property directly from the owner shortly after the listing had expired. Does the broker get paid?

a.	No, because when a listing expires it is gone
b.	No, because the broker was not the procuring cause of the sale.
c.	Yes if the listing has a carry-over or extension provision.
d.	Only if the seller agrees to it after the expiration

60.

Under a listing agreement the prospect or customer is the:

a.	seller.	c.	can be either buyer or seller
b.	buyer.	d.	can be both the buyer and seller

61.

Under buyer agency, the prospect or customer is the:

a.	seller.	c.	either buyer or seller
b.	buyer.	d.	both buyer and seller

62.

Under seller subagency, the subagent's principal or client is the:

a.	seller.	c.	both buyer and seller
b.	buyer.	d.	either buyer or seller

63.

A broker may tell the buyer that the seller will take less than the listed price under:

a.	seller agency.	c.	dual agency
b.	buyer agency.	d.	no circumstances

64.

For exam purposes, a cooperating M.L.S. broker is presumed to be:

a.	a subagent of the seller.	c.	the agent of the principal
b.	an associate broker for the MLS.	d.	the agent of the client

65.

A broker fails to disclose that the broker is acting as a dual agent.

a.	The broker's license may be revoked.
b.	The broker may still legally collect commissions from both parties.
c.	It is okay as long as he does not get caught
d.	It is permissable as long as either the seller or buyer know.

66.

A salesperson is an agent of:

a.	the salesperson's employing broker.	c.	the seller.
b.	any broker with a listing.	d.	the state licensing board.

67.

A broker has a listing which allows the broker to represent the principal but the broker cannot bind the principal to a contract. This is a/an:

a.	general agency	c.	a dual agency with special provisions
b.	special agency.	d.	a statutory agency with special provisions

68.

A broker acting as an agent in a listing is a:

a.	general agent.	c.	dual agent
b.	special agent.	d.	statutory agent

69.

A six day listing creates a:

a.	general agency.	c.	dual agency
b.	common agency	d.	special agency.

70.

A property manager is a:

a.	general agent.	c.	universal agent
b.	special agent.	d.	secret agent

71.

A listing which gives a broker authority to sign a sales contract is a:

a.	special agency with a power of attorney.	c.	super agent with a power of attorney
b.	general agency with a power of attorney.	d.	universal agent with a power of attorney

72.

A listing which does not give the broker authority to sign a contract of sale creates a:

a.	special agency.	c.	universal agency
b.	general agency.	d.	secret agent

73.

Under a listing, a broker is a:

a.	special agent	c.	universal agent
b.	general agent.	d.	secret agent

74.

A broker may sign a contract of sale for the seller if:

a.	the seller is ill.	c.	the seller says it is okay in writing
b.	the broker has a power of attorney.	d.	under no circumstances

75.

An agent hired to perform a particular task is a:

a.	special agent.	c.	universal agent
b.	general agent	d.	secret agent

76.

A guardian is a/an:

a.	universal agent.	c.	general agent
b.	special agent.	d.	secret agent

77.

Under exclusive agency listings, the broker is paid:

a.	if anyone other than the owner sells the property,	c.	only if the broker finds the buyer
b.	only if the listing firm finds the buyer.	d.	if the property sells

78.

After selling, the owner must pay a commission if the listing is a/an:

a.	open.	c.	exclusive agency
b.	exclusive right to sell.	d.	recorded

79.

An exclusive agency listing is:

a.	an implied contract to pay a commission.	c.	an offer to sell property.
b.	a contract of employment.	d.	an illegal contract.

80.

Which listing prohibits the owner from selling the property either herself or through anyone else without paying a commission?

a.	exclusive right to sell	c.	open listing
b.	exclusive agency	d.	pocket listing

81.

Under which listing will the broker be entitled to a commission only if the broker procures a ready, willing and able buyer?

a.	open	c.	exclusive agency
b.	exclusive right to sell	d.	special agency

82.

Under an exclusive agency listing:

a.	the seller may sell the property herself without paying a commission.
b.	the seller must pay a commission no matter who sells the property.
c.	the seller may pay a commission if she feels like it
d.	the owner does not have to pay a commission

83.

If 2 brokers have open listings, and one discovers a zoning change may occur, that broker should:

a.	remain silent.	c.	tell the other broker
b.	inform the seller of the potential change in zoning.	d.	tell the other broker and the seller

84.

Under an exclusive agency listing, the listing broker is paid if the:

a.	property is sold by another firm.	c.	if the property sells
b.	owner finds the buyer.	d.	only if the broker finds the buyr

85.

Which two listings allow the owner to find the buyer without paying a commission?

a.	exclusive agency and open	c.	exclusive right to sell and open listing
b.	exclusive right to sell and exclusive agency	d.	opton and open listing

86.

The only listing which entitles the broker to a commission no matter who sells the property is the:

a.	exclusive right to sell.	c.	exclusive agency
b.	open.	d.	open or exclusive agency

87.

The only listing that requires the owner to pay a commission if the property is sold by the owner is the:

a.	exclusive agency.	c.	open listing
b.	exclusive right to sell.	d.	open listing or exclusive agency

88.

The only listing that requires the owner to pay a commission if the property is sold by the owner or by a broker other than the listing broker is the:

a.	exclusive agency	c.	open listing
b.	exclusive right to sell	d.	exclusive agency or open listing

89.

With an open listing, the broker:

a.	is a special agent.	c.	has no agency relationship
b.	need not be the procuring cause of the sale in order to collect a commission.	d.	will be paid a commission regardless of who sells the property

90.

A listing obligates the seller to list with only one broker and pay a commission if that broker finds a buyer. If the owner finds the buyer, no commission will be owed. This listing is:

a.	open.	c.	exclusive right to sell.
b.	exclusive agency.	d.	illegal.

91.

Which listing designates the broker as the exclusive agent yet allows the owner to find the buyer without being obligated to pay a commission?

a.	exclusive agency	c.	exclusive right to sell
b.	open	d.	exclusive right to sell or opern

92.

To collect a commission, the broker must find a buyer before the property is sold by either the owner or another agent. The listing is:

a.	open.	c.	exclusive agency
b.	exclusive right to sell.	d.	exclusive agency or exclusive right to sell

93.

Under which listing is the broker's right to a commission conditional upon that broker finding the buyer before the seller or another broker is able to locate a buyer?

a.	open	c.	exclusive right to sell
b.	exclusive agency	d.	net

94.

Does the broker get a commission if the owner dies before the agent can present a full terms offer^?

a.	yes	c.	yes if the owner has a will
b.	no	d.	yes if the court agrees

95.

Which terminates a listing?

a.	the buyer defaults	c.	the property fails an FHA inspection
b.	the property is condemned	d.	the zoning changes

96.

Which will NOT terminate a listing?

a.	the property fails an FHA inspection	c.	the broker's license is revoked
b.	death of the listing broker	d.	the property is condimned

97.

A listing stated that it would expire on December 31. On December 1, the seller died. On December 2, the house burned to the ground. On December 3, the property was condemned. The listing terminated on:

a.	December 1	c.	December 3
b.	December 2	d.	December 31

98.

Which will NOT terminate a listing?

a.	seller bankruptcy.	c.	the seller revokes the listing.
b.	the closing is held.	d.	the buyer defaults.

99.

Death of the listing seller:

a.	automatically terminates the listing.	c.	affects the lsiting if the seller does not have a will
b.	does not affect the listing in any way.	d.	affects the lisiting if the seller has a will

100.

When a listed property is destroyed by fire, the listing:

a.	remains valid.	c.	is good as long as the owner rebuilds
b.	automatically terminates.	d.	is good if the court agrees

101.

A listed property was sold at a foreclosure sale. Is the broker entitled to a commission?

a.	Yes, because of the foreclosure.
b.	No, the broker did not find a ready, willing and able buyer.
c.	Yes, because the listing automatically continues until the property is sold
d.	It depends on the court decision