Multiple Choice Identify the letter of the choice that best
completes the statement or answers the question.
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1.
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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 |
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2.
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An agency relationship exists between the:
a. | principal and broker. | c. | principal and salesperson | b. | seller and
salesperson. | d. | client and
salesperson |
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3.
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A listing is also known as:
a. | an agency agreement. | c. | an offer to list | b. | an offer to sell. | d. | a marketing
contract |
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4.
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The relationship of trust between a principal an agent is known as:
a. | fiduciary. | c. | common law | b. | substitution. | d. | rights of
contract |
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5.
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A listing is also known as:
a. | a contract of sale. | c. | a listing contract | b. | an employment contract. | d. | an offer to
sell |
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6.
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A listing is a contract between the seller and the:
a. | principal. | c. | salesperson. | b. | broker. | d. | customer. |
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7.
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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 |
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8.
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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 |
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9.
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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 |
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10.
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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
the seller. | d. | no one is
liable |
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11.
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An agent owes a customer/prospect which duties?
a. | honesty, no misrepresentation, the disclosure of defects | b. | disclosure of all
confidential information | c. | disclosure of the clients personal
business | d. | just a good deal |
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12.
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An E & O (errors and omissions policy) covers.
a. | negligence. | c. | fraud | b. | theft of earnest money by a property
manager. | d. | misrepresentation |
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13.
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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 |
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14.
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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 |
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15.
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The principal owes the agent the duties of:
a. | compensation and indemnification. | c. | honor and
humility | b. | obedience and loyalty. | d. | advertising and signage |
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16.
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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 |
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17.
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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 |
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18.
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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 |
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19.
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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 it’s okay |
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20.
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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 |
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21.
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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 |
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22.
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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 |
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23.
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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 |
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24.
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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. | the statute of
frauds. | d. | golden
rule. |
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25.
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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 |
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26.
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Theft of money is covered by:
a. | surety bonds. | c. | the police force | b. | e & o insurance. | d. | civil court |
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27.
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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 |
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28.
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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 |
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29.
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A broker who, for personal use, takes money from the trust account is guilty
of:
a. | conversion. | c. | good business practices | b. | defeasance. | d. | commingling of funds |
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30.
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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 regulations
permission |
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31.
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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. | the statute of Frauds. | d. | blue sky laws |
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32.
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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 |
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33.
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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 |
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34.
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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 knows
secret and buy the property himself | b. | Insist that an appraisal is
done. | d. | quickly find a friend
to buy the property |
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35.
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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 |
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36.
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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 |
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37.
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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 |
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38.
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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 |
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39.
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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
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40.
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Defects which are not apparent are:
a. | latent defects. | c. | patents defects | b. | ignored. | d. | not important |
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41.
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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 |
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42.
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A broker learns about a zone change which may have a substantial effect 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 |
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43.
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Although a broker has a full price offer, the seller lacks a 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 |
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44.
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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 |
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45.
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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 |
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46.
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A salesperson may only collect her commission from:
a. | her employing broker. | c. | the seller | b. | the listing broker | d. | the buyer |
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47.
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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 |
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48.
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Commissions are set by the:
a. | seller and broker. | c. | listing agent and broker. | b. | seller and
principal. | d. | listing agent
and principal |
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49.
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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 a commission from the
buyer | d. | may only receive a commission from the seller |
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50.
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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 |
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51.
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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. |
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52.
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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 |
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53.
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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 |
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54.
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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. |
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55.
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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 |
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56.
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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 listing 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 |
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57.
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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. |
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58.
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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. |
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59.
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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 |
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60.
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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 |
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61.
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Under a buyer agency, the prospect or customer is the:
a. | seller. | c. | either buyer or seller | b. | buyer. | d. | both
buyer and seller |
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62.
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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 |
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63.
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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 |
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64.
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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 |
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65.
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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 permissible as long as either the seller or buyer
know. |
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66.
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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. |
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67.
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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 |
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68.
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A broker acting as an agent in a listing is a:
a. | general agent. | c. | dual agent | b. | special agent. | d. | statutory agent |
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69.
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A six-day listing creates a:
a. | general agency. | c. | dual agency | b. | common agency | d. | special agency. |
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70.
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A property manager is:
a. | a general agent. | c. | a universal agent. | b. | a special agent. | d. | a secret agent. |
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