Question 1

A dual agency

Accepted Answer

A)  is unlawful. 
B)  is legal but unethical. 
C)  must be disclosed to all parties. 
D)  requires a permit from the real estate commissioner. 
A)  is unlawful. 
B)  is legal but unethical. 
C)  must be disclosed to all parties. 
D)  requires a permit from the real estate commissioner.

Question 2

It might constitute commingling if a buyer's earnest money check is made out to the sales agent.

Accepted Answer

A) True 
 B)False

Question 3

Errors and omission insurance may cover intentional acts to deceive.

Accepted Answer

A) True 
 B)False

Question 4

An investor hires a broker to buy a particular property for him, naming the maximum he will pay. The broker, however, purchases it for himself at a lower price and then sells it to his client at a higher price without revealing his involvement. This is an example of illegal secret profits.

Accepted Answer

A) True 
 B)False

Question 5

Choose the one most appropriate answer for each.
-mixing of client's or customer's funds with an agent's personal funds

Accepted Answer

A) agent 
B) agency by estoppel 
C) boycotting 
D) buyer's broker 
E) commingling
F)dual agency
G)fiduciary relationship
H)implied authority
I)middleman
J)ostensible authority
K)price fixing
L)principal
M)property report
N)puffing
O)sales associate
P)special agency
Q)subagent
R)third parties
S)trust account
T)universal agency 
A) agent 
B) agency by estoppel 
C) boycotting 
D) buyer's broker 
E) commingling
F)dual agency
G)fiduciary relationship
H)implied authority
I)middleman
J)ostensible authority
K)price fixing
L)principal
M)property report
N)puffing
O)sales associate
P)special agency
Q)subagent
R)third parties
S)trust account
T)universal agency

Question 6

A buyer makes an initial deposit of $10,000 to buyer a $400,000 house. The buyer withdraws the offer before the seller accepts it. The broker should dispose of the buyer's earnest money by splitting it with the seller according to the terms of their commission agreement.

Accepted Answer

A) True 
 B)False

Question 7

The purpose of a trust account is to

Accepted Answer

A)  hold money belonging to clients and customers. 
B)  assure that a broker can be trusted. 
C)  to act as a neutral depository. 
D)  convert client's money to broker's account. 
A)  hold money belonging to clients and customers. 
B)  assure that a broker can be trusted. 
C)  to act as a neutral depository. 
D)  convert client's money to broker's account.

Question 8

Choose the one most appropriate answer for each.
-an agency relationship created by the conduct of the principal

Accepted Answer

A) agent 
B) agency by estoppel 
C) boycotting 
D) buyer's broker 
E) commingling
F)dual agency
G)fiduciary relationship
H)implied authority
I)middleman
J)ostensible authority
K)price fixing
L)principal
M)property report
N)puffing
O)sales associate
P)special agency
Q)subagent
R)third parties
S)trust account
T)universal agency 
A) agent 
B) agency by estoppel 
C) boycotting 
D) buyer's broker 
E) commingling
F)dual agency
G)fiduciary relationship
H)implied authority
I)middleman
J)ostensible authority
K)price fixing
L)principal
M)property report
N)puffing
O)sales associate
P)special agency
Q)subagent
R)third parties
S)trust account
T)universal agency

Question 9

Any earnest money deposits paid by the purchaser must be placed in a proper trust account.

Accepted Answer

A) True 
 B)False

Question 10

Choose the one most appropriate answer for each.
-the person empowered to act by and on behalf of the principal

Accepted Answer

A) agent 
B) agency by estoppel 
C) boycotting 
D) buyer's broker 
E) commingling
F)dual agency
G)fiduciary relationship
H)implied authority
I)middleman
J)ostensible authority
K)price fixing
L)principal
M)property report
N)puffing
O)sales associate
P)special agency
Q)subagent
R)third parties
S)trust account
T)universal agency 
A) agent 
B) agency by estoppel 
C) boycotting 
D) buyer's broker 
E) commingling
F)dual agency
G)fiduciary relationship
H)implied authority
I)middleman
J)ostensible authority
K)price fixing
L)principal
M)property report
N)puffing
O)sales associate
P)special agency
Q)subagent
R)third parties
S)trust account
T)universal agency

Question 11

Fiduciary responsibilities of an agent to the principal include faithful performance, loyalty, and provision of legal advice.

Accepted Answer

A) True 
 B)False

Question 12

Brokers can indemnify themselves against legal actions by those with whom they deal by purchasing errors and omission insurance.

Accepted Answer

A) True 
 B)False

Question 13

The seller has just informed the listing agent that he does not want the property shown to any Orientals or other minority buyers. The agent

Accepted Answer

A)  must obey the request under his fiduciary responsibilities. 
B)  may take the listing and show the property to anyone who desires to see it, including any minorities. 
C)  must explain that he cannot take the listing under these circumstances. 
D)  may take the listing and hope that no one undesirable turns up. 
A)  must obey the request under his fiduciary responsibilities. 
B)  may take the listing and show the property to anyone who desires to see it, including any minorities. 
C)  must explain that he cannot take the listing under these circumstances. 
D)  may take the listing and hope that no one undesirable turns up.

Question 14

A person who brings two or more parties together but does not represent either party is known as a ____________________.

Accepted Answer

The answer of A person who brings two or more...

Question 15

It is the responsibility of the real estate broker to

Accepted Answer

A)  submit only those offers that meet the listing price. 
B)  decide which offers are in the principal's best interest. 
C)  quote only the listing price, but present all offers. 
D)  say whatever is necessary to get an offer. 
A)  submit only those offers that meet the listing price. 
B)  decide which offers are in the principal's best interest. 
C)  quote only the listing price, but present all offers. 
D)  say whatever is necessary to get an offer.

Question 16

An agency relationship may be created by ratification or estoppel.

Accepted Answer

A) True 
 B)False

Question 17

When an agent is given the right to transact all types of matters on behalf of the principal, the agent serves as a

Accepted Answer

A)  notary public. 
B)  third party. 
C)  universal agent. 
D)  special agent. 
A)  notary public. 
B)  third party. 
C)  universal agent. 
D)  special agent.

Question 18

The duty of ____________________ care implies competence and expertise on the part of the broker.

Accepted Answer

The answer of The duty of ____________________ care implies competence...

Question 19

Choose the one most appropriate answer for each.
-refers to the agency relationship of a broker's sales associate to the seller

Accepted Answer

A) agent 
B) agency by estoppel 
C) boycotting 
D) buyer's broker 
E) commingling
F)dual agency
G)fiduciary relationship
H)implied authority
I)middleman
J)ostensible authority
K)price fixing
L)principal
M)property report
N)puffing
O)sales associate
P)special agency
Q)subagent
R)third parties
S)trust account
T)universal agency 
A) agent 
B) agency by estoppel 
C) boycotting 
D) buyer's broker 
E) commingling
F)dual agency
G)fiduciary relationship
H)implied authority
I)middleman
J)ostensible authority
K)price fixing
L)principal
M)property report
N)puffing
O)sales associate
P)special agency
Q)subagent
R)third parties
S)trust account
T)universal agency

Question 20

The broker writes an offer on one of his own listings. He should inform the buyer that he is an agent of the seller as well as the buyer prior to closing.

Accepted Answer

A) True 
 B)False

Exam 20: The Principal-Broker Relationship: Agency

A dual agency

It might constitute commingling if a buyer's earnest money check is made out to the sales agent.

Errors and omission insurance may cover intentional acts to deceive.

An investor hires a broker to buy a particular property for him, naming the maximum he will pay. The broker, however, purchases it for himself at a lower price and then sells it to his client at a higher price without revealing his involvement. This is an example of illegal secret profits.

Choose the one most appropriate answer for each. -mixing of client's or customer's funds with an agent's personal funds

A buyer makes an initial deposit of $10,000 to buyer a $400,000 house. The buyer withdraws the offer before the seller accepts it. The broker should dispose of the buyer's earnest money by splitting it with the seller according to the terms of their commission agreement.

The purpose of a trust account is to

Choose the one most appropriate answer for each. -an agency relationship created by the conduct of the principal

Any earnest money deposits paid by the purchaser must be placed in a proper trust account.

Choose the one most appropriate answer for each. -the person empowered to act by and on behalf of the principal

Fiduciary responsibilities of an agent to the principal include faithful performance, loyalty, and provision of legal advice.

Brokers can indemnify themselves against legal actions by those with whom they deal by purchasing errors and omission insurance.

The seller has just informed the listing agent that he does not want the property shown to any Orientals or other minority buyers. The agent

A person who brings two or more parties together but does not represent either party is known as a ____________________.

It is the responsibility of the real estate broker to

An agency relationship may be created by ratification or estoppel.

When an agent is given the right to transact all types of matters on behalf of the principal, the agent serves as a

The duty of ____________________ care implies competence and expertise on the part of the broker.

Choose the one most appropriate answer for each. -refers to the agency relationship of a broker's sales associate to the seller

The broker writes an offer on one of his own listings. He should inform the buyer that he is an agent of the seller as well as the buyer prior to closing.

Nature and Description of Real Estate

Rights and Interests in Land

Forms of Ownership

Transferring Title

Recordation Abstracts and Title Insurance

Contract Law

Real Estate Sales Contracts

Mortgage and Note

Deed of Trust

Lending Practices

The Loan and the Consumer

Sources of Financing

Types of Financing

Taxes and Assessments

Title Closing and Escrow

Real Estate Leases

Real Estate Appraisal

Licensing Laws and Professional Affiliation

The Principal-Broker Relationship: Employment

Fair Housing, Ada, Equal Credit, and Community Reinvestment

Condominiums, Cooperatives, Puds, and Timeshares

Property Insurance

Land-Use Control

Real Estate and the Economy

Investing in Real Estate

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