ENGRADE Chapter 7

Question 1

The real estate brokers 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 buyers willingness to buy is the duty of

Answer 1

DISCLOSURE

Question 2

Designated Agency in NC is considered

Answer 2

A form of DUAL AGENCY

Question 3

Designated Agency can be practiced

Answer 3

• agent is appointed by broker to act for a specific principal or client
• Used when one agent with the company listed the property & another agent within the company secured the buyer for the property.

Listing agent would be designated agent of seller
Buyers agent would be designated agent of the buyer

*WRITTEN PERMISSION of both parties
Both parties are clients.

Question 4

An agent must have the buyer sign a written agency agreement by what specific time?

Answer 4

• at the time the agent will PRESENT an offer on the BUYERS behalf
• at the time the agent attempts to LIMIT the buyers ability to work with another agent.

Question 5

If the seller’s agent or subagent misrepresentation of a material fact about a property causes injury or loss to the buyer as a customer, which of the following individuals may be held accountable.

Answer 5

Both the seller and the agent

Question 6

A disclosure of agency status should be made by a BUYERS AGENT to the seller

Answer 6

With a WRITTEN confirmation in the OFFER to PURCHASE and CONTRACT

At the initial contact with the seller or sellers agent, orally or in writing

Question 7

Iris, a subagent of the seller who is working with a buyer customer, is told by the buyer customer that he wants to offer a lower price on a property. The buyer customer says to Iris, “ I want to offer $85K initially; however, I’ll go as high as 90K to get the property”. Iris wrote the offer and delivered the offer to the listing Agent, Lucy. Iris told the Listing Agent Lucy that the buyer customer is offering $85K initially, but he will go as high as $90K to get the property. Listing Agent Lucy did not tell the sellers the buyer would be willing to go for a higher price. The seller accepted the buyers offer to $85K. Who violated the Law of Agency?

Answer 7

Lising Agent Lucy

Question 8

Which of the following would be DUAL AGENCY?

Answer 8

A broker having a buyer client for a property the broker personally listed

Question 9

A real estate broker was responsible for a chain of events that resulted in the sale of one of his clients properties. This is referred to as

Answer 9

PROCURING CAUSE

Question 10

All of the following could legally be considered fraudulent

Answer 10

Deceitful or dishonest practices

Omitted statements of material fact

Misstatements about the property

(not exaggerated opinions about the property)

Question 11

A seller has listed a home with a broker for $90K 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 $85K, and the seller accepts it. In this situation the broker

Answer 11

has violated his agency relationship with the seller.

Question 12

Upon discovering a latent defect in the property, the listing agent should discuss the problem with the seller, and then

Answer 12

inform any prospective buyers of the defect

Question 13

Which of the following BEST describes the common law of agency?

Answer 13

Case law establishing the responsibilities of a person who acts for another.

Question 14

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 NCREC rules, the agent must do all of the following

Answer 14

Obtain permission from her buyer client in order to obtain compensation from the seller

Disclose her agency status to the seller at initial contact

Provide the Working with Real Estate Agents brochure to the seller

(NOT convince the seller to list with her and authorize dual agency)

Question 15

The listing broker tells a prospective buyer that the seller is on the verge of bankruptcy. The broker’s actions are

Answer 15

unacceptable unless the seller has authorized the broker to share the information with potential buyers

Question 16

A listing agent is showing a house to a prospective buyer customer. The seller told the listing agent that during the past 10 winters, the sellers 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?

Answer 16

Withholding the information prevents the disclosure of a material fact

Question 17

Which of the following BEST describes a designated agency transaction?

Answer 17

A BIC 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.

Question 18

If the BIC is to act as one of the designated agents on a NC in house transaction, which of the following may be appointed as a designated agent for the other party to the transaction?

Answer 18

A licensed broker within the firm who has no prior confidential knowledge of the party that the BIC will represent.

Question 19

Which of the following describes designated agency in NC?

Answer 19

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

Question 20

The NC Working with Real Estate Agents brochure must be given

Answer 20

to all consumers in a sales transaction no later than FIRST SUBSTANTIAL CONTACT

Question 21

All of the following will terminate a listing

Answer 21

Mutual agreement by the parties

Breach by either party

Destruction of the listed property

(NOT death of the individual listing licensee)

Question 22

All of the following are true regarding the NC Working With Real Estate Agents Brochure,

Answer 22

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 must be given in all sales transactions at first substantial contact

(NOT the brochures use is mandatory in all real estate transactions including residential sales, commercial transactions and property management)