Arkansas Real Estate License Arkansas Real Estate License Agency and Fiduciary Duties Questions and Answers 2 — Questions and Answers
Question 1: Under Arkansas real estate law, which type of agency relationship is created when a broker represents both the buyer and seller in the same transaction?
- Dual agency (Correct answer)
- Single agency
- Designated agency
- Implied agency
Correct answer: Dual agency
Dual agency occurs when one broker represents both the buyer and seller in the same transaction, which requires informed written consent in Arkansas.
Question 2: Which fiduciary duty requires an Arkansas real estate agent to act in the client's best interest above their own?
- Loyalty (Correct answer)
- Obedience
- Disclosure
- Accounting
Correct answer: Loyalty
The duty of loyalty obligates an agent to place the client's interests above all others, including the agent's own interests.
Question 3: In Arkansas, when must a licensee provide the Agency Disclosure Form to a prospective buyer or seller?
- At the first substantive contact (Correct answer)
- After the purchase agreement is signed
- At closing
- Within 30 days of listing
Correct answer: At the first substantive contact
Arkansas law requires licensees to provide the Agency Disclosure Form at the first substantive contact with a prospective buyer or seller.
Question 4: A seller's agent in Arkansas learns that the property has a foundation defect. Which fiduciary duty requires the agent to inform the seller about potential liability if this is not disclosed to buyers?
- Disclosure (Correct answer)
- Obedience
- Confidentiality
- Due diligence
Correct answer: Disclosure
The duty of disclosure requires the agent to inform their client of all material facts and information that could affect the transaction.
Question 5: Under Arkansas designated agency, what happens to the managing broker's role when two agents in the same firm represent opposing parties?
- The broker becomes a neutral supervisory party (Correct answer)
- The broker represents the seller only
- The broker represents the buyer only
- The broker withdraws from the transaction entirely
Correct answer: The broker becomes a neutral supervisory party
In designated agency, the managing broker assumes a neutral supervisory role rather than advocating for either party in the transaction.
Question 6: Which of the following actions would violate an Arkansas agent's fiduciary duty of confidentiality?
- Telling a buyer's agent that the seller will accept a lower price without authorization (Correct answer)
- Disclosing known material defects to a buyer
- Sharing property listing details on the MLS
- Providing comparable sales data to a prospective buyer
Correct answer: Telling a buyer's agent that the seller will accept a lower price without authorization
Revealing the seller's willingness to accept a lower price without authorization is a breach of the confidentiality duty owed to the client.
Arkansas Real Estate License Arkansas Real Estate License Agency and Fiduciary Duties Questions and Answers 2
Under Arkansas real estate law, which type of agency relationship is created when a broker represents both the buyer and seller in the same transaction?