PSI PSI Real Estate Agency and Property Management 1 — Questions and Answers
Question 1: Which type of agency relationship is created when a seller hires a broker to sell their property?
- Dual agency
- Buyer agency
- Listing agency (Correct answer)
- Sub-agency
Correct answer: Listing agency
A listing agency relationship is formed when a property owner (principal) authorizes a broker (agent) to act on their behalf to sell the property.
Question 2: What fiduciary duty requires an agent to place the client's interests above all others, including the agent's own?
- Disclosure
- Confidentiality
- Loyalty (Correct answer)
- Reasonable care
Correct answer: Loyalty
The duty of loyalty requires the agent to act solely in the best interest of the principal and to avoid any conflicts of interest.
Question 3: A broker who represents both the buyer and the seller in the same transaction with informed consent is acting as a:
- Sub-agent
- Universal agent
- Dual agent (Correct answer)
- Transaction broker
Correct answer: Dual agent
A dual agent represents both the buyer and seller in a single transaction, which is only permissible with the informed written consent of both parties.
Question 4: An agent's authority that is expressly granted in writing through a listing agreement is called:
- Implied authority
- Apparent authority
- Express authority (Correct answer)
- Ratified authority
Correct answer: Express authority
Express authority is explicitly stated in a written or oral agreement, such as a listing contract that authorizes the agent to market and negotiate the sale of property.
Question 5: Which listing agreement gives the broker the exclusive right to a commission regardless of who sells the property?
- Open listing
- Net listing
- Exclusive agency listing
- Exclusive right-to-sell listing (Correct answer)
Correct answer: Exclusive right-to-sell listing
An exclusive right-to-sell listing entitles the broker to a commission if the property sells during the listing period, no matter who procures the buyer.
Question 6: Under agency law, the term 'procuring cause' is most associated with which scenario?
- Determining which agent is entitled to a commission (Correct answer)
- Establishing the legal cause of a contract breach
- Identifying why a property failed to sell
- Calculating the net proceeds to the seller
Correct answer: Determining which agent is entitled to a commission
Procuring cause refers to the broker whose continuous, uninterrupted efforts directly led to the successful sale, determining who is entitled to the commission.
PSI PSI Real Estate Agency and Property Management 1
Which type of agency relationship is created when a seller hires a broker to sell their property?