Real Estate Sales Exam Real Estate Sales Agency and Fiduciary Duties Questions and Answers 2 — Questions and Answers
Question 1: A buyer's agent learns that the seller is willing to accept a lower price than listed. What is the agent's fiduciary obligation?
- Disclose this information to the buyer immediately
- Keep this information confidential (Correct answer)
- Share it only if the buyer asks directly
- Report it to the listing broker
Correct answer: Keep this information confidential
A buyer's agent owes confidentiality to their client and must not disclose the seller's motivation or willingness to accept less without authorization.
Question 2: Which type of agency relationship is created when a broker represents both the buyer and the seller in the same transaction?
- Single agency
- Dual agency (Correct answer)
- Designated agency
- Implied agency
Correct answer: Dual agency
Dual agency occurs when one broker or firm represents both parties in a transaction, requiring informed written consent from both sides.
Question 3: An agent who fails to present all offers to a seller has violated which fiduciary duty?
- Loyalty
- Obedience
- Disclosure (Correct answer)
- Accounting
Correct answer: Disclosure
The duty of disclosure requires agents to present all material facts and offers to their clients, regardless of the agent's opinion of the offer.
Question 4: A listing agent discovers that the property has a hidden foundation crack during an open house. What must the agent do?
- Disclose the defect only if asked by potential buyers
- Disclose the defect to all prospective buyers (Correct answer)
- Keep the information confidential per the seller's request
- Wait until a buyer makes an offer before disclosing
Correct answer: Disclose the defect to all prospective buyers
Material defects that affect property value or safety must be disclosed to all prospective buyers regardless of the seller's wishes.
Question 5: In a designated agency arrangement, which statement is TRUE?
- The broker cannot assign separate agents to buyer and seller
- Both designated agents share all client information with each other
- Each designated agent represents only their assigned client's interests (Correct answer)
- Designated agency eliminates the need for written disclosure
Correct answer: Each designated agent represents only their assigned client's interests
In designated agency, the broker assigns individual agents to represent each party separately, and each agent advocates solely for their assigned client.
Question 6: Which fiduciary duty requires an agent to follow the lawful instructions of their client?
- Loyalty
- Obedience (Correct answer)
- Care
- Confidentiality
Correct answer: Obedience
The duty of obedience obligates an agent to carry out all lawful instructions given by the client in the scope of the agency agreement.
Real Estate Sales Exam Real Estate Sales Agency and Fiduciary Duties Questions and Answers 2
A buyer's agent learns that the seller is willing to accept a lower price than listed.
What is the agent's fiduciary obligation?