Real Estate Sales Exam Agency Law and Fiduciary Duties 2 — Questions and Answers
Question 1: A buyer's agent who also represents the seller in the same transaction without both parties' written consent is guilty of:
- Dual agency
- Undisclosed dual agency (Correct answer)
- Subagency
- Designated agency
Correct answer: Undisclosed dual agency
Undisclosed dual agency is illegal because it violates the agent's fiduciary duty of loyalty to both clients without their knowledge.
Question 2: Which fiduciary duty requires an agent to place the client's interests above their own personal gain?
- Disclosure
- Obedience
- Loyalty (Correct answer)
- Confidentiality
Correct answer: Loyalty
Loyalty requires the agent to prioritize the client's interests over all others, including the agent's own financial benefit.
Question 3: When a seller's agent learns that the seller is going through a divorce and must sell quickly, this information is:
- Material fact that must be disclosed to buyers
- Confidential and must not be disclosed without seller's permission (Correct answer)
- Required to be disclosed in the MLS listing
- Irrelevant to the transaction
Correct answer: Confidential and must not be disclosed without seller's permission
The seller's personal motivation to sell quickly is confidential information that the agent must protect under the duty of confidentiality.
Question 4: A real estate agent who represents the buyer is called a:
- Listing agent
- Cooperating agent
- Buyer's agent (Correct answer)
- Transaction broker
Correct answer: Buyer's agent
A buyer's agent exclusively represents the buyer's interests and owes fiduciary duties to the buyer.
Question 5: Under the duty of accounting, a real estate agent must:
- Provide financial investment advice
- Keep accurate records of all client funds and property (Correct answer)
- File the client's taxes
- Manage the client's investment portfolio
Correct answer: Keep accurate records of all client funds and property
The duty of accounting requires agents to safeguard and properly account for all money and property entrusted to them by clients.
Question 6: A listing agent who fails to present a buyer's offer to the seller because the agent thinks it is too low has violated the duty of:
- Confidentiality
- Obedience (Correct answer)
- Care
- Disclosure
Correct answer: Obedience
The duty of obedience requires the agent to present all offers to the seller unless the seller has given specific written instructions otherwise.
Question 7: Which of the following best describes a transaction broker (facilitator)?
- Represents only the seller
- Represents only the buyer
- Represents both parties as a dual agent
- Assists both parties without representing either (Correct answer)
Correct answer: Assists both parties without representing either
A transaction broker provides limited representation services to both parties without acting as a fiduciary for either side.
Real Estate Sales Exam Agency Law and Fiduciary Duties 2
A buyer's agent who also represents the seller in the same transaction without both parties' written consent is guilty of: