NAR Agency Relationships & Fiduciary Duties 3

Question 1

According to NAR's Code of Ethics, when must REALTORS® disclose the existence of an agency relationship to prospective buyers and sellers?

Accepted Answer

At first substantive contact with a prospective client

Answer

Only at the time of making an offer

Answer

Only after a listing agreement is signed

Answer

Within 24 hours of any showing

Question 2

What is 'implied agency' in real estate?

Accepted Answer

An agency relationship that arises from the conduct and actions of the parties, without a formal written agreement

Answer

An agency created by a written contract signed by both parties

Answer

An agency authorized by the state licensing board

Answer

A temporary agency relationship lasting less than 30 days

Question 3

What is the primary difference between a general agent and a special agent in real estate?

Accepted Answer

A general agent has broad authority to act on the principal's behalf in many transactions; a special agent is authorized for a single specific transaction

Answer

A general agent handles commercial property; a special agent handles residential

Answer

A general agent is licensed in multiple states; a special agent is licensed in one state

Answer

A general agent works for a franchise; a special agent is independent

Question 4

A listing agent who also owns investment properties and purchases a listing without disclosing their agent status to the seller is violating which principle?

Accepted Answer

The duty of loyalty and disclosure

Answer

The duty of obedience

Answer

The duty of accounting

Answer

The duty of reasonable care

Question 5

If a seller's agent learns that the property has serious foundation problems, what is their obligation to a potential buyer?

Accepted Answer

Disclose it to the buyer as a material fact regardless of their agency relationship

Answer

Keep it confidential because they represent the seller

Answer

Disclose it only if the buyer's agent specifically asks

Answer

Recommend the buyer hire an inspector and say nothing more

Question 6

What is the legal term for a real estate broker's authority to act on behalf of a principal that is explicitly stated in a written agreement?

Accepted Answer

Express authority

Answer

Implied authority

Answer

Apparent authority

Answer

Incidental authority

Question 7

Under the NAR Code of Ethics, a REALTOR® who represents a buyer in a transaction where the REALTOR's® brokerage also represents the seller MUST:

Accepted Answer

Obtain informed written consent from both parties before proceeding with dual agency

Answer

Withdraw from the transaction to avoid any conflict

Answer

Represent only the party who offers the higher commission

Answer

Immediately transfer one representation to another brokerage