Exam (elaborations)
POST-LICENSING 301 BROKER AND BROKER RESPONSIBILITIES
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POST-LICENSING 301 BROKER AND BROKER RESPONSIBILITIES
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POST-LICENSING 301 BROKER AND BROKERRESPONSIBILITIES
Courtney, a real estate broker, is at a listing meeting and notices some water staining
under the bathroom sink. She asks the seller about it and they state that the pipes are
leaking but have tried fixing them several times. The seller states that it really is not a
big deal because it doesn't leak that much. Courtney lists the property for sale and on
the Residential Property and Owners' Association Disclosure Statement (RPOADS), the
seller marks "No Representation" for all items. Which of the following statements is
TRUE?
A) Regardless what the seller discloses or does not disclose on the RPOADS, Courtney
must disclose the leak as a material fact.
B) Courtney does not have a duty to disclose the leak because the seller checked "No
Representation" on the RPOADS.
C) Courtney does not have a duty to disclose the leak because North Carolina is a
caveat emptor state.
D) Courtney would be violating her fiduciary duties - Answers- A) Regardless what the
seller discloses or does not disclose on the RPOADS, Courtney must disclose the leak
as a material fact.
Real estate brokers are prohibited from making any misrepresentations for failing to
disclose a material fact to any party involved in a real estate transaction (seller, buyer,
lender, attorney, etc.). This fundamental standard applies regardless of whether the
licensee has an agency relationship with the party.
Best Homes Realty lists a property for sale and the listing agent knows that the heat
pump at the listed house does not function properly but tells a prospective buyer that all
mechanical systems and appliances are in good condition. This is an example of which
prohibited conduct?
A) Willful misrepresentation
B) Negligent omission
C) Willful omission
D) Negligent misrepresentation - Answers- A) Willful misrepresentation
Willful misrepresentation occurs when a licensee who has "actual knowledge" of a
material fact deliberately misinforms a buyer, seller, tenant, or landlord concerning such
fact.
Jamal, a seller, has decided to list his property. Jamal has noticed that there is a small
leak in the roof. He completed the Residential Property and Owners' Association
Disclosure Statement (RPOADS) before he listed the property. On the RPOADS, he
marked "No Representation" on question #5, which stated, "Is there any leakage or
other problem with the dwelling's roof?" Which of the following statements is TRUE?
,A) Jamal does not have to complete the RPOADS. It is optional for all sellers in North
Carolina.
B) Jamal has complied with the North Carolina Residential Property Disclosure Act
because it requires a seller (with few exceptions) to complete the form and the seller
can choose "No Representation" to answer the questions.
C) Jamal must disclose the leak in the roof and does not have to complete the
RPOADS.
D) Jamal has not complied with the North Carolina Residential Property Disclosure Act
because he must dis - Answers- B) Jamal has complied with the North Carolina
Residential Property Disclosure Act because it requires a seller (with few exceptions) to
complete the form and the seller can choose "No Representation" to answer the
questions.
.North Carolina Residential Property Disclosure Act requires a seller (with few
exceptions) to complete the form and the seller can choose "Yes," "No," or "No
Representation" to answer the questions on the form.
Sofia, a listing agent, has just been told by the seller of an issue with the structural
integrity of the house in one of her current listings. The seller has indicated "No
Representation" on the Residential Property and Owners' Association Disclosure
Statement (RPOADS) on all items. Sofia does not inform Darren, the selling agent, of
the defect, and since the defect is hidden, the selling agent does not discover or
disclose the problem to the buyer. According to the North Carolina Real Estate
Commission, who is held responsible for this nondisclosure?
A) Both Sofia, the listing agent, and Darren, the selling agent
B) The seller
C) Sofia, the listing agent
D) The seller and Sofia, the listing agent - Answers- C) Sofia, the listing agent
There is no obligation of a seller to disclose the defect, though the seller has a
mandatory duty to complete the Residential Property and Owners' Association
Disclosure Statement. Regardless of how the seller completes the form, the licensee
(agent) has a duty to disclose all material facts so the liability rests with the listing agent.
The buyer's agent has the same disclosure obligation; however, in this question,
because the defect was hidden, it does not appear to be an item for which the selling
agent (buyer's agent) had liability.
Joan accepted a great job that requires her to relocate quickly. She reached out to Olga
and her firm to list her home for sale and told Olga about her need to sell quickly. When
buyer agents called to make appointments to see Joan's house, Olga made sure she
told them all about Joan's need for a quick sale. Which of the following statements is
TRUE?
,A) Olga and her firm were hired to sell the home quickly and used whatever information
they needed to follow through with their fiduciary duties.
B) Olga had a duty to disclose to everyone that Joan needed a quick sale because it is
a material fact.
C) Olga did not have a duty to disclose and violated her fiduciary duties to Joan.
D) Olga had a duty to disclose to everyone that Joan needed a quick sale because she
has a fiduciary duty to get the home sold quickly. - Answers- C) Olga did not have a
duty to disclose and violated her fiduciary duties to Joan.
The fiduciary relationship between principal and agent imposes a duty on the agent
NOT to disclose certain personal information about the client-principal to third persons
without the consent of the principal.
Real estate agents must always disclose ________________________ to everyone,
regardless of whether they are principals (clients) or third parties.
A) Personal information about a principal
B) Motivation of the principal
C) Financial information about a principal
D) Material facts - Answers- D) Material facts
When Colin listed a property for sale, the seller did not consent to dual agency. Later,
Colin received a call from a prospective buyer who wanted to purchase the property
after viewing it through the drone virtual tour. Colin meets with the buyer and explains
dual agency. They sign a buyer agency agreement and agree to dual agency. Colin then
assists the buyer with preparing an offer. Did Colin comply with licensing law?
A) No, Colin needs both the buyer and seller to agree to dual agency.
B) Yes, Colin did not need permission from either the buyer or the seller to act as a dual
agent.
C) Yes, Colin got permission from the buyer to act as a dual agent.
D) No, Colin was not required to discuss agency with the buyer. - Answers- A) No, Colin
needs both the buyer and seller to agree to dual agency.
Colin violated licensing law by practicing dual agency without written consent from both
parties in the transaction. The seller prohibited Colin from practicing dual agency when
he listed the property and violated fiduciary duties to the seller.
Spencer has listed a home with Gigi and her firm for $190,000, and Gigi suggests to a
prospective buyer customer that they submit a low offer because of the seller's urgent
need to sell. The buyer offers $175,000, and the seller accepts it. In this situation:
A) Gigi has violated her agency relationship with the seller.
B) Gigi's action was acceptable since the seller accepted the offer.
C) Gigi acted properly to obtain a quick offer on the property.
, D) Any broker is encouraged to solicit such bids for the property. - Answers- A) Gigi has
violated her agency relationship with the seller.
Gigi and her firm represent the seller. Their fiduciary duties are to the seller. In this
instance, the broker provided the seller's confidential urgency to a buyer customer and
violated the law of agency to protect and promote their client's interest.
All of the following statements regarding payment of an agent in a real estate
transaction is true EXCEPT
A) In a buyer agency agreement, the buyer can obligate the buyer agent firm to first
seek the firm's compensation from the seller first, and then if the seller does not pay, the
buyer must pay the buyer agent firm.
B) When a seller agrees to pay a buyer agent's firm, the payment automatically creates
an agency relationship between the seller and the buyer agent's firm.
C) Payment of a firm by a buyer or seller does not create an agency relationship; the
agency agreement between the buyer or seller creates the agency relationship.
D) When a seller agrees to pay a buyer agent's firm, the payment does not
automatically create an agency relationship between the seller and the buyer agent's
firm. - Answers- B) When a seller agrees to pay a buyer agent's firm, the payment
automatically creates an agency relationship between the seller and the buyer agent's
firm.
Who pays the broker does not necessarily determine who the broker represents; it is
merely one factor to consider. For example, a buyer agency agreement may obligate
the buyer to pay the broker, but the broker may agree to first seek compensation from
the seller of listing company from the sale proceeds. Even if the listing company or
seller pays the buyer agent, it in no way negates the buyer agency agreement nor
converts the buyer agent into a seller's agent.
When it comes to standards for selling agents, which of the following statements is
TRUE?
A) Neither the listing nor selling agent are liable for advertising as long as there is a
"disclaimer" warning for the reader to make an independent investigation.
B) A selling agent may never rely on the accuracy of property information provided by a
listing agent as they must always verify everything.
C) A selling agent may rely on the accuracy of property information provided by a listing
agent in MLS only and must verify other forms of advertising.
D) Generally, a selling agent may rely on the accuracy of property information provided
by a listing agent. - Answers- D) Generally, a selling agent may rely on the accuracy of
property information provided by a listing agent.
Generally, a selling agent may rely on the accuracy of property information provided by
a listing agent, whether on a listing information sheet or in an MLS computer data bank,
unless the selling agent should reasonably suspect that the information may be
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