Arkansas Real Estate License FREE Arkansas Real Estate License Agency Relationships and Disclosures Questions and Answers 2 — Questions and Answers
Question 1: Under Arkansas law, when must a real estate licensee provide a written agency disclosure to a prospective client?
- At closing
- After the offer is accepted
- At the first substantive contact (Correct answer)
- Only if the client requests it
Correct answer: At the first substantive contact
Arkansas requires licensees to provide written agency disclosure at the first substantive contact with a prospective buyer or seller.
Question 2: In Arkansas, what type of agency relationship allows a broker to represent both the buyer and seller in the same transaction?
- Single agency
- Dual agency (Correct answer)
- Subagency
- Transaction brokerage
Correct answer: Dual agency
Dual agency occurs when one broker represents both parties, which is permitted in Arkansas with informed written consent from both parties.
Question 3: Which document must an Arkansas licensee use to confirm the type of agency relationship with a client?
- Purchase agreement
- Agency confirmation statement (Correct answer)
- Listing agreement only
- MLS data sheet
Correct answer: Agency confirmation statement
An agency confirmation statement is required to formally confirm the agency relationship between the licensee and the client.
Question 4: What is the primary fiduciary duty an Arkansas real estate agent owes to their client?
- Obedience to all instructions without exception
- Loyalty, placing the client's interests above their own (Correct answer)
- Providing legal advice on contracts
- Guaranteeing the sale price
Correct answer: Loyalty, placing the client's interests above their own
Loyalty is a primary fiduciary duty requiring the agent to place the client's interests above their own or those of third parties.
Question 5: In Arkansas, if a seller's agent discovers a material defect in the property, what is their disclosure obligation?
- Disclose only if asked by the buyer
- No obligation to disclose
- Disclose to all parties regardless of whom they represent (Correct answer)
- Disclose only to their client
Correct answer: Disclose to all parties regardless of whom they represent
Known material defects must be disclosed to all parties in the transaction, regardless of which party the agent represents.
Question 6: Under Arkansas real estate law, what happens if a licensee fails to make required agency disclosures?
- The transaction is automatically voided
- The licensee may face disciplinary action including license suspension or revocation (Correct answer)
- Nothing, disclosures are optional
- Only a small fine is imposed
Correct answer: The licensee may face disciplinary action including license suspension or revocation
Failure to make required agency disclosures can result in disciplinary action by the Arkansas Real Estate Commission, including suspension or revocation of the license.
Arkansas Real Estate License FREE Arkansas Real Estate License Agency Relationships and Disclosures Questions and Answers 2
Under Arkansas law, when must a real estate licensee provide a written agency disclosure to a prospective client?