Arkansas Real Estate License Agency Relationships and Disclosures 2 — Questions and Answers
Question 1: In Arkansas, when must a licensee provide the 'Working With Real Estate Agents' disclosure form to a buyer?
- At the time of closing
- Only if the buyer requests it
- At the first substantive contact (Correct answer)
- After an offer is accepted
Correct answer: At the first substantive contact
Arkansas law requires licensees to provide the agency disclosure form at the first substantive contact with a prospective buyer.
Question 2: A seller's agent learns that the seller is going through a divorce and must sell quickly. What is the agent's duty regarding this information?
- Disclose it to all buyers to generate faster offers
- Keep it confidential as it could weaken the seller's negotiating position (Correct answer)
- Report it to the Arkansas Real Estate Commission
- Share it only with buyers who make full-price offers
Correct answer: Keep it confidential as it could weaken the seller's negotiating position
A seller's agent has a fiduciary duty of confidentiality to the seller and must not disclose information that would harm the seller's bargaining position.
Question 3: Under Arkansas law, a dual agency occurs when:
- Two agents from different companies represent the same buyer
- One brokerage represents both the buyer and seller in the same transaction (Correct answer)
- A licensee holds both a broker's and salesperson's license
- Two brokers co-list a property
Correct answer: One brokerage represents both the buyer and seller in the same transaction
Dual agency in Arkansas occurs when the same brokerage represents both the buyer and the seller in a single real estate transaction.
Question 4: What is a 'designated agency' arrangement in Arkansas?
- A broker personally handles all transactions without delegating to agents
- The Commission designates which agent handles foreclosure transactions
- A broker assigns one licensee to represent the buyer and a different licensee to represent the seller within the same firm (Correct answer)
- A state-designated agency that oversees real estate transactions
Correct answer: A broker assigns one licensee to represent the buyer and a different licensee to represent the seller within the same firm
Designated agency allows a broker to designate different agents within the same firm to represent the buyer and seller, avoiding dual agency conflicts.
Question 5: Which of the following best describes a 'transaction broker' in Arkansas?
- A broker who only handles commercial transactions
- A licensee who facilitates a transaction without representing either party as a fiduciary (Correct answer)
- A licensed attorney who closes real estate deals
- A broker managing REO (bank-owned) properties
Correct answer: A licensee who facilitates a transaction without representing either party as a fiduciary
A transaction broker in Arkansas assists both parties in completing a transaction without acting as a fiduciary agent for either side.
Question 6: An Arkansas buyer's agent must disclose which of the following to their buyer-client?
- The seller's asking price strategy
- That the seller has accepted other offers before
- Known material defects in the property (Correct answer)
- The seller's mortgage payoff amount
Correct answer: Known material defects in the property
A buyer's agent has a duty to disclose all known material facts, including property defects, that could affect the buyer's decision.
Question 7: In Arkansas, if a buyer's agent learns that the buyer intends to demolish the property after purchase, must the agent disclose this to the seller?
- Yes, always — all client plans must be disclosed
- No, this is confidential client information protected by the buyer's agent's duty of loyalty (Correct answer)
- Yes, but only if the seller directly asks
- Only if the property is historic or protected
Correct answer: No, this is confidential client information protected by the buyer's agent's duty of loyalty
A buyer's agent owes loyalty to the buyer and must keep buyer's plans confidential, as disclosing them could harm the buyer's negotiating position.
Arkansas Real Estate License Agency Relationships and Disclosures 2
In Arkansas, when must a licensee provide the 'Working With Real Estate Agents' disclosure form to a buyer?