FREE Real Estate Sales Agency Law and Fiduciary Duties Questions and Answers

Question 1

A real estate agent represents a seller.
A potential buyer, who is a customer without representation, reveals to the agent that they are willing to pay more than their initial offer.
Which of the following statements BEST describes the agent's fiduciary duty?

Accepted Answer

The agent must disclose this information to the seller.

Answer

The agent must keep this information confidential.

Answer

The agent can use this information to negotiate a higher commission.

Answer

The agent must advise the buyer to get their own representation.

Question 2

Which of the following fiduciary duties survives the termination of an agency relationship?

Accepted Answer

Confidentiality

Answer

Obedience

Answer

Loyalty

Answer

Disclosure

Question 3

A broker is representing both the buyer and the seller in the same transaction with the informed written consent of both parties. This type of agency is known as:

Accepted Answer

Dual Agency

Answer

Designated Agency

Answer

Subagency

Answer

Universal Agency

Question 4

An agent is showing a house to a buyer client. The agent knows the seller is facing financial hardship and is desperate to sell quickly. What is the agent's responsibility regarding this information?

Accepted Answer

Disclose the information to the buyer client as it is a material fact.

Answer

Keep the information confidential as it was learned through the agency relationship with the seller.

Answer

Advise the buyer to make a significantly lower offer.

Answer

Ignore the information as it does not relate to the property's physical condition.

Question 5

The fiduciary duty of 'Accounting' requires a real estate agent to do which of the following?

Accepted Answer

Safeguard and account for all money and property entrusted to them.

Answer

Provide a detailed market analysis for the property.

Answer

Disclose all known material defects of the property.

Answer

Obey all lawful instructions from the client.

Question 6

A seller's agent is instructed by the client not to disclose a latent defect in the property. Which of the following is the agent's proper course of action?

Accepted Answer

Disclose the defect to potential buyers, as this duty overrides the duty of obedience.

Answer

Follow the client's instructions to maintain the duty of obedience.

Answer

Terminate the listing agreement immediately.

Answer

Advise the client that the defect must be repaired before showing the property.