FREE Real Estate Sales Agency Relationships Questions and Answers

Question 1

Which of the following fiduciary duties requires an agent to act solely in the best interest of their client, even if it means sacrificing their own personal gain?

Accepted Answer

Loyalty

Answer

Confidentiality

Answer

Obedience

Answer

Accountability

Question 2

A buyer's agent discovers that their client, who is pre-approved for a loan, is also secretly willing to pay significantly more than their initial offer for a highly desirable property. What is the agent's primary obligation regarding this information?

Accepted Answer

Keep the client's financial position confidential and negotiate based on their stated offer.

Answer

Disclose the client's true willingness to pay to the seller's agent to facilitate a quicker deal.

Answer

Advise the client to increase their offer immediately to secure the property.

Answer

Use this information to negotiate a lower commission rate for themselves.

Question 3

When does an agency relationship typically terminate by operation of law?

Accepted Answer

Upon the death of either the principal or the agent.

Answer

When the principal decides to buy a different type of property.

Answer

When the agent finds a suitable property for the principal.

Answer

If the agent decides to transfer their license to another brokerage.

Question 4

A real estate broker is representing both the buyer and the seller in the same transaction with their informed written consent. What type of agency relationship has been established?

Accepted Answer

Dual agency

Answer

Single agency

Answer

Exclusive agency

Answer

Designated agency

Question 5

Which of the following actions by an agent would constitute a breach of the fiduciary duty of care and diligence?

Accepted Answer

Advising a client on the best way to structure a legal trust for property ownership.

Answer

Failing to disclose a known material defect about the property to a buyer.

Answer

Refusing to present a low offer to the seller as instructed.

Answer

Not promptly submitting all offers to the seller.

Question 6

An agent has an agency relationship with a seller. The agent learns that the seller is facing foreclosure, but the seller has explicitly instructed the agent not to disclose this information to potential buyers. What is the agent's ethical and legal obligation?

Accepted Answer

Advise the seller that they cannot legally withhold material facts, and then proceed with disclosure if the seller agrees.

Answer

Disclose the foreclosure to all potential buyers immediately, as it is a material fact.

Answer

Follow the seller's instruction and keep the foreclosure confidential, as it is client information.

Answer

Terminate the agency relationship, as the seller's instruction creates a conflict of interest.