Practice Test Geeks(NAR) National Association of Realtors Certification Practice Test
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Agency Relationships & Fiduciary Duties Flashcards

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Read the first 7 Agency Relationships & Fiduciary Duties flashcards as text

  1. Which fiduciary duty requires a real estate agent to place the client's interests above their own at all times?

    Answer: Loyalty

    The duty of loyalty obligates an agent to prioritize the client's best interests over their own or any third party's interests throughout the relationship.

  2. A listing agreement between a seller and a broker establishes which type of agency relationship?

    Answer: Seller agency (listing agency)

    A listing agreement creates a seller agency relationship, making the broker the seller's agent and obligating the broker to represent the seller's interests.

  3. The fiduciary duty of 'accounting' in real estate requires an agent to:

    Answer: Safeguard and report on all funds and property entrusted to them

    Accounting requires agents to keep accurate records of and properly handle all money, documents, and property received on behalf of the client.

  4. What must an agent disclose to a client under the fiduciary duty of disclosure?

    Answer: All material facts and relevant information that could affect the client's decisions

    The duty of disclosure requires agents to proactively share all known material facts and relevant information that could influence the client's decisions, even if not asked.

  5. In a dual agency arrangement, the agent represents:

    Answer: Both the buyer and the seller in the same transaction

    Dual agency occurs when the same agent or brokerage represents both the buyer and the seller in the same real estate transaction.

  6. Which of the following is TRUE about undisclosed dual agency?

    Answer: It is illegal and a breach of fiduciary duty

    Undisclosed dual agency is illegal because it violates the duty of loyalty and disclosure — an agent cannot secretly represent both parties without their informed consent.

  7. A subagent in real estate owes fiduciary duties to:

    Answer: The listing broker's principal (the seller)

    A subagent is an agent of the listing broker's principal (the seller), so even when working with a buyer, the subagent owes fiduciary duties to the seller.

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