NAR Client Relationship & Account Management 2 — Questions and Answers
Question 1: A buyer client asks you to show them a property that is listed by your own brokerage. What type of relationship exists?
- Single agency
- Dual agency (Correct answer)
- Designated agency
- Transactional brokerage
Correct answer: Dual agency
When a brokerage represents both the buyer and seller in the same transaction, a dual agency relationship exists.
Question 2: Which of the following best describes the concept of 'undivided loyalty' in an agency relationship?
- Keeping client information confidential
- Acting solely in the client's best interest without conflicting obligations (Correct answer)
- Disclosing all material facts to the client
- Following all lawful instructions from the client
Correct answer: Acting solely in the client's best interest without conflicting obligations
Undivided loyalty means the agent places the client's interests above all others, including their own.
Question 3: A seller tells their listing agent a fact about the property that could lower its value. What should the agent do?
- Keep it confidential to protect the seller's price
- Disclose it to all potential buyers as a material fact (Correct answer)
- Only disclose if the buyer asks directly
- Report it to the NAR ethics board
Correct answer: Disclose it to all potential buyers as a material fact
Agents have a duty to disclose material facts that could affect a buyer's decision, regardless of the seller's wishes.
Question 4: How long should a real estate agent typically retain client transaction records?
- 1 year
- 3 years
- 5 years
- The retention period varies by state law, often 3–7 years (Correct answer)
Correct answer: The retention period varies by state law, often 3–7 years
Record retention requirements vary by state but typically range from 3 to 7 years after transaction closing.
Question 5: A client signs a buyer representation agreement. What does this contract primarily establish?
- The purchase price of the home
- The agent's fiduciary duties and the client's obligation to work exclusively with that agent (Correct answer)
- The listing terms for the seller
- The commission split between cooperating brokers
Correct answer: The agent's fiduciary duties and the client's obligation to work exclusively with that agent
A buyer representation agreement formalizes the agency relationship, defining duties owed and often creating an exclusivity arrangement.
Question 6: When a REALTOR® refers a client to another agent in a different market, what ethical obligation applies?
- No obligation exists once the referral is made
- The referring agent must ensure the receiving agent is competent to serve the client (Correct answer)
- The referring agent becomes a co-agent in the transaction
- The client must sign a new representation agreement with the referring agent
Correct answer: The referring agent must ensure the receiving agent is competent to serve the client
NAR's Code of Ethics requires REALTORS® to refer clients only to agents they believe are competent to handle the client's needs.
Question 7: Which communication practice is most important when managing long-term client relationships after closing?
- Sending unsolicited property listings weekly
- Maintaining periodic, value-added contact such as market updates and anniversary check-ins (Correct answer)
- Asking for referrals at every interaction
- Limiting contact to avoid appearing pushy
Correct answer: Maintaining periodic, value-added contact such as market updates and anniversary check-ins
Providing consistent, value-added communication after closing builds trust and positions the agent as a long-term resource.
NAR Client Relationship & Account Management 2
A buyer client asks you to show them a property that is listed by your own brokerage.
What type of relationship exists?