NAR Client Representation & Customer Service 2 ā Questions and Answers
Question 1: A buyer's agent discovers the seller has not disclosed a known roof leak. What is the agent's primary obligation?
- Keep it confidential to avoid disrupting the sale
- Disclose the known defect to the buyer client (Correct answer)
- Inform the listing agent only
- File a complaint with the state after closing
Correct answer: Disclose the known defect to the buyer client
An agent must disclose all known material defects to their buyer client regardless of the seller's disclosure failures.
Question 2: Under NAR's Code of Ethics, a REALTORĀ® acting as a buyer's representative must place whose interests first?
- The cooperating broker
- The seller
- The buyer client (Correct answer)
- The MLS system
Correct answer: The buyer client
Article 1 of the Code of Ethics requires REALTORSĀ® to protect and promote their client's interests above all others.
Question 3: What distinguishes a 'client' from a 'customer' in a real estate transaction?
- A client pays a higher commission
- A client has signed an exclusive agreement and is owed fiduciary duties (Correct answer)
- A customer always works with a buyer's agent
- A customer receives more services than a client
Correct answer: A client has signed an exclusive agreement and is owed fiduciary duties
A client has an agency relationship with the broker, triggering fiduciary duties, while a customer receives only non-agency assistance.
Question 4: An agent represents a seller and a buyer in the same transaction without disclosure. This is an example of:
- Designated agency
- Undisclosed dual agency (Correct answer)
- Transaction brokerage
- Facilitated representation
Correct answer: Undisclosed dual agency
Representing both parties without informed written consent constitutes undisclosed dual agency, which violates NAR's Code of Ethics.
Question 5: When must a listing agent provide the seller with a net sheet estimating proceeds?
- Only at closing
- Only after an offer is accepted
- Before or at the time of listing to help the seller make an informed decision (Correct answer)
- Net sheets are optional and never required
Correct answer: Before or at the time of listing to help the seller make an informed decision
Providing an estimated net sheet before listing helps the seller understand their financial outcome, fulfilling the agent's duty of disclosure.
Question 6: A REALTORĀ® who receives an earnest money deposit must:
- Hold it in a personal account until closing
- Deposit it into an escrow or trust account as required by law and the contract (Correct answer)
- Return it immediately to the buyer pending acceptance
- Give it directly to the seller upon receipt
Correct answer: Deposit it into an escrow or trust account as required by law and the contract
Earnest money must be placed in a properly maintained escrow or trust account per state law and NAR ethics standards.
Question 7: A buyer's agent learns their client is willing to pay up to $400,000 but offers $370,000. The seller asks the agent if the buyer will go higher. The agent should:
- Disclose the buyer's maximum to keep the deal moving
- Maintain confidentiality and not reveal the buyer's financial position (Correct answer)
- Tell the seller the buyer has no room to negotiate
- Withdraw from the transaction to avoid conflict
Correct answer: Maintain confidentiality and not reveal the buyer's financial position
Confidentiality is a core fiduciary duty; the agent must protect the buyer's negotiating position from disclosure to adverse parties.
NAR Client Representation & Customer Service 2
A buyer's agent discovers the seller has not disclosed a known roof leak.
What is the agent's primary obligation?