NY Real Estate Exam Agency Relationships 1 — Questions and Answers
Question 1: When a real estate salesperson represents the seller in a transaction, what type of agency relationship exists?
- Buyer's agency
- Seller's agency (Correct answer)
- Dual agency
- Subagency
Correct answer: Seller's agency
When an agent represents the seller, a seller's agency relationship exists, and the agent owes fiduciary duties to the seller.
Question 2: Under New York law, when must a real estate agent provide the agency disclosure form to a prospective buyer?
- At the time of closing
- Only if the buyer requests it
- At the first substantive contact (Correct answer)
- After an offer is accepted
Correct answer: At the first substantive contact
New York law requires agents to present the Agency Disclosure Form at the first substantive contact with a prospective buyer or seller.
Question 3: What is dual agency in a real estate transaction?
- Two agents from different brokerages splitting a commission
- One agent representing both the buyer and the seller in the same transaction (Correct answer)
- An agent representing two sellers simultaneously
- A broker supervising two agents on the same deal
Correct answer: One agent representing both the buyer and the seller in the same transaction
Dual agency occurs when one agent (or brokerage) represents both the buyer and the seller in the same transaction, requiring written consent from both parties.
Question 4: Which of the following is a primary fiduciary duty owed by a buyer's agent to their client?
- Disclosing the buyer's maximum budget to the seller
- Negotiating the highest possible price for the property
- Loyalty — placing the buyer's interests above all others (Correct answer)
- Providing the seller with the buyer's financing details
Correct answer: Loyalty — placing the buyer's interests above all others
Loyalty is a core fiduciary duty requiring the buyer's agent to place the buyer's interests above those of all other parties, including the agent's own interests.
Question 5: In New York, what document must agents use to disclose their agency status to consumers?
- Listing Agreement
- Buyer Representation Agreement
- Agency Disclosure Form (Correct answer)
- Property Condition Disclosure Statement
Correct answer: Agency Disclosure Form
New York's Agency Disclosure Form (DOS Form 443-a) is required to be presented to buyers and sellers to disclose the agent's role and agency relationships.
Question 6: What is designated agency as practiced in New York real estate?
- A broker designating one agent to represent the buyer and another agent from the same brokerage to represent the seller (Correct answer)
- An agent designated by the state to handle foreclosure transactions
- A court-appointed agent for estate sales
- An agent authorized to work in multiple states
Correct answer: A broker designating one agent to represent the buyer and another agent from the same brokerage to represent the seller
Designated agency allows a broker to assign one agent to represent the buyer and a separate agent to represent the seller, even within the same brokerage, to avoid dual agency conflicts.
Question 7: What is the key difference between a general agent and a special agent in real estate?
- A general agent handles commercial property; a special agent handles residential
- A general agent has broad authority to act for the principal; a special agent has authority limited to a specific task (Correct answer)
- A general agent works for free; a special agent earns a commission
- A general agent is licensed; a special agent is not
Correct answer: A general agent has broad authority to act for the principal; a special agent has authority limited to a specific task
A general agent has broad, ongoing authority to act on behalf of the principal, while a special agent (typical in real estate sales) has limited authority for a specific transaction or task.
NY Real Estate Exam Agency Relationships 1
When a real estate salesperson represents the seller in a transaction, what type of agency relationship exists?