NY Real Estate Exam Agency Relationships 2 — Questions and Answers
Question 1: What is subagency in real estate?
- An agent who works part-time
- An agent from a cooperating brokerage who represents the seller through the listing broker (Correct answer)
- A licensed assistant working under a salesperson
- A buyer's agent sharing commission with the listing agent
Correct answer: An agent from a cooperating brokerage who represents the seller through the listing broker
Subagency occurs when a cooperating broker's agent represents the seller's interests through the listing broker, rather than acting as the buyer's agent.
Question 2: Which fiduciary duty requires a real estate agent to act in the client's best interest and not place personal gain above the client's welfare?
- Disclosure
- Obedience
- Loyalty (Correct answer)
- Accounting
Correct answer: Loyalty
Loyalty requires the agent to prioritize the client's interests over their own and avoid self-dealing or conflicts of interest.
Question 3: What is an implied agency in real estate?
- An agency relationship created by a formal written contract
- An agency relationship that arises from the conduct and actions of the parties, without a formal agreement (Correct answer)
- An agency authorized by a court order
- An agency that only applies to commercial transactions
Correct answer: An agency relationship that arises from the conduct and actions of the parties, without a formal agreement
Implied agency is created by the behavior and actions of the parties rather than a formal written agreement, which can inadvertently create agency duties.
Question 4: Under New York Real Property Law, written agency disclosure is required at what stage?
- Only upon execution of a purchase contract
- At the first substantive contact with any consumer (Correct answer)
- Only when the consumer specifically asks
- At the time the deed is transferred
Correct answer: At the first substantive contact with any consumer
New York Real Property Law §443 requires written agency disclosure at the first substantive contact, ensuring consumers know the agent's role before negotiations begin.
Question 5: What term describes a real estate licensee who assists both buyer and seller in a transaction without representing either party as a fiduciary?
- Dual agent
- Transaction broker (Correct answer)
- Subagent
- Designated agent
Correct answer: Transaction broker
A transaction broker (also called a facilitator) assists both parties but does not owe full fiduciary duties to either, acting as a neutral intermediary.
Question 6: Which fiduciary duty requires an agent to keep the client's personal information and negotiating position private?
- Loyalty
- Obedience
- Confidentiality (Correct answer)
- Disclosure
Correct answer: Confidentiality
Confidentiality requires the agent to protect sensitive client information — such as motivation to sell, financial limits, or personal circumstances — from other parties.
Question 7: Which of the following actions most commonly creates an agency relationship in New York real estate?
- A buyer attending an open house
- Signing a listing agreement or buyer representation agreement (Correct answer)
- An agent showing a property to a buyer
- A seller calling a brokerage for information
Correct answer: Signing a listing agreement or buyer representation agreement
A written agreement such as a listing agreement or buyer representation agreement formally establishes the agency relationship and defines the parties' duties.
NY Real Estate Exam Agency Relationships 2
What is subagency in real estate?