Arizona Real Estate License Agency Relationships and Duties Questions and Answers

Question 1

An Arizona real estate agent represents a seller. A potential buyer, who is not represented by an agent, tells the seller's agent confidential information about their negotiating position. Which of the following statements is TRUE regarding the agent's duty?

Accepted Answer

The agent must disclose the information to their seller client because their primary fiduciary duty is to their client.

Answer

In Arizona, a licensee owes the fiduciary duty of loyalty and disclosure to their client (the seller). Information that materially affects the consideration to be paid, such as the buyer's negotiating strategy, must be disclosed to the client. While the agent must treat the unrepresented buyer (a customer) fairly and honestly, they do not owe them a fiduciary duty of confidentiality.

Question 2

A licensee in Arizona enters into a buyer-broker agreement with a client. This action creates which type of agency relationship?

Accepted Answer

Special agency

Answer

A buyer-broker agreement creates a special agency relationship. In this type of agency, the agent is authorized to perform a specific act or transaction, which is helping the buyer find and purchase a property. A general agency would involve a broader range of responsibilities, and dual agency would mean representing both buyer and seller.

Question 3

Which of the following actions could create an implied agency relationship in Arizona?

Accepted Answer

A licensee consistently provides a prospective buyer with advice, negotiates on their behalf, and shares confidential opinions without a written agreement.

Answer

An implied agency is formed by the actions and conduct of the parties, not by a written agreement. By providing advice and negotiating on the buyer's behalf, the licensee's actions imply a fiduciary relationship, even without a formal contract. The other options describe express agency or actions that do not rise to the level of creating an agency relationship.

Question 4

In Arizona, a broker is representing both the buyer and the seller in the same transaction. This is known as dual agency. For this to be legal, what is required?

Accepted Answer

Informed, written consent from both the buyer and the seller.

Answer

Arizona law permits dual agency, but only with full disclosure and the informed, written consent of both parties to the transaction. This ensures both clients are aware of the potential conflicts and agree to the arrangement, where the agent's role shifts to that of a neutral facilitator.

Question 5

A listing agreement in Arizona is terminated because the property is destroyed in a fire. This is an example of termination by:

Accepted Answer

Operation of law

Answer

The destruction of the subject property is an event that automatically terminates the agency relationship by operation of law. It makes the fulfillment of the contract impossible, thus ending the agreement without any action required by either the client or the agent.

Arizona Real Estate License Practice Test

Arizona Real Estate License Practice Test

Arizona Real Estate License Agency Relationships and Duties Questions and Answers