RES Agency Law & Ethics

Question 1

What fiduciary duties does a real estate agent owe their client?

Accepted Answer

Obedience, loyalty, disclosure, confidentiality, accounting, and reasonable care

Answer

The fiduciary duties (often remembered as OLD CAR) require agents to follow lawful instructions, put the client's interests first, disclose material facts, keep information confidential, account for funds, and exercise competence.

Question 2

What is the difference between a buyer's agent and a seller's agent?

Accepted Answer

A buyer's agent represents the buyer's interests; a seller's agent (listing agent) represents the seller's interests

Answer

A buyer's agent has a fiduciary duty to the buyer, helping them find and negotiate the best deal. A seller's agent (listing agent) represents the seller, working to get the highest price and best terms.

Question 3

What must a real estate agent disclose to potential buyers about a property?

Accepted Answer

All known material facts that could affect the property's value or desirability

Answer

Agents must disclose all known material facts including structural defects, environmental hazards, neighborhood issues, and any condition that might affect a reasonable buyer's decision, regardless of the seller's wishes.

Question 4

What is the Fair Housing Act and what does it prohibit?

Accepted Answer

A federal law prohibiting discrimination in housing based on race, color, religion, sex, national origin, disability, and familial status

Answer

The Fair Housing Act (Title VIII of the Civil Rights Act of 1968, as amended) prohibits discrimination in the sale, rental, and financing of housing based on seven protected classes.

Question 5

What is steering in real estate?

Accepted Answer

The illegal practice of directing buyers toward or away from neighborhoods based on protected class characteristics

Answer

Steering violates the Fair Housing Act by directing prospective buyers or renters toward or away from certain neighborhoods based on race, religion, national origin, or other protected characteristics.

RES - Real Estate Salesperson Exam Practice Test

RES - Real Estate Salesperson Exam Practice Test

RES Agency Law & Ethics