Real Estate Contracts & Agency 1

Question 1

In an exclusive right-to-sell listing, the listing broker earns a commission if the property is sold by:

Accepted Answer

Any of the above

Answer

Under an exclusive right-to-sell listing, the broker earns a commission regardless of who procures the buyer, including the seller.

Question 2

Earnest money in a purchase transaction is best described as:

Accepted Answer

A good-faith deposit demonstrating buyer's intent to purchase

Answer

Earnest money is a deposit made by the buyer to show serious intent; it is typically applied toward the purchase price at closing.

Question 3

For a real estate contract to be legally valid, it must include all EXCEPT:

Accepted Answer

Notarization

Answer

Notarization is required for recording a deed but is not one of the essential elements for a contract to be valid and enforceable.

Question 4

Dual agency occurs when:

Accepted Answer

One agent represents both buyer and seller in the same transaction

Answer

Dual agency exists when the same broker or agent represents both the buyer and seller, requiring disclosure and consent from all parties.

Question 5

A buyer's agency agreement creates a fiduciary relationship in which the agent owes primary loyalty to the:

Accepted Answer

Buyer

Answer

A buyer's agency agreement legally obligates the agent to represent the buyer's best interests, creating full fiduciary duties to the buyer.

Real Estate Practice Test