Real Estate License Agency Relationships

Question 1

What type of legal relationship is established when a real estate licensee represents a buyer or seller in a transaction?

Accepted Answer

Principal-agent relationship

Answer

An agency relationship in real estate is a principal-agent relationship where the licensee (agent) owes fiduciary duties to the client (principal).

Question 2

Which of the following is NOT one of the fiduciary duties an agent owes to their principal?

Accepted Answer

Profitability

Answer

Fiduciary duties include loyalty, obedience, disclosure, confidentiality, accounting, and reasonable care — profitability is not among them.

Question 3

A listing agreement between a seller and a real estate broker creates which type of agency?

Accepted Answer

Seller's agency

Answer

A listing agreement establishes a seller's agency, meaning the broker is engaged to represent the seller's interests throughout the transaction.

Question 4

Dual agency in real estate occurs when:

Accepted Answer

One broker represents both the buyer and seller in the same transaction

Answer

Dual agency arises when a single broker or brokerage represents both the buyer and seller in one transaction, requiring full disclosure and consent from both parties.

Question 5

An agent's fiduciary duty of loyalty primarily requires the agent to:

Accepted Answer

Place the client's interests above all others, including the agent's own

Answer

The duty of loyalty obligates the agent to act exclusively in the client's best interest, even when doing so conflicts with the agent's own financial gain.

Real Estate License Practice Test

Real Estate License Practice Test

Real Estate License Agency Relationships