Real Estate Sales Agency and Fiduciary Duties Questions and Answers

Question 1

A buyer's agent knows their client is in a hurry to move due to a job relocation.
The seller's agent asks why the buyer is moving.
Which fiduciary duty requires the buyer's agent to keep the client's motivation private?

Accepted Answer

Confidentiality

Answer

Disclosure

Answer

Accounting

Answer

Obedience

Question 2

A listing agent is holding an open house. A potential buyer, who is not represented by an agent, attends and tells the listing agent they are pre-approved for a loan amount well above the asking price. To whom does the listing agent owe the fiduciary duty of loyalty?

Accepted Answer

To the seller.

Answer

To the buyer, because they shared confidential information.

Answer

To both the buyer and seller, as a dual agent.

Answer

To neither party, as they are just a facilitator.

Question 3

Which of the following events would automatically terminate an agency relationship by operation of law?

Accepted Answer

The property is destroyed in a fire.

Answer

The agent finds a ready, willing, and able buyer.

Answer

The client expresses dissatisfaction with the agent's marketing efforts.

Answer

The listing agreement's expiration date passes without a sale.

Question 4

An agent is representing a seller. The agent discovers a latent defect in the property's foundation that the seller did not mention. The seller instructs the agent not to disclose this to potential buyers. What is the agent's proper course of action?

Accepted Answer

Disclose the defect to all potential buyers, as the duty to disclose material facts overrides the duty of obedience in this case.

Answer

Obey the seller's instruction to maintain the duty of obedience.

Answer

Suggest the seller lower the price to compensate for the defect without disclosing it.

Answer

Terminate the agency relationship without disclosing the defect to anyone.

Question 5

An agent represents a buyer who makes an offer on a property. The agent then learns that another agent in the same brokerage firm represents the seller. What type of agency is this?

Accepted Answer

Dual agency

Answer

Single agency

Answer

Universal agency

Answer

Special agency

Question 6

The fiduciary duty that requires an agent to safeguard and account for all money or property entrusted to them by a client is known as:

Accepted Answer

Accounting

Answer

Loyalty

Answer

Reasonable Care

Answer

Confidentiality

A buyer's agent knows their client is in a hurry to move due to a job relocation.The seller's agent asks why the buyer is moving.Which fiduciary duty requires the buyer's agent to keep the client's motivation private?

A buyer's agent knows their client is in a hurry to move due to a job relocation.
The seller's agent asks why the buyer is moving.
Which fiduciary duty requires the buyer's agent to keep the client's motivation private?