FREE Real Estate Sales Agency Law and Fiduciary Duties Questions and Answers Flashcards

A seller's agent receives a verbal offer from a buyer. The agent believes the offer is too low and unlikely to be accepted. What should the agent do?

Answer: Present all offers to the seller promptly

Agents have a fiduciary duty to present all offers to their client promptly, regardless of the agent's personal opinion about the offer's adequacy.

Which of the following actions would constitute a breach of the agent's duty of accounting?

Answer: Commingling client funds with the agent's personal funds

The duty of accounting requires agents to keep client funds separate from personal funds; commingling these funds is a serious violation of fiduciary responsibility.

A real estate agent has an exclusive buyer agency agreement with a client. The agent finds a property they personally own that fits the buyer's criteria. What must the agent do?

Answer: Disclose their ownership interest in writing before the buyer makes an offer

An agent must disclose any personal interest in a property to their client in writing, as failing to do so would violate the fiduciary duties of loyalty and disclosure.

Under agency law, when does an agency relationship typically terminate?

Answer: Upon completion of the purpose, expiration of the term, or mutual agreement

Agency relationships terminate upon fulfillment of their purpose, expiration of the agreed-upon term, mutual consent, or by operation of law such as death or incapacity of either party.

A subagent in a real estate transaction owes fiduciary duties to which party?

Answer: The seller, through the listing broker

A subagent works through the listing broker and owes fiduciary duties to the seller, even though the subagent may have direct contact primarily with the buyer.

An agent's duty of reasonable care and diligence requires which of the following?

Answer: Using professional expertise and skill expected of a competent licensee

The duty of reasonable care requires agents to apply the level of knowledge, skill, and competence that a reasonably qualified real estate professional would exercise in similar circumstances.