Real Estate Sales Exam Agency and Fiduciary Duties 4

Question 1

A subagent in a real estate transaction owes fiduciary duties to:

Accepted Answer

The listing broker's principal (the seller)

Answer

A subagent is appointed by the listing broker and therefore owes fiduciary duties to the seller (the listing broker's principal), not to the buyer they may be assisting.

Question 2

Which of the following represents an agent's duty of 'accounting'?

Accepted Answer

Safeguarding and properly handling all client funds and property

Answer

The duty of accounting requires agents to properly account for and protect all money, documents, and property entrusted to them by clients.

Question 3

An agent signs a listing agreement that automatically renews indefinitely unless cancelled. This arrangement is considered:

Accepted Answer

An illegal or unethical 'evergreen clause' that most states prohibit

Answer

Most states prohibit or discourage automatic renewal (evergreen) clauses in listing agreements because they can trap sellers in agency relationships they no longer want.

Question 4

If a buyer's agent discovers the seller has already received a higher offer, the agent should:

Accepted Answer

Disclose this material fact to the buyer client so they can make an informed decision

Answer

A buyer's agent must disclose material facts affecting the buyer's decision, including the existence of competing offers, fulfilling the duty of disclosure.

Question 5

In most states, a real estate agent's fiduciary duties to their client survive:

Accepted Answer

The closing of the transaction with respect to confidentiality

Answer

While most fiduciary duties end at closing, the duty of confidentiality typically survives indefinitely — agents cannot later disclose a former client's confidential information.

Real Estate Sales Exam Practice Test

Real Estate Sales Exam Practice Test

Real Estate Sales Exam Agency and Fiduciary Duties 4