Real Estate Sales Exam Agency Law and Fiduciary Duties 3

Question 1

Subagency occurs when:

Accepted Answer

A listing broker authorizes other brokers to represent the seller

Answer

Subagency is created when a listing broker extends agency authority to cooperating brokers, who then also represent the seller.

Question 2

An agent's duty of care requires them to:

Accepted Answer

Exercise reasonable skill and diligence on behalf of their client

Answer

The duty of care (competence) requires agents to use the skills and knowledge expected of a competent real estate professional.

Question 3

A seller's agent learns the home has a hidden foundation crack that was painted over. The agent must:

Accepted Answer

Disclose it to potential buyers as a material fact

Answer

Known material defects affecting property value or safety must be disclosed to buyers even if it harms the seller's position.

Question 4

Which of the following creates an express agency relationship?

Accepted Answer

A written or verbal agreement to represent a client

Answer

Express agency is intentionally created through explicit written or verbal agreement between the agent and the principal.

Question 5

Designated agency allows a broker to:

Accepted Answer

Assign different agents to represent each party in a dual agency situation

Answer

Designated agency permits the broker to assign one agent to represent the buyer and another to represent the seller within the same brokerage.

Real Estate Sales Exam Practice Test