Wisconsin Real Estate License Agency Law and Relationships 3 — Questions and Answers
Question 1: In a Wisconsin multiple representation situation, what may a firm NOT disclose without permission?
- Confidential information such as one party's willingness to accept a lower price (Correct answer)
- The listing price of the property
- The property's square footage
- Publicly recorded tax information
Correct answer: Confidential information such as one party's willingness to accept a lower price
In multiple representation the firm must keep each party's confidential negotiating information private unless authorized to share it.
Question 2: Wisconsin's practice of a firm appointing separate agents to each party in a transaction is called:
- Designated agency (Correct answer)
- Subagency
- Universal agency
- Vicarious agency
Correct answer: Designated agency
Designated agency allows a firm to appoint different licensees to represent each party while managing conflicts within the firm.
Question 3: Which of the following is a material adverse fact that a Wisconsin licensee must disclose to all parties?
- A known structural defect affecting the property's safety (Correct answer)
- The seller's motivation for moving
- The client's minimum acceptable price
- The buyer's maximum budget
Correct answer: A known structural defect affecting the property's safety
Licensees must disclose material adverse facts, such as known defects, to all parties regardless of who they represent.
Question 4: In Wisconsin, when a listing broker authorizes a cooperating broker to act on the seller's behalf, this creates:
- Subagency (Correct answer)
- Dual agency
- Designated agency
- A customer relationship
Correct answer: Subagency
Subagency occurs when a cooperating broker is authorized to represent the seller's interests through the listing broker.
Question 5: How long must a Wisconsin licensee maintain the duty of confidentiality regarding a former client's confidential information?
- Indefinitely, even after the transaction closes (Correct answer)
- Only until the offer is accepted
- For 30 days after closing
- Only during the listing period
Correct answer: Indefinitely, even after the transaction closes
Confidential information must be protected indefinitely, with no expiration once the relationship ends.
Question 6: A Wisconsin licensee owes a customer which of the following?
- Fair and honest dealing and disclosure of material adverse facts (Correct answer)
- Full fiduciary loyalty
- Confidentiality of the customer's negotiating position
- The duty to obey the customer's instructions
Correct answer: Fair and honest dealing and disclosure of material adverse facts
Customers are owed honesty and disclosure of material adverse facts but not the full client-level duties.
Question 7: If a Wisconsin client refuses to authorize multiple representation, the firm must:
- Not proceed with representing both parties in that transaction (Correct answer)
- Represent both parties anyway
- Terminate the client without notice
- Disclose the client's confidential information
Correct answer: Not proceed with representing both parties in that transaction
Multiple representation requires the informed written consent of the parties; without it the firm cannot represent both.
Wisconsin Real Estate License Agency Law and Relationships 3
In a Wisconsin multiple representation situation, what may a firm NOT disclose without permission?