Wisconsin Real Estate License Ethics & Professional Practices 3 — Questions and Answers
Question 1: A buyer's agent learns the buyer plans to resell quickly for profit. Does the agent disclose this to the seller?
- Yes, always
- No, it is confidential information of the client (Correct answer)
- Only if the seller asks directly
- Only after closing
Correct answer: No, it is confidential information of the client
A client's motivation is confidential information that the agent must not disclose without consent.
Question 2: Which of the following is a material adverse fact a Wisconsin licensee must disclose?
- The seller is getting divorced
- A known structural foundation problem (Correct answer)
- The buyer's approved loan amount
- The seller's minimum acceptable price
Correct answer: A known structural foundation problem
A known structural defect significantly affecting the property is a material adverse fact requiring disclosure.
Question 3: Under Wisconsin's fair housing rules, refusing to show homes in certain neighborhoods based on race is called:
- Puffing
- Steering (Correct answer)
- Blockbusting
- Redlining
Correct answer: Steering
Steering is directing buyers toward or away from areas based on protected class characteristics.
Question 4: A licensee exaggerates that a home has 'the best view in the city.' This is generally:
- Fraud
- Legal puffing (opinion) (Correct answer)
- A material misrepresentation
- A license violation
Correct answer: Legal puffing (opinion)
Puffing is a non-factual opinion statement that is generally permissible and not fraud.
Question 5: How long must a Wisconsin broker generally retain transaction records?
- 30 days
- 1 year
- At least the period required by DSPS rules (multiple years) (Correct answer)
- Records need not be kept
Correct answer: At least the period required by DSPS rules (multiple years)
Brokers must retain transaction and trust account records for the multi-year period set by DSPS.
Question 6: A Wisconsin licensee accepts a referral fee from a home inspector without telling the client. This is:
- Acceptable if the inspector is licensed
- An undisclosed conflict of interest violation (Correct answer)
- Standard practice
- Only a problem if the fee is large
Correct answer: An undisclosed conflict of interest violation
Accepting undisclosed compensation that creates a conflict of interest violates the duty of disclosure.
Question 7: When a Wisconsin agency relationship ends, which duty typically continues?
- Duty to promote the client's interests
- Duty of confidentiality (Correct answer)
- Duty to negotiate
- Duty to present offers
Correct answer: Duty of confidentiality
The duty to keep confidential information private survives the end of the agency relationship.
Wisconsin Real Estate License Ethics & Professional Practices 3
A buyer's agent learns the buyer plans to resell quickly for profit.
Does the agent disclose this to the seller?