California Real Estate Practice Chpt. 1

  1. Which of the following does not involve dual agency?
    A - A listing agent gives advice to prospective buyers about pricing for their offer.
    B - A licensee introduces a seller to a prospective buyer without providing any additional services
    C - A buyer and seller consent in writing to be represented by the same broker
    D - A broker supervises both the selling and the listing agent in a transaction

    • B) Answer: B
    • When a real estate licensee acts as "finder" or "middleman" (merely introducing a buyer and a seller to each other). it doesn't create any agency between the licensee and the buyer or the seller


  2. Proper agency confirmation may be made:
    A) Anywhere in the purchase agreement
    B) in a separate document
    C) in a separate paragraph in the purchase agreement
    D) Both B and C
    • Answer: D)
    • The required agency confirmation disclosure may be included in the purchase agreement, as long as the information is in a separated paragraph on the form.  Alternatively, the disclosure may be made in a separate document that is signed by all the parties.
  3. Which of the following is not one of the common forms of real estate agency relationship in California?
    A) A Net Agency
    B) Seller Agency
    C) Dual Agency
    D) Buyer Agency

    • Answer: A)
    • The main forms of real estate agency in California are seller agency, buyer agency, and dual agency.
  4. Which of the following would be considered a material fact that an agent would be required to disclose?
    A) The roof leaks during rainy weather
    B) The house was site of a suicide five years ago
    C) The house was once rented by gang members
    D) The house was once the headquarters for a doomsday cult
    • Answer: A) 
    • An agent must disclose latent defects that would not be discovered during an ordinary inspection such as a leaking roof.  It is not material if the house was the site of a crime, gang activity, or political or religious activity.



  5. A principal may be held liable for the actions of a real estate broker and a broker's salesperson under the doctrine of:
    A) caveat emptor
    B) imputed knowledge
    C) vicarious liability
    D) receivership
    • Answer: C)
    • The doctrine of vicarious liability imposes liability on a principal for any harm caused by the principal's agent or subagent, even if the principal didn't approve or know of the agent's acts.
  6. Under California law, all of the following would have to be disclosed as latent defects except:
    A) Indications of flooding found during an agent's visual inspection
    B) Person diagnosed with HIV lived on the property last year
    C) The property was the site of an illegal drug lab
    D) The roof of the house leaks during heavy rains
    • Answer: B)
    • It is illegal under California law to disclose information about HIV/AIDS to potential buyers, the other items listed should be disclosed as potential latent defects
  7. A buyer's agent has a fiduciary duty to:
    A) Advise the buyer on how best to take title
    B) Use utmost care, diligence, honesty, and loyalty when dealing with the buyer
    C) Tell the buyer which title company to use
    D) Tell the seller the maximum price the buyer will pay for the property
    • Answer: B)
    • A buyer's agent has fiduciary duties to the buyer, which include the duties of utmost care, diligent, honesty, and loyalty.  A buyer's agent should not advise the buyer' in ways that exceed the agent's authority or expertise.
  8. In California, the written disclosure that specifies which party each agent is representing in the transaction is called the:
    A) A listing agreement
    B) purchase agreement
    C) agency disclosure form
    D) agency confirmation statement
    • Answer: D)
    • As soon as it's practical to do so, a
    • real estate agent is required to disclose to each party in a particular transaction which party or parties he is representing in the transaction.
  9. A buyer's agent may be compensated by:
    A) seller-paid fees only
    B) buyer-paid fees only
    C) broker-paid fees only
    D) both seller-paid and buyer-paid fees
    • Answer: D)
    • A buyer's agent may receive compensation from either (or both) the seller and the buyer, depending on the terms of the agreement.  The agent's duties to the buyer are unaffected by this compensation.
  10. The agent theory that makes a principal liable for all information her agent has (even if the agent didn't actually give the principal the information) is called:
    A) vicarious liability
    B) virtual knowledge
    C) imputed knowledge
    D) power of attorney
    • C)
    • The imputed knowledge rule holds that an agent's knowledge is imputed (attributed to) to the principal, whether or not the agent actually communicated the information
Author
Fabricio
ID
324129
Card Set
California Real Estate Practice Chpt. 1
Description
California Real Estate Practice Quiz 1
Updated