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California: “Agency Law” Questions only (no answers) Answers will be revealed with proper subscription
1. What is the best term to use when describing a third party with whom the agent deals with when working on behalf of the principal? a. A client b. A customer c. An agent d. A fiduciary entity
2. How is a universal agency relationship established? a. The instrument of authorization is the power of attorney. b. The instrument of authorization is a legal writ. c. The instrument of authorization is a notice of assignment letter. d. The instrument of authorization is a document of performance.
3. Under what condition can an agent offer legal advice and counsel to his or her principal? a. If the client makes a request b. If the agent provides information that will save the client money c. If the agent is a lawyer d. If the information provided by the agent is factual
4. Which of the following actions does an agent NOT have as an obligation to a customer? a. Honesty b. Reasonable care c. Fair dealing d. Confidentiality
5. A listed property with Sun Valley Real Estate was destroyed by fire. What is the status of the agency agreement? a. The relationship is held in force. b. The relationship is terminated. c. The relationship is extended for 90 days. d. The relationship is extended for 6 months.
6. A buyer’s agent must make his or her agency status known to the listing broker a. after showing the property. b. after presenting an offer. c. before showing the property. d. before title closing.
7. Which agency maintains a federal register of sex offenders? a. FBI b. Department of Internal Affairs c. Office of Records d. Department of Justice
8. Any person intending to offer subdivided lands for sale or lease must apply for and obtain a public report from the a. Office of Real Estate Development. b. Department of Real Estate. c. Department of Land Use. d. Department of Wildlife Management.
9. How long must a subdivider keep the receipts from Subdivision Disclosures issue notices? a. 2 years b. 3 years c. 3 months d. 5 years
10. What is the name given to the person who is authorized to represent and act on the behalf of another person? a. Principal b. Agent c. Customer d. Director of Affairs
11. In most instances, real estate brokerage is based on a(n) a. single agency. b. dual agency. c. special agency. d. assigned agency.
12. The intentional misrepresentation of a material fact for the purpose of gaining an unfair advantage over another person is known as a. passive fraud. b. active fraud. c. fraud in the third degree. d. closed fraud.
13. Which type of agreement limits any conflict with the seller over who was the procuring cause for the sale? a. Exclusive right to sell b. Exclusive agency c. Exclusive market rights d. Open listing
14. If the selling agent does not deal directly with the seller, the listing agent may deliver the Disclosure Regarding Real Estate Agency Relationships form prepared by the selling agent to the seller with an acknowledgment of its receipt or the selling agent can a. email a copy. b. provide verbal notice. c. mail it via certified mail. d. provide a copy at closing.
15. In what document would you find information regarding a defective whole-house HVAC system? a. HVAC Report b. Notice of Mechanicals c. Use Report Statement d. Real Estate Transfer Disclosure Statement
16. A very high fire hazard severity zone must be included in a a. Fire Zone Letter. b. Fire Abated Notice. c. Natural Hazard Disclosure Statement. d. Natural Environmental Impact Report.
17. If there is no listing broker, a buyer’s agent must make the disclosure to a. the seller. b. the title closing company. c. a third party broker. d. the MLS association.
18. When must an buyer’s agent disclose agency relationship? a. After a buyer broker shows a property b. Before a buyer broker takes a contract offer c. Only when asked by the seller d. Before a buyer broker shows a property
19. When is a broker due compensation? a. When the property sells b. When the seller terminates the listing agreement c. When a broker locates a ready, willing and able buyer d. When a broker terminates a listing agreement
20. What type of contract is an open listing? a. Lateral contract b. Unilateral contact c. Promissory contract d. Marginal contract
21. Which document certifies that as of the close of escrow, the property will be in compliance with the Health and Safety Code? a. Real Estate Transfer Escrow Statement b. Real Estate Transfer Notice Statement c. Real Estate Transfer Disclosure Statement d. Disclosure Statement of Occupancy
22. Which type of the following property sales is exempt from a Real Estate Transfer Disclosure Statement? a. A sale between spouses in a divorce or legal separation b. A sale exceeding 1 million dollars c. A sale of a private single family home d. A sale of an agent’s own home
23. Under what obligation is a principal required to provide the agent with a sufficient amount of information to complete a desired activity? a. Information b. Compensation c. Availability d. Honesty
24. What duty requires the licensee to account for all moneys and property received during a relationship? a. Knowledge b. Confidentiality c. Accounting d. Skill
25. Which of the following statements is most correct? a. Listing a property in the MLS may permit subagency; it does not automatically create it or require it. b. Listing a property in the MLS automatically creates subagency. c. Listing a property in the MLS creates dual agency. d. Listing a property in the MLS may permit subagency if the buyer signs a written approval.
26. If an agent enters into a seller’s agency agreement with the seller, the buyer a. can only be represented by himself. b. is either represented by himself or a subagent agent. c. can only be represented by a cooperating agent. d. is either represented by himself or a cooperating agent.
27. Brokers prefer to sell their own in-house listings because a. MLS fees are reduced. b. kick-backs from service providers are legal. c. they earn a higher commission. d. rebate fees are increased.
28. All exclusive listing contracts must contain a. a net sales rider. b. a definite termination date. c. an extension date provision. d. a mediation clause.
29. Which item is NOT required to be disclosed to a potential buyer? a. Lead-base paint b. Former owner had AIDS c. Structural settling d. Easements
30. Every contract for the sale of residential real property entered into on or after July 1, 2013, must include a a. Gas and Liquid Transmission Report. b. Hazardous Liquid Notice. c. Notice of Pipeline Hazards. d. Notice Regarding Gas and Hazardous Liquid Transmission Pipelines.