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FL Real Estate practice questions

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Question 1The Real Estate Business

Which of the following is a physical characteristic of real estate?

  1. Area preference for a location
  2. Scarcity of land in a given area
  3. Permanence of investment in buildings
  4. Immobility of the land Correct answer.

Explanation

Physical characteristics describe the land itself and cannot be changed by human action: immobility, indestructibility, and heterogeneity (uniqueness). Scarcity, area preference (situs), and permanence of investment are economic characteristics because they arise from how people value and use land.

Question 2The Real Estate Business

How many members serve on the Florida Real Estate Commission?

  1. Eleven
  2. Nine
  3. Seven Correct answer.
  4. Five

Explanation

The Florida Real Estate Commission is composed of seven members appointed by the governor and subject to Senate confirmation. The membership includes both broker members and consumer members who are not licensed in real estate.

Question 3The Real Estate Business

Which property is classified as special-purpose real estate?

  1. A duplex rented to two families
  2. A neighborhood shopping center
  3. A church building Correct answer.
  4. A multi-tenant office building

Explanation

Special-purpose properties are built for a single, limited use and rarely trade in the open market, such as churches, schools, and post offices. Residential, commercial, and industrial properties are the other broad categories and generally have broader buyer pools.

Question 4The Real Estate Business

Which statute governs real estate brokerage activity in Florida?

  1. Chapter 494
  2. Chapter 475, Part II
  3. Chapter 475, Part I Correct answer.
  4. Chapter 468, Part VIII

Explanation

Chapter 475, Part I, is the Real Estate Sales Associate, Broker, and Schools portion of the Florida Statutes and controls licensing and brokerage practice. Part II of the same chapter governs appraisers, while Chapter 494 covers mortgage brokerage and Chapter 468, Part VIII covers community association management.

Question 5The Real Estate Business

Which of the following is normally treated as real property?

  1. Corn planted by a tenant farmer
  2. A tenant's window air conditioner
  3. Lumber stacked in the driveway for a future addition
  4. A built-in dishwasher Correct answer.

Explanation

An item becomes a fixture, and therefore part of the realty, when it is permanently attached and intended to serve the property. A built-in dishwasher is plumbed and fitted into the cabinetry, so it passes with the sale of the home unless specifically excluded.

Question 6The Real Estate Business

In Florida, the term real estate includes which of the following?

  1. Land and the owner's personal property used on it
  2. Buildings, but never the land beneath them
  3. Land, attachments, and appurtenances Correct answer.
  4. Only the soil and the surface of the earth

Explanation

Real estate consists of the land, everything permanently attached to it (such as buildings and fixtures), and the rights and privileges appurtenant to it. Personal property used on the land is not part of the realty unless it has been converted into a fixture.

Question 7The Real Estate Business

A custom bookcase is built to fit exactly into an alcove and is finished to match the wall paneling. Which fixture test does this best illustrate?

  1. Agreement of the parties
  2. Adaptation to the property Correct answer.
  3. Length of time the item has been in place
  4. Method of annexation

Explanation

The adaptation test asks whether an item was custom-built or specially fitted for a particular structure so that removing it would leave an unusable gap. The classic example is a bookcase constructed for a specific alcove. Duration of attachment is not one of the recognized tests.

Question 8The Real Estate Business

An owner whose property borders the Atlantic Ocean holds which type of water rights?

  1. Littoral rights Correct answer.
  2. Easement rights
  3. Riparian rights
  4. Riparian and avulsion rights

Explanation

Littoral rights attach to land bordering a large body of water such as an ocean, sea, or lake. Riparian rights attach to land bordering a river or stream. Both concern access to and use of the adjoining water.

Question 9The Real Estate Business

In a Florida residential sale, which brokerage relationship is presumed if the parties do not establish another in writing?

  1. Dual agent
  2. No brokerage relationship
  3. Single agent
  4. Transaction broker Correct answer.

Explanation

Florida law presumes a transaction broker relationship in residential sales unless single agency, no brokerage relationship, or a nonresidential relationship is established in writing. The presumption protects the consumer by imposing limited confidentiality and honesty duties even without a signed agreement.

Question 10The Real Estate Business

A sales associate registered with Broker A wants to be treated as an independent contractor. Which statement is correct?

  1. The associate is an employee for all purposes under Florida law
  2. The associate may set commission splits with clients independently of the broker
  3. The broker must pay the associate's compensation Correct answer.
  4. The associate may collect a fee directly from a customer with the broker's consent

Explanation

A sales associate may not be paid by a member of the public; all compensation must flow through the broker with whom the associate is registered. Florida law also allows the parties to agree in writing that the associate will be treated as an independent contractor for tax purposes.

Question 11The Real Estate Business

Which activity requires a Florida real estate license?

  1. A homeowner negotiating the sale of her own residence
  2. A person negotiating a commercial lease for another for a fee Correct answer.
  3. An attorney preparing a deed for a client
  4. A property manager renting units in a building she owns

Explanation

The license law covers persons who, for another and for compensation, negotiate the sale, purchase, exchange, lease, or rental of real property. Owners dealing with their own property are exempt, and attorneys performing legal services are regulated under the Bar rather than by FREC.

Question 12The Real Estate Business

A farmer who rents land and plants corn on it has what interest in the corn before harvest?

  1. A fixture interest
  2. Real property owned by the landlord
  3. An appurtenance
  4. Personal property owned by the farmer Correct answer.

Explanation

Emblements, the crops cultivated by a tenant, are treated as the tenant's personal property so the tenant may harvest them even if the lease ends unexpectedly. They never become part of the realty because they are not permanently attached and are planted for periodic harvest.

Question 13The Real Estate Business

Which economic characteristic is illustrated when two identical houses on the same street sell for very different prices because one backs onto a park?

  1. Modification of the site
  2. Permanence of investment
  3. Situs, or area preference Correct answer.
  4. Scarcity

Explanation

Situs, also called area preference, reflects the value buyers place on a specific location within a market. The houses have the same physical traits, but the park view changes buyer preference and therefore price.

Question 14The Real Estate Business

An owner may retain the surface of a parcel while separately selling which of the following?

  1. Appurtenant easements only
  2. The mineral rights beneath the surface Correct answer.
  3. The right to receive a deed to the parcel
  4. The zoning classification of the parcel

Explanation

Subsurface rights, including mineral, oil, and gas rights, can be severed from the surface estate and conveyed to another party. The surface owner then holds the land subject to the rights the buyer has acquired below.

Question 15The Real Estate Business

Which phrase best describes the real estate market?

  1. A market where supply adjusts quickly to demand
  2. A centralized auction with perfect information
  3. A local market with unique properties and imperfect information Correct answer.
  4. A national market in standardized products

Explanation

Real estate markets are local, deal in unique properties, and suffer from incomplete information because transactions are infrequent and prices are not centrally reported. Supply also adjusts slowly because construction takes time and land is fixed in location.

Question 16The Real Estate Business

A Florida broker wants to operate under a name other than her legal name. What must she do?

  1. The name must be approved by the county commission where the office is located
  2. Trade names are prohibited for Florida real estate brokers
  3. No notice to any agency is required to use a trade name
  4. It must be registered with FREC Correct answer.

Explanation

A broker or brokerage entity may use a trade name, but the name must be registered with the Florida Real Estate Commission and appear on the brokerage's signage and advertising. Using an unregistered name violates the license law.

Question 17The Real Estate Business

A retail tenant bolts removable display shelving to the wall of a leased store. When the lease ends, the shelving is generally what?

  1. An appurtenance that passes with the realty whenever title transfers
  2. The landlord's real property, because it is attached to the wall
  3. The tenant's personal property, if removal causes no material damage Correct answer.
  4. The tenant's property only if the lease says nothing about shelving

Explanation

Trade fixtures installed by a commercial tenant for business purposes remain the tenant's personal property and may be removed before the lease expires, provided removal does not cause substantial damage. Any damage must be repaired by the tenant.

Question 18The Real Estate Business

A sales associate's employment with her broker ends and she registers with no new broker. What is the status of her license?

  1. It becomes voluntarily inactive for a period of two years
  2. It transfers automatically to the last broker she worked for
  3. It becomes involuntarily inactive until she registers with a new employer Correct answer.
  4. It becomes void and must be reissued by DBPR

Explanation

A sales associate must be registered with an active broker to practice. When the relationship ends and no new employer is registered, the license is placed on involuntary inactive status until the associate finds a qualifying employer or the license lapses.

Question 19The Real Estate Business

A Florida broker who is not a licensed appraiser gives a written opinion of value to a homeowner. Which statement is correct?

  1. The broker may appraise residential property but not commercial property
  2. The broker may appraise property valued at $250,000 or less
  3. The broker may prepare broker's price opinions but may not appraise a federally related transaction Correct answer.
  4. The broker may appraise any property as long as the fee is disclosed to the client

Explanation

Chapter 475, Part II, requires state certification for appraisals used in federally related transactions. A licensed broker who is not certified may still prepare a broker's price opinion for a client, such as a listing presentation or an estimate of probable selling price.

Question 20The Real Estate Business

Which task may an unlicensed assistant perform for a Florida brokerage?

  1. Hold an open house and answer questions about the property
  2. Quote the brokerage's commission rate to a caller
  3. Deliver a signed contract to the title company Correct answer.
  4. Explain the terms of a listing agreement to a prospective seller

Explanation

Unlicensed assistants may perform clerical and administrative tasks, such as delivering documents, answering the phone for messages, and assembling files. Any activity that involves negotiating, discussing terms, or inducing a person to buy, sell, or lease requires a license.

Question 21License Law and Regulation

How is the Florida Real Estate Commission (FREC) composed and selected?

  1. Seven members appointed by the Governor, all of whom must hold active broker licenses for five years.
  2. Nine members appointed by the Secretary of the Department of Business and Professional Regulation, all licensees.
  3. Five members elected by licensees: three brokers and two sales associates, each serving two-year terms.
  4. Seven members appointed by the Governor: four brokers, one sales associate, and two consumers. Correct answer.

Explanation

FREC consists of seven members appointed by the Governor: four licensed brokers, one licensed sales associate, and two consumer members. Members serve four-year terms and are subject to Senate confirmation. The commission regulates real estate licensees and sets policy under Chapter 475.

Question 22License Law and Regulation

Which source may lawfully pay a Florida real estate sales associate for brokerage services?

  1. The client directly, if the fee is disclosed in the listing agreement and closing statement.
  2. The sales associate's employer broker, or a broker paying through the employer broker. Correct answer.
  3. Any licensed Florida broker who procures the transaction and collects the commission.
  4. A title company as a marketing incentive for a completed closing.

Explanation

A sales associate may be compensated for brokerage services only by the employer broker, either directly or through the employer broker. The brokerage earns the commission, and the associate is paid according to the independent contractor agreement. Payment from clients, title companies, or unrelated brokers would violate Florida license law.

Question 23License Law and Regulation

Before the first renewal of a Florida sales associate license, the licensee must complete which post-license requirement?

  1. No additional education if the license was obtained by passing the state examination.
  2. A 72-hour broker pre-license course approved by FREC.
  3. A 14-hour continuing education course including three hours of core law.
  4. A 45-hour post-license education course. Correct answer.

Explanation

A Florida sales associate must complete a 45-hour post-license education course before the first renewal. The post-license requirement is separate from the 63-hour pre-license course. After the first renewal, the licensee moves to the 14-hour continuing education cycle.

Question 24License Law and Regulation

Florida real estate licenses are renewed on what schedule?

  1. Every two years, with an expiration date assigned by the Department. Correct answer.
  2. Annually, on the licensee's birthday.
  3. Every three years, on December 31.
  4. Every four years, on the anniversary of initial licensure.

Explanation

Florida real estate licenses are renewed biennially, and the Department assigns the expiration date. Renewal requires the appropriate education and fees. A license that is not renewed becomes involuntary inactive and the licensee may not perform brokerage activity.

Question 25License Law and Regulation

An applicant for a Florida real estate broker license must document what experience?

  1. At least 12 months of active real estate experience at any time in the past.
  2. At least 24 months of active real estate experience during the preceding five years. Correct answer.
  3. At least 36 months of active real estate experience during the preceding three years.
  4. At least 24 months of property management experience during the preceding two years.

Explanation

A broker applicant must show at least 24 months of active real estate experience within the five years preceding application. The experience is typically gained as a licensed sales associate. Property management alone does not automatically satisfy the requirement.

Question 26License Law and Regulation

If a Florida licensee and a consumer do not sign a written agreement establishing a different relationship, what brokerage relationship exists?

  1. Dual agent with full fiduciary duties.
  2. No brokerage relationship.
  3. Single agent for the seller only.
  4. Transaction broker. Correct answer.

Explanation

Florida presumes a transaction broker relationship unless a single agent or no brokerage relationship is established in writing. A transaction broker provides limited representation to both parties. The presumption protects consumers by supplying defined duties when no written agreement exists.

Question 27License Law and Regulation

When must a Florida licensee give the brokerage relationship disclosure to a prospective buyer or seller?

  1. At the closing table before disbursing funds.
  2. At the first substantive contact with the prospective party. Correct answer.
  3. Within 10 days after the listing agreement is signed.
  4. Only after a written offer is accepted by the seller.

Explanation

The brokerage relationship disclosure must be provided at the first substantive contact with a prospective buyer or seller. This timing ensures the consumer understands the relationship before exchanging confidential information. Waiting until closing or after signing is too late.

Question 28License Law and Regulation

What is the purpose of the Florida Real Estate Recovery Fund?

  1. To provide legal defense for licensees in disciplinary proceedings.
  2. To reimburse brokers for unpaid commissions after arbitration.
  3. To pay the operating expenses of the Division of Real Estate.
  4. To compensate consumers who hold unsatisfied court judgments against licensees for specified brokerage misconduct. Correct answer.

Explanation

The Recovery Fund compensates consumers who obtain a court judgment against a licensee for certain dishonest or improper brokerage acts and cannot collect from the licensee. Payment from the fund does not relieve the licensee of liability. The licensee's license may be suspended until the fund is repaid.

Question 29License Law and Regulation

A person who is not licensed in Florida advertises and performs real estate brokerage services for a fee. Under Florida law, what is the result?

  1. The person may register as a broker associate without taking the state examination.
  2. The person may lawfully practice if each fee is less than $1,000.
  3. The person is subject to penalties for unlicensed practice, including fines and injunctive relief. Correct answer.
  4. The person may lawfully practice if a licensed broker supervises each transaction.

Explanation

Performing brokerage services without a license violates Florida license law and subjects the person to penalties, including fines and injunctive relief. Supervision by a broker does not cure the lack of a license for the person performing the services. Only licensed persons may be compensated for brokerage activity.

Question 30License Law and Regulation

A Florida broker wants to pay a $500 referral fee to an unlicensed friend who referred a buyer. What does Florida law permit?

  1. Yes, if the fee is less than 10 percent of the total commission paid at closing.
  2. Yes, but only after the closing is recorded and the broker receives the full commission.
  3. Yes, if the friend signs a written disclosure of the payment and the broker retains a copy for three years.
  4. No; compensation for brokerage services may not be paid to an unlicensed person. Correct answer.

Explanation

A licensee may not pay a commission, referral fee, or other compensation for brokerage services to an unlicensed person. The prohibition prevents unlicensed brokerage activity and protects the public. A written disclosure or a small percentage does not create an exception.

Question 31License Law and Regulation

A Florida broker receives a buyer's earnest money deposit on Monday. When must the funds be placed in the broker's escrow account?

  1. Within 24 hours of acceptance by the seller.
  2. Within 3 business days of receipt. Correct answer.
  3. Within 10 business days of receipt.
  4. By the end of the same calendar month.

Explanation

Florida rules require a broker to deposit trust funds into an escrow account within three business days of receipt. The funds must be held in a properly designated escrow or trust account at a Florida financial institution. If the funds are not deposited, they must be delivered to the appropriate party.

Question 32License Law and Regulation

A sales associate working under a Florida broker makes a material misstatement while showing a property. Who is accountable to FREC for the sales associate's brokerage acts?

  1. No one, if the misstatement was unintentional and the buyer did not rely on it.
  2. The employer broker, who must supervise the associate's brokerage activities. Correct answer.
  3. Only the seller, because the seller owns the property and controls the listing information.
  4. Only the sales associate, because the broker did not participate in the showing.

Explanation

The employer broker is responsible for supervising the brokerage activities of associated sales associates and is accountable to FREC for those acts. A sales associate may also face discipline for his or her own conduct. The broker's supervisory duty cannot be avoided by pointing to the associate's independent contractor status.

Question 33License Law and Regulation

A consumer files a complaint with FREC asking it to order a licensee to refund a $10,000 commission. What authority does FREC have?

  1. FREC must refer the matter to the local board of REALTORS for binding arbitration.
  2. FREC cannot award monetary damages or resolve commission disputes; those are civil matters. Correct answer.
  3. FREC may order the licensee to refund the commission if the consumer proves dishonesty.
  4. FREC may award damages up to $50,000 per complaint from the Recovery Fund.

Explanation

FREC's authority is disciplinary and regulatory; it can suspend or revoke licenses and impose fines, but it cannot award monetary damages or decide commission disputes. A consumer seeking a refund must pursue a civil remedy. The Recovery Fund pays only after a court judgment, not through a FREC order.

Question 34License Law and Regulation

In which situation may a Florida broker use designated sales associates as single agents for opposite parties?

  1. A nonresidential deal where each party has assets of $250,000 or more, with written consent. Correct answer.
  2. Any residential transaction in which both parties consent to the arrangement in writing.
  3. Any transaction in which the broker also serves as a transaction broker for both parties and discloses it in writing.
  4. A residential transaction involving a property valued at $1 million or more with written consent.

Explanation

Designated sales associates may act as single agents for opposite parties only in nonresidential transactions where each party has assets of at least $250,000 and the required written consent is obtained. The arrangement allows each party to receive single-agent representation from a different associate within the same brokerage. Residential transactions do not qualify.

Question 35License Law and Regulation

A Florida sales associate advertises a listing on social media. What must the advertisement include?

  1. The name of the brokerage firm as registered with the Department. Correct answer.
  2. The words 'licensed real estate agent' in the caption.
  3. Only the sales associate's personal name and phone number.
  4. The sales associate's license number and the seller's written approval.

Explanation

Advertising by a sales associate must include the registered name of the brokerage firm. The associate may be identified, but the advertisement must not make it appear that the associate is the brokerage. Including the firm name ensures consumers know which brokerage is responsible.

Question 36License Law and Regulation

A Florida licensee is convicted of a misdemeanor. What must the licensee do regarding the Department?

  1. Nothing, because only felony convictions must be reported.
  2. Notify the Department within 30 days of the conviction. Correct answer.
  3. Report the conviction only at the next license renewal.
  4. Report the conviction within 10 days to the local association of REALTORS.

Explanation

A licensee must notify the Department within 30 days after being convicted or found guilty of a crime. The reporting duty applies regardless of whether the crime is a felony or misdemeanor. Failure to report is itself a disciplinary violation.

Question 37License Law and Regulation

What is a Florida broker associate?

  1. A sales associate who has completed the broker post-license course.
  2. A broker who owns the brokerage firm and supervises sales associates.
  3. An unlicensed assistant who performs only clerical tasks for a broker.
  4. A licensed broker who works under another broker and may be paid by that broker. Correct answer.

Explanation

A broker associate is a person who holds a broker license but chooses to work under another broker. The broker associate may be compensated by the employing broker and must register the association with the Department. This status differs from that of an owner-broker who operates the brokerage.

Question 38License Law and Regulation

A Florida sales associate places her license on inactive status. What may she lawfully do while inactive?

  1. Work for a broker as an unlicensed assistant while earning commissions.
  2. Continue representing her previous clients in pending transactions.
  3. Sell her own home without disclosing her license status.
  4. Nothing that requires a real estate license, such as showing property for a fee. Correct answer.

Explanation

An inactive license does not authorize the performance of any activity that requires a real estate license. The licensee may not show property for compensation or otherwise engage in brokerage. Reactivation requires the appropriate request and completion of any required education.

Question 39License Law and Regulation

How long does the Department generally have to commence disciplinary action against a Florida licensee for a violation?

  1. There is no time limit for real estate disciplinary actions.
  2. Five years from the date the violation occurred. Correct answer.
  3. Two years from the date the violation occurred.
  4. One year from the date the complaint is filed.

Explanation

Florida law generally requires disciplinary proceedings to be commenced within five years after the violation. The period protects licensees from stale claims while giving the Department time to investigate. The limitations period is not measured from the date a complaint is filed.

Question 40License Law and Regulation

A Florida licensee wants an official determination of how a statute applies to a specific proposed business practice. What should the licensee request?

  1. A citation from the Division of Real Estate.
  2. A notice of noncompliance from the Department.
  3. A declaratory statement from FREC. Correct answer.
  4. A declaratory statement from the broker's association.

Explanation

FREC may issue a declaratory statement regarding the applicability of a statute or rule to a petitioner's particular circumstances. The request must describe the specific facts and proposed conduct. A declaratory statement binds the agency as to that petitioner's situation.

Question 41Law of Agency

In Florida, a broker who provides brokerage services for a buyer or seller without a written agreement establishing a different relationship is presumed to be acting as

  1. a transaction broker Correct answer.
  2. a single agent
  3. a general agent
  4. a subagent of the listing broker

Explanation

Florida law presumes a transaction broker relationship unless a single agent relationship or a no brokerage relationship has been established in writing. The presumption is designed to protect the public when no written relationship has been formed.

Question 42Law of Agency

A Florida sales associate closes a sale and the seller owes a brokerage commission. Who is entitled to receive that commission from the seller?

  1. The title company handling the closing
  2. The sales associate personally
  3. The buyer's lender
  4. The sales associate's broker Correct answer.

Explanation

Licensees are compensated through the brokerage that employs them. A sales associate may not accept compensation directly from a client; the commission is paid to the broker, who then pays the associate under their agreement.

Question 43Law of Agency

Which duty is owed by a Florida broker in every authorized brokerage relationship, including a no brokerage relationship?

  1. Undivided loyalty
  2. Dealing honestly and fairly Correct answer.
  3. Obedience to the principal's instructions
  4. Unlimited confidentiality of the principal's bargaining position

Explanation

Honest and fair dealing, disclosure of known facts materially affecting value, accounting for funds, and limited confidentiality are owed in all three Florida brokerage relationships. Loyalty and obedience are owed only by a single agent.

Question 44Law of Agency

A Florida broker wants to represent both the buyer and the seller as a single agent in the same residential transaction. Under Florida law, this is

  1. permitted if the broker is the only licensee involved
  2. permitted only in nonresidential transactions
  3. not permitted; the broker may act as a transaction broker instead Correct answer.
  4. permitted if both parties consent in writing

Explanation

Florida does not permit a broker to serve as a single agent (a dual agent) for both parties to the same transaction. The broker may serve both parties as a transaction broker, and in nonresidential deals may use designated sales associates.

Question 45Law of Agency

When a Florida sales associate is engaged to represent a buyer, the client's agent for purposes of the brokerage relationship is

  1. the multiple listing service through which the sale is cooperated
  2. the sales associate individually
  3. the sales associate and the broker as co-agents
  4. the brokerage firm that employs the sales associate Correct answer.

Explanation

The brokerage relationship exists between the brokerage firm and the principal. The sales associate acts on the broker's behalf, and the broker is responsible for the associate's acts within the scope of the brokerage.

Question 46Law of Agency

Which statement best describes the duty of loyalty owed by a single agent?

  1. The agent must put the principal's interests ahead of the agent's own Correct answer.
  2. The agent must guarantee the principal the best price the market will bear
  3. The agent must share the principal's confidential information with the other party so negotiations stay fair
  4. The agent must continue to represent the principal after the listing agreement expires

Explanation

Loyalty is a fiduciary duty requiring the single agent to act solely for the principal and to avoid self-dealing or advocacy for the other side. It does not promise a particular price, and it does not extend the term of the agreement.

Question 47Law of Agency

A broker has a written single agent agreement with a seller. The seller now asks the broker to work with the buyer as well and act as a transaction broker. What must the broker do?

  1. Cancel the listing and relist the property under a new agreement
  2. Give the seller written notice of the change before it takes effect Correct answer.
  3. Make the change orally, since the seller requested it
  4. Obtain the seller's signature on a new single agent listing agreement before doing anything else

Explanation

A single agent may convert to a transaction broker at any time during the relationship if the agent first discloses the change in writing to the principal. No new signature is required for the conversion.

Question 48Law of Agency

A broker is acting as a transaction broker for both parties. The seller privately tells the broker that the seller would accept $20,000 less than the listing price. The broker should

  1. tell the buyer only if the buyer asks whether the price is negotiable
  2. tell the buyer immediately, because a transaction broker must disclose everything the broker learns
  3. keep the information confidential unless the seller authorizes disclosure or the law requires it Correct answer.
  4. withdraw from the transaction because the parties' interests conflict

Explanation

A transaction broker owes limited confidentiality and may not reveal that a seller will accept less than the asking price, or that a buyer will pay more, without the party's written permission or a legal requirement to disclose. The disclosure duty covers material facts about the property, not a party's bargaining position.

Question 49Law of Agency

A seller's listing agent receives a full-price written offer from a cooperating buyer's agent two days after the seller accepted a different offer. The listing agent should

  1. present it only if the first buyer's financing is denied
  2. present the offer to the seller unless the seller has directed otherwise in writing Correct answer.
  3. return it unopened to the cooperating agent because the property is already under contract
  4. hold it until the first contract closes and then present it

Explanation

A broker must present all offers and counteroffers to the principal in a timely manner unless the principal has directed otherwise in writing. That duty continues after a contract is signed, because the seller may want to keep the later offer as a backup.

Question 50Law of Agency

A broker has a written single agent agreement with the seller. The broker shows the property to an unrepresented buyer. Which statement is correct?

  1. The broker owes the buyer the same fiduciary duties owed to the seller
  2. The buyer is a customer owed honesty and disclosure of known material facts Correct answer.
  3. The broker must have the buyer sign a single agent agreement before showing the property
  4. The broker may negotiate on the buyer's behalf as long as the seller is not harmed

Explanation

An unrepresented buyer is a customer, not a client. The broker owes the customer honesty and fair dealing and must disclose known material facts that are not readily observable, but owes no loyalty, obedience, or advocacy.