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MD RE Broker practice questions

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Question 1Maryland Real Estate License Law, Regulations, and Commission Operations

Under Maryland real estate license law, a license is required for which of the following activities?

  1. Renting your own vacation cottage for fewer than 90 days a year
  2. Advertising your own residence for sale by owner
  3. Managing a property you personally own and lease to tenants
  4. For a fee, negotiating the sale of a neighbor's home on the owner's behalf Correct answer.

Explanation

Maryland requires licensure for any person who, for compensation, negotiates or attempts to negotiate a sale, purchase, exchange, or lease of real estate on behalf of another. A property owner dealing with their own property is acting for themselves and is outside the licensing requirement.

Question 2Maryland Real Estate License Law, Regulations, and Commission Operations

Which body is responsible for issuing real estate licenses and administering discipline in Maryland?

  1. The local county board of realtors
  2. The Department of Housing and Community Development
  3. The Maryland Real Estate Commission Correct answer.
  4. The Office of the Attorney General, Consumer Division

Explanation

The Maryland Real Estate Commission, within the Department of Labor, is the state agency that licenses brokers, associate brokers, and salespersons and hears disciplinary complaints. Local boards of realtors are private trade associations with no licensing authority.

Question 3Maryland Real Estate License Law, Regulations, and Commission Operations

A would-be salesperson must meet which minimum age requirement to be licensed in Maryland?

  1. 18 years of age Correct answer.
  2. 16 years of age
  3. 21 years of age
  4. 19 years of age

Explanation

Maryland requires an applicant for a real estate salesperson license to be at least 18 years old, along with completing required education and passing the examination. There is no higher age threshold such as 21.

Question 4Maryland Real Estate License Law, Regulations, and Commission Operations

A licensed Maryland salesperson must complete continuing education during each two-year license term. What is the minimum number of clock hours required?

  1. 15 hours
  2. 9 hours
  3. 6 hours
  4. 12 hours Correct answer.

Explanation

Maryland requires licensees to complete 12 clock hours of continuing education in each two-year renewal cycle, including mandated topic hours such as fair housing and ethics. The requirement applies to salespersons, associate brokers, and brokers.

Question 5Maryland Real Estate License Law, Regulations, and Commission Operations

A salesperson's license in Maryland is held by and issued through which of the following?

  1. The salesperson's broker, with whom the license is affiliated Correct answer.
  2. The salesperson individually, as an independent licensee
  3. The Maryland Association of Realtors
  4. The title company that handles the salesperson's closings

Explanation

Maryland salespersons must be affiliated with a licensed broker, and the license is held through that broker's office. A salesperson cannot practice brokerage independently; only a licensed broker may contract with clients and receive compensation for brokerage services.

Question 6Maryland Real Estate License Law, Regulations, and Commission Operations

Which of the following is a duty the Maryland Real Estate Commission is authorized to perform?

  1. Require all licensees to join a local board of realtors
  2. Set commission rates that licensees may charge clients
  3. Conduct hearings on complaints and impose sanctions on licensees Correct answer.
  4. Approve the standard form sales contract used statewide

Explanation

The Commission investigates complaints against licensees and may hold hearings, reprimand, suspend, revoke, or fine. It does not set brokerage fees, which are negotiable, and it does not require trade association membership.

Question 7Maryland Real Estate License Law, Regulations, and Commission Operations

A real estate broker in Maryland who maintains a principal office must display the broker's license in what manner?

  1. Filed with the county clerk instead of displayed
  2. Conspicuously displayed in the office Correct answer.
  3. Posted only at the branch offices, not the main office
  4. Kept in the broker's personal files and shown only on request

Explanation

Maryland requires the broker's license to be conspicuously displayed at the licensed place of business. Display gives the public notice that the office is operating under a valid license.

Question 8Maryland Real Estate License Law, Regulations, and Commission Operations

In Maryland, a person who performs brokerage services for compensation without holding a valid license is subject to which consequence?

  1. No consequence if the client consents in writing
  2. Automatic licensure after paying a late fee
  3. Criminal penalties and possible civil liability under the licensing statute Correct answer.
  4. Only a warning letter for a first offense

Explanation

Unlicensed brokerage is a violation of Maryland's real estate licensing law and can result in criminal penalties as well as civil exposure, including loss of the right to collect compensation. Client consent cannot cure the absence of a license.

Question 9Maryland Real Estate License Law, Regulations, and Commission Operations

A Maryland broker wishes to open a branch office. What does the licensing law generally require for that branch?

  1. Only a sign identifying the broker's name
  2. Approval from the local board of realtors
  3. Nothing, as long as the main office license is current
  4. A separate branch office license issued for that location Correct answer.

Explanation

Each branch office must be separately licensed and identified to the Commission, generally with a designated licensed manager. The main office license alone does not cover additional business locations.

Question 10Maryland Real Estate License Law, Regulations, and Commission Operations

A Maryland salesperson wants to move from one brokerage to another. What must occur for the salesperson to lawfully continue practicing?

  1. The salesperson must file a transfer and the new broker must be notified and confirm the affiliation Correct answer.
  2. The salesperson may begin work immediately and notify the Commission within 90 days
  3. The salesperson must wait one full license term before transferring
  4. The salesperson must pass the state exam again before transferring

Explanation

A license is tied to the sponsoring broker, so a change of affiliation requires a transfer filing with the Commission so the license reflects the new broker. Practicing for the new broker before the transfer is processed is unlicensed activity.

Question 11Maryland Real Estate License Law, Regulations, and Commission Operations

A Maryland salesperson receives a buyer's deposit check made payable to the broker. Under Commission regulations, the broker must handle the deposit how?

  1. Deposit it into the broker's general operating account and track it informally
  2. Maintain it in a separate escrow or trust account as required by regulation Correct answer.
  3. Give it to the salesperson to hold until closing
  4. Return it to the buyer until the contract is fully executed

Explanation

Maryland regulations require brokers to deposit client funds such as earnest money into a separate escrow or trust account and to keep records of those funds. Commingling with the broker's operating funds is prohibited.

Question 12Maryland Real Estate License Law, Regulations, and Commission Operations

A broker in Maryland has a client who asks whether the broker can rebate part of the commission to the client. How should the broker respond under Maryland law?

  1. Rebates are permitted only if the client is a first-time buyer
  2. Compensation is negotiable, and rebates or other compensation arrangements may be agreed with the client Correct answer.
  3. Rebates must be approved in advance by the local board of realtors
  4. Rebates are prohibited because commissions are fixed by the Commission

Explanation

Maryland law treats brokerage compensation as negotiable between the broker and the client, so a broker may agree to rebate or share compensation with a client. The Commission does not set commission rates.

Question 13Maryland Real Estate License Law, Regulations, and Commission Operations

An applicant for a Maryland broker's license must demonstrate which of the following in addition to passing the broker examination?

  1. Ownership of an office building
  2. A college degree in business administration
  3. A specified period of licensed real estate experience Correct answer.
  4. Membership in the Maryland Association of Realtors

Explanation

Maryland requires broker applicants to have a set period of active licensed experience, generally three years of active practice, before sitting for the broker exam. A degree, association membership, or property ownership is not a substitute.

Question 14Maryland Real Estate License Law, Regulations, and Commission Operations

A consumer files a complaint with the Maryland Real Estate Commission alleging that a licensee misrepresented the condition of a property. What is the Commission's authority in this matter?

  1. It has no authority because misrepresentation is only a civil matter
  2. It may investigate and, after a hearing, discipline the licensee Correct answer.
  3. It must refer the matter to the local board of realtors for decision
  4. It may award the buyer monetary damages for the misrepresentation

Explanation

The Commission may investigate complaints, conduct contested case hearings, and impose sanctions such as fines, suspension, or revocation for violations of the licensing law. It does not award civil damages, which are for courts to decide.

Question 15Maryland Real Estate License Law, Regulations, and Commission Operations

A Maryland salesperson's license is suspended by the Commission. Which statement best describes the effect on the salesperson's ability to practice?

  1. The salesperson may continue if the broker signs a waiver
  2. The salesperson may not engage in licensed brokerage activity while the suspension is in effect Correct answer.
  3. The salesperson may practice only on transactions already under contract
  4. The salesperson may continue working under the broker until the suspension hearing

Explanation

A suspension removes the privilege to act as a licensee for the period ordered, so the salesperson cannot perform brokerage services during that time. A broker cannot waive a Commission order or authorize continued licensed activity.

Question 16Maryland Real Estate License Law, Regulations, and Commission Operations

A Maryland broker is closing her brokerage and has several active listings. Which action is consistent with Commission requirements?

  1. Abandon the listings and leave client files with the landlord
  2. Transfer the listings to another broker without informing the clients
  3. Destroy all transaction records immediately to protect client privacy
  4. Arrange for the return or transfer of client records and notify clients and the Commission as required Correct answer.

Explanation

When a brokerage closes, the broker must account for client funds and records, notify affected clients, and follow Commission procedures for the disposition of records. Records must be retained for the required period rather than destroyed at closing.

Question 17Maryland Real Estate License Law, Regulations, and Commission Operations

Which of the following best describes the Maryland Real Estate Commission's rulemaking role?

  1. It issues advisory opinions that have the force of law
  2. It delegates rulemaking to local boards of realtors
  3. It enacts the licensing statute that the General Assembly must follow
  4. It adopts regulations that implement and carry out the licensing statute Correct answer.

Explanation

The General Assembly enacts the statute, and the Commission adopts regulations under that statutory authority to implement its provisions. Regulations must remain consistent with the statute and do not replace it.

Question 18Maryland Real Estate License Law, Regulations, and Commission Operations

An unlicensed assistant in a Maryland brokerage may perform which of the following tasks?

  1. Answer the phone and schedule appointments for a licensee Correct answer.
  2. Negotiate the price on a buyer's offer
  3. Explain the terms of a listing agreement to a prospective seller
  4. Hold an open house and quote commission rates

Explanation

Unlicensed assistants may perform clerical and administrative tasks such as answering phones and scheduling, but may not perform activities that require a license, including negotiating, explaining contract terms, or discussing compensation. Those activities must be handled by a licensee.

Question 19Maryland Real Estate License Law, Regulations, and Commission Operations

A Maryland salesperson wants to advertise a property on social media. Which practice complies with Commission advertising rules?

  1. Use a fictitious team name without disclosing the brokerage
  2. Advertise without identifying the brokerage, since the salesperson's name appears
  3. Let the seller write the ad without broker review
  4. Include the brokerage's name as required in the advertising Correct answer.

Explanation

Maryland advertising rules require that advertising by a licensee identify the affiliated brokerage so the public knows who is responsible. Advertising under a team name or without the brokerage name can mislead consumers and violates those rules.

Question 20Maryland Real Estate License Law, Regulations, and Commission Operations

A Maryland licensee is convicted of felony theft unrelated to real estate. What is the Commission's authority regarding the license?

  1. It has no authority because the crime was unrelated to real estate
  2. It may act only if the victim files a complaint with the Commission
  3. It must wait until the licensee's next renewal to act
  4. It may take disciplinary action based on the conviction, including suspension or revocation Correct answer.

Explanation

Conviction of certain crimes, including felony theft, is grounds for disciplinary action because it bears on the licensee's honesty and trustworthiness. The Commission may act on its own initiative and need not wait for a complaint or renewal.

Question 21Maryland Real Estate License Law, Regulations, and Commission Operations

A Maryland broker is required to retain transaction records for a specified period. Which statement best reflects the regulation?

  1. Records must be kept for the period set by Commission regulation and made available for inspection Correct answer.
  2. Records may be discarded once the transaction closes
  3. Records need be kept only if the client requests it in writing
  4. Records may be kept in any form but never need to be produced

Explanation

Commission regulations require brokers to keep transaction and trust account records for a defined retention period and to produce them for inspection on request. Discarding records at closing or keeping them only on client request does not comply.

Question 22Maryland Real Estate License Law, Regulations, and Commission Operations

A Maryland salesperson is offered compensation directly by a buyer for finding a home, separate from the brokerage's commission. How should the salesperson handle this under Maryland law?

  1. Accept it only with the broker's knowledge and through the brokerage
  2. Accept it personally, since the buyer is not the salesperson's client
  3. Accept it and report it at the next license renewal
  4. Refuse it because all compensation for brokerage must flow through the broker Correct answer.

Explanation

A salesperson may not accept compensation for brokerage services directly from any party; compensation must be paid to and through the affiliated broker. Accepting a side payment from a buyer violates the licensing statute.

Question 23Maryland Real Estate License Law, Regulations, and Commission Operations

A Maryland broker learns that an unlicensed office employee has been quoting commission rates to prospective sellers. What is the broker's most appropriate response?

  1. Report the matter only if a seller complains
  2. Nothing, because the employee is not licensed and therefore not subject to Commission rules
  3. Ratify the quotes by sending a written confirmation to the sellers
  4. Take corrective action to stop the unlicensed activity, since the broker is responsible for office conduct Correct answer.

Explanation

A broker is responsible for the activities of the office, including ensuring unlicensed staff do not perform licensed functions such as quoting commissions. The broker should stop the conduct; ratification or waiting for a complaint does not cure the violation.

Question 24Maryland Real Estate License Law, Regulations, and Commission Operations

A Maryland licensee is the subject of a Commission complaint. Which statement best describes the licensee's procedural rights in the contested case?

  1. The licensee may appeal only after serving a suspension
  2. The Commission may revoke the license without notice because it has discretion
  3. The licensee is entitled to notice and an opportunity for a hearing before sanctions are imposed Correct answer.
  4. The licensee has no right to be represented by counsel

Explanation

A disciplinary action is a contested case, so the licensee is entitled to notice of the charges and an opportunity to be heard before the Commission imposes sanctions. The licensee may also be represented by counsel and may seek judicial review afterward.

Question 25Maryland Real Estate License Law, Regulations, and Commission Operations

A Maryland broker holds a buyer's earnest money deposit that the parties have agreed should be released to the seller. Before releasing the funds, the broker should confirm which of the following?

  1. That the title company has approved the release
  2. That the release is authorized by the parties or by the contract terms Correct answer.
  3. That the salesperson agrees with the release
  4. That the Commission has issued a written order

Explanation

A broker holding trust funds may disburse them only when authorized by the parties' agreement or the contract, so the broker must confirm the parties' instructions before releasing the deposit. A salesperson's view, a title company's approval, or a Commission order is not the standard.

Question 26Maryland Real Estate License Law, Regulations, and Commission Operations

Under Maryland real estate regulations, a licensed salesperson who wishes to be paid a commission for a transaction must be compensated in which manner?

  1. Directly by the title company at settlement, bypassing the broker
  2. Directly by the client at settlement, with a copy of the receipt filed with the Commission
  3. Through the salesperson's employing broker, who receives and disburses the funds Correct answer.
  4. By the cooperating broker in the transaction, who pays the salesperson directly

Explanation

Maryland law requires that a salesperson be affiliated with a licensed broker and that compensation for brokerage services flow through that employing broker. The salesperson may not accept commission payments directly from clients, title companies, or cooperating brokers. Payment through any channel other than the employing broker is inconsistent with the licensing framework.

Question 27Maryland Real Estate License Law, Regulations, and Commission Operations

A Maryland broker's license is placed on inactive status. Which statement best describes what the broker may continue to do while inactive?

  1. Retain the license on inactive status without performing brokerage services Correct answer.
  2. Perform brokerage services only for transactions already under contract
  3. Continue supervising salespersons while personally handling no transactions
  4. Continue operating the brokerage but only for existing listings

Explanation

An inactive Maryland license is retained on the Commission's records but does not authorize the licensee to provide brokerage services or to supervise licensees on behalf of a brokerage. The broker must reactivate the license through the Commission before resuming any brokerage activity. Inactive status is essentially a holding status, not a limited practice authority.

Question 28Maryland Real Estate License Law, Regulations, and Commission Operations

A Maryland broker decides to change the trade name under which the brokerage operates. What is the broker's obligation to the Commission?

  1. No action is needed because trade names are outside Commission authority
  2. Obtain written consent from every active client before the change takes effect
  3. File a new broker's license application and pay the original licensing fee
  4. Notify the Commission of the change so its records reflect the current trade name Correct answer.

Explanation

The Commission maintains records of the name under which each brokerage is licensed and conducts business, so a broker must keep the Commission informed of changes to the trade name. Failure to update the Commission's records can create advertising and disclosure problems. A trade name change does not require a new license application or client consent.

Question 29Maryland Real Estate License Law, Regulations, and Commission Operations

A Maryland licensee is the listing agent for a home and, without the seller's knowledge, purchases the property personally through a relative who acts as the nominal buyer. How should this be characterized under Maryland licensing standards?

  1. Permissible if the licensee pays full list price for the property
  2. Permissible if the licensee discloses the relationship after settlement
  3. Acceptable because the relative, not the licensee, is the buyer of record
  4. An undisclosed conflict of interest that violates the licensee's fiduciary duty to the seller Correct answer.

Explanation

A licensee owes the seller loyalty and full disclosure, and acquiring an interest in the listed property through a straw buyer conceals a material fact from the seller. This is a self-dealing conflict of interest that breaches fiduciary duties and exposes the licensee to Commission discipline. Paying list price or using a relative does not cure the lack of disclosure.

Question 30Maryland Real Estate License Law, Regulations, and Commission Operations

Which of the following best describes the Maryland Real Estate Commission's authority over the Guaranty Fund?

  1. The fund reimburses brokers for unpaid commissions owed by clients
  2. The Commission uses the fund to cover its own operating expenses
  3. The fund is administered by the state treasury with no Commission involvement
  4. The Commission administers claims and may pay valid claims arising from certain licensee conduct Correct answer.

Explanation

Maryland maintains a Guaranty Fund to compensate consumers who obtain judgments against licensees for certain wrongful acts in real estate transactions, and the Commission administers the claims process. The fund is not a general revenue source and does not cover ordinary business debts such as unpaid commissions. Its purpose is consumer protection tied to licensee misconduct.

Question 31Maryland Real Estate License Law, Regulations, and Commission Operations

A Maryland salesperson is affiliated with a broker but wants to also hold a separate license as a broker. What does Maryland licensing law generally require?

  1. The salesperson must first qualify for and obtain a broker's license, which requires meeting broker experience and education requirements Correct answer.
  2. The salesperson may convert the salesperson's license to a broker's license by paying a fee only
  3. The salesperson must surrender the salesperson's license permanently before applying for a broker's license
  4. The salesperson may hold both licenses simultaneously without any additional requirements

Explanation

Maryland requires candidates for a broker's license to satisfy separate education and experience requirements in addition to passing the broker examination. A salesperson cannot simply pay a fee or hold both credentials without meeting those qualifications. The broker credential reflects a higher level of demonstrated experience and knowledge.

Question 32Maryland Real Estate License Law, Regulations, and Commission Operations

A Maryland broker permits an unlicensed person to negotiate the terms of a listing agreement with a seller. What is the Commission's likely view of this arrangement?

  1. Acceptable if the unlicensed person is paid a salary rather than a commission
  2. A violation because negotiating listing terms is brokerage activity reserved for licensees Correct answer.
  3. A violation only if the seller later complains to the Commission
  4. Acceptable because the broker remains responsible for the final agreement

Explanation

Negotiating the terms of a listing agreement is brokerage activity that Maryland law reserves for licensed persons. A broker's supervision does not authorize delegating that activity to an unlicensed employee, and the violation exists regardless of whether the seller complains. Compensation method does not change the licensing requirement.

Question 33Maryland Real Estate License Law, Regulations, and Commission Operations

A Maryland licensee wants to use a team name in advertising that differs from the brokerage's licensed name. Which practice is consistent with Commission advertising rules?

  1. Advertising the team name without any reference to the broker because teams are separate entities
  2. Advertising the team name only after the brokerage's license is placed on inactive status
  3. Advertising the team name together with the brokerage's licensed name Correct answer.
  4. Advertising the team name alone so consumers deal with a recognizable brand

Explanation

Maryland advertising rules require that advertising identify the brokerage with which the licensee is affiliated, so a team name must appear together with the licensed brokerage name. Advertising a team name alone can mislead consumers about which brokerage is responsible. Teams are not independent licensed entities under the brokerage.

Question 34Maryland Real Estate License Law, Regulations, and Commission Operations

A Maryland broker receives a written complaint from the Commission regarding a transaction. Which statement best describes the broker's obligation during the Commission's investigation?

  1. The broker may ignore the complaint because investigations are confidential and informal
  2. The broker may direct the salesperson involved to respond personally in place of the broker
  3. The broker may respond only after a formal hearing has been scheduled
  4. The broker must respond to the Commission's inquiries and may be required to produce transaction records Correct answer.

Explanation

Licensees are expected to cooperate with Commission investigations, including responding to inquiries and producing records the Commission is entitled to review. Ignoring the complaint or waiting for a hearing is not consistent with that duty. The broker of record bears responsibility for the brokerage's response.

Question 35Maryland Real Estate License Law, Regulations, and Commission Operations

A Maryland broker is reviewing the brokerage's handling of trust funds and wants to confirm the standard for recordkeeping. Which statement best reflects the Commission's expectation?

  1. Records need be kept only when a transaction closes with a commission paid
  2. Records may be discarded once the broker reconciles the bank statement each month
  3. Records of trust fund transactions must be maintained and available for Commission inspection Correct answer.
  4. Records may be kept solely in the broker's personal files rather than at the brokerage

Explanation

Maryland requires brokers to maintain records of trust fund transactions and to make them available for examination by the Commission. Recordkeeping is an ongoing compliance obligation, not something tied to closing or commission payment. Records must be maintained at the brokerage and preserved for the required period.

Question 36Maryland Real Estate License Law, Regulations, and Commission Operations

A Maryland licensee is considering whether a particular marketing practice complies with Commission regulations. Which approach best reflects how a prudent licensee should resolve the question?

  1. Delegate the decision to an unlicensed marketing assistant
  2. Proceed if the practice seems unlikely to draw a consumer complaint
  3. Consult the Commission's statutes and regulations and seek guidance before proceeding Correct answer.
  4. Rely on the practice of other local brokerages as the compliance standard

Explanation

Compliance in Maryland is measured against the Real Estate License Law and Commission regulations, not local custom or the likelihood of complaints. A prudent licensee reviews the governing rules and seeks guidance when uncertain before engaging in the practice. Delegating a compliance judgment to an unlicensed assistant is not appropriate.

Question 37Brokerage Practice, Agency Relationships, and Disclosures

Under Maryland law, when a real estate licensee's brokerage relationship with a seller is terminated, the licensee must retain records related to the transaction for how long?

  1. Five years from the date of the listing agreement's expiration
  2. One year from the date of settlement
  3. Seven years from the date of the initial contact with the client
  4. Three years from the date the brokerage relationship terminates Correct answer.

Explanation

Maryland regulations require a licensee to keep transaction records for at least three years following termination of the brokerage relationship. This retention period allows the Commission to audit compliance and gives parties a window to raise disputes.

Question 38Brokerage Practice, Agency Relationships, and Disclosures

A buyer contacts a listing agent directly to tour a home the agent has listed. Which statement best describes the agency relationship that arises?

  1. The agent automatically represents both parties as a dual agent once the buyer tours the home
  2. No agency relationship exists until the buyer submits a written offer
  3. The agent represents the seller, and the buyer is a customer unless a separate agreement is signed Correct answer.
  4. The agent becomes the buyer's agent because the buyer initiated the contact

Explanation

A listing agent owes agency duties to the seller, and a prospective buyer remains a customer until a written brokerage agreement creates representation. Simply touring a listed property does not shift or create agency for the buyer.

Question 39Brokerage Practice, Agency Relationships, and Disclosures

In Maryland, a licensee must provide a prospective client with a written disclosure of brokerage services at what point?

  1. Only when the prospective client requests it in writing
  2. At the time of the first offer presentation
  3. Before the licensee enters into a brokerage relationship with the prospective client Correct answer.
  4. Within three business days after the brokerage agreement is signed

Explanation

Maryland requires the disclosure of brokerage services to be delivered before the licensee enters into a brokerage relationship. This ensures the consumer understands representation options before committing to an agreement.

Question 40Brokerage Practice, Agency Relationships, and Disclosures

A seller tells her Maryland listing agent the lowest price she would accept. The agent reveals that figure to a buyer's agent. What is the most accurate characterization of the agent's conduct?

  1. It breaches the duty of confidentiality owed to the seller Correct answer.
  2. It is permissible if the agent believed it would help close the sale
  3. It breaches only if the seller had signed a dual agency consent form
  4. It is permissible because the agent did not disclose it to the buyer directly

Explanation

Confidential information obtained from a client, including the client's bottom-line price, must not be disclosed without authorization. Sharing it with another licensee violates the duty of confidentiality regardless of the agent's motive.

Question 41Brokerage Practice, Agency Relationships, and Disclosures

Which duty does a Maryland buyer's agent owe to the buyer under a brokerage relationship?

  1. Promoting the buyer's best interests in negotiations with sellers Correct answer.
  2. Guaranteeing that the property will appraise at the contract price
  3. Advising the buyer on the legal effect of contract contingencies
  4. Verifying the structural condition of the property for the buyer

Explanation

A buyer's agent owes loyalty and must promote the buyer's best interests in the transaction. The agent does not guarantee appraisal outcomes, act as a home inspector, or give legal advice.

Question 42Brokerage Practice, Agency Relationships, and Disclosures

A licensee represents both the seller and the buyer in the same transaction after both provide written informed consent. What type of relationship has been created?

  1. Dual agency Correct answer.
  2. Subagency
  3. Single agency
  4. Transaction brokerage

Explanation

When one licensee represents both parties to a transaction with their informed written consent, the arrangement is dual agency. Maryland permits it only with written consent from both clients.

Question 43Brokerage Practice, Agency Relationships, and Disclosures

In a Maryland dual agency situation, which action is prohibited for the dual agent?

  1. Explaining the terms of the purchase contract to both parties
  2. Providing comparable sales data to both parties
  3. Advocating for one party's position to the detriment of the other Correct answer.
  4. Coordinating inspections and settlement logistics for both parties

Explanation

A dual agent must remain neutral and cannot advocate for one client against the other. Providing factual information and coordinating the transaction are permitted, but advancing one side's interests is not.

Question 44Brokerage Practice, Agency Relationships, and Disclosures

A Maryland licensee is working with a buyer without any written brokerage agreement. How is the buyer best described?

  1. A customer to whom the licensee owes honesty and fairness but not full agency duties Correct answer.
  2. A subclient of the seller's broker
  3. A client owed the full duties of loyalty and confidentiality
  4. A dual client of the licensee's broker

Explanation

Without a written brokerage agreement, the buyer is a customer rather than a client. The licensee must treat the customer honestly and fairly but does not owe the fiduciary duties that accompany representation.

Question 45Brokerage Practice, Agency Relationships, and Disclosures

Before showing a property, a Maryland licensee gives a prospective buyer a brochure explaining agency options. The buyer declines to sign any agreement. What is the licensee's obligation regarding the disclosure?

  1. The licensee may skip the disclosure because no agreement was signed
  2. The licensee must obtain the buyer's signature or the disclosure is void
  3. The licensee has satisfied the disclosure requirement by delivering it before providing services Correct answer.
  4. The licensee must re-deliver the disclosure at settlement

Explanation

Maryland requires the brokerage services disclosure to be delivered to prospective clients before services are provided. Delivery, not the buyer's signature, satisfies the requirement, though documenting receipt is prudent.

Question 46Brokerage Practice, Agency Relationships, and Disclosures

A seller's agent learns during a listing appointment that the seller is planning a divorce. The agent later tells a buyer's agent about it. What duty has the agent most directly violated?

  1. Accounting
  2. Confidentiality Correct answer.
  3. Obedience
  4. Disclosure

Explanation

Personal information learned from a client, such as a planned divorce, is confidential and must not be shared without authorization. Divulging it to another licensee breaches the duty of confidentiality.

Question 47Brokerage Practice, Agency Relationships, and Disclosures

A Maryland broker designates one affiliated licensee to represent the seller and another to represent the buyer in the same transaction. What is this arrangement called?

  1. Subagency
  2. Transactional brokerage
  3. Dual agency
  4. Designated agency Correct answer.

Explanation

Designated agency allows a broker to assign different licensees to represent each party, so no single licensee serves two masters. Each designated agent owes full duties to only one client.

Question 48Brokerage Practice, Agency Relationships, and Disclosures

In a designated agency arrangement, which duty does each designated licensee owe to the party they do not represent?

  1. Full loyalty and confidentiality as if a client
  2. A duty to negotiate on that party's behalf
  3. Honesty and fair dealing without fiduciary duties Correct answer.
  4. No duties of any kind

Explanation

A designated agent represents only their assigned client and owes the other party honesty and fair dealing. The non-client is not owed fiduciary duties such as loyalty or confidentiality.

Question 49Brokerage Practice, Agency Relationships, and Disclosures

A Maryland licensee lists a property and, during the listing period, buys it personally through an entity the licensee controls. What must the licensee do?

  1. Disclose the licensee's interest in the purchase to the seller in writing Correct answer.
  2. Obtain the broker's oral approval before making the offer
  3. Nothing, because the licensee used a separate entity
  4. Wait until the listing expires before making any offer

Explanation

A licensee who acquires an interest in a listed property must disclose that interest to the seller in writing. Using a separate entity does not eliminate the conflict or the disclosure obligation.

Question 50Brokerage Practice, Agency Relationships, and Disclosures

A Maryland listing agent wants to show the seller's home to a prospective buyer who is the agent's cousin. What is the appropriate course of action?

  1. Disclose the relationship to the seller and proceed with the showing Correct answer.
  2. Transfer the listing to another broker immediately
  3. Show the home without mentioning the relationship
  4. Refuse to show the home to any relative

Explanation

A potential conflict arising from a personal relationship with a buyer should be disclosed to the seller so the seller can make an informed decision. Disclosure, not automatic withdrawal, is the appropriate response.