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MD Real Estate practice questions

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Question 1Licensing and Regulation (Maryland Real Estate Commission, license law, broker/salesperson duties)

Under Maryland license law, which of the following activities requires a real estate license?

  1. An owner who sells her own home without help from a licensee
  2. A receiver selling property under a court order
  3. An attorney who prepares a deed as part of legal representation
  4. A person who negotiates a lease for another party for a fee Correct answer.

Explanation

Maryland requires a real estate license for anyone who, for compensation, lists, sells, buys, leases, or negotiates on behalf of another person. The statute exempts owners acting for themselves, attorneys performing legal work, and court-appointed officers selling under court authority.

Question 2Licensing and Regulation (Maryland Real Estate Commission, license law, broker/salesperson duties)

A Maryland real estate salesperson license authorizes the holder to perform brokerage activities only when affiliated with which of the following?

  1. The Maryland Real Estate Commission directly
  2. A licensed Maryland real estate broker Correct answer.
  3. Any other licensed Maryland salesperson
  4. A Maryland title company approved by the Commission

Explanation

A salesperson license is always tied to a sponsoring broker, and the salesperson performs brokerage work under that broker's supervision. The broker, not a fellow salesperson or an outside company, is accountable for the salesperson's licensed activity.

Question 3Licensing and Regulation (Maryland Real Estate Commission, license law, broker/salesperson duties)

A Maryland salesperson earns a commission on a closing. Who must pay the salesperson's share?

  1. The title company handling the closing
  2. Either party to the transaction as agreed in the contract
  3. The broker with whom the salesperson is affiliated Correct answer.
  4. The seller at settlement

Explanation

All compensation for a salesperson's brokerage work must flow through the affiliated broker, who then pays the salesperson under their agreement. A salesperson may not accept a commission or fee directly from a client or from another party to the transaction.

Question 4Licensing and Regulation (Maryland Real Estate Commission, license law, broker/salesperson duties)

How often must a Maryland real estate license be renewed?

  1. Every 2 years Correct answer.
  2. Every 1 year
  3. Every 4 years
  4. Every 3 years

Explanation

Maryland issues real estate licenses for a two-year term, and licensees renew biennially. Continuing education must be completed within each renewal cycle.

Question 5Licensing and Regulation (Maryland Real Estate Commission, license law, broker/salesperson duties)

How much approved pre-licensing education must a Maryland salesperson applicant complete?

  1. 60 hours Correct answer.
  2. 135 hours
  3. 30 hours
  4. 90 hours

Explanation

A Maryland salesperson applicant must complete 60 clock hours of approved real estate instruction before licensure. The larger 135-hour requirement applies to broker applicants, not salespersons.

Question 6Licensing and Regulation (Maryland Real Estate Commission, license law, broker/salesperson duties)

What is the purpose of the Maryland Real Estate Guaranty Fund?

  1. To pay commission disputes between competing brokers
  2. To fund the Commission's day-to-day operating budget
  3. To reimburse consumers harmed by a licensee's fraud Correct answer.
  4. To cover a broker's operating losses in a slow market

Explanation

The Guaranty Fund protects consumers who are harmed by a licensee's fraud or dishonest dealing and who cannot collect a court judgment. Payment generally requires an unsatisfied judgment, and a licensee whose conduct caused the payout may have to repay the fund.

Question 7Licensing and Regulation (Maryland Real Estate Commission, license law, broker/salesperson duties)

A licensee is asked to represent both the buyer and the seller in the same transaction. What must the licensee obtain before acting as a dual agent in Maryland?

  1. Prior approval of the transaction from the Commission
  2. Written consent from the seller only, since the seller pays the fee
  3. Verbal permission from each party, noted in the file
  4. Written consent from both parties after full disclosure Correct answer.

Explanation

Maryland permits dual agency only when both the buyer and the seller give written, informed consent after disclosure of what dual agency means. Without that consent the licensee cannot represent both sides of the transaction.

Question 8Licensing and Regulation (Maryland Real Estate Commission, license law, broker/salesperson duties)

Which combination generally satisfies the experience and education requirements for a Maryland real estate broker license?

  1. Five years of salesperson experience with no further education
  2. A bachelor's degree and one year in a brokerage office
  3. One year of salesperson experience and 60 hours of education
  4. Three years of experience and 135 hours of education Correct answer.

Explanation

A Maryland broker applicant must document at least three years of active experience as a licensed salesperson, together with 135 hours of approved broker-level pre-licensing education. The education requirement is significantly greater than the 60 hours required of salespersons.

Question 9Licensing and Regulation (Maryland Real Estate Commission, license law, broker/salesperson duties)

How much continuing education must a Maryland licensee complete in each two-year renewal cycle?

  1. 15 hours, including ethics and fair housing Correct answer.
  2. 24 hours of any approved topic
  3. 6 hours of any approved topic
  4. 12 hours, including 6 hours of brokerage management

Explanation

Maryland requires 15 clock hours of approved continuing education per two-year cycle. The hours must include at least 3 hours of ethics instruction and 3 hours of fair housing instruction.

Question 10Licensing and Regulation (Maryland Real Estate Commission, license law, broker/salesperson duties)

Which statement describes the required form of an exclusive brokerage agreement in Maryland?

  1. It must be notarized and recorded among the land records of the county
  2. It must be filed with the Commission within thirty days of the parties signing it
  3. It may be made orally if the parties confirm the terms by email within ten days
  4. It must be written, include a definite end date, and be copied to the client Correct answer.

Explanation

An exclusive brokerage agreement in Maryland must be in writing and must state a definite termination date, and the client must receive a copy. Oral exclusives of unlimited duration are not enforceable.

Question 11Licensing and Regulation (Maryland Real Estate Commission, license law, broker/salesperson duties)

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

  1. Delivering documents and scheduling appointments for a licensee Correct answer.
  2. Holding an open house and quoting the listed price to visitors
  3. Negotiating counteroffer terms with a prospective buyer
  4. Advising a seller on how to respond to a low offer

Explanation

Unlicensed assistants may perform clerical and administrative work such as delivering documents and scheduling appointments. They may not perform any activity that requires a license, including quoting terms, negotiating, or advising clients on price.

Question 12Licensing and Regulation (Maryland Real Estate Commission, license law, broker/salesperson duties)

A Maryland licensee wants to pay a $250 referral fee to an unlicensed friend who introduced a buyer. How does Maryland license law treat this payment?

  1. Prohibited, because a licensee may not split fees with an unlicensed person Correct answer.
  2. Permitted, if the licensee first discloses the payment to the client in writing
  3. Permitted, because the payment is below the $500 threshold set by the Commission
  4. Permitted, if the friend is a relative of the buyer or the seller

Explanation

A licensee may not pay any part of a brokerage fee to an unlicensed person for referring or producing a buyer, seller, or property. Disclosure to the client, the amount involved, and family relationships do not create exceptions.

Question 13Licensing and Regulation (Maryland Real Estate Commission, license law, broker/salesperson duties)

Which action is within the Maryland Real Estate Commission's authority when a licensee violates the license law?

  1. Order the licensee to complete the pending transaction at once
  2. Sentence the licensee to a term of imprisonment
  3. Suspend or revoke the license, or impose a civil penalty Correct answer.
  4. Award money damages to the consumer who filed the complaint

Explanation

The Commission's sanctions are administrative: it may reprimand, suspend, or revoke a license, impose a civil penalty, or require additional education. It does not award damages, compel a transaction to close, or impose criminal sentences.

Question 14Licensing and Regulation (Maryland Real Estate Commission, license law, broker/salesperson duties)

Which transfer is exempt from Maryland's residential property disclosure requirement?

  1. A sale by a lender that acquired the property through foreclosure Correct answer.
  2. A sale of a single family home by its owner-occupant
  3. A sale of a townhouse by an investor who has never occupied the unit
  4. A sale of a condominium unit by its owner

Explanation

The disclosure statute covers most transfers of single family residential property, including condominiums and investor-owned homes. It carves out certain transfers, such as a sale by a lender that took the property through foreclosure or deed in lieu, court-ordered transfers, and transfers to a government unit.

Question 15Licensing and Regulation (Maryland Real Estate Commission, license law, broker/salesperson duties)

When must a Maryland licensee give a prospective client the agency disclosure explaining who represents whom?

  1. At the earliest practicable opportunity, before services begin Correct answer.
  2. Only at settlement, together with the closing documents
  3. Only after the buyer and seller sign a written contract
  4. Within thirty days after the licensee's first showing of the property

Explanation

The agency disclosure must be provided at the earliest practicable opportunity and before brokerage services are rendered, so the consumer understands whom the licensee represents. Waiting until a showing, a contract, or settlement defeats the purpose of the disclosure.

Question 16Licensing and Regulation (Maryland Real Estate Commission, license law, broker/salesperson duties)

Which item must appear in advertising placed by a Maryland salesperson?

  1. The seller's asking price and the commission being offered
  2. Prior written approval from the Commission before publication
  3. The salesperson's license number, without naming the affiliated brokerage
  4. The name of the brokerage with which the salesperson is affiliated Correct answer.

Explanation

A salesperson advertises under the supervision of the affiliated broker, so the advertising must identify the brokerage. Advertising that hides the broker's identity does not satisfy the requirement.

Question 17Licensing and Regulation (Maryland Real Estate Commission, license law, broker/salesperson duties)

A Maryland broker receives a $5,000 earnest money deposit on a listing. How must the broker handle the funds?

  1. Deposit it in a trust account, uncommingled with the broker's funds Correct answer.
  2. Apply it immediately to the broker's commission once the offer is accepted
  3. Deposit it in the broker's general operating account until closing
  4. Give it to the salesperson who wrote the contract for safekeeping

Explanation

Trust money must be held in a separate trust account and may not be commingled with the broker's own funds. A broker also cannot convert the deposit to commission before the parties are entitled to disbursement.

Question 18Licensing and Regulation (Maryland Real Estate Commission, license law, broker/salesperson duties)

What does a Maryland broker's supervisory responsibility for affiliated licensees require?

  1. Guaranteeing that each transaction will close on schedule
  2. Reviewing files once a year, because licensees act independently of the broker
  3. Supervising affiliated licensees' activities and answering for lapses Correct answer.
  4. Accompanying every affiliated licensee to every showing

Explanation

A broker must exercise reasonable supervision over the brokerage activities of affiliated licensees, and the Commission may discipline a broker who fails to do so. The duty is one of oversight, not personal attendance at every showing or a guarantee of results.

Question 19Licensing and Regulation (Maryland Real Estate Commission, license law, broker/salesperson duties)

What must an applicant for a Maryland real estate license submit as part of the application?

  1. Fingerprints for a criminal history records check Correct answer.
  2. Three letters of recommendation from licensed brokers
  3. A credit score of at least 650
  4. A surety bond equal to one year of expected commissions

Explanation

Maryland requires applicants to be fingerprinted so the Commission can obtain state and federal criminal history records before licensure. A surety bond, broker references, and a minimum credit score are not licensing prerequisites.

Question 20Licensing and Regulation (Maryland Real Estate Commission, license law, broker/salesperson duties)

After a brokerage relationship with a client ends, which duty continues?

  1. Obedience to every lawful instruction the former client gave
  2. Confidentiality of information learned during the relationship Correct answer.
  3. Obtaining the best possible price for the former client
  4. Full advocacy for the former client in any later negotiation

Explanation

Fiduciary duties such as obedience, loyalty, and advocacy end when the brokerage relationship ends. The duty to keep the former client's confidential information confidential continues afterward.

Question 21Licensing and Regulation (Maryland Real Estate Commission, license law, broker/salesperson duties)

A licensee listing a home learns from the seller that the basement floods every spring. What does Maryland law require of the licensee?

  1. Disclosure after the contract is ratified, at the inspection stage
  2. The licensee must disclose the known material defect to the buyer Correct answer.
  3. Disclosure only if the buyer asks about the basement
  4. Nothing, because only the seller completes the disclosure statement

Explanation

A licensee must disclose known material defects or latent conditions to prospective buyers. The seller's written disclosure statement supplements but does not replace the licensee's own duty of honesty and disclosure.

Question 22Licensing and Regulation (Maryland Real Estate Commission, license law, broker/salesperson duties)

A broker has written dual agency consent from both parties. Which arrangement does Maryland law permit under that consent?

  1. The broker represents both and may reveal the seller's minimum price
  2. A single agent represents both parties while keeping both confidences
  3. The broker refers the buyer to an unaffiliated broker without consent
  4. The broker assigns one licensee to the buyer and one to the seller Correct answer.

Explanation

With written consent to dual agency, a Maryland broker may designate one affiliated licensee to represent the buyer and another to represent the seller. Each designated agent serves only its own client, while the broker remains a dual agent with limited duties to both.

Question 23Licensing and Regulation (Maryland Real Estate Commission, license law, broker/salesperson duties)

A consumer holds an unpaid court judgment against a Maryland licensee for fraud. What must exist before the Real Estate Guaranty Fund can pay the claim?

  1. A Commission order revoking the licensee's license before any payment
  2. An unsatisfied court judgment, plus a claim filed with the Commission Correct answer.
  3. A complaint first filed with the local association of realtors
  4. A waiting period of five years from the transaction date

Explanation

The Guaranty Fund is a last resort for consumers who have reduced a fraud or dishonest-dealing claim to a court judgment that cannot be collected. The consumer then files a claim with the Commission, which administers the fund.

Question 24Licensing and Regulation (Maryland Real Estate Commission, license law, broker/salesperson duties)

A person whose Maryland salesperson license has lapsed continues to list and sell homes for a broker. What is the legal consequence?

  1. Only the broker is liable; the unlicensed person faces no penalty
  2. The person is practicing unlicensed and may face criminal penalties Correct answer.
  3. The transactions are valid if the broker reviews the file afterward
  4. The person may pay a fine to the Commission and keep the commissions

Explanation

Practicing brokerage without a valid license is a violation that can carry criminal penalties for the unlicensed individual. The broker who engages or permits an unlicensed person to perform brokerage activity is also subject to Commission discipline.

Question 25Agency and Brokerage Relationships (required written brokerage agreements, disclosure of agency, fiduciary duties)

Before listing her house, a seller tells her listing licensee that she will accept $25,000 below the asking price because she must relocate. When a buyer's agent asks whether the seller is flexible on price, the listing licensee should:

  1. share it with the buyer's agent and ask for discretion
  2. disclose the seller's bottom line to encourage an offer
  3. keep the seller's price floor confidential Correct answer.
  4. reveal it only after the buyer submits a written offer

Explanation

A licensee owes the client undivided loyalty, which includes protecting the client's bargaining position and confidential information. A seller's willingness to accept less is confidential and may not be passed to the other side, even to help a deal along.

Question 26Agency and Brokerage Relationships (required written brokerage agreements, disclosure of agency, fiduciary duties)

A Maryland licensee must deliver the written agency disclosure form (the consumer notice describing whom agents represent) to a prospective buyer no later than:

  1. the loan application date
  2. the home inspection
  3. the signing of the sales contract
  4. the first scheduled meeting with the licensee Correct answer.

Explanation

Maryland requires the written agency disclosure to be given to a prospective buyer or seller at the first scheduled meeting with the licensee, so the consumer knows from the outset whom the licensee represents. Later delivery defeats the purpose of informed consent.

Question 27Agency and Brokerage Relationships (required written brokerage agreements, disclosure of agency, fiduciary duties)

A licensee may act as a dual agent in a Maryland transaction only when:

  1. the seller alone approves the arrangement in the listing
  2. both parties give written consent after full disclosure Correct answer.
  3. the buyer is not represented by another licensee
  4. the broker supervises the transaction personally

Explanation

Dual agency is permitted only with the informed written consent of both the buyer and the seller, obtained after the licensee explains the consequences of the dual role. Consent from one side alone is insufficient.

Question 28Agency and Brokerage Relationships (required written brokerage agreements, disclosure of agency, fiduciary duties)

At a brokerage's open house, a visitor who has signed no agreement asks the host licensee to help him decide whether to offer $20,000 under the list price. In Maryland, the visitor is:

  1. a client, because the licensee is giving him advice
  2. a customer owed honesty, not loyalty Correct answer.
  3. a dual client of the brokerage
  4. a subclient of the listing broker

Explanation

The host licensee represents the seller, so an unrepresented visitor is a customer. A licensee owes customers honest dealing and disclosure of material facts, but not the fiduciary loyalty and advocacy owed to a client.

Question 29Agency and Brokerage Relationships (required written brokerage agreements, disclosure of agency, fiduciary duties)

In Maryland, a licensed salesperson may be paid a commission for brokerage services by:

  1. a cooperating broker directly
  2. any licensed referral company
  3. only the broker with whom the salesperson is affiliated Correct answer.
  4. either party to the transaction, as agreed

Explanation

A salesperson licensee may not be compensated directly by a client or another broker; compensation flows through the broker with whom the licensee is affiliated. The broker then pays the salesperson under their arrangement.

Question 30Agency and Brokerage Relationships (required written brokerage agreements, disclosure of agency, fiduciary duties)

A broker and a seller agree orally on a 90-day exclusive right-to-sell listing, but no writing is signed. The seller then sells the home through a different broker. The first broker's claim for a commission will most likely:

  1. fail, because such a commission agreement must be in writing Correct answer.
  2. succeed, because exclusive listings need no writing
  3. fail, unless the broker proves the buyer was procured
  4. succeed, because the oral agreement fixed the commission

Explanation

An agreement to pay compensation for the sale of an interest in real estate falls within the statute of frauds and must be in writing and signed to be enforceable. Proof of procuring a buyer does not overcome the writing requirement.

Question 31Agency and Brokerage Relationships (required written brokerage agreements, disclosure of agency, fiduciary duties)

A buyer client hands her licensee a $10,000 earnest money check made payable to the brokerage. The licensee must:

  1. deposit it in the broker's escrow account Correct answer.
  2. apply it to the brokerage's commission at settlement
  3. hold the check in a desk drawer until closing
  4. endorse it over to the seller immediately

Explanation

Funds belonging to others must be handled as the contract directs and held by the broker in a proper escrow or trust account. The duty to account for client money is a fiduciary duty, and commingling or holding funds casually is prohibited.

Question 32Agency and Brokerage Relationships (required written brokerage agreements, disclosure of agency, fiduciary duties)

A licensee with a signed exclusive buyer agency agreement takes her client to a listing. The listing agent asks, "Whose client is he?" The buyer's licensee should:

  1. say she represents the seller to keep the deal smooth
  2. say she represents both parties
  3. decline to answer to protect her client's privacy
  4. say she represents the buyer Correct answer.

Explanation

A licensee must accurately disclose whom she represents when dealing with another licensee. Misstating the agency relationship would mislead the listing side and breach the disclosure duty.

Question 33Agency and Brokerage Relationships (required written brokerage agreements, disclosure of agency, fiduciary duties)

In a transaction where the brokerage is a consented dual agent, the licensee learns that the seller would accept $15,000 less than the list price. The licensee may:

  1. tell the buyer so the deal closes faster
  2. hint that the buyer should offer below list
  3. tell the buyer only if the seller is present
  4. not reveal the seller's position to the buyer Correct answer.

Explanation

A dual agent may not disclose either party's confidential information, including price motivation, and may not advocate for one side over the other on price. The dual agent facilitates the transaction and must advise both parties to protect their own interests.

Question 34Agency and Brokerage Relationships (required written brokerage agreements, disclosure of agency, fiduciary duties)

Two licensees with the same broker represent the seller and the buyer in the same transaction as intra-company agents. This arrangement is permitted only if:

  1. the buyer pays the brokerage directly
  2. both parties give written consent after disclosure Correct answer.
  3. the two licensees agree between themselves
  4. the seller's listing agreement is nonexclusive

Explanation

Maryland permits intra-company agency, in which individual licensees within one firm serve separate parties while the broker is treated as a dual agent. The arrangement requires written consent from both the buyer and the seller after the relationship is explained.

Question 35Agency and Brokerage Relationships (required written brokerage agreements, disclosure of agency, fiduciary duties)

A seller instructs his listing licensee to stop showing the home to buyers of a particular religion. The licensee should:

  1. resign the listing without explanation
  2. follow the instruction because obedience is a fiduciary duty
  3. follow it but document the seller's request
  4. refuse, because obedience covers only lawful instructions Correct answer.

Explanation

The fiduciary duty of obedience extends only to the client's lawful instructions. A licensee must not follow an instruction that would violate fair housing law, and should explain to the seller why the instruction cannot be carried out.

Question 36Agency and Brokerage Relationships (required written brokerage agreements, disclosure of agency, fiduciary duties)

A listing licensee learns the basement takes on water every spring. The seller says, "Don't mention it; it's not on the disclosure form." The licensee must:

  1. tell only buyers who ask directly
  2. disclose the water problem to prospective buyers Correct answer.
  3. wait until a buyer makes an offer
  4. stay silent because the seller decides what to disclose

Explanation

A licensee owes a duty to disclose latent material defects to all parties in the transaction, regardless of the seller's wishes. The seller's preference cannot override the licensee's own disclosure obligation.

Question 37Agency and Brokerage Relationships (required written brokerage agreements, disclosure of agency, fiduciary duties)

Two years after a buyer agency agreement ended, the former client's licensee is asked by a new client about the former client's finances. The licensee should:

  1. answer if the former client never asked for confidentiality
  2. keep it confidential; the duty survives termination Correct answer.
  3. answer, because the agency agreement has expired
  4. answer if the questions come from another licensee

Explanation

The duty of confidentiality does not end when the brokerage agreement ends; it continues after termination of the agency. Information learned in the course of the representation may not be used against or revealed about the former client.

Question 38Agency and Brokerage Relationships (required written brokerage agreements, disclosure of agency, fiduciary duties)

A buyer's licensee will be paid a cooperating share of the commission offered in the MLS listing. This means the licensee:

  1. still represents the buyer under the buyer agency agreement Correct answer.
  2. owes no duties to the buyer
  3. represents the seller because the seller pays
  4. is a dual agent by operation of law

Explanation

Who pays the cooperating fee does not determine whom the licensee represents. A licensee working under a buyer agency agreement represents the buyer even when the compensation comes from the listing side.

Question 39Agency and Brokerage Relationships (required written brokerage agreements, disclosure of agency, fiduciary duties)

A seller signs an exclusive agency listing (not an exclusive right to sell) and then finds a buyer herself without any help from the broker. The seller:

  1. owes half the commission as a compromise
  2. owes no commission under an exclusive agency listing Correct answer.
  3. owes the full commission because all listings are exclusive
  4. owes a commission only if the buyer was shown the home

Explanation

Under an exclusive agency listing, the broker is paid only if the broker or another broker procures the buyer; a sale the owner makes personally is not commissionable. Under an exclusive right to sell, by contrast, the broker would be paid regardless of who found the buyer.

Question 40Agency and Brokerage Relationships (required written brokerage agreements, disclosure of agency, fiduciary duties)

Under Maryland rules governing licensed real estate teams, an advertisement for a team must:

  1. name the brokerage with which the team is affiliated Correct answer.
  2. list the license number of every team member
  3. use the team name in place of the brokerage name
  4. be approved by the Maryland Real Estate Commission before use

Explanation

Team advertising must identify the affiliated brokerage so the public knows which firm is responsible for the team's brokerage services. Teams must also be registered with the Commission, but prior approval of each advertisement is not required.

Question 41Agency and Brokerage Relationships (required written brokerage agreements, disclosure of agency, fiduciary duties)

A licensee promises to pay a $500 referral fee out of her commission to an unlicensed friend who introduced a buyer. Under Maryland law this payment is:

  1. permitted if the broker approves the payment in writing
  2. permitted because it comes from the licensee's own share
  3. permitted if the friend signs a written receipt
  4. prohibited, since the friend holds no license Correct answer.

Explanation

A licensee may not share compensation for brokerage services with an unlicensed person, even when the money comes from the licensee's own commission, because it would allow unlicensed brokerage activity. Written receipts or broker approval do not change this rule.

Question 42Agency and Brokerage Relationships (required written brokerage agreements, disclosure of agency, fiduciary duties)

A licensee wants to buy a home listed by another brokerage. Before the contract is accepted, the licensee must:

  1. refer the purchase to a colleague at her own brokerage
  2. disclose in writing that the buyer is a licensee Correct answer.
  3. do nothing, because the licensee is acting as a consumer
  4. collect the cooperating commission herself

Explanation

A licensee purchasing property for his own account must disclose in writing that he holds a real estate license, so the other party knows the buyer has professional knowledge of the transaction. The disclosure belongs in the contract or an accompanying writing before acceptance.

Question 43Agency and Brokerage Relationships (required written brokerage agreements, disclosure of agency, fiduciary duties)

In Maryland, when a salesperson signs a brokerage agreement with a seller, the agency relationship created is between the seller and:

  1. the Maryland Real Estate Commission
  2. the salesperson personally
  3. the broker with whom the salesperson is affiliated Correct answer.
  4. the salesperson's team leader

Explanation

The brokerage agreement creates an agency relationship with the broker, and the affiliated salesperson acts on the broker's behalf. The broker is responsible for supervising the licensees who carry out the brokerage services.

Question 44Agency and Brokerage Relationships (required written brokerage agreements, disclosure of agency, fiduciary duties)

A seller revokes his exclusive right-to-sell listing in the middle of its term without cause. Which statement is correct?

  1. Revocation ends all of the broker's rights, so no claim can survive
  2. The seller may revoke, but may owe the broker damages for breach Correct answer.
  3. The seller cannot revoke; the listing is irrevocable for its term
  4. Revocation is effective only if the broker agrees in writing

Explanation

The client holds the power to revoke the agent's authority at any time, but exercising that power without justification can be a breach of the brokerage agreement. The broker's remedy is then a claim for damages or commission under the contract.

Question 45Agency and Brokerage Relationships (required written brokerage agreements, disclosure of agency, fiduciary duties)

After a listing expires, the same licensee is hired by a buyer who wants to purchase that former client's home. The licensee may represent the buyer only if she:

  1. pays the former seller any commission earned in the new transaction
  2. obtains the former seller's written consent to the new representation
  3. avoids using confidential information from the former listing Correct answer.
  4. waits until one year has passed since the listing expired

Explanation

Confidentiality owed to a former client continues after the listing ends. The licensee may act for the buyer only so long as she does not use or reveal information acquired during the former representation to the former client's disadvantage.

Question 46Agency and Brokerage Relationships (required written brokerage agreements, disclosure of agency, fiduciary duties)

A buyer signs a six-month exclusive buyer agency agreement. In month three he buys, with no help from the licensee, a home his cousin was selling. Under the usual terms of that agreement, the licensee is:

  1. entitled to the agreed compensation during the term Correct answer.
  2. entitled to compensation only if the licensee showed him the home
  3. entitled to nothing, because the licensee procured no sale
  4. entitled to compensation from the cousin's side only

Explanation

An exclusive buyer agency agreement entitles the broker to the agreed compensation when the buyer purchases property during the term of the agreement, even if the licensee did not locate or show that property. The exclusivity, not the licensee's efforts, drives the result.

Question 47Agency and Brokerage Relationships (required written brokerage agreements, disclosure of agency, fiduciary duties)

The licensee's spouse owns the title company she routinely recommends to her buyer clients. To comply with her agency duties, the licensee should:

  1. disclose the interest and let clients choose freely Correct answer.
  2. make the disclosure only if a client asks about the ownership
  3. disclose the relationship after settlement closes
  4. stop recommending any title company to clients

Explanation

A licensee must disclose any personal or financial interest that could influence her recommendations, and must leave the consumer free to select a provider. Concealing the relationship breaches the duties of loyalty and disclosure.

Question 48Agency and Brokerage Relationships (required written brokerage agreements, disclosure of agency, fiduciary duties)

A one-year exclusive right-to-sell listing expires. It contains a provision that the broker will be paid if, within 90 days after expiration, the seller sells to a buyer the broker registered with the seller during the term. The seller sells 45 days after expiration to a buyer on that registered list. The broker is:

  1. entitled to compensation only if the broker re-lists the home
  2. not entitled to compensation, because the listing has expired
  3. entitled to half the commission as a matter of law
  4. entitled to compensation under the extension clause Correct answer.

Explanation

An extension or protected-buyer clause carries the broker's commission right beyond the listing term for buyers the broker identified and registered as the contract requires. Because the sale occurred within 90 days to a protected buyer, the clause controls.

Question 49Contracts and Transaction Documents (listing and buyer-broker agreements, purchase contracts, contingencies, disclosures)

A buyer and seller orally agree on every term for the sale of a Maryland townhouse, and the buyer hands the seller a deposit check. What is the effect of this agreement?

  1. It is enforceable if a licensed agent overheard the conversation.
  2. It is unenforceable because there is no writing signed by the party to be charged. Correct answer.
  3. It is enforceable because oral agreements are valid for homes in Maryland.
  4. It is enforceable because the buyer's deposit is partial performance.

Explanation

Maryland's statute of frauds requires a contract for the sale of land to be in writing and signed by the party against whom enforcement is sought. Paying a deposit, without a signed writing, does not satisfy that requirement.

Question 50Contracts and Transaction Documents (listing and buyer-broker agreements, purchase contracts, contingencies, disclosures)

A seller gives a broker an exclusive-right-to-sell listing, then personally finds a ready, willing, and able buyer during the listing term. What is the broker entitled to?

  1. Nothing, because the seller, not the broker, procured the buyer.
  2. Only out-of-pocket advertising expenses.
  3. The full agreed commission, because the listing was exclusive. Correct answer.
  4. Half the agreed commission, since the seller did the work.

Explanation

An exclusive-right-to-sell listing entitles the broker to the agreed compensation if the property sells during the term, regardless of who produced the buyer, including the seller.