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NH Real Estate practice questions

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Question 1New Hampshire Real Estate License Law and Administrative Rules

Under New Hampshire law, a person must hold a real estate license in order to:

  1. collect a fee for brokering the sale of a home Correct answer.
  2. lease an apartment as a tenant
  3. buy a home for personal use
  4. record a deed at the registry of deeds

Explanation

New Hampshire licensing law covers anyone who, for another and for compensation, negotiates or assists in the sale, purchase, exchange, or leasing of real estate. Consumers acting for themselves and owners selling their own property fall outside the licensing requirement.

Question 2New Hampshire Real Estate License Law and Administrative Rules

Which person may sell real property in New Hampshire without holding a real estate license?

  1. A property manager who leases units for a fee
  2. An unlicensed assistant who hosts open houses
  3. An owner selling her own home Correct answer.
  4. A person who negotiates a sale for a friend for a fee

Explanation

An owner may market and sell her own property without a license because the licensing statute regulates brokerage activity performed for another for compensation. Anyone who performs those services for a fee on behalf of someone else must be licensed.

Question 3New Hampshire Real Estate License Law and Administrative Rules

A licensed New Hampshire salesperson who earns a commission on a closed sale is paid by:

  1. the title company holding escrow
  2. the buyer, at closing
  3. the cooperating broker who brought the buyer
  4. the salesperson's managing broker Correct answer.

Explanation

A salesperson is licensed under a broker and may be compensated only by that broker. Commission money earned in the transaction is paid to the brokerage and then shared with the salesperson by the managing broker.

Question 4New Hampshire Real Estate License Law and Administrative Rules

Every real estate brokerage office in New Hampshire must be:

  1. supervised by a licensed broker Correct answer.
  2. open to the public at least 30 hours each week
  3. staffed by at least two licensed salespersons
  4. located in a commercially zoned district

Explanation

Each brokerage office must have a licensed broker in charge who supervises the activities of affiliated licensees at that location. The Commission holds the supervising broker accountable for the office's operations and compliance.

Question 5New Hampshire Real Estate License Law and Administrative Rules

A New Hampshire licensee's advertisement offering a listed property for sale must include:

  1. the seller's asking price
  2. the square footage of the dwelling
  3. the name of the brokerage firm Correct answer.
  4. the license number of the listing agent

Explanation

Advertising rules require that a licensee's ads identify the brokerage firm so the public knows which licensed entity stands behind the offer of services. Advertising a property without naming the brokerage is treated as a prohibited blind advertisement.

Question 6New Hampshire Real Estate License Law and Administrative Rules

The New Hampshire Real Estate Commission has authority to:

  1. set appraised values for property tax purposes
  2. discipline licensed brokers and salespersons Correct answer.
  3. decide title disputes between buyers and sellers
  4. set the commission rate brokers may charge

Explanation

The Commission administers the real estate licensing statute and may investigate complaints, hold hearings, and impose discipline on licensees. It does not set fees, resolve private title disputes, or perform municipal tax assessments.

Question 7New Hampshire Real Estate License Law and Administrative Rules

In New Hampshire, the commission a broker charges for listing a home is:

  1. negotiated between the broker and the seller Correct answer.
  2. fixed at a standard percentage by local practice
  3. set by the Real Estate Commission's fee schedule
  4. capped by statute at six percent

Explanation

Commission rates are set by negotiation between the broker and the client. Publishing, agreeing on, or adhering to a standard rate among competitors would violate antitrust law, and the Commission does not regulate the amount.

Question 8New Hampshire Real Estate License Law and Administrative Rules

To be enforceable in New Hampshire, a contract employing a broker to sell real property must be:

  1. approved by the Real Estate Commission
  2. notarized by a licensed attorney
  3. filed with the registry of deeds
  4. in writing and signed by the party to be charged Correct answer.

Explanation

An agreement to pay a broker a commission for selling real property falls within the statute of frauds, so it must be in writing and signed by the party to be charged. Recording or agency approval is not required for enforceability.

Question 9New Hampshire Real Estate License Law and Administrative Rules

Earnest money that a New Hampshire broker holds on behalf of a buyer must be:

  1. returned to the buyer if closing has not occurred within 30 days
  2. held in the salesperson's personal account until closing
  3. kept in a separate trust account Correct answer.
  4. deposited into the broker's general operating account

Explanation

A broker who holds money belonging to others must keep it in a separate trust account rather than in the broker's own operating funds. Segregating the funds protects the parties and makes the money identifiable if the transaction fails.

Question 10New Hampshire Real Estate License Law and Administrative Rules

A broker deposits a client's security deposit into the same account used to pay office payroll. This practice is best described as:

  1. novation
  2. subagency
  3. commingling Correct answer.
  4. designated agency

Explanation

Mixing client trust funds with the broker's personal or business money is commingling, a violation of the license law. Trust funds must be kept in a dedicated account at all times.

Question 11New Hampshire Real Estate License Law and Administrative Rules

Before a New Hampshire brokerage can act as a dual agent in a transaction, it must:

  1. refer one of the parties to another brokerage
  2. reduce its commission by half
  3. obtain approval from the Real Estate Commission
  4. obtain the written consent of both parties Correct answer.

Explanation

Dual agency means the brokerage represents both sides in a transaction with conflicting interests, so both parties must give informed written consent. Without that consent, the brokerage must limit its representation to one side.

Question 12New Hampshire Real Estate License Law and Administrative Rules

When a broker takes a listing on a seller's home, the broker's fiduciary duties are owed to:

  1. the seller who signed the listing agreement Correct answer.
  2. the lender financing the purchase
  3. the listing salesperson
  4. the buyer who ultimately purchases the home

Explanation

In a listing, the seller is the broker's client, and the broker owes that seller fiduciary duties such as loyalty, confidentiality, and full disclosure. A buyer represented by another brokerage is owed honesty and fair dealing rather than fiduciary loyalty.

Question 13New Hampshire Real Estate License Law and Administrative Rules

New Hampshire brokerage records relating to a transaction, including trust account records, must be retained for at least:

  1. 6 months
  2. 10 years
  3. 1 year
  4. 3 years Correct answer.

Explanation

Brokers must keep transaction and trust account records available for Commission inspection for at least three years. A shorter retention period would defeat the Commission's ability to investigate complaints after a deal closes.

Question 14New Hampshire Real Estate License Law and Administrative Rules

A New Hampshire salesperson who wishes to move from one brokerage to another must:

  1. wait 90 days after leaving the first brokerage
  2. pay a transfer fee to the former broker
  3. apply for a new broker license
  4. have the license transferred to the new broker Correct answer.

Explanation

A salesperson's license is affiliated with a particular brokerage, so changing firms requires the Commission to transfer the license to the new broker. A salesperson may not be affiliated with two brokers at the same time.

Question 15New Hampshire Real Estate License Law and Administrative Rules

After a salesperson's New Hampshire license is placed on inactive status, the salesperson must:

  1. work only with buyers, not sellers
  2. surrender the license to the Commission
  3. continue working until current listings expire
  4. stop engaging in brokerage activity until reactivated Correct answer.

Explanation

An inactive license authorizes no brokerage activity, so the licensee must stop performing licensed acts until the license is reactivated under a broker. The license itself remains on file with the Commission rather than being given up.

Question 16New Hampshire Real Estate License Law and Administrative Rules

Which task may a New Hampshire broker assign to an unlicensed assistant?

  1. taking phone messages at the office Correct answer.
  2. negotiating the price of a listing
  3. showing a listed home to prospective buyers
  4. explaining the terms of a purchase agreement

Explanation

Unlicensed assistants may perform clerical and administrative work that does not require a license, such as answering the telephone and taking messages. Negotiating, showing property, and interpreting contract terms are licensed activities.

Question 17New Hampshire Real Estate License Law and Administrative Rules

A New Hampshire broker who wants to buy a home that her own brokerage has listed must:

  1. resign her license before making an offer
  2. disclose in writing that she is a licensee Correct answer.
  3. obtain permission from the multiple listing service
  4. wait until the listing expires

Explanation

A licensee who acts as a principal in a transaction must disclose the licensed status in writing so the other party knows they are dealing with an agent. The broker also may not use confidential information gained through the listing.

Question 18New Hampshire Real Estate License Law and Administrative Rules

A New Hampshire broker may share a commission from a transaction with:

  1. another broker licensed in New Hampshire Correct answer.
  2. an unlicensed home inspector who recommended the broker
  3. an employee of the title company that closed the loan
  4. the buyer's unlicensed cousin who introduced the buyer

Explanation

Compensation for brokerage services may be shared only with persons who hold a real estate license, so a broker may split a commission with another New Hampshire licensee. Paying unlicensed persons for referrals is prohibited.

Question 19New Hampshire Real Estate License Law and Administrative Rules

Which circumstance is grounds for the Commission to deny or discipline a real estate license?

  1. The licensee resides outside New Hampshire
  2. The licensee has no prior sales experience
  3. The licensee was convicted of a crime involving fraud Correct answer.
  4. The licensee works part-time in real estate

Explanation

A conviction involving fraud or dishonesty bears directly on a person's fitness to handle other people's money and property and is grounds for discipline. Lack of experience, out-of-state residence, and part-time practice are not themselves violations.

Question 20New Hampshire Real Estate License Law and Administrative Rules

When the Commission seeks to revoke a license, the licensee is entitled to:

  1. notice and an opportunity for a hearing Correct answer.
  2. a jury trial in superior court
  3. a private settlement conference with the governor
  4. compensation for lost commissions

Explanation

An administrative license proceeding requires notice of the charges and a hearing at which the licensee may respond before a sanction is imposed. Jury trials and payment for lost commissions are not part of the administrative process.

Question 21New Hampshire Real Estate License Law and Administrative Rules

A broker uses funds from a client's trust account to pay the office rent. This conduct is:

  1. a permissible advance against future commissions
  2. commingling of business assets
  3. conversion of trust funds Correct answer.
  4. an allowed short-term loan with client consent

Explanation

Trust funds are held in a fiduciary capacity, and unauthorized use of them for the broker's own obligations is conversion. Conversion exposes the broker to license discipline as well as civil and criminal liability.

Question 22New Hampshire Real Estate License Law and Administrative Rules

After a listing agreement expires, the broker's duty to keep confidential the seller's negotiating position:

  1. ends when the listing expires
  2. applies only while the broker holds an active license
  3. continues after the agency relationship ends Correct answer.
  4. ends when the seller signs with a new broker

Explanation

The duty of confidentiality regarding a former client's bargaining position and personal information survives the end of the agency relationship. It is not extinguished by expiration of the listing or by the client engaging another broker.

Question 23New Hampshire Real Estate License Law and Administrative Rules

Funds held in trust by a New Hampshire broker must be deposited in:

  1. a separate trust account at a New Hampshire financial institution Correct answer.
  2. an escrow account controlled by the listing salesperson
  3. an account at any federally insured institution chosen by the broker
  4. the broker's personal savings account, with a ledger of deposits

Explanation

Trust funds must be held in a separate trust account at a financial institution authorized to do business in New Hampshire, apart from the broker's own funds. Records of the account must be available for Commission inspection.

Question 24New Hampshire Real Estate License Law and Administrative Rules

A nonresident who applies for a New Hampshire real estate license must:

  1. consent to service of process in New Hampshire Correct answer.
  2. hold a license in the state where the property is located
  3. move to New Hampshire within one year
  4. post a surety bond with the Commission

Explanation

A nonresident applicant must file an irrevocable consent that legal process in a New Hampshire action may be served on the Commission or another designated agent. Residency, a surety bond, and prior licensure elsewhere are not conditions of licensure.

Question 25New Hampshire Real Estate License Law and Administrative Rules

A broker who fails to supervise a salesperson who violates the license law may:

  1. avoid discipline because the salesperson acted alone
  2. be disciplined only if the broker shared the commission
  3. be disciplined by the Commission for the failure Correct answer.
  4. be protected by the salesperson's independent contractor status

Explanation

The supervising broker is responsible for the brokerage's compliance, and ineffective supervision is itself a violation for which the Commission may impose discipline. Independent contractor status affects employment matters but does not remove that regulatory duty.

Question 26New Hampshire Real Estate License Law and Administrative Rules

Under New Hampshire law, which person must hold a real estate license?

  1. A person who, for a fee, negotiates the purchase of a home on behalf of a buyer Correct answer.
  2. A homeowner who sells her own residence without using a brokerage
  3. A landlord who rents out one unit of his own duplex
  4. An attorney who performs customary legal work for a client in a property sale

Explanation

New Hampshire requires a license for anyone who, for another and for compensation, negotiates or attempts to negotiate a sale, purchase, exchange, or lease of real estate. Persons dealing with their own property and attorneys performing customary legal services fall outside the licensing requirement.

Question 27New Hampshire Real Estate License Law and Administrative Rules

A person wants to open a real estate office in New Hampshire and have other licensees work under her supervision. What must she hold?

  1. A broker license Correct answer.
  2. A salesperson license plus five years of experience
  3. A salesperson license
  4. No license, as long as the other licensees are individually licensed

Explanation

A salesperson may only provide brokerage services while associated with a licensed broker and cannot operate an independent brokerage or engage other licensees. Authority to run a real estate business and supervise licensees comes with the broker license.

Question 28New Hampshire Real Estate License Law and Administrative Rules

A New Hampshire salesperson advertises a listing on a social media page. What must the advertisement include?

  1. The name of the brokerage with which the salesperson is affiliated Correct answer.
  2. The salesperson's home address
  3. The seller's personal telephone number
  4. The commission rate the seller agreed to pay

Explanation

Advertising by a salesperson must identify the brokerage, because the salesperson does not hold an independent license to provide brokerage services and the public must be able to identify the responsible broker. The other items are not required elements of a real estate advertisement.

Question 29New Hampshire Real Estate License Law and Administrative Rules

A New Hampshire salesperson earns a commission in a transaction she handled. From whom may she lawfully receive her share of that commission?

  1. Directly from a cooperating broker who represented the buyer
  2. From the listing brokerage, even if it is not the brokerage she is licensed with
  3. Directly from the seller, if the seller agrees in writing
  4. Only from the broker with whom she is licensed Correct answer.

Explanation

A New Hampshire salesperson may be compensated for brokerage services only by the broker to whom the salesperson's license is attached. Any commission or fee earned by the salesperson flows through that broker, who is responsible for the salesperson's activities.

Question 30New Hampshire Real Estate License Law and Administrative Rules

A broker holds a buyer's earnest money deposit in trust. The transaction falls apart and both the buyer and the seller demand the funds. What should the broker do?

  1. Release the funds to the buyer, since the buyer tendered the deposit
  2. Move the funds to the broker's operating account until the dispute is resolved
  3. Keep the funds in the trust account until the parties reach a written agreement or a court directs distribution Correct answer.
  4. Release the funds to the seller, since the seller is the party who did not default

Explanation

A broker holds trust funds as a stakeholder and has no authority to decide which party is entitled to a disputed deposit. The broker must continue to safeguard the money until the parties agree in writing or a court orders distribution.

Question 31New Hampshire Real Estate License Law and Administrative Rules

A New Hampshire licensee is preparing to renew her license. Which condition must she satisfy for the renewal period?

  1. Complete the continuing education required by Commission rules Correct answer.
  2. Retake and pass the state licensing examination
  3. File a surety bond with the Commission
  4. Obtain a letter of sponsorship from a new broker

Explanation

New Hampshire conditions license renewal on completing the continuing education that the Real Estate Commission requires for the licensing period. The license is renewed administratively; the exam, a new sponsor, and a bond are not renewal requirements.

Question 32New Hampshire Real Estate License Law and Administrative Rules

A consumer believes a New Hampshire licensee violated the license law during a transaction. What is the proper course of action?

  1. The consumer must first file a complaint with the local board of REALTORS
  2. The consumer may file a written complaint with the Commission, which may investigate and hold a hearing if warranted Correct answer.
  3. Only a party to the transaction may complain, and only within ten days of the closing
  4. The consumer must sue the licensee in court before the Commission can act

Explanation

The Commission accepts written complaints about alleged license law violations from any person and has authority to investigate and, where appropriate, conduct a hearing and impose discipline. A private lawsuit or a trade association complaint is not a prerequisite.

Question 33New Hampshire Real Estate License Law and Administrative Rules

A New Hampshire licensee whose license is on inactive status refers a seller to a brokerage, which agrees to pay her a percentage of the commission if the property sells. How should this arrangement be treated?

  1. It is permissible if the payment is less than $500
  2. It is prohibited, because compensation for referring real estate business may not be paid to a person who does not hold an active license Correct answer.
  3. It is permissible if the inactive licensee discloses the arrangement to the seller in writing
  4. It is permissible because a referral is not brokerage activity

Explanation

Paying a fee to someone who holds no active license for referring real estate business violates the license law, and an inactive licensee may not perform brokerage activity or be compensated for it. Written disclosure or a small dollar amount does not cure the violation.

Question 34New Hampshire Real Estate License Law and Administrative Rules

A New Hampshire broker's license has been suspended by the Commission. Which action may she lawfully take while the suspension is in effect?

  1. List a new property, provided the listing is signed by a salesperson at her firm
  2. Negotiate an extension of a pending purchase contract she originated
  3. Accept commission payments for transactions that fully closed before the suspension began Correct answer.
  4. Supervise the firm's salespersons during the suspension period

Explanation

A suspension removes the licensee's authority to perform brokerage acts during the suspension period, but it does not retroactively eliminate compensation already earned on transactions completed before the suspension. New listings, supervision, and ongoing negotiation all constitute brokerage activity that a suspended licensee may not perform.

Question 35Agency Relationships, Disclosures and Fiduciary Duties

Which of the following is the usual way an express agency relationship is created between a brokerage firm and a seller in New Hampshire?

  1. The seller signs a written listing agreement with the firm. Correct answer.
  2. The seller allows the firm to hold an open house at the property.
  3. The firm advertises the property in the local multiple listing service.
  4. The seller verbally agrees to pay a commission at closing.

Explanation

Express agency arises when the principal and the agent agree, in writing, that the firm will represent the principal. In New Hampshire, brokerage relationships for the sale of real estate must be set out in a written agreement, so the signed listing agreement is the standard vehicle. Advertising or holding an open house does not by itself create an agency relationship.

Question 36Agency Relationships, Disclosures and Fiduciary Duties

Which fiduciary duty requires a licensee to place the client's interests ahead of the licensee's own?

  1. Reasonable care
  2. Accounting for funds
  3. Loyalty Correct answer.
  4. Confidentiality

Explanation

Loyalty is the duty that forbids self-dealing and requires the agent to prefer the principal's interests to the agent's own. Accounting concerns money and documents, confidentiality concerns private information, and reasonable care concerns competence and diligence.

Question 37Agency Relationships, Disclosures and Fiduciary Duties

Under New Hampshire practice, when must a licensee disclose in writing which party the licensee represents?

  1. Within 30 days after a brokerage agreement is signed
  2. At the first substantive contact, before confidential information is shared Correct answer.
  3. Only at the closing settlement
  4. Only when the consumer specifically asks about representation

Explanation

Agency disclosure must be made early in the relationship, at the first substantive contact and before the consumer reveals confidential financial or personal information. The purpose is to let consumers know whose interests the licensee is protecting before they rely on the licensee.

Question 38Agency Relationships, Disclosures and Fiduciary Duties

How are real estate commission rates established in New Hampshire?

  1. By negotiation between the broker and the client Correct answer.
  2. By state statute for residential transactions
  3. By a schedule published by the Real Estate Commission
  4. By the local board of REALTORS for each county

Explanation

Commission rates are set by negotiation between the brokerage firm and its client and must appear in the brokerage agreement. Neither the Real Estate Commission nor any trade association may fix or publish rates for mandatory use, because that would restrain competition.

Question 39Agency Relationships, Disclosures and Fiduciary Duties

Which event ends a seller's agency agreement automatically?

  1. The broker's vacation during the listing period
  2. The buyer's request for a home inspection
  3. The expiration date stated in the listing agreement Correct answer.
  4. The seller's decision to interview a second broker

Explanation

An agency agreement terminates by its own terms when the stated expiration date arrives. Interviewing another broker, a temporary absence, or a buyer's inspection request does not, by itself, end the existing relationship.

Question 40Agency Relationships, Disclosures and Fiduciary Duties

A buyer has signed no agency agreement but is being shown homes by the seller's listing agent. The buyer is legally treated as what?

  1. A subagent of the buyer
  2. A client of the listing broker
  3. A dual client
  4. A customer Correct answer.

Explanation

A consumer who receives services but has no representation agreement is a customer, not a client. The licensee owes the customer honesty and disclosure of material facts, but not loyalty, full confidentiality, or advocacy.

Question 41Agency Relationships, Disclosures and Fiduciary Duties

Earnest money that a New Hampshire broker receives on behalf of a buyer must be handled how?

  1. Delivered immediately to the seller as a deposit
  2. Deposited in the broker's general operating account
  3. Held personally by the salesperson handling the transaction
  4. Deposited promptly into a trust or escrow account Correct answer.

Explanation

Funds held for others are trust funds and must be placed promptly in a separate escrow or trust account, with records kept of each transaction. Commingling trust funds with the firm's own operating money is prohibited.

Question 42Agency Relationships, Disclosures and Fiduciary Duties

Before a firm may act as a dual agent in a New Hampshire transaction, the firm must obtain what?

  1. A written appraisal of the property
  2. Verbal agreement from both parties at the showing
  3. Approval from the Real Estate Commission
  4. Informed written consent from both parties Correct answer.

Explanation

Disclosed dual agency is permitted only with the informed written consent of both the buyer and the seller. Once consent is given, the firm must treat both parties fairly and may not advocate for either side's negotiating position.

Question 43Agency Relationships, Disclosures and Fiduciary Duties

A buyer with no representation tells the listing agent, 'I would gladly pay $30,000 over asking.' The agent represents the seller. What should the agent do?

  1. Share it only if the buyer later signs a buyer agency agreement
  2. Announce it to the other buyers so the process stays fair
  3. Keep it confidential because the agent works closely with the buyer
  4. Relay it to the seller; the buyer is only a customer Correct answer.

Explanation

A licensee owes loyalty to the seller and no duty of confidentiality to an unrepresented customer. Information bearing on the seller's negotiating position should be passed to the seller, who decides how to use it.

Question 44Agency Relationships, Disclosures and Fiduciary Duties

A listing agreement ends. Two years later, the former client's ex-spouse asks the licensee about financial details revealed during the listing. The licensee should do what?

  1. Answer only if the former client is present
  2. Report the inquiry to the Real Estate Commission
  3. Refuse; confidentiality survives the end of the agency Correct answer.
  4. Answer, because the agency relationship has ended

Explanation

The duty of confidentiality continues after the agency relationship terminates, so information the client disclosed in confidence remains protected. The licensee should decline to discuss the former client's private financial affairs.

Question 45Agency Relationships, Disclosures and Fiduciary Duties

A seller tells the listing agent the basement floods every spring and orders the agent not to mention it to buyers. The agent should do what?

  1. Follow the order, since the agent must obey the seller
  2. Withdraw from the listing and say nothing to any buyer
  3. Stay silent but urge every buyer to hire a home inspector
  4. Disclose the flooding, because known material defects must be revealed Correct answer.

Explanation

Known material defects affecting the property must be disclosed to prospective buyers; the duty of obedience never requires concealment or misrepresentation. Suggesting an inspection does not cure the failure to disclose a defect the agent knows about.

Question 46Agency Relationships, Disclosures and Fiduciary Duties

A licensee wants to submit an offer on a home listed by her own brokerage. What must she do before making the offer?

  1. Disclose in writing her licensed status and interest Correct answer.
  2. Have another licensee submit the offer for her
  3. Wait until the listing agreement expires
  4. Obtain written permission from the Real Estate Commission

Explanation

A licensee who seeks to acquire an interest in property must disclose in writing that she is a licensed real estate professional and that she is the purchaser. Using a colleague to paper over the licensee's role does not satisfy the disclosure requirement.

Question 47Agency Relationships, Disclosures and Fiduciary Duties

A seller instructs the licensee to advertise the home as having a 'new roof,' though the roof is twenty years old. The licensee should do what?

  1. Comply, since the seller is the principal and the client
  2. Comply but note the roof age in the private remarks only
  3. Resign from the listing without telling the seller why
  4. Refuse, because obedience does not require making false statements Correct answer.

Explanation

The duty of obedience covers lawful instructions only; a licensee may not publish a statement the licensee knows to be false. Advertising a twenty-year-old roof as new would be misrepresentation regardless of who requested it.

Question 48Agency Relationships, Disclosures and Fiduciary Duties

An agent markets a home as 2,400 square feet based on the seller's guess and never verifies it. A buyer later measures 1,900 square feet. Which duty has the agent most likely breached?

  1. The duty of accounting for funds
  2. The duty of loyalty to the client
  3. The duty of confidentiality to the client
  4. The duty of care and diligence Correct answer.

Explanation

Mistakes in listing data that could have been verified with reasonable effort are failures of care and diligence. The agent should have measured, used a reliable source, or stated the figure as an estimate with its source.

Question 49Agency Relationships, Disclosures and Fiduciary Duties

A cooperating licensee is about to show a listing to a prospective buyer she has just met. Before the showing, what should she do?

  1. Have the buyer sign a dual agency consent form
  2. Disclose in writing whom she represents in the transaction Correct answer.
  3. Ask the listing agent to attend the showing as well
  4. Obtain a written promise of compensation from the listing firm

Explanation

Agency disclosure must be given at the first substantive contact, including when a licensee first works with a prospective buyer. The buyer is entitled to know before viewing or sharing information whether the licensee represents the buyer, the seller, or both.

Question 50Agency Relationships, Disclosures and Fiduciary Duties

A licensee wants to pay $500 to an unlicensed friend who referred a buyer to her. How is this payment treated under New Hampshire law?

  1. Allowed if the supervising broker approves it in writing
  2. Allowed if the friend tells the buyer about the payment
  3. Prohibited; referral compensation requires a license Correct answer.
  4. Allowed whenever the amount stays under $1,000

Explanation

Only licensed persons may be compensated for performing brokerage services, which includes referring a buyer for a fee. Disclosure to the buyer or broker approval cannot cure the licensing violation.