I85PREP
⌘ K
OK Real Estate study materials
OK Real Estate study resources

OK Real Estate practice questions

One question at a time. Build your OK Real Estate understanding.

First 50 of 200 questions. Each one lists the choices, the correct answer, and an explanation. The checker at the top of this page saves progress in this browser when it is available.

Continue in the practice tool above to load more questions, 50 at a time.

Question 1Oklahoma Real Estate License Law, Rules and Commission Regulations

Which state agency administers the Oklahoma Real Estate License Code and adopts the rules that govern real estate licensees?

  1. Oklahoma Real Estate Commission Correct answer.
  2. Oklahoma Insurance Department
  3. Oklahoma Secretary of State
  4. Oklahoma Corporation Commission

Explanation

The Oklahoma Real Estate Commission is the agency created by the Real Estate License Code; it issues licenses and adopts the administrative rules that regulate licensees. The other agencies listed handle utilities, insurance, and business filings rather than real estate licensing.

Question 2Oklahoma Real Estate License Law, Rules and Commission Regulations

What is the minimum age at which a person may obtain an Oklahoma real estate license?

  1. 25 years old
  2. 21 years old
  3. 16 years old
  4. 18 years old Correct answer.

Explanation

An applicant for an Oklahoma real estate license must be at least 18 years old. Age is a statutory qualification verified at application, and the same minimum applies to sales associates and brokers.

Question 3Oklahoma Real Estate License Law, Rules and Commission Regulations

An Oklahoma sales associate license authorizes the holder to do which of the following?

  1. work under the supervision of a broker Correct answer.
  2. sponsor newly licensed sales associates
  3. run an independent brokerage after one year
  4. collect commissions directly from clients

Explanation

A sales associate license is always held under a sponsoring broker, who is responsible for the associate's real estate activity. The associate may not operate independently, sponsor others, or receive compensation directly from a client.

Question 4Oklahoma Real Estate License Law, Rules and Commission Regulations

A broker deposits a client's earnest money into the brokerage's general operating account. This practice is best described as which of the following?

  1. commingling Correct answer.
  2. redlining
  3. hypothecation
  4. conversion

Explanation

Commingling is placing client or trust funds into the same account as the broker's personal or operating funds. Conversion is a separate and more serious wrong involving actual use or misappropriation of another person's money.

Question 5Oklahoma Real Estate License Law, Rules and Commission Regulations

Which task may an unlicensed assistant lawfully perform for an Oklahoma brokerage?

  1. Scheduling appointments and preparing flyers Correct answer.
  2. Negotiating the price and terms of a listing
  3. Explaining the terms of a purchase contract to a buyer
  4. Holding an open house and discussing financing options

Explanation

Unlicensed assistants may perform clerical and administrative work such as scheduling appointments and preparing advertising materials. They may not negotiate, interpret contract terms, or discuss financing with members of the public.

Question 6Oklahoma Real Estate License Law, Rules and Commission Regulations

An Oklahoma licensee wants to pay $300 to an unlicensed friend who referred a buyer to her. Under the License Code, this payment is which of the following?

  1. allowed only if the friend is a party to the transaction
  2. allowed, as long as the licensee discloses the payment in writing
  3. prohibited, since only licensees may be paid for referrals Correct answer.
  4. allowed, because the amount is below the statutory threshold

Explanation

Oklahoma law limits compensation for brokerage services and referrals to licensed persons, so a licensee may not share a commission or pay a referral fee to an unlicensed friend. Disclosure or the size of the payment does not cure the violation.

Question 7Oklahoma Real Estate License Law, Rules and Commission Regulations

An Oklahoma real estate license is issued for a term of how long?

  1. five years
  2. two years
  3. three years Correct answer.
  4. one year

Explanation

Oklahoma real estate licenses run for a three-year term and are renewed on the licensee's expiration date. Continuing education is measured over that same three-year period.

Question 8Oklahoma Real Estate License Law, Rules and Commission Regulations

Which penalty may the Oklahoma Real Estate Commission itself impose on a licensee?

  1. Suspension or revocation of the license Correct answer.
  2. An order requiring the licensee to pay punitive damages
  3. A criminal fine collected by the district court
  4. A jail sentence of up to six months

Explanation

The Commission's disciplinary powers are administrative: it may suspend or revoke a license, place a licensee on probation, issue a reprimand, or impose an administrative fine. It cannot imprison anyone or award damages, which are functions of the courts.

Question 9Oklahoma Real Estate License Law, Rules and Commission Regulations

A licensee begins helping a buyer with no written brokerage agreement. Under the Oklahoma Broker Relationships Act, the licensee is presumed to be acting as which of the following?

  1. a transaction broker Correct answer.
  2. a dual agent
  3. a subagent of the seller
  4. the buyer's agent

Explanation

Under the Oklahoma Broker Relationships Act, a broker who provides brokerage services without a written agreement is presumed to be a transaction broker. A written agreement is needed to create a single-party relationship with a buyer or seller.

Question 10Oklahoma Real Estate License Law, Rules and Commission Regulations

Which duty does an Oklahoma transaction broker owe to both the buyer and the seller?

  1. Undivided loyalty to each party's bargaining position
  2. Honesty and disclosure of known material facts Correct answer.
  3. Advocacy for whichever party pays the commission
  4. Concealment of defects that would lower the price

Explanation

A transaction broker assists both parties without representing either as a fiduciary and owes honesty, disclosure of known material facts about the property, accounting, and reasonable care. Loyalty, advocacy, and concealment are inconsistent with that role.

Question 11Oklahoma Real Estate License Law, Rules and Commission Regulations

A sales associate earns a commission on a closing. Under Oklahoma law, the commission must be paid to which of the following?

  1. the associate directly, with a copy sent to the broker
  2. the Commission, which forwards it to the associate
  3. the associate's sponsoring broker Correct answer.
  4. the title company, which holds it in escrow

Explanation

Commissions earned by a sales associate are paid to the sponsoring broker, who then compensates the associate under their agreement. Direct payment to the associate by a client is not permitted.

Question 12Oklahoma Real Estate License Law, Rules and Commission Regulations

How many hours of continuing education must an Oklahoma licensee complete in each three-year license term?

  1. 21 hours Correct answer.
  2. 6 hours
  3. 12 hours
  4. 9 hours

Explanation

Oklahoma requires 21 clock hours of approved continuing education during each three-year license term. The hours must be earned in approved courses and reported before the license is renewed.

Question 13Oklahoma Real Estate License Law, Rules and Commission Regulations

Commission rules require an Oklahoma broker to keep records of real estate transactions for how long?

  1. One year
  2. Two years
  3. Ten years
  4. Five years Correct answer.

Explanation

The Commission's rules require a broker to retain transaction records, including trust account records, for five years. The records must be available for inspection by the Commission.

Question 14Oklahoma Real Estate License Law, Rules and Commission Regulations

A sales associate advertises a listing on a social media site. The advertisement must include which of the following?

  1. the associate's personal license number
  2. the seller's asking price and terms
  3. the associate's home mailing address
  4. the name of the associate's brokerage Correct answer.

Explanation

Advertising must identify the brokerage, and a sales associate may not advertise in a way that suggests the associate is the brokerage or that omits the broker's name. Price, home address, and license number are not required elements.

Question 15Oklahoma Real Estate License Law, Rules and Commission Regulations

Members of the Oklahoma Real Estate Commission are appointed by which of the following?

  1. the Governor Correct answer.
  2. the state Senate
  3. the Chief Justice of the Oklahoma Supreme Court
  4. the state association of Realtors

Explanation

Commissioners are appointed by the Governor, and the Commission operates as an agency of the executive branch. Trade associations may recommend candidates but hold no appointing power.

Question 16Oklahoma Real Estate License Law, Rules and Commission Regulations

A broker receives a buyer's $5,000 earnest money check made payable to the brokerage. The broker should do which of the following?

  1. apply it immediately toward the broker's commission
  2. hold the check uncashed in the transaction file until closing
  3. deposit it in the brokerage operating account and record it as income
  4. deposit it into a trust account and disburse it under the contract Correct answer.

Explanation

Earnest money held by a broker is trust money that must be deposited in a trust account and disbursed according to the contract. Treating it as brokerage income or commission is commingling and conversion.

Question 17Oklahoma Real Estate License Law, Rules and Commission Regulations

A licensee is selling her personal residence without a listing broker. Oklahoma law requires her to do which of the following?

  1. disclose in writing that she is a licensee Correct answer.
  2. pay a referral fee to the Commission
  3. obtain the Commission's approval before the sale closes
  4. list the property with a broker before advertising it

Explanation

A licensee selling property she owns must disclose her licensed status in writing to the other party. The requirement prevents buyers or sellers from assuming they are dealing with an unlicensed principal.

Question 18Oklahoma Real Estate License Law, Rules and Commission Regulations

Which act may a licensee perform for a party whom she does not represent?

  1. Negotiating repairs on the party's behalf
  2. Scheduling a showing appointment Correct answer.
  3. Drafting the party's contract contingencies
  4. Advising the party on how much to offer

Explanation

Ministerial acts are routine, non-discretionary tasks such as arranging appointments or supplying factual information. Giving advice, negotiating, or drafting contract terms requires a brokerage relationship and exceeds a ministerial act.

Question 19Oklahoma Real Estate License Law, Rules and Commission Regulations

A buyer and a seller both claim the earnest money held in the broker's trust account. The broker should do which of the following?

  1. send the funds to the Commission for safekeeping
  2. hold the funds until the dispute is resolved Correct answer.
  3. release the funds to the seller, who holds title
  4. release the funds to the buyer, who paid them

Explanation

When entitlement to trust funds is disputed, the broker must keep the money in trust until the parties agree in writing or a court decides the matter. Releasing funds to either claimant exposes the broker to liability.

Question 20Oklahoma Real Estate License Law, Rules and Commission Regulations

Under Commission rules, every real estate brokerage office must be supervised by which of the following?

  1. a licensed sales associate with two years of experience
  2. an unlicensed office manager approved by the Commission
  3. the owner of the building in which the office is located
  4. a licensed real estate broker Correct answer.

Explanation

Each brokerage office must be under the supervision of a licensed broker who is responsible for the real estate activity conducted there. Unlicensed managers and sales associates may not supervise brokerage activity.

Question 21Oklahoma Real Estate License Law, Rules and Commission Regulations

A sales associate wants to move to a different brokerage. Before providing real estate services for the new broker, the associate must do which of the following?

  1. wait thirty days after leaving the first brokerage
  2. pay a transfer fee to the previous broker
  3. have the license transferred to the new broker Correct answer.
  4. complete an additional forty-five hours of education

Explanation

A sales associate's license is registered with a specific sponsoring broker, so the license must be transferred before the associate performs services for a new broker. An ordinary sponsorship change requires no waiting period and no additional education.

Question 22Oklahoma Real Estate License Law, Rules and Commission Regulations

An unlicensed limited liability company that is not a licensed brokerage refers a tenant to a licensee. What may the licensee do?

  1. pay the company a flat fee of less than $500
  2. pay the company if the referral is disclosed to both parties
  3. split the commission with the company if the split is disclosed
  4. pay the company nothing, since only licensees may be compensated Correct answer.

Explanation

Only licensed persons and licensed business entities may receive compensation for brokerage activity, including referrals. An unlicensed company cannot be paid even if the payment is disclosed or small.

Question 23Oklahoma Real Estate License Law, Rules and Commission Regulations

A seller tells her transaction broker the lowest price she would accept. The broker should do which of the following?

  1. keep it confidential unless the seller consents Correct answer.
  2. tell the buyer so that both sides have the same information
  3. tell the buyer only if the buyer asks directly
  4. report it to the Commission as a material fact

Explanation

A transaction broker must not disclose a party's confidential information, such as the lowest acceptable price, without that party's consent. The disclosure duty covers material facts about the property, not a party's bargaining strategy.

Question 24Oklahoma Real Estate License Law, Rules and Commission Regulations

A person procures a buyer for a property while unlicensed and later obtains a license. He then sues the seller for a commission. The likely result is that he does which of the following?

  1. recovers, because the services were performed in good faith
  2. recovers nothing, because he was unlicensed at the time Correct answer.
  3. recovers only the reasonable value of the services
  4. recovers, because he was licensed when the suit was filed

Explanation

A person must be licensed when the brokerage services are performed in order to collect compensation for them. Later licensure does not retroactively validate earlier unlicensed activity.

Question 25Oklahoma Real Estate License Law, Rules and Commission Regulations

A broker uses $3,000 from the company trust account to cover a payroll shortage, intending to repay it on Friday. This conduct is which of the following?

  1. acceptable if the broker leaves a note in the file
  2. acceptable because the funds will be restored within a week
  3. a violation only if a client complains to the Commission
  4. a violation, even if the money is later replaced Correct answer.

Explanation

Trust funds belong to the parties, and using them for the broker's own purposes is conversion regardless of any intent to repay. Repayment and the absence of a complaint do not excuse the misuse.

Question 26Oklahoma Real Estate License Law, Rules and Commission Regulations

In Oklahoma, which statement accurately describes a broker associate?

  1. A broker who owns and operates an independent firm
  2. An unlicensed assistant who may negotiate contracts
  3. A broker licensed to work under another broker Correct answer.
  4. A sales associate who has finished post-license education

Explanation

Oklahoma recognizes broker associates as licensed brokers who choose to practice under the supervision of another licensed broker rather than as independent brokers. They hold broker-level credentials but work within an employing broker's brokerage.

Question 27Oklahoma Real Estate License Law, Rules and Commission Regulations

Which body administers the Oklahoma Real Estate License Code and adopts rules for licensees?

  1. The Oklahoma Corporation Commission
  2. The Oklahoma Attorney General's office
  3. The local board of realtors
  4. The Oklahoma Real Estate Commission Correct answer.

Explanation

The Oklahoma Real Estate Commission is the state agency that administers the real estate license law and adopts Commission rules governing licensees. Local boards of realtors are private trade organizations and do not administer the state license code.

Question 28Oklahoma Real Estate License Law, Rules and Commission Regulations

An Oklahoma sales associate places her license on inactive status. While inactive, she may lawfully do which of the following?

  1. Solicit a listing for a home for sale
  2. Present an offer to a seller on behalf of a buyer
  3. Advertise herself as an active sales associate
  4. Complete continuing education courses Correct answer.

Explanation

Inactive status means the licensee may not perform activities that require an active real estate license, such as soliciting listings, showing property, or negotiating. The licensee may still complete education and satisfy renewal requirements while inactive.

Question 29Oklahoma Real Estate License Law, Rules and Commission Regulations

An Oklahoma brokerage hires an unlicensed assistant. Which task may the assistant lawfully perform?

  1. Negotiate the sales price with a buyer
  2. Schedule appointments and deliver documents Correct answer.
  3. Explain the terms of a listing agreement to a seller
  4. Prepare a purchase contract for a buyer to sign

Explanation

Unlicensed assistants may perform administrative and clerical duties, such as scheduling appointments and delivering documents. They may not negotiate, explain contract terms, or prepare contract documents for clients.

Question 30Oklahoma Real Estate License Law, Rules and Commission Regulations

Which statement about the Oklahoma Real Estate Commission's investigative authority is correct?

  1. The Commission may impose criminal fines for license violations
  2. The Commission may order a licensee to serve jail time for trust account misuse
  3. The Commission may subpoena witnesses and records Correct answer.
  4. The Commission may enter a licensee's home without consent to search for evidence

Explanation

The Commission has authority to investigate complaints and may issue subpoenas to compel testimony and production of documents relevant to a licensing matter. It is an administrative agency; criminal fines and incarceration are imposed by courts, not by the Commission.

Question 31Agency Relationships, Fiduciary Duties and Disclosures

A licensed broker who is authorized to act for a client in a real estate transaction is acting in which capacity?

  1. As a customer
  2. As a fiduciary Correct answer.
  3. As a mortgage loan originator
  4. As a principal

Explanation

An agent is a fiduciary, meaning the agent is entrusted to act in the client's best interest in matters within the scope of the agency. The customer is the party the licensee does not represent, and the principal is the party who grants the authority.

Question 32Agency Relationships, Fiduciary Duties and Disclosures

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

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

Explanation

Loyalty obligates the agent to place the principal's interests above the agent's own, including avoiding self-dealing and undisclosed conflicts of interest. It is the duty most directly concerned with whose interest prevails when interests diverge.

Question 33Agency Relationships, Fiduciary Duties and Disclosures

A buyer tells the listing agent, "I would happily pay $20,000 over the asking price." The listing agent represents the seller. What should the agent do?

  1. Tell the seller about the buyer's willingness to pay more Correct answer.
  2. Refuse to present any offer from that buyer
  3. Keep the remark confidential because the buyer shared it in confidence
  4. Advise the buyer to offer the asking price to avoid overpaying

Explanation

The agent owes fiduciary duties to the seller, and a buyer working with the listing agent is a customer rather than a client, so no duty of confidentiality is owed to that buyer. Information that affects the seller's negotiating position must be passed along to the seller.

Question 34Agency Relationships, Fiduciary Duties and Disclosures

A licensee's duty to keep a former client's confidential information private:

  1. Ends when the sale closes
  2. Continues after the agency relationship ends Correct answer.
  3. Ends when the licensee changes brokerage firms
  4. Ends on the date the listing expires

Explanation

Confidentiality is one of the fiduciary duties that survives termination of the agency. Information learned within the relationship remains protected unless it becomes public knowledge or the former client releases the licensee.

Question 35Agency Relationships, Fiduciary Duties and Disclosures

A broker receives an earnest money check made payable to the brokerage. The broker must:

  1. Deposit it into a separate trust account designated for client funds Correct answer.
  2. Give the check to the seller's agent to hold personally
  3. Hold the uncashed check in the transaction file until the closing date
  4. Deposit it into the brokerage's general operating account

Explanation

Client money such as earnest money must be held in a dedicated trust account and may not be mixed with the brokerage's own operating funds. Commingling client funds with business funds is a license law violation.

Question 36Agency Relationships, Fiduciary Duties and Disclosures

A seller directs the listing agent, in writing, not to schedule showings on Sundays. The agent books a Sunday showing anyway. Which fiduciary duty has the agent breached?

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

Explanation

Obedience requires an agent to follow the principal's lawful instructions within the scope of the agency. Scheduling a showing the seller expressly prohibited violates that instruction.

Question 37Agency Relationships, Fiduciary Duties and Disclosures

A licensee who represents both the buyer and the seller in the same transaction without the informed written consent of both parties is engaging in:

  1. Designated agency within one firm
  2. Subagency created by the listing broker
  3. Undisclosed dual agency Correct answer.
  4. Transaction brokerage without representation

Explanation

Dual agency exists when one licensee represents both sides of the same transaction, and it requires full disclosure plus the informed written consent of both parties. Acting as a dual agent without that consent is undisclosed dual agency and a breach of loyalty.

Question 38Agency Relationships, Fiduciary Duties and Disclosures

A seller's agent knows the roof has active leaks that the seller has not mentioned. A buyer asks, "Is the roof in good shape?" The agent should:

  1. Answer only what is asked to protect the seller's bargaining position
  2. Say the roof is fine because the seller is the one making disclosures
  3. Tell the buyer about the leaks and any other known material defects Correct answer.
  4. Suggest the buyer hire an inspector without mentioning the leaks

Explanation

An agent may not make a false statement about a material fact and must disclose known adverse facts that materially affect value or a buyer's decision to purchase. Recommending an inspector does not excuse concealment of defects the agent already knows about.

Question 39Agency Relationships, Fiduciary Duties and Disclosures

Under Oklahoma's Residential Property Condition Disclosure Act, the property condition disclosure statement is prepared and delivered by:

  1. The seller, based on actual knowledge Correct answer.
  2. The buyer's agent, after the home inspection
  3. The listing broker, based on the broker's inspection
  4. The closing agent, from the title records

Explanation

The Act places the disclosure obligation on the seller, who must disclose known defects in the residence to the purchaser. The licensee's role is to advise the seller of the requirement and see that the statement is delivered, not to certify condition from a personal inspection.

Question 40Agency Relationships, Fiduciary Duties and Disclosures

A prospective buyer walks into an open house and begins describing her financial situation to the licensee. When must the licensee explain whom she represents?

  1. Before the buyer reveals confidential financial information Correct answer.
  2. At the time the purchase contract is signed by both parties
  3. Only if the buyer asks about representation
  4. After the buyer submits a written offer

Explanation

Licensees must disclose their brokerage relationship at first substantive contact and before the party shares sensitive information, so the party knows whether the licensee represents them. Disclosure is the licensee's affirmative duty, not something triggered by a question.

Question 41Agency Relationships, Fiduciary Duties and Disclosures

A broker who is not the listing broker but who works with a buyer as the agent of the listing broker is best described as a:

  1. Dual agent
  2. Subagent Correct answer.
  3. Transaction broker
  4. Buyer's agent

Explanation

A subagent acts on behalf of the seller through the listing broker, so the subagent owes its fiduciary duties to the seller rather than to the buyer. The buyer in that situation is a customer, not a client.

Question 42Agency Relationships, Fiduciary Duties and Disclosures

A buyer is shown a home by a licensee who is the seller's agent, and the seller pays the commission at closing. The licensee's agency relationship is with:

  1. Neither party, because no written agreement exists
  2. The buyer and the seller equally
  3. The seller, whom the licensee represents Correct answer.
  4. The buyer, because the buyer received the service

Explanation

Agency is created by the agreement of the parties, not by who performs the service or who pays the commission. A licensee who has an agency relationship with the seller represents the seller even while assisting a buyer.

Question 43Agency Relationships, Fiduciary Duties and Disclosures

Which event automatically terminates an agency relationship without any action by the parties?

  1. A change in the market value of the property
  2. Destruction of the listed property Correct answer.
  3. The listing agent taking a vacation
  4. The seller refinancing an unrelated property

Explanation

Agency terminates automatically by operation of law when its subject matter is destroyed, when the term expires, upon death or incapacity of a principal, or upon closing of the transaction. The other events do not affect the legal relationship.

Question 44Agency Relationships, Fiduciary Duties and Disclosures

The fiduciary duty of care requires a licensee to:

  1. Use reasonable skill and diligence in handling the transaction Correct answer.
  2. Guarantee that the property will appraise at the contract price
  3. Obtain the highest possible price regardless of the client's instructions
  4. Assume personal liability for the client's contract obligations

Explanation

Care means exercising the competence and diligence a reasonable licensee would use, including recommending inspections and specialists when issues are outside the licensee's expertise. It does not create guarantees of outcomes.

Question 45Agency Relationships, Fiduciary Duties and Disclosures

A licensee holding a listing wants to buy the listed property for herself. To comply with her fiduciary duties, she should:

  1. Have a relative submit the offer so her name does not appear
  2. Disclose the conflict and obtain the seller's written consent Correct answer.
  3. Resign the listing after the purchase closes
  4. Buy it quietly at the asking price before other buyers see it

Explanation

Purchasing a client's property is self-dealing that creates a conflict of interest, and it is permissible only with full disclosure and the client's informed written consent. Concealing the licensee's identity or interest breaches loyalty.

Question 46Agency Relationships, Fiduciary Duties and Disclosures

A listing agent tells a buyer, "This is the best value in the neighborhood." The statement is best characterized as:

  1. Fraudulent concealment
  2. Undisclosed dual agency
  3. A material misrepresentation of a specific fact about the property
  4. Puffing, an expression of opinion Correct answer.

Explanation

General statements of opinion or sales talk, often called puffing, are not misrepresentations of material fact. A licensee still may not state false facts about the property itself.

Question 47Agency Relationships, Fiduciary Duties and Disclosures

A broker's unlicensed assistant, who hands out business cards bearing the brokerage name, tells a buyer the roof was replaced last year. The statement is false. The brokerage is:

  1. Not liable, because the assistant had no written agency agreement with the buyer
  2. Not liable, because only the seller made disclosures about the property
  3. Not liable, because the assistant was unlicensed
  4. Potentially liable, because the assistant acted within the brokerage's apparent authority Correct answer.

Explanation

A principal may be liable for the acts of an agent or employee acting within the scope of apparent authority, and a broker is responsible for the activities of unlicensed assistants held out to the public as part of the brokerage. License status does not insulate the brokerage from that responsibility.

Question 48Agency Relationships, Fiduciary Duties and Disclosures

One firm has written consent to act as a dual agent for both parties. Which statement about the firm's duties is correct?

  1. The firm must withdraw if either party asks a question about the other's motivation
  2. The firm may pass the seller's bottom-line price to the buyer as long as the price is disclosed to the seller
  3. The firm may not use confidential information from one party to the advantage of the other Correct answer.
  4. The firm may advocate for whichever party offers to pay a larger commission

Explanation

In a consented dual agency the firm must remain neutral and may not use confidential information obtained from one party to benefit the other. Advocacy for either side is inconsistent with the dual role even when both parties have consented.

Question 49Agency Relationships, Fiduciary Duties and Disclosures

A buyer's agent learns that the buyer is preapproved for a much larger loan than the offer being made. The agent should:

  1. Post the approval amount in the MLS listing remarks
  2. Tell the seller's agent so that the seller takes the buyer's offer seriously
  3. Tell the seller's agent only if the seller asks about financing
  4. Keep it confidential and use it to advise the buyer on strategy Correct answer.

Explanation

The buyer's financial strength is confidential client information that the buyer's agent may not disclose to the other side. The agent may use it to further the client's own negotiating strategy.

Question 50Agency Relationships, Fiduciary Duties and Disclosures

A seller's neighbor, with no agreement, asks a licensee to "find me a buyer," and the licensee does so. The seller later accepts the buyer and pays the licensee a commission. This is an example of:

  1. Dual agency
  2. Agency by ratification Correct answer.
  3. Agency created by estoppel
  4. Subagency

Explanation

Ratification occurs when a principal approves an act done on the principal's behalf without prior authority, which can create an agency relationship retroactively. The seller's acceptance of the buyer and payment of the commission is that approval.