WRA LICENSING EXAM QUESTIONS AND CORRECT SOLUTIONS

A seller signs a listing contract with a firm. Who is the agent and who is the principal? - The seller is the principal. The firm is the agent. A buyer asks a listing agent to draft an offer. The buyer does not sign a buyer agency agreement. Is the buyer a customer or a client? - he buyer is a customer. What kind of agency is a firm practicing if the firm represents just one party in the transaction? - Single agency When can a firm engage in multiple representation? - Written consent of both parties, agency disclosure to both parties In what kind of transactions must a firm provide agency disclosure? - All transactions (residential, commercial, vacant land etc.) By when must a firm provide agency disclosure to a client? A customer? - Before or at the time of entering into the agency agreement By when must a buyer's agent disclose the buyer agency relationship to the seller or the listing firm? - The earliest of first contact, a showing, or any other negotiations with the seller or the listing firm. What are a listing firm's agency disclosure obligations when working with a customer who wants to write an offer on a duplex? What if the buyer wants to write an offer on a commercial warehouse? - Provide agency disclosure to buyer for duplex and ask that buyer to sign the agency disclosure because this is a 1-4 family transaction. Provide agency disclosure to buyer for commercial warehouse but you do not have to ask that buyer to sign because it is not a 1-4 family property. When does a property manager need to have a real estate license? - If signing or negotiating leases on behalf of the property owner. If a licensee is representing a family member who is writing an offer on a property, what are the licensee's disclosure obligations? customer? - Disclose the relationship in writing and obtain consent of both parties. What are a licensee's disclosure obligations if the licensee is going to receive a fee from referring a lawn maintenance company? What if the licensee is a listing agent who is referring a client to a buyer's agent? - For the lawn maintenance company, disclose the potential referral fee in writing before or at the time of making the referral. Referral fees from license to license do not need to be disclosed. When must a licensee disclose that the licensee holds a real estate license when selling the licensee's own home? What if the licensee is selling commercial property owned by the licensee? - The earliest of first contact, a showing, or any other negotiations. The disclosure shall be in writing and is the same whether selling personally owned home or commercial property. What tie-in arrangements are legal? - Legal tie-ins Condition the sale of vacant land owned by the licensee upon the buyer's agreement to use a specific builder if the builder co-owns the property with the licensee. Condition the sale of vacant land owned by the licensee upon the buyer's agreement to use a specific builder if the builder and the licensee are the same person. Condition the sale of vacant land owned by the license upon the buyer's agreement to use a specific builder if the agreement to use the builder is a legitimate effort to maintain developmental quality/ architectural uniformity and no compensation passes from the builder to the licensee. Who can retain an unlicensed personal assistant? Who can retain a licensed personal assistant? - Unlicensed personal assistant - anyone. Licensed personal assistant - just the firm. Which agency duty survives the transaction? - Confidentially What duties does a firm owe to all parties in a transaction? - Duties to all parties; Provide brokerage services to all parties honestly and fairly. Provide brokerage services with reasonable skill and care. Timely disclose material adverse facts in writing that the firm knows and that the party does not know or cannot discover through reasonably vigilant observation, unless the disclosure is prohibited by law. Keep confidential any information given to the firm, or any information obtained by the firm that the firm knows a reasonable party would want to be kept confidential, unless the information must be disclosed by law or the person whose interests may be adversely affected by the disclosure specifically authorizes the disclosure of particular information. Provide accurate information about market conditions that affect a person's transaction to any party who requests the information, within a reasonable time of the person's request. Safeguard trust funds and other property held by the firm as required by statute and rule. When negotiating on behalf of a party, present contract proposals in an objective and unbiased manner and disclose the advantages and disadvantages of the proposals. What are the additional duties owed to a client? - Loyally represent the client's interests by placing the client's interests ahead of the firm's interest. Provide, when requested by the client, information and advice to the client on matters that are material to the client's transaction and that are within the scope of the knowledge, skills and training required of a licensee. Disclose all material facts affecting the transaction, not just adverse facts. (divorcing spouses list with two firms = owe two commissions, seller's daughter wants to offer selling bonus) Fulfill any obligation required by the agency agreement (listing contract/buyer agency agreement) and any order of the client that is within the scope of the agency agreement and is consistent with other duties. Negotiate on behalf of the client unless released from this duty. [The duty of negotiation may be waived by a client in part or full, if an express written waiver of negotiation duties is made by the client.] When a firm has a multiple representation relationship with designated agency, to whom will each salesperson provide information, opinions, and advice? - Their respective clients. How should a client withdraw consent to a multiple representation relationship? - In writing. How should a client waive a firm's duty of negotiation? - In writing and the firm must provide disclosure language regarding waiver of negotiation. What type of agency relationship is created with written words? - Express What type of agency relationship gives an agent the authority to represent a principal in more than one transaction? - General What are the seven ways to terminate an agency relationship? - Death or incapacity of principal Destruction of condemnation of the property Expiration Mutual agreement Breach Operation of law Completion