Law
Laws of Agency Exam Question and
Answers 2025
A general agency empowers the agent to:
1. Transact matters of all types for the client
2. Transact the client's affairs in a certain business
3. Perform only specific acts for the client
4. Perform any legal acts for the client - -transact the client's affairs in a certain business
All of the following are examples of dual agency except:
1. Broker representing buyer and seller, with consent of both
2. Escrow agents
3. Broker representing both buyer and seller, without consent of either
4. Two salespersons in a firm represent a different buyer and seller - -two salespersons
in a firm represent a different buyer and seller
Bill, a broker with xyz realty, sells a property listed by gene, an independent broker. In
this transaction, what is the relationship between bill and gene?
1. Bill is the agent; gene is the principal
2. Bill is the trustee; gene is the trustor
3. Bill is the subagent; gene is the agent
4. Either 1 or 3 could be correct - -bill is the agent; gene is the principal
A woman offers to buy property listed by her sister (a broker). However, she does not
want her sister to tell the seller of their relationship. The sister should:
1. Tell the seller that the prospective buyer is a relative
2. Let another person buy the property and turn the deed over to her sister
3. Sell the property without disclosing the relationship
4. Find another listing agent to avoid conflict of interest - -tell the seller that the
prospective buyer is a relative
What is not a fiduciary duty that an agent has towards his client?
1. To use care in completing contracts
2. To obey all client instructions
3. To be loyal to the client
4. To be accountable for documents and funds - -to obey all client instructions
Law
,Law
An owner is listing his rental property with a broker. Based on past experience, the
owner thinks that females cause less damage. He therefore tells the broker that he only
wants to rent to females. What should the broker do?
1. Advise the owner that this restriction is illegal
2. Follow the owner's instruction in order to protect the client's interest
3. Accept the listing and give preferential treatment to female applicants
4. Follow the owner's instruction because of the fiduciary relationship - -advise the
owner that this restriction is illegal
All of the following persons may act as escrow agents except:
1. Brokers
2. Neutral third persons
3. Salespersons
4. Attorneys - -salespersons
A buyer's broker presents an offer for property listed by another broker. Proper agency
disclosures have been made. Prior to acceptance, the listing broker discovers a zoning
change that will affect the value of the property. He tells the buyer and the offer is
withdrawn. Which of the following statements is correct?
1. The listing broker has violated his fiduciary relationship with the seller
2. The listing broker has exercised due care and loyalty to his principal
3. The buyer may not withdraw his offer
4. Disclosure of this info violates state licensing authorities - -the listing broker has
exercised due care and loyalty to his principal
A buyer broker agreement may arise by all of the following means, except:
1. Express agreement
2. Ostensible agreement
3. Custom
4. None of the above are valid - -custom
What is the highest commission rate that a real estate broker may charge for marketing
a farm property?
1. 10%
2. 15%
3. 25%
4. None of the above - -none of the above
Law
,Law
A broker represents a buyer. While showing a property to his client, the broker learns
something that might influence the sale. Nevertheless, the broker may not disclose
which of the following items to his client?
1. That the current owner has hiv
2. That the seller is in poor financial condition
3. That the seller will not accept an offer based on va financing
4. The broker is unrestricted because he represents the buyer - -that the current owner
has hiv
Which of the following actions would create an agency relationship?
1. A broker accepts the listing to sell a friend's home and agrees to a reduced
commission
2. An individual gives written authority for a broker to buy, sell, or exchange his real
property for a one year period
3. A duplex owner signs a listing agreement which authorizes a broker to market the
property for one year
4. All of the above - -all of the above
Smith dies and his real property is sold. What determines the amount of commission
paid to the broker who handles the sale?
1. The state real estate board
2. The local bar association
3. The listing agreement
4. The state association of realtors - -the listing agreement
When does a broker earn commission?
1. When the listing is taken
2. When the purchaser signs the title insurance policy
3. When closing it is complete and the title passes
4. When the offer to purchase has been signed and accepted by the seller - -when the
offer to purchase has been signed and accepted by the seller
In order for a dual agency to be legal, it must be:
1. Disclosed orally prior to negotiations
2. Disclosed in writing and agreed upon prior to negotiations
3. Disclosed in writing after negotiations
4. None of the above - -disclosed in writing and agreed upon prior to negotiations
Law
, Law
A listing broker is showing property near a toxic waste dump. The broker does not tell a
prospective buyer about the dump. By withholding this information, the broker is
negligent in his fiduciary duty of:
Select one:
1. Obedience
2. Loyalty
3. Accounting
4. None of the above - -none of the above
Broker lynch has an exclusive listing to sell jones' hardware store for a $4,500
commission. He took another exclusive listing to sell brown's grocery store for a $5,000
commission. With the consent of jones and brown, lynch arranges an exchange of these
two stores. How much will lynch make from this exchange?
1. 4500
2. 5000
3. 9500
4. No commission, because an exchange is not a sale - -9500
Tom lists his home with salesman gary, with the provision that the house not be shown
if he is not at home. Tom leaves town on monday for a two week business trip. On
tuesday, jose and maria (a minority couple) contact gary to see tom's house. Gary
refuses to show the house. In this situation, which of the following statements is true?
1. The couple should file a discrimination suit against tom, the owner of the property
2. The couple should complain to garys broker and demand to be shown the property
3. The couple should sue tom, gary, and the broker for refusing to deal with them in
violation of fair housing laws
4. Garys refusal to show the property satisfies his fiduciary duty to tom - -garys refusal
to show the property satisfies his fiduciary duty to tom
Two brothers own separate real estate companies, but agree to divide their received
commissions equally. Broker a pays for three-fourths of the advertising costs and finds
the buyer. Broker b pays for one-fourth of the advertising costs. If the total commission
on the sale is $4,500, how much does broker b receive?
1. 1125
2. 2250
3. 4500
4. None of the above - -2250
How can an agency relationship be created?
Law
Laws of Agency Exam Question and
Answers 2025
A general agency empowers the agent to:
1. Transact matters of all types for the client
2. Transact the client's affairs in a certain business
3. Perform only specific acts for the client
4. Perform any legal acts for the client - -transact the client's affairs in a certain business
All of the following are examples of dual agency except:
1. Broker representing buyer and seller, with consent of both
2. Escrow agents
3. Broker representing both buyer and seller, without consent of either
4. Two salespersons in a firm represent a different buyer and seller - -two salespersons
in a firm represent a different buyer and seller
Bill, a broker with xyz realty, sells a property listed by gene, an independent broker. In
this transaction, what is the relationship between bill and gene?
1. Bill is the agent; gene is the principal
2. Bill is the trustee; gene is the trustor
3. Bill is the subagent; gene is the agent
4. Either 1 or 3 could be correct - -bill is the agent; gene is the principal
A woman offers to buy property listed by her sister (a broker). However, she does not
want her sister to tell the seller of their relationship. The sister should:
1. Tell the seller that the prospective buyer is a relative
2. Let another person buy the property and turn the deed over to her sister
3. Sell the property without disclosing the relationship
4. Find another listing agent to avoid conflict of interest - -tell the seller that the
prospective buyer is a relative
What is not a fiduciary duty that an agent has towards his client?
1. To use care in completing contracts
2. To obey all client instructions
3. To be loyal to the client
4. To be accountable for documents and funds - -to obey all client instructions
Law
,Law
An owner is listing his rental property with a broker. Based on past experience, the
owner thinks that females cause less damage. He therefore tells the broker that he only
wants to rent to females. What should the broker do?
1. Advise the owner that this restriction is illegal
2. Follow the owner's instruction in order to protect the client's interest
3. Accept the listing and give preferential treatment to female applicants
4. Follow the owner's instruction because of the fiduciary relationship - -advise the
owner that this restriction is illegal
All of the following persons may act as escrow agents except:
1. Brokers
2. Neutral third persons
3. Salespersons
4. Attorneys - -salespersons
A buyer's broker presents an offer for property listed by another broker. Proper agency
disclosures have been made. Prior to acceptance, the listing broker discovers a zoning
change that will affect the value of the property. He tells the buyer and the offer is
withdrawn. Which of the following statements is correct?
1. The listing broker has violated his fiduciary relationship with the seller
2. The listing broker has exercised due care and loyalty to his principal
3. The buyer may not withdraw his offer
4. Disclosure of this info violates state licensing authorities - -the listing broker has
exercised due care and loyalty to his principal
A buyer broker agreement may arise by all of the following means, except:
1. Express agreement
2. Ostensible agreement
3. Custom
4. None of the above are valid - -custom
What is the highest commission rate that a real estate broker may charge for marketing
a farm property?
1. 10%
2. 15%
3. 25%
4. None of the above - -none of the above
Law
,Law
A broker represents a buyer. While showing a property to his client, the broker learns
something that might influence the sale. Nevertheless, the broker may not disclose
which of the following items to his client?
1. That the current owner has hiv
2. That the seller is in poor financial condition
3. That the seller will not accept an offer based on va financing
4. The broker is unrestricted because he represents the buyer - -that the current owner
has hiv
Which of the following actions would create an agency relationship?
1. A broker accepts the listing to sell a friend's home and agrees to a reduced
commission
2. An individual gives written authority for a broker to buy, sell, or exchange his real
property for a one year period
3. A duplex owner signs a listing agreement which authorizes a broker to market the
property for one year
4. All of the above - -all of the above
Smith dies and his real property is sold. What determines the amount of commission
paid to the broker who handles the sale?
1. The state real estate board
2. The local bar association
3. The listing agreement
4. The state association of realtors - -the listing agreement
When does a broker earn commission?
1. When the listing is taken
2. When the purchaser signs the title insurance policy
3. When closing it is complete and the title passes
4. When the offer to purchase has been signed and accepted by the seller - -when the
offer to purchase has been signed and accepted by the seller
In order for a dual agency to be legal, it must be:
1. Disclosed orally prior to negotiations
2. Disclosed in writing and agreed upon prior to negotiations
3. Disclosed in writing after negotiations
4. None of the above - -disclosed in writing and agreed upon prior to negotiations
Law
, Law
A listing broker is showing property near a toxic waste dump. The broker does not tell a
prospective buyer about the dump. By withholding this information, the broker is
negligent in his fiduciary duty of:
Select one:
1. Obedience
2. Loyalty
3. Accounting
4. None of the above - -none of the above
Broker lynch has an exclusive listing to sell jones' hardware store for a $4,500
commission. He took another exclusive listing to sell brown's grocery store for a $5,000
commission. With the consent of jones and brown, lynch arranges an exchange of these
two stores. How much will lynch make from this exchange?
1. 4500
2. 5000
3. 9500
4. No commission, because an exchange is not a sale - -9500
Tom lists his home with salesman gary, with the provision that the house not be shown
if he is not at home. Tom leaves town on monday for a two week business trip. On
tuesday, jose and maria (a minority couple) contact gary to see tom's house. Gary
refuses to show the house. In this situation, which of the following statements is true?
1. The couple should file a discrimination suit against tom, the owner of the property
2. The couple should complain to garys broker and demand to be shown the property
3. The couple should sue tom, gary, and the broker for refusing to deal with them in
violation of fair housing laws
4. Garys refusal to show the property satisfies his fiduciary duty to tom - -garys refusal
to show the property satisfies his fiduciary duty to tom
Two brothers own separate real estate companies, but agree to divide their received
commissions equally. Broker a pays for three-fourths of the advertising costs and finds
the buyer. Broker b pays for one-fourth of the advertising costs. If the total commission
on the sale is $4,500, how much does broker b receive?
1. 1125
2. 2250
3. 4500
4. None of the above - -2250
How can an agency relationship be created?
Law
