Colorado Real Estate Agency
Relationships Exam Questions with
Verified Answers & Rationales 2026
Q&A | Instant Download Pdf
1. In Colorado real estate practice, an agency relationship is created
when a broker:
A. Pays a commission to another broker
B. Represents a party in a real estate transaction
C. Records a deed with the county
D. Conducts an appraisal
Answer: B. Represents a party in a real estate transaction
Rationale: An agency relationship exists when a broker legally
represents a buyer, seller, landlord, or tenant in a transaction and
owes duties to that client.
2. Which Colorado brokerage relationship allows a broker to assist
both parties without advocating for either side?
A. Seller agency
B. Buyer agency
C. Transaction-brokerage
D. Universal agency
Answer: C. Transaction-brokerage
,Rationale: A transaction-broker assists both parties impartially
without acting as an advocate or fiduciary for either side.
3. A fiduciary duty requires a broker to:
A. Protect confidential information
B. Ignore client instructions
C. Avoid written agreements
D. Eliminate inspections
Answer: A. Protect confidential information
Rationale: Fiduciary duties include loyalty, confidentiality, obedience,
disclosure, accounting, and reasonable care.
4. In Colorado, a broker acting as a transaction-broker owes:
A. Full fiduciary loyalty
B. Confidentiality and honesty
C. No duties whatsoever
D. Legal representation in court
Answer: B. Confidentiality and honesty
Rationale: Transaction-brokers must exercise honesty, fair dealing,
accounting, and confidentiality even though they are not fiduciaries.
5. Which document commonly establishes a brokerage relationship
in Colorado?
,A. Closing Disclosure
B. Exclusive Right-to-Sell Listing Contract
C. Warranty Deed
D. Deed of Trust
Answer: B. Exclusive Right-to-Sell Listing Contract
Rationale: Listing contracts define the relationship between brokers
and sellers and establish duties and compensation terms.
6. A broker representing a buyer exclusively is known as a:
A. Universal agent
B. Seller representative
C. Buyer’s agent
D. Escrow officer
Answer: C. Buyer’s agent
Rationale: A buyer’s agent owes fiduciary duties to the buyer and
advocates for the buyer’s interests.
7. Which duty requires a broker to follow all lawful client
instructions?
A. Loyalty
B. Obedience
C. Accounting
D. Disclosure
Answer: B. Obedience
, Rationale: Brokers must obey lawful instructions from clients as part
of their fiduciary obligations.
8. In Colorado, designated brokerage means:
A. One broker represents both parties
B. Different brokers in the same firm represent separate clients
C. No written agreements are required
D. All brokers are transaction-brokers only
Answer: B. Different brokers in the same firm represent separate
clients
Rationale: Designated brokerage allows separate brokers within the
same firm to represent opposing parties independently.
9. Which of the following is considered confidential information?
A. Property square footage
B. Seller’s willingness to accept less money
C. Public tax records
D. MLS remarks
Answer: B. Seller’s willingness to accept less money
Rationale: A client’s negotiating position is confidential and cannot be
disclosed without permission.
10. A broker must disclose material defects to:
Relationships Exam Questions with
Verified Answers & Rationales 2026
Q&A | Instant Download Pdf
1. In Colorado real estate practice, an agency relationship is created
when a broker:
A. Pays a commission to another broker
B. Represents a party in a real estate transaction
C. Records a deed with the county
D. Conducts an appraisal
Answer: B. Represents a party in a real estate transaction
Rationale: An agency relationship exists when a broker legally
represents a buyer, seller, landlord, or tenant in a transaction and
owes duties to that client.
2. Which Colorado brokerage relationship allows a broker to assist
both parties without advocating for either side?
A. Seller agency
B. Buyer agency
C. Transaction-brokerage
D. Universal agency
Answer: C. Transaction-brokerage
,Rationale: A transaction-broker assists both parties impartially
without acting as an advocate or fiduciary for either side.
3. A fiduciary duty requires a broker to:
A. Protect confidential information
B. Ignore client instructions
C. Avoid written agreements
D. Eliminate inspections
Answer: A. Protect confidential information
Rationale: Fiduciary duties include loyalty, confidentiality, obedience,
disclosure, accounting, and reasonable care.
4. In Colorado, a broker acting as a transaction-broker owes:
A. Full fiduciary loyalty
B. Confidentiality and honesty
C. No duties whatsoever
D. Legal representation in court
Answer: B. Confidentiality and honesty
Rationale: Transaction-brokers must exercise honesty, fair dealing,
accounting, and confidentiality even though they are not fiduciaries.
5. Which document commonly establishes a brokerage relationship
in Colorado?
,A. Closing Disclosure
B. Exclusive Right-to-Sell Listing Contract
C. Warranty Deed
D. Deed of Trust
Answer: B. Exclusive Right-to-Sell Listing Contract
Rationale: Listing contracts define the relationship between brokers
and sellers and establish duties and compensation terms.
6. A broker representing a buyer exclusively is known as a:
A. Universal agent
B. Seller representative
C. Buyer’s agent
D. Escrow officer
Answer: C. Buyer’s agent
Rationale: A buyer’s agent owes fiduciary duties to the buyer and
advocates for the buyer’s interests.
7. Which duty requires a broker to follow all lawful client
instructions?
A. Loyalty
B. Obedience
C. Accounting
D. Disclosure
Answer: B. Obedience
, Rationale: Brokers must obey lawful instructions from clients as part
of their fiduciary obligations.
8. In Colorado, designated brokerage means:
A. One broker represents both parties
B. Different brokers in the same firm represent separate clients
C. No written agreements are required
D. All brokers are transaction-brokers only
Answer: B. Different brokers in the same firm represent separate
clients
Rationale: Designated brokerage allows separate brokers within the
same firm to represent opposing parties independently.
9. Which of the following is considered confidential information?
A. Property square footage
B. Seller’s willingness to accept less money
C. Public tax records
D. MLS remarks
Answer: B. Seller’s willingness to accept less money
Rationale: A client’s negotiating position is confidential and cannot be
disclosed without permission.
10. A broker must disclose material defects to:
