CA Real Estate Exam Pt. 2 Practice Questions and Answers

An agency relationship creates a fiduciary relationship between principal and agent. Which of the following relationships illustrates a fiduciary relationship? (A) Real estate broker to his/her client (B) Trustee to a beneficiary (C) Both A and B (D) Neither A nor B Answer: (C) Both A and B require a fiduciary responsibility as both are acting as agents for their principal. A broker takes a listing on a residence. The seller tells the broker she is selling because a freeway is planned nearby. The freeway is not scheduled to be completed for five years. The path of the freeway might affect the desirability of the property in the future. The broker: (A) Need not disclose the planned freeway because the broker owes a responsibility to the seller (B) May disclose the planned freeway if the buyer specifically asks (C) Must disclose the planned freeway whether asked or not (D) The statute of limitations is three years, so the broker does not need to disclose since the freeway is scheduled for five years Answer: (C) Disclosure law requires the broker to disclose all facts affecting the value or desirability of the property When a Principal employs an Agent, this action creates: (A) An agency relationship (B) A fiduciary relationship (C) Both A and B (D) Neither A nor B Answer: (C) Both A and B are correct A salesperson tells his broker he is quitting and going to work for another broker. His present broker should: (A) Notify the Real Estate Commissioner and hold the license until further notice from the Commissioner