15 free questions from the Cinna RE agency and fiduciary duties bank (102 in the app). Tap an answer to check it. The rationale opens right away.
A property sells for $250,000 at a 7 percent commission. The listing side gets 50 percent of the total, and the listing agent keeps 60 percent of the listing side's share. How much does the listing AGENT earn?
Answer: B. $5,250
Total commission = $250,000 x 0.07 = $17,500; listing side = $8,750; agent's 60 percent = $8,750 x 0.60 = $5,250.
A buyer's agent fails to recommend a property inspection and the buyer later discovers a major hidden defect that an inspection would have revealed. The agent most likely breached the duty of:
Answer: B. Care
Failing to use the skill and diligence a competent agent would exercise, such as advising an inspection, is a breach of the duty of reasonable care.
An agent's duty to act exclusively in the best interest of the principal and to place the principal's interests above the agent's own is the duty of:
Answer: A. Loyalty
The duty of loyalty requires the agent to put the principal's interests ahead of everyone else's, including the agent's own.
A home sells for $300,000 with a total commission of 6 percent, split 50/50 between the listing and selling brokerages. How much does the SELLING brokerage receive?
Answer: A. $9,000
Total commission is $300,000 x 0.06 = $18,000; split 50/50 gives each brokerage $9,000.
The principal federal law that prohibits price-fixing, group boycotts, and market allocation in the brokerage business is the:
Answer: B. Sherman Antitrust Act
The Sherman Antitrust Act is the foundational federal statute prohibiting agreements that restrain trade, including price-fixing, boycotts, and market allocation among real estate competitors.
A buyer tells her agent she will pay up to $320,000 but wants to offer $300,000. Under an exclusive buyer-agency agreement, the agent must:
Answer: B. Keep the buyer's maximum confidential and present the $300,000 offer
As the buyer's fiduciary, the agent must maintain confidentiality of the buyer's top price and act on the buyer's instruction to offer $300,000.
A property manager who is empowered to handle a range of ongoing matters for an owner, such as leasing units, collecting rent, and hiring contractors, is acting as a:
Answer: B. General agent
A general agent is authorized to handle a continuous series of transactions involving ongoing duties, which is typical of a property manager.
A seller tells the listing agent, 'I'm getting divorced and must sell fast, but don't tell any buyer that.' The agent passes this on to a buyer. The agent has breached the duty of:
Answer: C. Confidentiality
The duty of confidentiality requires the agent to keep the principal's personal and financial information private, especially anything that could weaken the principal's bargaining position.
A licensee shows a home to an unrepresented buyer who has signed no agreement. To that buyer the licensee owes:
Answer: B. Honesty, fair dealing, and disclosure of known material defects
An unrepresented buyer is a customer; the licensee owes honesty, fair dealing, and disclosure of known material defects, but not fiduciary loyalty.
When a broker appoints one agent to represent the buyer and another to represent the seller in the same transaction, it is:
Answer: A. Designated agency
Designated (appointed) agency lets a broker assign different associated agents to each party, reducing the conflicts of full dual agency.
Under an EXCLUSIVE RIGHT TO SELL listing, the broker earns a commission if the property sells during the listing period:
Answer: C. No matter who finds the buyer, including the seller
An exclusive right to sell entitles the listing broker to a commission regardless of who procures the buyer, even if the owner finds the buyer themselves.
Two competing brokers agree over lunch that neither will charge a commission below 6 percent. This agreement is:
Answer: B. Illegal price-fixing under antitrust law
Any agreement among competing brokers to set, standardize, or maintain commission rates is illegal price-fixing, a per se violation of antitrust law regardless of the rate involved.
When a listing is placed in the MLS with an offer of cooperation and compensation, a cooperating broker who chooses to accept subagency becomes:
Answer: B. A subagent of the seller
Historically, accepting the MLS offer of subagency made the cooperating broker a subagent of the seller, owing fiduciary duties to the seller rather than the buyer.
An agency relationship created when a principal's conduct leads a third party to reasonably believe authority exists is agency by:
Answer: A. Estoppel
Agency by estoppel arises when a principal's words/conduct cause a third party to reasonably rely on an apparent authority the principal is then estopped from denying.
The broker who sets in motion the uninterrupted chain of events that results in the sale is recognized as the:
Answer: A. Procuring cause
Procuring cause is the agent whose efforts started an unbroken series of events leading to the sale; it is the key concept in commission disputes between brokers.
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