62 Agency & Contracts Practice Questions & Answers

1. 1. A property owner hires a broker to manage an apartment building, collect rents, and handle repairs on an ongoing basis. What type of agent is the broker?

   • A.Universal agent
   • B.Subagent
   • C.Special agent
   • D.General agent✓ Answer

   A general agent is authorized to perform an ongoing series of acts within a continuing relationship, such as a property manager. A special agent is limited to a single transaction.

   Ref QB-BP24C6Source: Law of agency — classification of agents (general vs. special vs. universal)Report a problem with this question

2. 2. A seller signs a listing agreement authorizing a broker to find a buyer for one specific property. With respect to that transaction, the broker is best classified as a:

   • A.Gratuitous agent
   • B.Universal agent
   • C.Special agent✓ Answer
   • D.General agent

   A listing broker is a special agent because the authority is limited to a single specific transaction rather than a continuing series of acts.

   Ref QB-S6HKK4Source: Law of agency — special agent (single transaction)Report a problem with this question

3. 3. An agency relationship is created when a principal, through words or conduct, accepts the benefits of an unauthorized act performed on their behalf. This method of creating agency is called:

   • A.Express agreement
   • B.Estoppel
   • C.Ratification✓ Answer
   • D.Novation

   Ratification creates agency after the fact when the principal approves or accepts the benefits of an act that was originally unauthorized.

   Ref QB-APPR65Source: Creation of agency — ratificationReport a problem with this question

4. 4. A principal's own conduct leads a third party to reasonably believe that a person is the principal's agent, even though no actual authority was granted. This is an example of:

   • A.Universal authority
   • B.Apparent authority✓ Answer
   • C.Express authority
   • D.Actual authority

   Ostensible or apparent authority arises from the principal's conduct that causes a third party to reasonably believe agency exists, even without an express grant.

   Ref QB-R669E3Source: Agency authority — ostensible/apparent vs. actual authorityReport a problem with this question

5. 5. A cooperating broker who works for the listing broker's principal (the seller) rather than for their own client is acting as a:

   • A.Subagent✓ Answer
   • B.Universal agent
   • C.Designated agent
   • D.Dual agent

   A subagent owes the same fiduciary duties to the agent's principal because the subagent works for the principal through the agent, not for a separate customer.

   Ref QB-9PBEZ3Source: Agency — subagencyReport a problem with this question

6. 6. In a real estate brokerage relationship, the person to whom full fiduciary duties are owed is best described as the:

   • A.Client✓ Answer
   • B.Customer
   • C.Subagent
   • D.Third party

   The client, or principal, is the party the agent represents and to whom full fiduciary duties are owed; a customer is owed only honesty and fair dealing.

   Ref QB-Q6TW82Source: Agency — client vs. customer distinctionReport a problem with this question

7. 7. A buyer who is not represented by the agent but is shown a property by the listing agent is considered a:

   • A.Fiduciary
   • B.Principal
   • C.Client
   • D.Customer✓ Answer

   An unrepresented buyer is a customer, owed only honesty, fair dealing, and disclosure of known material defects — not the full fiduciary duties owed to a client.

   Ref QB-8PY3U2Source: Agency — customer relationship dutiesReport a problem with this question

8. 8. An agent follows a seller's instruction to hold all offers until a certain date, even though the seller's reason is simply personal convenience. Assuming the instruction is lawful, which fiduciary duty requires the agent to comply?

   • A.Accountability
   • B.Disclosure
   • C.Confidentiality
   • D.Obedience✓ Answer

   The duty of obedience requires the agent to follow all lawful instructions of the principal; only unlawful instructions may be refused.

   Ref QB-P6FK3ZSource: Fiduciary duties (OLD CAR) — obedience to lawful instructionsReport a problem with this question

9. 9. A listing agent learns that a buyer is willing to pay more than the offered price but tells the seller only the amount actually offered, and privately arranges to buy the property for personal resale. Which fiduciary duty has the agent MOST clearly breached?

   • A.Accountability
   • B.Obedience
   • C.Care
   • D.Loyalty✓ Answer

   Loyalty requires placing the principal's interest above all others and prohibits secret profit and undisclosed self-dealing, both of which occurred here.

   Ref QB-7PMRNZSource: Fiduciary duties — loyalty (no secret profit, no self-dealing)Report a problem with this question

10. 10. A broker deposits a client's earnest-money funds into the broker's own personal operating account. This improper act is known as:

    • A.Accounting
    • B.Consideration
    • C.Commingling✓ Answer
    • D.Subrogation

    Commingling is mixing client trust funds with the broker's own funds; the duty of accountability requires trust funds be kept separate.

    Ref QB-AKKMBBSource: Fiduciary duties — accountability / no commingling of trust fundsReport a problem with this question

11. 11. After a listing expires, an agent reveals to a future buyer that the former seller had been going through a divorce and was desperate to sell quickly. Which fiduciary duty did the agent violate?

    • A.Care
    • B.Obedience
    • C.Disclosure
    • D.Confidentiality✓ Answer

    The duty of confidentiality protects the principal's personal and financial information, and it survives the termination of the agency relationship.

    Ref QB-S3EFRASource: Fiduciary duties — confidentiality (survives termination)Report a problem with this question

12. 12. Which of the following is a fiduciary duty owed to a principal (client) but NOT to a customer?

    • A.Disclosure of known material defects
    • B.Fair dealing
    • C.Loyalty✓ Answer
    • D.Honesty

    Loyalty and confidentiality are owed only to the principal; honesty, fair dealing, and disclosure of known material defects are owed to all parties including customers.

    Ref QB-BKXXGCSource: Duties to principal vs. duties to third partiesReport a problem with this question

13. 13. An agent must disclose to the seller-principal a material fact the agent learns that could affect the seller's decision, such as the true financial strength of a prospective buyer. This obligation reflects the duty of:

    • A.Confidentiality
    • B.Care
    • C.Accountability
    • D.Disclosure✓ Answer

    The duty of disclosure requires the agent to reveal to the principal all material facts relevant to the transaction that could influence the principal's decision.

    Ref QB-T3SSWBSource: Fiduciary duties — disclosure of material facts to principalReport a problem with this question

14. 14. A buyer's agent fails to research readily available public records and, as a result, the buyer overpays for a property in a flood zone. The agent has most likely breached the duty of:

    • A.Confidentiality
    • B.Reasonable care and skill✓ Answer
    • C.Obedience
    • D.Loyalty

    The duty of reasonable care and skill requires the agent to use the competence and diligence expected of a professional, including investigating readily available information.

    Ref QB-8KVXY8Source: Fiduciary duties — reasonable care and skillReport a problem with this question

15. 15. An agent representing a seller accepts an undisclosed referral fee from a home inspector the agent recommends to the buyer. This is prohibited primarily because it constitutes:

    • A.Consideration
    • B.A secret profit✓ Answer
    • C.Accountability
    • D.Ratification

    Taking an undisclosed benefit is a secret profit, which violates the duty of loyalty; any such benefit must be disclosed and consented to.

    Ref QB-Q3QSD8Source: Fiduciary duties — loyalty / no secret profitReport a problem with this question

16. 16. Dual agency, in which one licensee represents both the buyer and the seller in the same transaction, is legally permissible only when:

    • A.The broker discloses it only to the seller
    • B.Both parties give informed written consent✓ Answer
    • C.The agent treats both sides fairly
    • D.The transaction price is above market value

    Dual agency is legal only with the informed written consent of both parties; merely being fair to both sides does not satisfy the requirement.

    Ref QB-9K8A6ASource: Dual agency — informed written consent of both partiesReport a problem with this question

17. 17. In a properly disclosed dual agency, which of the following may the agent NOT do?

    • A.Present all offers to the seller
    • B.Explain financing options to both
    • C.Tell the buyer the seller's bottom price✓ Answer
    • D.Prepare documents for both parties

    A dual agent must not disclose either party's confidential negotiating position, such as the lowest price a seller will accept or the highest a buyer will pay.

    Ref QB-R335K9Source: Dual agency — no disclosure of confidential negotiating positionReport a problem with this question

18. 18. A licensee represents a seller. While showing the home, the licensee tells an unrepresented buyer, "Offer $10,000 less than asking — they'll take it." This advice most likely creates:

    • A.An undisclosed dual agency✓ Answer
    • B.A properly disclosed dual agency
    • C.A valid subagency
    • D.A universal agency

    Giving a customer negotiating advice can imply agency to that buyer while the licensee still represents the seller, silently creating an undisclosed dual agency and breaching loyalty to the seller.

    Ref QB-6K6AN6Source: Implied agency / undisclosed dual agencyReport a problem with this question

19. 19. Undisclosed dual agency is a serious violation primarily because it can result in:

    • A.Automatic contract validity
    • B.Loss of commission and license✓ Answer
    • C.A larger commission for the broker
    • D.Reduced fiduciary duties

    Undisclosed dual agency is a breach of the agency relationship that can forfeit the agent's commission and jeopardize the license.

    Ref QB-N3Z436Source: Undisclosed dual agency — consequences (breach)Report a problem with this question

20. 20. In a designated (appointed) agency arrangement, how is representation handled within a single brokerage when both buyer and seller are clients of that firm?

    • A.The firm withdraws from the transaction
    • B.One licensee openly represents both parties
    • C.Each party is assigned a separate licensee✓ Answer
    • D.Neither party receives representation

    Designated agency assigns different licensees within the same brokerage to represent each party, allowing individual representation despite the firm's dual role.

    Ref QB-ZCK5SYSource: Designated / appointed agencyReport a problem with this question

21. 21. Agency disclosure laws generally require a licensee to inform the parties of whom the licensee represents. The main purpose of this disclosure is to:

    • A.Guarantee the sale will close
    • B.Eliminate the need for written contracts
    • C.Set the commission rate
    • D.Prevent confusion about representation✓ Answer

    Agency disclosure ensures the parties understand which party the licensee represents so they know to whom fiduciary duties are owed.

    Ref QB-HVRACZSource: Agency disclosure requirementReport a problem with this question

22. 22. An agency relationship ends automatically upon which of the following events?

    • A.The buyer lowering an offer
    • B.Death of the principal✓ Answer
    • C.A slow real estate market
    • D.The agent taking a vacation

    Death or incapacity of either the principal or agent automatically terminates the agency relationship because the personal relationship can no longer be performed.

    Ref QB-JV4NH2Source: Termination of agency — death or incapacity of a partyReport a problem with this question

23. 23. Which of the following would terminate an agency by operation of law rather than by the act of a party?

    • A.Mutual agreement to cancel
    • B.Destruction of the property✓ Answer
    • C.Renunciation by the agent
    • D.Revocation by the principal

    Destruction of the property terminates the agency by operation of law because its subject matter no longer exists; the other choices are terminations by act of a party.

    Ref QB-XCVFEWSource: Termination of agency — destruction of property (operation of law)Report a problem with this question

24. 24. A principal revokes a broker's listing without cause before its expiration and before any buyer is procured. What is the general legal result?

    • A.The listing continues in force despite revocation
    • B.The broker automatically earns the full commission
    • C.The agency ends, but the seller may owe damages✓ Answer
    • D.The agency cannot be revoked at all

    A principal generally has the power to revoke, which ends the agency, but wrongful revocation without cause can create liability for damages to the broker.

    Ref QB-FV2NZWSource: Termination of agency — revocation vs. wrongful terminationReport a problem with this question

25. 25. Which of the following is one of the four essential elements required for a valid contract?

    • A.A notarized signature
    • B.A licensed broker
    • C.Consideration✓ Answer
    • D.A recorded deed

    The four essentials are competent parties, mutual assent, lawful object, and consideration; a broker, notarization, and recording are not required for validity.

    Ref QB-YC8TKXSource: Contract law — four essential elementsReport a problem with this question

26. 26. A contract signed by a person who was legally declared mentally incompetent at the time of signing is:

    • A.Voidable at the other party's option
    • B.Void✓ Answer
    • C.Unenforceable only after one year
    • D.Fully valid and enforceable

    A person adjudicated legally incompetent lacks capacity, so the contract is void and has no legal effect because a valid contract requires competent parties.

    Ref QB-GVDY6YSource: Contract classifications — void (incompetent party)Report a problem with this question

27. 27. A contract that a minor enters into is generally classified as which of the following, because the minor may disaffirm it?

    • A.Voidable✓ Answer
    • B.Unenforceable
    • C.Void
    • D.Executed

    A minor's contract is voidable — it is valid until the minor with limited capacity chooses to disaffirm (rescind) it.

    Ref QB-5DZFF5Source: Contract classifications — voidable (minor)Report a problem with this question

28. 28. A contract required by law to be in writing, but which exists only as an oral agreement, is best described as:

    • A.Ratified
    • B.Void from inception
    • C.Unenforceable✓ Answer
    • D.Fully executed

    A contract that fails a writing requirement under the Statute of Frauds is unenforceable — it may be otherwise valid but a court will not enforce it.

    Ref QB-NV6N26Source: Contract classifications — unenforceable / Statute of FraudsReport a problem with this question

29. 29. A real estate sales contract in which the seller promises to convey and the buyer promises to pay is an example of what kind of contract?

    • A.Unilateral
    • B.Void
    • C.Executed
    • D.Bilateral✓ Answer

    A bilateral contract is a promise exchanged for a promise; here both parties make enforceable promises, unlike a unilateral contract where only one party promises.

    Ref QB-4FKAA4Source: Contract classifications — bilateral vs. unilateralReport a problem with this question

30. 30. An option contract, in which the owner is bound to keep an offer open but the optionee is not obligated to buy, is an example of a:

    • A.Executed contract
    • B.Void contract
    • C.Bilateral contract
    • D.Unilateral contract✓ Answer

    An option is a unilateral contract because only one party (the owner) is obligated; the optionee has a right, but no obligation, to perform.

    Ref QB-KXD5Q3Source: Contract classifications — unilateral (option)Report a problem with this question

31. 31. A signed purchase agreement on which the closing has not yet occurred is best described as a(n):

    • A.Void contract
    • B.Unenforceable contract
    • C.Executory contract✓ Answer
    • D.Executed contract

    An executory contract has obligations still to be performed; once all obligations are completed at closing it becomes an executed contract.

    Ref QB-3F8Y43Source: Contract classifications — executory vs. executedReport a problem with this question

32. 32. A buyer signs a purchase contract only because the seller intentionally lied about a major hidden defect. The buyer's consent was not genuine, making the contract:

    • A.Void from the start
    • B.Unenforceable by the seller only after recording
    • C.Voidable by the buyer✓ Answer
    • D.Fully enforceable against the buyer

    Fraud destroys genuine assent, making the contract voidable at the option of the defrauded party, who may rescind or enforce it.

    Ref QB-JX2TH2Source: Mutual assent — genuine consent (fraud makes contract voidable)Report a problem with this question

33. 33. For a contract to have mutual assent, the offer and acceptance must reflect a genuine "meeting of the minds." Which of the following would NOT, by itself, destroy genuine assent?

    • A.A hard but honest negotiation✓ Answer
    • B.Undue influence
    • C.Fraud
    • D.Duress

    Genuine assent is destroyed by fraud, duress, menace, undue influence, or mistake; ordinary hard but honest bargaining does not negate consent.

    Ref QB-2FVMXZSource: Mutual assent — factors that negate genuine consentReport a problem with this question

34. 34. A contract whose purpose is to accomplish something illegal is:

    • A.Unenforceable but valid
    • B.Void✓ Answer
    • C.Executory
    • D.Voidable

    A contract lacking a lawful object is void from its inception and has no legal effect, since lawful object is an essential element.

    Ref QB-HXPFCZSource: Contract elements — lawful object (void if unlawful)Report a problem with this question

35. 35. Under the Statute of Frauds, which of the following must be in writing to be enforceable?

    • A.A contract conveying real property✓ Answer
    • B.A one-week apartment rental
    • C.A verbal agreement to mow a lawn
    • D.A month-to-month oral tenancy

    The Statute of Frauds requires contracts conveying real property, and leases longer than one year, to be in writing to be enforceable.

    Ref QB-ZEHASYSource: Statute of Frauds — real property conveyances in writingReport a problem with this question

36. 36. Which lease, under the Statute of Frauds, must generally be in writing to be enforceable?

    • A.A daily rental
    • B.A lease over one year✓ Answer
    • C.A three-month lease
    • D.A two-week vacation rental

    The Statute of Frauds requires leases with a term longer than one year to be in writing; shorter leases may be enforceable orally.

    Ref QB-GXB57YSource: Statute of Frauds — leases longer than one yearReport a problem with this question

37. 37. A buyer submits a written offer; the seller responds by changing the price and adding a condition, then signing. This response is legally a:

    • A.Valid acceptance of the original offer
    • B.Ratification of the original offer
    • C.Counteroffer to the original offer✓ Answer
    • D.Assignment of the original offer

    Changing any term is a counteroffer, which rejects and terminates the original offer; the original offer can no longer be accepted.

    Ref QB-8FZMY8Source: Offer and acceptance — counteroffer terminates original offerReport a problem with this question

38. 38. For an acceptance to create a binding contract, it must be:

    • A.Kept private in the offeree's mind
    • B.Made after the offer is revoked
    • C.Unqualified and communicated to the offeror✓ Answer
    • D.Conditioned on a new price

    Acceptance must be unqualified (mirroring the offer) and communicated to the offeror; silent or internal acceptance does not form a contract.

    Ref QB-QXTFD8Source: Offer and acceptance — must be unqualified and communicatedReport a problem with this question

39. 39. Before a seller accepts a buyer's written offer, the buyer notifies the seller that the offer is withdrawn. This is a valid:

    • A.Counteroffer by the seller
    • B.Breach of contract
    • C.Revocation of the offer✓ Answer
    • D.Novation

    An offer may be revoked by the offeror any time before it is accepted; because no contract had yet formed, the revocation is valid and not a breach.

    Ref QB-DYGEGSSource: Offer and acceptance — revocation before acceptanceReport a problem with this question

40. 40. Substituting a new contract or a new party for an existing one, thereby discharging the original obligation, is called:

    • A.Assignment
    • B.Ratification
    • C.Novation✓ Answer
    • D.Rescission

    Novation substitutes a new contract or party and discharges the original obligation, distinguishing it from an assignment, which transfers rights without necessarily releasing the original party.

    Ref QB-WFPK3TSource: Discharge of contracts — novationReport a problem with this question

41. 41. A contract clause stating that both parties agree in advance to a set amount the buyer forfeits if the buyer defaults (such as the earnest money) is a provision for:

    • A.Liquidated damages✓ Answer
    • B.Novation
    • C.Specific performance
    • D.Rescission

    Liquidated damages are an amount agreed in advance as compensation for a breach, such as forfeiture of the buyer's earnest money on default.

    Ref QB-CY54BRSource: Contract remedies — liquidated damagesReport a problem with this question

42. 42. A seller breaches a signed purchase contract by refusing to convey a unique property. The buyer asks a court to force the seller to complete the sale. The buyer is seeking:

    • A.Novation
    • B.Liquidated damages
    • C.Specific performance✓ Answer
    • D.Rescission

    Specific performance is a court order compelling the actual conveyance, available because real property is considered unique and money damages may be inadequate.

    Ref QB-VFB9WRSource: Contract remedies — specific performanceReport a problem with this question

43. 43. When a purchase contract states that "time is of the essence," the effect is that:

    • A.Deadlines are strictly binding✓ Answer
    • B.Consideration is no longer required
    • C.Deadlines become suggestions only
    • D.The contract can never be enforced

    "Time is of the essence" makes the specified dates strictly binding, so failure to perform by the deadline is a breach.

    Ref QB-BYSR5QSource: Contract performance — time is of the essenceReport a problem with this question

44. 44. Under an exclusive right to sell listing, when does the listing broker earn a commission during the listing term?

    • A.No matter who procures the buyer, including the owner✓ Answer
    • B.Never, because commission is illegal
    • C.Only if another broker finds the buyer
    • D.Only if the listing broker personally finds the buyer

    In an exclusive right to sell listing, the broker earns a commission if the property sells during the term regardless of who procures the buyer, even the owner.

    Ref QB-UFYWQQSource: Listing agreements — exclusive right to sellReport a problem with this question

45. 45. Under an exclusive agency listing, the seller owes NO commission to the listing broker if:

    • A.Any broker sells the property
    • B.The property sells during the term at all
    • C.The owner personally finds the buyer and sells✓ Answer
    • D.The listing broker sells the property

    In an exclusive agency listing, the owner reserves the right to sell personally without owing a commission, but owes one if any broker sells it.

    Ref QB-AYEEYNSource: Listing agreements — exclusive agencyReport a problem with this question

46. 46. Under an open listing, which broker is entitled to the commission?

    • A.No broker, since open listings pay nothing
    • B.The first broker to list it
    • C.Every broker who advertised the property
    • D.Only the broker who procures the sale✓ Answer

    An open listing is non-exclusive, and only the broker who is the procuring cause of the sale earns the commission.

    Ref QB-TFMKJPSource: Listing agreements — open listing / procuring causeReport a problem with this question

47. 47. A listing arrangement in which the broker keeps any sale proceeds above a set net amount to the seller is a net listing. Why is it disfavored or illegal in many states?

    • A.It always pays the seller more
    • B.It is required by the Statute of Frauds
    • C.It creates a conflict of interest✓ Answer
    • D.It eliminates the need for a termination date

    A net listing creates a conflict of interest because the broker profits by keeping the price low to the seller, so it is disfavored or illegal and allowed only with full disclosure.

    Ref QB-9Y34TMSource: Listing agreements — net listing (conflict of interest)Report a problem with this question

48. 48. An exclusive right to sell listing must contain which of the following to be proper?

    • A.A promise of dual agency
    • B.A guaranteed sale price
    • C.A definite termination date✓ Answer
    • D.An automatic renewal forever

    An exclusive right to sell listing should specify a definite termination date; open-ended or automatically renewing listings are generally prohibited.

    Ref QB-SF99DNSource: Listing agreements — definite termination date requiredReport a problem with this question

49. 49. Two competing brokerages agree to charge all clients the same commission rate in their market. This agreement most likely violates:

    • A.Antitrust law✓ Answer
    • B.The Statute of Frauds
    • C.Fair housing law
    • D.The parol evidence rule

    Commissions are always negotiable and never set by law; competitors agreeing to fix rates is illegal price fixing under antitrust law.

    Ref QB-YZT89ASource: Antitrust — commission negotiable, no price fixingReport a problem with this question

50. 50. The federal law that prohibits ALL racial discrimination in the sale or rental of property, with no exemptions, is the:

    • A.Statute of Frauds
    • B.Civil Rights Act of 1866✓ Answer
    • C.Americans with Disabilities Act
    • D.Fair Housing Act of 1968

    The Civil Rights Act of 1866 bars all racial discrimination in property transactions with no exemptions, as affirmed in Jones v. Mayer (1968).

    Ref QB-FHN3P9Source: Civil Rights Act of 1866 (Jones v. Mayer)Report a problem with this question

51. 51. Which of the following is a protected class under the federal Fair Housing Act of 1968 (as amended)?

    • A.Familial status✓ Answer
    • B.Income level
    • C.Political party
    • D.Occupation

    The federal protected classes are race, color, religion, national origin, sex, disability, and familial status; occupation, political party, and income are not federally protected.

    Ref QB-ZZ6KEBSource: Fair Housing Act of 1968 — protected classesReport a problem with this question

52. 52. An agent steers minority buyers only toward certain neighborhoods and white buyers toward others based on the buyers' race. This prohibited practice is called:

    • A.Novation
    • B.Steering✓ Answer
    • C.Redlining
    • D.Blockbusting

    Steering is channeling buyers toward or away from particular areas based on a protected class, which is prohibited under the Fair Housing Act.

    Ref QB-GHZDUASource: Fair Housing Act — steeringReport a problem with this question

53. 53. An agent tells homeowners they should sell quickly because families of a certain protected class are moving in and property values will fall. This illegal practice is:

    • A.Commingling
    • B.Redlining
    • C.Blockbusting✓ Answer
    • D.Steering

    Blockbusting, or panic peddling, is inducing owners to sell by claiming that entry of a protected class will lower property values; it is prohibited.

    Ref QB-22JWKCSource: Fair Housing Act — blockbusting/panic peddlingReport a problem with this question

54. 54. A lender refuses to make mortgage loans in certain neighborhoods based on the racial makeup of the area rather than the individual applicant's qualifications. This practice is:

    • A.Redlining✓ Answer
    • B.Subrogation
    • C.Blockbusting
    • D.Steering

    Redlining is the prohibited practice of lenders denying loans or insurance in geographic areas based on protected-class composition rather than the applicant's own creditworthiness.

    Ref QB-HHCRZBSource: Fair Housing Act — redliningReport a problem with this question

55. 55. A landlord has a facially neutral policy that unintentionally excludes a protected class at a much higher rate than others, with no business justification. Under fair housing law this may still be a violation under the theory of:

    • A.Specific performance
    • B.Disparate impact✓ Answer
    • C.Novation
    • D.Steering intent

    Disparate impact means a neutral policy can violate the Fair Housing Act if it disproportionately harms a protected class, even without any discriminatory intent.

    Ref QB-32W8SDSource: Fair Housing Act — disparate impact (no intent required)Report a problem with this question

56. 56. A buyer signs an exclusive right-to-represent (exclusive buyer agency) agreement with Broker A. During the term, the buyer finds a for-sale-by-owner (FSBO) home on her own and buys it without involving Broker A. Under the agreement, what is Broker A owed?

    • A.No fee, since the buyer found the home without the broker's help
    • B.Half the agreed fee, since the broker did not locate the property
    • C.A fee only if the FSBO seller agrees to pay it at the closing table
    • D.The agreed fee, since she bought a qualifying home during the term✓ Answer

    Under an exclusive right-to-represent agreement, the broker earns the agreed compensation whenever the buyer purchases a property of the type covered during the term, no matter who found it, including a FSBO the buyer located alone. The rule that no fee is owed when the buyer finds the home alone belongs to an exclusive agency or open (non-exclusive) buyer agreement, not to exclusive right to represent. Nothing supports a half fee, and the buyer's obligation does not depend on the FSBO seller agreeing to pay; if the seller will not pay, the buyer owes the fee directly.

    Ref QB-JHQ37DSource: Common-law agency and brokerage-agreement principles; Pearson VUE National Salesperson Content Outline V.B.2 (buyer representation agreements); NAR written buyer agreement guidance (agreement type and compensation are negotiable)Report a problem with this question

57. 57. A buyer signs non-exclusive (open) buyer agreements with Broker A and Broker B. Broker A shows a home first, but the buyer says she is not interested and stops pursuing it. Weeks later, Broker B reintroduces the same home, writes and negotiates the offer, and the sale closes. Who has earned compensation under the agreements?

    • A.Both brokers, splitting the fee equally between them
    • B.Neither broker, as open agreements carry no fee duty
    • C.Broker A only, as the first broker to show the home
    • D.Broker B only, as the procuring cause of the sale✓ Answer

    Under open (non-exclusive) buyer agreements, only the broker who is the procuring cause earns compensation: the broker whose efforts started an uninterrupted chain of events ending in the sale. Broker A's showing did not lead to the sale because the buyer dropped the home, which broke the chain; Broker B's reintroduction and negotiation produced the purchase. Showing a property first is not enough by itself, open agreements do create a fee obligation to the procuring broker, and there is no automatic equal split.

    Ref QB-429KXESource: Procuring-cause doctrine under common-law brokerage principles; Pearson VUE National Salesperson Content Outline V.B (brokerage agreements; services, fees and compensation)Report a problem with this question

58. 58. Before touring homes with a new buyer, a broker prepares the written buyer agreement that is now standard practice nationally. Which compensation term best satisfies the rule that compensation be objectively ascertainable and not open-ended?

    • A.An amount to be set after the seller accepts
    • B.The customary rate charged in the local market
    • C.Whatever compensation the listing broker offers
    • D.A stated 2.5% of the price, from any source✓ Answer

    A written buyer agreement must state the amount or rate of compensation, or how it will be determined, in a way that is objectively ascertainable. A stated percentage, flat fee or hourly rate qualifies. 'Whatever the listing broker offers' is open-ended because the amount depends on someone outside the agreement. An amount left for later does not fix the compensation either. A 'customary' local rate implies a standard commission, which misstates the law, since broker fees are negotiable and not set by law, and invites antitrust problems.

    Ref QB-KH3ECESource: NAR practice changes / MLS policy for written buyer agreements (compensation objectively ascertainable, not open-ended); Sherman Antitrust Act (no standard or fixed commissions)Report a problem with this question

59. 59. A buyer asks who determines the amount a broker will be paid under a written buyer agreement. Which statement is accurate?

    • A.It is set by the state real estate commission
    • B.It is the rate the local association recommends
    • C.It is fixed by the MLS for all participating brokers
    • D.It is fully negotiable between the buyer and broker✓ Answer

    Broker compensation is negotiated individually between the broker and the client. Written buyer agreements must conspicuously state that broker fees are not set by law and are fully negotiable. State regulators license and discipline brokers but do not set commission rates. A rate set or recommended by an association or an MLS, or agreed among competing brokers, would be price-fixing under federal antitrust law.

    Ref QB-5SSQE5Source: NAR practice changes / MLS policy (conspicuous statement that broker fees are not set by law and are fully negotiable); Sherman Antitrust Act Section 1 (price fixing)Report a problem with this question

60. 60. A buyer has a written agreement with Broker B. In the purchase contract, the seller agrees to a concession that pays B's agreed fee at closing, and this is disclosed to all parties. Whom does Broker B represent?

    • A.The buyer only, as set out in the buyer agreement✓ Answer
    • B.The seller only, because the seller funds the fee
    • C.Both parties, as a dual agent created by the payment
    • D.No one, because the fee came from a third party

    Agency is created by the agreement and conduct of principal and agent, not by the source of the money. A buyer's broker may be paid by the buyer, by a seller concession, or by the listing broker, as negotiated and disclosed, and still owes fiduciary duties only to the buyer. Payment by the seller does not make the broker the seller's agent and does not create dual agency, which requires the informed written consent of both parties.

    Ref QB-N9YVZ5Source: Common-law agency principle that compensation source does not determine agency; NAR practice changes / MLS policy (buyer broker compensation may be negotiated from the buyer or via seller concessions, with disclosure)Report a problem with this question

61. 61. A buyer's agreement with a broker expires. A month later, the buyer purchases, without any broker, a home the broker had shown her during the term. Which agreement provision may still entitle the broker to compensation for that purchase?

    • A.Liquidated damages clause
    • B.Protection (tail) clause✓ Answer
    • C.Right of first refusal
    • D.Automatic renewal clause

    A protection clause, also called a tail, carryover or safety clause, entitles the broker to compensation if, within a stated period after the agreement ends, the buyer buys a property the broker introduced during the term. An automatic renewal clause would try to extend the whole agreement rather than cover specific introduced properties, and many jurisdictions disfavor or restrict it. A liquidated damages clause sets damages for breach, and a right of first refusal is a purchase right in property, not a broker compensation term.

    Ref QB-6S53M6Source: Brokerage agreement principles: protection (carryover/tail) clause; Pearson VUE National Salesperson Content Outline V.B.4-V.B.5 (termination of agreements; services, fees and compensation)Report a problem with this question

62. 62. A buyer agreement sets the broker's compensation at 2% of the purchase price. During negotiations, the seller offers to pay the buyer's broker 3%. Under the agreement term that limits compensation from any source, what may the broker receive?

    • A.No more than the 2% stated in the buyer agreement✓ Answer
    • B.The 2% from the buyer plus the 3% from the seller
    • C.The full 3%, since the seller is the one paying
    • D.The 3%, if the broker discloses it to the buyer

    Written buyer agreements must bar the broker from receiving more compensation, from any source, than the amount or rate agreed with the buyer. The broker is therefore capped at 2% whether the money comes from the buyer, the seller or the listing broker. Any extra seller money can instead be negotiated as a benefit to the buyer, such as a credit. Disclosure alone does not lift the cap, and amending the agreement only to capture a higher seller offer is contrary to the client's interest.

    Ref QB-P9B877Source: NAR practice changes / MLS policy for written buyer agreements (term prohibiting the broker from receiving compensation from any source exceeding the agreed amount); fiduciary duty of loyaltyReport a problem with this question

Practice questions cover the uniform national portion of the real estate exam. Your state adds a state-law portion — study your state's official materials before testing. Licensing info (ARELLO) →