What this section covers: Broker responsibilities and unauthorized practice of law, Listing, buyer and property management agreements, Fair housing, Risk management: supervision, antitrust, fraud, insurance.
5 free practice questions
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Question 1Under which listing agreement does the broker earn a commission even if the owner finds the buyer without the broker's help?
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Answer: A — Exclusive right-to-sell listing.
An exclusive right-to-sell listing pays the listing broker no matter who sells the property during the listing period, including the owner.
Checked against: National outline V.B.1.a Exclusive right-to-sell and exclusive agency listing
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Question 2An agent shows a family only homes in neighborhoods where most residents share the family's religion, although they asked for any area in their price range. This is:
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Answer: B — Steering.
Steering is channeling buyers or renters toward or away from areas because of a protected characteristic. It is prohibited by the Fair Housing Act.
Checked against: 24 CFR 100.70 Steering (part of Part 100, subpart B)
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Question 3A buyer asks his agent whether he should take title as a joint tenant or a tenant in common with his partner, and what the tax effects would be. The agent should:
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Answer: C — Explain that this is a legal and tax question and suggest he consult an attorney and a tax adviser.
Advising on how to take title, its legal consequences or tax effects, or drafting legal documents beyond the approved forms, can be unauthorized practice of law. Licensees should stay within their expertise and refer to professionals.
Checked against: National outline V.A.1 Practicing within scope of expertise; V.A.2 Unauthorized practice of law
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Question 4Several brokers in town meet and agree that none of them will list homes for less than a 6% commission. This is:
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Answer: D — Price fixing, a violation of antitrust law.
Competing brokers agreeing on commission rates is price fixing, a violation of federal antitrust law. Commissions are set by negotiation between each broker and client.
Checked against: National outline V.D.4 Antitrust laws
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Question 5A broker deposits a buyer's earnest money check into the brokerage's operating account used to pay rent and salaries. This is:
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Answer: A — Commingling, which license laws prohibit.
Commingling is mixing client or customer funds with the broker's own money. Earnest money must be kept in a separate trust or escrow account as state law requires. Using those funds for the broker's own purposes is conversion.
Checked against: National outline V.B.3.a Accounting for funds; IV.G Licensee obligations
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