A relationship, whereby one, called the principal, authorizes another, called the agent, called the agent, to represent the principal in business relations with third parties, is known as
agency
brokerage
apparent
authority
One employed by and under the control of another known as the principal, to represent such principal in business dealings with third parties is called a/an
servant
agent
independent contractor
client
In an agency relationship, the one who employees another to represent him/her in legal and/or business dealings with third persons is called a/an
attorney in fact
customer
principal
The brokerage firm employed by either a seller or buyer may employ associated licensees to assist in meeting the obligations to the brokerage firm's principal/client. Those so employed may be called
subagents of the brokerage firm
special agents of the brokerage firm
fiduciaries
The person(s) with whom a brokerage firm is working under a transaction brokerage agreement is a
fiduciary
One who is in a position of trust and confidence with respect to another is known as a/an
broker
A competent person who is authorized by another to act in his/her place as an agent is known as a/an
master
attorney at law
A written instrument authorizing a person to act for another to the extent indicated in the instrument is called
power of attorney
a listing contract
a permission to act slip
an employment agreement
An agency which is voluntarily created through contractual agreement between the principal/client and the agent is known as a/an
implied agency
express agency
sensible agency
statutory agency
A common law agency created by the conduct and acts of the principal and agent is called
An agent, while working within the scope of his/her authority, binds his/her principal. The authority granted by a seller to a broker is expressed in the
buyer's broker agreement
listing agreement
management contract
option contract
A type of authority that is voluntarily and explicitly set forth as instructions by the principal in the agency agreement is called
implied authority
necessary authority
express authority
Authority exercised by an agent which is in accord with usual or traditional practices is called
traditional authority
statutory authority
One authorized to conduct a series of transactions involving an ongoing relationship such as a salesperson or broker employed by a broker in charge is
general agent
special agent
disclosed agent
statutory agent
One authorized to conduct a single transaction or a series of transactions not involving an ongoing relationship is
undisclosed agent
An agent disclosed to the customer that he/she represents a client and he/she also disclosed the client's identity. What type of principal is the client?
disclosed principal
undisclosed principal
partially disclosed principal
general principal
Which of the obligations of a principal to an agent is not automatic and must be agreed upon?
Reimbursement
Opportunity
Good conduct
Good faith
There are eight situations by which an agency can be terminated by operation of the law. Which is best for the agent?
Performance
Lapse of time
Change of law
Destruction of subject matter
Broker Tom has a listing on property owned by seller Steve. Which of the following should broker Tom not disclose to buyer Bob?
Tom has seen evidence of termites.
Steve may take less than listing price.
The building has structural defects.
Zoning makes the present use non-conforming.
Which of the following is correct concerning a listing broker's obligations and responsibilities to the seller?
The broker may buy the seller's property and sell it to a prospect at a profit as long as the profit is 6% or less.
The broker may relieve herself of any fiduciary responsibilities as long as they have been delegated to any qualified agents that are licensed with her company.
The broker is obligated to obey all of the seller's lawful instructions, even those with which she personally disagrees.
The broker has the implied authority to reject unreasonable offers to the principal.
Broker Joyce received a full price offer on some property she had listed. The offer is contingent on the owner financing 90% of the price. Joyce feels the offer is unacceptable because the buyer has defaulted on other loans in the past, but she does not mention this to her client. Did Joyce meet her fiduciary duties?
No, because she withheld relevant facts from her client.
Yes, because she delivered the offer regardless of her feelings about it.
No, because she may be able to get a better deal later.
Yes, since she found a buyer who was willing to pay full price.
After listing a house for sale, a broker incurs $37 in advertising expense and $17 in taxi fares for prospects interested in the property. For which expense should the seller reimburse the broker?
only those expenses agreed upon by the seller and the broker as part of the listing agreement.
only advertising expenses, as taxi fares are not a normal expense of a listing broker
advertising expenses and transportation costs incurred in an attempt to market the listed property
expenses are never reimbursed to a broker by a seller as part of a listing agreement
A broker took an exclusive listing contract on a seller's home. The seller told the broker the roof leaked, but the broker made no notation on the listing. Later, a buyer made an offer on the property that the seller accepted. The broker lied when the buyer made his/her offer; telling him/her the roof was in good condition. After the buyer took possession, he/she discovered the truth during the first rain. Responsibility for the misrepresentation rests with
both the broker and the seller
the broker only
the seller only
after possession, caveat emptor applies
During the period of an exclusive right to sell listing, if the principal no longer wishes to be represented by the brokerage firm, the principal may
revoke the agency created by the listing contract but may be liable for damages
revoke the listing contract and not be liable for damages
not revoke the agency because an exclusive right to sell listing is an irrevocable contract
be forced to sell the property in accordance with the terms of the listing
Three of the five permissible brokerage relationships in South Carolina are
transaction agency, disclosed dual agency and seller agency
seller agency, buyer agency and transaction brokerage
seller agency, single agency, and undisclosed dual agency
buyer agency, cooperative subagency and transaction brokerage
In South Carolina, when must a licensee provide a meaningful explanation of agency relationships to a buyer or a seller?
any time before the offer is presented
at the first practical opportunity at which the licensee and the buyer or seller has substantive contact
prior to writing the offer for the buyer
prior to asking the buyer his name and telephone number
What term in the SC license law replaced the common law term, principal?
Client
Attorney in fact
Master
Fiduciary
In South Carolina, which of these duties of an agent to a principal continues after the agency relationship has been terminated?
full disclosure
loyalty
obedience
confidentiality
What is a common law 'third party' called in the SC license law?
When creating an agency relationship in SC between a real estate brokerage firm and a seller, what is required?
the seller and the brokerage firm must have a written agency agreement
there must be an agreement for the seller to pay a commission
the seller must have a clear title to the property
the seller and the brokerage firm must agree to a 180 day listing
A requirement for a non-resident to be eligible to receive a SC license is that they
not maintain a place of business within the state
reside in a state which grants reciprocity with SC
be licensed with a broker in charge licensed by SC
are a non resident for only 4 months a year
An unlicensed person negotiated the sale of real estate. The real estate commission is payable to
the broker
the salesperson
no one
an escrow holder
Before taking the South Carolina real estate sales examination, every applicant shall furnish evidence satisfactory to the Real Estate Commission of: successful completion of sixty classroom hours,
attain the age of 21 years and be a high school graduate or equivalent
attain the age of 18 years and be a high school graduate or equivalent
attain the age of 18 years and be a resident of this state
attain the age of 21 years and be a resident of this state
In the event that a licensee failed to renew her license,
no more real estate activity will be legal except transactions in which she is the principal
no commissions may be collected on the transactions she has not closed before her license expired
her license will be cancelled on September 30th
as of September 1st, she will be fined $75
When should a buyer's earnest money personal check be deposited in the trust account of the brokerage?
upon acceptance of both parties of the contract
within 48 hours of acceptance of an offer to purchase
within 48 hours after receipt
on or before the next banking day after receipt
A real estate salesperson in SC wrote an ad for her new listing: "Spacious executive brick home with great view of the mountains and priced to sell at only $625,000. Call 271-9732." What is wrong with this ad?
It does not contain the name of the real estate company.
It is offensive to certain groups.
It is in violation of the Fair Housing Act as amended in 1989.
It is in violation of Regulation Z.
The SC Real Estate Commission has the power to
act as an advisory board to the Governor.
create the standards for the employees of the SC Real Estate Commission.
suspend a license, find and impose jail sentences of up to 6 months
conduct disciplinary hearings and decide the punishment of those found guilty
When a salesperson receives a personal check as an earnest money deposit he must
give it to his broker no later than the following business day
place it in his own trust account
place it in the broker's general account
place it in the salesperson's special account
A very difficult sale results in a dispute between brokers A and B about earned commission. Broker A feels that the bonus offered should have been paid to him as a procuring cause and complains to the Real Estate Commission. Which is correct?
Commission disputes are not under the jurisdiction of the Real Estate Commission
He must submit his complaint in writing
Bonuses are always paid to the selling agent only
Both brokers will have to appear at a hearing before Commission members
By what authority does the state of South Carolina require a person to have a real estate license to practice real estate?
Commission power
State statute
Governmental authority
State Constitution
The real estate license law is an example of
good legislation
big government
police power
protectionism
The purpose of the real estate license law is to
provide revenue for the state
protect the people who are selling real estate
increase employment opportunities for salepersons
protect the public when involved in real estate transactions
J was found guilty of acting as a broker and an undisclosed principal in the same transaction. The decision of the Commission was to revoke J's license. What is the minimum time J must wait following revocation of his license, to be eligible for a new license?
three years
two years
nine months
six months
K, a licensed salesperson from Alabama, has a friend, M, in South Carolina who has listed his house for sale. K gave M's agent the name of a buyer who purchased the house. After the settlement, M's agent gave K's brokerage firm a referral fee. How is this legal?
K did not come into SC and help with the sale.
The referral fee is $500 or less.
The fee was paid in cash.
K's continuing education hours have been met.
Why are the requirements for continuing education mandated by the state?
to decrease liability for brokers
to protect the public's interest
to provide additional training for agents
to comply with Federal Statutes
Copies of all closing statements of transactions handled by a broker must be kept on file in his office for a period of
five years
one year
An agent received a cash deposit for a principal's property. The agent placed the deposit in his personal checking account and then wrote a check to his trust account. For this action, the agent was found guilty of
conversion
commingling
dual agency
secret profit
If a South Carolina Real Estate licensee guarantees a buyer a future profit, he should know that
he is doing the buyer a favor
he is not allowed to do this by SC license law
he must be a broker and five years of experience
he should also give the buyer legal advice
A real estate license may be revoked upon proof of the licensee
violating a buyer's right to choose an attorney or insurance agent
charging more than the usual rate of commission
having a dispute between a broker and a salesperson as to commission
refusing to accept a listing
What does the Statute of Frauds relate to in real estate?
Contracts for the sale of land or any interest in land must be in writing in order to be enforceable
Contracts for the sale of land or any interest in land must be notarized and witnessed in order to be recordable
Contracts for the sale of land or any interest in land must be in writing in order to be legal
When people go to court and testify about a real estate transaction, they must be at least 18 years of age
What is the purpose of the Statute of Frauds?
To provide reliable evidence of the existence and terms of a contract
To provide a system to prevent the bribery of a witness to a contract
To stop fraud in the sale of real estate
To make oral contracts against the law
Oral contracts for the sale of land are ____________ because of _____________
valid, good intentions
void, Statute of Frauds
unenforceable, good intentions
unenforceable, Statute of Frauds
Who must sign a contract for the purchase of real estate?
the buyer only
the person to be charged
either the buyer or seller
A contract in which the agreements and terms are stated by both parties is _________ and when the consideration is an exchange of promises, it is also __________
implied, bilateral
express, unilateral
implied, executed
express, bilateral
A contract in which the terms are determined from observing the conduct of the parties in a/an _____________ contract.
express
unilateral
bilateral
implied
A contract in which a promise is exchanged for a promise is
A contract in which both parties have met all obligations is
executed
executory
A contract which lacks one or more of the essential elements of a contract is
void
voidable
A contract which allows one of the parties to elect to be bound to the contract or escape its consequences is
illegal
A proposal made by one person to another is called
a contract
a memo
a communication
an offer
There are 5 ways to terminate an offer. When an offeree turns down the offer, this is called
rejection
revocation
counter offer
lapse of time
When an offeror changes his/her mind and notifies the offeree before the offer is accepted, this terminates the offer by
rejections
When an offeree accepts an offer by making changes in the original offer, it is a termination of the original offer and is called
The elements of either fraud or misrepresentation are a misstatement of a ____ with _____ and ______
material fact, reliance by the other party, resulting damages
material fact, damages, deceit
fact, reliance, resulting damages
salesman, ignorance, carelessness
When the terms of a contract are completely satisfied by both parties, the contract is discharged by
performance
release
novation
accord and satisfaction
The substitution of a new contract for an old contract which discharges all obligations under the old contract is called
rescission
statute of limitations
A substitution of the parties to a contract which excuses the original parties is called
Certain contracts may be discharged by a definite time limit within which a suit must be initiated. The laws governing this are called
Statute of Limitations
Statute of Time Limits
Statute of Frauds
Statute of Liberty
One situation that always terminates an offer but which is only an excuse for non-performance of a contract of sale when specifically stated in the terms of the contract is
mutual mistake
frustration of purpose
death of one of the parties
destruction of the subject matter
When one party to a contract fails to perform in whole or in part, gives advance notice that he/she does not intend to perform, or makes performance impossible, this is known as
fraud
misrepresentation
fraudulent misrepresentation
breach of contract
A court ordered K to pay P $50,000 in excess of P's out of pocket damages that resulted from K's fraudulent actions in relationship to his/her contract with P. What is this $50,000 called?
punitive damages
liquidated damages
compensatory damages
nominal damages
S's offer to purchase states that it will be kept open three days for acceptance. One day after making the offer, and before acceptance, S wants to withdraw it. The real estate agent should inform S that
the offer may be withdrawn without penalty
revocation means the forfeiture of earnest money
only in the event of death can the offer be revoked prior to acceptance
the offer is irrevocable
A contract was ambiguous in that numbers written as words differed from the numerals. Which of the following principles can be used to interpret this contractual ambiguity?
words take precedence over numerals
numerals take precedence over words
ambiguous contracts are void
the lesser amount would prevail
P leased an apartment to L under an oral lease. Which lease agreement is enforceable?
A lease for one month starting twelve months
A lease for three months starting in ten months
A lease for eight months starting in five months
A lease for eight months starting in four months
A purchase contract provision stating that the buyer shall forfeit the deposit if the buyer fails to complete the purchase is known as
the safety clause
the subordination clause
K agreed in an enforceable written agreement to buy a lot from P for $30,000. K later refused to complete the purchase as agreed, and after extensive effort, P later found a buyer for the lot who would not pay more than $26,000. A court awarded P $4,000 in damages. Which term describes the damages?
compensatory
nominal
punitive
liquidated
The ________ establishes an agency relationship between the property owner as principal (client) and the brokerage as agent.
sales contract
personal services agreement
buyer's representation agreement
The listing agreement does which of the following ?
Creates an agency relationship between the listing salesperson and the property owner
Obligates the seller to sell if a full price offer is received
Employs a real estate brokerage to represent a buyer
Creates an agency relationship between the listing brokerage and the property owner
A brokerage agreement whereby the property owner hires one or more brokerages, agrees to compensate only the one brokerage who produces a buyer, and reserves the right to sell by himself and pay no agents, is called
open listing
net listing
exclusive right to sell
exclusive agency
A brokerage agreement whereby one one brokerage is hired by the owner, but the owner can sell his/her own property without incurring obligations to pay a commission, is called
A brokerage agreement that obligates the property owner to pay the commission to the listing brokerage regardless of who made the sale is known as
An owner says "I want to get $50,000 out of this property, and you can have anything over that amount as your commission." What would we call this arrangement?
A salesperson was told his/her brokerage's commission was too high. He responded by saying that everyone charges about the same. Which law may this have violated?
Federal antitrust laws
Federal obscenity laws
SC unfair trade laws
SC license law
The three practices that are forbidden by the Sherman and Clayton Acts are price fixing, allocation of customers and
allocation of markets
taking net listings
blockbusting
allocation of deed stamps
A listing contract creates an agency relationship and it may be terminated by
death of listing employee
failure to sell the property in 90 days
expiration of the term
listing with another agency
A brokerage firm earned a commission from the sale of a parcel of property when the firm is
a listing brokerage on the property that was sold
the procuring cause...the reason the property was sold
managed by a licensed broker in charge at the time the property was sold
managed by a licensed broker in charge, had a valid listing, and the property was sold
The owner received a full price all cash offer from the buyer. The terms of the exclusive right to sell listing gave the owner the right to take a purchase money mortgage for 80% of the purchase price at 7 1/2% for 20 years. Which of the following statements is true?
The owner may refuse this offer and owe the brokerage nothing
The owner may refuse this offer and owe the brokerage the full commission
The buyer may sue for specific performance
The brokerage may sue for full commission
In a contract of sale, mutual assent (offer and acceptance) is usually contained in the paragraph that identifies the contracting parties. The offer, in a real estate contract of sale, must be definite as to
price, time, and property
property, price, and terms
property, time, and location
terms, location, and parties
The mutual promises of the vendor (seller) and vendee (buyer) are sufficient
purpose
consideration
form
conditions
Which of the following is not true regarding earnest money deposits? They
are not essential to make a contract of sale binding
are paid by the buyer as evidence of good faith
may serve as liquidated damages if the buyer breaches contract
are required to make the contract of sale binding
When any agreement for the sale of real estate will include personal property, the personal property sale should be evidenced by
a bill of sale
the contract of sale
the listing contract
the deed of conveyance
When a purchase and sale agreement (contract of sale) is fully executed, ________ is transferred to the buyer.
equitable title
title
legal title
possession
When a property is under contract, normally the one holding ______ title assumes the risk of loss in the event of damage or destruction before conveyance, but by agreement, the liability may be moved to the one holding __________ title.
legal, equitable
absolute, legal
normal, equitable
equitable, legal
VA and FHA each require that the contract of sale include a certain statement. The basic subject matter of both of the added statements deals with which of the following?
The buyer does not have to complete the purchase if the appraisal is less than the sale price
The seller does not have to complete the sale if the appraisal is more than the purchase price
The buyer will be required to put more money down if the appraisal is less than the sale price
The seller is required to sell for a lower price if the appraisal is lower than the purchase price
Brokers are not normally a party to the contract. The agreement of a seller to pay a commission should be
in the listing agreement
in the purchase and sale agreement
included in both listing and purchase and sale in every case
agreed to orally since it is not under the Statute of Frauds
When the date for performance will not be met in a contract that contains the phrase "time is of the essence," it is sound prace to
have all parties execute a formal extension to avoid the possibility of litigation
assume the courts will allow for reasonable delays
get all parties to orally agree to another date (not to exceed 30 days)
get the parties together for a meeting of the minds to extend the date
A contract in which one makes an offer to sell to another, and the other gives valuable consideration to keep the offer from being revoked for a definite period of time, is called a/an
option to buy
option to sell
legally binding offer
bilateral contract
In an option to buy, the seller is called _________ and the buyer is _________
optioner, optionee
maker, payee
payee, maker
optionee, optioner
After the option has been exercised, the optionee gets
An option without valuable consideration is a/an
void contract
implied contract
executory contract
voidable contract
On June 1, K paid M $1,000 for a 60 day option to buy M's house for $230,000 cash at closing. The terms of the option gave 30 days, after the date of election, to close. On July 10, K sold his/her option to J. On July 28, J notified M that he/she would buy M's house and would close on August 15. Which of the following is true?
Options cannot be sold, therefore, J cannot buy unless M wants to sell to him/her.
All of the procedure was legitimate and J can buy on August 15.
If J changes his/her mind and decides not to buy after all, he/she is not guilty of breach of contract.
If M decides not to sell, he/she can get out of the deal by returning the $1000 plus 9% interest.
B told J that he/she could have a right of first refusal to buy his/her motel. Which of the following situations is correct?
If S makes B an offer that he/she finds attractive, he/she must make the same deal available to J before he/she can sell to S.
If J decides to buy, B must sell to him/her.
If S makes B an offer that he/she finds attractive, he/she is obligated to sell the motel.
If B decides to sell, J must make the first offer or lose his/her right of first refusal.
Property that is fixed, immovable, indestructible, and unique in character is
real property
intangible property
personal property
tangible property
The solid part of the surface of the earth, and the free or occupied space for an indefinite distance upwards, as well as downwards, is a definition of
land
improvements
Everything that is the subject of ownership not coming under the denomination of real property is called
corporeal property
incorporeal property
fixtures
A valuable addition made to real property, intended to enhance its value or beauty, or to adapt it for a new or further purpose, is known as a/an
improvement
fixture
appurtenance
trade fixture
Which of the following is an example of an improvement?
a paved road to or on the property
original vegetation, including trees
wallpapering the foyer
painting the living room
Articles, interests, and rights which attach to and pass with real property, such as rights of way, easements, outbuildings, and barns are called
appurtenances
trade fixtures
An item of personal property that has lost its identity as such because of the manner or method in which it has been associated with real property is known as a/an
Items of personal property attached to rental property by the tenant to be used in connection with the business for which he/she occupies the premises are known as
The terms "use, possession, control, disposition" bring which legal theory to mind?
bundle of rights
bundle of legal interests
When a property is bordered by a non-navigable stream the
property line goes to the center of the stream
edge of the water forms the property line
owner may use the water any way he/she desires
owner has littoral rights
Relative to freehold estates, the term "_______" assures that one has the "bundle of rights" and will enjoy freedom from disturbances caused by defect in the title.
quiet enjoyment
non-possessory interest
complete property
possessory interest
One of a property's boundard lines, in a metes and bounds description, is N 30 degrees E 150'
The angle between the East-West line and the boundary line is 30 degrees toward North
Standing at the POB, the surveyor starts with her face toward North and then looks to the right down a line 30 degrees East
Standing at the POB, the surveyor starts with her back toward North and then looks to the left down a line 30 degrees toward East.
The angle between the North-South line is 30 degrees toward East.
A surveyor who wants to know the elevation above sea level of a certain location would first need to locate a/an
altitude mark
principal base line mark
benchmark
meridian base link mark
