In a jurisdiction where the common law of agency applies, a broker has listed a home and then presented to the seller an offer from another client of the broker. The offer has been accepted. The broker has what type of agency relationship with the parties?
Answer(s): D
Under the common law of agency, when a broker represents both the seller and the buyer in the same transaction, the broker is acting as a dual agent.The broker has a fiduciary duty to both parties.This arrangement is only legal if both parties give informed, written consent.A sub-agency relationship would apply if another agent brought the buyer as a subagent of the seller's broker, not if the buyer is directly the broker's own client.Therefore, the correct agency type in this case is dual agency.
NJ Real Estate Salesperson Study Guide, Chapter on Agency Relationships and Disclosure; Common Law of Agency Principles.
Two parcels of land priced at $2,100 per acre were purchased. One parcel was 5 acres in size, and the other was 1 square mile in size. How much should these two parcels have cost together?
Answer(s): C
Limiting the neighborhoods in which a licensee shows houses because of a buyer's race is:
Steering = Directing or discouraging buyers from certain neighborhoods based on race, religion, or other protected classes. This violates the Federal Fair Housing Act.Blockbusting = Inducing owners to sell by suggesting a protected class moving into the neighborhood will lower values.Redlining = Refusing loans or insurance in certain neighborhoods.Puffing = Exaggerated sales talk, not discriminatory.Therefore, the action described = steering.
Federal Fair Housing Act (1968, as amended); NJ Real Estate Salesperson Study Guide, Chapter on Fair Housing Practices.
The following statement was found in a real estate sales contract: "In the event of a default by the purchaser, the forfeiture of the earnest money to the seller will be the only compensation to which the seller will be entitled." This statement most likely describes a:
Answer(s): B
A liquidated damages clause specifies in advance the amount of money or type of damages one party will receive if the other party defaults.In this case, the earnest money deposit forfeiture is the seller's only compensation in the event of buyer default.A broker protection clause protects a broker's commission rights.Indemnification clauses shift liability to another party.A default delivery clause is not a standard real estate term.Thus, the correct clause is B: liquidated damages clause.
NJ Real Estate Salesperson Study Guide, Chapter on Contracts and Contract Clauses.
A seller sold a property for $375,000, with the closing on July 1st, in a jurisdiction where the buyer pays for the day of closing. The seller had a mortgage balance at the time of closing of $301,000, and had recently paid invoices of $400 for the second quarter's water and electricity, $1,200 for new appliances, and roofing repairs of $700. Based only on these items, how much will the seller receive at closing?
Sale price = $375,000Mortgage payoff = $301,000Seller prepaid invoices (utilities, appliances, roof) are already paid and not reimbursable through closing unless agreed. They do not affect the closing statement.Buyer pays closing day (July 1), so no adjustment required for that day.,-,=,375,000-301,000=74,000Thus, the seller's net proceeds = $74,000.
NJ Real Estate Salesperson Study Guide, Chapter on Closings and Settlement Statements.
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