A real estate broker is guilty of conversion if they `____`

A used trust funds for their personal use.

explanation

Unlike commingling which is the mixing of client funds, conversion requires the personal use of client monies.

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A listing broker may not be ____

the sole agent of the buyer.

The listing broker, also known as a seller’s broker, would naturally represent the seller. They could also represent the buyer and therefore be a dual agent. They could never represent solely the buyer.

Which of these would create an agency relationship ____

Any of the above.

Agency can be created by any of those actions.

If an agent discloses to their principal the race, creed, or color of a prospective buyer or tenant, has the agent committed a discriminatory act?

Yes, since the race, creed or color of the prospect does not matter.

This is a Civil Rights Act question. The answer may seem obvious if one thinks ‘color blind’ – the race, creed or color of the prospect does not matter.

A salesperson representing a buyer, in selling properties listed with another broker, is directly responsible to ____

the selling broker.

The salesperson is always responsible to their broker. Unique to real estate, “selling broker” refers to the buyer’s broker.

When a broker deposits their own personal or business funds in a client trust fund account, that act is referred to as ____

commingling.

The mixing of monies is commingling, as demonstrated here. In order for this to be conversion, the broker would have to be using client funds for personal purposes.

In regards to items of value held in trust, which of the following statements is least likely to be true?

Trust funds cannot take the form of precious gems or stones.

Trust funds come in many forms, including checks, precious metals/stones, stocks/bonds, collectibles, promissory notes, and any other item or evidence of value.

Which will not terminate an agency relationship?

Estoppel.

Estoppel is a legal theory under which a person is barred from asserting or denying a fact because of the person’s previous acts or words. This would not terminate an agency relationship. All the other answer selections are valid ways to terminate an agency relationship.

A seller’s agent listed a ranch for sale under an exclusive right to sell listing. A buyer’s agent, working through the local multiple listing service (MLS), presented an offer which the seller accepted. During escrow, the seller’s agent discovered the buyer had recently purchased many similar ranches in the area at a far higher cost per acre than had been offered in this transaction. What should the seller’s agent do?

Disclose all information to the seller and let the seller decide what to do.

The listing agent’s fiduciary duty requires them to disclose all material facts to their client, including the existence of the other transactions.

A seller’s broker receives a written offer on a listed property. They are certain the seller will not accept it. What would NOT be an acceptable action for the seller’s broker?

change the offer price to what the broker thinks the seller will accept, and initial the change.

Changes and counteroffers must be made by the principals. Any action instigated by the agent would be wrong.

Failing to provide financing in certain communities is called ____

redlining.

This is an example of redlining. Panic selling is similar to blockbusting.

A real estate broker sends all of their title business to Wonderful Title Co. In appreciation of the business, the title company pays the broker $10 for each transaction. According to the Real Estate Settlement Procedures Act (RESPA), this practice is ____

forbidden.

The Real Estate Settlement Procedures Act (RESPA) explicitly protects consumers from kickbacks and uncompetitive or duplicated fees.

A real estate broker is guilty of conversion if they ____