Free New Mexico Agency Practice Test — LicenseIQ

Question 1

A seller knows that the basement flooded last spring, but the damage was repaired and is not visible. The seller and listing agent must:

Accepted Answer

Latent (hidden) defects known to the seller or agent must be disclosed; failing to do so can create liability for both.

Question 2

A licensee never signs a buyer agreement but repeatedly gives a buyer negotiating advice and acts on his behalf. An agency relationship may have been created by:

Accepted Answer

Implied agency arises from conduct; the agent then owes full fiduciary duties. Express agency is created by stated agreement, ideally in writing.

Question 3

When a broker appoints one salesperson to represent the seller and another salesperson in the same office to represent the buyer, this is:

Accepted Answer

Designated agency assigns separate agents within one brokerage; the broker is still a dual agent and written consent is required.

Question 4

A seller has already accepted an offer, and another buyer submits a higher offer. The listing agent should:

Accepted Answer

Listing agents must present all offers through closing, but should not give legal advice about the seller's obligations under the existing contract.

Question 5

A seller instructs her listing agent not to show the home to buyers of a certain national origin. The agent should:

Accepted Answer

Obedience requires following lawful instructions only. Discriminatory instructions violate fair housing laws and must be refused.

Question 6

A listing where the seller may sell themselves without owing commission, but only the listing broker among agents is protected, is:

Accepted Answer

In an exclusive agency listing, the seller pays no commission on a self-sale, but the listing broker is protected if any broker sells it. (Reclassified to section 6 / CORE.)

Question 7

A buyer's agent's brother owns a home that fits the buyer's needs. Before showing it, the agent must:

Accepted Answer

Any personal or financial interest of the agent or family must be disclosed up front so the client can make an informed decision.

Question 8

An agent authorized to perform a single specific act for a principal is a:

Accepted Answer

A special (limited) agent has authority for a specific task, typical of a listing agent. A property manager is usually a general agent.

Question 9

How is an agency (fiduciary) relationship created between a New Mexico brokerage and a consumer?

Accepted Answer

16.61.1.7 NMAC defines agency as a fiduciary relationship created solely by an express written agency agreement. Conduct alone does not create agency under the rules.

Question 10

Which agency issues permits for new on-site liquid waste (septic) systems in New Mexico?

Accepted Answer

20.7.3.401 NMAC prohibits installing a new on-site liquid waste system without an NMED permit. The State Engineer handles water rights and wells.

Question 11

The best way to create an agency relationship is a(n):

Accepted Answer

A written express agreement clearly defines parties, duties and compensation and is enforceable.

Question 12

When must a dual agent obtain written authority from both clients?

Accepted Answer

16.61.19.10(C) NMAC requires written authority from both clients in a separate dual agency agreement before offers are written or presented.

Question 13

Which duty does a seller's agent owe to a buyer who is a customer, not a client?

Accepted Answer

Customers are owed HARD duties - Honesty, Accounting, Reasonable skill and care, and Disclosure of material facts - but not loyalty, obedience or confidentiality.

Question 14

Which is listed as a form of exclusive agency in the New Mexico rules?

Accepted Answer

16.61.19.9(B) NMAC lists buyer agency, seller agency, designated agency, and subagency as forms of exclusive agency. Dual agency and transaction brokerage are facilitator roles.

Question 15

Two associate brokers under the same qualifying broker represent the buyer and the seller in one sale, and the brokerage has not elected designated agency. Who are dual agents?

Accepted Answer

16.61.19.10(A)(3) NMAC makes both associates and the QB dual agents when associates under one QB represent both sides without designated agency.

Question 16

Which statement about dual agency is correct?

Accepted Answer

Dual agency creates an inherent conflict; with informed written consent, the agent provides limited representation and must keep each party's confidences.

Question 17

The client a broker represents is the:

Accepted Answer

The principal is the client to whom the agent owes fiduciary duties; a customer is a party the agent works with but does not represent.

Question 18

Which of the following is a fiduciary duty an agent owes the principal?

Accepted Answer

Fiduciary duties are Confidentiality, Obedience, Accounting, Loyalty and Disclosure (COALD), plus reasonable care.

Question 19

At an open house, a buyer begins telling the listing agent the most he could pay. The agent should first:

Accepted Answer

Agents must disclose up front whom they represent so customers don't mistakenly share confidential information - anything the agent learns must be shared with the client.

Question 20

During a listing walk-through, the agent notices fresh paint on one ceiling area and a musty odor. The agent should:

Accepted Answer

Agents are not inspectors, but must recognize red flags (stains, odors, cracks) and disclose them for further investigation.

Question 21

Which fiduciary duty continues even after the agency relationship has ended?

Accepted Answer

Most fiduciary duties end with the agency, but the agent must continue to keep the former client's confidential information private.

Question 22

A property manager owes fiduciary duties primarily to the:

Accepted Answer

The property manager is the owner's (general) agent and owes fiduciary duties to the owner, while dealing honestly with tenants.

Question 23

What allows two associate brokers in the same brokerage to each act as the exclusive agent of opposing clients in an in-house sale?

Accepted Answer

A designated agent is designated in writing by the QB, and the designated agency policy discloses that each broker is the client's only representative in the brokerage.

Question 24

A transaction broker (no agency) learns the seller would take $15,000 less than list. Absent written authorization, may the broker tell an interested buyer?

Accepted Answer

The seller confidentiality duties in 16.61.19.8(B)(7) are broker duties owed to the party the broker directly serves, not agency duties. They apply to transaction brokers as well.

Question 25

What must a broker do with confidential information learned in a prior agency relationship?

Accepted Answer

16.61.19.8(B)(5) NMAC requires confidentiality of prior-agency information unless the former principal consents in writing or disclosure is required by law.

New Mexico real estate agency practice test

1. A seller knows that the basement flooded last spring, but the damage was repaired and is not visible. The seller and listing agent must:

2. A licensee never signs a buyer agreement but repeatedly gives a buyer negotiating advice and acts on his behalf. An agency relationship may have been created by:

3. When a broker appoints one salesperson to represent the seller and another salesperson in the same office to represent the buyer, this is:

4. A seller has already accepted an offer, and another buyer submits a higher offer. The listing agent should:

5. A seller instructs her listing agent not to show the home to buyers of a certain national origin. The agent should:

6. A listing where the seller may sell themselves without owing commission, but only the listing broker among agents is protected, is:

7. A buyer's agent's brother owns a home that fits the buyer's needs. Before showing it, the agent must:

8. An agent authorized to perform a single specific act for a principal is a:

9. How is an agency (fiduciary) relationship created between a New Mexico brokerage and a consumer?

10. Which agency issues permits for new on-site liquid waste (septic) systems in New Mexico?

11. The best way to create an agency relationship is a(n):

12. When must a dual agent obtain written authority from both clients?

13. Which duty does a seller's agent owe to a buyer who is a customer, not a client?

14. Which is listed as a form of exclusive agency in the New Mexico rules?

15. Two associate brokers under the same qualifying broker represent the buyer and the seller in one sale, and the brokerage has not elected designated agency. Who are dual agents?

16. Which statement about dual agency is correct?

17. The client a broker represents is the:

18. Which of the following is a fiduciary duty an agent owes the principal?

19. At an open house, a buyer begins telling the listing agent the most he could pay. The agent should first:

20. During a listing walk-through, the agent notices fresh paint on one ceiling area and a musty odor. The agent should:

21. Which fiduciary duty continues even after the agency relationship has ended?

22. A property manager owes fiduciary duties primarily to the:

23. What allows two associate brokers in the same brokerage to each act as the exclusive agent of opposing clients in an in-house sale?

24. A transaction broker (no agency) learns the seller would take $15,000 less than list. Absent written authorization, may the broker tell an interested buyer?

25. What must a broker do with confidential information learned in a prior agency relationship?

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