South Carolina Real Estate Broker Exam — All Questions

At the latest, when must the commission's dual agency agreement be signed?

• a.By the seller at listing and the buyer at the first showing
• b.By whichever party the broker-in-charge asks to sign it first
• c.By the buyer before writing an offer, by the seller before the sales contract✓
• d.By both parties at the closing table, before the deed is delivered

Section 40-57-350(I)(1) allows disclosed dual agency "only with the prior informed and written consent of all parties," presumes consent informed where a party signs the commission-promulgated form, and fixes the outer limit: "at the latest, the form must be signed by the buyer before writing an offer and by the seller before signing the sales contract." Signing at closing is not prior consent at all; by then the negotiation the limited agency affected is over. Requiring the seller to sign at listing and the buyer at the first showing sets deadlines earlier than the statute and, more importantly, before anyone knows a dual agency will arise, so the consent could not be informed as to a specific transaction. Letting the broker choose the order ignores that each party has its own trigger. The agreement must also name the parties, specify the transaction, and state that agency duties are limited, what may not be disclosed, and that consent is voluntary and may be refused.

A disclosed dual agent in South Carolina may pass information between the clients EXCEPT:

• a.That a neighboring parcel has been rezoned for commercial use
• b.That the seller would take less than the asking price✓
• c.That the roof was replaced two years ago under warranty
• d.That the property lies within a mapped flood hazard area

Section 40-57-350(I)(1)(b) lets a dual agent's supervised licensees share information relevant to the transaction except where it concerns the willingness or ability of a seller to accept less than the asking price, the willingness or ability of a buyer to pay more than the offered price, any confidential negotiating strategy not disclosed as terms of a sale, or either party's motivation. A seller's willingness to take less is the first item on that list. The other three are facts about the property rather than bargaining positions: a replaced roof is property history, a mapped flood hazard is a condition affecting the property, and the rezoning of an adjoining parcel is public land-use information. Far from being withheld, facts of that kind run the other way — Section 40-57-350(G)(1) requires a licensee to treat all parties honestly and forbids knowingly giving false or misleading information about the property's condition.

How does a South Carolina broker-in-charge create designated agency?

• a.Automatically, whenever two of the firm's licensees represent clients
• b.By assigning different supervised licensees under an adopted company policy✓
• c.By filing a designated agency notice with the Real Estate Commission office
• d.By an oral instruction to the two licensees before the first showing

Section 40-57-350(J)(1) provides that a broker-in-charge "may assign, through the adoption of a company policy, different licensees affiliated with the broker-in-charge as designated agents to exclusively represent different clients in the same transaction," and the policy must contain provisions reasonably calculated to ensure each client is represented as the chapter requires. Nothing is filed with the commission; the commission's role here is to promulgate the designated agency agreement form that Section 40-57-350(J)(2) requires the clients to sign, signed by the buyer before writing the offer and by the seller before signing the sales agreement. An oral instruction cannot do it, because Section 40-57-370(E) rules out any agency created orally or by implication. Nor does designated agency arise automatically: without the policy and the signed informed consent, the firm is left in ordinary disclosed dual agency under subsection (I).

A South Carolina broker-in-charge appoints designated agents for a buyer client and a seller client in one transaction. What is the status of the rest of the firm?

• a.The broker-in-charge, all remaining licensees and the firm are dual agents✓
• b.The remaining licensees owe no duty at all to either client
• c.The firm becomes a transaction broker for both of the clients
• d.Only the broker-in-charge becomes a dual agent; the other licensees are unaffected

Section 40-57-350(J)(8) is categorical: where a broker-in-charge appoints different supervised licensees as designated agents, "the broker-in-charge, all remaining affiliated licensees, and the real estate brokerage firm must be considered to be dual agents." That is why subsection (J)(9) then blocks imputation of knowledge between the broker-in-charge, the agents and the clients, and why (J)(10) preserves confidential information across the appointment. Saying the remaining licensees owe nothing ignores the dual agent status the statute imposes on them. The firm does not slip into transaction brokerage; both parties here are clients under signed agency agreements, and transaction brokerage under subsection (L) is what applies to customers who have not signed one. Confining dual agency to the broker-in-charge alone reads the words "all remaining affiliated licensees" out of the provision.

Both buyer and seller in one South Carolina transaction are represented by designated agents. What form must the broker-in-charge complete?

• a.None; consent sits in the designated agency agreement itself✓
• b.A separate dual agency agreement signed by the buyer and the seller
• c.A transaction broker agreement signed by both of the designated agents
• d.A written waiver of confidentiality signed by each of the two clients

Section 40-57-350(J)(5) says that where both buyer and seller are represented by designated agents the broker-in-charge acts as a dual agent "pursuant to subsection (I)" but "is not required to complete a dual agency agreement under this provision. Consent must be contained in the designated agency agreement." A second, separate dual agency agreement is therefore the very thing the subsection excuses. A transaction broker agreement belongs to a different relationship entirely and would misdescribe two clients as customers. A confidentiality waiver runs against the grain of subsections (J)(9) and (J)(10), which keep each client's confidential information from crossing between designated agents and bar the broker-in-charge from revealing it. The designated agency agreement must still be the commission's promulgated form and must carry language explaining the obligations of the broker-in-charge and the supervised licensees.

Which duty does a South Carolina transaction broker owe to a customer?

• a.Obedience to every lawful instruction the customer gives
• b.Undivided loyalty throughout the negotiation
• c.Confidentiality of everything the customer ever says
• d.Promptly presenting all written offers and counteroffers✓

Section 40-57-350(L)(2) lists the customer duties a transaction broker must disclose and perform: honesty and fair dealing, accounting for all funds, skill, care and diligence, disclosure of material adverse facts affecting the transaction or the value or condition of the property and not readily ascertainable, promptly presenting all written offers and counteroffers, and limited confidentiality. Obedience and loyalty are client duties. Section 40-57-350(A) attaches loyalty, obedience, disclosure, confidentiality, reasonable care, diligence and accounting to a firm acting under an agency agreement, and a transaction broker has no such agreement with a customer. Confidentiality of everything the customer says overstates the duty in the other direction: what the transaction broker owes is the limited confidentiality defined in (L)(2)(f), which protects motivation, willingness to move on price, alternative financing terms and information the party asks to be kept confidential.

A transaction broker's limited confidentiality in South Carolina may be given up in what way?

• a.By the broker-in-charge's written office policy
• b.It cannot be given up under any circumstances
• c.Only by a written waiver from the party✓
• d.By the party's spoken permission given at a showing

Section 40-57-350(L)(2)(f) lists among a transaction broker's customer duties "limited confidentiality, unless waived in writing by a party," so writing is the sole route and the waiver belongs to the party whose information it is. A spoken permission does not meet the statutory form, and the chapter is consistently hostile to oral arrangements in this area: Section 40-57-370(E) rules out oral or implied agency for the same reason. An office policy is the broker-in-charge's own document, adopted under Section 40-57-350(B) to describe what relationships the firm offers; it cannot waive a consumer's protection because the consumer is not a party to it. Nor is the protection absolute: saying it can never be given up ignores the express waiver clause, and the same subsection already carves out information required by law to be disclosed.

A prospective buyer has substantive contact with a South Carolina firm but has signed nothing. What does Section 40-57-370(C) presume?

• a.The buyer is a client and the firm is the buyer's agent
• b.The buyer is a customer and the firm is the seller's subagent
• c.No relationship of any kind exists until a form is signed
• d.The buyer is a customer and the firm a transaction broker✓

Section 40-57-370(C) provides that at first substantive contact "it is presumed that the potential buyer or seller is to be a customer of the real estate brokerage firm and that the real estate brokerage firm will be acting as a transaction broker," offering customer services under Section 40-57-350(L), "only until the potential buyer or seller signs an agency representation agreement." Client status is what the signed agreement creates, so treating the unsigned buyer as a client reverses the default. Subagency of the seller is not one of the five relationships Section 40-57-350(A) permits a firm to establish with a party, and casting the firm that way would import duties the statute does not create. Saying no relationship exists misses the point of the subsection: the firm is not free of obligation, it owes the customer duties in Section 40-57-350(L)(2) and (L)(4) from the moment the conversation becomes substantive.

A South Carolina seller tells a licensee "you are my agent" and the licensee agrees. What relationship has been created?

• a.A designated agency binding the whole brokerage firm
• b.None; agency cannot arise orally or by implication✓
• c.An implied seller agency terminable at will by either
• d.An oral listing enforceable for up to ninety days

Section 40-57-370(E) is unambiguous: "no agency relationship between a buyer, seller, landlord, or tenant and a real estate brokerage firm exists unless" they "agree, in writing, to the agency relationship. No type of agency relationship may be assumed by a buyer, seller, landlord, tenant, or licensee or created orally or by implication." An implied seller agency is precisely what that sentence forbids, whether or not it would be terminable. An oral listing with a ninety-day life is doubly wrong: the form fails, and Section 40-57-135(I)(2) requires a listing agreement to be in writing with specific beginning and ending dates and the signatures of all parties. Designated agency needs more still — an adopted company policy under Section 40-57-350(J)(1) and the commission's signed designated agency agreement. Until something is signed, the seller is a customer and the firm is presumed a transaction broker under Section 40-57-370(C).

When must a South Carolina licensee give a prospective buyer the Disclosure of Brokerage Relationships form?

• a.At the first practical opportunity on substantive contact✓
• b.Before the licensee may show the buyer any property
• c.At the same time as the buyer's written offer is delivered
• d.Within three business days after the first telephone contact

Section 40-57-370(A) requires a licensee to provide "at the first practical opportunity to all potential buyers and sellers of real estate with whom the licensee has substantive contact" both a meaningful explanation of the brokerage relationships the firm offers and the commission's Disclosure of Brokerage Relationships form. The trigger is substantive contact, which Section 40-57-30(38) defines as the point where talk moves from casual introduction to a meaningful conversation about buying or selling motives, objectives or financial qualifications — a threshold that can be crossed before or after any property is shown, so tying the duty to a showing measures the wrong thing. Waiting until the offer is delivered is far too late, since the disclosure exists to let the buyer choose a relationship before revealing anything. A three-day mailing window is not in the section; subsection (D) simply lets the acknowledgment form be sent electronically when first substantive contact happens by phone, internet or email.

The brokerage relationship disclosure requirements do not apply to which South Carolina dealings?

• a.New construction, and sales by a builder's own licensees
• b.Rentals or leases, and communications that solicit business✓
• c.Commercial sales and sales of unimproved land
• d.Auctions, and sales of property in probate

Section 40-57-370(G) supplies exactly two exemptions: the requirements do not apply if "the transaction is regarding the rental or lease of property" or "the communication from the licensee is a solicitation of business." Commercial sales and large unimproved tracts are not excluded; the section speaks of potential buyers and sellers of real estate without limiting itself to homes. Auctions and probate sales are likewise inside the rule, and Section 40-57-135(F)(1) separately requires a licensee to reveal his own license status in a personal transaction involving an auction. New construction and builder-affiliated licensees enjoy no exemption either, and a licensee selling for a builder still owes the disclosure at the first practical opportunity. Note that the rental exemption cuts only against this disclosure duty; the trust-account, advertising and record-keeping rules apply to rentals in full.

Which duties does a South Carolina firm still owe a client after the agency agreement ends?

• a.Accounting and confidentiality✓
• b.Loyalty and obedience to the client
• c.Reasonable care and diligence in marketing
• d.Disclosure and accounting

Section 40-57-380 says a broker and all supervised licensees "owe no duty or obligation to a client following termination, expiration, completion, or performance of an agency agreement or closing of the real property transaction, whichever occurs first," except accounting in a timely manner for money and property received during the relationship and keeping confidential the information the client asked to be kept confidential. Loyalty and obedience are live duties under Section 40-57-350(A) while the agreement runs, and they end with it — which is what frees the licensee to work for the next client. Reasonable care and diligence end the same way; there is nothing left to be diligent about. Disclosure is a duty during the relationship too, and pairing it with accounting captures only one of the two survivors. Confidentiality still yields where the client consents in writing, the law requires disclosure, the licensee must defend against an accusation of wrongful conduct, or the information becomes public from another source.

Who must supervise the title search, document preparation, closing and disbursement in a South Carolina residential sale?

• a.The broker-in-charge of the listing firm
• b.A licensed title insurance producer
• c.A licensed South Carolina attorney✓
• d.The lender's in-house closing department

South Carolina's Supreme Court treats the steps of a residential real estate closing as the practice of law, so a licensed South Carolina attorney must supervise the title search and preparation of title documents, the closing itself, the instructions for recording, and the disbursement of funds; Doe v. McMaster (Op. No. 25508, 2003) held that a title company's search and document preparation for a lender "without direct attorney supervision, constitutes the unauthorized practice of law." Section 40-5-310 makes practicing law without membership in the South Carolina Bar a felony. A lender's in-house closing department cannot supply that supervision, which is the arrangement the court examined and rejected. The listing broker-in-charge supervises licensees and the firm's trust account under Section 40-57-135, not legal work, and Section 40-57-350(C)(1)(b)(iv) tells a licensee to send clients for expert advice beyond his own expertise. A title insurance producer sells a policy; the underwriting decision is not a substitute for an attorney's supervision of the closing.

Before closing a loan secured by a lien on the borrower's home, what must a South Carolina creditor do about the borrower's choice of lawyer?

• a.Leave the choice entirely to the real estate licensee
• b.Ascertain the borrower's preference and comply with it✓
• c.Assign the closing to the lender's own panel attorney
• d.Require the borrower to use the title insurer's agent

Section 37-10-102(a) of the Consumer Protection Code provides that where a loan secured by a lien on real estate is for a personal, family or household purpose, "the creditor must ascertain prior to closing the preference of the borrower as to the legal counsel that is employed to represent the debtor" and, outside Horizontal Property Act units, the insurance agent for hazard and flood cover, and must "comply with such preference." The creditor may satisfy this by putting the preference question on or with the credit application, or by written notice delivered or mailed within three business days of the application. Assigning the file to the lender's own panel attorney overrides the very choice the section protects. Requiring the title insurer's agent does the same for insurance, though the creditor may still demand reasonable security by way of mortgage title insurance from an acceptable company and reasonable closing procedures. The duty is the creditor's; the real estate licensee has no role in it, and Section 37-10-105 gives the borrower a civil remedy when it is ignored.

South Carolina's deed recording fee is one dollar eighty-five cents for each five hundred dollars of value. Who is primarily liable for it?

• a.The closing attorney, from the settlement proceeds
• b.The lender, as part of the recording package
• c.The grantor; the grantee is secondarily liable✓
• d.The grantee, with the grantor secondarily liable

Section 12-24-10(A) imposes the fee "for the privilege of recording a deed" at "one dollar eighty-five cents for each five hundred dollars, or fractional part of five hundred dollars, of the realty's value," and Section 12-24-20(A) makes it "the liability of the grantor, or the joint and several liability of the grantors, but the grantee is secondarily liable for the payment of the fee." Reversing the two states the exception as the rule: Section 12-24-20(B) shifts liability to the grantee only for a master-in-equity deed, a deed from a government body, or a deed from a tax-exempt qualified retirement plan. The closing attorney customarily remits the fee out of the settlement statement, but paying on a client's behalf is not the same as bearing the liability. The lender records its mortgage and pays ordinary recording charges; this fee attaches to the deed transferring the realty, and Section 12-24-30 defines the value it is measured against.

A South Carolina buyer will occupy the house as a legal residence. Which assessment ratio applies once that classification is granted?

• a.Six percent, instead of the four percent on other real property
• b.Ten and one-half percent, the rate for other personal property
• c.Four percent, but only after five years of continuous occupancy
• d.Four percent, instead of the six percent on other real property✓

Section 12-43-220(c)(1) taxes "the legal residence and not more than five acres contiguous thereto, when owned totally or in part in fee or by life estate and occupied by the owner of the interest" on an assessment equal to four percent of fair market value, while Section 12-43-220(e) puts "all other real property not herein provided for" at six percent. Stating the pair the other way round is the standard trap and would raise a homeowner’s bill by half. Ten and one-half percent is the ratio Section 12-43-220(f) sets for other personal property, which is a different class of property altogether. There is no five-year occupancy qualification: the owner-occupant need only have owned and occupied the residence as a legal residence and been domiciled there for some part of the tax year, and must apply to the county assessor — the classification does not follow the deed automatically, which is why it belongs on a buyer’s closing checklist. The value it is applied to also moves at closing: Section 12-37-3150(A)(1) makes a conveyance by deed an assessable transfer of interest, and Section 12-37-3140(A)(1)(b) then resets fair market value to the value applicable for December thirty-first of the year the transfer occurred.