Indiana Real Estate Broker Exam — All Questions

Indiana law permits a licensee to represent both the buyer and the seller in the same transaction as a limited agent only with the:

• a.Consent of the managing broker alone
• b.Written consent of both parties✓
• c.Verbal consent of one party
• d.Approval of the Commission

Indiana's agency statute allows limited agency (representing both sides) only when both the buyer and seller give written consent after disclosure. Without informed written consent, a licensee may not act as a limited agent for opposing parties.

Under Indiana agency law, a licensee representing a client owes duties that include loyalty, confidentiality, and:

• a.Guaranteeing the client the lowest price
• b.Disclosing adverse material facts about the property✓
• c.Representing the other party's interests
• d.Setting the commission rate by law

An Indiana agent owes the client statutory duties such as loyalty, confidentiality, obedience to lawful instructions, accounting, reasonable care, and disclosure of adverse material facts about the property that the licensee knows. The licensee cannot guarantee price or represent opposing interests without proper consent.

An Indiana licensee is working with a prospective buyer and has signed nothing with anyone. Whom does the licensee represent?

• a.That buyer, absent a written agreement to the contrary✓
• b.No one, until a written agency agreement is signed
• c.The seller, because the listing side pays the fee
• d.Both parties, as a limited agent by operation of law

Indiana reverses the old default: a licensee has an agency relationship with, and is representing, the individual the licensee is working with unless there is a written agreement to the contrary or the licensee is merely assisting the person as a customer without compensation. Cite: IC 25-34.1-10-9.5(a).

What is a "limited agent" under Indiana agency law?

• a.A licensee whose authority ends when the listing expires
• b.A licensee who represents both sides with written consent✓
• c.A licensee acting as subagent for the listing broker
• d.A licensee who represents a client for one showing only

A limited agent represents both the seller and the buyer, or both the landlord and the tenant, only with the written and informed consent of all parties, and owes a client only the duties set out in the agency chapter. Cite: IC 25-34.1-10-7; IC 25-34.1-10-12(a).

What does Indiana law say about offering subagency through a multiple listing service?

• a.It is allowed if the seller consents in writing
• b.It is allowed if the compensation is disclosed
• c.It is prohibited; licensees may not offer it✓
• d.It is allowed only in commercial transactions

Indiana eliminated subagency. A licensee may not offer subagency through an MLS or other information source, or agree to appoint, cooperate with, compensate or otherwise associate with a subagent. Cooperating with a licensee who is not acting for a client remains permitted. Cite: IC 25-34.1-10-17.

Which obligations survive the end of an Indiana agency relationship?

• a.Presenting offers that arrive after the relationship ends
• b.Accounting for money and keeping the client's confidences✓
• c.Continuing to promote the former client's interests
• d.None; every duty ends when the relationship ends

Exactly two duties carry forward: accounting for all money and property received during the relationship, and keeping confidential what the client asked to be kept confidential. Confidentiality lapses only if the law requires disclosure, the client consents in writing, or the information becomes public from another source. Cite: IC 25-34.1-10-14(c).

What does a licensee representing the seller owe a prospective buyer in Indiana?

• a.An independent inspection of the property's condition
• b.Verification of the statements the seller has made
• c.Honesty and disclosure of known physical defects✓
• d.Nothing, because the buyer is not the licensee's client

The seller's licensee must treat prospective buyers honestly, must not knowingly give them false information, and must disclose adverse material facts or risks actually known about the physical condition that a reasonable and timely inspection would not reveal. There is no duty to inspect independently or to verify the seller's statements. Cite: IC 25-34.1-10-10(c), (d).

Without the seller's informed written consent, what may the seller's Indiana licensee not tell a buyer?

• a.That the roof leaked badly during last spring's storms
• b.That the property sits inside a mapped flood plain
• c.That the seller would take less than the listed price✓
• d.That an offer on the property has already been accepted

Three things are sealed without informed written consent: that the seller will accept less than the listed price or grant other concessions, what motivates the seller to sell, and other material or confidential information about the seller. Known adverse physical facts run the other way and must be disclosed. Cite: IC 25-34.1-10-10(b), (d).

In Indiana, what does the payment of a licensee's compensation establish about agency?

• a.It creates an agency relationship with whoever pays
• b.It creates a limited agency with both of the parties
• c.It creates nothing; compensation does not make agency✓
• d.It creates a subagency with the listing broker company

The statute states flatly that the payment of compensation does not create an agency relationship between a licensee and a seller, landlord, buyer or tenant. Parties must still be advised whether compensation will be shared with other broker companies representing adverse interests. Cite: IC 25-34.1-10-13(c), (d).

Who must develop and enforce a broker company's written office policy on agency relationships?

• a.Each broker associated with the broker company
• b.The broker company's designated managing broker✓
• c.The Indiana Real Estate Commission by rule
• d.The listing broker on each individual file

The statute puts the policy on the managing broker, and it must specifically permit or reject the practice of disclosed limited agency. The policy is disclosed in writing at the beginning of the relationship, before the prospective client reveals anything confidential. Cite: IC 25-34.1-10-13(a), (b).

Two licensees in one Indiana broker company represent the buyer and the seller on the same deal. What is the result?

• a.Both licensees become limited agents for both clients
• b.The managing broker becomes a limited agent for both
• c.Each represents only their own client, with no imputation✓
• d.Knowledge held by one licensee is imputed to the other

This is an in-house agency relationship, not limited agency. Each client is represented only by that client's own licensee; the managing broker represents no party unless personally acting for a client; and there is no imputation of agency, knowledge or information among the company, the managing broker and the licensees. Cite: IC 25-34.1-10-12.5.

What must the written limited agency consent tell each Indiana party?

• a.That the commission has approved the arrangement
• b.That the limited agent will share all information
• c.That the party is free to refuse limited agency✓
• d.That the party may cancel the contract later on

The writing must state that the licensee will represent parties whose interests are different or adverse, list what the limited agent may not disclose, state that there is no imputation of knowledge, and state plainly that a party does not have to consent to the limited agency. Cite: IC 25-34.1-10-12(a).

An Indiana broker company refers a client to another broker company for a fee. What is required?

• a.Oral disclosure to the client at the time of the referral
• b.Written disclosure to the client at the time of the referral✓
• c.Written disclosure to the client before the deal closes
• d.No disclosure, since the fee comes from the other company

This duty is new. A broker company that refers a client or customer to another broker company must disclose that it may be compensated for the referral, in writing and at the time of the referral. Cite: IC 25-34.1-10-18, added by P.L.30-2026.