A broker is representing both the buyer and the seller in a transaction. What is this type of agency relationship called, and what is the primary fiduciary duty that becomes particularly complex in this situation?

Dual agency; Loyalty. This is dual agency, where the broker represents two principals with opposing interests. The duty of loyalty is particularly complex as the broker must act in the best interest of both parties, which can be challenging when those interests conflict.

A seller lists their property with Broker A for $500,000. During the listing period, Broker A markets the property and receives an offer for $490,000, which the seller accepts. Subsequently, Broker B, who is not affiliated with Broker A, procures a ready, willing, and able buyer for the property at $510,000, but this offer is rejected by the seller after accepting Broker A's offer. Under what circumstances might the seller be liable to Broker B for a commission?

If Broker B can prove their buyer was ready, willing, and able to purchase the property at the listed price or better, and the seller interfered with the sale.. A broker is typically entitled to a commission when they produce a ready, willing, and able buyer at the listed price and terms, or at a price and terms acceptable to the seller. If the seller unjustifiably refuses a valid offer, or if the seller's actions prevent the sale, they may still owe a commission to the procuring broker.

A commercial property is leased for a term of 5 years with an initial annual rent of $60,000. The lease agreement includes an escalation clause stating that the rent will increase by 3% annually, compounded on each anniversary of the lease commencement. What will the annual rent be in the third year of the lease?

$63,654.00. Year 1: $60,000. Year 2: $60,000 * 1.03 = $61,800. Year 3: $61,800 * 1.03 = $63,654.00. The rent increases by 3% of the previous year's rent each year.

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Free New Mexico Real Estate Broker Exam practice test with 50 realistic multiple-choice questions, instant grading, and explanations. Study with drill mode, category score reports, and a personalized review plan.

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50 multiple-choice practice questions
Drill mode with instant feedback and explanations after each answer

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Sample New Mexico Broker practice questions

Try a few representative questions below. Each includes the correct answer and a short explanation — the same style you'll see in the full practice test.

Question 1Agency Relationships
A broker is representing both the buyer and the seller in a transaction. What is this type of agency relationship called, and what is the primary fiduciary duty that becomes particularly complex in this situation?
- A.Designated agency; Confidentiality
- B.Transaction brokerage; Disclosure
- C.Sub-agency; Obedience
- D.Dual agency; Loyalty(Correct)
Explanation
This is dual agency, where the broker represents two principals with opposing interests. The duty of loyalty is particularly complex as the broker must act in the best interest of both parties, which can be challenging when those interests conflict.
Question 2Commission Disputes
A seller lists their property with Broker A for $500,000. During the listing period, Broker A markets the property and receives an offer for $490,000, which the seller accepts. Subsequently, Broker B, who is not affiliated with Broker A, procures a ready, willing, and able buyer for the property at $510,000, but this offer is rejected by the seller after accepting Broker A's offer. Under what circumstances might the seller be liable to Broker B for a commission?
- A.The seller is not liable as they accepted another offer prior to Broker B's offer.
- B.If Broker B can prove their buyer was ready, willing, and able to purchase the property at the listed price or better, and the seller interfered with the sale.(Correct)
- C.Only if Broker B had a written agreement with the seller to procure a buyer.
- D.If Broker B can demonstrate that their buyer's offer was higher than the accepted offer.
Explanation
A broker is typically entitled to a commission when they produce a ready, willing, and able buyer at the listed price and terms, or at a price and terms acceptable to the seller. If the seller unjustifiably refuses a valid offer, or if the seller's actions prevent the sale, they may still owe a commission to the procuring broker.
Question 3Lease Calculations
A commercial property is leased for a term of 5 years with an initial annual rent of $60,000. The lease agreement includes an escalation clause stating that the rent will increase by 3% annually, compounded on each anniversary of the lease commencement. What will the annual rent be in the third year of the lease?
- A.$61,800.00
- B.$63,600.00
- C.$65,560.00
- D.$63,654.00(Correct)
Explanation
Year 1: $60,000. Year 2: $60,000 * 1.03 = $61,800. Year 3: $61,800 * 1.03 = $63,654.00. The rent increases by 3% of the previous year's rent each year.

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How many questions are on this New Mexico Broker practice test?

This practice test includes 50 multiple-choice questions designed to mirror the format and difficulty of the real New Mexico Real Estate Broker Exam.

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Take the full exam under timed conditions, review missed questions by category, then focus study on your weakest sections before scheduling the real exam.

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