South Dakota Agency
Practice Questions & Answers (2026)
Agency law is one of the most tested subjects on the South Dakota real estate exam, and it's also one of the most misunderstood. The South Dakota Real Estate Commission expects licensees to understand the legal duties owed to clients vs. customers, and the specific timing of required disclosures under South Dakota law. Study these questions carefully — candidates who rely on national agency frameworks and don't account for SD-specific rules are among the most common failures on the state portion.
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South Dakota Agency — Practice Questions & Answers
103 questions on Agency from the South Dakota real estate question bank. First 10 are free — sign up to unlock all 103.
Q1. In South Dakota, when must an agency disclosure be provided to a potential client?
Explanation
South Dakota law requires that agency disclosure be made at the first substantive contact with a potential client so they understand who the licensee represents.
Q2. A licensee who represents both buyer and seller in the same transaction is practicing:
Explanation
Dual agency occurs when a single licensee or brokerage represents both the buyer and the seller in the same real estate transaction. In South Dakota, this requires informed written consent from both parties.
Q3. Which fiduciary duty requires an agent to place the client's interests above all others, including the agent's own?
Explanation
The fiduciary duty of loyalty requires the agent to place the client's interests above all others, including the agent's own financial interests. This is a cornerstone of the agent-client relationship.
Q4. A buyer's agent discovers that the seller's home has undisclosed foundation damage. The buyer's agent should:
Explanation
A buyer's agent has a fiduciary duty to disclose all material facts to their buyer client. Undisclosed foundation damage is a material fact that could affect the buyer's decision.
Q5. Which type of agency relationship is created when an agent acts on behalf of a client without explicit agreement but through the parties' conduct?
Explanation
Implied agency is created through the conduct and actions of the parties rather than through a formal written or verbal agreement. Licensees must be careful not to inadvertently create an implied agency relationship.
Q6. When a listing broker assigns two different agents within the same office to separately represent a buyer and a seller, this is known as:
Explanation
Designated agency occurs when a broker assigns specific agents within the same brokerage to separately represent the buyer and the seller, allowing each party to have individual representation.
Q7. In South Dakota, the relationship between a real estate broker and their client is best described as:
Explanation
A real estate broker typically acts as a special agent for a client, authorized to perform specific acts (like selling a property) rather than having broad authority to act on the client's behalf.
Q8. South Dakota requires that agency relationships be disclosed:
Explanation
South Dakota law requires real estate licensees to disclose the nature of the agency relationship at first substantial contact with a consumer, before any confidential information is exchanged.
Q9. A South Dakota broker representing both the buyer and seller in the same transaction without proper disclosure is:
Explanation
Undisclosed dual agency is illegal in South Dakota. A broker representing both parties must obtain informed written consent from all parties before proceeding.
Q10. Which of the following is a fiduciary duty owed by a South Dakota seller's agent to their client?
Explanation
A seller's agent must present all offers to their client, which is part of the duty of loyalty and obedience. Disclosing the seller's minimum price would breach confidentiality.
Q11. In South Dakota, 'designated agency' means:
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