North Dakota Real Estate Practice Exam

Under what circumstance does a bank or trust company not fall under the definition of a real estate brokerage?

1. When they are selling properties they own

2. When their employees assist outside brokers

3. When acting in their official capacity as employees

4. When they are offering real estate advice to clients

The correct answer is: When acting in their official capacity as employees

A bank or trust company does not fall under the definition of a real estate brokerage when acting in their official capacity as employees. This situation arises because banks and trust companies have specific roles and responsibilities defined by their institutional functions. When employees of these institutions engage in transactions or manage properties strictly as part of their job duties—such as overseeing trust accounts or executing real estate transactions for the bank or trust—they are not acting as independent brokers. This means their actions are performed under the authority and regulations governing their banking or trust operations, rather than as real estate brokers operating in the open market. In contrast, selling properties owned by the bank or trust company can still be classified within a brokerage context because they are engaging in the sale of real estate. Assisting outside brokers also does not exempt them from being considered as acting in a brokerage capacity, as they are facilitating transactions involving third-party property. Similarly, providing real estate advice to clients could fall under the scope of brokerage services if it involves facilitating transactions or negotiations regarding real estate. Therefore, the nature of their role as employees, focused on their institutional responsibilities rather than acting as brokers, clearly defines why they do not fit the brokerage definition in that specific context.