4. Agency

Question 1

AGENCY

Answer 1

The relationship between a principal and an agent wherein the agent is authorized to represent the principal in certain transactions.

Question 2

AGENCY COUPLED WITH AN INTEREST

Answer 2

An agency relationship in which the agent is given an estate or interest in the subject of the agency (the property).

Question 3

AGENTS

Answer 3

One who acts or has the power to act for another. A fiduciary relationship is created under the law of agency when a property owner, as the principal, executes a listing agreement or management contract authorizing a licensed real estate broker to be his or her agent.

Question 4

CLIENT

Answer 4

The principal.

Question 5

CUSTOMER

Answer 5

The third party for whom some level of service is provided.

Question 6

DESIGNATED AGENT

Answer 6

A licensee authorized by a broker to act as the agent for a specific principal in a particular transaction.

Question 7

DUAL AGENCY

Answer 7

Representing both parties to a trans action. This is unethical unless both parties agree to it, and it is illegal in many states.

Question 8

EXPRESS AGENCY

Answer 8

An agency relationship based on a formal agreement between the parties.

Question 9

EXPRESS AGREEMENT

Answer 9

An oral or written contract in which the parties state the contract’s terms and express their intentions in words.

Question 10

FIDUCIARY RELATIONSHIP

Answer 10

A relationship of trust and confidence, as between trustee and beneficiary, attorney and client, or principal and agent.

Question 11

FRAUD

Answer 11

Deception intended to cause a person to give up property or a lawful right.

Question 12

GENERAL AGENT

Answer 12

One who is authorized by a principal to represent the principal in a specific range of matters.

Question 13

IMPLIED AGENCY

Answer 13

Based on the actions of the parties which imply that they have mutually consented to an agency relationship, an implied agency relationship is formed.

Question 14

IMPLIED AGREEMENT

Answer 14

A contract under which the agreement of the parties is demonstrated by their acts and conduct.

Question 15

LATENT DEFECT

Answer 15

A hidden structural defect that could not be discovered by ordinary inspection and that threatens the property’s soundness or the safety of its inhabitants. Some states impose on sellers and licensees a duty to inspect for and disclose latent defects.

Question 16

LAW OF AGENCY

Answer 16

The relationship between a principal and an agent wherein the agent is authorized to represent the principal in certain transactions.

Question 17

LISTING AGREEMENT

Answer 17

A contract between an owner (as principal) and a real estate broker (as agent) by which the broker is employed as agent to find a buyer for the owner’s real estate on the owner’s terms, for which service the owner agrees to pay a commission.

Question 18

NEGLIGENT MISREPRESENTATION

Answer 18

When a broker should have known that a statement about a material fact was false. The fact that the broker might actually be ignorant about the issue is no excuse.

Question 19

PRINCIPAL

Answer 19

A main party to a transaction—the person for whom the agent works.

Question 20

PUFFING

Answer 20

Exaggerated or superlative comments or opinions.

Question 21

SPECIAL AGENT

Answer 21

One who is authorized by a principal to perform a single act or transaction; a real estate broker is usually a special agent authorized to find a ready, willing, and able buyer for a particular property.

Question 22

SUBAGENT

Answer 22

One who is employed by a person already acting as an agent. Typically a reference to a salesperson licensed under a broker (agent) who is employed under the terms of a listing agreement.

Question 23

UNIVERSAL AGENT

Answer 23

A person empowered to do anything the principal could do personally.