Agency

Question 1

Termination of Agency

Answer 1

Expiration: Expiration of the agency time period

Death: Death of the principal or the agent

Incapacity or Bankruptcy: Incapacity or bankruptcy of either the principal or the agent

Performance: When the agent has performed his/her duties

Repudiation: Agency requires consent; therefore, either party can terminate an agency. However, if terminated by wrongful breach, the injured party may sue for damages.

Destruction or Condemnation

Agency Coupled with an Interest: An agent receives an interest in the subject of the agency. This cannot be revoked by the principal or terminated because of the death of the principal.

Question 2

Power of Attorney

Answer 2

A written legal document that authorizes a person, who becomes an agent of the principal, to act on behalf of the principal. If the principal is not available at the time of closing, the agent who has power of attorney acts on the principal’s behalf. The power of attorney form must be notarized and must be recorded if real property is being conveyed.

Question 3

Facilitator-Intermediary (customer relationship)

Answer 3

Works for both the seller and the buyer to complete a transaction but not in an agency relationship with either party.
No fiduciary relationship with either buyer or seller but must be fair with both parties. All material facts must be disclosed to both the seller and buyer.
Written agreement between all parties stating what the broker (non-agent) shall and shall not do
Cannot help one party to the transaction to the detriment of the other party

Question 4

Types of Agents

Answer 4

General Agent: A general agent represents the principal in a wide variety of matters within a specific business activity. Property managers are general agents performing a variety of tasks for the owner/principal.

Special or Specific Agent: Real estate agents generally work as special agents. A buyer agent has the limited authority to locate a property that meets the buyer’s criteria, while a seller’s agent has the limited authority to find a buyer for the seller’s property.

Single Agent: The agent could be a buyer’s agent, landlord’s agent, seller’s agent, tenant’s agent, or sub-agent. The agent represents only one party in any single transaction, and any third party is a customer.

Question 5

Disclosure of Agency

Answer 5

Mandatory Agency Disclosure Laws now exist in all states. Most require a written form
Licensees are required to disclose seller and buyer agency services so customers can decide whether they want or need an agency relationship versus a facilitator/customer relationship

Question 6

Principal

Answer 6

(client relationship): The one for whom action is taken and who benefits.

Question 7

Agent

Answer 7

The one who is entrusted to act.

Question 8

Non-Agent

Answer 8

An intermediary between a buyer and seller who assists with the transaction without representing either party as an agent

Question 9

Fiduciary Duties

Answer 9

Loyalty, Obedience, Disclosure, Confidentiality, Reasonable Care and Diligence

Question 10

Facilitator is also known as a

Answer 10

Intermediary