Agency

Question 1

Fiduciary relationship (ACOLD)

Answer 1

Accountable
Care and skill
Obey legal instructions
Loyal to your client
Disclose all pertinent information

Question 2

Universal agent

Answer 2

A universal agent is one who has been given full power to act on behalf of a person or business

Question 3

General agent

Answer 3

A general agent is authorized by the principal to perform any and all acts associated with the on-going operation of the job or business. A real estate licensee acting in the capacity of a property manager is a general agent to the owner.

Question 4

Special agent

Answer 4

A special agent is one who has limited authority granted to him or her through a principal. The relationship with the principal is not expected to be continuous. The listing contract creates a special agency relationship with the seller. The authority is limited to the duties given in the listing contract, and the relationship ends when the terms have been fulfilled.

Question 5

Attorney in fact

Answer 5

An attorney in fact is a person authorized to perform certain acts for another person, under power of attorney.

Question 6

Principal

Answer 6

A principal is any person involved in a contract, such as a seller, buyer, principal broker, or an owner who has hired an agent as a property manager.

Question 7

Client

Answer 7

A client is a party who has signed an agreement with an agent, and this agreement creates a fiduciary relationship.

Question 8

Customer

Answer 8

A customer uses the services of a real estate licensee but has not signed an agreement with an agent. Even though there is not a fiduciary relationship with the customer, the lessee must act honestly and fairly with the customer.

Question 9

Buyer and seller can be either customer or client

Answer 9

Ex:
When a real estate broker enters into a contract with a buyer, the buyer becomes the client and the seller becomes the customer.

A seller who enters into a listing contract with a brokerage firm is a client of the listing agent’s company, not of the agent themselves.

The brokerage firm and the listing agent are required to act on behalf of the seller’s interest.

Question 10

Transaction broker ( a facilitator)

Answer 10

A transaction broker provides the buyer and seller with the necessary paperwork to transfer the property, and both parties are customers of the broker. The seller and buyer negotiate the sale without the broker. The transaction broker must act honestly and fairly, disclose all property defects, but must not disclose confidential information to either party.

Question 11

Dual or limited agency

Answer 11

A dual agency is created when the licensee represents the buyer and seller as clients in the same transaction, or if the brokerage firm represents both. In a dual agency, both the buyer and seller are clients.

A dual agency is legal as long as everything is disclosed and everyone agrees.