Agency Basics, Types, Responsibilities

Question 1

arm’s length

Answer 1

a reference to a type of transaction where there is no relationship between the two parties, such as being members of the same family

Question 2

agency by estoppel

Answer 2

an agency created when the principal doesn’t stop the agent from going beyond his normal duties, thereby giving the impression that an agency relationship has been created

Question 3

agency by ratification

Answer 3

an agency created by accepting the circumstances after the fact

Question 4

agency coupled with an interest

Answer 4

an agency relationship where the agent has some kind of interest in the property being sold

Question 5

agency relationship

Answer 5

the relationship between the agent and the client — in real estate, the broker and the buyer client or seller client. The salesperson is the subagent of the buyer client or seller client.

Question 6

assignment

Answer 6

in contract terms, a situation where someone else takes over (the assignee) the obligations and responsibilities of one of the parties to the contract

Question 7

associate broker

Answer 7

a person who holds a broker’s license and who has a status similar to that of a salesperson, in that the associate broker is allowed to perform certain real estate activities, but only under the supervision of a real estate broker

Question 8

bilateral contract

Answer 8

an agreement in which two parties each agree to do something, in effect exchanging promises

Question 9

breach of contract

Answer 9

a situation where one party, but not the other, refuses to fulfill its obligations under a contract

Question 10

broker

Answer 10

a person, licensed by the state, who is permitted to perform certain listed activities related to real estate transactions. A broker’s license is required in order to perform these activities for another person for a fee.

Question 11

buyer agency

Answer 11

the establishment of an agency relationship that allows the buyer to be represented by his own broker

Question 12

client

Answer 12

the person you represent as an agent

Question 13

contract

Answer 13

a voluntary agreement to do or not to do something

Question 14

customer

Answer 14

the third party to a transaction in which an agent is used. Example: If the agent represents the seller/client, the buyer is the third party/customer.

Question 15

delegation

Answer 15

in contract terms, a situation where one of the parties to the contract hires someone else to fulfill their obligations under the contract. The original party remains responsible.

Question 16

discharging a contract

Answer 16

a term that describes the end of the contract in one of several ways

Question 17

dual agency

Answer 17

a situation where both the buyer and seller are represented by the same agent. This may be illegal in some states.

Question 18

enforceable

Answer 18

in contract term, the ability of the courts, within existing laws, to make the parties to the contract do what they agreed to do