Agency, Brokerage and Ethical Considerations

Question 1

Broker

Answer 1

A person who is licensed to assist others in real estate transactions and to receive compensation for those services.

Question 2

Real estate salesperson

Answer 2

Works on behalf of and is licenses to work under the supervision of a broker.

Question 3

Another term for “client”.

Answer 3

Principal

Question 4

Another term for “customer”.

Answer 4

Third party.

Question 5

What does FAD stand for?

Answer 5

-Fair dealing
-Accurate information
-Disclosure of material fact

Question 6

What does OLDCAR stand for? (Fiduciary duty)

Answer 6

-Obedience
-Loyalty
-Disclosure
-Confidentially
-Accounting
-Reasonable care

Question 7

Types of Agency

Answer 7

-Universal agent
-General agent
-Special agent
-Power of attorney (POA)

Question 8

An agency that has the authority to represent the principal in all matters that can be delegated.

Answer 8

Universal agent

Question 9

An agency that is empowered to represent the principal in a broad range of matters.

Answer 9

General agent

Question 10

An agency that is authorized to represent the principal in one specific capacity only.

Answer 10

Special agent

Question 11

An agency that was given written authorization allowing on person to act on behalf of someone else (the principal) in a legally binding capacity.

Answer 11

Power of attorney (POA).

Question 12

The person named in the power of attorney.

Answer 12

Attorney-in-fact.

Question 13

What is CEPA and when was it effected from?

Answer 13

-NJ Real Estate Consumer Protection Enhancement Act
-August 1, 2024

Question 14

What has to be agreed upon for a meeting of the minds?

Answer 14

-Price
-Down payment
-Financing method

Question 15

Kickbacks

Answer 15

The return of part of the commission as gifts or money to sellers.

Question 16

What is the CIS and what does it disclose?

Answer 16

-Consumer Information Statement
-Describes the types of business relationships a real estate agent can enter into with a customer or client and the duties associated with each relationship.

Question 17

What are an agent’s obligations to customers?

Answer 17

(FAD)
-Fair dealing
-Accurate information
-Disclosure of material facts
Example of material facts: physical condition of property

Question 18

What is a special agent?

Answer 18

An agency that is authorized to represent the principal in one specific capacity only. This is what most agents are.

Question 19

What is a general agent?

Answer 19

An agency that is empowered to represent the principal in a broad range of matters.

Question 20

What is a universal agent?

Answer 20

An agency that has the authority to represent the principal in all matters that can be delegated.

Question 21

What is it called when there is a defect of the property that you cannot see in a visual inspection?
Example: plumbing issues

Answer 21

Latent defects.

Question 22

Sherman Antitrust Act

Answer 22

States that every broker can set their own prices, and separate brokers cannot conspire to fix prices at a specific amount.