Agency Terminology

Question 1

The Principal

Answer 1

The individual that authorizes another person to act on his or her behalf. This person may also be referred to as the client. The agent must be empowered by this individual to take the role of agent.

Question 2

The Third Party

Answer 2

The individual with whom the agent and principal enter into real estate negotiations; he or she is sometimes referred to as the customer. This is the final variable to consider when an agency relationship is formed.

Question 3

Universal Agent

Answer 3

This agent can do anything on the behalf of the principal that is allowed by law, such as enter into contracts for the principal and give gifts in the name of the principal.

Question 4

General Agent

Answer 4

This agent has more limited authority than a universal agent but is usually authorized to manage all of the principal’s affairs in certain specified areas.

Question 5

Special Agent

Answer 5

This agent has the most limited authority of any type of agent. This agent may not enter into sign contracts on behalf of his or her principal.

Question 6

Authority

Answer 6

Having the power to perform certain actions for the principal.

Question 7

Actual Authority

Answer 7

Being able to express agreements and some implies agreements.

Question 8

Apparent Authority

Answer 8

When the actions or words of a principal can convince a third party that the agent has authority when in fact the agent has no authority.

Question 9

Express Actual Authority

Answer 9

Actions within the scope of the agent’s authority. Duties that the principal specifically tells the agent to do.

Question 10

Implied Actual Authority

Answer 10

Actions that are necessary to complete the duties that were expressly authorized. Actions that are customary for the business.

Question 11

Express Agreement

Answer 11

Where the principal appoints an agent, and the agent accepts. This agreement does not have to be written to be valid.

Question 12

Implied Agreement

Answer 12

When a party assumes consent to the relationship based solely upon inferences formed from communication with the other party. This is created by the actions, conduct and words of the parties.

Question 13

Agent

Answer 13

An individual who is authorized to represent the interests of another is an __________.

Question 14

Special Agent

Answer 14

A real estate agent is usually a _______ _____, Which means that he or she has limited authority in a specific transaction.

Question 15

Client

Answer 15

The principal is also known as the ______.

Question 16

Express Agreement

Implied Agreement

Answer 16

An agency relationship can be created by _______ _________ or _______ _________.

Question 17

Third Party

Answer 17

The _____ _____ is also known as the customer.

Question 18

Authority

Answer 18

_________ is the power to perform certain actions for the principal.

Question 19

Consent

Answer 19

The only requirement for establishing and agency relationship is the _______ of both parties.

Question 20

In Writing

Answer 20

Although not required, it is highly encouraged that the terms of agency relationships are expressed __ _______.

Question 21

Express Agreement

Answer 21

Most agency relationships are formed by _______ _________.

Question 22

Buyer

Answer 22

I am third party (customer).

Question 23

Seller

Answer 23

I am principal (client).

Question 24

Supervising Broker

Answer 24

I am, technically, the agent.

Question 25

Salesperson

Answer 25

I am not technically the agent, but I have the authority to act as the agent.

Question 26

The Agent

Answer 26

Any individual acting as a representative for another individual in dealings with a third party. This person is authorized by the person he or she represents to act on that person’s behalf.