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Real Estate Exam > Ch. 2 - Agency > Flashcards

Ch. 2 - Agency Flashcards

1
Q

Agency is..

A

Agency is the ancient concept where one person — the PRINCIPAL— designates authority to a trusted other person — the AGENT — to conduct certain affairs on behalf of the principal.

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2
Q

Expressed Agency is…

A

An agreement, oral or written, between a principal and an agent which clearly delineates the duty being assigned by the principal and accepted by the agent. A listing agreement is an example.

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3
Q

Implied Agency is…

A

Occurs when a principal or an agent acts in a way that would lead people to believe that an agency relationship exists because of their conduct.

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4
Q

An Agent is..

A

a person in whom a Principal places trust to conduct certain affairs on behalf of the principal, knowing that the agent will put the principal’s interests above all others, including his own.

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5
Q

A Principal is..

A

A person who delegates certain duties to an agent, whom he knows he can trust to be honest, obedient, loyal, accountable and diligent in undertaking those duties, always treating the principal’s interests above all others’, including the agent’s own interests.

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6
Q

Universal Agency is…

A

The principal grants the agent unlimited authority to represent him or her in all matters.

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7
Q

General Agency is…

A

The principal grants the agent broad authority—but not unlimited authority to represent him or her in all matters. (Such as a property manager)

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8
Q

Special Agency is…

A

The principal grants the agent narrow authority to represent him or her in one specific matter. (Such as a listing or buyer’s agent)

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9
Q

Sub Agent is…

A

n agent of an agent and whom the principal authorizes to act on behalf of his designated agent. A broker’s salesperson.

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10
Q

A Client is…

A

A person your work FOR. For example, the seller is the listing agent’s CLIENT, as is the buyer of an agent who represents the client as a buyer’s broker.

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11
Q

A Customer is…

A

A person you work WITH. For example, if you are the seller’s agent, and a broker with another firm brings a buyer for your client’s listing, that buyer—the other agent’s client—is your CUSTOMER.

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12
Q

What does OLD CAR stand for?

A
  • Obedience
    *Loyalty
    *Disclosure

*Confidentiality
*Accountability
*Reasonable care

Fiduciary duty to an agent’s Principal.

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13
Q

What does HARD stand for?

A
  • Honesty
  • Accountability
  • Reasonable Care
  • Disclosure

Duty ti an agent’s customer.

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14
Q

When and How do we disclose Agency?

A

We must disclose whom we represent during the first substantive business discussion.

We must disclose our dual agency status before any discussion of a confidential nature takes place with a potential buyer or seller when we (or another agent with our firm) represents the other side.

We must explain the Consumer Information
Statement (P.70) and have the client sign it at the first face-to-face meeting. Give them 1 copy and keep 1 signed copy in our broker’s files.

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15
Q

Single Agency is…

A

Represents ONLY the buyer/seller/landlord or tenant in a transaction and neither the agent nor any other licensee within the agent’s brokerage represents the other side in a transaction.

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16
Q

Dual Agency is…

A

Represents BOTH buyer & seller (or landlord & tenant) in the same transaction. This representation could be from the agent, or from two agents from the same brokerage who each initially represented one side before the buyer or tenant became interested in the property.

17
Q

A Transaction Broker is…

A

One to whom the principal gives limited authority to conduct specific tasks for the principal.

18
Q

A Buyer’s Agent

A

works exclusively for the buyer (or tenant), and as such has a fiduciary duty to serve the buyer in finding a property that meets his needs.

19
Q

A Seller’s Agent

A

Also known as the listing agent—is engaged by the seller client to market her property so she can get the best possible sale price, net proceeds, settlement date, terms and conditions.

20
Q

Disclosed Dual Agent

A

Represents both the buyer and seller and he must disclose this fact at the first substantive discussion with the client. The agent must obtain signed consent from both buyers and sellers before he can act in a dual agency role.

The agent owes a fiduciary duty to both parties, the agent cannot offer any preference in his loyalty to one client over the other.

21
Q

Transaction Broker

A

A transaction broker has no agency relationship with customers; he doesn’t even “represent” them, so no fiduciary duty is owed.

A transaction broker does not give advice, nor represent the interests of one party over the other.

Cannot advise or counsel either party on how to gain an advantage at the expense of the other party.

22
Q

Power of Attorney (a POA)

A

Written authorization given by a principal to another person—an attorney-in-fact—to act on behalf of the principal. The POA can be a limited power of attorney or a general power of attorney.

he attorney-in-fact has a fiduciary duty to the principal and must be trustworthy, knowledgeable and reliable. In New Jersey, to be valid, a POA must be in writing and be notarized. When the grantor dies, the POA becomes void.

23
Q

Terminating Agency is done by…

A
  • The purpose for the agency has been met, such as the when title of a listed property has been transferred.
  • By mutual agreement.
  • The death of the principal or the broker.
  • By court order.
  • Because the broker has had his real estate license revoked.
  • In some cases, such as with a power of attorney, agency ends upon the death of the principal or the agent.
24
Q

Vicarious Liability can happen by…

A

An agent can create vicarious liability for the employing broker principal and even for their client principal through actions such as:
* Misrepresentation.
* Careless statements.
* Failing to disclose significant details or conditions that a reasonable person would consider “material.”
* Misappropriation or mishandling of client or customer funds.
* Improper behavior, such as the use of drugs or alcohol, while driving clients.
* Failing to adhere to federal or state laws.
* Not staying abreast of changing laws.
* Acting as an agent in areas where the agent has no skills or expertise.

25
Q

A Fiduciary is…

A

A person retained by a principal in a position of trust.

26
Q

Fiduciary Duties are…

A

The duties an agent owes her principal, always putting the principal’s interests ahead of those of others, including the agent’s own interests.

27
Q

A Property manger is an example of..

A

General Agent

Real Estate Exam (3 decks)

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