Chapter 10 Yellow Text --RE Agency Flashcards
In a RE Transaction, the term fiduciary typically refers to the
Agent’s relationship to the principal
The relationship between RE Broker and Seller is generally what type of agency?
Special–or a limited agent is authorized to represent the principal in on specific act or business transaction only.
A General Agent
May represent the principal in a broad range of matters related to a particular business or activity. A property manager is typically a general agent.
Universal Agent
is empowered to do anything the principal could do personally. They have the authority to act on behalf of the principal.
Signle agency
the agent represents only one party to a transaction.
Dual agency
the agent represents two principals in the same transaction. Must be disclosed in MA
Property Management
An owner may employ a broker to market, lease, maintain or manage the owner’s property.
Designated Agency
a process that accommodates an inhouse sale in which two different agents are involved. The broker designates one agent to represent the seller and one to represetn the buyer.
Which statement is True of a RE Broker acting as the agent of the seller?
The broker is obligated to render loyalty to the seller.
A RE Broker lists a woman’s home for sale for $189,500. Later that same day, a man comes into the brokers office and asks for general information about homes for sale in the $130,000 to $140,000 range but refuses representation by the broker’s co at this time. Based on these facts, which statement is true?
The woman is the broker’s client, the man is a customer.
In a dual agency situation, a broker may represent both the seller and the buyer in the same transaction if:
both parties consent in writing to dual agency…thus forming a disclosed dual agency.
Which event will terminate an agency in a broker-seller relationship?
If the seller declares personal bankruptcy.
Designated agency is Most likely to occur when:
the buyer and the seller are represented by the same company.
A RE broker hired by an owner to sell a parcel of RE must comply with:
all lawful instructions of the owner.
Which one of the following is NOT a valid reason to terminate an agency relationship?
The buyer wanted to work with a new agent, but the terms of agency had not yet expired and the current agent did not agree to terminate.
A seller tells his agent in confidence that he must sell fast and may accept less than the list price. The agent tells a buyer the seller will accept up to $5,000 less than the list price. Which is True?
Disclosure was improper and possibly illegal, regardless of the agents motive.
A buyer who is a client of the broker wants to purchase a house that the broker has listed. Which is true?
The seller and the buyer must be informed of the situation and agree in writing to the broker’s representing both of them.
What does the phrase the Law of Agency is a common law doctrine mean?
It is part of a body of law established by tradition and court decisions.
Statuary Law
the laws enacted by the legisature
Administrative Law
the rules and regulations created by RE commissions and departments as authorized by the legislature
A broker helps a buyer and a seller with paperwork but does not represent either party. This relationship is
a transactional broker.
A RE sales associate represents a buyer. At their first meeting, the buyer reveals plans to operate a dog-grooming business out of the purchased house. The sales associate did not check the local zoning ordinances to determine in which parts of town such a business could be conducted. Which common law duty did the sales associate violate?
Care–Agents must exercise a reasonable degree of care while transacting the business entrusted to them by principals. Principals expect the agent’s expertise in RE matters to be superior to that of the average person.
A broker tells a buyer, “this home has the most beautiful river view”. In fact, the view includes the river and the back of a shopping center. Which is true?
The broker is merely puffing.
A RE Broker’s responsibility to keep the principal informed of all the facts that might affect a transaction is the duty of:
Disclosure
Which of the following is considered dual agency?
a broker acting for both parties in the same transaction
the relationship of broker to client in an agency relationship is that of:
a Fiduciary
A RE Broker acting as the agent of the seller
must promote and safeguard the seller’s best interests.
A broker is permitted to represent both the seller and the buyer in the same transaction when:
both parties have been informed and agree in writing to the dual representation.
