Chapter 10 Yellow Text --RE Agency

Question 1

In a RE Transaction, the term fiduciary typically refers to the

Answer 1

Agent’s relationship to the principal

Question 2

The relationship between RE Broker and Seller is generally what type of agency?

Answer 2

Special–or a limited agent is authorized to represent the principal in on specific act or business transaction only.

Question 3

A General Agent

Answer 3

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.

Question 4

Universal Agent

Answer 4

is empowered to do anything the principal could do personally. They have the authority to act on behalf of the principal.

Question 5

Signle agency

Answer 5

the agent represents only one party to a transaction.

Question 6

Dual agency

Answer 6

the agent represents two principals in the same transaction. Must be disclosed in MA

Question 7

Property Management

Answer 7

An owner may employ a broker to market, lease, maintain or manage the owner’s property.

Question 8

Designated Agency

Answer 8

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.

Question 9

Which statement is True of a RE Broker acting as the agent of the seller?

Answer 9

The broker is obligated to render loyalty to the seller.

Question 10

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?

Answer 10

The woman is the broker’s client, the man is a customer.

Question 11

In a dual agency situation, a broker may represent both the seller and the buyer in the same transaction if:

Answer 11

both parties consent in writing to dual agency…thus forming a disclosed dual agency.

Question 12

Which event will terminate an agency in a broker-seller relationship?

Answer 12

If the seller declares personal bankruptcy.

Question 13

Designated agency is Most likely to occur when:

Answer 13

the buyer and the seller are represented by the same company.

Question 14

A RE broker hired by an owner to sell a parcel of RE must comply with:

Answer 14

all lawful instructions of the owner.

Question 15

Which one of the following is NOT a valid reason to terminate an agency relationship?

Answer 15

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.

Question 16

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?

Answer 16

Disclosure was improper and possibly illegal, regardless of the agents motive.

Question 17

A buyer who is a client of the broker wants to purchase a house that the broker has listed. Which is true?

Answer 17

The seller and the buyer must be informed of the situation and agree in writing to the broker’s representing both of them.

Question 18

What does the phrase the Law of Agency is a common law doctrine mean?

Answer 18

It is part of a body of law established by tradition and court decisions.

Question 19

Statuary Law

Answer 19

the laws enacted by the legisature

Question 20

Administrative Law

Answer 20

the rules and regulations created by RE commissions and departments as authorized by the legislature

Question 21

A broker helps a buyer and a seller with paperwork but does not represent either party. This relationship is

Answer 21

a transactional broker.

Question 22

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?

Answer 22

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.

Question 23

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?

Answer 23

The broker is merely puffing.

Question 24

A RE Broker’s responsibility to keep the principal informed of all the facts that might affect a transaction is the duty of:

Answer 24

Disclosure

Question 25

Which of the following is considered dual agency?

Answer 25

a broker acting for both parties in the same transaction

Question 26

the relationship of broker to client in an agency relationship is that of:

Answer 26

a Fiduciary

Question 27

A RE Broker acting as the agent of the seller

Answer 27

must promote and safeguard the seller’s best interests.

Question 28

A broker is permitted to represent both the seller and the buyer in the same transaction when:

Answer 28

both parties have been informed and agree in writing to the dual representation.