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Real Estate Principles > Chapter 11 > Flashcards

Chapter 11 Flashcards

1
Q

Gross Rent Multiplier

A

A number which, times the gross income of a property, produces an estimate of value of the property.

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2
Q

Section 1031 Exchange

A

A section of the U.S. Internal Revenue Service Code that allows investors to defer capital gains taxes on any exchange of like-kind properties for business or investment purposes.

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3
Q

Agent

A

One who acts for and with authority from another called the principal.

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4
Q

Agency

A

The relationship between principal and the principal’s agent which arises out of a contract, either expressed or implied, written or oral, wherein the agent is employed by the principal to do certain acts dealing with a third party.

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5
Q

Respondeat Superior

A

A common-law doctrine that makes an employer liable for the actions of an employee when the actions take place within the scope of employment.

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6
Q

Independent Contractor

A

A person who acts for another but who sells final results and whose methods of achieving those results are not subject to the control of another.

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7
Q

Principal

A

The employer of an agent; one of the main parties in a real estate transaction, such as a buyer, borrower, seller, or lessor.

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8
Q

Client

A

Prior to signing a listing agreement, a party in a real estate transaction who will employ an agent.

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9
Q

Real Estate Broker

A

A person employed for a fee by another to carry on any of the activities listed in the license law definition of a broker.

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10
Q

Express Agency

A

An agency relationship created by oral or written agreement between principal and the agent.

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11
Q

Implied Agency

A

Agency that exists as a result of actions of the parties.

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12
Q

Ostensible Authority (apparent authority)

A

That authority which a third person reasonably believes an agent possesses because of the acts or omissions of the principal.

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13
Q

Universal Agent

A

The agent who has complete authority over any activity of principal; for example, power of attorney.

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14
Q

General Agent

A

An agent with full authority over one property of the principal, such as a property manager.

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15
Q

Special Agent

A

An agent with limited authority to act on behalf of the principal, such as created by a listing contract.

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16
Q

Fiduciary

A

A person in a position of trust and confidence, as between principal and broker; broker as a fiduciary owes certain loyalty which cannot be breached under the rules of agency.

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17
Q

Fiduciary Duty

A

That duty owed by an agent to act in the highest good faith toward the principal and not to obtain any advantage over the latter by the slightest misrepresentation, concealment, duress or pressure.

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18
Q

Single Agent

A

An agent who works only for the buyer or the seller.

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19
Q

Dual Agency

A

An agency relationship in which the agent acts concurrently for both of the principals in a transaction.

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20
Q

Listing Contract

A

A contract in which a property owner employs a real estate broker to market the property described in the contract.

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21
Q

Exclusive Agreement (Exclusive Right to Sell Listing Agreement)

A

A listing given to only one broker who is entitled to the commission if anyone sells the property during the term of the listing contract.

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22
Q

Exclusive Agency Agreement

A

A listing given to only one broker (exclusive) who is entitled to the commission if the broker or any agent of the listing broker effects a sale but imposes no commission obligation on the owner who sells the property to a person who was not interested in the property by efforts of the listing broker or an agent of the listing broker.

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23
Q

Non-Exclusive Listing (Open Listing)

A

a listing given to one or more brokers in which the broker procuring a sale is entitled to the commission but imposes no commission obligation on the owner when the owner sells the property.

24
Q

Net Listing

A

A listing which provides that the agent may retain as compensation for agent’s services all sums received over and above a net price to the owner.

25
Q

Sherman Anti-Trust Act

A

Federal legislation including imposition of civil and punitive damages for anti-trust activities.

26
Q

A number which, times the gross income of a property, produces an estimate of value of the property…?

A

Gross Rent Multiplier

27
Q

This is a section of the U.S. Internal Revenue Service Code that allows investors to defer capital gains taxes on any exchange of like-kind properties for business or investment purposes…?

A

Section 1031 Exchange

28
Q

Agency that exists as a result of actions of the parties is known as…?

A

Implied Agency

29
Q

That authority which a third person reasonably believes an agent possesses because of the acts or omissions of the principal is known as…?

A

Ostensible Authority

30
Q

The agent who has complete authority over any activity of principal is known as a…?

A

Universal Agent

31
Q

An agent with full authority over one property of the principal is known as a…?

A

General Agent

32
Q

An agent with limited authority to act on behalf of the principal, such as created by a listing contract, is known as a…?

A

Special Agent

33
Q

Real estate agents act as what type of agents…?

A

Special Agent

34
Q

A person in a position of trust and confidence is known as a…?

A

Fiduciary

35
Q

That duty owed by an agent to act in the highest good faith toward the principal and not to obtain any advantage over the latter by the slightest misrepresentation, concealment, duress or pressure is known as…?

A

Fiduciary Duty

36
Q

Which of the following is an example of a fiduciary duty owed by an agent to his/her principal…?

A

Reasonable Care, Obedience, Confidentiality

37
Q

An agent who works only for the buyer or the seller is known as a…?

A

Single Agent

38
Q

A high risk property will demand higher rates of return from investors…?

A

T (True)

39
Q

An agency relationship in which the agent acts concurrently for both of the principals in a transaction is known as a…?

A

Dual Agent

40
Q

Dual agency must be disclosed…?

A

T (True)

41
Q

Which of the following is an example of dual agency…?

A

Escrow

42
Q

A contract in which a property owner employs a real estate broker to market the property described in the contract is known as a…?

A

Listing Contract

43
Q

A listing given to only one broker who is entitled to the commission if anyone sells the property during the term of the listing contract is known as a…?

A

Exclusive Right to Sell Listing Agreement

44
Q

A listing given to one or more brokers in which the broker procuring a sale is entitled to the commission but imposes no commission obligation on the owner when the owner sells the property is known as a…?

A

Non-Exclusive Listing

45
Q

A listing which provides that the agent may retain as compensation for the agent’s services all sums received over and above a net price to the owner…?

A

Net Listing

46
Q

Federal legislation including imposition of civil and punitive damages for anti-trust activities is known as the…?

A

Sherman Anti-Trust Act

47
Q

Residential listing agreements must be in writing…?

A

T (True)

48
Q

Exclusive Agency Agreements are typically found in residential transactions…?

A

F (False)

49
Q

One who acts for and with authority from another called the principal is known as a/an…?

A

Agent

50
Q

The relationship between principal and the principal’s agent which arises out of a contract, either expressed or implied, written or oral, wherein the agent is employed by the principal to do certain acts dealing with a third party, is known as…?

A

Agency

51
Q

A common-law doctrine that makes an employer liable for the actions of an employee when the actions take place within the scope of employment is known as…?

A

Respondeat Superior

52
Q

A person who acts for another but who sells final results and whose methods of achieving those results are not subject to the control of another is referred to as a/an…?

A

Independent Contractor

53
Q

The employer of an agent is known as the…?

A

Principal

54
Q

Prior to signing a listing agreement, a party in a real estate transaction who will employ an agent is known as the…?

A

Client

55
Q

An agency relationship created by oral or written agreement between principal and the agent is known as…?

A

Express Agency

Real Estate Principles (14 decks)

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