Chapter 16 - Agency In Real Estate Flashcards
A person who has the authority to enter into contracts concerning all business affairs of another is called …
general agent
The term FIDUCIARY refers to
the principal-agent relationship
The legal relationship between broker and seller is MOST frequently a …
-special agency
A real estate broker acting as the agent of the seller …
is obligated to render faithful service to the seller.
In Pennsylvania, all exclusive contracts for real estate activities must be …
in writing
The broker provided the seed money for developing a property and is now acting as the listing agent. In this situation, the developer …
-may NOT revoke the listing agreement
In a fiduciary relationship, the agent is primarily responsible to the …
client
Which event terminates an agency in a broker-seller relationship?
- The owner abandons the property
- The owner declares personal bankruptcy
- The broker discovers that the market value of the property is such that an adequate commission will not be earned.
-The owner declares personal bankruptcy
A licensee lists a residence for $187,000. For various reasons, the owner must sell the house quickly and confides to the licensee that a lower price would probably be acceptable, although the asking price is reasonable. To expedite the sale, the licensee tells a prospective purchaser that the seller will accept up to $5,000 less than the asking price for the property. Based on these facts, which statement is TRUE?
- The licensee should only have disclosed that the seller would reduce the price
- The licensee has not violated any agency responsibilities to the seller
- The disclosure was improper, and possibly illegal, regardless of the motive of the licensee
- The licensee should have disclosed this information, regardless of its accuracy.
-The disclosure was improper, and possibly illegal, regardless of the motive of the licensee
The Consumer Notice must include a discussion of …
-The Real Estate Recovery Fund
What is a transaction licensee obligated to disclose?
- Material Defects In The Property
- Seller will except less than the asking price
- Buyer will pay more than the submitted offered price
- Parties will accept different financing terms than those offered
-Material Defects In The Property
In addition to the Consumer Notice, the broker of the real estate firm must also establish procedures for disclosing …
-company policies regarding dual agency and designated agency.
A buyer and a seller approach a broker and explain that they have agreed on the sale of the seller’s home. They ask the broker to assist them with the rest of the transaction. In Pennsylvania, the broker
-is permitted to act as a transaction broker.
At what time should a Pennsylvania licensee present the Consumer Notice to a prospective home buyer?
-at the initial interview
A salesperson representing the seller shows a house to a prospective buyer. The salesperson knows that the house has a wet basement. Which of the following is TRUE?
- Disclosing the information violates the fiduciary to the seller
- Withholding the information prevents the buyer from making an informed decision.
- Disclosing the information could create an undisclosed fiduciary relationship with the buyer.
- Withholding the information protects the confidence of the seller
-Withholding the information prevents the buyer from making an informed decision.
In the case of real estate agency, who is the individual who is authorized and consents to represent the interest of another?
-Broker of record
The sellers listed their home with a broker for $190,000. The broker tells a prospective buyer to submit a low offer because the seller is desperate to sell. The buyer offers $180,000 and the seller accepts it. In this situation, the broker …
-has violated his agency relationship with the seller
In real estate, the relationship between the principal/consumer and agent/broker must be …
-consensual
In a dual agency situation, brokers may be compensated by both the seller and the buyer if …
-both parties give their informed written consent to the dual compensation
A broker may represent both the seller and the buyer when …
-both parties give informed written consent to such a transaction
Which of the following is an example of dual agency?
- The broker acting for both the buyer and the seller in the same transaction
- Brokers cooperating with each other
- The broker representing different principles
- The broker listing and selling the same property
-The broker acting for both the buyer and the seller in the same transaction
The relationship of a broker to a client is that of
-a fiduciary
A real estate broker acting as the agent of the seller …
is obligated to render faithful service to the principle
Statements by a real estate licensee exaggerating the benefits of a property are called …
Puffing
A broker is permitted to represent both the seller and the buyer in the same transaction when …
both parties have been informed and agree to the dual representation.
Unless some other written agreement has been made, the broker will usually receive the sales commission from the seller when …
-the transaction is closed
All of the following are considered fraudulent EXCEPT
- deceitful or dishonest practices
- exaggerated statements about the property
- omitted statements of material fact
- misstatements about the property
-exaggerated statements about the property
As an agent for the seller, a real estate broker can …
solicit an offer to purchase the property from a prospective buyer
When a listing broker was told by his principle not to advertise the listing in a particular newspaper, which was out of the area, the broker complied because the broker …
-must obey the lawful instructions of his principal
In a typical agency relationship between the broker and the client, the broker’s commission is determined by
-mutual agreement
An agent has a duty to disclose to the principal every step taken in the transaction of the principal’s business. This is because the …
-agent has fiduciary obligations to the princepal
A salesperson emplyed by a broker told a prospective buyer that the house she was looking at is “the best house in the area”. Because of this statement the …
salesperson would be viewed as puffing
Which of the following BEST defines law of agency?
- The selling of another’s property by an authorized agency
- The rules of law that apply to the responsibility of a person who acts for another
- The principles that govern one’s conduct in business
- The rules and regulations of the state’s licensing agency.
-The rules of law that apply to the responsibility of a person who acts for another
A broker who is the agent of the buyer should do which of the following?
- Disclose to the seller that the buyer is a minority person
- Disclose to the seller the maximum price the buyer is willing to pay.
- Present to the seller only offers that are acceptable.
- Advise the buyer whether the listing price of the seller’s
-Advise the buyer whether the listing price of the seller’s
A broker’s salesperson lists a unit for sale in a condominium building. The salesperson in this transaction …
-acts on behalf of the broker
The real estate broker’s responsibility to keep the principle informed of all the facts that might affect a transaction is the duty of …
-disclosure
C.O.A.L.D means what?
- Care
- Obedience
- Accounting
- Loyalty
- Disclosure
