Chapter 2. Flashcards
Accountability
To be responsible.
Advance Consent to Dual Agency
The seller or buyer agrees to dual agency before it occurs by indicating the same on the agency disclosure form.
Designated Sales Agent
Appointing one or more individual agents in a firm to represent only the interests of the seller and one or more different individual agents in the firm to represent only the interests of the buyer when a firm has an “in-house” dual agency situation.
Confidentiality
An agent is obligated to safeguard his/her principal’s lawful confidences and secrets. Therefore, a real estate broker must keep confidential any information that may weaken a principal’s bargaining position.
Cooperating Agent
A real estate agent who sells a property. The selling agent may be (1) the subagent or listing agent of the seller; (2) a buyer’s agent; or (3) a dual agent. Also called a selling agent or participating agent
Disclosure
The release of relevant information about a property that may influence the final sale, especially if it represents defects or problems.
Estoppel
The principle which precludes a person from asserting something contrary to what is implied by a previous action or statement of that person or by a previous pertinent judicial determination.
Group Boycott
An agreement between members of a trade to exclude other members from fair participation in the trade
Informed Consent
An agreement to do something or to allow something to happen only after all the relevant facts are disclosed.
Loyalty
An agent’s duty to place the client’s interest above those of all others, including the agent’s own self-interest.
Market Allocation
An agreement between members of a trade to refrain from competition in specific market areas.
Obedience
This fiduciary relationship obligates the agent to act in good faith at all times, obeying the client’s instructions in accordance with the contract.
Price Fixing
Conspiring to establish fixed fees or prices for services or products.
Reasonable Care
The degree of caution and concern for the safety of himself/herself and others an ordinarily prudent and rational person would use in the circumstances. This is a subjective test of determining if a person is negligent, meaning he/she did not exercise reasonable care.
Tie-in Arrangement
A contract where one transaction depends upon another.
Vicarious Liability
A situation in which one party is held partly responsible for the unlawful actions of a third party
Dual Agency
Representing both principals (seller and buyer) to a transaction.
Seller’s Agent
An agent who represents the seller of real property.
Buyer Agent
An agent who represents the buyer of real property.
Broker’s Agent
A broker’s agent is an agent that cooperates or is engaged by a listing agent or a buyer’s agent (but does not work for the same firm as the listing agent or buyer’s agent) to assist the listing agent or buyer’s agent in locating a property to sell or buy, respectively, for the listing agent’s seller or the buyer agent’s buyer.
Landlord’s Agent
A person who has oral or written authority, either express or implied, to act for or on behalf of a landlord.
Tenant’s Agent
A licensed real estate agent who acts on behalf of a tenant in a commercial property transaction.
Expressed Agency
An actual agency created by written or oral agreement between the principal and the agent.
Implied Agency
Form of agency that occurs when the words and actions of the parties indicate that there is an agency relationship.
General Agent -
An agent with the full authority over one property of the principal, such as a property manager.
Special Agent
An agent with limited authority to act on behalf of the principal, such as created by a listing.
Misrepresentation
Making an intentionally false statement to induce someone to contract.
Confidentiality
An agent is obligated to safeguard his/her principal’s lawful confidences and secrets. Therefore, a real estate broker must keep confidential any information that may weaken a principal’s bargaining position. The duty of confidentiality precludes a broker who represents a seller from disclosing to a buyer that the seller can, or must, sell a property below the listed price. Conversely, a broker who represents a buyer is prohibited from disclosing to a seller that the buyer can, or will, pay more than what has been offered for a property. The duty of confidentiality does not include an obligation by a broker who represents a seller to withhold know material facts about the condition of the seller’s property from the buyer, or to misrepresent the property’s condition. To do so constitutes misrepresentation and may impose liability on both the broker and/or the seller
Disclosure
The release of relevant information about a property that may influence the final sale, especially if it represents defects or problems.
Fiduciary
A person who on behalf of or for the benefit of another transacts business or handles money or property not the person’s own; such relationship implies great confidence and trust.
Fiduciary Duties
The legal duty of a fiduciary to act in the best interests of the beneficiary. One common duty includes confidentiality.
Obedience
The fiduciary relationship obligates the agent to act in good faith at all times, obeying the client’s instructions in accordance with the contract.
Which of the following may be considered a 3rd party to a transaction…?
Customer
According to this concept, the principal must act to defend the agent in the event the agent is sued while acting on behalf of the principal…?
Indemnification
Representing both principals (seller and buyer) in a transaction is known as…?
Dual Agency
Michael, a property owner, allowed Andrew, a real estate broker, to show his house to prospective buyers. However, Michael and Andrew do not have a signed agency agreement and instead operated under an implied agency. According to this doctrine, Michael cannot claim that an agency relationship did not exist…?
Estoppel
A person who on behalf of, or for the benefit of another, transacts business or handles money or property not the person’s own is known as a…?
Fiduciary
A listing given to any number of brokers without liability to compensate any broker, except the one who first secures a buyer ready, willing and able to meet the terms of the listing, is known as a/an…?
Open Listing
An agent of a broker who is already acting as an agent of a principal is known as a…?
Sub-agent
Which of the following is NOT considered a principal in an agency relationship…?
Broker
John, a real estate broker, and Chris, a property owner, have entered into an agency relationship. Soon after, a dispute arose in regards to how much commission should be paid to John if he finds a buyer for Chris’ property. What should they do to resolve their dispute…?
Refer back to the listing agreement, which states the agreed upon commission
A selling agent or participating agent is referred to as the…?
Cooperating Agent
According to an agent’s fiduciary duties, the agent must present all offers to his/her client. Which of the following fiduciary duties best reflects this…?
Disclosure
According to this fiduciary duty, an agent must present all offers to the client…?
Disclosure
Representing both principals (seller and buyer) in a transaction is known as…?
Dual Agency
John, a real estate salesperson, was referred a client from another agent. After successfully closing on the deal, John would like to offer a referral fee to the agent who referred the client. What must John obtain first before offering a referral fee…?
Informed consent of the client
If a union of brokers in New York State bound together and agreed to only accept commissions of 9% or higher, far more than the typical 6% in a transaction, what may they be held liable for…?
Price fixing
The first contact or meeting by a licensee when some detail and information about the property is shared with parties who express some interest in the real estate transaction is known as…?
First Substantive Contact
An agent with the full authority over one property of the principal, such as a property manager, is considered a…?
General Agent
An agent that cooperates or is engaged by a listing agent or a buyer’s agent to assist in locating a property to sell or buy is known as a…?
Broker’s Agent
A relationship in which the real estate agent is found to be the agent of both the buyer and seller in a transaction, but without the knowledge and informed consent of both parties, is known as…?
Undisclosed Dual Agency
Which of the following is NOT considered a principal in an agency relationship…?
Agent
John is a real estate broker and wants to enter into an agency relationship with Steve, a property owner. What document must John and Steve execute in order to enter into an agency relationship…?
Listing Agreement
A selling agent or participating agent is referred to as the…?
Cooperating Agent
According to this fiduciary duty, an agent must present all offers to the client…?
Disclosure
The party the agent brings to the principal as seller or buyer of the property is known as the…?
Customer
If there is any doubt as to the distribution of proceeds at the closing table, it must be resolved in favor of the client, as per which fiduciary duty…?
Accountability
Andrew is a real estate agent specializing in condo sales. However, he tries to facilitate the sale of a commercial office building, only to find that he is not familiar with commercial leases. Under which fiduciary duty can he be sued for negligence, if a party in the transaction loses money…?
Reasonable Care
You may be breaching the fiduciary duties you owe to your principal if you do not do which of the following…?
Exercise reasonable care
As an agent to a cooperative board, Mark has the authority to enter into contracts with 3rd party vendors to help service the building. This level of authority suggests that Mark is what type of agent…?
General Agent
If a broker engages in anti-trust actions or agreements, what will they most likely be in breach of…?
Fiduciary duties to their client
According to the ‘In-house Sales’ clause in an Exclusive Right to Sell agreement, a seller cannot do which of the following if the listing broker also finds a buyer…?
Refuse to pay a commission to the listing broker
According to NYS law, a broker is not allowed to do which of the following…?
Take an extended leave of absence from his/her brokerage office
Which of the following orders from a seller must a seller’s agent NOT follow…?
The agent cannot sell to a minority
A person who is hired to provide services to a company on a regular basis in exchange for compensation and who does not provide these services as part of an independent business is known as a/an…?
Employee
In addition to the agent signing the independent contractor agreement, what else is required before the agreement can be finalized…?
The agreement must be notarized
According to New York State law, an independent contractor agreement can NOT be signed under what condition…?
Duress
Jason, a buyer’s broker, found a property for his client on the MLS. By agreeing to the cooperative arrangement of the MLS, who in addition to his client does Jason have an agency relationship with…?
The seller
John, a real estate broker representing the owner, listed his client’s property on the MLS. Any buyer’s agent will be a sub-agent to whom…?
John’s client
If a real estate agent representing the buyer enters into a dual agency arrangement, to whom does he/she become a sub-agent…?
The seller
Two agents are attempting to create a dual agency with permission from both the buyer and seller. According to New York State law, what must be given in-writing…?
Informed consent from all parties
Abby, a real estate agent, is working to rent an apartment on behalf of her client. Mark, a real estate agent who works for the same broker as Abby, has a client who is interested in renting the apartment. Before the apartment can be shown, what must be provided by the landlord and prospective tenant…?
Informed Consent
When dual agency exists between the landlord’s agent and tenant’s agent, which fiduciary duty may be most at risk to both principals…?
Undivided loyalty
This form informs the client about dual agency and details the risks and benefits involved in the transaction…?
Disclosure Form
Which of the following forms is used to inform the parties to a transaction about the risks of dual agency…?
Disclosure Form
Jason is a real estate agent who is seeking to rent an apartment on behalf of his client. Jason’s colleague, David, works for the same broker and has a client who is interested in renting the apartment. What document should Jason and David have their clients review and sign-off on prior to entering a dual agency relationship…?
The Disclosure Form
What alternative action can be taken if consent to dual agency is not granted or subsequently withdrawn…?
Assign designated sales agents
John is an agent who has been designated to represent the buyer in a dual agency arrangement. Who does John owe a fiduciary duty to…?
Only the buyer
What is the typical commission paid to the buyer’s agent in a transaction…?
3 (Percent %)
Which section of the New York State Real Property Law states that the broker may be liable for the salesperson’s actions…?
Section 442-C
An agreement of employment of a broker to the exclusion of all other brokers is known as…?
Exclusive Agency
Justin, a real estate salesperson, would like to offer his colleague a referral fee for referring him a new client. Before offering the referral fee, however, Justin obtained informed consent from the client. Justin’s actions are an example of what policy…?
Full disclosure
This is a form of agency that occurs when the words and actions of the parties indicate that there is an agency relationship…?
Implied Agency
Who does the agent bring to the principal in a transaction…?
A Customer
A selling agent or participating agent is referred to as the…?
Cooperating Agent
According to an agent’s fiduciary duties, the agent must present all offers to his/her client. Which of the following fiduciary duties best reflects this…?
Disclosure
Who can benefit from confidential information in a transaction…?
Client
When an agent represents either the buyer or the seller, but NOT both in a transaction, the agent is considered what…?
Single Agent
Mark, a buyer’s broker, found a perspective property for his client on the MLS. By agreeing to the cooperative arrangement of the MLS, who does Mark have an agency relationship with, in addition to his client…?
The seller
When a buyer’s broker agrees to the cooperative arrangement of the MLS, he/she becomes a sub-agent to whom…?
The seller
If a real estate agent representing the buyer enters into a dual agency arrangement, to whom does he/she become a sub-agent…?
The seller
Chris and Mark are real estate agents working for the same broker. Chris is seeking to rent an apartment on behalf of his client, while Mark’s client is interested in renting the apartment. If all parties in the transaction agree to dual agency, which fiduciary duty to the principals may be most at risk…?
Undivided loyalty
If one or both of the parties in a transaction are not aware that a dual agency relationship exists, what can occur…?
The contract can be rescinded
Which section of the New York State Real Property Law states that the broker may be liable for the salesperson’s actions…?
Section 442-C
The broker, as a franchisee of a national brokerage, is considered what to the national brokerage…?
Sub-agent
A listing given to any number of brokers without liability to compensate any broker, except the one who first secures a buyer ready, willing and able to meet the terms of the listing, is known as a/an…?
Open Listing
According to the Exclusive Right to Sell Agreement, who is liable for any damage, theft or loss attributed to a lockbox…?
The seller
As an agent, how many brokers are you typically allowed to work for at any given time…?
1
Marcus is a real estate agent with Town Brokers. Town Brokers demanded that Marcus work a minimum of 25 hours per week at their main office location. Under this scenario, what may New York State consider Marcus if he were to work a set amount of hours in a specific location…?
An employee
When an agent represents either the buyer or the seller, but NOT both in a transaction, the agent is considered what…?
Single Agent
According to this doctrine, an agency relationship which is created after the fact when the principal agrees to be bound by the actions of the agent who was acting without authority, is known as…?
Ratification
One who undertakes to transact some business or to manage some affair for another by authority of the latter is known as a…?
Agent
John, a real estate broker, and Chris, a property owner, have entered into an agency relationship. The scope of their agency relationship is defined in what document…?
Listing Agreement
John, a real estate broker, and Chris, a property owner, have entered into an agency relationship. Soon after, a dispute arose in regards to how much commission should be paid to John if he finds a buyer for Chris’ property. What should they do to resolve their dispute…?
Refer back to the listing agreement, which states the agreed upon commission
Who does the agent bring to the principal in a transaction…
Customer
If there is any doubt as to the distribution of proceeds at the closing table, it must be resolved in favor of the client, as per which fiduciary duty…
Accountability
