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New York Real Estate > Chapter 2 > Flashcards

Chapter 2 Flashcards

1
Q

Which agent represents a principal in all matters concerning all transactions.

A

A universal agent

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2
Q

Which agent represents principals in all matters concerning ONE transaction?

A

General agent

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3
Q

Which agent is the most like a property manager?

A

A general agent

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4
Q

Which agent represents the principal in one specific action under detailed instruction?

A

A specific agent

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5
Q

Which agent is a salesperson most like?
A. Universal agent
B. Specific agent
C. A general agent

A

B, specific agent

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6
Q

What does “old car” stand for? And what is it for?

A

Reasonable Care
Obedience
Loyalty
Disclosure
Accounting or accountability
Confidentiality

It is for fiduciary responsibility

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7
Q

Which is more common, expressed agency or implied agency?

A

Express agency

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8
Q

Which agency is based on acts and conduct, express or implied?

A

Implied

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9
Q

Is an implied agency verbal or nonverbal?

A

Non verbal

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10
Q

Which agency has nothing in writing? Implied or expressed.

A

Implied agency

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11
Q

What is an example of an expressed agency?

A

A listing agreement

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12
Q

Which agency does a listing agreement pertain to?

A

An expressed agency

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13
Q

True or false: an implied agency is oral or written.

A

False, that’s an expressed agency

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14
Q

Do customers or clients pay agents commission?

A

Clients

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15
Q

True or false: Clients do not pay agents commissions.

A

False

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16
Q

What does an agency disclosure form do?

A

It describes roles of agents to customers and potential clients

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17
Q

Are people obligated to sign an agency disclosure form?

A

No

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18
Q

Which form applies to residential transactions? (4 or fewer units intended for dwelling purposes)

A

An Agency disclosure form

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19
Q

What is the main purpose of an agency disclosure form?

A

To educate the public as to who or whom not to share confidential information to.

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20
Q

When must the agency disclosure form be signed?

A

At the first substantive meeting

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21
Q

What should the salesperson sign when the buyer refuses to sign the agency disclosure form?

A

A declaration by real estate licensee

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22
Q

What does the declaration by real estate licensee form state?

A

That the agency disclosure form was presented and explained to the buyer, but the buyer refused to sign it.

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23
Q

If the buyer does not sign the agency disclosure form, when can you show the buyer houses?

A

The agent can show the buyer houses when they sign the declaration by real estate licensee form.

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24
Q

Which of the following best describes the relationship between the broker and seller under a listing agreement?
A. Special agency
B. General agency
C. Universal agency

A

A, special agent

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25
Q

Power of attorney is what type of agency?

A

Universal

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26
Q

What kind of relationship\agency is your relationship with the homeowner?

A

Special agent

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27
Q

What is it called when you first meet someone officially.

A

First substantive contact

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28
Q

If I take a buyer out as a customer, who is paying my fee?

A

The seller is paying the fee

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29
Q

If you take a buyer out as a client, who pays your fee?

A

The buyer. Because it means they went from your customer to your client.

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30
Q

What is the safest place to meet a buyer?

A

The office

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31
Q

If you represent a buyer and a seller in the same transaction, what am I considered?

A

Dual agency

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32
Q

If you find yourself in a dual agency, what must you do?

A

Inform both parties and have them sign agency disckosure

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33
Q

If you’re in a dual agency, what are the buyer and seller losing and giving up?

A

Undivided loyalty and full disclosure

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34
Q

If buyer and seller don’t want to be in a dual agency, what would you get?

A

Designated agent from your office. But you should hold onto your seller.

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35
Q

Do you owe your customers any fiduciary responsibilities? If not, what do you owe them?

A

No, you owe them fair …

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36
Q

The formal offering an acceptance of employment between a principal and a real estate licensee in a transaction creates a what?

A

Agency

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37
Q

A principle is another word for?

A

Client

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38
Q

The term describing the role that the agent takes on when the agency relationship is created (based on the highest form of trust and confidence) is called what

A

Fiduciary

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39
Q

What duties does an agent owe a customer?

A

Limited duties like fair and honest dealing

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40
Q

Does an agent owe a fiduciary duty to a customer?

A

No, only fair and honest dealing

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41
Q

“Are brokerage” and a “real estate agency” the same thing

A

No

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42
Q

The body of law that governs agency working relationships is called?

A

Law of agency

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43
Q

The fiduciary working relationship that is created between a principle and an agent is called?

A

Agency

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44
Q

Can a universal agency happen without a written document known as a power of attorney?

A

No

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45
Q

Which agency does power of attorney relate to?
A. Universal
B. Specific
C. General

A

A

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46
Q

A person who is authorized to act on behalf of another person, or principal, and is similar to a helper for the main agent. What is this?

A

Sub agent

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47
Q

If you’re a sponsors licensee of a broker and your broker has a client, who is the sub agent, and who are you a sub agent to?

A

The salesperson is the sub agent to the brokers client

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48
Q

Do salespersons and associate brokers have the authority to make contracts?

A

No, only brokers can

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49
Q

Is a broker an agent or a principle to a salesperson?

A

A principle

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50
Q

True or false: a salesperson is an agent of the broker and a sub agent of a seller.

A

True

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51
Q

What might occur when competing firms agree to split up in area and refrain from doing business in one another’s territories?

A

Market allocation

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52
Q

What is market allocation?

A

When competing firms agree to split up an area and refrain from doing business in each others area.

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53
Q

What is it called when companies attempt to boycott a firm to drive it out of business

A

Group boycott 

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54
Q

What is the penalty for violating anti-trust laws

A

$350,000 and felony prison sentencing of up to three years

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55
Q

Which laws are the Sherman and Clayton acts in reference to?

A

Antitrust laws

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56
Q

When does a tie in arrangement usually occur?

A

When a selling party conditions the sale of an item (they’re tying in the sale of their house on a condition)

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57
Q

What is a tie in arrangement?

A

When a seller as a prerequisite to the purchase of the property otherwise they refuse to sell it

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58
Q

Is price fixing illegal?

A

Yes

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59
Q

What is it called when competing brokers get together to set commission rates rather than letting the open market establish those rates?

A

Price fixing

60
Q

What four acts violate antitrust laws?

A

Price fixing, market allocation, tie in arrangement, and group boycotting

61
Q

What terminates an agency (7 options)

A

Bankruptcy, mutual agreement, death or incompetence by either side, destruction of property, expiration of the terms, revocation by the client, renunciation by agent

62
Q

Who decides on the salespersons compensation?

A

The broker and salesperson

63
Q

What does article 442-a state?

A

Salesperson cannot accept commission from any buyer or seller or broker that they are not sponsored by

64
Q

What does Megan’s law say?

A

A broker or agent does not have an obligation to search State records on which convicted pedophiles must register their addresses. Prospective purchasers can gain information about the possibility that crimes have been committed on a property but it’s sellers agent and the seller may choose whether or not to respond to the buyers questions.

65
Q

A broker hired by an owner to sell a parcel of real estate must comply with
A. All instructions of the buyer
B. Principle of estoppel
C. Any legal and reasonable instruction of the owner
D. Entering into a net listing

A

C

66
Q

If a buyer‘s broker is told by the buyer that he filed for bankruptcy the year before what is the buyers broker obligated to do for the seller?

A

He is required to disclose this material fact to the seller

67
Q

A sellers willingness to accept a buyers offer only if the buyer will purchase property insurance from their insurance broker is example of what?

A

Tie in arrangement

68
Q

Are you obligated as a sellers agent to disclose to a prospective buyer that a house is haunted?

A

No

69
Q

The sellers broker must disclose to a prospective buyer that
A. The heating system does not work well
B. The seller has aids
C. The last owner was murdered there

A

A

70
Q

A relationship of trust and confidence is best described as
A. Law of agency
B. License law
C. Statutory law

A

law of agency

71
Q

If the seller commits willfull default and back out, even if a prosed transaction does not go through, can the broker possibly collect commission?

A

Yes

72
Q

If an agent is selling a principles home, who is the potential buyer considered as?

A

A customer

73
Q

An example of a latent defect would be
A. A used car lot next door
B. A roof with messed up shingles
C. A large crack in ceiling
D. A malfunctioning septic tank

A

D, malfunctioning septic tank

74
Q

What does latent mean?

A

Hidden or concealed

75
Q

A seller who wishes to cancel a listing agreement in New York
A. Must cite a legally acceptable reason
B. May face damages to the broker
C. May not sell the property for s year
D. May not cancel without the agents consent

A

B, may face damages

76
Q

Section 175.7 states that A broker may only receive compensation from both the seller and the buyer in the same transaction when what occurs?

A

Both parties have been provided with full disclosure and have given the broker their informed consent.

77
Q

True or false: a broker representing a buyer does not need to disclose the deficiencies of a property as well as contract or financing issues that are not to the buyers benefit.

A

False

78
Q

An acronym to remember fiduciary duties is?

A

Old car

79
Q

Which of the following is an essential element of a valid contract?
A. Must be recorded
B. Must be a us citizen
C. All signatures must be notarized
D. Mutual agreement

A

D mutual agreement

80
Q

Which of the following is an essential element of a valid contract?
A. Must be recorded
B. All signatures must be notarized
C. Must be citizen
D. Consideration

A

D, consideration

81
Q

Which contract will most affect brokers and agents?

A

Listing agreement

82
Q

What does the Stambovsky v Ackley case state?

A

To clear up the problem of stigmatized properties from 1995 443-a, it provided that an owner, occupant, or agent does not need to disclose the fact that the property is suspected to be the site of a murder, felony, etc. in addition, not having to disclose that the prior owner of a house had HIV OR AIDS.

83
Q

What is a latent defect?

A

A defect not discoverable to the human eye with further inspection.

84
Q

True or false: a seller is responsible for revealing to a buyer, any material latent defects relating to a property.

A

True

85
Q

Are brokers obligated to reveal latent defects whether they are selling the buyer or the seller?

A

Yes

86
Q

What is it called when a broker lists the properties and then decides to buy it and collect the agreed-upon commission?

A

Self dealing

87
Q

What kind of Agency can self-dealing lead to?

A

Dual agency

88
Q

Describe what statement of opinion vs fact means.

A

An agent asked ensure that the customer does not solely rely on their opinion in regard to the purchase of a property. They must ensure that the customer understands whether the statement is an opinion or a fact. If they exaggerate their opinion it’s called puffing, which is legal. But fraud is illegal. Stating something as fact when it’s actually your opinion

89
Q

What is it called when someone makes statements that exaggerate a property’s benefits.

A

Puffing

90
Q

Is puffing legal?

A

Yes, it’s a sales tactic

91
Q

When puffing, what must the real estate agent be careful of?

A

To make sure that they’re puffing is not accepted by buyers as facts

92
Q

Intentional misrepresentation of a material fact in such a way as to harm or take advantage of another person is known as what?

A

Fraud

93
Q

Breach of fiduciary duties can lead to
A. Loss of commission
B. Loss of the agents license or other disciplinary action by the state
C. Rescission or voiding or the transaction by court order
D. Judgment in a civil suit
E. All the above

A

E

94
Q

What does accountability/accounting in fiduciary responsibilities mean?

A

Brokers must immediately deposit all funds entrusted to them in special accounts with titles that must include the word trust or escrow. It is illegal for brokers to commingle.

95
Q

What is the easiest way to break fiduciary responsibility?

A

To play with money (accountability)

96
Q

Your client is looking for a penthouse with a dog park on the rooftop and you are the agent looking for the same thing. You find the property, so you are obligated to choose your clients best interest and tell them about the property. Which fiduciary duty does this fall under?

A

Loyalty

97
Q

When a dual agency is created, the client and principal both loose what?

A

Full disclosure and undivided loyalty

98
Q

An agent must always place the principles interest above those of all other persons including the agents on interest. Which fiduciary duty is this?

A

Loyalty

99
Q

What does disclosure mean in fiduciary duty?

A

Communicating with client and presenting all offers. Have to disclose all information even if it prevents you from closing on the sale.

100
Q

Agents must supply their clients with all the material facts so that the principles may make informed decisions. What fiduciary duty is this?

A

Disclosure

101
Q

What is the duty of disclosure also known as?

A

The duty of notice

102
Q

What is a material fact?

A

Any fact that affects the value of the property and is important for a person to make a decision.

103
Q

What does presumption of knowledge (theory of law) apply to?

A

Anything the broker should have known

104
Q

Which fiduciary duty does this fall under: if an agent is representing the seller, and the buyer is the agents relative

A

Disclosure

105
Q

What fiduciary duty does self dealing fall under?

A

Disclosure

106
Q

If you get a low offer for your sellers home, what duty is it to share that offer.

A

Disclosure

107
Q

True or false: Brokers must exercise reasonable care.

A

True

108
Q

An agent may not disclose any confidential information learned from or about the principal. Which duty is this?

A

Confidentiality

109
Q

Information can’t be used to benefit anyone other than the client. What duty is this?

A

Confidentiality

110
Q

Is the duty of obedience absolute? If yes, why. If not, why?

A

No, because you can’t obey instructions from your principle if they’re unlawful or unethical.

111
Q

Describe the duty of obedience.

A

the broker needs to obey the legal and reasonable instructions of the principles.

112
Q

Acting in good faith at all times is which duty?

A

Obedience

113
Q

Loyalty=

A

Selflessness

114
Q

What does the duty of reasonable care mean?

A

An agent must be competent and not act in a negligent manner. Otherwise the agent could be liable.

115
Q

Which duty is this an example of: if you’re an expert in the Hampton but you try to deal with a transaction in Manhattan.

A

Reasonable care

116
Q

Does a principle have the right to dissolve a dual agency at any time?

A

Yes

117
Q

A legal doctrine preventing a person from making claims or going back on their word. Judicial device that can be used to stop an auction that would be unfair to alloe it to continue

A

Estoppel

118
Q

A legal defense tool used when someone contradicts a previous agreement or claim.

A

Estoppel

119
Q

This fee can only be given as long as the principle is aware of the transaction.

A

Referral fee

120
Q

What is caveat emptor?

A

Buyer beware, it’s the buyers own responsibility to be informed about the property

121
Q

Is it your duty to disclose facts and material facts?

A

No just the material ones

122
Q

Agreement to do something or to Allow something to happen after all the facts are disclosed

A

Informed consent

123
Q

How can a brokerage be established?

A

Independent, single license , national

124
Q

Does a sales person have vicarious liability to a client

A

No, broker does

125
Q

What is it called when a principal is liable for the conduct of a sub agent

A

Indemnification

126
Q

If a sub agent makes a misrepresentation of the property, the seller may be liable to the third-party or the customer. What is this an example of.?

A

Indemnification

127
Q

Section 442 states?

A

Broker may be liable for salesperson

128
Q

When the principle agrees to be bound by the actions of an agent who was acting without authority.

A

Agency by ratification

129
Q

A referral fee is most closely related to which duty?

A

Disclosure

130
Q

A sum paid in advance

A

A flat fee

131
Q

Laws that protect trade and commerce from unlawful restraints and unfair business practices.

A

Antitrust liability

132
Q

True or false, a dual agency can only be created by a buyers agent

A

True

133
Q

What is a dual agency?

A

When a buyers agent becomes a sub agent to both the buyer and a seller.

134
Q

Which law does a referral commission relate to?

A

Article 175.7

135
Q

What kind of transactions do agency disclosure forms apply to?

A

Residential transactions (4 or fewer units intended for dwelling purposes)

136
Q

What is first substantive contact?

A

When the conversation between a real estate progress and the buyer or seller moves from casual to formal

137
Q

Which law does dual agency relate to?

A

Section 175.7

138
Q

Unless a listing agreement states otherwise, commissions are usually earned when

A. The buyer makes a purchase offer
B. The title to the property is searched
C. The seller accepts the buyers offer without conditions

A

C

139
Q

A relationship of trust and confidence is best described as what? A. License law b. Law of agency c. RESPA d. Statutory law

A

Law of agency

140
Q

Even if a proposed transaction does not go through, the broker sometimes may collect a commission fee if

A. The buyer turns out to be financially unstable
B. The seller refuses to do repairs required by the lender
C. The seller commits willful default and backs out
D. The lender does not appraise the house for the sales price.

A

C

141
Q

Oldcar is what

A

Fiduciary responsibilities

142
Q

Power of attorney = ?

A

Attorney in fact

143
Q

Earnest money means?

A

Deposit money

144
Q

Can a universal agency or power of attorney happen without a contract?

A

No, attorney has power over the principal

145
Q

Are brokers fully responsible for the agents under them?

A

Yes, under vicarious liability (the wrongful acts of another)

146
Q

Latent defect is

A

Something not so obvious and you can’t really see it

New York Real Estate (20 decks)

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