Chapter 3-Law of Agency 2

Question 1

Agency

Answer 1

Relationship of trust created when one person (principal) gives another person (agent) the right to represent the principal in dealings with third parties.

Question 2

Agency Disclosure Form

Answer 2

Form that states whether an agent is representing the seller, buyer, or both in a transaction.

Question 3

Antitrust

Answer 3

A business activity that attempts to monopolize, contract, or conspire (or any these things together) in a way that impact’s negatively on another’s ability to do business.

Question 4

Brokerage

Answer 4

The business of bringing together buyers and sellers of real property and assisting in negotiating such transactions.

Question 5

Broker Protection Clause

Answer 5

Provides the broker is still entitled to commission if the property is sold during a certain time period under certain circumstances.

Question 6

Broker’s Agent

Answer 6

Engaged and works directly for the broker-a broker’s agent is not a subagent of the seller or the buyer. Still owes the same fiduciary duty to the broker’s seller or buyer as the broker does.

Question 7

Consensual Dual Agency

Answer 7

Occurs when 1. the broker and all licensees are dual agents for both parties in the transaction, or 2. the buyer and seller each appoint a designated agent, who fully represents them. The broker, however, would (with consent) act as a dual agent in the transaction.

Question 8

Cooperating Broker

Answer 8

An outside broker from another company who brings the “other” party in a transaction.

Question 9

Exclusive Agency

Answer 9

Listing agreement between a broker and seller that provides the broker the exclusive right to represent the seller in the sale of the seller’s property and the broker will be compensated if he or any other person or entity (excluding the seller) produces a purchaser in accordance with the listing agreement.

Question 10

Exclusive Right to Sell

Answer 10

Listing agreement that entitles the broker to a commission if anyone, including the seller, finds a buyer for the property during the listing term.

Question 11

First Substantive Contact

Answer 11

An event triggered agency disclosure (e.g. prior to entering into a listing agreement, prior to showing a property, an an open house when a buyer displays serious interest, etc.). 443 Disclusure.

Question 12

Group Boycott

Answer 12

A boycott is a concerted refusal to deal with a particular party. Illegal.

Question 13

Informed Consent

Answer 13

Written evidence that a client is aware of and has given permission to an agent to perform a specific action or take on a specific role in the client-agent relationship.

Question 14

Listing Agreement

Answer 14

A written agency contract between a seller and a real estate broker, stating the broker will be paid a commission for finding (or attempting to find) a buyer for the seller’s real property.

Question 15

Market Allocation

Answer 15

An antitrust violation where two or more brokers conspire to divide their customers in any way.

Question 16

Net Listing

Answer 16

See Chap 2.

Question 17

Offer of Compensation

Answer 17

The commission that will be paid on the sale of the property.

Question 18

Offer of Cooperation

Answer 18

An open invitation to other brokers to sell property listed by another broker.

Question 19

Open Listing

Answer 19

A nonexclusive listing given by a seller to as many brokers as he chooses. If the property is sold, the broker who was the procuring cause of the sale is entitled to the commission.

Question 20

Price Fixing

Answer 20

An antitrust violation in which competitors set a standard commission rate.

Question 21

Procuring Cause

Answer 21

The real estate agent who is primarily responsible for bringing about a sale such as by introducing the buyer to the property or by negotiating the agreement between the buyer and the seller. Sometimes more than one agent contributes to a sale.

Question 22

Subagent

Answer 22

An agent of an agent; a person that an agent has delegated authority to, so that the subagent can assist in carrying out the principal’s orders/

Question 23

Tie-in Arrangements

Answer 23

Requiring the consumer, as a condition of a transaction, to use, or not use a particular service or product. Illegal.