Chapter 4

Question 1

An agent

Answer 1

s a person who is empowered by contract (or action) to represent the interest of someone (you) called a Principal or Client.

Question 2

The agency relationship is governed by

Answer 2

the statutory law, which are based on current records today

Question 3

To create an agency relationship you must have

Answer 3

A principal/client
Task
Agent

Question 4

A fiduciary relationship is one

Answer 4

where there is the utmost loyalty and trust in the agency

Question 5

There are four types of agency which are

Answer 5

Universal agent is one that handles all delegated business of the principal

Question 6

The Universal Agent has the power of attorney

Answer 6

and is called an Attorney in Fact

Question 7

A general Agent

Answer 7

handles all delegated business of the principal

Question 8

Agency Coupled with An Interest

Answer 8

when the real estate licensee is a partner in the ownership of the property as well as represents the partners in an agency relationship.

Question 9

Special Agent

Answer 9

handles one transaction for one seller of one property. This is the most common type of real estate representation

Question 10

There are three ways an agency relationship can be created

Answer 10

1. Written or Expressed Agency - written or oral contract
2. Implied agency - created by the act of the parties
3. Ratification of agency - always created after the fact

Question 11

Statute of Frauds

Answer 11

it is an old English statute adopted in almost all the United States and its purpose is to prevent fraud

Question 12

What is an Arm’s Length Transaction?

Answer 12

Each seller and buyer are knowledgeable about the transaction

Question 13

Caveat Emptor means

Answer 13

Let the buyer be aware

Question 14

Dual Agency means

Answer 14

representation to both, buyer and seller at the same time with the same commitment and dedication and this is illegal under Florida law

Question 15

Undisclosed dual agency means

Answer 15

one of the parties is unaware that a dual agency exists. This is also illegal

Question 16

Subagent is

Answer 16

one who assists in some or all of the duties as assigned by the Agent to do a job for a Principal.When a broker assumes the role of Agent, all sales associates under that broker take on the role of sub-agent.

Question 17

Types of agency relationship

Answer 17

1. No brokerage relationship - agent represents one side or the other in the sale transaction but not the one on the form
2. Single Agent Broker - an agent that represents the buyer or seller but not both
3. Transaction Broker - an agent that provides limited transaction representation to a buyer, a seller or both but does not represent in a fiduciary capacity
4. Designated Sales Associate - a special case for non-residential transactions where two licensees under the direction of one broker act as single agents.

Question 18

No brokerage transaction means

Answer 18

the buyer or seller have no representation in the transaction but the broker will help them both complete the transaction

Question 19

Transaction Broker Relationship Obligations

Answer 19

Broker provides limited representation to a buyer or seller. Provides limited confidentiality and no fiduciary responsibility.

Question 20

Agents can change from a single agent to a

Answer 20

transaction broker in the middle of the process by filling out the correct form

Question 21

Designated Sales Associate

Answer 21

One that can represent more than one client participating in a transaction that exceeds over a million dollars

Question 22

Events that may cause termination of agency:

Answer 22

Fulfillment of the purpose of the agency
Time period expired as stated in the limit
Breach or cancellation by one of the parties
Mutual consent
Death or incapacitation
Destruction of the property
Bankruptcy on either party