Chapter 4 - Agency and its Responsibilities

Question 1

commingling

Answer 1

the mixing of funds held in trust with personal funds

Question 2

open listing

Answer 2

authorization from a property owner giving a real estate agent the non exclusive right to secure a purchaser. Other Brokers, or the owners themselves, may also solicit a purchaser

Question 3

conversion

Answer 3

the unlawful taking and use of another’s property placed in your trust, as an agent, by that person.

Question 4

principal

Answer 4

the person who employs a real estate agent usually through a listing company

Question 5

agency

Answer 5

the relationship between the principal and the principal’s agent that arises out of a contract, either expressed or implied, written or oral, where in the agent is employed by the principal to do certain acts dealing with a third party.

Question 6

subagent

Answer 6

a person upon whom the powers of an agent have been conferred, not by the principal, but by an agent authorized by the principal.

Question 7

verisign

Answer 7

a free service for CAR/NAR members to Auto sign documents so they can be emailed without actually having to meet the signer in person

Question 8

estoppel

Answer 8

the theory of law that states a person cannot suddenly after a legal right when that person has neglected to asserted previously. For example: if someone claims to be your agent and you know about it and don’t stop that person, you can’t later claimed that person was not acting on your behalf.

Question 9

independent contractor

Answer 9

a person who acts for another, selling final results and using his or her own judgment to achieve those results.

Question 10

ratification

Answer 10

the approval of an act performed on behalf of a person without previous authorization, such as the approval by a principal of a previously an authorized act of an agent.

Question 11

dual agency

Answer 11

an agency relationship in which the agent act concurrently if you’re both the principles (buyer and seller) with their consent in a transaction

Question 12

multiple listing service

Answer 12

an association of real estate agents that provides a pooling of listings and the sharing of commissions

Question 13

third party

Answer 13

any party to a transaction other than the principal with whom you have an agency relationship

Question 14

attorney in fact

Answer 14

one who is authorized to perform any act for another under a power of attorney

Question 15

exclusive agency listing

Answer 15

a listing agreement employing a broker as a sole agent for the seller of real property, under the terms of which the broker is entitled to a commission unless the homeowner sells the property.

Question 16

exclusive right to sell

Answer 16

a listing agreement employing a broker to act as an agent for the seller of real property. Under the terms of this agreement, the broker is entitled to a commission if the property is sold during the duration of the listing by the broker or by the owner without an agent.

Question 17

net listing

Answer 17

a listing that provides for the agent to retain, as a compensation for his or her services, all sums received over and above and net price to the owner.

Question 18

secret profit

Answer 18

an agent’s making of additional money in a real estate transaction without disclosing it to the principal and third party.

Question 19

innocent misinterpretation

Answer 19

making false statements about a property, without realizing it.

Question 20

negligent misinterpretation

Answer 20

making false statements regarding a property that could have been checked out or verified.

Question 21

transfer disclosure statement

Answer 21

a form that notifies buyers of any physical defects to a property and requires the seller and the agent to list any evidence of defects of which they are aware.

Question 22

agency disclosure form

Answer 22

a form presented to the principles in a transaction stating exactly who the agent is working for: the buyer or the seller or both

Question 23

fiduciary relationship

Answer 23

the relationship between the agent and the principle that requires the highest level of trust and good faith

Question 24

employee

Answer 24

one who works directly for another person, is told what to do, and is controlled and how they do it.

Question 25

policy manual

Answer 25

a written book of procedures explaining how a broker expects the agents working under him or her to conduct business and handle routine problems.

Question 26

special attorney in fact

Answer 26

someone authorized to represent a principal in a specific tasks, such as selling a property.

Question 27

REALTOR domain

Answer 27

a domain suffix available only to REALTORS