Chapter 6: Agency

Question 1

What is the principal or client?

Answer 1

Someone who authorizes another person or entity to act on their behalf

Question 2

What is the definition of an agent?

Answer 2

the person engaged to act on the behalf of another

Question 3

What is the third party or customer?

Answer 3

the person the agent interacts with

Question 4

What is a fiduciary relationship?

Answer 4

one that implies trust and confidence

Question 5

What are the 2 factors affecting liability that are inherent in agency?

Answer 5

Principal is accountable for agents words & agent owes loyalty to client

Question 6

What is a universal agent?

Answer 6

authorized to perform any act the principal could perform (not in RE)

Question 7

What is a general agent?

Answer 7

Has the authority to bind principal in ongoing conduct of a business

Question 8

What are the 3 types of agents?

Answer 8

universal, general, special/limited agent

Question 9

What is a special/limited agent?

Answer 9

appointed for a particular purpose or act

Question 10

What are the 3 types of agency?

Answer 10

actual agency, ostensible agency, implied agency

Question 11

What is actual agency?

Answer 11

arises when parties agree to relationship intentionally . verbal or written

Question 12

What is ostensible agency?

Answer 12

when 3rd party (client) relies on a principal ‘s implied or expressed representation that a person is their agent

Question 13

what is implied agency?

Answer 13

(from broker or buyer) occurs when an agent by their words and actions leads a buyer to feel the broker is acting on their behalf

Question 14

What is a power of attonrey?

Answer 14

a document authorizing one person to act on behalf of another

Question 15

What is an an attorney in fact?

Answer 15

the actual person chosen to be a power of attorney

Question 16

What is implied authority?

Answer 16

an agent’s implied authority can arise out of custom and common usage (everyone puts signs in their yards)

Question 17

What are the 6 obligations an agent is owed to the principal? (POLAND)

Answer 17

personal performance, obedience, loyalty, accountability, notice and due care

Question 18

What are 4 duties the principal owes to the agent?

Answer 18

indemnification, performance, reimbursement, compensation

Question 19

What are 10 ways to agency agreement can be terminated?

Answer 19

performance, expiration, revocation, renunciation, abandonment, agreement, death, incapacity, supervening legality, extinction

Question 20

What are latent defects?

Answer 20

defects that are hidden and not readily apparent

Question 21

What are patent defects?

Answer 21

defects that are visible and easily discovered

Question 22

What does a Sole proprietorship consist of?

Answer 22

owner runs the business and can pocket profits. personal liability for business possess

Question 23

What do partnerships consist of?

Answer 23

partners are personally liable for business loses

Question 24

What does a corporation consist of?

Answer 24

mostly eliminates personal liability. profits are taxed at corporate and personal levels

Question 25

What does s corporation consist of?

Answer 25

popular for small business. provides liability protection but profits and losses flow through

Question 26

What does limited liability company consist of?

Answer 26

personal liability is limited, profits aren't taxed at corporate level

Question 27

What is involved in an open listing?

Answer 27

owner promises a commission to a broker who produces buyer at named price(express, unilateral contract)

Question 28

What is involved in an exclusive agency?

Answer 28

only one broker can market property but owner can sell themselves. (express, bilateral, executory contract)

Question 29

What is involved in an exclusive right to sell listing?

Answer 29

the broker has the right to market exclusively and commission is assured (express, bilateral, executory contract)

Question 30

What is involved in net listing?

Answer 30

when seller has amount in mind and authorizes broker to market property at any price and pocket difference

Question 31

what are the 4 types of listing?

Answer 31

open listing, exclusive agency listing, exclusive right to sell listing, net listing

Question 32

What is a procuring cause?

Answer 32

the broker who began an uninterrupted chin of events that result in sale

Question 33

What is a selling agent?

Answer 33

the broker working with the buyer

Question 34

What does subagency consist of?

Answer 34

involves two different brokers that represent the seller

Question 35

What are ministerial acts?

Answer 35

act that dont require judgment and dont amount to advising or counseling

Question 36

What does the brokerage relationship in real estate transaction act involve? (BRRETA)

Answer 36

governs relationships between licensees and their clients or customers

Question 37

What is a brokerage engagment?

Answer 37

a written agency relationship between broker and client

Question 38

What are material facts?

Answer 38

facts a party does not know, could not discover and would want to know

Question 39

What is a buyer brokerage argreement?

Answer 39

contract of employment, similar to listing, buyer is client

Question 40

What is a designated agency?

Answer 40

both parties are represented by the same broker but different agent in it