Chapter 7: Brokerage Relationships - Laws and Practice

Question 1

Agency

Answer 1

The relationship that exists in which one person is empowered to act on behalf of another.

Question 2

Agent

Answer 2

The agent is the party who acts on behalf of the principal. Can be a person or a company (firm).

Question 3

Subagent

Answer 3

Literally the agent of the agent. In instances where the Agent is the firm, the subagent would be the person (agent) of the firm). Also refers to any agent NOT serving as the buyers agent.

Question 4

Third Party

Answer 4

The 3rd party is the part you do not represent.

Question 5

Principal/Client

Answer 5

The person for whom the agent acts.

Question 6

Fiduciary

Answer 6

A position of trust.

Question 7

Customer

Answer 7

A customer is the person the agent does not represent, although the agent may have a relationship with this person.

Question 8

Facilitator/Transactional Broker

Answer 8

NOT allowed in North Carolina. A Licensee just helps the seller and buyer in a transaction but doesn’t not actually represent either party. Each party is treated as a customer not a client.

Question 9

Universal Agency

Answer 9

Power of Attorney - all encompassing powers to make decisions and act on behalf of the principal. Not common in real estate relationships.

Question 10

General Agency

Answer 10

Some power to make decisions, eg: property manager

Question 11

Special Agency

Answer 11

AKA Limited agency. Limited task and usually limited time. Not empowered to make decisions, just to receive and transmit information between client and another. k

Question 12

Creation of Special Agency

Answer 12

1. Listing agreement/contract
2. Buyer agency agreement
3. Dual agency agreement
4. Property management agreement for a single property
5. Tenant representative contract
6. By Conduct of the Parties

Question 13

Agency Agreements Must be in Writing Because …

Answer 13

North Carolina Real Estate Commission says so.