Chapters 2-4 - Law of Agency

Question 1

Accountability

Answer 1

Documentation! Right everything down.

Question 2

Actual Fraud

Answer 2

Intentional fraud - knowingly making false statements

Question 3

Agency

Answer 3

Trust created when one person gives another the right to represent them in dealings with third parties.

Question 4

Agency Disclosure Form

Answer 4

Form stating who agent is representing in a transaction

Question 5

Agency Relationship

Answer 5

Representation of a party in a real estate transaction

Question 6

Antitrust

Answer 6

x

Question 7

Brokerage

Answer 7

Business of bringing buyers and sellers together and assisting in sale of real estate.

Question 8

Broker’s Agent

Answer 8

Works directly for the broker - not a subagent of the principal but still owes them the same fiduciary duties

Question 9

Broker Protection Clause

Answer 9

Provides broker is still entitled to commission if the property is sold in a certain amount of time under certain circumstances

Question 10

Buyer Broker Contract

Answer 10

Written agreement between buyer and broker stipulating broker will receive a commission when the buyer purchases real estate.

Question 11

Buyer’s Agent

Answer 11

Represents/owes all loyalty to buyer

Question 12

Client

Answer 12

Principal

Question 13

Confidentiality

Answer 13

x

Question 14

Consensual Dual Agency

Answer 14

Buyer and seller consent to representation by the same agent or broker

Question 15

Constructive Fraud

Answer 15

Intentional concealment - knowingly failing to disclose

Question 16

Cooperating Broker

Answer 16

Broker from another company who brings the other party to the transaction.

Question 17

Customer

Answer 17

Third party in transaction - agent does not have fiduciary duty but agent must still be fair and honest with them

Question 18

Designated Agency

Answer 18

When supervising broker assumes role of dual agent and each affiliated licensee represents their own client

Question 19

Disclosure

Answer 19

Points or facts in a real estate transaction that must be revealed.

Question 20

Dual Agency

Answer 20

Representing both the principal and customer - ok as long both parties agree in writing.

Question 21

Estoppel

Answer 21

Legal doctrine preventing person from asserting rights inconsistent with earlier actions/statements

Question 22

Exclusive Agency

Answer 22

Provides that broker will receive commission if any broker finds a buyer (will not if the buyer finds buyer on their own)

Question 23

Exclusive Right to Sell

Answer 23

Listing agreement entitling broker to commission if anyone (including seller) finds a buyer

Question 24

Expressed Agency

Answer 24

Agency relationship based on an expressed agreement - written or spoken.

Question 25

Fiduciary Duties

Answer 25

OLDCAR:
Obedience
Loyalty
Disclosure
Confidentiality
Accountability
Reasonable Care

Question 26

Fiduciary Relationship

Answer 26

Relationship of trust and confidence, where one party owes the other loyalty and a higher standard of good faith than owe to third parties.

Question 27

First Substantive Contact

Answer 27

Event that triggers agency disclosure

Question 28

Fraud

Answer 28

Intentional or negligent misrepresentation or concealment of a material fact (fact that would greatly affect decision-making)

Question 29

General Agent

Answer 29

Authorized to represent the principal in a range of matters.

Question 30

Implied Agency

Answer 30

Agency created by actions and or behavior

Question 31

Listing Agreement

Answer 31

Written agreement between agent and seller stating the agent will receive a commission for selling the seller’s property

Question 32

Loyalty

Answer 32

x

Question 33

Misrepresentation

Answer 33

False or misleading statements - fraud.

Question 34

Negligence

Answer 34

Failure to exercise adequate care.

Question 35

Net Listing

Answer 35

Seller sets amount they’d like to make and agent keeps everything above that - ILLEGAL in New York.

Question 36

Nonsolicitation Orders

Answer 36

Prohibits the solicitation of residential property listings and applies to all brokers and agents.

Question 37

Obedience

Answer 37

x

Question 38

Offer of Compensation

Answer 38

Commission to be paid by property’s sale.

Question 39

Open Listing

Answer 39

Nonexclusive listing given by seller to multiple brokers. Commission goes to agent who sells the property (procuring cause).

Question 40

Ostensible Agency

Answer 40

Occurs when agent is perceived as fiduciary by a third party and principal does not say otherwise.

Question 41

Price Fixing

Answer 41

Setting a standard rate of commission amongst agents - ILLEGAL

Question 42

Principal

Answer 42

Person who grants agent the authority to represent them in dealings with third parties.

Question 43

Procuring Cause

Answer 43

Agent who is primarily responsible for bringing about a sale.

Question 44

Renunciation

Answer 44

Someone who has been granted something gives it up - EX: agent withdraws from relationship with principal

Question 45

Revocation

Answer 45

Someone who granted/offered something withdraws it - EX: principal withdraws authority granted to agent.

Question 46

Self-Dealing

Answer 46

Broker has an undisclosed interest in the property.

Question 47

Stigmatized

Answer 47

x

Question 48

Subagent

Answer 48

Broker and seller agree that other MLS members will be working for the seller - some fiduciary responsibility.

Question 49

Tie-In Arrangement

Answer 49

Requires consumer to use or not use certain services

Question 50

Undisclosed Dual Agency

Answer 50

Dual agency without consent from both parties

Question 51

Undivided Loyalty

Answer 51

Given up by buyer and seller when they consent to dual agency