Creation of agency, termination of agency, and the role of disclosure in agency relationships

Question 1

An agency relationship may be based on a formal agreement between the ___ or result from the implied agency.

Answer 1

Express agency

Question 2

An agency relationship may be based on a formal agreement between the express agency or it may result from the ___ agency.

Answer 2

implied

Question 3

What is an agency relationship based on a formal agreement between the parties?

Answer 3

Express agency

Question 4

Who is the principal in a listing agreement?

Answer 4

The owner

Question 5

What kind of agreement would involve an agency relationship between a seller and a sponsoring broker?

Answer 5

Listing agreement

Question 6

Who is the agent in a listing agreement?

Answer 6

The agent’s sponsoring broker

Question 7

An express agency relationship between a buyer and a sponsoring broker is created by a ___ agreement

Answer 7

Buyer agency agreement

Question 8

What kind of agreement stipulates the activities and responsibilities the buyer expects from the sponsoring broker or designated licensees in finding the appropriate property for purchase or rent?

Answer 8

Buyer agency agreement

Question 9

A(n) ___ contract occurs when the actions when the actions of the licensee indicate that the licensee has formed an agency relationship with a party.

Answer 9

Implied Contract

Question 10

A buyer enters a property and asks to see a property that is listed with another brokerage. The real estate licensee immediately calls the sellers agent and makes an appointment to show the property. Without discussing the available agency options or having the customers sign a written agency agreement, the licensee drives them to the house. Through the licensee’s actions, the customers believe they are being represented. What type of agency relationship is this an example of?

Answer 10

Implied Contract

Question 11

In Illinois, licensees will be considered as representing the consumer they are working with as a(n) ___ agent for them unless there is a written agreement between the consumer and sponsoring broker stating otherwise.

Answer 11

designated

Question 12

An agency that exists without a fee

Answer 12

Gratuitous agency

Question 13

In Illinois, compensation does not determine the ___ relationship.

Answer 13

Agency

Question 14

In Illinois, both the buyer’s and seller’s real estate agents are often paid by the seller in what type of arrangement?

Answer 14

Cooperative Commission Arrangement

Question 15

When the seller pays the listing sponsoring broker, and the listing sponsoring broker cuts a check to the cooperating sponsoring broker, or directs commission to be paid out of proceeds at closing… What type of arrangement is this?

Answer 15

Cooperative Commission Arrangement

Question 16

If two different sponsoring brokers have a cooperative commission agreement, the licensee required to___ to a client the sponsoring broker’s compensation and policy with regard to the cooperating brokers who represent other parties in a transaction.

Answer 16

disclose

Question 17

Which of the following would be a reason for terminating an agency?

A) Death or incapacity of either party

B) Completion, performance, or fulfillment of the purpose for which the agency was created

C) Destruction or condemnation of the property

D) All of the above

Answer 17

All of the above

Question 18

Is a mutual agreement between all parties a reason to terminate an agency?

Answer 18

Yes

Question 19

In Illinois, licensees are not allowed to obtain a written brokerage agreement that does not ___ within a certain time period or provide the client the right to terminate the agreement annually by giving no more than ___ day’s of advanced written notice

Answer 19

Expire automatically

30 days

Question 20

In ____, the agent has an interest in the subject of the agency, such as the property being sold.

Answer 20

agency coupled with an interest

Question 21

An agency coupled with an interest cannot be ___ by the principal

Answer 21

revoked

Question 22

An agency coupled with an interest cannot be ___ on the principal’s death.

Answer 22

terminated

Question 23

A broker agrees to provide the financing for a condominium building being constructed by a developer in exchange for the exclusive right to sell units once the building is completed. The developer may not revoke the listing agreement once the broker has provided the financing. What is this an example of?

Answer 23

An agency coupled with an interest