General Principles of Agency 2

Question 1

What is Universal Agency?

Answer 1

A Universal Agent can do anything for the principal that they can do for themselves: universal agency has no limits on authority

Question 2

What is a General Agent?

Answer 2

A General Agent is one who represents the principal in a range of matters related to a particular business or activity. They are granted power to enter into contracts on behalf of the principal within the agent’s scope of authority through an instrument like a “Power of Attorney.”

Question 3

General Agency is often used in a Real Estate transaction where:

Answer 3

An out-of-town client will have someone in town represent them.
An absentee spouse will give their partner/wife/husband the authority to make decisions for them as a couple.

Question 4

Real Estate Agents act as what?

Answer 4

Special Agents

Question 5

What does a Special Agent Represent?

Answer 5

A special agent represents the interest of the principal in one specific transaction or one business activity only, and cannot bind them to a contract.

Question 6

Special Agency is created by what terms?

Answer 6

Listing Agreement
Purchase Agreement
Buyer Brokerage Contract.

Question 7

What are the two ways Agency can be established?

Answer 7

Expressed Agency and Implied Agency

Question 8

How is Expressed Agency Established?

Answer 8

Expressed Agency is established when parties state their terms of Agreement and express their intentions either orally or in writing.

Question 9

How is Implied Agency Established?

Answer 9

Implied Agency is action; through behavior or activities the parties suggest they have mutually consented to an agency relationship.

In-order for Agency to be enforceable in a court of law, it is recommended that the agreement is in writing.

Question 10

Does compensation dictate agency?

Answer 10

No

Question 11

Some states require agency agreements to be in writing and do not recognize what type of agency?

Answer 11

implied agency or agency expressed verbally.

Question 12

In-order for Agency to be enforceable in a court of law, it is recommended that the agreement must be in?

Answer 12

Writing

Question 13

Can an Agent represent more than one principal to the same transaction?

Answer 13

Yes, an agent can acs as
Single agent
Dual agent
Multiple Agent (they represent more than one principal to the transaction)
Some, but not all states allow dual agency or multiple-representation.

Question 14

What is Single Agency?

Answer 14

Single Agency is when the broker represents either the seller or the buyer, not both in the same transaction; any third party is considered a customer.

Question 15

What is Dual Agency?

Answer 15

Dual Agency is when the broker represents two parties involved in the transaction.

Question 16

Dual Agency is also referred as what in some states?

Answer 16

multiple-representation; representing more than one party in the transaction with interest adverse to each other.

Question 17

Examples of conflict of interest

Answer 17

The sellers do not want potential buyers to know the least amount of money they are willing to take for their house; while,
The buyer does not want the seller to know how much they are willing to pay to get the house.

Question 18

To properly represent both sides, an agent must first?

Answer 18

disclose dual agency in a way that the principal understands that there may be a conflict of interest and then get consent from all principals to the transaction.

The principals must be informed, and consent must be given in writing to move forward with multiple-representation.

Question 19

In states that allow dual agency what state mandated forms must be signed?

Answer 19

Disclosure forms and Consent forms

Question 20

What is undisclosed dual agency?

Answer 20

When a dual agency is created unintentionally

Question 21

Example of Multi Representation

Answer 21

A buyer’s agent shows two different buyers the same property and both buyers would like to submit an offer. This situation requires informed consent.

Question 22

What is Designated Agency?

Answer 22

Designated Agency: Available in some states to accommodate an in-house sale in which two sales associates of the same broker are involved, the broker will designate another agent to represent one of the parties.

Question 23

What is Non-Agency also referred as?

Answer 23

a transactional broker, facilitator, coordinator, or contract broker

Question 24

What is Non-Agency

Answer 24

Helps both buyer and seller with paperwork and formalities in transferring property.

Responsible to both parties and must treat them honestly and competently.

Assists parties to arrive at mutually agreeable terms and help with the closing.

Will not negotiate for parties or disclose confidential information.

Question 25

Is transactional brokerage allowed in Nevada?

Answer 25

No