Lesson 1 Terminology

Question 1

Accountability

Answer 1

In an agency relationship, the agent’s statutory duty is to account to the principal.

Question 2

Actual Fraud

Answer 2

Intentional misrepresentation or concealment of a material fact; when a person actively conceals material information or makes statements known to be false or misleading. (Also called Deceit)

Question 3

Agency

Answer 3

A relationship in which a real estate broker or licensee, whether directly or through an affiliated licensee, represents a consumer by the consumer’s consent, whether express or implied, in a real property transaction.

Question 4

Agency Disclosure

Answer 4

The legal obligation of a licensee to disclose the relationship that a agent has with a buyer or seller in a real estate transaction, if any.

Question 5

Antitrust

Answer 5

An area of law concerned with maintaining competition in private markets by prohibiting any restraint on trade.

Question 6

Attorney-in-Fact

Answer 6

Any person authorized to act for another by a power of attorney (not necessarily an attorney-at-law).

Question 7

Brokerage

Answer 7

A business concept premised primarily on bringing parties together for the purpose of a transaction.

Question 8

Buyer’s Agent

Answer 8

An agent representing the interests of the buyer of a property.

Question 9

Client/Principal

Answer 9

A person who grants another person (an agent) authority to represent him or her in dealings with third parties.

Question 10

Confidential Information

Answer 10

Any information obtained by a licensee from a client during the term of a brokerage agreement that (i) was made confidential by the written request or written instruction of the client, or (ii) deals with the negotiating position of the client, or (iii) is information the disclosure of which could materially harm the negotiating position of the client, unless at any time, (1) the client permits the disclosure of information given by that client by word or conduct; (2) the disclosure is required by law; or (3) the information becomes public from the source other than the licensee. Note that material information about the physical condition of the property shall not be considered confidential information.

Question 11

Confidentiality

Answer 11

The protection of the client’s confidential information.

Question 12

Constructive Fraud

Answer 12

A negligent misrepresentation or concealment of a material fact; when a person carelessly fails to disclose material information, or makes false or misleading statements. (Also called: Negligent Misrepresentation)

Question 13

Contemporaneous Offers

Answer 13

Offers to purchase or lease on behalf of two or more clients represented by the same designated agent for the same real estate parcel or unit that the designated agent knows, or has known, or has reason to know will be taken under consideration by the owners or owner’s representative at the same time.

Question 14

Customer

Answer 14

A consumer who is not being represented by the licensee but for whom the licensee is performing ministerial acts.

Question 15

Designated Agency

Answer 15

A contractual relationship between a sponsoring broker and a client in which one or more licensees associated with or employed by the sponsoring broker are designated as an agent of the client.

Question 16

Designated Agent

Answer 16

A sponsored licensee names by a sponsoring broker as the legal agent of a client as defined in Section 15-50 of the Illinois Real Estate Act.

Question 17

Disclosure

Answer 17

The obligation to reveal points or facts in a real estate transaction.

Question 18

Dual Agency

Answer 18

An agency relationship in which a licensee is representing both buyer and seller or both landlord and tenant in the same transaction. When the agency relationship is a designated agency, the question of whether there is dual agency shall be determined by the agency relationship of the designated agent of the parties and not of the sponsoring broker.

Question 19

Dual Agent

Answer 19

A licensee who represents both the buyer and the seller (or the landlord and the tenant) in a real estate transaction.

Question 20

Expressed Agency

Answer 20

Agency relationship based on an expressed agreement, either written or oral.

Question 21

Fiduciary Relationship

Answer 21

A relationship of trust and confidence, in which one party owes the other (or both parties owe each other) loyalty and a higher standard of good faith than is owed to third parties.