Level 7 General Principles of Agency

Question 1

an individual with authority to act on behalf of another; a state license is required to operate as an agent in real estate

Answer 1

Agent

Question 2

an individual with whom a license holder has no agency relationship nor fiduciary duties but to whom fairness and honesty are still required

Answer 2

customer

Question 3

an agency arrangement wherein both parties to the
transaction are represented by their own agent, but both agents are employed by the same brokerage; by necessity, each client enjoys an agency relationship exclusively with the named agent within the brokerage

Answer 3

designated agency

Question 4

an agency relationship wherein both the buyer and the seller are represented by the same broker in an in-house real estate transaction; requires written consent from both parties

Answer 4

dual agency

Question 5

the legal principle that prevents an individual from asserting something contrary to that which was implied by previous words or deeds by that individual

Answer 5

estoppel

Question 6

an individual upon whom is placed the highest levels of trust and confidence when acting on behalf of another

Answer 6

fiduciary

Question 7

the full sum of obligations owed to the client in an agency relationship that ensure that the agent always acts in the best interest of the client

Answer 7

fiduciary duties

Question 8

t the critical point at which agency disclosure is required by a license holder; generally occurs at the first face-to-face meeting with the customer and prior to the sharing of any confidential information or initiation of any action in regards to a specific property

Answer 8

first substantive contact

Question 9

a form of agency relationship that authorizes an agent to manage all of a principal’s affairs within certain specified areas; provides broader authority than that of special agency but less than that of universal agency

Answer 9

general agency

Question 10

agency resulting from the words or deeds of one or both parties; agency not stated in writing

Answer 10

implied agency

Question 11

the principle that a client or customer must understand and agree to certain actions or agency relationships prior to implementation

Answer 11

informed consent

Question 12

the sum of laws that address the roles and obligations of those operating as an agent for another individual; includes required duties and expectations of the agent when interacting with principals, customers, and third parties

Answer 12

law of agency

Question 13

agreement by all parties to either create, amend, or terminate a contract

Answer 13

mutual consent

Question 14

the fulfillment of an obligation, duty, or contract

Answer 14

performance

Question 15

a legal instrument used to confer the right of one individual to act on behalf of another

Answer 15

power of attorney

Question 16

the client of a broker in an agency relationship; the parties to a contract in a real estate transaction (as opposed to license holders, lenders, escrow agents, etc.); also, the amount borrowed in a loan from which interest is accrued

Answer 16

principal

Question 17

a form of agency relationship in which agents are limited in scope and are only authorized to perform acts permitted by their principal

Answer 17

special agency

Question 18

property with suppressed market value unrelated to its
physical condition or features; frequently as result of death of an occupant, murder, suicide, or a belief the property is haunted

Answer 18

stigmatized property

Question 19

a broker who facilitates a transaction absent of any agency relationship with either party to the contract; has no fiduciary duties for ministerial acts performed; also known as a facilitator

Answer 19

transaction coordinator

Question 20

a form of agency relationship in which agents have a very broad and general scope of power to act on behalf of the principal; often granted via a general power of attorney

Answer 20

universal agency