Module 2 Flashcards by Caiti Jones

Authority that comes from specific instructions, either written or oral.

Express Authority

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Authority given because it is the standard practice, the norm or customary in the industry.

Implied Authority

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When a principal inadequately supervises an agent, and the agent takes on powers beyond the scope of authority given by the principal.

Agency by Estoppel

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Exists when an individual grants express authority to the agent to perform some act, orally or in writing.

Agency by Actual Authority

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The power to act for the principal in ALL transactions.

Universal Agency

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Also known as Limited Agency; the agent may only perform limited duties for the principal. The agent must simply follow the instructions of the principal.

Special Agency

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The right to represent the principal in a particular type of transaction or business.

General Agency

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Actions lead another person to assume that one is an agent.

Ostensible Agency

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Established when an agent acts without prior authorization and the principal accepts it.

Agency by Ratification

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Exists when a broker is the owner of a property being sold or is interested in buying a property

Agency Coupled with an Interest

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The right to represent the principal in a particular type of transaction or business.

General Agency

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Authority that comes from specific instructions, either oral or written.

Express Authority

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The power to act for the principal in all transactions.

Universal Agency

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Established when an agent acts without prior authorization and the principal accepts it.

Agency by Ratification

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Also known as Limited Agency.

Special Agency

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Choose Yes or No to indicate which relationship an agent must disclose to another party in a transaction:

A real estate agent is selling his house as a For Sale By Owner (FSBO) and is not using the brokerage to represent him.

Yes

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Choose Yes or No to indicate which relationship an agent must disclose to another party in a transaction:

A real estate agent represents her cousin who is buying a condominium.

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Choose Yes or No to indicate which relationship an agent must disclose to another party in a transaction:

A real estate agent with an inactive sales agent license wants to make an offer to purchase a house.

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An investor, who wholly owns an LLC that will purchase a commercial Choose Yes or No to indicate which relationship an agent must disclose to another party in a transaction:

retail center.

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Choose Yes or No to indicate which relationship an agent must disclose to another party in a transaction:

A real estate agent represents his parents who are buying a second home on the beach.

Yes

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Choose Yes or No to indicate which relationship an agent must disclose to another party in a transaction:

A real estate agent who has 5% ownership of a corporation that is buying a rental house.

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Choose Yes or No to indicate which relationship an agent must disclose to another party in a transaction:

A real estate agent represents his sister who is buying a house to live in.

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Choose Yes or No to indicate which relationship an agent must disclose to another party in a transaction:

An LLC is purchasing a home to remodel and then lease to a residential tenant. A real estate agent is 25% owner of the LLC.

Yes

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A written listing agreement, buyer representation agreement, or oral instruction gives

Express Authority

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Implied agency is the

norm or what is customary

BLANK are held to the highest amount of good faith and are required to exclude all selfish interests.

Fiduciaries

A property manager is an example of a

general agent

Choose the most appropriate type of agency: A broker manages rental properties for a landlord.

General Agency

Choose the most appropriate type of agency: A sales agent sponsored by a broker

General Agency

Choose the most appropriate type of agency: Buyer Representation Agreement

Special Agency

Choose the most appropriate type of agency: A seller lists a home for sale

Special Agency

Choose the most appropriate type of agency: The broker representing a tenant in a commercial real estate transaction

Special Agency

Choose the most appropriate type of agency: An agent with authority to conduct any and all business for the client

Universal Agency

Choose the most appropriate type of agency: The most limited form of agency

Special Agency

Choose the most appropriate type of agency: An agency relationship with authority in a particular area of business

General Agency

Choose the most appropriate type of agency: An agent with no authority to bind the client.

Special Agency

Choose the most appropriate type of agency: An agent with no authority to sign or initial anything on behalf of the client

Special Agency

Choose the most appropriate type of agency: An agent with the authority to sign a listing agreement on behalf of a broker.

General Agency

The broker is responsible for the following types of activities on the part of sponsored license holders:

Compliance with fair housing laws Compliance with advertising regulations Use of promulgated forms Compliance with regulations for disclosure Compliance with all aspects of the Texas Real Estate License Act

The broker is not responsible for the following types of activities on the part of sponsored license holders:

Timely renewal of license Completion of continuing education requirements Adequate opportunities for generating income Company car, health insurance, vacation, or disability benefits

True or False: The broker is responsible for compliance with fair housing laws

True

True or False: The broker is responsible for an agent's health insurance

False

True or False: The broker is responsible for compliance with advertising regulations.

True

True or False: The broker is responsible for providing adequate opportunities for generating income.

False

True or False: The broker is responsible for use of promulgated forms.

True

True or False: The broker is responsible for providing a company car.

False

True or False: The broker is responsible for compliance with regulations for disclosure.

True

True or False: The broker is responsible for providing disability benefits.

False

True or False: The broker is responsible for compliance with the Texas Real Estate License Act.

True

True or False: The broker is responsible for timely renewal of an agent's license.

False

True or False: The broker is responsible for completion of an agent's continuing education requirements.

False

As agents, our fiduciary duties to clients are specific and can be remembered by using the acronym OLD CAR:

Obedience Loyalty Disclosure Confidentiality Accounting Reasonable Care

_______states that an agent will follow all of the lawful instructions of a client

Obedience

_________is spending client funds without authorization

Conversion

Determine which fiduciary duty the agent is violating: An agent tells others in office that the property is listed $150,000 above market.

Confidentiality

Determine which fiduciary duty the agent is violating: An agent disregards an instruction given by the seller

Obedience

Determine which fiduciary duty the agent is violating: A listing agent helps an unrepresented buyer when making an offer to purchase

Loyalty

Determine which fiduciary duty the agent is violating: An agent commingles funds

Accounting

Determine which fiduciary duty the agent is violating: An agent leaves doors unlocked after showing property

Reasonable Care

Determine which fiduciary duty the agent is violating: A seller's agent fails to inform seller that a price increase is justified based on changes in the market.

Disclosure

Agent Anne is holding an open house at 123 Main St. This property is a new listing and she is very excited about it, as she feels it will sell quickly. The Smiths attend the open house and begin to question Anne about some of the property’s features. What is Agent Anne’s first course of action?

Agent Anne's first course of action should be to inform the Smiths that she represents the seller.

Agent Bob has signed a buyer’s representation agreement with the Nelsons. He is calling ABC Realty to make an appointment to show their listing at 10 Park Lane. What must Agent Bob tell ABC Realty when making the appointment?

Agent Bob must tell ABC Realty that he is a buyer's agent.

Later, when the Nelsons arrive at 10 Park Lane, they find the owners at the home. When the sellers come to the door, Bob tells them that he is a buyer’s agent. Is Bob’s oral disclosure sufficient?

Yes, the oral disclosure is sufficient.

Substantive discussion triggers the need to provide the

The Information About Brokerage Services (IABS)

Is the agent required or not required to provide an individual with a copy of the Information About Brokerage Services? A potential buyer visits your open house and no substantive conversation took place.

Not required

Is the agent required or not required to provide an individual with a copy of the Information About Brokerage Services? You respond to an email inquiry from your website regarding a home for sale

Required

Is the agent required or not required to provide an individual with a copy of the Information About Brokerage Services? A stranger on the street, knowing that you are in real estate asks you “how is business?”

Not required

Is the agent required or not required to provide an individual with a copy of the Information About Brokerage Services? You visit a seller to discuss listing their home

Not required

Is the agent required or not required to provide an individual with a copy of the Information About Brokerage Services? A potential buyer meets with you to discuss the purchase of an office building

Required

Is the agent required or not required to provide an individual with a copy of the Information About Brokerage Services? A tenant that wants to discuss the terms of a 1 year lease. No sale is being considered

Required

What form must an agent provide to a potential client at the first substantive discussion of a real estate transaction?

Information about brokerage services

An example of a general agent in the world of real estate would be a (n)?

Property manager