MRE_Chapter4

Question 1

2 laws governed by Agency

Answer 1

• Common Law: The rules of a society established by tradition and court decisions - Statutory law: The laws , rules, and regulations enacted by legislatures and other governing bodies

Question 2

Agent

Answer 2

Individual who is authorized and consents to represent the interests of another person

Question 3

Law of Agency

Answer 3

Defines the rights and duties of the parties in the real estate transaction: The Principal, the Agent and the Consumer

Question 4

Principal

Answer 4

Individual who hires the agent and delegates to that agent the responsibility of representing the principal’s interest E.g. the Buyer, Seller or the landlord or tenant

Question 5

Agency

Answer 5

The fiduciary relationship between the principal and the agent

Question 6

Fiduciary

Answer 6

The relationship in which the agent is held in a positions of special trust and confidence by the principal

Question 7

Client

Answer 7

The principal

Question 8

Customer

Answer 8

the third party or non represented consumer for whom some level of service is provided

Question 9

Nonagent

Answer 9

• Also referred as a facilitator, intermediary, transactional broker, transactional coordinator or contract broker - A middleman between buyer and a seller who assist on or both parties with the transaction without representing either party’s interest.

Question 10

Express Agency

Answer 10

• The principal and Agent formally express their intention to establish an agency and state in terms and conditions - The agreement may be Oral or Written (commonly known as Listing Agreement)

Question 11

Implied Agency

Answer 11

The principal and Agent create an Agency unintentionally , inadvertently or accidentally by their actions

Question 12

Fiduciary Responsibilities

Answer 12

Care, obedience, loyalty,disclosure, accounting and confidentiality

Question 13

Obligations to Buyer

Answer 13

• Responsibilities - Earnest Money Deposit - Seller Financing - Documents - Negotiation - Showing - Property Goals - Offers - Possession Dates - Default - Efficiency - Negotiation - Appraisal

Question 14

Six Common-law Fiduciary duties

Answer 14

• Care - Obedience - Loyalty - Disclosure - Accounting - Confidentiality

Question 15

Termination of Agency

Answer 15

• Completion, performance or fulfillment of the purpose - Death or incapacity of either party - Destruction or condemnation of the property - Expiration of terms of the Agency - Mutual Agreement by all parties to cancel the contract - Breach by one of the party - By operation of law, as in bankruptcy of the principal

Question 16

Type of Agents

Answer 16

• Universal - General - Special - Designated

Question 17

Universal Agent

Answer 17

A person empowered to do anything the principal could do personally

Question 18

General Agent

Answer 18

• A person represent the principal in a broad range of matters related to particular business or activity. For e.g. Property manager is typically a general agent for th owner - Most real estate salesperson are general agents of their Broker

Question 19

Special Agent

Answer 19

• Also called Limited Agent, is authorized to represent the principal in one specific act or business transaction only. - A real estate broker usually a special agent. Eg. Seller Agent, Buyer Agent,

Question 20

Designated Agent

Answer 20

Is a person authorized by the real estate broker to act as the agent of a specific principal.

Question 21

Single Agency

Answer 21

• Agent represent only one party in any single transaction - While Single Agency Broker may represent both buyer & Seller, but not in the same transaction and remain a single agent

Question 22

Dual Agency

Answer 22

The agent represents two principals in the same transaction.