Principle 6

Question 1

Agent

Answer 1

Represents a principal in dealing with a third person

Question 2

Agency

Answer 2

The act of representing someone else

Question 3

Special agent

Answer 3

Is one appointed to carry out a single act or transaction.

Question 4

Principal

Answer 4

Can be anyone who has the ability to enter into a contract.

Question 5

Cooperating broker

Answer 5

Are agents who try to sell a property that is currently listed for sale by a broker but who work for someone other than the listing broker.

Question 6

Subagent

Answer 6

Any agent appointed by the previous agent to act on their behalf due to their absence.

Question 7

Cooperating split

Answer 7

The cooperating broker’s share of the commission.

Question 8

Multiple listing service (MLS)

Answer 8

Is an organization of real estate agents that receives information from individual members on their property listings and makes that information available to participating members.

Question 9

Single agency

Answer 9

An agent represents only one principal.

Question 10

Dual agency

Answer 10

The same agent represents two principals in the same transaction.

Question 11

Before entering into dual agency you must what?

Answer 11

Inform both parties and obtain their written consent to the dual representation.

Question 12

Attorney at law

Answer 12

Is someone licensed by the state to practice law.

Question 13

Attorney-in-fact

Answer 13

Is an agent who has been granted a power of attorney by a principal.

Question 14

Power of attorney

Answer 14

Authorizes an agent to act in the capacity of the principal.

Question 15

Express agreement

Answer 15

Is established by an act of the parties that both parties acknowledge.

Question 16

Commingling

Answer 16

• Occurs if the agent places client or customer funds in the agent’s personal account.
• placing funds in inappropriate account instead of a trust account

Question 17

Escrow

Answer 17

The deposit instruments, funds (with instructions), or both with a neutral third party to carry out the provisions of an agreement or a contract

Question 18

Open listing

Answer 18

• Also called a nonexclusive listing, provides for a commission to the broker if the broker is the procuring cause of a sale.
• only the first person to get a willing buyer gets the commission

Question 19

Exclusive agency listing

Answer 19

Property owner cannot list the property with another broker at the same time. If another broker finds a buyer the seller’s broker can still get a share of the commission.

Question 20

Exclusive authorization and right-to-sell listing

Answer 20

The broker is entitled to a commission no matter who sells the property, even if the owner appears to find a buyer without the broker’s assistance.

Question 21

Multiple listing clause

Answer 21

Part of the exclusive authorization and right-to-sell listing allows the property to be made available to other brokers participating in the MLS.

Question 22

Net listing

Answer 22

A listing agreement providing that the agent may retain as compensation for her services all sums received over and above a net price to the owner.

Question 23

Option listing

Answer 23

• gives the broker the right to purchase the property.
• if the option is exercised the principal should be informed of the broker’s profit in the transaction and agree to it in writing.

Question 24

Material Facts

Answer 24

Can be anything that would affect the value or desirability of the subject property.

Question 25

Recovery account

Answer 25

-established to help compensate victims of fraud, misrepresentation, deceit, or conversion of trust funds when they cannot collect a court-ordered judgement against a real estate licensee.

Question 26

Ways to terminate an agency

Answer 26

• Fulfillment of the agency agreement
• Expiration of the term of the agreement
• Destruction of the property
• Death of either the principal or agent
• Incapacity of the agent to act as an agent, or incapacity of the principal to enter into a contract
• agreement of the principal and agent
• by operation of law, as in a bankruptcy