Principles - Chapter 6 Agency

Question 1

Agency Relationship

Answer 1

Principal=Seller
Agent=Broker (Real Estate Agent is a salesperson of Broker)
Third Party=Buyer

Question 2

Agent

Answer 2

Not employee of Broker
Operates in own name
Must obey the lawful instruction of the Princpal

Question 3

Actual Authority

Answer 3

When agent is employed by the principal

Question 4

Ostensible

Answer 4

causes person to believe agent is employed by them??

Question 5

General Agency

Answer 5

Agency that gives agent authority to do anything and everything that the principal can do in a particular area
ex: salesperson is a general agent of employing broker

Question 6

Specific Agency

Answer 6

Agency that gives agent authority to do a specific act or matter for principal
ex: Broker

Question 7

Agency Relationship

Answer 7

relationship of agency and principal wither by express contract (listing agreement), ratification or estoppel

Question 8

Ratification

Answer 8

adoption or approval of act performed without previous authorization

Question 9

Estoppel

Answer 9

person barred from asserting or denying a fact because of previous acts of work

Question 10

Listing Agreement

Answer 10

authorizes broker to solicit offers to buy property on accepted terms and establishes principal-agent relationship between owner and broker
must be in writing
if broker procures qualified buyer willing to meet exact terms of listing agreement and owner refuses, broker is entitled to a commission

Question 11

Fiduciary relationship

Answer 11

good faith, loyalty and honesty based on trust and confidence
full disclosure

Question 12

Dual Agency

Answer 12

Agent represents both buyer and seller and collects commission for each

Question 13

Discrimination

Answer 13

race, creed or color is not a material fact and should not be disclosed even at request of owner

Question 14

Misrepresentation

Answer 14

False misleading statement with intent of inducing another party to act.

Question 15

Comingling

Answer 15

mixing a clients funds with those of an agent by failing to place all funds in a special trust account

Question 16

Secret Profit

Answer 16

when agent makes a profit without owners knowledge

Question 17

Trust Accounts

Answer 17

monies received must be placed in escrow accounts or trust funds the next business day following receipt
Broker must keep record of all deposits
withdrawls only made by borker
retained 3 years

Question 18

Duration and Termination

Answer 18

termination by acts of one or both of the parties, operation of law, expiration of term, extinction of subject matter, death or incapacity of principal or agent

Question 19

De facto revocation

Answer 19

withdrawl of property by owner prior to expiration date

Question 20

Exclusive Listing Contract

Answer 20

must contain definite specified date of final and complete termination

Question 21

Commission

Answer 21

paid by principal to broker after sale
% of final sales price
must be licensed broker, broker who procured the sale and employed by the seller to make the sale

Question 22

Breach of Contract

Answer 22

unexcused failure to perform

injury or damages

Question 23

Breach of Fiduciary Duty

Answer 23

performing personally
following principals instruction
disclosing pertinent facts

Question 24

Grounds for license revocation

Answer 24

1.misrepresentation=innocent, negligent, fraudulent
2.false promise
commingling
conversion
secret profit
dual agency