Real Estate Test Unit 9

Question 1

agency

Answer 1

the relationship between a principal and an agent wherein the agent is authorized to represent the principal in certain transactions

Question 2

agent

Answer 2

one who acts or has the power to act for another. a fiduciary relationship is created under the law of agency when a property owner, as the principal, executes a listing agreement or management contract authorizing a licensed real estate broker to be his or her agent. a prospective property buyer may authorize a real estate broker to act as the buyer’s agent to find a suitable property

Question 3

boycott

Answer 3

when individuals or businesses withhold their patronage to a businesss as a protest or to reduce competition

Question 4

branch office

Answer 4

a secondary place of business apart from the principal or main office from which real estate business is conducted. a brunch office usually must be run by a licensed real estate professional

Question 5

buyer representation agreement

Answer 5

a principal-agent relationship in which the real estate professional acts on behalf of the buyer, usually as an agent, with fiduciary responsibilities to the buyer

Question 6

buyer’s broker

Answer 6

a residential real estate professional who represents prospective buyers exclusively

Question 7

buyer’s agent

Answer 7

a real estate professional who is under contract to locate property for a buyer and represent the buyer’s interests in a transaction

Question 8

common law

Answer 8

the body of law based on custom, usage, and court decisions

Question 9

client

Answer 9

the principal in an agency relationship or other form of representation

Question 10

consent

Answer 10

expressing or implying permission, approval, or agreement of an action or decision

Question 11

conversion

Answer 11

the illegal use of money received on behalf of the principal

Question 12

customer

Answer 12

the third party for nonrepresented consumer for whom some level of service is provided

Question 13

designated agency

Answer 13

a process that accommodates an in-house sale in which two different agents are involved. the broker designates one agent to represent the seller and one agent to represent the buyer

Question 14

designated agent

Answer 14

a real estate professional authorized by a broker to act as the agent for a specific principal in a particular transaction; also may be called assigned agent or appointed agent

Question 15

disclosure

Answer 15

relevant information or facts that are known or should have been known

Question 16

dual agency

Answer 16

representing both parties to a transaction. this is unethical unless both parties agree to it, and it is illegal in some states

Question 17

express agency

Answer 17

an agency relationship based on a formal agreement between the parties

Question 18

express agreement

Answer 18

an oral or written contract in which the parties state the contract’s terms and express their intentions in words

Question 19

fiduciary relationship

Answer 19

a relationship of trust and confidence, as between trustee and beneficiary, attorney and client, or principal and agent

Question 20

fraud

Answer 20

deception intended to cause a person to give up property or a lawful right

Question 21

general agent

Answer 21

one who is authorized by a principal to represent the principal in a specific range of matters

Question 22

implied agency

Answer 22

if the actions of the parties imply that they have mutually consented to an agency relationship, an implied agency relationship is formed

Question 23

implied agreement

Answer 23

a contract under which the agreement of the parties is demonstrated by their acts and conduct

Question 24

latent defect

Answer 24

a hidden structural defect that could not be discovered by ordinary inspection and that threatens a property’s soundness or the safety of its inhabitants. some states impose on property sellers and real estate professionals a duty to inspect for and disclose latent defects

Question 25

listing agreement

Answer 25

a contract between an owner (as principal) and a real estate professional (as representative of the owner) by which the real estate professional is employed to find a buyer for the owner’s real estate on the the owner’s terms, for which service the owner agrees to pay a commission or other form of compensation

Question 26

negligent misrepresentation

Answer 26

occurs when the real estate professional should have known that a statement about a material fact was false

Question 27

megan’s law

Answer 27

federal legislation that promotes the establishment of state registration systems to maintain residential information on every person who kidnaps children, commits sexual crimes against children, or commits sexually violent crimes

Question 28

ministerial acts

Answer 28

the necessary paperwork and formalities involved in transferring ownership of real property

Question 29

nonagent

Answer 29

an intermediary between a buyer and a seller, or a landlord and a tenant, who assists one or both parties with a transaction without representing either

Question 30

principal

Answer 30

1) a sum loaned or employed as a fund or an investment, as distinguished from its income or profits. 2) the original amount (as in a loan) of the Toal due and payable at a certain date. 3) a main party to a transaction- the person for whom an agent works

Question 31

puffing

Answer 31

exaggerated or superlative comments or opinions

Question 32

rules and regulations

Answer 32

real estate licensing authority orders that govern real estate professionals’ activities, having the same force and affect as statutory law

Question 33

single agency

Answer 33

agency relationship in which the agent represents only one party to a transaction

Question 34

special agent

Answer 34

one who is authorized by a principal to perform a single act or transaction; a real estate professional is usually a special agent authorized to find a ready, willing, and able buyer for a particular property, when representing a seller, or a special agent authorized to find a suitable property, when representing a buyer

Question 35

stigmatized property

Answer 35

a property that has acquired an undesirable reputation due to an event that occurred on or near it

Question 36

subagent

Answer 36

a cooperating agent working with the broker on behalf of the broker’s client

Question 37

transaction broker

Answer 37

helps both the buyer and the seller with paperwork and formalities in transferring ownership of real property, but who is not an agent of either party

Question 38

universal agent

Answer 38

a person empowered to do anything the principal could do personally