Section 4 - Chapter 4

Question 1

Agency is:

Answer 1

special word to describe relationship between agent, buyer, seller, and transaction itself; consumer has given consent to a real estate licensee to represent them in a real estate transaction

Question 2

agency is governed by two types of law:

Answer 2

common and statutory (statutory in illinois)

Question 3

law of agency defines

Answer 3

rights and duties of principal and the agent

Question 4

“general agency”

Answer 4

relationship between broker and sponsoring broker

Question 5

an agent is:

Answer 5

the individual who is authorized to represent another; sponsoring broker is agent and shares responsibilities with licensees

Question 6

brokerage agreement is:

Answer 6

verbally or in writing, agent/firm to represent consumer and to be paid

Question 7

client

Answer 7

person or entity that a licensee represents

Question 8

consumer

Answer 8

a person or entity for whom an agent provides services, which are only to be provided by a licensee, or a person or entity who seeks such services from a licensee

Question 9

customer

Answer 9

person or entity for whom a licensee is providing services but who is not represented by the licensee in an agency relationship

Question 10

an agent works:

Answer 10

for the client and with the customer

Question 11

under the common law of agency, an agent owes the principal:

Answer 11

duties of care, obedience, loyalty, disclosure, accounting, and confidentiality

Question 12

commingling:

Answer 12

grouping escrow funds with licensee’s personal or business funds; illegal

Question 13

conversion;

Answer 13

practice of licensee using escrow funds as his own money; illegal

Question 14

puffing:

Answer 14

exaggeration of a property’s benefits

Question 15

fraud:

Answer 15

intentional misrepresentation of a material fact

Question 16

negligent misrepresentation:

Answer 16

when the licensee should have known that a statement about a material fact was false

Question 17

latent defect:

Answer 17

a structural defect not normally uncovered during an ordinary inspection

Question 18

exclusive brokerage contracts must

Answer 18

be in writing

Question 19

gratuitous agency is:

Answer 19

agency existing even if no fee involved

Question 20

termination of agency via:

Answer 20

death/incapacity of either party, destruction/condemnation of property, expiration of terms of agency, mutual agreement by all parties to the contract, breach by one of the parties in which the breaching party may be liable for damages, operation of law (like bankruptcy), completion of project

Question 21

agency coupled with interest:

Answer 21

agency where agent has an interest in the property

Question 22

universal agent:

Answer 22

person empowered to do anything the principal could do personally

Question 23

a general agent:

Answer 23

represents the principal in a variety of matters

Question 24

a special agent:

Answer 24

authorized to represent principal in one specific act or business transaction only

Question 25

designated agent:

Answer 25

person authorized by sponsoring broker to act as the agent of a specific principal

Question 26

single agency:

Answer 26

when an agent represents only one party in a transaction

Question 27

dual agency

Answer 27

agent represents two principals in the same transaction