SU # 08__Agency Relationships Flashcards
Define implied agency.
An implied agency is formed when the actions of the parties indicate that they have mutually consented to an agency. The persons involved may not have consciously planned to form an agency relationship. However, their actions may unintentionally, inadvertently or accidentally form the relationship.
Under the Act, what must a licensee do when he or she meets a customer regarding a property that is a potential for negotiations?
The licensee must tell that person whom he or she is representing. This should happen early on in the first substantial discussion concerning any real estate.
What does the Act mandate that a licensee provide to a client at the beginning of a designated agency relationship?
The client receives documentation in writing that a designated agency relationship exists, unless there is written agreement between the sponsoring broker and the consumer providing for a different brokerage relationship.
The written confirmation shows the name of the designated agent (or agents).
What does Illinois require in the event of a dual agency situation?
- Dual Agency Consent Agreement
The Act dictates the language that must be used on this form and the licensee cannot change that language.
Describe the difference between active and passive fraud
Active fraud is an intentional misrepresentation of a material fact for the purpose of gaining an unfair or dishonest advantage over another person.
Passive fraud is an intentional nondisclosure of a material fact.
What is puffing?
Puffing is a non-factual statement or opinion made to enhance the desirability of a property
What does the law say about the disclosure of latent defects?
A broker has no duty to discover “latent” material defects in a property if the seller has not disclosed these defects prior to the sale.
Article 15 of the Real Estate License Act of 2000, Section 15-20 addresses the “hold harmless” liability issue regarding disclosure of latent defects by a licensee.
Licensee Paul is bound to inform his client of all facts that might affect the client’s interests – both what Paul knows and what he “should have known.” Which of these situations would not be something Paul “should know?”
There is a crack in the basement wall.
The air conditioner does not work.
The owner of the property is HIV positive.
The casement windows have broken seals.
The owner of the property is HIV positive.
Colleen plans to be a dual agent in a real estate transaction. At what point, if any, should she receive her clients’ permission to act as a dual agent.
Colleen must disclose her intention to be a dual agent, and have written permission of both clients before acting as a dual agent.
Colleen must disclose her agency status at the time any written agreement and/or written authorization is obtained.
Colleen does not have to disclose her agency status.
When Colleen’s broker directs the disclosure.
Colleen must disclose her intention to be a dual agent, and have written permission of both clients before acting as a dual agent.
What is the standard for agency representation in Illinois?
Basic agency
Disclosed agency
Contractual agency
Designated agency
Designated agency
When does the first substantive contact take place?
A buyer contacts a broker through the Internet.
A seller calls a broker to schedule a listing appointment.
A potential buyer shows up at an open house.
A potential buyer or seller begins to discuss his or her needs.
A potential buyer or seller begins to discuss his or her needs.
Which of the following types of agency is not allowed in Illinois?
Dual agency
Buyer’s agency
Designated agency
Undisclosed dual agency
Undisclosed dual agency
A property seller signs a listing agreement with a licensee. What is this an example of?
General agency
Universal agency
No agency
Express agency
Express agency
Which of the following can a dual agent disclose?
The lowest price the seller will accept.
The motivating factors for any person buying, selling or leasing the property.
Material or latent defects.
The terms of any prior offers or counter offers made by any party.
Material or latent defects.
All of the following is considered confidential information EXCEPT:
The sellers are selling because they are getting a divorce.
The buyer will pay more than what’s being offered.
The seller will take less than the current offer.
The buyer has four children
The buyer has four children
What do we call an agent who represents only one party in a real estate transaction?
Exclusive agent
Single agent
Subagent
Broker agent
Single agent
The situation that allows the broker to appoint more than one agent for the client within the same firm, is called:
Designated agency
Dual agent
Sponsoring licensee
Sponsoring broker
Designated agency
When should a seller agency disclosure take place?
At the time of the first substantive dialogue
Upon first face to face meeting
Before writing up an offer
After the offer is written but before closing
At the time of the first substantive dialogue
Which laws holds harmless a licensee to discover latent defects?
Still v. Minor 1987
State of Illinois v. Paragon, et al
Stubby v. Flag, 2000
Munjal v. Baird & Warner, Inc. et al.
Munjal v. Baird & Warner, Inc. et al.
Broker Dan is representing Mandy as a buyer’s agent. He wants to show Mandy one of his listed properties. Which statement is true?
There is no reason why Dan should not show Mandy the property.
Dan must disclose to the seller that he is also representing the buyer.
Dan needs to get the informed, written consent of both Mandy and the seller to act as a dual agent.
Dan must notify the Department of State that he wants to represent both parties in the transaction.
Dan needs to get the informed, written consent of both Mandy and the seller to act as a dual agent.
Is it permissible, as a buyer representative, to dispense advice to your purchaser client?
No. A buyer representative should only dispense assistance, not advice.
Yes. A buyer representative should be able to dispense advice on all areas, including inspections, technical issues, etc.
Yes. A buyer representative should advise the client on matters of which he/she has knowledge. It is important to advise the client to obtain expert advice on areas in which the licensee is not an expert.
No. A buyer representative should remain neutral and simply aid in the transaction.
Yes. A buyer representative should advise the client on matters of which he/she has knowledge. It is important to advise the client to obtain expert advice on areas in which the licensee is not an expert.
