UNIT 5 - AGENCY RELATIONSHIPS

Question 1

agency

Answer 1

legal relationship in which a principal authorizes an agent to act as the principal’s representative when dealing with third parties

Question 2

fiduciary relationship

Answer 2

a position of trust or confidence. The agent has the fiduciary duty of loyalty, integrity, and utmost care to the principal.

Question 3

special agent

Answer 3

employed to perform a specific task (e.g. real estate agent with a contract)

Question 4

general agent

Answer 4

employed for any other tasks

Question 5

actual authority

Answer 5

The authority given an agent, by the principal

Question 6

power of attorney

Answer 6

a written document that gives a person legal authority to act on behalf of another person

Question 7

special power of attorney

Answer 7

authorizes the agent to do certain specific acts

Question 8

general power of attorney

Answer 8

allows the agent to transact all the business of the principal

Question 9

attorney-in-fact

Answer 9

an agent with general power of attorney

Question 10

dual agency

Answer 10

one broker represents both principals. Must have informed, written consent of both principals

Question 11

subagent

Answer 11

a broker delegated by the listing agent (if authorized by the seller) who represents the seller in finding a buyer

Question 12

cooperating broker

Answer 12

a selling agent who assists another broker by finding a buyer (may represent either seller or buyer)

Question 13

agency relationship disclosure act

Answer 13

01/01/1988 became effective. It applies to every residential property transaction of 1-4 units. The law requires that an agent supply a written document called disclosure regarding real estate agency relationships.

Question 14

disclosure process

Answer 14

disclose, elect and confirm

Question 15

agency by ratification

Answer 15

acceptance of an act already performed. (i.e. ratified after the owner accepts an offer)

Question 16

agency by estoppel

Answer 16

E.G. if a seller allows a buyer to believe, a broker represents the serller, and the buyer believes that to be so, the existence of an agency cannot be denied by the seller.

Question 17

Terminating an Agency relationship

Answer 17

• Full performance
• Expiration of its term
• Agreement of the parties
• Acts of the parties
• Destruction of the property
• Death, incapacity, or insanity of the broker or principal
• Bankruptcy of the principal

Question 18

Form RLA (residential listing agreement - exclusive) (Exclusive authorization and right-to-sell listing)

Answer 18

exclusive contract where the seller must pay the listing broker a commission if the property is sold within the time limit. (bilateral contract)

Question 19

Form RLAA (residential listing agreement - agency) (exclusive agency listing)

Answer 19

exclusive contract where the seller must pay the listing broker a commission if any broker sells the property. (time limit)

Question 20

Form RLAN (residential listing agreement - open) (Open Listing)

Answer 20

gives any number of brokers the right to sell a property. (time limit)

Question 21

procuring cause

Answer 21

refers to a broker who produces a buyer ready, willing, and able to purchase the property for the price and on the terms specified by the seller. (no time limit)

Question 22

Net Listing

Answer 22

employment contract in which the commission is not definite. the broker receives all the money from the sale of the property that is in excess of the selling price set by the seller.

Question 23

Option Listing

Answer 23

gives the broker the right to purchase the property that is listed.

Question 24

listing violations

Answer 24

• every exclusive listing must specify a definite termination date
• a listing broker must give a copy of the listing to the seller at the time the seller signs it
• a listingn broker cannot accept a deposit from the buyer, unless specifically authorized in the listing agreement.
• A listing broker may not return a buyer’s deposti after the seller accepts the offer, without the consent of the seller
• the acceptance of a check, rather than cash/promissory note, as an earnest money deposti must be disclosed to the seller at the time the offer is presented
• If the buyer instructs the listing broker to hold the check uncashed until the offer is accepted, the fact must be disclosed to the seller when offer is presented.
• any agent who puts a client’s money in his or her own personal bank account

Question 25

commingling

Answer 25

depositing client’s funds into broker’s personal or general business account

Question 26

tort

Answer 26

violation of legal right or civil wrong, such as negligence, libel, or nuisance

Question 27

safety clause

Answer 27

protects the listing broker’s commission, if the owner personally sells the property to someone who was shown the property or made an offer during the term of the listing.

Question 28

puffing

Answer 28

a statement of opinion that is not factual about a piece of property