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NC Real Estate Exam > Unit 7 - Real Estate Brokerage and the Law of Agency > Flashcards

Unit 7 - Real Estate Brokerage and the Law of Agency Flashcards

1
Q

A real estate transaction involving two or more brokerage firms, one firm representing the seller and the other representing the buyer.

A

co-brokered sale AKA

co-brokered transaction

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2
Q

A Latin phrase meaning “Let the buyer beware.” Sellers do not have to disclose any facts about their property when selling.

A

caveat emptor

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3
Q

The basic framework of law that governs the legal responsibilities of the broker to the people the broker represents.

A

common law of agency

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4
Q

Duties to third party/customers

A
  1. Honesty
  2. Disclosure of material facts
  3. Fairness
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5
Q

Work for

A

Clients

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6
Q

Work with

A

Third party/customers

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7
Q

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

A

agency

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8
Q

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

A

agency

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9
Q

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 the property owner’s agent.

A

agent

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10
Q

OLD CAR

A

O bedience
L oyalty
D isclosure of Information

C onfidentiality
A ccounting
R easonable Skill, Care, and Diligence

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11
Q

The fiduciary relationship between the subagent and the principal

A

Subagency

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12
Q

One who is employed by a person already acting as an agent; typically a reference to a provisional broker licensed under a broker who is employed under the terms of a listing agreement. Has the same duties to the client as an agent.

A

subagent

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13
Q

A main party to a transaction - the person for whom the agent works

A

principal AKA

the client

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14
Q

A third party to whom is owed honesty and fairness; not a fiduciary relationship

A

Customer

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15
Q

One in whom trust and confidence are placed; a reference to a principal-agent relationship

A

fiduciary

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16
Q

The real estate licensee who assists buyers and sellers in reaching an agreement in a real estate transaction without representing interests of either party. The licensee treats both parties equally as customers.

A

facilitator AKA

Transaction Broker

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17
Q

An illegal act by licensee who takes advantage of clients by failing to disclose the appropriate value of property

A

self-dealing AKA

secret profit

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18
Q

Any fact that is important or relevant to the issue at hand; mandatory disclosure by all agents in a transaction to all parties of the transaction.

A

material fact

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19
Q

The illegal act by a real estate broker of placing consumer funds with personal funds. By law, brokers are required to maintain a separate trust or escrow account for other parties’ funds held temporarily by the broker.

A

commingling

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20
Q

Exaggerated or superlative comments or opinions: e.g. “This house has the best view in town!”

A

puffing

21
Q

An intentional misrepresentation of material fact so as to harm or take advantage of another person.

A

fraud

22
Q

Intentionally misinforming any party involved in a transaction about a material fact.

A

willful misrepresentation

23
Q

Unintentionally misinforming any party involved in a transaction about material fact.

A

negligent misrepresentation

24
Q

Intentionally failing to disclose a material fact to any party involved in a transaction.

A

willful omission

25
Q

Unintentionally failing to disclose a material fact to any party involved in a transaction.

A

negligent omission

26
Q

Prohibited conduct

A
  1. Willful misrepresentation
  2. Negligent misrepresentation
  3. Willful omission
  4. Negligent omission
27
Q

Property regarded as undesirable because of events that occured there. Some conditions that cause this are murder, gang-related activity, proximity to a nuclear plant, and even the alleged presence of ghosts.

A

stigmatized property AKA

psychologically impacted property

28
Q

A wrongful act, injury, or violation of legal right to the person or property of another.

A

tort

29
Q

Person empowered to do anything the principal could do personally; unlimited authority; unusual in real estate.

A

universal agent

30
Q

One who is authorized to represent the principal in a broad range of matters related to a specific business or activity; a property manager might have this power.

A

general agent

31
Q

One who is authorized by a principal to perform a single act or transaction. A real estate broker for the seller is usually authorized to find a ready, willing, and able buyer for a particular property, or a special agent of the buyer to find a specific type of property to purchase. Has limited authority and cannot bind his principal.

A

special agent

32
Q

The bringing together of buyers and sellers in the marketplace

A

brokerage

33
Q

(1) One who acts as an intermediary on behalf of others for a fee or commission. (2) One who is licensed to list, lease, buy, exchange, auction, negotiate or sell interest in real estate for others for a fee.

A

broker

34
Q

Payment to a broker for services rendered, as in the sale or purchase of real property; traditionally a percentage of the gross sales price of the property but can be a flat fee or some other calculation.

A

commission

35
Q

The broker/firm in a multiple-listing situation representing the seller, as opposed to the cooperating broker/firm, that brings the buyer to the transaction.

A

cooperating brokers

36
Q

A contract under which the agreement of the parties is demonstrated by their conduct

A

implied agreement/conduct

37
Q

An agency relationship created when principals and agents, without formally agreeing to the agency, act as if one exists.

A

implied authority

38
Q

A method of creating an agency relationship in which the principal accepts/confirms the conduct of someone who acted without prior authorization as the principal’s agent.

A

ratification AKA

apparent authority

39
Q

When someone claims to be an agent but there is no express agreement, the principal can establish an agency relationship by performing any act that accepts (ratifies) the conduct of the agent as that of an agent.

A

apparent authority AKA

ratification

40
Q

A real estate transaction where the listing firm actually produces the buyer for their listing, as opposed to a co-brokered or cross sale that involves two firms.

A

in-house sale

41
Q

Representing both parties to a transaction; must be consensual and reduced to writing prior to presentation of first offer.

A

dual agency

42
Q

An illegal agency relationship where buyers and/or sellers are unaware of an individual broker or firm’s conflicting duties to their clients.

A

undisclosed dual agency

43
Q

A flexible moment in time when conversation between a licensee and a consumer begins to address confidential needs, desires and abilities; latest moment to legally disclose agency choices to a consumer.

A

first substantial contact

44
Q

A non-exclusive verbal agency agreement between a firm and a buyer-client. There is no time limit, but it must be reduced to writing prior to presentation of first offer.

A

oral buyer agency

45
Q

Someone who works directly for an employer. Employer is obligated to withhold income taxes and Social Security taxes from compensation.

A

employee

46
Q

Someone who is retained to perform a certain act but who is subject to the control and direction of another only as to the end result and not as to the way in which the act is performed. They pay all expenses and Social Security and income taxes and receive no benefits. MOST real estate licensees

A

independent contract

47
Q

Tax form for employee

A

W2

48
Q

Tax form for independent contractor

A

1099

NC Real Estate Exam (21 decks)

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