Unit 9

Question 1

Agent

Answer 1

Hired by a principal to act on their behalf

Question 2

Principal

Answer 2

The client

Question 3

Real estate relationships are governed by

Answer 3

Common Law, which is established by tradition and court decisions and statutory law, which is passed by state legislatures and other governing bodies

Question 4

Agency

Answer 4

The fiduciary relationship in which the agent is held in a position of special trust and confidence by the principal

Question 5

Customer

Answer 5

The nonrepresented party for whom some level of service is provided and who is entitles to fairness and honesty

Question 6

Nonagent/ facilitator/ intermediary/ transaction broker, transaction coordinator/ contract broker

Answer 6

Assists one or both parties with the transaction without representing either party’s interests and often is subject to specific statutory responsibilities

Question 7

Express agency

Answer 7

Express agreement between parties

Question 8

Implied agency

Answer 8

Created when the actions of the parties indicate that they have mutually consented to an agency

Question 9

6 common-law fiduciary duties

Answer 9

COLD-AC
Care
Obedience
Loyalty
Disclose
Accounting
Confidentiality

Question 10

Universal Agent

Answer 10

Empowered to do anything the principal could do personally

Question 11

General Agent

Answer 11

Represents the principle in a broad range of matter

Question 12

Special Agent

Answer 12

Represents the principal in one specific act or business transaction only under detailed instruction

Question 13

Single Agency

Answer 13

Agent represents only one party in a transaction

Question 14

Buyer’s broker

Answer 14

Represents a buyer as an agent to find property that meets the buyer’s specifications

Question 15

Dual agency

Answer 15

Agent represents 2 principals in the same transaction. Requires informed consent of both principals

Question 16

Undisclosed dual agency

Answer 16

May occur inadvertently, can result in rescission of the sale’s contract, forfeiture of a commission, a lawsuit for damages, and possibly license suspension or revocation

Question 17

Designated agent

Answer 17

A Sales associate authorized by the broker to represent one party to a transaction, while a different sales associate in the same firm represents the other party.

Question 18

Agency coupled with an interest

Answer 18

Cannot be revoked by the principal or terminated upon principal’s death

Question 19

Termination of agency

Answer 19

-completion, performance, fulfillment of agency
-destruction or condemnation of property
-expiration of the terms
-mutual agreement of all parties to contract
-breach, who may be liable for damages
-operation of law, as in the bankruptcy

Question 20

Puffing

Answer 20

Legal exaggeration of a property’s benefits

Question 21

Fraud

Answer 21

Intentional misrepresentation of a material fact to harm or take advantage of another person

Question 22

Negligent misrepresentation

Answer 22

Occurs when a real estate professional should have known about a statement of material fact was false and was due to careless negligence rather than accidental negligence

Question 23

Stigmatized properties