Unit 9: Real Estate Agency- 8%

Question 1

Agency

Answer 1

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

Question 2

Agent

Answer 2

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 his or her agent.

Question 3

Buyer Representation Agreement

Answer 3

A principal-agent relationship in which the real estate professional acts on behalf of the buyer, usually as an agent, with fiduciary responsibilities to the buyer.

Question 4

Buyer’s Agent

Answer 4

A real estate professional who is under contract to locate property for a buyer and represent the buyer’s interests in a transaction.

Question 5

Client

Answer 5

A person who has entered into a brokerage relationship with a broker licensee.

Question 6

Customer

Answer 6

The third party or nonrepresented consumer for whom some level of service is provided.

Question 7

Designated Agency

Answer 7

A process that accommodates an in-house sale in which two different agents are involved. The broker designates one agent to represent the seller and one agent to represent the buyer.

Question 8

Designated Agent

Answer 8

A real estate professional authorized by a broker to act as the agent for a specific principal in a particular transaction; also may be called assigned agent or appointed agent.

Question 9

Dual Agency

Answer 9

Representing both parties to a transaction. This is unethical unless both parties agree to it, and it is illegal in some states.

Question 10

Express Agreement

Answer 10

An oral or written contract in which the parties state the contract’s terms and express their intentions in words.

Question 11

Fiduciary

Answer 11

One in whom trust and confidence is placed; a reference to a real estate professional employed under the terms of a listing contract or buyer representation agreement.

Question 12

Fiduciary Relationship

Answer 12

A relationship of trust and confidence, as between trustee and beneficiary, attorney and client, or principal and agent.

Question 13

Fraud

Answer 13

Deception intended to cause a person to give up property or a lawful right.

Question 14

General Agent

Answer 14

One who is authorized by a principal to represent the principal in a specific range of matters.

Question 15

Implied Agency

Answer 15

If the actions of the parties imply that they have mutually consented to an agency relationship, an implied agency relationship is formed.

Question 16

Implied Agreement

Answer 16

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

Question 17

Latent Defect

Answer 17

A hidden structural defect that could not be discovered by ordinary inspection and that threatens a property’s soundness or the safety of its inhabitants. Some states impose on property sellers and real estate professionals a duty to inspect for and disclose latent defects.

Question 18

Listing Agreement

Answer 18

A contract between an owner (as principal) and a real estate professional (as representative of the owner) by which the real estate professional is employed to find a buyer for the owner’s real estate on the owner’s terms, for which service the owner agrees to pay a commission or other form of compensation.

Question 19

Negligent Misrepresentation

Answer 19

Occurs when the real estate professional should have known that a statement about a material fact was false.

Question 20

Nonagent

Answer 20

An intermediary between a buyer and a seller, or a landlord and a tenant, who assists one or both parties with a transaction without representing either. Also known as a facilitator, transaction broker, transaction coordinator, and contract broker.

Question 21

Principal

Answer 21

(1) A sum loaned or employed as a fund or an investment, as distinguished from its income or profits. (2) The original amount (as in a loan) of the total due and payable at a certain date. (3) A main party to a transaction—the person for whom an agent works.

Question 22

Puffing

Answer 22

Exaggerated or superlative comments or opinions.

Question 23

Single Agency

Answer 23

Agency relationship in which the agent represents only one party to a transaction.

Question 24

Special Agent

Answer 24

One who is authorized by a principal to perform a single act or transaction; a real estate professional is usually a special agent authorized to find a ready, willing, and able buyer for a particular property, when representing a seller, or a special agent authorized to find a suitable property, when representing a buyer.

Question 25

Transaction Broker

Answer 25

Helps both the buyer and the seller with paperwork and formalities in transferring ownership of real property, but who is not an agent of either party.

Question 26

Universal Agent

Answer 26

A person empowered to do anything the principal could do personally.