Vocabulary: Chapter 12-Agency

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’s Agent

Answer 3

A residential real estate broker or salesperson who represents the prospective purchaser in a transaction. The buyer’s agent owes the buyer-principal the common[law or statutory agency duties

Question 4

Client

Answer 4

The principal

Question 5

Customer

Answer 5

The third party or non-represented consumer for whom some level of service is provided

Question 6

Designated Agent

Answer 6

A licensee authorized by a broker to act as the agent for a specific principal in a particular transaction

Question 7

Designated Agency

Answer 7

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

Question 8

Dual Agency

Answer 8

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

Question 9

Express Agency

Answer 9

An agency relationship based on a formal agreement between the parties

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 broker employed under the terms of a listing contract or buyer agency 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

Based on the actions of the parties that 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 the property’s soundness or the safety of its inhabitant. Some states impose on seller and licensees 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 broker (as agent) by which the broker is employed as agent 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

Question 19

Negligent Misrepresentation

Answer 19

Occurs when the broker 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 the agent works

Question 22

Puffing

Answer 22

Exaggerated or superlative comments or opinions

Question 23

Special Agent

Answer 23

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

Question 24

Universal Agent

Answer 24

A person empowered to do anything the principal could do personally