Agency Relationships

Question 1

The Principal-Agent relationship is a

Answer 1

Fiduciary Relationship

Question 2

What is a Fiduciary Relationship?

Answer 2

relationship is based on trust

Question 3

What governs the relationship between a Broker and their Principal?

Answer 3

Common Law of Agency

Question 4

The principal is also known as

Answer 4

The Client

Question 5

What must be presented at the time of the first meaningful contact with a party or prospect?

Answer 5

Disclosure of information about Agency

Question 6

As an agent, we must treat everyone with ________ and ___________.

Answer 6

Honesty and Fairness

Question 6

When is the disclosure of agency typically given to the seller and the buyer?

Answer 6

With a Seller, this is often at the listing presentation. With a Buyer, this is often on his/her first visit to your office.

Question 7

What are the two levels of responsibility an agent has?

Answer 7

Public Responsibility and Fiduciary Responisbility

Question 8

What is an agent’s Public Responsibility, and who does it apply to?

Answer 8

Duties to Customers and third parties in a transaction: Honesty, integrity, fairness, disclosure of material facts, and accounting of funds

Question 9

What is an agent’s Fiduciary Responsibility, and who does it apply to?

Answer 9

Clients; Being honest and acting with integrity, give full disclosure, be loyal and competent

Question 10

Agency SHOULD be created by ____________. However, agency CAN be created _______ or by ___________.

Answer 10

Written Agreement, Orally, Ratification

Question 11

What does Agency by ratification occur?

Answer 11

When a principal accepts actions that were not authorized by the agency agreement

Question 12

What type of agency Occurs due to actions, and there is NO written or oral agreement?

Answer 12

Implied Agency

Question 13

A person with power of attorney is called an

Answer 13

Attorney-in-Fact

Question 14

What are the three levels of agency?

Answer 14

1. Universal
2. General
3. Special

Question 15

Which agency gives the agent the authority to represent their client in all business and personal matters, the equivalent of having unlimited power of attorney and is very rare in real estate?

Answer 15

Universal Agency

Question 16

What agency gives the agent the power to bind their principal in a particular trade or business?

Answer 16

General Agency

Question 17

True or false: In an general Agency an agent can sign a legally binding agreement in the name of their principal

Answer 17

True

Question 18

What are two examples of General Agency?

Answer 18

Owner - Property Manager
Broker - Sales Agent

Question 19

Which agency gives the agent the power to perform only specific acts and NO others and does NOT have the power to bind their client/principal in a transaction?

Answer 19

Special Agency

Question 20

What is the preferred method of creating an agency relationship?

Answer 20

written agreement

Question 21

What contract Employs the Broker to act as a fiduciary to the Buyer? (Creates a SPECIAL Agency relationship).

Answer 21

Buyer’s Representation Agreement

Question 22

What contract Employs the Broker to act as a fiduciary to the Seller? (Creates a SPECIAL Agency relationship)

Answer 22

Listing Agreement

Question 23

What contract Employs the Broker/Property Manager to act as a fiduciary to the Owner? (Creates a GENERAL Agency relationship).

Answer 23

Management Agreement

Question 24

An independent contractor agreement between a broker and a license holder also creates a ...

Answer 24

General Agency

Question 25

What is a Single Agency Broker?

Answer 25

One who does NOT act as a dual agent, the broker recommends that one of the parties (usually the buyer) either find another broker or continue in the transaction unrepresented

Question 26

single agency is the practice of representing _________ the buyer or the seller but ___________ in the same transaction

Answer 26

EITHER ; never both

Question 27

True or false: An example of a single agency is am apartment locator

Answer 27

True

Question 28

What is a Transactional Broker/Facilitator/?

Answer 28

a licensee who assists a buyer and seller in reaching an agreement in a real estate transaction but does not have an agency relationship with either party

Question 29

A middleman in a transaction is also known as ?

Answer 29

Transactional Broker/Facilitator

Question 30

What is a broker who agrees to represent BOTH parties with their written permission?

Answer 30

Dual Agency Broker

Question 31

In Texas, a broker who agrees to represent both parties in a single transaction must do so as an.?

Answer 31

Intermediary

Question 32

Intermediary is a _________ Law concept

Answer 32

Statutory

Question 33

True or False: Statutory Law ALWAYS takes precedence over Common Law

Answer 33

True

Question 34

Dual Agency or Intermediary may only be permitted if

Answer 34

BOTH the buyer and seller agree in writing

Question 35

A Principal’s (or Client's) Duties to an Agent are:

Answer 35

CRIP Compensation Reimbursement Indemnification Performance

Question 36

What is Indemnification?

Answer 36

the principal is to Defend the agent when the agent acts on the client’s instruction