Ch 22-25

Question 1

Independent Contractor

Answer 1

A person that provides services to another under terms specified in a contract or within a verbal agreement. An independent contractor is not an employee.

Question 2

Commission

Answer 2

An agent’s compensation for performing the duties of agency; in real estate practice, a percentage of the selling price of property, percentage of rentals, etc.

Question 3

Agency

Answer 3

The relationship between principal and the principal’s agent, which arises out of a contract, either expressed or implied, written or oral, wherein the agent is employed by the principal to do certain acts dealing with a third party.

Question 4

Agent

Answer 4

One who acts for and with authority from another called the principal

Question 5

Principal

Answer 5

The employer of an agent, such as a buyer or seller. The principal authorizes the agent to represent them to other people in working on a business transaction.

Question 6

Subagent

Answer 6

A person upon whom the powers of an agent have been conferred, not by the principal, but by an agent as authorized by the agent’s principal.

Question 7

Dual Agency

Answer 7

An agency relationship in which the agent acts concurrently for both of the principals in a transaction. In real estate, this primarily occurs when a broker or salesperson simultaneously acts as the agent of both the seller of a property and the buyer of that same property.

Question 8

General Agent

Answer 8

– An agent with full authority over one property of the principal, such as a property manager. A general agent is much more common of a role to see amongst professionals within the real estate industry.

Question 9

Single Agent

Answer 9

An agent who works only for the buyer or the seller.

Question 10

Special Agent

Answer 10

An agent with limited authority to act on behalf of the principal, such as created by a listing contract. A real estate broker or salesperson operates as a special agent which is the type of agent that is most common for a real estate salesperson or broker to be.

Question 11

Sub-agent

Answer 11

A person upon whom the powers of an agent have been conferred, not by the principal, but by an agent as authorized by the agent’s principal. The most common example of a sub-agent is a real estate salesperson or associate broker working under a sponsoring broker.

Question 12

Universal Agent

Answer 12

The agent who has complete authority over any activity of the principal; for example, power of attorney, one person has signed a piece of paper that has bestowed another person with the legal right to act fully in all of their affairs.

Question 13

Express Agency

Answer 13

An agency relationship created by oral or written agreement between principal and the agent. When a broker and a seller both sign a listing agreement, they have entered into an express agency relationship in which the broker is the agent and the seller is the principal.

Question 14

Implied Agency

Answer 14

Agency that exists as a result of actions of the parties. It is implied agency that can arise accidentally, and it is the kind of relationship which only one party, the principal or the agent, might believe exists, while the other is unaware of there being any agency relationship there.

Question 15

Ostensible Agency

Answer 15

specific kind of implied agency. it is a third party who believes the agency relationship exists. A person who has been given the appearance of being an employee or acting (an agent) for another (principal), which would make anyone dealing with the ostensible agent reasonably believe he/she was an employee or agent.

Question 16

Commission

Answer 16

An agent’s compensation for performing the duties of agency; in real estate practice, a percentage of the selling price of property, percentage of rentals, etc. A fee for services.

Question 17

Ministerial Acts

Answer 17

services performed without compensation, except that they facilitate a transaction by ensuring all parties are well-informed and have access to information necessary to make transaction decisions

Question 18

Blockbusting

Answer 18

The practice on the part of unscrupulous speculators or real estate agents of including panic selling of homes at prices below market value, especially by exploiting the prejudices of property owners in neighborhoods in which the racial make-up is changing or appears to be on the verge of changing.

Question 19

Redlining

Answer 19

An illegal lending policy of denying real estate loans on properties in older, changing urban areas, usually with large minority populations, because of alleged higher lending risks without due consideration being given by the lending institution to the credit worthiness of the individual loan applicant.

Question 20

Steering

Answer 20

The practice in which real estate brokers guide prospective home buyers towards or away from certain neighborhoods based on their race. Steering is highly illegal.

Question 21

Testers

Answer 21

Volunteers from state or private agencies who enforce fair housing by claiming to be home seekers, thereby finding out if brokers deal fairly with all clients/customers.