General - Chapter 7 Lesson 1

Question 1

simple mistakes or oversights can lead to…

Answer 1

significant consequences and possible legal issues

Question 2

Responsible for…

Answer 2

protecting your clents’ best interest while cooperating fully with third parties. CLents are safe

Question 3

Risk management plan

Answer 3

identifies potential hazards and threats and describes plans necessary to mitigate them

Question 4

risk assessment

Answer 4

continuous process of understanding and categorizing potential risk

Question 5

Risk assessment parts

Answer 5

identification, analysis, and evaluation

Question 7

What is the process of identifying potential hazards and threats and implementing plans to mitigate them?

Answer 7

risk management

Question 8

imputed knowledge

Answer 8

concept that any information made known to an agent is communicated to their client

Question 9

real estate licensees are expected to know certain things about the industry as part of their fiduciary duty of

Answer 9

reasonable skill and care

Question 10

imputed knowledge helps mitigate risk

Answer 10

by ensuring all parties are aware of the details and nobody is caught off-guard

Question 11

imputed knowledge creates risk

Answer 11

by creating assumptions

Question 12

Vicarious liability

Answer 12

real estate salespeople and associate brokers are agents of sponsoring broker, the broker may be help liable for their actions

Question 13

material fact

Answer 13

detail that could affect the value of a property to a consumer

Question 14

material defect

Answer 14

flaw that could impact value or pose a safety risk

Question 15

failure to disclose a defect…

Answer 15

violates the duty an agent owes to third parties

Question 16

Examples of material facts

Answer 16

age of major utility systems, age of roof, location in a flood zone, easements or encroachments, tax assessments

Question 17

Examples of material defects

Answer 17

rook leak or damage, malfunctioning furnace, sinking foundation, damaged electrical system, broken windows

Question 18

Misrepresentation

Answer 18

false or misleading statement

Question 19

omission

Answer 19

failure to mention or disclose information completely

Question 20

Misrepresentation and omission can…

Answer 20

arise at any point in a transaction, and they don’t necessarily have to be related to the features of a property

Question 21

Misrepresentation and Omission: Property details

Answer 21

square footage, condition, or features. Inaccurate listing descriptions, misleading or edited photos, or verbal statements made by sellers and their agents.

Question 22

Misrepresentation and Omission: inaccurate pricing

Answer 22

agents should be transparent about the property’s true value

Question 23

Misrepresentation and Omission: Contract Omissions

Answer 23

legal disputes, all parties should review the details in a contract before signing it

Question 24

Misrepresentation and Omission: Dual agency conflicts

Answer 24

must receive consent from both parties, failure to do so could lead to conflict of interest and legal action against the agent

Question 25

Misrepresentation and Omission: Misleading Marketing

Answer 25

heavily editing photos or using photos showing features that don't exist are forms of misrepresentation

Question 26

Errors and Omissions (E&O) insurance

Answer 26

help cover the expenses of a lawsuit if a client claims the licensee committed an error while performing professional duties (risk transfer tool)

Question 27

Who carries E&O insurance

Answer 27

brokers for themselves and licensees

Question 28

Make sure all required documentation is...

Answer 28

present and kept on file in a safe place

Question 29

Practicing good record keeping ensures...

Answer 29

safety of all parties in the transaction and minimizes the risk of unforeseen issues

Question 30

Broker's duty to...

Answer 30

supervise and assist the licensees who work for them

Question 31

Accounting

Answer 31

obligation to strictly account for all money and other valuables received

Question 32

supervising broker deposits money in an

Answer 32

escrow account (trust account)

Question 33

commingling

Answer 33

mixing brokerage's business funds and escrow money

Question 34

conversion

Answer 34

broker using escrow money for their own purposes

Question 35

If licensee is found liable and they don't have enough money to pay damages

Answer 35

personal assets can be seized

Question 36

asset

Answer 36

item of economic value owned by someone that can be converted to cash

Question 37

Protecting Personal Assets: Limited Liability Company

Answer 37

legal business structure that allows a licensee to separate personal assets from business assets

Question 38

Protecting Personal Assets: Personal Liability Insurance

Answer 38

offers protections that E&O doesn't like bodily injury or property damage

Question 39

Protecting Personal Assets: Personal Asset Trusts

Answer 39

transfers property to a trustee, who manages it for beneficiary. Assets are managed by trustee and owned by trust shielding the assets from creditors.

Question 40

Protecting Personal Assets: Arbitration and mediation

Answer 40

avoid court case, resolve matters outside the legal system

Question 41

Responsible for paying own...

Answer 41

income taxes

Question 42

Personal safety, first interaction...

Answer 42

at office or in public

Question 43

Pictures of clients infront of new home

Answer 43

get their consent

Question 44

Seller information posting

Answer 44

get consent