Module 1 Flashcards
1
Q
_________ is generally defined as a “standard of practice” equal to the level of real estate marketing skills and knowledge of other practitioners in the area.
A
Competence
2
Q
The agent is hired to do a job, and is therefore expected to do it with __________ and reasonable ___________.
A
diligence & competence.
3
Q
A listing agent must disclose in writing to a buyer or tenant that the agent represents the owner in the transaction. This disclosure must occur before or at the first “________ _______” with the customer prospect.
A
substantive contact
4
Q
In a _________ agency, the principal delegates to the agent ongoing tasks and duties within a particular business or enterprise. Such delegation may include the authority to enter into contracts.
A
general agency
5
Q
An agent who intends to represent a seller or owner must disclose the import of the proposed agency ____________ in writing before the listing agreement is ________.
A
relationship
executed
6
Q
In a _________, a broker or licensed salesperson works as the agent of a broker who is the agent of a client.
A
subagency
7
Q
_________ might include a cooperating licensed broker, that broker’s licensed salespeople, and the listing broker’s licensed salespeople, all of whom agree to work for the listing broker on behalf of the client
A
Subagents
8
Q
__________ requires the agent to keep the principal informed of all material facts that the agent knows or should have known that can influence the principal when deciding on a course of action. The material facts the agent should disclose include those that are either favorable or unfavorable to the principal. Court cases have even expanded the duty to disclose to include what “should have been known in the exercise of reasonable diligence.”
A
Disclosure
9
Q
_________ requires the agent to act in good faith according to the instructions and wishes of the principal. However, this duty is not absolute, and the agent does not have to and should not act in an illegal or unethical manner if so instructed by the principal.
A
Obedience
10
Q
___________ means that at all times the agent must be able to account for all funds received from or on behalf of the principal. This duty also requires the agent to keep accurate records of all documents relating to a transaction, an engagement to sell a property, or agreements relating to leasing real property.
A
Accounting
11
Q
_______________ means the agent is prohibited from communicating personal information about the principal that is given to or acquired by the agent within the scope of the employment. Unless the client releases the agent, personal information must be kept confidential.
A
Confidentiality
12
Q
________ requires the agent to place the interests of the principal above all others, including the interests of the agent. Some of the implications of this duty are:
• Information relating to confidential matters gained from the principal may not be disclosed. The buyer’s agent may not disclose the buyer’s willingness to pay a higher than offered price, the buyer’s willingness to buy, etc., unless specifically authorized by the buyer.
• The agent must disclose the agent’s interest in a property that is for sale, or disclose when the licensee is making an offer on a property for the licensee’s own account.
• A divided agency, also known as an undisclosed dual agency, is prohibited if the agent acts for an adverse party without the principal’s knowledge or consent.
• The agent cannot compete with the principal on the agent’s own account, or for another, in matters relating to the subject of the agency. For example, a real estate licensee cannot make an offer on a property the licensee knows a client would also be interested in purchasing.
A
Loyalty
13
Q
____ means that the agent must protect the principal from foreseeable risks of harm. It also means that the real estate agent is expected to have expertise and skill superior to that of the average person. The agent is to use that expertise and skill to the advantage of the principal.
When the principal’s needs are outside the scope of that agent’s expertise, the agent is to recommend that the principal obtain expert advice or assistance. Examples may include financing issues, legal matters, or property condition issues.
As an agent representing a buyer, ____ and skill may include:
• Locating of property meeting the buyer’s criteria
• Assisting the buyer in the evaluation of the property and neighborhood
• Financing alternatives available to the buyer
• The terms and implications of the buyer’s offer and responses to counter offers
• Negotiating for the buyer
• Diligent attention to all the details necessary to facilitate a closing
A
Care
14
Q
The agent must use reasonable ____ while working for the principal
A
Care
15
Q
The person who hires the agent and delegates to that agent the authority of representing their interests.
A
Principal
16
Q
One who represents the principal in dealings with third parties.
A
Agent
17
Q
The ___________ ______ , also called the transaction facilitator, is allowed in some states that allow nonagency relationships with the public.
A
transaction broker
18
Q
The __________ agent, sometimes called the appointed agent, is the licensee chosen by the managing licensee to act as the agent for the buyer or seller when the same firm is in a dual agency and representing both clients in a transaction.
A
designated
19
Q
In Oregon, the _________ ___ _____ is called the disclosed limited agent.
A
disclosed dual agent
20
Q
The _________ ___ _____ is a licensee who has disclosed and received permission to act as the agent for more than one party to a real estate transaction (the buyer and seller or two buyers who are competing for the same property).
A
disclosed dual agent
21
Q
The _______ is the agent of an agent. For example, in Oregon, the principal broker is the agent of the client (the buyer or seller or both) and the brokers associated with the principal broker are the _________ of the principal broker’s clients.
A
subagent
22
Q
The _______ agent, also called the selling agent, is the licensee representing a buyer in finding a property to buy and throughout the subsequent purchase transaction.
A
buyer’s
23
Q
An agent enters into a listing agreement with a homeseller, but then becomes too busy to professionally fulfill the terms of the agreement. To solve the dilemma, the agent assigns the agreement to another licensee in the office. Would this course of action be legal? why or why not?
A
No, the agent can not assign the listing agreement.
24
Q
When must a listing agent disclose his or her agency relationship to prospective tenants or buyers?
A
Whenever substantive contact is made beyond casual conversation.
25
The standard of care and competence that a principal can expect from an agent is generally that which is
comparable to that of other practitioners in the area.
26
Audrey wants to take a vacation. To do so, she authorizes an agent to conduct the operations of one of her business enterprises. The kind of agency she has established is
general.
27
A subagent is the agent of
a broker who has an agency relationship with a client.
28
The meaning and salient characteristics of the agency relationship should be disclosed to the client......
prior to completing a listing agreement.
29
A property seller empowers an agent to market and sell a property on his behalf. The kind of agency represented is
special.
30
An agent is operating as a disclosed dual agent on a transaction. In this case, the agent.....
must not represent one party's interests to the detriment of the other.
31
An agent has the duty to inform the client of all material facts, reports, and rumors that might affect the client's interests in the property transaction. This includes:
the agent's opinion of the property's condition; information about the buyer's motivations and financial qualifications; discussions between agent and buyer regarding the possibility of the agent's representing the buyer in another transaction.
32
The degree of authority granted by a residential brokerage listing agreement generally allows the agent to......
market, sell and show the property.
33
The __________ standard is one of the duties that extends beyond the termination of the listing: at no time in the future may the agent disclose confidential information.
confidentiality
34
Involuntary termination of the relationship may create _____ & ________ _________ for a party who defaults or cancels. For example, a client may renounce an agreement but then be held liable for the agent's expenses or commission.
legal and financial liability
35
It is important to understand that the agency relationship does not require ____________ or any form of consideration. Nor does ____________ define an agency relationship: a party other than the principal may __________ the agent.
compensation
36
An agent informs a buyer that a provision in a contract is very commonplace. After explaining the clause, the agent assures the buyer that the clause does not mean anything significant. If something goes wrong with the transaction, the agent could be liable for
practicing law without a license.
37
An agent should not act or speak outside the agent's ____ __ _________ . A customer may rely on anything an agent says, and the agent will be held accountable. For example, an agent represents that a property will appreciate. The buyer interprets this as expert investment advice and buys the property. If the property does not appreciate, the buyer may hold the agent liable.
area of expertise
38
Jensen Manufacturing Corp wants to buy land for a distribution center in a new industrial park near Portland International Airport. They made their offer in the name of Western Associates, LLC so as to not alert their competitors of the attempted purchase. This is an example of a/an _____________ principal.
partially disclosed
39
Randy Gillmore, as President of Century Corporation, makes an offer to purchase Morning View Business Park. This is an example of a/an _____ principal.
disclosed
40
Raul Ruiz contacts his broker to purchase a house in Sunriver. Because he is so famous, he does not want to make the offer in his name and asks the broker to make the offer in her name. This is an example of a/an _____ principal.
undisclosed
41
types of principals
Disclosed, Undisclosed, and Partially Disclosed
42
Principal Broker Jason represents Marty Lucas, a well-known NBA basketball player. Marty is attempting to buy an ocean front home on the Salishan spit and asks Jason to keep his existence and identity hidden. This is an example of a/an ___________ principal.
undisclosed
43
Niko Corporation wants to buy a large parcel of land in Eugene and build a manufacturing plant. Niko will pay cash for the property. Because of their well-known financial prosperity, they do not want the seller to know they are the purchaser. Niko Corporation contacts Broker Jason and instructs him to prepare a cash offer in the name of SM LLC, an LLC owned by Niko. This is an example of a/an_____ principal.
partially disclosed
44
Principal Broker Fred received an earnest money check from Broker Ethel for an offer made by Lucy and Ricky. Fred was in a hurry so he deposited the check into his operations account. After a few days, Fred remembered what he had done with the money and moved it over to his trust account. Fred is guilty of:
commingling.
45
Willow has Zander's ranch listed for sale. Zander isn't making his mortgage payments and is facing a foreclosure action. Without Zander's consent, Willow tells buyers that Zander is desperate to sell and encourages them to make any offer. Which fiduciary duty did Willow violate?
Confidentiality
46
The fiduciary duty of _____________ requires the agent not to disclose ___________ matters about the client. ____________ is one of the duties that extends beyond the agency contract (listing, property management, buyer broker) and at no time in the future may the agent disclose __________ information.
confidentiality/confidential
47
____________ is the misdeposit of trust funds.
Commingling
48
_________ is the duty of an agent to put the interest of the client above that of all others, especially that of the agent.
Loyalty
49
While preparing a CMA to help her client decide on an offering price, Isabel finds that the average sales price for closed comparable properties is $4,000 less than the listed price of the home in question. Isabel feels her clients are willing to pay full price for the home. Because she has spent so much time finding her client a suitable property and feels she deserves a little extra commission, she removes the lower priced sales statistics from the CMA and recommends to her client to make a full price offer.
Isabel is in violation of her fiduciary duty of:
Loyalty
50
Which fiduciary duty requires an agent to obey the lawful instructions of a client relating to the transaction?
obedience
51
_____________ is the duty of an agent to obey all lawful instructions of the client relating to the transaction.
Obedience
52
The fiduciary duty of __________ requires the agent to follow the instructions of the client, provided the instruction are legal.
obedience
53
Willow knows from the city planner, a friend of hers, that the road in front of the building Spike is offering to buy may be widened within the next five years, but the project has not yet been formally approved by the city council. Willow withholds information about the street widening from Spike and violates which of her fiduciary duties?
disclosure & loyalty
54
Isabel received a full price offer on Roxie and Franklin's townhouse from cooperating broker Paul. The offer is contingent on the sale and closing of the buyers' existing house. Isabel takes the time to make sure that Roxie and Franklin understand the details of the offer, as well as what it means to accept an offer that is contingent on the sale of the buyer's property.
Isabel's actions are an example of the fiduciary duty of:
care
55
The fiduciary duty of _______ requires the agent to be proactive, competent, act within the bounds of her expertise, and to use her skills and knowledge to the best of her ability for the betterment of her client.
care
56
__________ is telling the client any and all information known relating to the transaction.
disclosure
57
TRUE or FALSE
| Death or incapacity of the agent automatically terminates an agency agreement.
TRUE
58
TRUE or FALSE
| Most agency relationships require a written agreement.
TRUE
59
TRUE or FALSE
| A broker is a subagent of the clients with whom they work.
TRUE
60
TRUE or FALSE
| The same fiduciary duties are owed to a customer as are owed to a client.
FALSE
61
An agency relationship can be __________ by bankruptcy of either the principal or agent, a material change in circumstances, unilateral discharge of the agent by the principal, a change in law that makes the relationship illegal, one of the parties dies or becomes incapacitated, the agreement expires, or the agreement is performed and ended.
terminated
62
Star, the President of Good Coffee Corporation, entered into a buyer agency agreement with her brother-in-law, Buck, to find her a suitable location for her next coffee shop. After 60 days, Buck failed to present Star with any properties, so Star fired Buck.
Star terminated her contract with Buck by:
unilateral discharge.
63
When looking at it from an Oregon real estate law perspective, the agency relationship is between the principal broker and the buyer/seller, with the brokers acting as sub-agents of the agent (principal broker). The death of the ________ _____ would end the agency relationship, but the death of the sub-agent (the broker) would not. The ________ ______ could assign a new sub-agent to represent the buyer/seller.
principal broker
64
A change in _____ terminates agency relationships.
law
65
Fred Sanford listed his junkyard with his friend Bubba Bexly, the principal broker at Watts Area Realtors. Thirty days after taking the listing, Bubba died from a heart attack. Fred's listing agreement is terminated because of
death.
66
Fred, principal broker at Mertz Realty and Property Management, entered into a one-year property management agreement with his friend and client, Ricky Ricardo, for his 96-unit apartment complex. Ricky is upset with Fred's service so to save their friendship they agree to terminate their contract before its expiration date. Ricky and Fred terminated their agency relationship by
mutual agreement.
67
Ethel, a broker for Mertz Realty and Property Management, listed Ricky and Lucy's house and then suffered a heart attack and died one month later. Fred, Ethel's principal broker, must......
handle the listing himself or assign it to another broker in his office.
68
The duty of _________ requires the agent to fully disclose property condition and material facts. This duty also requires the agent to present all offers to the principal regardless of their amount.
disclosure
69
is boasting about a property's benefits and is not considered fraud. Fraud happens when a party relies on and is damaged including for the following reasons:
Misstatement of a material fact
Failure to disclose a material fact
Knowledge that a statement about a material fact is false
Puffing
70
________ _________ is the purposeful misstatement of a material fact.
Intentional misrepresentation
71
________ _________ is the purposeful concealment of a material fact.
Intentional omission
72
________ _________ is an unintended misstatement that an agent should have known.
Negligent misrepresentation
73
________ _________ is an unintended concealment that an agent should have known.
Negligent omission
74
to fully disclose property condition and material facts. This duty also requires the agent to present all offers to the principal regardless of their amount.
The Fiduciary Duty of Disclosure
75
Your buyer looks at two identical houses, but one is offering a $5,000 bonus to the buyer broker who sells the listing. Which is your best course of action?
Tell the buyer that the houses are identical, that one is offering you a $5,000 bonus and let the buyer to decide which house to buy.
76
When must a listing agent disclose his or her agency relationship to prospective tenants or buyers?
Whenever substantive contact is made beyond casual conversation.
Since a listing agreement is a personal service contract, it is not assignable. In particular, a broker cannot assign a listing to another broker.
77
An agent enters into a listing agreement with a homeseller, but then becomes too busy to professionally fulfill the terms of the agreement. To solve the dilemma, the agent assigns the agreement to another licensee in the office. Can the agent assign the listing?
The agent cannot assign the listing agreement
A listing agent must disclose in writing to a buyer or tenant that the agent represents the owner in the transaction. This disclosure must occur before or at the first "substantive contact" with the customer prospect.
78
A buyer agent or tenant representative should disclose their agency relationship to the owner's agent
upon initial contact.
A buyer agent must disclose the agency relationship to the seller or seller's agent on first contact. Substantive contact is assumed to occur immediately in this circumstance.
79
Agent Gerry has executed an exclusive buyer broker agreement with the Andersons. The agent subsequently places an offer with Melinda, the exclusive selling agent for the Lincolns, to buy their lakefront property. The offer contains provisions for the Lincolns to pay the brokerage commission, which the Lincolns agree to. Given this set of circumstances, Gerry owes the full set of fiduciary duties to
the Andersons.
Since Gerry executed an agency agreement with the Andersons, they become the client and the Lincolns the customer, regardless of who pays the commission.
80
When One agent represents both sides in a transaction. What type of agency exists?
Dual agency - means representing both principal parties to a transaction. The agent represents both buyer and seller or tenant and owner.
81
An owner's agent is showing a buyer a residential property for sale. The buyer notices water stains on the foundation walls and floor, and informs the agent. The appropriate course of action for the agent is to
inform the seller.
An agent has the duty to inform the client of all material facts, reports, and rumors that might affect the client's interests in the property transaction.
82
The standard of care and competence that a principal can expect from an agent is generally that which is
comparable to that of other practitioners in the area.
The agent is hired to do a job, and is therefore expected to do it with diligence and reasonable competence. Competence is generally defined as a "standard of practice" equal to the level of real estate marketing skills and knowledge of other practitioners in the area.
83
The essential foundation of the agency relationship consists of
good faith, trust and confidence.
The essence of the agency relationship is trust, confidence, and mutual good faith. The principal trusts the agent to exercise the utmost skill and care in fulfilling the authorized activity, and to promote the principal's best interests. The agent undertakes to strive in good faith to achieve the desired objective, and to fulfill the fiduciary duties.
84
A principal discloses to her agent that she would sell a property for $500,000. During the listing period, the house is listed and marketed for $530,000. No offers come in, and the listing expires. Three weeks later, the agent confides to a customer that the seller would have sold for less than the listed price. Which fiduciary duty has the agent violated?
The agent has violated the duty of confidentiality.
An agent may not disclose any information that would harm the client's interests or bargaining position, or anything else the client wishes to keep secret. The confidentiality standard is one of the duties that extends beyond the termination of the listing: at no time in the future may the agent disclose confidential information.
85
Audrey wants to take a vacation. To do so, she authorizes an agent to conduct the operations of one of her business enterprises. The kind of agency she has established is
General
In a general agency, the principal delegates to the agent ongoing tasks and duties within a particular business or enterprise. Such delegation may include the authority to enter into contracts.
86
A subagent is the agent of
a broker who has an agency relationship with a client.
In a subagency, a broker or licensed salesperson works as the agent of a broker who is the agent of a client. Subagents might include a cooperating licensed broker, that broker's licensed salespeople, and the listing broker's licensed salespeople, all of whom agree to work for the listing broker on behalf of the client.
87
The meaning and salient characteristics of the agency relationship should be disclosed to the client
prior to completing a listing agreement.
An agent who intends to represent a seller or owner must disclose the import of the proposed agency relationship in writing before the listing agreement is executed.
88
Among the fiduciary duties imposed on a real estate agent is the requirement to
present all offers to the principal regardless of their amount.
A conventional listing agreement does not authorize an agent to obligate the client to contracts, and it does not allow the agent to conceal offers to buy, sell, or lease coming from a customer or another agent. Further, since a client relies on a broker's representations, a broker must exercise care not to offer advice outside of his or her field of expertise.
89
When a broker enters into a listing agreement, the broker has agreed to accept which of the following?
Fiduciary and contractual obligations with the client.
A listing agreement establishes an agency relationship between agent and client that commits the agent to the full complement of fiduciary duties to the client in fulfilling the agreement.
90
A property seller empowers an agent to market and sell a property on his behalf. The kind of agency represented is
special.
Under a special agency agreement, the principal delegates authority to conduct a specific activity, after which the agency relationship terminates. In most cases, the special agent may not bind the principal to a contract. Real estate brokerage is commonly based on a special agency.
91
Under a _______ agency agreement, the principal delegates authority to conduct a specific activity, after which the agency relationship terminates. In most cases, the special agent may not bind the principal to a contract. Real estate brokerage is commonly based on a special agency.
special
92
An agent is operating as a disclosed dual agent on a transaction. In this case, the agent must
must not represent one party's interests to the detriment of the other.
A dual agent's first duty is to disclose the agency relationship to both principal parties or to withdraw from one side of the duality. After disclosing, the agent must obtain the written consent of both parties. If both parties accept the dual agency, the agent owes all the fiduciary duties to both parties except full disclosure, undivided loyalty, and exclusive representation of one principal's interests.
93
Agent Michael is showing his new listing to a buyer who informs him that he has just inherited five million dollars. Michael is now bound by fiduciary duty to
disclose the information to the seller.
An agent has the duty to inform the client of all material facts, reports, and rumors that might affect the client's interests in the property transaction. This includes: the agent's opinion of the property's condition; information about the buyer's motivations and financial qualifications; discussions between agent and buyer regarding the possibility of the agent representing the buyer in another transaction.
94
A salesperson, without an oral or written listing agreement, brings potential buyers to the seller. The seller says, "You can bring me buyers if you want, but I'm not paying you a commission." The salesperson then continues to direct buyers to the property. What type of agency might have been created?
An implied agency may have been created, with obligations to perform for both seller and agent.
Clients and agents may also create an implied agency listing based on substantive actions rather than on an express agreement. For example, if a seller allows a broker to undertake certain activities toward effecting a transaction without a specific authorization, but with full knowledge and consent, an implied agency may have been created.
95
Would an agent showing a client's property to a prospective buyer be expected to disclose his agency relationships?
Yes
Agency disclosure must occur upon "substantive contact" between the listing agent and a customer. Examples of substantive contact include: showing the prospect a property; eliciting confidential information from a prospect regarding needs, motivation, or financial qualification; and executing a contractual offer to sell or lease.
96
The degree of authority granted by a residential brokerage listing agreement generally allows the agent to
market, sell and show the property.
Special agency limits the scope of the broker's authority to specific activities, generally those which generate customers and catalyze the transaction. A special agency agreement usually does not authorize a broker to obligate the client to a contract as a principal party. Normally, principals do not delegate the authority to negotiate price to an agent in a residential transaction.
97
A principal instructs an agent to market a property only to families on the west side of the university campus, which is an illegal instruction based on Fair Housing Law. The agent refuses to comply. In this case,has the agent violated the fiduciary duty?
the agent has not violated fiduciary duty.
Since it is illegal to refuse to show buyers the property based on where the buyers live, the agent has not violated fiduciary duty. The duty of obedience only applies to legal activities.
98
One of the agent's fiduciary duties that continues even after a listing agreement expires is
confidentiality
The confidentiality standard is one of the duties that extends beyond the termination of the listing: at no time in the future may the agent disclose confidential information.
99
One of the parties to an agency relationship defaults and the agreement terminates. Is the defaulting party at risk of financial obligations?
Yes
Involuntary termination of the relationship may create legal and financial liability for a party who defaults or cancels. For example, a client may renounce an agreement but then be held liable for the agent's expenses or commission.
100
Does Compensation create an agency relationship?
No
It is important to understand that the agency relationship does not require compensation or any form of consideration. Nor does compensation define an agency relationship: a party other than the principal may compensate the agent.
101
The duties of a transaction broker or facilitator include
disclosing material facts that affect the value of the property to both parties.
In the role of facilitator, the broker's only fiduciary duties and standards of conduct are those of accounting; skill, care, and diligence; honesty and fair dealing; and disclosure to both parties of all material facts in residential sale transactions affecting the property's value. Some states do not allow for this form of relationship in a real estate transaction.
102
Implied agency arises when
a party creates an agency relationship outside of an express agreement.
An agency relationship can arise by implication, intentionally or unintentionally. Implication means that the parties act as if there were an agreement. For example, if an agent promises a buyer to do everything possible to find a property at the lowest possible price, and the buyer accepts the proposition, there may be an implied agency relationship even though there is no specific agreement.
103
Condemnation of a property allows for an agency relationship to be
Involuntarily Terminated
An agency relationship may terminate contrary to the wishes of the parties by reason of: death or incapacity of either party; abandonment by the agent; condemnation or destruction of the property; renunciation; breach; bankruptcy; or revocation of the agent's license.
104
The agency relationship is defined by
the laws of agency, or in some states, by statute.
In every state, a body of law, generally called the law of agency, defines and regulates the legal roles of this relationship. While the relationship is subject to contract law, agency law dictates how the relationship will achieve its purposes, regardless of what the listing contract states.
105
An agent informs a buyer that a provision in a contract is very commonplace. After explaining the clause, the agent assures the buyer that the clause does not mean anything significant. If something goes wrong with the transaction, the agent could be liable for
practicing law without a license.
An agent should not act or speak outside the agent's area of expertise. A customer may rely on anything an agent says, and the agent will be held accountable. For example, an agent represents that a property will appreciate. The buyer interprets this as expert investment advice and buys the property. If the property does not appreciate, the buyer may hold the agent liable.
106
During Spike's listing for Buffy's house, he is contacted by Willow who asks Spike to show her the house. Spike politely explains to Willow how Oregon agency law works and that he is representing only Buffy. What type of agent is Spike?
Spike is a single agent.
A single agent represents only one party to the transaction.
107
TRUE or FALSE
A dual agent's first duty is to disclose the agency relationship to both principal parties or to withdraw from one side of the duality. After disclosing, the agent must obtain the written consent of both parties. If both parties accept the dual agency, the agent owes all the fiduciary duties to both parties except full disclosure, undivided loyalty, and exclusive representation of one principal's interests.
True
Undisclosed dual agency is illegal. A dual agent's first duty is to either disclose the agency relationship to both principal parties and obtain their written consent to represent both parties or to withdraw from representing one of the parties.
108
TRUE or FALSE
A seller who agrees in the listing agreement to pay a percentage of the sale price of his property as commission to the licensees involved in the transaction has automatically created an agency relationship with both the listing agent and the selling agent.
False
Payment or the promise of payment of a real estate commission or other fee does not by itself create an agency relationship. While the listing itself will create an agency relationship between the listing agent and the seller, the payment of commission by the seller to the selling agent (buyer's agent) does not create an agency relationship between the seller and the selling agent.
109
An agent who agrees to work without compensation is called
a gratuitous agent.
110
The ________ is the individual who represents the principal in dealings with third parties (not a principal). The type of agency that is created is classified by the level of authority given to the agent. There are three types of agents:
1. _________
2. _________
3. _________
agent
universal
general
special
111
hint: same word all 4 blanks...
The __________ agent represents a principal in all matters that can be delegated by a principal to an agent. This delegation is broad and includes the authority to enter into contracts and sign other legal documents on behalf of the principal. A power of attorney or court order gives the authority to act as a _________ agent. Typically, real estate licensees are not given ___________ agency authority but sometimes work with the _________ agent of a buyer or seller.
Universal
112
The ________ agent represents a principal in a particular business or specified range of ongoing business matters. The general agent can enter into binding contracts while operating within the scope of the authority given in the agency agreement. A general power of attorney is one way to create this type of agency relationship.
general
113
The _________ agent can represent the principal in all business matters and can contract on behalf of the principal.
General
114
The ________ agent can represent the principal in all matters that can be delegated (that the principal can legally entrust to another person).
universal
115
The ________ agent can represent the principal in one business transaction, cannot normally contract for the principal, and is the type of agency that characterizes the real estate brokerage business.
special
116
The _______ agent is the most common type of agency relationship in real estate brokerage.
special
117
The _______ agent has limited and specific authority, usually to represent a principal in a single transaction. The principal retains most rights and responsibilities and authorizes the agent to perform limited and specific tasks, such as finding a buyer for a property and negotiating the purchase. Final authority to enter into any contract remains with the principal.
Special
118
The sub-agent (the broker) receives authority from the ______ (the buyer or seller client), but only through the agent (the principal broker).
principal
119
Under Oregon law, a listing contract or buyer broker contract must be between the ______ ____ and the ______, not between the broker and client. As a result, the broker becomes a sub-agent of the principal broker's client.
principal broker
| client
120
When a broker is hired to find a property for a buyer, the buyer is the client and the seller is the ______ party.
third
121
When the broker is hired to sell a property, the seller is the client and the buyer is the _____ party.
third
122
The distinction between a third party relationship and a customer relationship comes down to ___________ ___________.
Representation Responsibility
123
A customer is not represented by an agent, but the agent owes to each customer ______ and fair dealing, ________ _____ and skill and proper ________.
honesty
reasonable care
disclosure
124
The agent does NOT represent the ______. The agent DOES represent a _______.
customer
| client
125
Under the law of agency, agency relationships may be created by ______ or ______ agreements.
express
| implied
126
What are the four most common examples of express agency agreements used in the real estate business?
- Listing agreement
- Purchase and Sale Agreement
- Property management agreement
- Right to lease property agreement
127
Agency relationships are defined by how they get created. These different types of agency relationships are:
```
Express agency
Implied agency
Agency by ratification
Agency by estoppel
Agency by necessity
```
128
The statute of frauds requires all but the _____ _____ agreement to be written.
buyer broker
129
The express mutual consent of the principal and agent creates an ______ _______.
express agency
130
True or False
| An express agreement can be by written or spoken words
True
131
True or False
Because all matters dealing with real estate need to be written, most agency agreements with real estate licensees must be written
True
132
Actions or conduct that create an implied agency can also create an _______ agency. For this reason, the agent must be cautious about creating an implied agency.
accidental
133
True or False
When more than one agency relationship exists with the same agent during the same transaction, whether it's intentional or not, express or implied, it creates a conflict of interest for the agent. A conflict of interest prevents the agent from representing the best interests of the collective clients.
True
134
The most common agency relationship that a licensee has with the principal is as a ______ ______
Special Agent
Most real estate licensees are special agents with their clients. The special agent has limited and specific authority, usually to represent a principal for just a single transaction. The principal retains most rights and responsibilities, while the special agent is authorized to perform limited and specific tasks. Final authority to enter into any contract remains with the principal.
135
Using client funds for personal use is known as
| _________
conversion
136
A standard listing contract authorizes the principal broker to.....
Among other things, the standard listing contract authorizes the principal broker to find a buyer for the house.
