Real Estate Agency

Question 1

Common Law

Answer 1

rules established by tradition and court decisions

Question 2

Statutory Law

Answer 2

laws enacted by the legislature

Question 3

Administrative Law

Answer 3

rules and regulations created by real estate commissions and departments, as authorized by the legislature

Question 4

Caveat Emptor

Answer 4

“let the buyer beware”

Question 5

Agent

Answer 5

the individual who is authorized and consents to represent the interests of another person in dealings with a third person

Question 6

Principal

Answer 6

individual who hires the agent and delegates to that agent the responsibility of representing the principal’s interests

Question 7

Agency

Answer 7

the fiduciary relationship in which the agent is held in a position of special trust and confidence by the principal

Question 8

Client

Answer 8

the principal in a real estate transaction for whom a real estate broker acts as agent; also used when a broker represents someone in a relationship other than an agency

Question 9

Customer

Answer 9

third party or nonrepresented consumer who is not a principal but for whom some level of service may be provided and who is entitled to fiarness and honesty

Question 10

Nonagent

Answer 10

(facilitator, intermediary, transactional broker, etc) someone who works with a buyer and a seller assisting one or both parties with the transaction without representing either party’s interests

Question 11

Express Agreement

Answer 11

the parties formally express their intention to establish an agency and state its terms and conditions; can be oral or written unless required by law

Question 12

Listing Agreement

Answer 12

(seller representation agreement) a written employment contract that establishes an agency relationship between a real estate seller and a broker

Question 13

Buyer Representation Agreement

Answer 13

express agency relationship between a buyer and a broker

Question 14

Implied Agreement

Answer 14

when the parties act as though they have mutually consented to an agency, even if they have not entered into a formal agency agreement; can be created unintentionally, accidentally or inadvertently

Question 15

Gratuitous Agency

Answer 15

agency that exists even if no fee is involved

Question 16

Fiduciary Relationship

Answer 16

a relationship of trust and confidence where the broker owes the principal certain duties

Question 17

Duties of Agency (COLD-AC)

Answer 17

care, obedience, loyalty, disclosure, accounting and confidentiality

Question 18

Universal Agent

Answer 18

a person empowered to do anything the principal could do personally

Question 19

General Agent

Answer 19

may represent the principal in a broad range of matters related to a particular business or activity

Question 20

Special Agent

Answer 20

(limited agent) authorized to represent the principal in one specific act or business transaction only

Question 21

Single Agency

Answer 21

the agent represents only one party to a transaction

Question 22

Dual Agency

Answer 22

the agent represents two principals in the same transaction

Question 23

Designated Agency

Answer 23

(assigned or appointed agency) accomodates an in-house sale in which two sales associates of the same broker are involved

Question 24

Nonagent / Transaction Broker

Answer 24

not an agent of either party; helps both the buyer and the seller with the necessary paperwork and formalities involved in transferring ownership of real property

Question 25

Termination of Agency

Answer 25

completion, death or incapacity, destruction or condemnation of property, expiration of terms, mutual agreement, breach, bankruptcy

Question 26

Puffing

Answer 26

exaggeration of a property's benefits

Question 27

Fraud

Answer 27

the intentional misrepresentation of a material fact in such a way as to harm or take advantage of another person

Question 28

Negligent Misrepresentation

Answer 28

when the real estate professional should have known that a statement about material fact was false; lack of awareness of an issue is no excuse

Question 29

Culpable

Answer 29

subject to liability

Question 30

Latent Defect

Answer 30

a hidden structural defect that would not be discovered by ordinary inspection

Question 31

Stigmatized Properties

Answer 31

those that society has found undesirable because of events that occurred there or because of proximity of the property to a known nuisance

Question 32

Megan's Law

Answer 32

promotes the establishment of state registration system to maintain residential information on every person who kidnaps children, commits sexual crimes against children or commits sexually violent crimes