Unit 4

Question 1

Real Estate Agency

Answer 1

special relationship between broker and parties involved in transaction, governed by statutory law Art 15 of Real Estate Act of 2000

Question 2

Agents and Clients

Answer 2

Agents - hired

Clients - those who hire

Question 3

General Agency

Answer 3

relationship between broker and sponsoring broker

Question 4

Agent

Answer 4

Individual authorized to represent interest of another person; principal hires the agent

Question 5

Agency

Answer 5

Relationship in which consumer has given consent (implied or express) to licensee to represent them in real estate transaction

Question 6

Brokerage Agreement

Answer 6

Agreement to provide brokerage services and receive compensation for those services

Question 7

Client

Answer 7

person or entity licensee represents

Question 8

Compensation

Answer 8

Payment for executing services

Question 9

Consumer

Answer 9

a person for whom an agent provides services

Question 10

Confidential info

Answer 10

info that can’t be shared without client authorization; must be shared by law or revealed by another person

Question 11

Customer

Answer 11

person for whom services provided but not represented in agency relationship - NO advice or counsel given

Question 12

E & O Insurance

Answer 12

Errors and omissions insurance purchased by sponsoring broker

Question 13

IL Residential Real Property Disclosure

Answer 13

Required for seller to complete in 1-4 unit buildings

Question 14

Accounting

Answer 14

Licensees must provide copies of signed sales contracts and documents within 24 hours; funds must be accounted for and specifically handled

Question 15

Confidentialtity

Answer 15

Key element in fiduciary duties; can’t disclosure anything that would harm principal’s bargaining power

Question 16

Puffing

Answer 16

exaggerating of property’s benefits –legal

Opinion vs Fact - can’t misrepresent material defects or omit facts - this can lead to liability for the licensee

Question 17

Latent Defects

Answer 17

Structural defect usually not uncovered in ordinary inspection; seller and broker has duty to disclose if they have direct knowledge; may be liable for not disclosing

Question 18

Buyer Action re: substantial defects/Latent defects

Answer 18

Statute of limitations is 1 year

Question 19

Stigmitized Properties

Answer 19

property society has branded as undesirable because of events that happened there; always consult an attorney with these issues; *courts have ruled you don’t have to disclose HIV or AIDS from previous owner/tenant

Question 20

Article 15 Disclosure Claims - claims for stigmatized properties

Answer 20

2 year statute of limitations

Question 21

Megan’s Law

Answer 21

law requiring sex offender info available to public by law enforcement. Seller agent not required to disclose neighboring offenders; not to be disclosed by agent - just refer to police or online database

Question 22

Express Agency

Answer 22

principal and agent enter into contract; written or oral

Question 23

Implied Agency

Answer 23

agency created by implied agreement; agency exists because of actions of the parties (show property, haven’t signed anything but actions show agency)

Question 24

Compensation

Answer 24

Source of compensation does not determine agency; in Illinois buyer agent gets paid by seller agency

Question 25

Gratuitous agency

Answer 25

agency with no fee involved

Question 26

**Termination of Agency

Answer 26

- death/incapacity of either property - destruction of property - expiration - mutual agreement - breach - operation of law - completion

Question 27

Termination of Brokerage Agreement

Answer 27

Brokerage agreement must have definite termination date. NO auto extension clauses in Illinois

Question 28

Agency coupled with interest

Answer 28

agent has an interest in subject of agency. CANNOT be revoked by principal or terminated on principal's death

Question 29

Universal agent

Answer 29

need power of attorney; empowered to do anything on behalf of principal

Question 30

general agent

Answer 30

represents principal in broad range of matters related to specific transaction or ex. Property Manager; **broker and managing broker acting as general agent for sponsoring broker

Question 31

Special agent

Answer 31

one specific act or business transaction. Licensee usually special agent to client. Hired to represent them in one specific act

Question 32

Designated Agent

Answer 32

person authorized by sponsoring broker to act as agent of principal; brokerage may assign an agent to a principal.

Question 33

Dual Agent

Answer 33

Represents both buyer and seller in transaction; legal in Illinois law as long as both informed and consent. Can't act as dual agent when their property is involved;

Question 34

**Fiduciary Duties of Agents (6) COLDAC

Answer 34

- Care - Obedience - act in good faith and obey instructions unless the instructions are illegal - Loyalty - they cannot act in own best interests; principal is first priority - Disclosure - principal must receive all information, offers, counteroffers, information about the property - Accounting - funds must be accounted for and follow specific protocols related to those funds; signed contract to all parties within 24 hours; funds deposited in specific escrow account (no comingling) within next business day - Confidentiality- agent must recognize and cannot disclosure to other parties

Question 35

Ministerial Acts

Answer 35

admin acts; performed for consumer and do not rise to the level of representation; don't have to be licensed to provide this information; set up appointment, set up open house; referring a client to another office. Do not need to be licensed to perform these acts