Real Estate Guide Unit 10 Flashcards

Real Estate Guide Unit 10 Flashcards The seller's agent has certain duties to the client-principal.

All of these are duties of the principal EXCEPT:A)

Cooperating with the agentB) Dealing with the agent in good faithC) Compensating the agentD) Suggesting marketing strategies to the agent Suggesting marketing strategies to the agent PrincipalA main party to a transaction. The person for who the agent works.

Express or Implied Agency:A buyer asks to see other

homes at an open house Implied

T/F: In a dual agency relationship, the agent represents two

principals in the same transaction.

TRUE When a broker places trust funds of others into the company's operating account and then withdraws funds for the firm's use, what illegal practice has taken place?A) Asset-liability managementB) EscrowingC) ConversionD) DBA accounting Conversion

T/F: The source of compensation is the key to determining

factor in whether an agency relationship exists.

FALSE Errors and Omissions (E&O) InsuranceType of insurance that covers liability for mistakes and negligence in the usual activities of a real estate office.

T/F: A universal agent is a person empowered to do

anything the principal could do personally.

TRUE Buyer representation agreementA principal-agent relationship in which the real estate professional acts on behalf of the buyer, usually as an agent, with fiduciary responsibilities to the buyer.AgencyThe relationship between a principal and an agent wherein the agent is authorized to represent the principal in certain transactions.Dual agencyRepresenting both parties to a transaction. This is unethical unless both parties agree to it, and it is illegal in many states Special agentOne who is authorized by a principal to perform a single act or transaction; a real estate broker is usually a special agent authorized to find a ready, willing, and able buyer for a particular property.DisclosureIt is the agent's duty to keep the principal informed of all fact or information that might affect a transaction.

T/F: The fiduciary is the individual who hires and delegates

to the agent the responsibility of representing the fiduciary's other interests.

FALSE

Clientthe principal in a real estate transaction for whom a real estate broker acts as agent.Single agencyAn office policy that allows the broker to only represent one party to the transaction. The broker may represent the buyer or seller, but not both in the same transaction.

T/F: The real estate professional's duty to a third party

(customer) includes disclosure of all facts that the real estate professional knows or should reasonably be expected to know that materially affect the value or desirability of the property.

TRUE

T/F: In traditional common law, the relationship in which the

agent is held in a position of special trust and confidence by the principal is one of a fiduciary.

TRUE AccountingThe agent must be able to report the status of all funds received from or on behalf of the principal.AgentOne who acts or has the power to act on behalf of another.A fiduciary relationship is created under the law of agency when a property owner, as the principal, executes a listing agreement or management contract authorizing a licensed real estate broker to be his or her agent.

T/F: Examples of nonagents are facilitators, transactional

brokers, transactional coordinators, and contact brokers.

TRUE The requirement that brokers promptly deposit funds entrusted to the broker into an escrow account is an example of how brokers fulfill the fiduciary duty of ____.Accounting Which of these statements could be negligent misrepresentation?A) "The uneven floors just mean that the building dates to colonial times."B) "The simple design is uncluttered and can give you many possibilities for decor."C) "the size of the bedrooms makes them wonderfully cozy and perfect for your children."D) "I think these low doorways are a charming part of the Cape Code Style." "The uneven floors just mean that the building dates to colonial times."

T/F: A dual agency relationship is legal if either the buyer or

the seller consents to the dual representation.

FALSE What is a seller's agent required to disclose to prospective buyers about material defects in the property?A) All information about material defects that the agent knows or should know.B) Only information about material defects that the agent has personally observed.C) Only information about material defects the seller has provided the agent.D) Both information the seller has provided the agent, and material defects that the agent has personally observed.All information about material defects that the agent knows or should know

Express or Implied Agency:A broker shows homes and

makes an offer for the buyer Implied

T/F: An agent works with a client and for the customer.FALSE

Even when a property is sold as-is or with a seller ____, agents should still disclose known problems with the property if they could affect the health and well-being of the occupants.Disclaimer Common lawThe rules established by tradition and court decisions A person who is designated by the principal in a broad range of matters related to a particular transaction of

activity is a:A) General agentB) Designated agentC)

Special agentD) Facilitator General agent

T/F: Exaggeration of a property's benefits is called puffing

and is illegal.

FALSE Listing agreementA contract between an owner (as Principal) and a real estate broker (as agent) by which the broker is employed as agent to find a buyer for the owner's real estate on the owner's terms, for which service the owner agrees to pay a commission Implied agencyIf the actions of the parties imply that they have mutually consented to an agency relationship, an implied agency relationship is formed.An agent representing the seller has a duty to disclose to

the principal all of these EXCEPT:A) The buyer's financial

ability to offer a higher price.B) The agent's advertising budgetC) The offers that are ridiculously lowD) The buyer's intention to resell the property for a profit The agent's advertising budget PuffingExaggerated or superlative comments or opinions A key element of an agent's fiduciary responsibility of

loyalty is to:A) Reveal relevant information of material

factsB) Report the status of all funds received from or on behalf of the principalC) Avoid conflicts of interestD) Obey the principal's instructions in accordance with the contract Avoid conflicts of interest General agentOne who is authorized by a principal to represent the principal in a specific range of matters.The agent's obligation to use skill and expertise on behalf of the principal arises under which of these common-law duties?A) LoyaltyB) CareC) ObedienceD) Disclosure Care Transaction brokerHelps both the buyer and the seller with paperwork and formalities in transferring ownership of real property, but who is not an agent of either party.A seller tells his agent in confidence that he must sell fast and may accept less that the list price. The agent tells a buyer the seller with accept up to $5,000 less than the list price. Which is TRUE?A) Disclosure was improper, and possibly illegal, regardless of the agent's motive.B) The agent should have disclosed this information, regardless of

its accuracy.C) The relationship between the agent and the seller ends automatically if the purchaser submits and offer.D) The agent has not violated any agency responsibilities to the seller.Disclosure was improper and possibly illegal, regardless of the agent's motive.

T/F: When a property has a hidden structural defect that

could not be discovered by ordinary inspection, it is called a stigmatized property.

FALSE