Chapter 2.2 - Agency Relationship

Special Agent

John, a real estate salesperson, has entered into an agency agreement with a client whose scope is limited to that described in the agreement. This level of authority suggests that John is what type of agent...?

Informed consent of the client

John, a real estate salesperson, was referred a client from another agent. After successfully closing on the deal, John would like to offer a referral fee to the agent who referred the client. What must John obtain first before offering a referral fee...?

1978

A Lead Paint Disclosure Form is required for all properties built prior to what year...?

Disclosure

According to this fiduciary duty, an agent must present all offers to the client...?

Dual Agency

Both the seller and the buyer must give their consent in writing for the creation of what...?

Ely is the Agent, Justin is the Principal, and James is the Customer

Ely is a real estate broker who has entered into an agency relationship with Justin, a property owner looking to sell his house. Ely brings James, a prospective buyer, to Justin with an offer to purchase Justin's house. Which of the following statements is correct...?

Independent Contractors

In New York State, all real estate agents are considered...?

Single Agency Relationship

Represent buyer or seller. Not both. Primary obligation is to your client. Best interest of your client in mind.

Confidentiality

Susan and Mark are in the process of getting a divorce and need to sell their house quickly. They have hired a real estate broker to help facilitate the transaction. According to which fiduciary duty must the information regarding the divorce not be disclosed...?

Disclosure of Information

The salesperson must communicate with the client and present all offers.

Implied Agency

This is a form of agency that occurs when the words and actions of the parties indicate that there is an agency relationship...?

Being negligent with the client's money

What is a common breach of the fiduciary duty of accountability...?

6 Months

What is the typical length of term for an Exclusive Right to Sell agreement...?

Broker

Whose job is it to act as a middleman in a transaction...?

Tenant's Agent

A licensed real estate agent who acts on behalf of a tenant in a commercial property transaction is known as a...?

Open Listing

A listing given to any number of brokers without liability to compensate any broker, except the one who first secures a buyer ready, willing and able to meet the terms of the listing, is known as a/an...?

Accountability

A mortgage broker offers to give you a referral fee if you refer your buyer to them to obtain a mortgage. This fiduciary duty requires that you disclose the referral fee to the buyer as there can be no hidden profits in the deal.

Cooperating Agent

A selling agent or participating agent is referred to as the...?

Assist in locating available property

According to the Buyer's Agency Agreement, which of the following is the broker's obligation to his/her client...?

John's client

John, a real estate broker representing the owner, listed his client's property on the MLS. Any buyer's agent will be a sub-agent to whom...?

Accountability

The salesperson must safeguard any money or property held on behalf of the client.

Loyalty

The salesperson must work in the best interest of the client.

Obedience

Your client demands that you list her property below market value as she wants to sell the property quickly. Although you can earn a higher commission if the property were sold at market value, this fiduciary duty requires you to follow through with your client's listing price.

Special Agent

A general agent is typically granted more power than what other type of agent...?

Confidentiality

An agent has become aware of information that may affect the value of his client's property. If the agent reveals this information to a prospective buyer, he will be in breach of which fiduciary duty...?

Sales

As a real estate agent working as an independent contractor, compensation is directly related to what...?

Loyalty

Ben, a real estate agent, represents several buyers. In an attempt to increase his commission, he decides to have his clients bid against the same property without their knowledge or consent. Which fiduciary duty has Ben breached...?

Ben, the listing broker

Ben, a real estate broker, entered into an Exclusive Right to Sell agreement with his client. Ben introduced a buyer to the seller who eventually bought the property, however, the client decided to terminate the agreement with Ben prior to the closing. Who is entitled to the commission...?

Lisa is the Agent, Robert is the Principal, and Andrew is the Customer

Lisa is a real estate broker who has entered into an agency relationship with Robert, a landlord looking to lease one of his apartments. Lisa brings Andrew, a prospective tenant, to Robert with an offer to rent Robert's apartment. Which of the following statements is correct...?

Principal

The one by whom a broker is employed is known as a...?

Obedience

The salesperson must act in accordance to the client's demands and instructions.

Reasonable Care

The salesperson must be competent and not act in a negligent manner.

NYS Disclosure Form

This document describes the roles and duties of a dual agent...?

Group Boycotting

Town Realty and City Realty created an alliance in an attempt to prevent another brokerage firm from competing in the marketplace. What may Town Realty and City Realty be guilty of...?

Seller

When a buyer's broker agrees to the cooperative arrangement of the MLS, he/she becomes a sub-agent to whom...?

Designated Sales Agent

When an agent is appointed to act on behalf of the seller in a dual agency arrangement, they are referred to as a...?

Reasonable Care

Your expertise as a salesperson lies in residential rentals. According to this fiduciary duty, you may have to pass on a deal if a client comes to you looking to lease a new 50,000 sq.ft. office space.

Special Agent

An agent with limited authority to act on behalf of the principal, such as created by a listing agreement, is known as a...?

Special Agent

A real estate salesperson is typically what type of agent...?

Undisclosed Dual Agency

A relationship in which the real estate agent is found to be the agent of both the buyer and seller in a transaction, but without the knowledge and informed consent of both parties, is known as...?

Vicarious Liability

A situation in which one party is held partly responsible for the unlawful actions of a third party is known as...?

General Agent

An agent with the full authority over one property of the principal, such as a property manager, is considered a...?

The Buyer

Abby, a real estate broker, has entered into an agreement to sell John's house. Who will be the customer in the transaction...?

The broker

According to Section 442-C of the NYS Real Property Law, who may be held liable for a salesperson's actions...?

Obedience

According to an agent's fiduciary duties, the agent must act in accordance to his/her client's demands and instructions. Which of the following fiduciary duties best reflects this...?

Reasonable Care

According to an agent's fiduciary duties, the agent must be competent and not act in a negligent manner. Which of the following fiduciary duties best reflects this...?

Refuse to pay a commission to the listing broker

According to the 'In-house Sales' clause in an Exclusive Right to Sell agreement, a seller cannot do which of the following if the listing broker also finds a buyer...?

Indemnification

According to this concept, the principal must act to defend the agent in the event the agent is sued while acting on behalf of the principal...?

NYS Disclosure Form

According to this document, a seller's agent owes his/her client the following six fiduciary duties; reasonable care, undivided loyalty, confidentiality, full disclosure, obedience, and duty to account...?

Loyalty

According to which fiduciary duty is an agent prohibited from forcing on his or her client a sale, lease or opportunity to buy...?

Loyalty

According to which fiduciary duty is an agent prohibited from not showing a lower offer to the seller in an effort to obtain a higher commission...?

Sub-agent

An agent of a broker who is already acting as an agent of a principal is known as a...?

Seller's Agent

An agent who represents the seller of real property is referred to as the...?

Reasonable Care

Andrew is a real estate agent specializing in condo sales. However, he tries to facilitate the sale of a commercial office building, only to find that he is not familiar with commercial leases. Under which fiduciary duty can he be sued for negligence, if a party in the transaction loses money...?

Designated Sales Agent

Appointing one or more individual agents in a firm to represent only the interests of the seller, and one or more different individual agents in the firm to represent only the interests of the buyer, when a firm has an "in-house" dual agency situation, is known as...?

Inform the client that the buyer is capable of paying more

As part of an agent's fiduciary duties to his/her client, if a prospective buyer tells the seller's agent that he is capable of paying more than the asking price, what should the seller's agent do...?

Fair Housing clause

As stated in the Exclusive Right to Sell Agreement, this clause dictates that an owner cannot discriminate against any potential buyers...?

Tie-in Arrangement

Chris, a real estate broker representing a buyer, insists that his client use his home inspector during the due diligence phase, otherwise, he will only show the client a limited number of properties. What has Chris introduced to his client...?

At the closing of the transaction

David is a real estate broker who represents the seller in a transaction. When do David's fiduciary duties to his client terminate...?

Disclosure Form

Emily is a real estate agent representing the seller in a transaction. Her colleague, Mark, works for the same broker and represents a prospective buyer. What should Emily and Mark have their clients review and sign-off on before entering into a dual agency relationship...?

Taxes are paid in arrears

How does a salesperson pay taxes on commissions earned...?

Fiduciary duties to their client

If a broker engages in anti-trust actions or agreements, what will they most likely be in breach of...?

Implied Agency

If a property owner seeking to sell his house knows that an agent is showing his house to prospective buyers, but does not have an agency agreement with the agent, what type of agency relationship may arise...?

Fiduciary responsibilities

In a dual agency arrangement, the buyer's broker also owes what to the seller....?

The Customer

In addition to the principal, the agent also owes fiduciary duties to which of the following...?

The Disclosure Form

Jason is a real estate agent who is seeking to rent an apartment on behalf of his client. Jason's colleague, David, works for the same broker and has a client who is interested in renting the apartment. What document should Jason and David have their clients review and sign-off on prior to entering a dual agency relationship...?

Listing Agreement

John is a real estate broker and wants to enter into an agency relationship with Steve, a property owner. What document must John and Steve execute in order to enter into an agency relationship...?

AAll of the above BObedience CLoyalty DReasonable Care

John is a real estate salesperson for City Realty, a local brokerage company. John has been hired by Josh, a homeowner seeking to sell his house. As a sub-agent to the transaction, which of the following fiduciary duties applies to John...?

Only the buyer

John is an agent who has been designated to represent the buyer in a dual agency arrangement. Who does John owe a fiduciary duty to...?

Full disclosure of the referral fee

John, a real estate broker, is referring his client to David, a mortgage broker, as a means to help his client obtain financing on a property. In return, David is offering to give John a referral fee. Before John can accept the referral fee, what must be provided to the client...?

Justin's sponsoring broker

Justin, a real estate salesperson with City Brokerage, recently met a client who is looking to purchase a condo in Manhattan. Since Justin specializes in Brooklyn rentals, he decides to refer the client to a colleague of his at City Brokerage and instead receive a referral fee. If Justin's client closes a deal with the other salesperson, who ultimately pays Justin his referral fee...?

Group Boycotting

Marcus is a real estate broker representing a seller. Jason, a buyer's broker, is attempting to do a deal with Marcus that would prevent other broker's from showing their clients Marcus' client's property. In this scenario, what may Jason and Marcus be liable of if they act on this agreement...?

Flat fee

Mark is a real estate agent who has entered into an agency relationship with David, a homeowner, to sell David's house. They agreed to set Mark's commission at 6% of the sales price. How else may the commission be calculated...?

Accountability

Mark is a real estate broker who represents a buyer in a transaction. He recommended a mortgage broker to help his client obtain financing for a property. What the client doesn't know is that Mark will receive a referral fee from the mortgage broker if the client obtains a mortgage from the mortgage broker. This is a breach of which fiduciary duty...?

Estoppel

Michael, a property owner, allowed Andrew, a real estate broker, to show his house to prospective buyers. However, Michael and Andrew do not have a signed agency agreement and instead operated under an implied agency. According to this doctrine, Michael cannot claim that an agency relationship did not exist...?

Disclosure

Needs be signed by client at first substantive meeting. If they don't, need to document why and when they didn't. Represent Both Parties? New form, Dual Agent.

Agent

One who undertakes to transact some business or to manage some affair for another by authority of the latter is known as a...?

The broker

Philip is a real estate salesperson who represents a seller in a transaction. However, Philip violated several of his fiduciary duties to the client. According to the concept of vicarious liability, who can be held liable for Philip's actions...?

The price agreed upon in the contract between the seller and seller's agent

The Listing Price is also referred to as what...?

Sub-agent

The broker, as a franchisee of a national brokerage, is considered what to the national brokerage...?

Self Dealing

The conduct of a trustee, an attorney, a corporate officer, or other fiduciary that consists of taking advantage of his position in a transaction and acting for his own interests rather than for the interests of his clients is known as...?

Undivided Loyalty

The fiduciary duty that prohibits the agent from advancing any interests adverse to the principal's interest, or conducting the principal's business in such a way as to benefit a customer is known as...?

Informed consent by all parties

What should be provided before a dual agency relationship occurs...?

Single Agent

When an agent represents either the buyer or the seller, but NOT both in a transaction, the agent is considered what...?

Confidentiality

Which of the following fiduciary duties is conversely related to the duty of Disclosure...?

Disclosure Form

Which of the following forms is used to inform the parties to a transaction about the risks of dual agency...?

Cooperate with the agent

Which of the following is a primary duty of the principal to the agent...?

Owner

Which of the following is considered a principal in an agency relationship...?

Have the buyer obtain a pre-approval letter from a lender

Which of the following should an agent recommend to their client as a means to verify the financial capabilities of the client...?

Confidentiality

Your client is going through a divorce and must quickly sell their house. This fiduciary duty requires that this information remain private, as it may affect a buyer's offer price.

David is never permitted to share this information

While working as a landlord's broker in a transaction, David learned from the landlord in confidence that he is looking to sell his building in the next 6-12 months. When is David permitted to share this information with his colleagues...?

Client

Who can benefit from confidential information in a transaction...?

The buyer or seller

Who is required to sign the NYS Agency Disclosure Form...?

Loyalty

You have a client who is looking for a 2 bedroom rental apartment in a desirable neighborhood. You find an apartment that matches your client's criteria but the apartment is listed well below market value. Although you personally may want the apartment for yourself, this fiduciary duty requires that you present the apartment to your client first.