Chapter 7 - Quiz - Part 1

Who has a duty of loyalty, and to whom is it owed?

An agent owes a duty of loyalty to the principal.

What is a special agent when referring to the real estate industry?

An agent who is granted limited authority on behalf of the principal. Almost all real estate agents are acting as special agents.

What type of authority does the agent have when the principal gives him or her specific instructions?

Express authority.

Which of the following circumstances ends the agency relationship?

Full performance of the contract.

Which statement is true about universal agents?

Having power of attorney is one type of universal agent.

Lionel is a real estate broker who signs a listing agreement with Rachel to sell her house. The listing agreement contains the marketing plan, the listing price, the listing expiration, and the commission as well as other pertinent information. Before showing any prospective buyers the house, he always gives the customer a consumer notice that states that he represents the seller of the house as the principal, and does not represent the customers. Which two things are true about Lionel's agency relationship with Rachel?

He is a special agent and a single agent.

What must an agent NOT use to gain an unfair advantage?

His or her former position of confidence.

Under which of the following circumstances would the agent's fiduciary duties extend beyond the termination of the agency relationship?

If the agent is holding money for the principal.

Which statement is true about dual agency?

It must always be disclosed to the competing principals.

The principal terminates the agency relationship but does not tell any third parties that the relationship has been terminated. What kind of authority exists?

Lingering apparent authority.(Lingering apparent authority can be created if the principal fails to notify third parties that the agency agreement has been terminated.)

Which of the following circumstances ends the agency relationship?

One party breaches the contract.

Which of the following is an example of a fiduciary relationship?

The executor of a will to the will's beneficiaries.(Some examples of fiduciary relationships include a stockbroker to his client, a business partner to the other partners, the executor of a will to the will's beneficiaries, and an accountant to his client.)

Who is the agent if the consumer signs with an independent broker

The independent broker.

What consists of legal principals that regulate the principal-agent relationship.

The law of agency.

How must a licensed real estate broker do his or her job?

With reasonable care and diligence.

How does agency law require an agent to perform his or her duties?

With skill, care, and diligence.

What should you do if the consumer refuses to sign the flap of the brochure?

Write "refused to sign" and try to get the consumer to initial it.

What if the buyer doesn't want to enter into a buyer's agency agreement?

You must work as a subagent of the seller.

Which statement is true about a general agent?

A property manager is a type of general agent.

Who is the principal in a buyer agency contract?

The buyer.

When must the seller's agent disclose an offer on the property?

The seller's agent must disclose all offers on the property.

What is exclusive seller agency?

A broker works as a seller's agent only.

What is the difference between a consumer hiring a sole practitioner broker or a real estate firm?

A consumer hiring a sole practitioner broker has an agency relationship with the agent and a consumer hiring a real estate firm has an agency relationship with the firm.

What is a "fiduciary"?

A person in a trusted position who is required to put the other person's interests before his or her own interests.

What is a special agent?

An agent who is only authorized to perform specific acts.

What must an agent disclose to the principal?

Any facts that might influence his or her decisions.

What must the agent keep confidential under the duty of confidentiality?

Any information about the principal that could weaken the deal.

What type of authority does not give actual authority?

Apparent authority.

Bailey is a real estate salesperson working with Lenore who wants to buy a home, and who has signed a buyer's agreement with Bailey's office. Bailey shows Lenore a house which her office has the exclusive listing on, but it will expire in less than a week. Lenore says it's not exactly what she's looking for, but maybe she should just put an offer on it. Bailey saw a new listing on MLS that morning that sounds like it is exactly what Lenore was looking for. Which is true?

Bailey should tell Lenore about the new listing.

Which of the following can dissolve an agency relationship?

Bankruptcy.

Which of the following is an example of a universal agent?

Power of attorney

What is it called when an agent puts his or her own interests ahead of the principal's interests?

Self-dealing.

What is implied authority based on?

Standard practices and customs.

Sydney's brother Lawrence is a real estate salesperson in a prestigious brokerage that is a member of several active MLS services. Sydney wants to sell her condo, and she wants to negotiate a listing agreement with her brother that will allow him to make 100% of the commission. Which statement is true?

Sydney should negotiate a listing agreement with Lawrence's sponsoring broker. It's very unlikely she'll be able to get 100% for Lawrence, but she may be able to negotiate a listing agreement that gives Lawrence a significant split of any commission as a subagent.

What happens if one or both parties die?

The agency relationship is dissolved.

Which statement most accurately describes the role of a subagent?

The agent authorizes the subagent to represent the interests of the principal.

An agent says he will have a cleaning service clean the property when the principal is not present, and there is nothing in his contract giving him that authority. What kind of authority does he have

The agent has no authority.

What happens if a buyer does not want a buyer's agent?

The agent must represent the seller while showing properties to the buyer

What type of agency relationship exists if the cooperating broker is not a buyer's agent?

The cooperating broker is the seller's subagent.

In the case of a rental property, whose interests does the buyer's agent represent?

The renter.

Who has a fiduciary duty to the seller?

The seller's agent.

Who is the principal in a tenant representation contract?

The tenant.

What can happen if the broker's actions are found to be self-dealing?

The transaction can be voided by the principal and the broker may be liable for damage

How is express authority usually granted?

Through a contract.

What does it mean to exercise skill, care, and diligence?

To do as good a job as could reasonably be expected

Which of the following is not an agent's duty to the principal?

To ensure that the property sells.(Agents have an obligation to be loyal and obedient to the principal, to make certain disclosures, to provide confidentiality, to provide an accounting of funds, and to use reasonable care and duties in the performance of their duties.)