section 7 unit 1: A Brief History of Agency

Alison was thrilled to meet with Brent. In a matter of days, she executed (signed) an agency agreement with Brent, searched for properties on the multiple listing service, and had several showings scheduled. Who's who in this scenario? Match the terms to the appropriate party, but let's see if you can do so without the help of your resource. (Don't worry, you can take a peek at it if you'd like to review the resource again.) Agent- Client- Fiduciary- Principal-

Agent- Alison Client- Brent Fiduciary- Alison Principal- Brent

You need to be able to explain to your client what it means for you to be their agent and fiduciary. Out of the choices, which one best describes the fiduciary duties an agent owes a client? a. "As your agent, I'll obey any lawful instructions you provide me. I'm loyal to you and I put your interests ahead of any others. Anything you share with me will remain confidential, and I'll quickly disclose to you any material information about the transaction. You can personally hold me accountable for any money or property exchanged throughout our relationship, and know that I'm providing you the services you expect of me." b. "As your agent, I'll go to bat for you. You're my priority. I'll do anything you ask and do whatever it takes to sell this house. Let's get this done!" c. "As your agent, I'll identify potential homes based on the information you provide. I'll take you to showings and negotiate on your behalf. I'll use anything you tell me as a bargaining chip with the sellers."

a. "As your agent, I'll obey any lawful instructions you provide me. I'm loyal to you and I put your interests ahead of any others. Anything you share with me will remain confidential, and I'll quickly disclose to you any material information about the transaction. You can personally hold me accountable for any money or property exchanged throughout our relationship, and know that I'm providing you the services you expect of me."

By now, you've seen the term "dual agent" a few times. Did you know there are a couple types of dual agency relationships? The resource you've been using for the previous interactions discusses these two types. So what's the difference between a dual agent and a dual agent with designated sales agent? a. A dual agent situation exists when one agent represents both buyers and sellers in a transaction. Dual agent with designated sales agent occurs when different agents represent the buyers and sellers, but they both work for the same broker. b. A dual agent situation exists when one agent represents both buyers and sellers in a transaction. Dual agent with designated sales agent situations occur when different agents from different brokerages represent the buyers and sellers.

a. A dual agent situation exists when one agent represents both buyers and sellers in a transaction. Dual agent with designated sales agent occurs when different agents represent the buyers and sellers, but they both work for the same broker.

Justin is representing the seller in a transaction. Which of the following tasks is he permitted to perform for the unrepresented buyer as a non-agent? a. Explain to a buyer the purpose of the seller's property disclosure. b. Help the buyer get pre-approved for a mortgage loan. c. Help the buyer interpret the title policy exceptions. d. Help the buyer structure an offer to the seller.

a. Explain to a buyer the purpose of the seller's property disclosure.

You're representing Crystal in the purchase of a house. Crystal has a trust fund and can more than afford the house on which she's made an offer. Which of the following statements is true? a. Your duty of confidentiality to your client dictates that you not disclose your client's financial situation to the seller. b. Your duty of disclosure to customers and third parties requires that you disclose Crystal's financial status to the seller. c. Your duty of honesty and fairness to customers dictates that you must share with the seller Crystal's ability to pay more for the property than she offered. d. Your duty of working in your client's best interests means you should be showing her properties that are in a higher price range since she can afford it.

a. Your duty of confidentiality to your client dictates that you not disclose your client's financial situation to the seller.

Someone who acts on behalf of someone else a. non-agent b. agent c. fiduciary

a. agent

Someone who's working with a real estate licensee, but who isn't represented by him a. customer b. principal c. consumer d. client

a. customer

Which fiduciary duty is missing: loyalty, reasonable skill and care, obedience, confidentiality, accounting, and ______? a. disclosure b. disobedience c. lawfulness d. skill

a. disclosure

Confidentiality a. fiduciary duty b. not a fiduciary duty

a. fiduciary duty

Loyalty a. fiduciary duty b. not a fiduciary duty

a. fiduciary duty

accounting a. fiduciary duty b. not a fiduciary duty

a. fiduciary duty

Has the responsibility to handle all dealings for a specific piece of client property a. general agent b. special agent

a. general agent

Someone who represents neither party in the transaction a. non-agent b. agent c. fiduciary

a. non-agent

Broker's agent a. real estate agent b. not a real estate agent

a. real estate agent

Buyer's agent a. real estate agent b. not a real estate agent

a. real estate agent

Dual agent a. real estate agent b. not a real estate agent

a. real estate agent

Landlord's agent a. real estate agent b. not a real estate agent

a. real estate agent

Seller's agent a. real estate agent b. not a real estate agent

a. real estate agent

Single agent a. real estate agent b. not a real estate agent

a. real estate agent

property manager a. real estate agent b. not a real estate agent

a. real estate agent

sub-agent a. real estate agent b. not a real estate agent

a. real estate agent

tenant's agent a. real estate agent b. not a real estate agent

a. real estate agent

Broker's agent: Assists but does not represent the buyer; works for another firm and is a sub-agent of the listing broker. a. special agent b. general agent

a. special agent

Buyer's agent: Represents only the buyer in the transaction. a. special agent b. general agent

a. special agent

Dual agent: Represents both the buyer and seller in the same transaction. a. special agent b. general agent

a. special agent

Seller's agent: Represents only the seller in the transaction. a. special agent b. general agent

a. special agent

Single agent: Represents one client. a. special agent b. general agent

a. special agent

Kristy needs an agent to act on her behalf to negotiate a lease on an apartment while she finishes grad school. Andre fits the bill. a. tenant's agent b. dual agent c. property manager d. transactional broker e. broker's agent

a. tenant's agent

A non-agent is a facilitator. a. true b. false

a. true

A real estate licensee works with customers but doesn't represent them. a. true b. false

a. true

An agent can only represent a client. a. true b. false

a. true

An escrow officer is a limited agent. a. true b. false

a. true

Properly handle all money or property entrusted to you.

accounting

Relationship between the real estate professional and the person being represented

agency

One who acts on behalf of another in a business transaction.

agent

Terry represents seller Farrah, and Michael represents Troy, the buyer. Who is (or are) the principal(s) in this transaction? a. ferrah b. Ferrah and Troy c. Terry and Michael d. Troy

b. Ferrah and Troy

Rhonda is an unrepresented buyer who's purchasing Tony's townhome. Gary represents Tony in the sale of his property. What's Rhonda's relationship to Gary? a. client and a fiduciary b. a customer c. customer and a client d. fiduciary

b. a customer

Which of the following is an example of a universal agent? a. buyer's agent b. conservator c. escrow officer d. listing agent

b. conservator

Alison has listed just the property her buyer clients, the Lopezes, want. It's the Pinskis' home, which Alison put on the market last week. a. tenant's agent b. dual agent c. property manager d. transactional broker e. broker's agent

b. dual agent

A transactional broker is a limited agent to the seller. a. true b. false

b. false

A universal agent is a facilitator. a. true b. false

b. false

You can perform additional duties for customers, like negotiating on their behalf or helping them decide how much to offer, as long as the other party in the transaction isn't your client. a. true b. false

b. false

Phil is a property manager, which means he serves as a ______ agent to his landlord/client. a. designated b. general c. special d. universal

b. general

When a licensee has broad responsibility to handle all details of a specific transaction, what type of real estate agency relationship usually exists? a. designated b. general c. special d. universal

b. general

Property manager: Acts within the scope of the property management agreement on behalf of the landlord. a. special agent b. general agent

b. general agent

Which type of agent is an escrow officer? a. general agent b. limited agent c. single agent d. universal agent

b. limited agent

reasonable profit a. fiduciary profit b. not a fiduciary profit

b. not a fiduciary profit

Double agent a. real estate agent b. not a real estate agent

b. not a real estate agent

Secret agent a. real estate agent b. not a real estate agent

b. not a real estate agent

transactional broker a. real estate agent b. not a real estate agent

b. not a real estate agent

Someone who's a party to a transaction OR the person for whom the agent acts a. customer b. principal c. consumer d. client

b. principal

Has limited authority to act on a client's behalf a. general agent b. special agent

b. special agent

Most real estate transactions involving a buyer and seller deal with this type of agency a. general agent b. special agent

b. special agent

An agent who represents the broker from another firm. This agent does not represent the principal, only the broker.

broker's agent

An agent who is engaged by a buyer to represent the buyer's interests.

buyer's agent

It's not enough to know the difference between a customer and a client. You also need to be able to explain differences to a consumer. Out of the following correct choices, which one best describes to the consumer the difference between customers and clients and the benefits of being a client? a. Would you like to be a client or a customer? In other words, do you want me to work for you or with you? b. You have a choice to be my client or my customer. If you're my client, I represent you. c. If you're my customer, I'll work alongside you. If you're my client, I'll do that and more. I'll represent you and negotiate on your behalf. I become your fiduciary and work for you.

c. If you're my customer, I'll work alongside you. If you're my client, I'll do that and more. I'll represent you and negotiate on your behalf. I become your fiduciary and work for you.

Someone who uses or purchases a product or service a. customer b. principal c. consumer d. client

c. consumer

You're holding an open house for Brenda. Walt and Mary walk in and ask for a flyer that gives details about the property. Walt and Mary are now your ______. a. clients b. confidents c. customers d. friends

c. customers

We've learned about the role of a non-agent. What four duties does a non-agent owe the parties in the transaction? a. obedience b. loyalty c. disclosure d. confidentiality e. accounting d. reasonable skin and care

c. disclosure d. confidentiality e. accounting f. reasonable skill and care

In general, a person in a position of loyalty and trust is a(n) ______. a. attorney-in-fact b. client c. fiduciary d. mortgage lender

c. fiduciary

Someone who's in a position of trust and loyalty a. non-agent b. agent c. fiduciary

c. fiduciary

Putting clients' interests ahead of all others describes which fiduciary duty? a. confidentiality b. disclosure c. loyalty d. reasonable skill and care

c. loyalty

As the owner of an apartment complex near the college, Bill needs someone to act in his interests. He hired Carter as his agent. a. tenant's agent b. dual agent c. property manager d. transactional broker e. broker's agent

c. property manager

When working with a client on a real estate sale, a real estate licensee is usually acting as which type of agent? a. designated b. general c. special d. universal

c. special

We know that agency is the relationship between the real estate professional and the person being represented. But who's the person being represented?

client

Keep information shared by the client private.

confidentiality

_______ is an acronym that can help you remember an agent's fiduciary duties. a. CARE OF b. DUE CARE c. FAR GONE d. OLD CAR

d. OLD CAR

Which one of the following definitions best describes a consumer? a. Someone who is involved in a transaction but represents neither party b. Someone who's hired to act on behalf of a client c. Someone who's in a position of trust and loyalty d. Someone who uses or purchases a product or service

d. Someone who uses or purchases a product or service

Someone who has agency representation with the real estate licensee a. customer b. principal c. consumer d. client

d. client

In most cases, what type of agent is a real estate licensee when working with a client on a real estate sale? a. double b. dual c. general d. limited or special

d. limited or special

Aaron doesn't represent either party in the transaction. He's just there to facilitate. a. tenant's agent b. dual agent c. property manager d. transactional broker e. broker's agent

d. transactional broker

Divulge all facts pertinent to the transaction.

disclosure

Represents both the buyer and seller in the same transaction.

dual agent

Two salespeople from the same brokerage who each represent a different party in the same transaction

dual agent with designated sales agent

Alison, an agent with XYZ Agency, is assisting Ryan, the listing agent from RST Brokerage, with marketing a property on 7th Street. a. tenant's agent b. dual agent c. property manager d. transactional broker e. broker's agent

e. broker's agent

An agent who assists a landlord in finding a tenant.

landlord's agent

Rules governing the relationship between the real estate professional and the person being represented

law of agency

Put clients' interests ahead of all others.

loyalty

We'd like to introduce Alison, a real estate licensee. Alison just received a call from the Masons. They're interested in putting their house on the market and would like to talk more with Alison about this process. Alison meets with the Masons the next day and is excited about this new prospect. She leaves them with her business card and a promise to call back in two months when they say they'll be ready to act. In return, Alison leaves with an unsigned agency agreement and contact information for their son, Brent, who's ready to buy his first home. Are the Masons Alison's clients?

no there is no agency agreement in place, therefore, they are not Alison's clients

Follow client instructions (just the lawful ones, though).

obedience

An agent who acts within the scope of the property management agreement on behalf of the landlord.

property manager

Provide clients with quality, knowledgeable, and prudent service.

reasonable skill and care

The agent, also called a listing agent, is engaged by a seller to represent the seller's interest.

seller's agent

This type of agent represents only one party

single agent

An agent who works under another agent to perform some of the acts of agency with the principal's permission. Agents are also sub-agents of their broker.

sub-agent

An agent who assists someone in finding a property to lease or rent.

tenant's agent