Laws of Agency Practice exam

The broker who qualifies the most for commission is the one who

communicated the acceptance to the buyer. 

Ostensible agency

The principal allows a licensee to act as the listing broker in front of a prospective buyer

Express agency

When a written agreement spells out the responsibilities of the principal and the agent

Limited partnership

business arrangement with one or more general partners who manage the business and have unlimited liability, and one or more limited partners who invest money but have limited liability and no management authority.

Implied agency

an agency relationship created by actions or conduct, rather than a written or spoken agreement.

The fiduciary duty of full disclosure requires the seller's agent to

tell the seller anything that might be of use in negotiations.

General agency

relationship between property manager and owner

Dual agency

occurs when one broker (or firm) represents both the buyer and the seller in the same transaction, with the knowledge and written consent of both parties.

Special agency

an agency relationship in which the agent is authorized to perform one specific task or transaction for the principal

Limited partnership

a business structure with one or more general partners who manage the business and have unlimited liability, and one or more limited partners who invest money but have limited liability and no management authority

special agency

one task only

limited partnership

managers vs investors

When an agency relationship ends, which duty does not continue

loyalty

Fiduciary 1

An agent acting on behalf of a principal or client. the duties/responsibilities they legally have to the principal or client

Due care

refers to the licensee's obligation to ensure that all steps in the transaction

processes are followed with professionalism and accuracy.

Net listing

is illegal in most states and open to fraudulent dealings

Agents cannot interfere with any transactions that originated during their relationship with a principal

even if the principal has terminated the listing agreement

When the broker dies, the listing terminates so

the new broker should attempt to renegotiate the listings with the sellers.

Fiduciary

A real estate broker who becomes an agent of a seller or buyer, either intentionally through the execution of a written agreement, or unintentionally by a course of conduct

An agent becomes the agent of the seller when both the seller and the agent

sign a(n)

Listing agent

Under an Exclusive Agency Listing

the seller reserves the right to sell the property themselves and not pay a commission.

net lease

the lessee (tenant) not only pays rent for occupancy but also pays maintenance and operating expenses such as taxes, insurance, utilities, maintenance, and repairs. The lessor (owner) would pay the leasing commission.

emancipated minor

if the person has entered into a valid marriage, is on active duty in any armed forces, or willingly lives apart from their parents with the parents' consent and manages their own financial affairs regardless of the source of income. They’re treated as adults by the law, so are capable of consenting to a contract.

The lessee of an apartment and the owner of a condominium have many things in common. Which of the following is true for both?

They each hold an estate in real property

Deed

transfers title to property and thereafter evidences ownership. It is not a part of the contract nor is it necessary to complete a transaction unless made a part thereof.

An exclusive right-to-sell listing is an example of

a bilateral contract with the broker agreeing to use his/her best efforts (diligence) to locate a ready, willing and able buyer, while the seller promises to pay the broker a commission if the property is sold.

A vendor (in this case, the real estate agent) may call a consumer with whom it has an established business relationship for

up to 18 months after the consumer's last contact - even if the consumer's number is on the National Do Not Call Registry.

real estate counteroffer

generated after a buyer or seller has submitted an offer to

purchase and the offer includes terms that aren't agreeable. Typically  states that one party accepts the bulk of the offer, subject to one or more changes. It generally voids a previous offer

procuring cause agent

The agent who ultimately caused the buyer to purchase the home and earned the commission

Each broker represents separate sides in the transaction and each works for a different real estate firm

no relationship exists between the two brokers.

Statutes of limitations

exist to keep the legal system from getting bogged down in old disputes and allow for evidence and recollections to remain reasonably fresh. Civil limitations typically range from one to six years, though in some cases up to twenty-five years.

Which does not have to be included in a written listing agreement?

the complete legal description of the property being sold