Exam Two: Module 1

Front 1

What does agency mean?

Back 1

Relationship between two parties (representation) The party who excepts responsibility for representing the other party

Front 2

Who is the principal

Back 2

The party being represented by the agent

Front 3

Who is the brokerage in an agency relationship

Back 3

Agent

Front 4

Who is the seller/ buyer in agency relationships

Back 4

Principal

Front 5

What is dual agency?

Back 5

Occurs when there is one agent representing two or more principles within the same trade. Multiple representation/ concurrent representation

Front 6

What does it mean to convey an offer

Back 6

Present offer

Front 7

What does acquisition/divestiture by registrant mean?

Back 7

Purchase/sale of registrant

Front 8

What does third party mean?

Back 8

Individual who is not directly connected to the agency relationship but may be affected by it

Front 9

What does Fiduciary refer to?

Back 9

A relationship of trust with one or more parties

Front 10

Define authority

Back 10

The legal right given by a principal and excepted by the agent to act on the principles behalf and business transactions with a third-party

Front 11

What is expressed agreement

Back 11

Can be written or verbal and creates definite understanding between the parties

Front 12

What is implied agreement?

Back 12

Can be created by the words or actions of the party which leads the party to believe an agency relationship with no formal acknowledgement

Front 13

What does written agreements detail?

Back 13

The obligations of all parties and would be signed by the brokerage and the seller/buyer

Front 14

What are verbal agreements?

Back 14

Include many aspects of written agreements however are not documented

Front 15

What is agency relationship by ratification

Back 15

When the authority is granted retroactively and applies if the agent has acted without authority or an excess of authority granted when the principal subsequently agrees to be bound by such an authority

Front 16

What is agency relationship by Estoppel

Back 16

Occurs where the principal acts in such a way that leads a third-party to believe principle is being represented by an agency

Front 17

What is agency relationship by operation of law

Back 17

Occurs where a duty is created by circumstance and is imposed on the agent to act on behalf of the principal where previously no agency relationship existed. Established on legal principles rather than formal agreement

Front 18

Is termination of agency relationship by performance by way of agreement or operation of law? What does it entail?

Back 18

By way of agreement

Automatic once obligations under the terms are fulfilled

Front 19

Is termination through mutual agreement considered by way of agreement or by way of operation of law? What does it entail?

Back 19

By way of agreement

Used to terminate between the agent and principal when they mutually agree to terminate

Front 20

Is an agency relationship automatically terminated on expiry date agreed to?

Back 20

Yes

Front 21

Is terminating an relationship by way of revocation considered by way of agreement or by way of operation of law? What does it entail?

Back 21

By way of agreement

When the principal has the power to revoke the authority of an agent to act on their behalf

Front 22

Is terminating an agency relationship through impossibility of performance considered by way of agreement or by way of operation of law? What does it entail?

Back 22

Operation of law

Occurs when the subject matter of the agency ceases to exist and the duties of the principal and agent can no longer people fails under normal circumstance

Front 23

What other ways can relationships be terminated by operation of law

Back 23

If the agency purpose or relationship is unlawful, death, mental incapacity or bankruptcy

Front 24

What is express authority granted by a seller?

Back 24

A seller grants express authority to a brokerage to offer their property for sale including inspection of property, placing for sale/sold signs and giving exclusive authority to make advertising decision

Front 25

What is expressed authority granted by a buyer

Back 25

Buyer grants expressed authority to brokerage to seek out suitable properties for a buyer to view, includes brokerages entitlement to receive and retain commission and provide information as needed to third parties to assist in transaction

Front 26

What is seller representation implied authority

Back 26

Allows the brokerage to determine advertising specifics including delegation, showings, negotiations, deposit, trust account and notices

Front 27

What is buyer representation implied authorities

Back 27

Allows Brokeridge to select appropriate methods to locate properties for viewing such as delegation, relevant facts, presentation, negotiations and notices

Front 28

What authority limit does brokerages have in relation to a contract?

Back 28

Brokerage or sales person does not have authority to sign contracts on behalf of a principal unless clearly authority is granted

Front 29

What authority limits does brokerages have in relation to delegation of duties

Back 29

Using other brokerages in the marketing/selling process is neither presumed nor implied under agency law. For other brokerages to participate authority must be provided

Front 30

What parts of the purchase price is the brokerage authorized to receive?

Back 30

Deposit

Front 31

Can brokerages seek of reimbursement on behalf of principal without express authority?

Back 31

No. Typically an agreement with the principal will identify commission or reimbursement

Front 32

What is indemnification mean?

Back 32

Principal duty owed to the agent

Agent must act according to lawful instructions of the principal and in doing so will not be held responsible for any liability, claim, loss, damage or injury resulting from the acts

Front 33

Does the principal compensate agents for loss or damage incurred in caring out lawful acts?

Back 33

Yes

Front 34

What is remuneration?

Back 34

Principal duty owed to the agent

Upon signing the agreement the principal is obligated to pay the brokerage for services agreed to as provided and part of the agency relationship- typically commission

Front 35

What are the duties owed to a client?

Back 35

Exercise care and skilled, negotiate favourable terms, maintain confidentiality, disclose information, ensure honesty, perform duties personally, obey instructions and perform mandate

Front 36

What are duties owed to a customer

Back 36

Exercise care and skill and ensure honesty

Front 37

What are fiduciary obligations owed to a client

Back 37

Don’t miss use confidential information, maintain loyalty, avoid conflict of interest, disclose conflict, don’t make secret profit

Front 38

Are fiduciary obligations owed to a customer?

Back 38

No

Front 39

What are regulatory obligations oh to clients and customers

Back 39

Safeguard documents, disclosure, commission obligations/remuneration provisions , description of services, to deliver agreements offers and statements, not to breach or make certain promises

Front 40

What are limitations to obligations owed under multiple representation

Back 40

Sales person can’t look at best interest of two or more clients, cannot reveal information about one client to another, cannot disclose how much seller is willing to accept, amounts buyer is willing to pay, motivation behind sellers listing or buyers purchase, personal information and information related to negotiation

Front 41

What are disclosure requirements before representation agreement

Back 41

Required to discuss aspects of multiple representation, circumstances that could arise in which brokerages could represent more than one client, how brokerages cannot represent more than one client unless consented in writing and must discuss nature of services brokerages would provide to client whether in Multiple or single representation

Front 42

What must be disclosed before an offer?

Back 42

If the brokerage proposes to represent more than one client and differences between obligation’s brokerage would have if it represented more than one client

Front 43

What are minimum required info before agreements?

Back 43

Service alternatives, services being provided, multiple representation obligations, customer service obligations, service limitations, obtaining written acknowledgment

Front 44

What services are for seller clients during pre-listing

Back 44

Conduct visual walk through, gathering key info related to property, identifying and disclosing material facts, explaining marketing options, estimate value of property, explain selling cost, advertising property

Front 45

What are services to seller client during listing

Back 45

Accurately list property, explain showing process, implement marketing plan, qualify buyers, ensure disclosures are made, coordinate showings, explain offer process, be aware or competing and recent sales, update of market conditions

Front 46

What is sub agency?

Back 46

Extending the ability to represent the principal to another brokerage doing a sub agent of the brokerage established relationship with principal. Seller is a client of listing brokerage and a cooperating brokerage has a customer buyer. Cooperating brokerage is in a sub agency owing fiduciary duties to seller rather than buyer

Front 47

What are duties provided to a buyer client pre-showing

Back 47

Discussing buyers wants/needs, outlining all costs, prequalifying the buyer, seeking out properties, inspect properties in advance And verify all info

Front 48

What are duties to a buyer client during showing of properties

Back 48

Obtain information about neighborhood, schools, transit. Discover and disclose material facts, provide update on market conditions and follow up on property of interest

Front 49

What are services provided to buyer customer

Back 49

Disclose material facts, prepares and present offers to seller, facilitates general communication between buyer and seller and maintains contract management throughout transaction

Front 50

What are limitations to buyer customer services

Back 50

Not obligated to research and verify property defects, cannot provide advice on offering price or terms to include in an offer, not obligated to act in best interest but required to treat fairly and honestly and not obligated to keep buyers information confidential

Front 51

Can sales persons communicate with seller directly?

Back 51

Sales persons must only communicate with seller through their listing brokerages and lust given written permission to communicate directly

Front 52

Can sales persons induce a party to break an existing contract

Back 52

Under the code a person shall not induce the seller or buyer to break an existing agreement

Front 53

How shall registrants treat every person in trade?

Back 53

With fairness honesty and integrity