MREC Agency - Commercial Quiz

Study Notes

An agent has a duty of loyalty to their principal.
The duty of loyalty includes not disclosing confidential information and not competing with the principal.
An agent must obey reasonable and lawful instructions from the principal.
However, an agent is not obligated to follow unlawful instructions.
An agent has a duty to disclose all relevant and material information to their principal.
A real estate broker representing a seller must disclose all offers, potential buyers, and information affecting the value of the property.
A real estate broker representing a buyer must disclose the willingness of the seller to accept a lower price, urgency to sell, and information affecting the value of the property.
An agent's duty of disclosure is limited to the scope of their agency.
Compliance with unlawful instructions could constitute a breach of an agent's duty of loyalty.
A broker's relationship or interest in a transaction must be disclosed to their principal.

Real estate agents may lead buyers to believe they represent them while acting as the seller's agent.
Working for the buyer is different from working with the buyer.
Implied agency relationships can be created through conduct and words spoken.
Certain words or phrases used by real estate agents can create an implied agency relationship with buyers.
Referring to the buyer as the client can imply agency.
Real estate brokers can provide certain services to buyers without creating an agency relationship.
Showing properties, describing amenities, and transmitting offers are examples of services that do not create an agency relationship.
When a broker becomes an advocate or negotiator for the buyer, an implied agency relationship may be created.
This can result in undisclosed dual agency if the broker is also the agent of the seller.
It is important for buyers to understand the nature of their relationship with a real estate agent.

Termination of agency can occur when the purpose has been fulfilled, through unilateral rescission by owner or broker, mutual consent, expiration of the term, death of owner or broker, or loss of license by broker.
This information is a summary of a course outline approved by the Maryland Real Estate Commission in August 2011.
The accuracy, completeness, and timeliness of the course outline are not guaranteed or warranted by the commission.
The commission assumes no responsibility for the use or reliance on the course outline by the public or licensees.
The commission may change course requirements to reflect changes in Maryland real estate law and regulations.
The course outline does not replace or amend any requirements of Maryland real estate law and regulations.

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