RealEstateU Quiz 1

• An agency relationship example that is NOT an agency relationship is Landlord - Tenant
• The definition of Self Dealing is when a fiduciary takes advantage of his position in a transaction and acts for his own interests rather than for the interests of his clients.
• When offering a referral fee, Justin, a real estate salesperson must obtain informed consent because Justin has a fiduciary duty to the client.
• Only the client can benefit from confidentiality which is enforced to prevent the customer from benefiting from information.
• According to vicarious liability, the broker can be held liable for Philip's actions as Philip violated several of his fiduciary duties to the client.
• Reasonable Care best reflects the agent's fiduciary duties.
• The agent owes fiduciary duties to the sub-agent.
• All fiduciary dutues apply to John as a sub-agent in the transaction.
• Brokers directly pay the real estate salesperson's commission.
• In the acronym 'OLD CAR', the 'D' refers to Disclosure.
• A broker's agent is an agent that cooperates or is engaged by a listing agent or a buyer's agent to assist in locating a property to sell or buy.
• John and Steve must execute a Listing Agreement to enter into an agency relationship.
• If Mr. Smith's house eventually sold for $365,000 and the commission was 5%, then Mr. Smith paid $18,250 for the commission.
• An agent undertakes to transact some business or to manage some affair for another by authority of the latter.
• The tenant is the customer in the real estate transaction.
• First Substantive Contact: The first contact or meeting by a licensee when some detail and information about the property is shared with parties who express some interest in the real estate transaction.
• Two ways a broker is compensated for a transaction: a flat fee or percentage of the sale price.
• Agents must present all offers to his/her client because of the fiduciary duties of Disclosure.
• If Ely's house was listed for $225,000 and eventually sold for $215,000, the agreed upon commission was 6%. Ely will pay $12,900 for the commission.
• The fiduciary duty of Disclosure is conversely related to the duty of Confidentiality
• The broker is not considered a principal in an agency relationship.
• In a typical agency structure, the real estate broker is the primary agent to the client.
• In order to disclose confidential information, the agent must first obtain written consent from the client.
• John, a real estate salesperson, has entered into an agency agreement with a client whose scope is limited to that described in the agreement, the level of authority suggests that John is a special agent.
• As a special agent in a transaction, a real estate salesperson cannot negotiate the terms of the contract on behalf of the owner.
• The agent brings a customer to the principal in a transaction.
• Safeguarding his/her principal's lawful confidences and secrets is the agent's duty of confidentiality
• Town Realty and City Realty may be guilty of group boycotting if they create an alliance in an attempt to prevent another brokerage firm from competing in the marketplace.
• A selling agent or participating agent is referred to as the cooperating agent.
• If Cindy's house was listed at $732,100 and sold for $736,250, the commission was 6% and Cindy will pay $44,175.
• A fiduciary is a person who, on behalf of or for the benefit of another, transacts business or handles money or property not the person's own.
• Ely is the Agent; Justin is the Principal; and James is the Customer.
• Ratification: An agency relationship which is created after the fact when the principal agrees to be bound by the actions of the agent who was acting without authority.
• Loyalty is an agent's duty to place the client's interest above those of all others, also the agents own self-interest
• Tenant is not a principal. Principals are typically owners, buyers, landlords or tenants.
• If a union of brokers in New York State bound together and agreed to only accept commissions of 9% or higher then they may be accused of price fixing, the average percentage is 6% in real estate transactions.
• A landlord is considered a principle in an agency relationship
• John has the power to hire and/or fire employees as a agent to a condo board, since John has the power to perform multiple services, then this suggests that John is a general agent.
• Accountability is the fiduciary duty that Mark breached since he will receive a referral fee from the mortgage broker.
• The agent and the pricipal cannot misrepresent facts to the customer
• An example that is NOT an agency relationship is Owner - Tenant.
• A general agent is typically granted more power than a special agent.
• John is the Agent, Kevin is the Client, and Steve is the Customer, in an agency relationship.
• An actual agency created: Expressed Agency.
• The Agent and the principal enter into an agency relationship through a Listing Agreement. There is no agency using a lease agreement or sales contract
• Disclosure is the release of relevant information about a property that may influence the final sale, especially if it represents defects or problems
• There are generally two ways an agent is compensated for a transaction which includes a percentage of the sales price or a flat fee
• If there is doubt about the distribution of proceeds at the closing table, it must be resolved in favor of the client following the fiduciary duty of accountability.
• The fiduciary duty Reasonable Care is where Andrew can be sued.
• The principle is the employer of an agent or broker
• An agent is prohibited from showing a lower offer to the seller to obtain a higher commission following the fiduciary duty of loyalty. The interest must be in the best interest of thier client
• Being negiligent with the clients money is a common breech of the fiduciary duty of accountability
• The the fiduciary duty of confidentiality is conversely related to the duty of disclosure.
• A breach of duty happens when you fail to exercise reasonable care.
• According to indemnification, the principal must act to defend the agent.

Explore real estate agency, focusing on fiduciary responsibilities. Learn about relationships, self-dealing, and the duties agents owe to clients and sub-agents. Understand vicarious liability and the meaning of 'OLD CAR' acronym in real estate.