Podcast
Questions and Answers
What role defines an individual who authorizes an agent to represent their interests in a real estate transaction?
What role defines an individual who authorizes an agent to represent their interests in a real estate transaction?
- Principal (correct)
- Customer
- Third party
- Client
Who is considered a client in a real estate context?
Who is considered a client in a real estate context?
- An interested bystander in the sale
- The buyer or seller in a transaction
- An individual who has a signed agency agreement with a broker (correct)
- Any individual involved in the transaction
Which party is NOT a primary role player in agency relationships?
Which party is NOT a primary role player in agency relationships?
- Third party
- Agent (correct)
- Principal
- Customer
In a real estate transaction, who has fiduciary duties owed to them?
In a real estate transaction, who has fiduciary duties owed to them?
Which term is often used interchangeably with 'client' but has a distinct definition?
Which term is often used interchangeably with 'client' but has a distinct definition?
In an agency relationship, who is responsible for fulfilling agency responsibilities?
In an agency relationship, who is responsible for fulfilling agency responsibilities?
Which of the following statements is true about a 'customer' in a real estate transaction?
Which of the following statements is true about a 'customer' in a real estate transaction?
Who represents the best interests of a client in a real estate transaction?
Who represents the best interests of a client in a real estate transaction?
What primarily distinguishes a customer from a client in a real estate transaction?
What primarily distinguishes a customer from a client in a real estate transaction?
Which party is considered a third party in a real estate transaction?
Which party is considered a third party in a real estate transaction?
What duty does a license holder owe to a customer?
What duty does a license holder owe to a customer?
What is a key characteristic of a ministerial act in real estate?
What is a key characteristic of a ministerial act in real estate?
What should a license holder avoid when working with customers?
What should a license holder avoid when working with customers?
Which two roles define primary parties in a transaction?
Which two roles define primary parties in a transaction?
Who is classified as a customer in a real estate transaction scenario?
Who is classified as a customer in a real estate transaction scenario?
In what situation does a third party exist in a real estate transaction?
In what situation does a third party exist in a real estate transaction?
What does it mean when an agent works directly with a customer?
What does it mean when an agent works directly with a customer?
Which of the following statements is correct about the relationship between clients and principals?
Which of the following statements is correct about the relationship between clients and principals?
What is the primary purpose of establishing agency agreements in writing?
What is the primary purpose of establishing agency agreements in writing?
Which of the following best describes a real estate third party?
Which of the following best describes a real estate third party?
What essential duty is owed to clients compared to customers?
What essential duty is owed to clients compared to customers?
Which of the following roles does not involve a direct agency relationship?
Which of the following roles does not involve a direct agency relationship?
Flashcards
Principal (In Agency Relationship)
Principal (In Agency Relationship)
An individual who authorizes an agent to represent their best interests.
Principal (In a Real Estate Transaction)
Principal (In a Real Estate Transaction)
Any major party to a real estate transaction (buyer, seller, landlord, tenant).
Client
Client
An individual who has signed an agency agreement with a broker, authorizing that broker to represent them in a real estate transaction. Clients are the people you will work for as a licensee.
Customer
Customer
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Third Party
Third Party
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Ministerial Act
Ministerial Act
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Fiduciary Duties
Fiduciary Duties
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Principal
Principal
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Who is your client?
Who is your client?
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Who is your customer?
Who is your customer?
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Is it a conflict of interest to perform ministerial acts for a customer?
Is it a conflict of interest to perform ministerial acts for a customer?
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What is a ministerial act?
What is a ministerial act?
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What is the difference in duties owed to clients and customers?
What is the difference in duties owed to clients and customers?
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What is the difference between working for a client and working with a customer?
What is the difference between working for a client and working with a customer?
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What is the difference between a principal and a client?
What is the difference between a principal and a client?
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What is the difference between a customer and a third party?
What is the difference between a customer and a third party?
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Why is it important to understand the different roles in a real estate transaction?
Why is it important to understand the different roles in a real estate transaction?
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What is the key to understanding the roles in a real estate transaction?
What is the key to understanding the roles in a real estate transaction?
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What is the most important takeaway from this information?
What is the most important takeaway from this information?
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Study Notes
Roles in Agency Relationships
- Principal: A person who authorizes an agent to represent their best interests. Also, any major party in a real estate transaction (buyer, seller, landlord, tenant).
- Client: A person who has signed an agency agreement with a real estate broker, authorizing them to represent them. A client is a principal with whom you have an agency relationship. You owe fiduciary duties to a client. Obtaining a written agency agreement is crucial.
- Customer: A person with whom no agency relationship exists. You do not owe fiduciary duties to a customer, but you do owe them fairness and honesty. A customer is usually on the opposite side of the transaction from the client.
- Third Party: Any person involved in a real estate transaction who is not your client. This includes customers and other non-client participants. Examples include title officers, inspectors, loan officers, insurance agents, and appraisers.
Client vs. Customer
- A broker works for a client.
- A broker works with a customer.
Client vs. Principal
- Principal is the broader term, referring to a major party in a transaction.
- A client is a principal with whom you have an agency relationship.
Customer vs. Third Party
- All customers are third parties, but not all third parties are customers.
- Third parties can include non-client real estate professionals (e.g., title officers).
Ministerial Acts
- Ministerial acts are actions performed for another based on established procedures.
- Ministerial acts don't require judgment or individual discretion.
- Agents can perform ministerial acts for customers without violating their duties to clients.
- Examples: Activities that facilitate the transaction without favouring one party.
- Ministerial acts are crucial for moving the transaction forward and pleasing the client.
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Description
Explore the various roles involved in agency relationships within real estate transactions. This quiz covers the distinctions between principals, clients, customers, and third parties, along with their responsibilities and duties. Gain a better understanding of these critical concepts to enhance your knowledge in real estate.
