5 Written Questions
5 Matching Questions
- What are the four (4) ways to terminate...an agency relationship? Think Mr. RT, also, think together, then seperate forms of attack.
- What is a secret profit, and is it allowed?
- What is Imputed Knowledge? (Does it apply in Washington State?)
- Is self-dealing okay?
- What is the duty in an agency relationship?
- a ABSOLUTELY NOT!!! NO KICKBACKS!!! An agent must not make any secret profits off the agency. A secret profit is a financial benefit that the agent receives without the principal's consent, such as a kickback from referring the principal's business to a contractor. An agent may still use the services of a contractor with whom she has an interest, so long as the interest is disclosed and the principal consents.
- b Fiduciary! Agent stands in special position of trust and confidence for someone else.
- c Mutual agreement, revocation by principal, renunciation by agent, termination by operation of law
- d Under general agency law, a principal is considered to have notice of information that the agent has, even if the agent never actually tells the principal. As a result, a principal could be liable for failing to disclose a problem to a third party, even if the agent never told the principal about the problem. This rule does not apply in Washington State = Principal is NOT automatically liable for things known by his agent.
- e NO! An agent must inform the seller if the agent is buying the property him or herself. A broker should not list a property for less than it is worth, buy it, and then sell it for a profit; this is known as self-dealing.
5 Multiple Choice Questions
- For listing agreements with this term, a buyer's agent who finds a buyer is STILL a subagent of the seller, rather than agent for the buyer.
- YES YES YES! You MUST disclose those defects as well. In fact, if the seller is trying to get you NOT to disclose them, you should refer to take the listing!
- In addition to the general duties that licensees owe to any party to whom they render services, there are specific duties that licensees owe to the parties they represent. If the agent represents the seller, these duties are owed only to the seller. If the agent represents the buyer, these duties are owed only to the buyer. If the agent is a dual agent, these duties are owed to both buyer and seller.
- information that has a substantial negative effect on the value of the property or on a party's ability to perform his or her contractual duties, or that defeats the purpose of the transaction. RULE OF THUMB: Anything that might make it difficult for the parties to complete the transaction (such as the bankruptcy of one of the parties) should be disclosed. (Sex offender presence does not need to be disclosed)
- HECK NO! But it is allowed, PROVIDED, there is a written consent from BOTH parties.
5 True/False Questions
What is Vicarious liability and why does it matter in principal/agent relationships? → Under general agency law, the principal may be held liable for his agent's wrongful acts. This is known as vicarious liability. Thus, a buyer or seller may be liable for the acts of his broker or a salesperson working for that broker.
Duty 6: Providing an agency law pamphlet → Real estate agents must avoid inaccuracies in their statements to prospective buyers. Opinions, predictions, or puffing - Misrepresentations, which may be grounds for a lawsuit, should not be confused with opinions, predictions, or puffing. The latter are nonfactual or exaggerated statements a buyer should know he cannot rely on
What are the main parties involved in an agency relationship? → Fiduciary! Agent stands in special position of trust and confidence for someone else.
What are the legal effects of agency? → The principal is bound by acts of the agent that are within the scope of the agent's authority.
Why is the scope of authority in an agency relationship important? What are the three basic types? → Fiduciary! Agent stands in special position of trust and confidence for someone else.