5 Written Questions
5 Matching Questions
- Does Washington State impose a duty to investigate upon the agent?
- In-house transaction
- Agent's duties in general?
- There aren't any exceptions to the confidentiality rule...uh, right?
- Is the broker responsible for the salesperson's conduct, even if he or she is an independent contractor?
- a Even if a salesperson is considered an independent contractor for tax purposes, the broker is still considered responsible for supervising the salesperson's actions and may be liable for a salesperson's misconduct.
- b WRONG! Think court order, and latent defects -- Confidential information may be disclosed under court order or subpoena. In addition, latent defects should always be disclosed, even if a principal considers them to be "confidential."
- c The most common dual agency situation is an in-house transaction, in which two different salespersons, representing the buyer and seller, both work for the same broker.
- d NOPE! Agents are meant to be Sherlock Holmes! Alicensee has no duty to investigate any matters that he does not specifically agree to investigate. This includes inspecting the property, investigating either party's financial position, or verifying the seller's statements.
- e In addition to owing fiduciary duties to her principal, an agent owes certain duties to any party to whom he renders services. This applies whether it is a principal or a third party.
5 Multiple Choice Questions
- Relationship doesn't last forever -- An agency relationship will terminate automatically if (1) the term of the agency expires; (2) the purpose of the agency is fulfilled (property sold); (3) either the principal or agent dies, is declared incompetent, or declares bankruptcy; or (4) the property is destroyed (e.g., burns down).
- Real estate salesperson is broker's agent (broker being principal). Broker's principal is the seller/buyer, so a salesperson representing a broker is a "subagent", aka an agent of an agent
- The principal is bound by acts of the agent that are within the scope of the agent's authority.
- IN WRITING AND BEFORE!!! The agency disclosures must be made to the buyer before the buyer signs the offer, and to the seller before the seller signs the offer. The disclosure must be in writing, either in a separate paragraph in the purchase and sale agreement or in a separate disclosure document.
- WRONG WRONG WRONG! The Pamphlet must be given out before ANY written agreement is signed!!!
5 True/False Questions
Ratification of agency relationship → Implied agency: one not expressed in words, but understood from actions or circumstances.
Is dual agency representation encouraged? → HECK NO! But it is allowed, PROVIDED, there is a written consent from BOTH parties.
How is vicarious liability treated in Washington between real estate agent and client? → 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.
What are Agency Disclosure Requirements? → Think of this as Washington's requirement that ALL the cards be put on the table: Washington law requires real estate agents in residential transactions to make agency disclosures to both the buyer and seller informing them which party (or parties) they represent.
Mutual agreement to terminate → Most agencies are created by an express written agreement, such as a listing agreement or a buyer agency agreement. However, the agreement does not need to be in writing to create a valid agency, nor does the agreement have to be supported by consideration.