5 Written questions
5 Matching questions
- What is Imputed Knowledge? (Does it apply in Washington State?)
- What is a General Agent?
- What are the agent's duties to the principal?
- What are the main parties involved in an agency relationship?
- What are Agency Disclosure Requirements?
- a Agent - authorized rep; Principal - controller of agent's acts; People outside the relationship are third parties. Principal who engages agent's services is the "client", but a mere third party is a "customer."
- b 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.
- c 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.
- d A general agent is authorized to handle all of the principal's affairs in one or more specified areas. Property managers are considered general agents
- e 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.
5 Multiple choice questions
- This agent has limited authority to do a specific thing or conduct a specific transaction. In most cases, a real estate broker is a special agent because she has only limited authority; for instance, she can only negotiate with third parties and cannot sign a contract on the seller's behalf. (She would need a power of attorney to bind the seller.)
- Approval/adoption of acts performed outside agency relationship; can be expressed or through accepting the benefit of those acts
- Important employment and tax laws apply when someone is classified as an employee, particularly those involving the withholding of income taxes and social security. Unlike employees, independent contractors do not have taxes withheld from their earnings.
- 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.
- 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 True/False questions
What is an inadvertent dual agency? → WATCH OUT LISTING AGENT! Don't get too buddy-buddy with the buyer. Many dual agency lawsuits involve unintended dual agency, in which the seller's agent's conduct with the buyer created an agency by implication be- tween the agent and buyer.
Duty 1: Loyalty → KEEP SECRETS!!! The agent must place the principal's interests above the interests of a third party by refusing to reveal confidential information. The duty not to disclose confidential information continues even after the agency relationship has ended; thus, a broker could not tell subsequent clients information about a past client obtained while representing that past client.
What is a Dual Agency? → Dual agency exists when an agent represents both the buyer and the seller in the same transaction. Dual agency is legal in Washington, although it is discouraged. To act as a dual agent, a broker must have the written consent of both parties to the transac- tion. He must also act impartially towards both buyer and seller and refrain from acting to the detriment of either party.
Express agreement for agency → 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.
How is an independent contractor distinguishable from an employee? → WATCH OUT LISTING AGENT! Don't get too buddy-buddy with the buyer. Many dual agency lawsuits involve unintended dual agency, in which the seller's agent's conduct with the buyer created an agency by implication be- tween the agent and buyer.