5 Written questions
5 Matching questions
- In Washington State, how is an agency relationship developed between a licensee and a buyer or seller?
- How is vicarious liability treated in Washington between real estate agent and client?
- Revocation by principal
- What is a material fact?
- What are the four ways that a principal agent relationship can be formed?
- a YOU'RE FIRED!!! The principal may revoke the agency by firing the agent whenever she wishes. The principal may be liable for any damages caused by the breach.
- b Express agreement, ratification, estoppel, implication
- c When licensee undertakes to provide real estate services; seller = begins with written agrm't; buyer = automatic, once real estate brokerage services are performed
- d 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)
- e Under Washington real estate law, there is no vicarious liability between a real estate agent and a principal. A seller or buyer is ordinarily not liable for any act, error, or omission by a broker or salesperson.
5 Multiple choice questions
- The extent to which the principal can be bound by the agent's actions depends on the scope of authority granted to the agent; Types: Universal, general, special.
- 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!
- Implied agency: one not expressed in words, but understood from actions or circumstances.
- 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.
- A licensee is obligated to present all types of written communications, including all written offers, to and from either party in a timely manner. Offers and counteroffers must be presented regardless of how unacceptable they may appear. The party, not the licensee, will decide whether or not to accept a particular offer. The licensee should present offers even if the property is subject to an existing contract (although not if the listing has expired).
5 True/False questions
Duty 1: Loyalty → An agent must always place the principal's interests above the interests of a third party. For instance, a seller's agent must negotiate with the buyer to get the highest price possible for the seller.
Ratification of agency relationship → Approval/adoption of acts performed outside agency relationship; can be expressed or through accepting the benefit of those acts
What are the agent's duties to the principal? → 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.
Duty 4: Disclosure of material facts → A licensee must disclose any material fact, if the fact is not apparent or readily ascertainable by the party.
Duty 5: Accounting for Trust Funds → Licensee must watch the money closely!!!! A licensee must account for any trust funds: money or valuable items received on behalf of a party to a transaction. The licensee must report to the party on the status of the trust funds and avoid commingling (mixing) them with her own money. The duty of accounting continues after the termination of the agency.