5 Written questions
5 Matching questions
- What are the legal effects of agency?
- What are Agency Disclosure Requirements?
- How is vicarious liability treated in Washington between real estate agent and client?
- What are the agent's duties to the principal?
- Are agents and brokers employees or independent contractors?
- a 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.
- b 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.
- c Real estate brokers are virtually always independent contractors in relation to their principals. And most real estate salespersons and associate brokers are independent contractors in relation to their brokers, although in rare instances they're classified as employees.
- d 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.
- e The principal is bound by acts of the agent that are within the scope of the agent's authority.
5 Multiple choice questions
- 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."
- 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.
- 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.
- Principal allowed third party to believe agency relationship existed; unfair to not allow
- Don't quit!!! Licensees must make a good faith and continuous effort to fulfill the terms of the agency agreement. For instance, a seller's agent must make a good faith and continuous effort to find a buyer for the property.
5 True/False questions
Duty 3: Confidentiality → 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.
Does Washington State impose a duty to investigate upon the agent? → 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.
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.
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.
Duty 3: Present ALL written communications → If an agent's negligence or in- competence harms a third party, the agent may be liable