LAW OF AGENCY ACTUAL QUESTIONS
AND VERIFIED ANSWERS COMPLETE
STUDY PACK
●● actual authority
Answer: specific powers given to an agent by the principal that allows
them to act on the principal's behalf
●● agency by actual authority
Answer: actions taken by an agent for which they have permission,
whether given through express or implied authority by a principal
●● agency by estoppel
Answer: agency imposed by law when it is determined that ostensible
agency existed; used to create legal accountability for the agent or the
principal on whose behalf the agent acted
●● agency by ratification
Answer: created when a license holder acts on behalf of but without
prior authorization of a principal and that principal accepts the license
holder's action after the fact
●● agency coupled with interest
,Answer: when an agent is involved in a real estate transaction with a
personal interest (either for themselves, a family member, or a business
interest)
●● arbitration
Answer: a forum where parties and counsel present their positions
before an impartial third party who renders a specific award
●● attorney representation
Answer: a situation in which a real estate attorney can represent the
buyer in the purchase of a home (this option is only available in certain
states)
●● backup offer
Answer: offer made on a property already under contract
●● blockbusting
Answer: occurs when a real estate agent canvasses a geographical area
and incites panic by suggesting that people of certain races, colors,
religions, or other protected classes will be moving into the
neighborhood and causing the area to deteriorate and prices to
destabilize
●● broker
, Answer: An individual licensed by TREC to perform brokerage duties
●● broker compensation
Answer: the percentage fee or commission (or, in rare instances, flat fee)
that is paid for an agent's representation and services provided during
real estate transactions; a.k.a. brokerage fee
●● broker price opinion (BPO)
Answer: the agent's determination of an appropriate purchase price
●● brokerage
Answer: the joining of two people for the purpose of an exchange of
products or services
●● buyer representation agreement
Answer: a document that outlines the duties and implications of the
broker-buyer agency relationship
●● buyer's agent
Answer: a broker representing a buyer in a real estate transaction, a.k.a.
buyer's broker
●● client
AND VERIFIED ANSWERS COMPLETE
STUDY PACK
●● actual authority
Answer: specific powers given to an agent by the principal that allows
them to act on the principal's behalf
●● agency by actual authority
Answer: actions taken by an agent for which they have permission,
whether given through express or implied authority by a principal
●● agency by estoppel
Answer: agency imposed by law when it is determined that ostensible
agency existed; used to create legal accountability for the agent or the
principal on whose behalf the agent acted
●● agency by ratification
Answer: created when a license holder acts on behalf of but without
prior authorization of a principal and that principal accepts the license
holder's action after the fact
●● agency coupled with interest
,Answer: when an agent is involved in a real estate transaction with a
personal interest (either for themselves, a family member, or a business
interest)
●● arbitration
Answer: a forum where parties and counsel present their positions
before an impartial third party who renders a specific award
●● attorney representation
Answer: a situation in which a real estate attorney can represent the
buyer in the purchase of a home (this option is only available in certain
states)
●● backup offer
Answer: offer made on a property already under contract
●● blockbusting
Answer: occurs when a real estate agent canvasses a geographical area
and incites panic by suggesting that people of certain races, colors,
religions, or other protected classes will be moving into the
neighborhood and causing the area to deteriorate and prices to
destabilize
●● broker
, Answer: An individual licensed by TREC to perform brokerage duties
●● broker compensation
Answer: the percentage fee or commission (or, in rare instances, flat fee)
that is paid for an agent's representation and services provided during
real estate transactions; a.k.a. brokerage fee
●● broker price opinion (BPO)
Answer: the agent's determination of an appropriate purchase price
●● brokerage
Answer: the joining of two people for the purpose of an exchange of
products or services
●● buyer representation agreement
Answer: a document that outlines the duties and implications of the
broker-buyer agency relationship
●● buyer's agent
Answer: a broker representing a buyer in a real estate transaction, a.k.a.
buyer's broker
●● client
