National Real Estate Exam TEST BANK
2022
Agent --> works for a client giving advice and with a customer giving information
Agency --> condition which legally exists when a principal contracts with an agent to
perform on his behalf.
Universal agency --> authorizes an agent to handle matters of all types for the principal.
Requires power of attorney
General agent --> authorizes an agent to transact matters concerning a specific area of
business for the principal.
Example: managing several investment properties
Specific agent --> represents the principal for a specific act only, such as the sale of a house
Express agency --> based on a formal agreement between parties in which the parties express
the establishment of an agency and state the terms and conditions
EX. listing agreement
Implied agency --> occurs when parties act in such a was as to indicate that they have agreed
to an agency
Fiduciary relationship --> based on trust and confidence
EX giving power of attorney
Fiduciary responsibilities --> OLD CAR
Obedience, loyalty, disclosure, confidentiality, accountability, reasonable care
duties owed to the customer --> the person you do not represent, owe them honesty and
fairness
Termination of agency --> death or incapacity of either party
destruction or condemnation of property
,expiration of terms
by mutual agreement
renunciation by the agent (fire each other)
bankruptcy of the principal
fulfillment of purpose
Designated agent --> person authorized by the broker to act as the agent of a specific
principal
Sub agency --> (not in La) salespersons are general agents of the broker, and therefore owe
fiduciary duties to the broker. a cooperating broker may also be a subagent of a listing broker
Dual agency --> the act of representing 2 principals to a transaction at the same time and
require equal loyalty to both.
Undisclosed dual agency --> (illegal in La) may occur unintentionally by either carelessness
or misunderstanding
Disclosed dual agency --> representing both the buyer and seller in the same transaction with
the informed consent of both
Agency disclosure brochure --> must be signed by the client and agent before an agent may
show a property
Pertinent material facts and defects --> an agent must fully disclose that he knows to be
present in the property he is showing
Latent defect --> a hidden structural defect that would not be discovered by ordinary
inspection
Fraud --> the intentional misrepresentation of a material fact
Negligent misrepresentation --> occurs when the agent should have known that a statement
about a material fact was false
,Negligent omission --> the agent accidently fails to perform some act, such as delivering a
counter offer
Puffing --> exaggerating a property's benefits such as views or landscaping. an opinion
Agent may be --> employee of a broker or an independent contractor
Exempt from licensing --> for sale by owner
executors, administrators, guardians
attorney
lending institution
city, state, federal
appraisers, trustees
(la) appraisers must have license
environmental hazards --> hazards you must disclose.
option (unilateral contract) --> a right extended to purchase real property for a specified
amount within a specified period of time. If the second party accepts, the offerer is obligated.
Must be signed by one.
void contract (La null) --> no contract at all. does not conform with law
voidable contract (La relatively null) --> a contract that is still binding, but is flawed
offer and acceptance --> "meeting of the minds" offerer makes and offer and offeree accepts
or rejects
constructive communication --> when an offerer specifies the means by which he wants his
offer accepted.
legally binding as soon as the offeree follows offerers directions
actual communication --> when the offerer receives written or oral communication of
acceptance
Valid contract in La must have --> cause, even if money is involved.
, promise is considered to be sufficient cause
lesion beyond moiety (la) --> if property is sold for less than 1/2 of the market value at the
time of sale
seller can sue to rescind the sale for up to one year from the time of sale
legal capacity --> all parties must be legally competent and authorized.
minors must have legal guardian
legal objective --> contracts that are in violation of the law, lack legality of purpose are not
valid
disclosure --> for a real estate contract to be valid, an accurate legal description of the subject
property must be disclosed.
actual fraud --> committed when there is intent to deceive
constructive fraud --> committed with no intent to harm, mislead or misrepresent
by performance --> all terms of a contract are satisfactorily carried out.
written acceptance --> when the person to whom acts have not been done or to whom money
has not been paid accepts in writing partial performance of the terms of the contract
novation --> allows substitution with a new party or the replacement of a new obligation for
an old one
bankruptcy --> under certain conditions, bankruptcy may cause a contract to be discharged. it
will not relieve you of a fraudulent debt
statutes of fraud --> the real estate contracts must be in writing if they are to be enforceable
by the courts
open listing --> seller retains the right to employ as many brokers as he wants to try to sell his
property, but is only obligated to pay a commission to the one who actually finds a willing
2022
Agent --> works for a client giving advice and with a customer giving information
Agency --> condition which legally exists when a principal contracts with an agent to
perform on his behalf.
Universal agency --> authorizes an agent to handle matters of all types for the principal.
Requires power of attorney
General agent --> authorizes an agent to transact matters concerning a specific area of
business for the principal.
Example: managing several investment properties
Specific agent --> represents the principal for a specific act only, such as the sale of a house
Express agency --> based on a formal agreement between parties in which the parties express
the establishment of an agency and state the terms and conditions
EX. listing agreement
Implied agency --> occurs when parties act in such a was as to indicate that they have agreed
to an agency
Fiduciary relationship --> based on trust and confidence
EX giving power of attorney
Fiduciary responsibilities --> OLD CAR
Obedience, loyalty, disclosure, confidentiality, accountability, reasonable care
duties owed to the customer --> the person you do not represent, owe them honesty and
fairness
Termination of agency --> death or incapacity of either party
destruction or condemnation of property
,expiration of terms
by mutual agreement
renunciation by the agent (fire each other)
bankruptcy of the principal
fulfillment of purpose
Designated agent --> person authorized by the broker to act as the agent of a specific
principal
Sub agency --> (not in La) salespersons are general agents of the broker, and therefore owe
fiduciary duties to the broker. a cooperating broker may also be a subagent of a listing broker
Dual agency --> the act of representing 2 principals to a transaction at the same time and
require equal loyalty to both.
Undisclosed dual agency --> (illegal in La) may occur unintentionally by either carelessness
or misunderstanding
Disclosed dual agency --> representing both the buyer and seller in the same transaction with
the informed consent of both
Agency disclosure brochure --> must be signed by the client and agent before an agent may
show a property
Pertinent material facts and defects --> an agent must fully disclose that he knows to be
present in the property he is showing
Latent defect --> a hidden structural defect that would not be discovered by ordinary
inspection
Fraud --> the intentional misrepresentation of a material fact
Negligent misrepresentation --> occurs when the agent should have known that a statement
about a material fact was false
,Negligent omission --> the agent accidently fails to perform some act, such as delivering a
counter offer
Puffing --> exaggerating a property's benefits such as views or landscaping. an opinion
Agent may be --> employee of a broker or an independent contractor
Exempt from licensing --> for sale by owner
executors, administrators, guardians
attorney
lending institution
city, state, federal
appraisers, trustees
(la) appraisers must have license
environmental hazards --> hazards you must disclose.
option (unilateral contract) --> a right extended to purchase real property for a specified
amount within a specified period of time. If the second party accepts, the offerer is obligated.
Must be signed by one.
void contract (La null) --> no contract at all. does not conform with law
voidable contract (La relatively null) --> a contract that is still binding, but is flawed
offer and acceptance --> "meeting of the minds" offerer makes and offer and offeree accepts
or rejects
constructive communication --> when an offerer specifies the means by which he wants his
offer accepted.
legally binding as soon as the offeree follows offerers directions
actual communication --> when the offerer receives written or oral communication of
acceptance
Valid contract in La must have --> cause, even if money is involved.
, promise is considered to be sufficient cause
lesion beyond moiety (la) --> if property is sold for less than 1/2 of the market value at the
time of sale
seller can sue to rescind the sale for up to one year from the time of sale
legal capacity --> all parties must be legally competent and authorized.
minors must have legal guardian
legal objective --> contracts that are in violation of the law, lack legality of purpose are not
valid
disclosure --> for a real estate contract to be valid, an accurate legal description of the subject
property must be disclosed.
actual fraud --> committed when there is intent to deceive
constructive fraud --> committed with no intent to harm, mislead or misrepresent
by performance --> all terms of a contract are satisfactorily carried out.
written acceptance --> when the person to whom acts have not been done or to whom money
has not been paid accepts in writing partial performance of the terms of the contract
novation --> allows substitution with a new party or the replacement of a new obligation for
an old one
bankruptcy --> under certain conditions, bankruptcy may cause a contract to be discharged. it
will not relieve you of a fraudulent debt
statutes of fraud --> the real estate contracts must be in writing if they are to be enforceable
by the courts
open listing --> seller retains the right to employ as many brokers as he wants to try to sell his
property, but is only obligated to pay a commission to the one who actually finds a willing
