HUMBER COLLEGE REAL ESTATE
EXAM COURSE 2, MODULE 1
M1, L1
Principal under REBBA is - Correct Answers -Client (buyer or seller)
Third party under REBBA is - Correct Answers -Customer
Agency - Correct Answers -a relationship between a principal and an agent wherein the
agent is authorized to represent the principal in dealing with the third party
The brokerage is the agent and.... - Correct Answers -the salesperson is authorized to
trade on behalf of the brokerage when representing the principal in a transaction
the principal is the individual who authorizes an agent to act.. - Correct Answers -on
their behalf in an agency relationship
Marketplace term for representation is - Correct Answers -Agency
Marketplace term for multiple representation is - Correct Answers -Dual agency
Marketplace term for acquisition/divesture by registrant is - Correct Answers -
Purchase/Sale of Agreement
Agent obligations to the principal under fiduciary obligations are... (FOCCAL) - Correct
Answers -- full disclosure
-Obedience
-Confidentiality
-Competence
-Accounting
-Loyalty
The two most common ways in which a brokerage can enter into an agency relationship
with a seller/buyer are - Correct Answers -Express of Implied
, Express agreements - Correct Answers -can be written or verbal, and creates a definite
understanding between the parties of the agency relationship
Implied Agreements - Correct Answers -Can be created by the words and actions of
one party, which leads the other party to believe there is an agency relationship when
no formal acknowledgement of the relationship exists- proper documentation is needed
under REBBA
What are the characteristics of a written agreement, verbal agreement, and implied
agreement? - Correct Answers -Written- details the obligations of all parties and would
be signed by the brokerage and the seller or the buyer (Buyer rep agreement, or seller
rep agreement)
Verbal- many of the same aspects as a written agreement but the details are not put
into writing
Implied agreement- can be unintentionally created based on the words and actions of
the salesperson, the seller, or the buyer
What are the additional 3 ways an agency relationship can be created - Correct
Answers --Ratification
-Estoppel
-By Operation of Law
Ratification - Correct Answers -Is created retroactively if both a principal and an agent
later sign an agreement or give formal consent to an action previously taken without
explicit permission, thus ratifying the relationship
ex. a salesperson shows a seller's property to a buyer without authority and brings an
offer. The seller accepts the offer, and this ratifies the agency relationship
Estoppel - Correct Answers -Can be created when a principal leads a third party to
believe that they are being represented by the agent, and that the agent has the
authority to act on behalf of the principal.
(giving someone else the impression that they are represented by the salesperson)
Operation of Law - Correct Answers -Creates an agency relationship where a duty is
created by circumstances is imposed on an agent to act on behalf of the principal,
where previously no agency relationship existed. The agency relationship would be
based on established legal principals rather than by a formal agreement.
Happens in emergency situations
EXAM COURSE 2, MODULE 1
M1, L1
Principal under REBBA is - Correct Answers -Client (buyer or seller)
Third party under REBBA is - Correct Answers -Customer
Agency - Correct Answers -a relationship between a principal and an agent wherein the
agent is authorized to represent the principal in dealing with the third party
The brokerage is the agent and.... - Correct Answers -the salesperson is authorized to
trade on behalf of the brokerage when representing the principal in a transaction
the principal is the individual who authorizes an agent to act.. - Correct Answers -on
their behalf in an agency relationship
Marketplace term for representation is - Correct Answers -Agency
Marketplace term for multiple representation is - Correct Answers -Dual agency
Marketplace term for acquisition/divesture by registrant is - Correct Answers -
Purchase/Sale of Agreement
Agent obligations to the principal under fiduciary obligations are... (FOCCAL) - Correct
Answers -- full disclosure
-Obedience
-Confidentiality
-Competence
-Accounting
-Loyalty
The two most common ways in which a brokerage can enter into an agency relationship
with a seller/buyer are - Correct Answers -Express of Implied
, Express agreements - Correct Answers -can be written or verbal, and creates a definite
understanding between the parties of the agency relationship
Implied Agreements - Correct Answers -Can be created by the words and actions of
one party, which leads the other party to believe there is an agency relationship when
no formal acknowledgement of the relationship exists- proper documentation is needed
under REBBA
What are the characteristics of a written agreement, verbal agreement, and implied
agreement? - Correct Answers -Written- details the obligations of all parties and would
be signed by the brokerage and the seller or the buyer (Buyer rep agreement, or seller
rep agreement)
Verbal- many of the same aspects as a written agreement but the details are not put
into writing
Implied agreement- can be unintentionally created based on the words and actions of
the salesperson, the seller, or the buyer
What are the additional 3 ways an agency relationship can be created - Correct
Answers --Ratification
-Estoppel
-By Operation of Law
Ratification - Correct Answers -Is created retroactively if both a principal and an agent
later sign an agreement or give formal consent to an action previously taken without
explicit permission, thus ratifying the relationship
ex. a salesperson shows a seller's property to a buyer without authority and brings an
offer. The seller accepts the offer, and this ratifies the agency relationship
Estoppel - Correct Answers -Can be created when a principal leads a third party to
believe that they are being represented by the agent, and that the agent has the
authority to act on behalf of the principal.
(giving someone else the impression that they are represented by the salesperson)
Operation of Law - Correct Answers -Creates an agency relationship where a duty is
created by circumstances is imposed on an agent to act on behalf of the principal,
where previously no agency relationship existed. The agency relationship would be
based on established legal principals rather than by a formal agreement.
Happens in emergency situations
