CHAMPION SCHOOL OF REAL ESTATE- LAW OF AGENCY QUESTIONS & ANSWERS (RATED A+)

CHAMPION SCHOOL OF REAL
ESTATE- LAW OF AGENCY
QUESTIONS & ANSWERS (RATED A+)
Broker - ANSWERA Properly Licensed party who serves a principal in an agency
relationship

Agency - ANSWERA fiduciary relationship between a broker and a principal or a
broker and a client

Fiduciary - ANSWERA Party acting for another in a position of trust-a broker or agent

Fiduciary Relationship - ANSWERThe relationship based on trust-the relationship
governed by the law of the agency between a broker and a principal

Principal - ANSWERA party represented by a broker in an agency relationship-also
called a client

Safe Harbor Policy - ANSWERdecides if an advertisement is clear and conspicuous.
Brokers name or brokerage names has to be at least 50% of the largest item on
contact information

Errors and Omissions Insurance - ANSWERprotects the broker if the seller
misrepresents property condition, if the broker is unaware of the misrepresentation
and could not detect it by visual inspection

Stigmatized Property - ANSWERwhen some event occurs, or some people believe
that a past event or condition is affecting it.

Client - ANSWERA Party represented by a broker in an agency relationship-also
called a principal

Customer - ANSWERA third party-one a broker is working with, but who is not
represented by that broker

Buyer Representation Agreement - ANSWERAn employment contract obligating a
broker to act as a fiduciary to a buyer

Listing Agreement - ANSWERAn employment contract obligating a broker to act as a
fiduciary to a seller

Management Agreement - ANSWERAn Employment contract obligating a broker to
act as a fiduciary to a property owner

Public Responsibilities - ANSWERThe responsibilities a broker has to customers or
third partyies including-Honesty, Fairness and disclosure to material facts

, Fiduciary Responsibilities - ANSWERThe responsibilities a broker has to clients in
an agency relationship-includes placing the interest of the client first, full disclosure
of all facts, material and other, and giving advice and opinions

Oral Agency - ANSWERAn agency relationship created by an oral or spoken
agreement

Implied Agency - ANSWERAgency as a result of customary, usual or typical
conditions

Ostensible Agency - ANSWERAgency as a result of the actions of an agent and the
response of others to those actions

Agency by Ratification - ANSWERAgency established when an agent acts without
permission of the principal and the principal accepts or ratifies those actions

Agency by Estoppel - ANSWERA principal fails to maintain due diligence over his
agent and as a result the court prevents the principal from denying the agency
relationship

Universal Agency - ANSWERA principal gives an agent the power to transact
matters of all types for him

General Agency - ANSWERA principal gives an agent the power to bind him in a
particular trade or business

Special Agency - ANSWERA principal gives an agent the power to perform specific
acts, but not to bind the principal-also called limited agency

Limited Agency - ANSWERA principal give an agent the power to perform specific
acts, but not to bind the principal-also call Special Agency

Duties of an Agent - ANSWERAn Agent owes his client obedience, loyalty,
disclosure, confidentiality, accounting and reasonable care

OLDCAR - ANSWERObedience, Loyalty, Disclosure, Confidentiality, Accounting,
Reasonable Care-Duties of an agent

Duties of a Principal - ANSWERA principal owes his agent compensation,
reimbursement, indemnification and performance

CRIP - ANSWERCompensation, Reimbursement, Indemnification and Performance-
duties of a Principal or client

Blind Ad - ANSWERAn advertisement that does not clearly indicate the licensed
status of the party placing the ad-real estate licensees are prohibited from placing
blind ads