Humber Real Estate - Course 2, Module 1, Explaining Services Available to a Seller or Buyer Questions and Correct Answers (100% Pass)

1 | P a g e Grade A+ Humber Real Estate - Course 2, Module 1, Explaining Services Available to a Seller or Buyer Questions and Correct Answers (100% Pass) Under Ontario law, how is an 'agency relationship' defined? The relationship between two parties in which one party (the agent) accepts responsibility for representing the other party (the principal) in dealing with a third party. While common law uses the terms 'Principal' and 'Third Party', what terms does REBBA use instead? Client & Customer The underlying relationship of the brokerage, salesperson, seller and buyer is based on what? The Common Law of Agency In relation to a contract, how is a third party defined? Master01 | October, 2024/2025 | Latest update 1 | P a g e Grade A+ Someone who is not directly connected with a legal transaction but may be affected by it, OR supporting one of the people involved, i.e. lawyer, home inspector, etc. Under REBBA, what is the equivalent for the legislative term for "agency"? Representation In a real estate transaction, who is the 'Agent'? The brokerage In a real estate transaction, who is usually the 'Principal'? A seller or buyer Agency is also known as ... Representation A Listing (Seller Agency) Agreement / Buyer Agency Agreement is also known as ... Representation Agreement Agreement of Purchase and Sale is also know as ... Master01 | October, 2024/2025 | Latest update 1 | P a g e Grade A+ Agreement (Conveyance of Interest in Real Estate) Dual Agency is also known as ... Multiple Representation Present Offer is also known as ... Convey Offer Purchase / Sale by Registrant Acquisition / Divestiture by Registrant Who are the 'Parties' to a real estate transaction? The seller and buyer What type of relationship does a salesperson have with their brokerage from a legal perspective? Employee / Employer relationship with authorization to trade on behalf of their respective brokerages. Master01 | October, 2024/2025 | Latest update 1 | P a g e Grade A+ Once an agency relationship is established between a brokerage and a client, does the agreement apply to all brokers & salespersons employed by the brokerage? Yes. Everyone must protect the client's best interests. Define 'Brokerage' according to REBBA The agent who is authorized to trade in real estate on behalf of others. Principal is also known as ... Client What is a 'Principal'? Someone who authorizes an agent to act on their behalf in an agency relationship, and provides information and lawful instructions to the agent regarding the transaction. When a brokerage represents a seller when listing a property, who is the 'Principal'? The seller Master01 | October, 2024/2025 | Latest update 1 | P a g e Grade A+ When a brokerage represents a buyer when showing properties for sale, who is the 'Principal'? The buyer What is the comparable term to 'Third Party' under REBBA? Customer A brokerage representing only a seller would consider a buyer as a or a customer? Third Party What does 'Fiduciary' refer to in relation to a Representation Agreement? A relationship of trust with one or more parties. An agent (brokerage) as a has the legal obligation to act in the principal's (seller's or buyer's) best interests. Fiduciary In a 'Fiduciary' relationship, what are the agent's obligations to the principal (aka Client)? Master01 | October, 2024/2025 | Latest update 1 | P a g e Grade A+ - Full disclosure (of all facts known) - Obedience (obey the lawful instructions of the principal) - Confidentiality (all info that is confidential will not be disclosed) - Competence (provide all services competently) - Accounting (responsible handling of all documents and funds related to the transaction) Define 'Authority' in legal terms The legal power or right given by a principal, and accepted by the agent, to act on the principal's behalf in business transactions with a third party, and is typically analyzed in terms of actual and implied authorities. What is an example of 'Actual Authority'? A seller gives the brokerage authority to offer their property for sale. What is an example of 'Implied Authority'? The brokerage will determine the best marketing methods to offer the property for sale (not specified in detail in the contract but allows the agent to get the job done properly).