Superior Real Estate Chapter 7 Exam 2024 Questions and Answers (Graded A)

Superior Real Estate Chapter 7 Exam 2024 Questions and Answers (Graded A) Agency -Answer-A relationship that exists in which one person is empowered to act on behalf of another; SIMPLY STATED: ACTING ON BEHALF OF ANOTHER Common Law of Agency -Answer-NCREC requires all agency agreements to be IN WRITING Principal/Client -Answer-The person for whom the agent acts Typically the party who hires the agents to act on his behalf Could be the buyer in a buyer agency agreement or the seller in a listing agreement Agent -Answer-The party who acts on behalf of the principal; can be an person who lists a property on behalf of a firm or it could be the firm itself. Subagent (Subagency) -Answer-The agent of the agent; if the agent is the firm itself then the subagent would be those agents who work at the firm; Subagency is used to describe REPRESENTATION OF THE SELLER whether it is from the listing firm/agents or the buyers firm/agents who are WORKING WITH a buyer BUT NOT serving in the capacity of a buyer's agent. All agents/subagents rep the seller UNLESS there is a buyer's agency agreement Third Party -Answer-The party you do not represent With a listing agreement, listing firm and their agent rep the seller as their principal; buyer is the third party (customer). In buyer agency, the buyer agent represents the buyer as their principal and the seller as their third party (customer). An agent can MUST disclose information about a third party to their principal but cannot disclose personal information about their principal with the third party without first obtaining permission Fiduciary -Answer-a relationship based on trust; agency is considered a relationship based on trust as the agent is entrusted to represent the vest interest of the principal client Customer (Third Party) -Answer-The person the agent DOES NOT represent, even though the agent may have a relationship with this person. No written agreement with this person` Other people in the transaction; can be mortgage lender, appraiser, plumber, etc. Agents still owe Customers: fairness, honesty, disclosure of material facts, prompt presentation of offers but NOT fiduciary duties e.g. the agent who shows houses to a buyer but represents the interests of the seller. The seller is the client, the buyer is the customer. Facilitator/Transaction Broker -Answer-Not allowed in NC; is used in some other states "nonagency" relationship The licensee assists buyers and sellers in a transaction but does not actually represent either party Treat both buyer and seller as customers Disclosure of material facts is still required 3 Classifications of Agency Relationships -Answer-Universal Agent General Agent Special Agent Universal Agency -Answer-Agent can do ANYTHING the principal can do Requires unlimited POA; MUST be in writing Can sign contracts, buy/sell on behalf of their client, negotiate on clients behalf - EVERYTHING General Agency -Answer-Ability to perform specific acts for a particular activity Requires limited POA; can sign contracts; POA MUST be in writing Licensees who become affiliated as broker = general agency Property management - agent signs leases, authorize repairs, etc on behalf of client (landlord) Special Agency -Answer-Limited Acts only Detailed instructions - one act at a time Licensees working with sellers/buyers; agents ASSIST buyers/sellers in selling or buying a house ONLY Property Mgmt. Agreement for single property Estoppel (pg. 138) -Answer-when an individual claims incorrectly that a person is his agent and a third party relies on the incorrect representation Creation of Agency Relationship -Answer-ALL OF THESE: Negotiating on someone's behalf Acting on their behalf Gathering Confidential Information Having detailed conversations about personal situatios Items That DO NOT Create Agency Relationship -Answer-Payment, seller usually pays commissions, but you can still have an agency relationship with a buyer. Written agreement (can be oral) NC requires written agency agreements by a certain point when working with a client on a transaction Express or Implied Agreement Creation of Agency Relationships -Answer-Mutual consent of the parties May be Oral or Written MUST be reduced to writing by a certain point depending on who you represent Seller = Before Listing Presentation Buyer = Before you open the first door for them Types of Contracts Required to be in Writing -Answer-Listing Contract Buyer Agency Contract Dual/Designated Agency Contract Property Management Contract Independent Contractor Agreement with a Broker "When" it goes to Contract and MUST be reduced to writing depends on whether or not you are working with a buyer or a seller Types of Agency Relationships -Answer-Express Agency Agreement Implied Agency Express Agency Agreement -Answer-Agency relationship created through words, written or oral, between the principal and the agent, such as a listing agreement or buyer's agency agreement We have talked about it or put it in writing on paper; agreement - Express Agency GETS YOU PAID Implied Agency -Answer-Rare in NC Showing property does NOT create Im