Humber Real Estate - Course 2, Module 1, Explaining Services Available to a Seller or Buyer Questions and Answers

Under Ontario law, how is an 'agency relationship' defined? - Answer-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? - Answer-Client & Customer The underlying relationship of the brokerage, salesperson, seller and buyer is based on what? - AnswerThe Common Law of Agency In relation to a contract, how is a third party defined? - Answer-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"? - Answer-Representation In a real estate transaction, who is the 'Agent'? - Answer-The brokerage In a real estate transaction, who is usually the 'Principal'? - Answer-A seller or buyer Agency is also known as ... - Answer-Representation A Listing (Seller Agency) Agreement / Buyer Agency Agreement is also known as ... - AnswerRepresentation Agreement Agreement of Purchase and Sale is also know as ... - Answer-Agreement (Conveyance of Interest in Real Estate)Dual Agency is also known as ... - Answer-Multiple Representation Present Offer is also known as ... - Answer-Convey Offer Purchase / Sale by Registrant - Answer-Acquisition / Divestiture by Registrant Who are the 'Parties' to a real estate transaction? - Answer-The seller and buyer What type of relationship does a salesperson have with their brokerage from a legal perspective? - Answer-Employee / Employer relationship with authorization to trade on behalf of their respective brokerages. Once an agency relationship is established between a brokerage and a client, does the agreement apply to all brokers & salespersons employed by the brokerage? - Answer-Yes. Everyone must protect the client's best interests. Define 'Brokerage' according to REBBA - Answer-The agent who is authorized to trade in real estate on behalf of others. Principal is also known as ... - Answer-Client What is a 'Principal'? - Answer-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'? - Answer-The seller When a brokerage represents a buyer when showing properties for sale, who is the 'Principal'? - AnswerThe buyer What is the comparable term to 'Third Party' under REBBA? - Answer-CustomerA brokerage representing only a seller would consider a buyer as a _________ or a customer? - AnswerThird Party What does 'Fiduciary' refer to in relation to a Representation Agreement? - Answer-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. - Answer-Fiduciary In a 'Fiduciary' relationship, what are the agent's obligations to the principal (aka Client)? - Answer-- 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 - Answer-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'? - Answer-A seller gives the brokerage authority to offer their property for sale. What is an example of 'Implied Authority'? - Answer-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). Under REBBA, what is 'Single Agency' called? - Answer-Single Representation Define a 'Single Agency' relationship - Answer-There is one agent (brokerage) representing one principal (seller or buyer) within a transaction with a third party.Define a 'Dual Agency' relationship - Answer-There is one agent (brokerage) representing two or more principals (sellers and/or buyers) within the same transaction. What is 'Dual Agency' called under REBBA? - Answer-Multiple Representation (a form of concurrent representation) What is the legal term used when a brokerage represents two clients (i.e. two competing buyers) at the same time? - Answer-Concurrent Representation Under common law, how can you legally enter into agreement? - Answ