AZ Real Estate Exam- Agency Relationships Practice Questions and Answers

Agency Legal relationship where one party allows someone else the powers to act for them or on their behalf in some manner or capacity" Vicarious liability (Respondent Superior) refers to the responsibility one individual has for the acts of another In the real estate business, this would be the case when a listing or buyer's broker is an "agent" of the seller or buyer It also means that as an agent, we share or have the same intents as our principals For real estate relationships the agent is either the broker or the salesperson and the principal is either the buyer or seller that you represent, while a customer is any other party Principal "Person who uses or hires an agent to work on their behalf with a third party" Principal and Client are the same person Agent Acts on behalf of the principal and should not have a conflict of interest in carrying out the wishes or the act on behalf of the principal" (Also known as the Broker) The agent is empowered to do what the principal could lawfully do in person It is not legal to do something illegal on the behalf of someone else An employing broker shall not assign a real estate employment agreement to another broker without the express written consent of all parties to the agreement at the time of the assignment Customer Third party who is part of the transaction but is not the actual client/principal" Universal Agent Agent acts on behalf of principal in all matters" Commonly used in cases of incapacitation where principal can't make decisions Agent must have a 'power of attorney' drafted and signed by principal Agent then becomes known as the 'attorney in fact' for the principal One need not be a licensed salesperson in real estate to be an attorney in fact in order to sell, liquidate or dispose of real estate