National Real Estate Exam: National Real Estate Exam Prep: Questions & Answers: Updated Complete Solution

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Agent (ans- works for a client giving advice and with a customer giving information Agency (ans- condition which legally exists when a principal contracts with an agent to perform on his behalf... . Universal agency (ans- authorizes an agent to handle matters of all types for the principal. Requires power of attorney General agent (ans- authorizes an agent to transact matters concerning a specific area of business for the principal. Example: managing several investment properties Specific agent (ans- represents the principal for a specific act only, such as the sale of a house Express agency (ans- based on a formal agreement between parties in which the parties express the establishment of an agency and state the terms and conditions Ex. Listing agreement Implied agency (ans- occurs when parties act in such a was as to indicate that they have agreed to an agency Fiduciary relationship (ans- based on trust and confidence Ex giving power of attorney Fiduciary responsibilities (ans- old car Obedience, loyalty, disclosure, confidentiality, accountability, reasonable care Duties owed to the customer (ans- the person you do not represent, owe them honesty and fairness Termination of agency (ans- death or incapacity of either party Destruction or condemnation of property Expiration of terms By mutual agreement Renunciation by the agent (fire each other) Bankruptcy of the principal Fulfillment of purpose Designated agent (ans- person authorized by the broker to act as the agent of a specific principal Sub agency (ans- salespersons are general agents of the broker, and therefore owe fiduciary duties to the broker. A cooperating broker may also be a subagent of a listing broker Dual agency (ans- the act of representing 2 principals to a transaction at the same time and require equal loyalty to both. Undisclosed dual agency (ans- may occur unintentionally by either carelessness or misunderstanding Disclosed dual agency (ans- representing both the buyer and seller in the same transaction with the informed consent of both Agency disclosure brochure (ans- must be signed by the client and agent before an agent may show a property Pertinent material facts and defects (ans- an agent must fully disclose that he knows to be present in the property he is showing Latent defect (ans- a hidden structural defect that would not be discovered by ordinary inspection Fraud (ans- the intentional misrepresentation of a material fact Negligent misrepresentation (ans- occurs when the agent should have known that a statement about a material fact was false Negligent omission (ans- the agent accidently fails to perform some act, such as delivering a counter offer Puffing (ans- exaggerating a property's benefits such as views or landscaping. An opinion Agent may be (ans- employee of a broker or an independent contractor Exempt from licensing (ans- for sale by owner Executors, administrators, guardians Attorney Lending institution City, state, federal Appraisers, trustees (la) appraisers must have license Environmental hazards (ans- hazards you must disclose. Option (unilateral contract) (ans- a right extended to purchase real property for a specified amount within a specified period of time. If the second party accepts, the offerer is obligated. Must be signed by one. Void contract (ans- no contract at all. Does not conform with law Voidable contract (ans- a contract that is still binding, but is flawed Offer and acceptance (ans- "meeting of the minds" offerer makes and offer and offeree accepts or rejects Constructive communication (ans- when an offerer specifies the means by which he wants his offer accepted. Legally binding as soon as the offeree follows offerers directions Actual communication (ans- when the offerer receives written or oral communication of acceptance Valid contract (ans- cause, even if money is involved. Promise is considered to be sufficient cause Lesion beyond moiety (la) (ans- if property is sold for less than 1/2 of the market value at the time of sale Seller can sue to rescind the sale for up to one year from the time of sale Legal capacity (ans- all parties must be legally competent and authorized. Minors must have legal guardian Legal objective (ans- contracts that are in violation of the law, lack legality of purpose are not valid Disclosure (ans- for a real estate contract to be valid, an accurate legal description of the subject property must be disclosed. Actual fraud (ans- committed when there is intent to deceive Constructive fraud (ans- committed with no intent to harm, mislead or misrepresent By performance (ans- all terms of a contract are satisfactorily carried out. Written acceptance (ans- when the person to whom acts have not been done or to whom money has not been paid accepts in writing partial performance of the terms of the contract Novation (ans- allows substitution with a new party or the replacement of a new obligation for an old one Bankruptcy (ans- under certain conditions, bankruptcy may cause a contract to be discharged. It will not relieve you of a fraudulent debt Statutes of fraud (ans- the real estate contracts must be in writing if they are to be enforceable by the courts Open listing (ans- seller retains the right to employ as many brokers as he wants to try to sell his property, but is only obligated to pay a commission to the one who actually finds a willing and able buyer. If the seller sells his property himself, he is not obligated to [Show More]

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