Real Estate Chapter 12

Real estate brokers serve as intermediaries by bringing buyers and sellers together in the real estate market. For this service, brokers are paid what is commonly referred to as:

• commission.

• licensing fee.

• recovery fee.

• listing fee.

The importance of brokers in the real estate market is often overlooked. In the absence of a real estate broker, one would expect all of the following to be true EXCEPT:

• The asking price would most likely be higher, on average, than in the case where a broker was involved because the seller is in total control of the sale.

• A seller would most likely rely on a “thinner” market (i.e., the seller has access to fewer prospective buyers).

• It would be more difficult for an individual to buy a property.

• Buyers would be more inclined to negotiate prices downward by at least the value of a typical commission.

The individual or entity that grants authority to the broker to act on their behalf is more commonly referred to as the:

• principal.

• agent.

• fiduciary.

• appraiser.

Under the __________, a real estate broker is given the right to act on behalf of another individual or entity who is trying to buy or sell a property.

• law of agency
• law of principals

• fair housing law

• universal disclosure law

When the principal in an agency relationship delegates the power to act on all materials that can be delegated in place of the principal, the agent is more commonly referred to as a:

• universal agent.

• general agent.

• special agent.

• dual agent.

When the principal in an agency relationship delegates the power to act within the confines of a business or employment relationship, the agent is more commonly referred to as a:

• universal agent

• general agent

• special agent

• dual agent

In the basic principal-agent relationship of real estate brokerage, real estate brokers act in the capacity of a:

• universal agent

• general agent

• special agent

• undercover agent

In acting as an agent for another person, the broker carries several special responsibilities, which by law must be adhered to throughout the transaction process. These responsibilities constitute what is commonly referred to as a:

• subagency relationship

• dual agency relationship

• fiduciary relationship

• open listing relationship

In a “traditional brokerage” relationship, the relation between the selling broker and the buyer is typically classified as which of the following (Hint: In this relationship, the buyer is simply a customer of the seller-broker firm rather than a client):

• subagency relationship

• special agency relationship

• “arm’s length” relationship

• dual agency relationship

In a “traditional brokerage” relationship, the relation between the listing broker and the selling broker is typically classified as which of the following:

• subagency relationship

• special agency relationship

• “arm’s length” relationship

• dual agency relationship