TheoryYork Real Estate Practice Test Video
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Q1In real estate, an 'agent' is best defined as a person who:
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✓ Correct answer: Acts on behalf of another with that person's authority
An agent is someone authorized to act on behalf of a principal. In real estate, licensees act as agents for buyers or sellers, but the defining characteristic is the authority granted to act for another.
Q2The person on whose behalf an agent acts is called the:
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✓ Correct answer: Principal
The principal is the party who authorizes the agent to act on their behalf. In real estate, the principal is typically the buyer or seller who hires the agent.
Q3A 'customer' in a real estate transaction is most accurately described as:
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✓ Correct answer: A third party who is not represented by the licensee
A customer is a third party (not the licensee's client/principal) to whom the licensee may still owe certain duties such as honest dealing but NOT fiduciary duties.
Q4Which type of agency authorizes the agent to perform only ONE specific act?
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✓ Correct answer: Special agency
A special (or specific) agency limits the agent to performing a single act or transaction, such as selling one particular property. Most real estate agents operate as special agents.
Q5A general agency relationship in real estate typically exists between:
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✓ Correct answer: A broker and their licensed salespersons
Salespersons are general agents of their employing broker because they are authorized to conduct a wide range of activities on the broker's behalf on an ongoing basis, not just for a single transaction.
Q6Universal agency differs from general agency primarily because the universal agent:
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✓ Correct answer: May be authorized to act in ALL matters for the principal, including signing legal documents
Universal agency grants the broadest authority, often via a power of attorney, allowing the agent to act in virtually all matters for the principal. General agency, by contrast, is limited to a specific business or type of activity.
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