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? - ✔️✔️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? - ✔️✔️Client & Customer
The underlying relationship of the brokerage, salesperson, seller and buyer is based on what?
- ✔️✔️The Common Law of Agency
In relation to a contract, how is a third party defined? - ✔️✔️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"? -
✔️✔️Representation
In a real estate transaction, who is the 'Agent'? - ✔️✔️The brokerage
In a real estate transaction, who is usually the 'Principal'? - ✔️✔️A seller or buyer
Agency is also known as ... - ✔️✔️Representation
A Listing (Seller Agency) Agreement / Buyer Agency Agreement is also known as ... -
✔️✔️Representation Agreement
Agreement of Purchase and Sale is also know as ... - ✔️✔️Agreement (Conveyance of Interest
in Real Estate)
Dual Agency is also known as ... - ✔️✔️Multiple Representation
Present Offer is also known as ... - ✔️✔️Convey Offer
Purchase / Sale by Registrant - ✔️✔️Acquisition / Divestiture by Registrant
Who are the 'Parties' to a real estate transaction? - ✔️✔️The seller and buyer
What type of relationship does a salesperson have with their brokerage from a legal
perspective? - ✔️✔️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? - ✔️✔️Yes.
Everyone must protect the client's best interests.
Define 'Brokerage' according to REBBA - ✔️✔️The agent who is authorized to trade in real
estate on behalf of others.
Principal is also known as ... - ✔️✔️Client
What is a 'Principal'? - ✔️✔️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'? - ✔️✔️The
seller
When a brokerage represents a buyer when showing properties for sale, who is the
'Principal'? - ✔️✔️The buyer
What is the comparable term to 'Third Party' under REBBA? - ✔️✔️Customer
A brokerage representing only a seller would consider a buyer as a _________ or a
customer? - ✔️✔️Third Party
What does 'Fiduciary' refer to in relation to a Representation Agreement? - ✔️✔️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. - ✔️✔️Fiduciary
In a 'Fiduciary' relationship, what are the agent's obligations to the principal (aka Client)? -
✔️✔️- 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)
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