AgencyIntermediateArizona Exam

In Arizona, 'apparent authority' arises when:

AA principal explicitly grants authority to an agent in a signed writing that specifies the exact scope of the agent's powers for a particular transaction

BA third party reasonably believes an agent has authority based on the principal's conduct, even if no actual authority was grantedCorrect

CAn agent acts to protect the principal's interests in an emergency situation where prior authorization was impossible to obtain in time to prevent harm

DA salesperson acts under general authority from their employing broker, creating a presumption of authority for all acts within the normal scope of real estate brokerage

Why A third party reasonably believes an agent has authority based on the principal's conduct, even if no actual authority was granted Is Correct

Answer B: A third party reasonably believes an agent has authority based on the principal's conduct, even if no actual authority was granted

Apparent authority (also called ostensible authority) arises when a principal's words or conduct lead a third party to reasonably believe the agent has authority, even though no actual authority was granted. The principal may be bound by the agent's acts.

Exam Tip: Agency

Agency questions are among the most tested on the exam. Focus on the difference between client and customer, and memorize the fiduciary duties (OLD CAR). Watch for questions that try to blur the line between a general agent and a special agent.

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Key Terms to Know

Agency

A legal relationship in which a licensee (agent) acts on behalf of a principal (buyer or seller) in a real estate transaction.

Dual Agency

A situation where a single real estate agent or brokerage represents both the buyer and the seller in the same transaction.

Fiduciary Duty

The highest legal duty an agent owes to a principal — requiring the agent to act in the principal's best interest above all others.

Listing Agreement

A contract between a property owner and a real estate broker that authorizes the broker to market and sell the property.

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