Real Estate Exam Cheat Sheet

Agency

Fiduciary Duties — COALD

• Care — use reasonable skill & care
• Obedience — follow lawful client instructions
• Accounting — account for all funds
• Loyalty — place client interests first
• Disclosure — reveal all material facts

Types of Agency

• Express — created by written/oral agreement (listing agreement)
• Implied — created by actions/conduct
• Ostensible (Apparent) — principal causes 3rd party to believe agency exists
• Seller's Agent — represents seller; owes fiduciary duties to seller
• Buyer's Agent — represents buyer; owes fiduciary duties to buyer
• Dual Agent — represents both; requires written consent from both parties

Disclosure Requirements

• Agency relationship must be disclosed in writing (C.A.R. AD form)
• Disclosure required ASAP — before offer is signed
• Material facts must always be disclosed regardless of agency
• Stigmatized property: natural death need not be disclosed after 3 years (CA)

Dual Agency Rules

• Legal in CA only with informed written consent from both buyer and seller
• Agent cannot disclose seller's lowest acceptable price or buyer's highest
• Designated agency: different agents within same brokerage represent each party

Vicarious Liability

• Broker is vicariously liable for acts of their salespersons
• Applies even if broker did not authorize the act
• Broker must supervise all affiliated licensees