California Real Estate Broker ExaminationAgencyEasy
A real estate broker lists a property for sale. A prospective buyer contacts the broker directly and expresses interest in the property. The broker provides information about the property, answers questions, and eventually helps the buyer prepare an offer. The buyer believes the broker is representing their best interests. What type of agency relationship, if any, has likely been created between the broker and the buyer?
- AImplied agency, through the broker's actions and the buyer's reasonable belief.
- BExpress agency, as the buyer clearly stated their interest.
- CDesignated agency, with the broker acting for both parties.
- DNo agency relationship, as there is no written agreement.
Show answer & explanationAnswer & explanation
Correct answer: A. Implied agency, through the broker's actions and the buyer's reasonable belief.
Implied agency can arise from the actions and conduct of the parties, even without a formal written agreement. The broker's actions of assisting the buyer and the buyer's reasonable belief of representation can create an implied agency.
Why the other options are wrong
- B. Express agency requires a clear, explicit agreement, typically written.
- C. Designated agency involves specific assignment within a brokerage, not an automatic creation.
- D. Agency can be created without a written agreement, especially through implication.
Implied Agency
An agency relationship that arises from the actions, conduct, or circumstances of the parties, rather than from an explicit agreement.
- Created by conduct, not explicit words.
- Can lead to unintended agency relationships.
- Agent owes fiduciary duties to the implied principal.
Memory trick: Agency forms by Agreement, Conduct, or Law.