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Real Estate · 8 Essential Terms
Salesperson-exam agency law: the fiduciary duties, loyalty, disclosure, confidentiality, commingling, dual agency, special agency, and puffing versus misrepresentation.
License law is state-specific and manuals are revised. Confirm every item against the candidate handbook for the state where you will test.
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The highest duty an agent owes a principal: to put the principal's interest first and to act with care, loyalty, and honesty in the agency.
Flip cards, the timed match, and the quiz open in this panel. The full glossary below is ready either way.
Every term, pronunciation, definition, memory hook, and exam trap is written out here so you can review the whole set or print it.
fi-DOO-shee-air-ee DOO-tee
The highest duty an agent owes a principal: to put the principal's interest first and to act with care, loyalty, and honesty in the agency.
Mnemonic. Fiduciary means the client's interest outranks the commission.
Exam trap. The duty is owed to the client, not to every customer who tours a house. Customers still receive honesty and fair dealing, but not the full fiduciary bundle.
LOY-ul-tee
The fiduciary duty that forbids the agent from secretly competing with the principal, making a secret profit, or favoring someone else's interest.
Mnemonic. Loyalty means no hidden side and no secret profit.
Exam trap. Buying the client's property through a straw buyer, or steering the client toward the deal that pays the agent more, is a loyalty failure even when the price looks fair.
dis-KLOH-zher
The duty to tell the client material facts the client needs, including the agent's own interest in the transaction. Known material property defects are disclosed as the law requires.
Mnemonic. If it would change the client's decision, it does not stay in the agent's pocket.
Exam trap. Silence about a known material defect is not cured by an as-is clause. As-is limits repairs; it does not license concealment.
kon-fi-den-shee-AL-ih-tee
The duty to keep the client's private information secret, including bargaining position, unless the law requires disclosure or the client permits it.
Mnemonic. Confidentiality survives the deal. The client's bottom line is not cocktail conversation.
Exam trap. Confidentiality does not cover a material defect the law says must be disclosed. The trap answer hides a crack because the seller called it confidential.
kuh-MING-gling
Mixing client or trust money with the agent's or the firm's own money. Conversion is the further step of using that money as if it were the agent's.
Mnemonic. Commingling is mixing. Conversion is spending.
Exam trap. Putting an earnest-money check in the personal account over the weekend is commingling even if the agent intends to move it Monday. The exam does not grade the intention.
DOO-ul AY-jen-see
One firm, and sometimes one licensee, representing both buyer and seller in the same transaction. It requires informed consent where the state allows it at all.
Mnemonic. Dual agency serves two principals, so loyalty has to be divided out loud and in writing.
Exam trap. Undisclosed dual agency is the trap. Consent obtained after the offer is written is not the consent the question is looking for.
SPESH-ul AY-jen-see
Authority limited to specific acts, such as finding a buyer, without authority to bind the principal to a contract. A typical listing creates a special agency.
Mnemonic. Special agency finds the deal. It does not sign the deed for the seller.
Exam trap. The trap is a salesperson who accepts an offer on the seller's behalf because the price is good. Without authority to bind, the agent presents; the principal decides.
PUF-ing
Exaggerated opinion that a reasonable person would not treat as a fact, such as calling a house the coziest on the street. It is not a license to invent facts.
Mnemonic. Puffing is sales talk a reasonable buyer would not take to the bank.
Exam trap. Saying the roof is new when it is twelve years old is misrepresentation, not puffing. Opinions can puff. Facts that are false cannot.