A buyer enters into a buyer agency agreement with a real estate licensee to negotiate the purchase of a particular FSBO property. The buyer then enters into purchase and sale agreement, but the property he agreed to buy is subsequently condemned. Which of the following is true?
A. The agency is terminated
B. They can immediately look for another property
C. The agent may sue the buyer for damages, if any were incurred
D. This creates a dual agency
Answer: A. The agency is terminated
An agency is terminated by operation of law based on the extinction of the subject matter, such as the condemnation of the subject property. The buyer and agent can look for another property, but would need to form another agency relationship first. Practically speaking, that's not very difficult (especially in states where an agency relationship can be formed simply by beginning to provide brokerage services to someone).
You might also like to view...
The _______________ selects and removes the corporate officers, determines the capital structure and declares dividends.
Fill in the blank(s) with the appropriate word(s).
The net liability of bonds will decrease each interest period if the bonds were issued at a premium
Indicate whether the statement is true or false