26-28 Flashcards
listing contract
also called a listing agreement and it acts as a contract between a real estate broker and a seller who is the owner of real property. The listing contract gives the broker the authority to act on behalf of the seller as an agent in the sale of real property included in the agreement.
Exclusive Agency Listing
A listing agreement employing a broker as the sole agent for the seller of real property under the terms of which the broker is entitled to a commission if the property is sold through any other broker, but not if a sale is negotiated by the owner without the services of an agent.
Exclusive Right to Sell Agreement
A listing agreement employing a broker to act as agent for the seller of real property under the terms of which the broker is entitled to a commission if the property is sold during the duration of the listing through another broker or by the owner without the services of an agent. Most common used listing contract and offers most protection to the broker.
Listing
An employment contract between principal and agent authorizing the agent to perform services for the principal involving the latter’s property; listing contracts are entered into for the purpose of securing persons to buy, lease, or rent property. Employment of an agent by a prospective purchaser or lessee to locate property for purchase or lease may be considered a listing.
Net Listing
A listing which provides that the agent may retain as compensation for agent’s services all sums received over and above a net price to the owner. Net listings are fraught with peril and are illegal in some states.
Open Listing
An authorization given by a property owner to a real estate agent wherein said agent is given the nonexclusive right to secure a purchaser; open listings may be given to any number of agents without liability to compensate any except the one who first secures a buyer ready, willing, and able to meet the terms of the listing, or secures the acceptance by the seller of a satisfactory offer.
unilateral contract
a legally-enforceable promise, entered into by competent parties, that obligates one party to do as specified legal service for another. A unilateral contract specifies the conditions under which one person pays the other to perform a certain duty.
non-exclusive agreement
two parties are entering agreement that services will be performed, but more than one party may be contracted to perform the same services.
Comparative Market Analysis
An analysis of the competition in the marketplace that a property will face upon sale attempts.
Fiduciary
A person in a position of trust and confidence, as between principal and broker; broker as fiduciary owes certain loyalty which cannot be breached under the rules of agency.
Fiduciary Duty
That duty owed by an agent to act in the highest good faith toward the principal and not to obtain any advantage over the latter by the slightest misrepresentation, concealment, duress or pressure.
Loyalty
An agent’s duty to place the client’s interest above those of all others, including the agent’s own self-interest.
Obedience
This fiduciary relationship obligates the agent to act in good faith at all times, obeying the client’s instructions in accordance with the contract.
Reasonable Care
The degree of caution and concern for the safety of himself/herself and others an ordinarily prudent and rational person would use in the circumstances. This is a subjective test of determining if a person is negligent, meaning he/she did not exercise reasonable care.
Multiple Listing Service
An association of real estate agents providing for a pooling of listings and the sharing of commissions on a specified basis
Nonexclusive Not-for-Compensation Contracts
specifies commission is not due to the broker. The buyer can retain multiple brokers and revoke the contract at any time. If the broker does find a suitable home, commission is paid at that time.
Nonexclusive Right-to-Represent Contracts
provides the terms of compensation due if the broker finds a suitable home for the buyer. The buyer may obtain a home on their own or through another broker. This agreement can only be prematurely canceled under specified conditions.
Exclusive Right-to-Represent Contracts
This is the most common buyer’s broker contract. This agreement defines broker-agent relationship, which includes the obligations of the buyer and the broker. The buyer cannot retain another broker for the duration of the contract. The broker is due a commission even if the buyer or another broker finds the house the buyer purchases.
Puffing
incredulous claims made by sellers or seller’s agents to attract potential buyers. Exaggerating the positive points of a home may seem harmless, but there is a fine line between creative marketing and fraudulent statements that simply aren’t based on facts.
Passive Fraud (Intentional Non-disclosure)
the intentional failure to reveal a material fact that impacts a real estate transaction. This is also known as a negative fraud.
Active Fraud (Intentional Misrepresentation)
Active fraud occurs when you intentionally deceive a person by misrepresenting a material fact that induces the person to rely upon the fact. This is also known as actual fraud.
Self-Dealing
involves a Realtor or broker who acts in his own best interest in a real estate transaction rather than in the best interest of his client, to whom he owes a fiduciary responsibility.
Express Contract
A contract that has been put into words, either spoken or written. The parties clearly state all the terms of the agreement, and each party knows what they must do to complete the contract. An express contract may be oral or written and still be enforceable. A contract is an express contract if the parties have expressed all the terms clearly.
Implied Contract
An agreement that has not been put into words, but is implied by the actions of the parties. Implied contracts may be implied-in-fact or implied-in-law. Implied contracts usually only arise when essential elements of an express contract are missing—terms haven’t been clearly expressed, or no written agreement exists, or the parties disagree about what was said.
Statute of Frauds
A state law, based on an old English statute, requiring certain contracts to be in writing and signed before they will be enforceable at law, e.g.. contracts for the sale of real property, contracts that are not performed within one year. An oral lease for less than a year is enforceable and does need not be in writing.
Bilateral Contract
A contract in which each party promises to do something. Bilateral contracts are common in real estate. For example, sales contracts are bilateral agreements. A lease agreement is also a bilateral contract. Most listing agreements are also bilateral.
Unilateral Contract
A contract in which one party promises to do something if the other party performs a certain act, but the other party does not promise to perform it; the contract is formed only if the other party does perform the requested act. Unilateral contracts occur in real estate most often as open listings.
Valid
Having force, or binding force; legally sufficient and authorized by law. If an apparently valid contract is unenforceable, it’s usually because it’s missing one of these elements.
Void
To have no force or effect; that which is unenforceable. An agreement can become a void contract in two ways: it can be void when the parties make it or it can become void when something happens to render it void.
Voidable
That which is capable of being adjudged void, but is not void unless action is taken to make it so.
Executed Contract
A contract in which both parties have completely performed their contractual obligations.
Executory Contract
A contract in which one or both parties have not yet completed performance of their obligations.
Sales Contracts
an agreement in which one person agrees to sell real property to another person, who, in turn, agrees to buy the property at a specified price before a specified date.
Options contracts
gives a party a right—but not an obligation—to purchase a property at a specified price during a specified time.
Time is of the Essence
A condition of a contract expressing the essential nature of performance of the contract by a party in a specified period of time. If the parties haven’t performed by the date set in the clause, they are in breach of contract.
Assignment
A transfer to another of any property in possession or in action, or of any estate or right therein.
Novation
The substitution or exchange of a new obligation or contract for an old one by the mutual agreement of the parties. Unlike assignment, however, novation requires both parties to agree to it. Novation usually results in a completely new contract, under the same terms, but with different parties. Unlike assignment, novation usually releases one of the original parties from their obligations.
Liquidated Damages
A sum agreed upon by the parties to be full damages if a certain event occurs. specifies how much will be paid in damages in the event of a particular event, like a breach or an unforeseen event.
Rescission
The cancellation of a contract and restoration of the parties to the same position they held before the contract was entered into.
Specific Performance
An action to compel performance of an agreement, e.g., sale of land as an alternative to damages or rescission. The court orders a party to do whatever the contract requires the person to do.
Statute of Limitations
A statute prescribing a period of limitations for the bringing of certain kinds of legal actions.
