Agency Flashcards
The party empowered to represent a principal (client) in real estate transaction
Agent
The license assigned to assist the principal (client) on behalf of the agent (BIC)
Subagent
An agent (BIC) who represents both the buyer and the seller in the same in the same real estate transaction
This occurs only with the prior informed, written and signed of both parties
Dual agent
The license (subagent) designated by the dual agent (BiC) to solely represent the interests of one client in real estate transaction in which a dual agency relationship exists
This occurs only with the prior informed, written, and signed of both parties
Designated
Agent
A person who performs only ministerial
acts in a transaction
This person does not represent either party
in the transaction; instead, they provide
information on the property, show the
property, and act as a scribe for completion and
presentation of paperwork between the parties.
They do not offer advice, counsel, or expertise
during the offer or negotiation phases of a deal.
Transaction
Broken
The identity of the principal is known to all parties in the transaction
Most residential transactions involve a disclosed principal
Disclosed
Principal
A specific third party who has chosen not
to enter into an agency relationship but
still requests assistance from an agent in a real
estate transaction
An agent may not provide fiduciary services
(obedience, loyalty, and disclosure) to a customer.
The agent, however, must still provide the
customer with honesty, fair dealing, accounting
for money, and reasonable care.
Customer
The identity of the principal is not known to any
third parties in the transaction, although the
existence of the principal has been established.
Partially
Disclosed
Principal
Anyone who is not a principal (represented by
the agent through a written agency agreement)
in a real estate transaction
Third party
The existence of a principal is not disclosed; their own name in the contract,
Undisclosed
Principal
A person who has been given written authority to legally act behalf of another
The written permission is called power attorney (POA)
Attorney-in-fact
An agent is given broad authority to conduct business on behalf of a large entity
For example, an agent might work on behalf of chain grocery store and could be tasked with finding and purchasing new locations for the store
Universal agent
The person or entity (client) who enlists party (agent) to represent them in real estate transaction
Principal
Agency:used to describe the fiduciary (legal) and consensual realationship between an agent and a principal (client)
Agency relationship: Required for the agent to provide any professional services to the principal
Agency and agency relationship
Created purely through the actions of the parties involved but should be used in real estate transaction
Lmplied agency
Established in writing through a buyer representation agreement or a listing agreement
Express agency
The efforts the agent takes are understandable and appreciate and the agent has expertise needed to help the client
Old car: Reasonable care and skill
Required of the agent in two areas
Money: The agent must account for any money (typically) earnest money) that a principal contribution toward the completion a transaction
Paperwork: The agent must account for all paperwork related to the transaction and provide copies of all such documents to the principal
Accounting
Nothing can be disclosed to anyone else
With just a few exceptions
When the principal has given permission to the agent disclose information
When it is required by law to divulge
Information
When the agent is definitely themselves in a legal setting accusations of wrongdoing
Confidential
The obligation of the agent to reveal material information related to the transaction
Disclosure
Requires the agent to put the interest of the principal ahead of the interest of all others in the transaction (including the agent)
Loyalty
Requires the agent to obey all instructions from their principal for duration of the agency relationships
The agent is free to express ideas contrary to the principal and provide professional guidance on how to proceed, but in the end, the principal’s wishes should be followed, so long as the actions are not illegal or immoral
Obedience
Summarizes the obligations of the fiduciary relationship
• Obedience
•Loyalty
•Disclosure
•Confidentiality
•Accounting
•Reasonable care and skill
OLD CAR
The agent has six specific legal obligations that they must abide by in their dealings with the principal
These obligations relate to the trust that principal has placed in the agent during the transaction
Fiduciary relationship
