Agency Flashcards
General Agent
is responsible for handling all dealings in a given area for a client, such as a property manager. This type
of agent may be able to bind a client to a contract.
universal agent
has broad authority to act for the principal, such as someone who has power of attorney.
principal
is usually the party to the transaction who is represented (the client).
special agent
aka limited agent) has limited authority to act on a client’s behalf, such as a real estate agent or an
escrow officer. This type of agent can’t bind a client to a contract.
Single agency
is when a licensee represents one party, either the buyer or the seller, in a transaction. Single agency firms
don’t permit licensees to engage in dual agency, even if the state permits it.
Single licensee dual agency
is when a single licensee represents both the buyer and the seller in the same
transaction.
dual-licensed dual agency
Designated/appointed agency (aka dual-licensed dual agency) is when two separate licensees from a single
firm each represent one party (buyer or seller) in the same transaction.
Sub-agency
has traditionally been recognized as a situation in which a licensee brings an unrepresented buyer to a
transaction. In states where sub-agency is permitted, that licensee represents and owes fiduciary duties to the seller.
Today’s buyers are typically represented by a licensee, thus eliminating sub-agency of this type in most transactions.
“facilitator” and “transaction broker”
Terms used interchangeably to describe a nonagency
relationship.
OLD CAR
A licensee’s fiduciary responsibilities (duties) include obedience, loyalty, disclosure, confidentiality, accounting, and reasonable skill and care.
Two duties that do not end with termination of agency relationship.
Confidentiality and accounting.
COALD
Traditional rules of agency: Confidentiality, Obedience, Accounting, Loyalty and full Disclosure (COALD) along with Reasonable Care and Diligence.
attorney-in-fact
A power of attorney ( POA) is a legal document that grants legal rights and powers from one person (the principal) to
another (the agent or attorney-in-fact) to make decisions on behalf of the principal. The agent’s decisions must reflect
the principal’s preferences and can’t exceed the authority granted by the specific power of attorney document. An agent
may never override the principal’s wishes.
General Power of Attorney
general power of attorney gives broad powers to the agent to act in someone else’s behalf.
special power of attorney
A special power of attorney is more narrow in scope and authorizes the agent to act in specific circumstances or
transactions. A special power of attorney grants authority similar to that of an agency agreement between a
licensee and a client.
express agency
Express agency is an agency relationship that’s understood and agreed to by the parties. Spoken or written words create
express agency
Implied agency
Actions of the parties may create implied agency, which is to be avoided. All agency agreements should be in writing.
Estoppel
Estoppel is a legal principle that protects one party by holding another to their word or requiring them to adhere to established legal facts. Estoppel prevents one party from suing another, because the party’s actions or statements implied that he or she
agreed with the other party; e.g., if Kara creates an implied agency relationship with a client and performs agency
tasks for the client, estoppel prevents her from later claiming she wasn’t in an agency relationship.
net listing
A net listing is one in which the broker contracts with the seller to receive all net proceeds from a sale above a specified
sale price. Net listings are illegal in most jurisdictions because they create a conflict of interest and encourage unethical
behavior such as trying to sell a property for more than its value.
Exclusive agency Agreement
agreements allow sellers who find the buyer and to avoid paying the listing agent a commission.
exclusive right-to-sell
agreement provides the listing agent with a commission no matter who brings the buyer to the
transaction. Exclusive right-to-sell agreements include definite start and end dates.
Open listing
agreements allow the seller to work with multiple agents. They don’t always result in a listing agent earning
a commission, as only the agent who successfully brings a buyer will be paid.
exclusive right-to-represent agreement buyer
Other licensees can’t represent the buyer during the term of an exclusive right-to-represent agreement.
Non-exclusive/open buyer representation agreement
Non-exclusive/open buyer representation agreements allow the buyer to work with many agents during the home search
process. If a buyer enters into an exclusive agreement with a broker, any open agreements are terminated.
Agency coupled with interest
Agency coupled with interest means that the agent has some form of ownership of, security interest in, or possession of
the principal’s property. The agent’s compensation depends on continuance of the agency agreement. For example, a
licensee sells an undeveloped acreage for a reduced cash price plus the right to an exclusive-right-to-sell listing agreement
on the developed lots.
Virginia: What is the difference between Dual Agency and Dual Representation in Virginia?
Dual agency has brokerage agreement behind it (the broker is the person who hold the contract, not the agency) In commercial real estate, agents can do Dual agency OR Dual Representation. Dual Representation, the agent can have an independent contact with the client rather than a brokerage agreement.
