Agency and RE License Act Flashcards
What is the definition of agency?
A relationship established between a principal and a real estate agent
What do we call a relationship in which one party places special trust, confidence, and reliance in another?
Fiduciary Relationship
Real estate brokerage is based on what kind of agency?
Special agency
Under what circumstances would a client be responsible for misrepresentation committed by his or her real estate agent?
If the client actually knew of the misrepresentation
At whose level is agency formed?
At the broker level, never the salesperson level
What is a duty agent?
The person who is given the opportunity to answer the phones or greet someone walking off the street in an attempt to find leads
How does a buyer typically come in contact with a real estate agent?
By calling on a sign in the yard or calling on an ad in a publication
What are fiduciary duties designed to do?
Place the client’s needs above the desires of the brokers and salespeople
What gives consumers the idea that real estate professionals have a high level of expertise in real estate?
The state requires them to be licensed.
These days, how do consumers often view a home purchase?
As an investment
In a home sale involving 2 licensees, absent a buyer representation agreement, who do the brokers represent?
Contrary to what the buyer may think, absent a buyer representation agreement, both the listing broker and the selling broker represent the seller.
What is the primary reason that you need to have a clear understanding of agency concepts?
Because of the increased interest in litigation
What four types of agency positions are recognized in Texas?
Seller’s agent (single agent)
Subagent
Buyer’s agent (single agent)
Intermediary
Under what conditions can a supervising broker appoint a license holder associated with the broker to represent one party to a real estate transaction?
With written consent of all parties
When must a seller’s agent provide a written statement about brokerage services to a party?
At the time of the first substantive dialogue with the party
When must a buyer’s agent provide a written statement about brokerage services to a party?
At first contact with the seller, landlord, or either party’s agent
In the real estate world, the agent relationship is between a licensee and one of the following:
A seller
A buyer
A landlord
A tenant
Agency
A relationship established between a principal and a real estate agent
Agent
The person who is authorized to represent and act on the behalf of another person
Brokerage Agreement
A written or oral agreement for brokerage services in exchange for compensation
Client
A person who is being represented by an agent
Consumer
A person requesting or receiving licensed services
Customer
A person who is not represented by an agent, but receiving ministerial acts
Minesterial Act
Acts performed by a licensed agent for a customer that are informative or clerical in nature
Fiduciary Relationship
A relationship in which one party places special trust, confidence, and reliance in another
Principal
The person who hires the agent and delegates to the agent the responsibility of representing the principal’s interests
Universal Agency Relationship
the principal empowers the agent to perform any and all actions that may be legally delegated to an agency representative.
General Agency
the principal delegates to the agent ongoing tasks and duties within a particular business or enterprise.
Special Agency
the principal delegates authority to conduct a specific activity, after which the agency relationship terminates.
In most instances
real estate brokerage is based on a special agency.
Agency Formed At…
is always formed at the broker level, never at the salesperson level.
broker of record for the office
is responsible for everything that is done by the broker and her sales people.
Upon becoming a client
the buyer will receive a much higher degree of service, and it will be the salesperson’s job to get the buyer the best transaction possible.
Fiduciary Duties
Licensees who practice real estate in Texas have strong responsibilities to the people whom they are representing.
There are several reasons why the question of representation is an important one:
Consumer Representation- Consumers on both sides of a transaction lean heavily on the skill, judgment, and competency of their agents.
Intricacy- of relationships with clients.
Multiple Brokers- Most of the sales of residential property involve two licensees: a listing broker and a selling broker.
Professionalism in the Industry
Public View of the Profession
Increased Litigation- the primary reason that a clear understanding of agency concepts is necessary.
Texas Real Estate License Act (TRELA)
defines four positions a broker might take with a seller, buyer landlord, or tenant:
Seller’s Agent
Sub Agent
Buyer’s Agent
Intermediary
Seller’s Agent
When a licensee represents either a seller/ landlord or a buyer/tenant directly and exclusively as an agent.
Sub Agent
Where “cooperating” licensees, of differing firms, are subagents of the listing supervising broker of the principal.
Intermediary
where a licensee represents both sides of a transaction in an agent-client capacity.
Dual Agency
Not Allowed in Texas
Texas Law Requires
that seller agents provide to a party to a real estate transaction at the time of the first substantive dialogue a written disclosure that explains the four agency positions.
