Agency Basics Flashcards
Accountability
In an agency relationship, the agent’s fiduciary duty to account to the principal, rather related to financial accounting or responsiveness
Actual Fraud
Intentional misrepresentation or concealment of a material fact; when a person actively conceals material information or makes statements known to be false or misleading
Agency
A relationship of trust created when one person (the principal) gives another person (the agent) the right to represent the principal in dealings with third parties.
Agency Coupled with an Interest
A situation in which the agent has a personal interest in the subject of the agency, as when one co- owner has been authorized by the others to sell their property.
Agent
A person licensed to represent another (the principal) in a real estate transaction; a person authorized to represent the principal in dealings with third parties (clients or customers).
Brokerage
A business concept premised primarily on bringing parties together for the purpose of a transaction.
Client
A person being represented by a licensee. Also called a Principal
Commingle
Illegally mixing personal funds with money held in trust on behalf of a client.
Confidentiality
The protection of the client’s confidential information
Constructive Fraud
A negligent misrepresentation or concealment of a material fact; when a person carelessly fails to disclose material information, or makes false or misleading statements.
Consumer
A person or entity seeking or receiving licensed activities
Customer
A party in a transaction with whom an agent does not have a fiduciary duty or relationship, but with whom an agent must still be fair and honest.
- honesty & fairness
Designated Agency
A contractual relationship between a sponsoring broker and a client in which one or more licensees associated with or employed by the sponsoring broker are appointed to be the designated agent of the client.
Disclosure
An agent’s fiduciary obligation to reveal certain points or facts
Disclosures
Points or facts in a real estate transaction that must be revealed
Express Agency
Agency relationship based on an expressed agreement, either written or oral.
Fiduciary
Person in a position of trust, held by law to high standards of good faith and loyalty.
Fraud
An intentional or negligent misrepresentation or concealment of a material fact. Making statements that a person knows, or should realize, are false or misleading
General Agent
A person authorized to handle a principal’s affairs in one area or in specified areas.
Gratuitous Agency
An agency relationship where the agent is not compensated for his or her services, but still owes the principal all statutory obligations due every client
Implied Agency
Agency relationship created through the behavior (actions or words) of one or both parties.
Latent Defects
A defect that is not visible or apparent; a hidden defect that would not be discovered in a reasonably thorough inspection of property
Loyalty
A fiduciary duty that requires an agent to put the principal’s interests above all others’ interests, including the agent’s own.
Material Fact
An important fact; one that is likely to influence a decision
Multiple Listing Service (MLS)
A cooperative service whereby local member brokers agree to share listings, show properties, and share commissions on jointly sold properties
Negligence
Conduct that falls below the standard of care a reasonable person would exercise under the circumstances; an unintentional breach of a legal duty resulting from carelessness, recklessness, or incompetence.
Obedience
A fiduciary duty that requires an agent to follow the (legal) instructions of the principal, obey the parameters of the agency relationship, and not stray beyond the scope of authority
Offer of Cooperation
Usually published in a multiple listing service that includes the amount (most frequently a percent of the gross sales price or a flat fee) offered as compensation to an agent of another brokerage for participating in a property transaction, for example, as a selling agent, buyer’s agent, or leasing agent.
Patent Defects
A visible, apparent defect that can be seen during a reasonably thorough inspection of property.
Real Estate Owned (REO)
Property acquired by a lending institution through foreclosure and held in inventory.
Residential Real Property
Real property improved with not less than one nor more than four (4) residential dwelling units; units in residential cooperatives; or condominium units, including the limited common elements allocated to the exclusive use thereof that form an integral part of the condominium unit.
Residential Real Property Disclosure Report
A standardized form that sellers must fill out, as applicable, and provide to any prospective buyer, or the prospective buyer’s agent, prior to the signing of any written agreement or contract to transfer ownership of the residential real property.
Special Agent
An agent with limited authority to do a specific thing or conduct a specific transaction.
Stigmatized Property
A property that may be undesirable to some people because of a past event, such as a crime or former environmental hazard.
Universal Agent
An agent authorized to do everything that can be lawfully delegated to a representative. Including power of attorney
Vicarious Liability
A relationship or situation in which one person is responsible for the actions of another.
O-L-D-C-A-R
- Obedience
- Loyalty
- Discourse
- Confidentiality
- Accountability
- Reasonable care skill (competence)
