Agency, Brokerage, and Ethical Considerations Flashcards
broker
a person licensed to assist others in real estate transactions and receive compensation for those services
salesperson
works on behalf of and is licensed to work under the supervision of a broker
Agent
one who undertakes to transact some business or to manage some affair for a client
principal
the client who employs the broker
antitrust laws
laws designed to preserve the free enterprise of the open marketplace
makes private conspriacies and monopolies illegal
attorney in fact
an agent authorized to act on behalf of another person, but not necessarily authorized to practice law
buyer’s agent
a real estate professional who guides home buyers through the process of purchasing a home
buyer’s broker
broker retained by prospective buyer, who become broker’s principal and to whom fiduciary duties are owed
client
one who employs a broker as an agent
Code of Ethics
standards of conduct adopted by the National Association of REALTORS
commission
payment to broker for services rendered
conflict of interest
a situation in which the concerns or aims of two different parties are incompatible
Consumer Information Statement (CIS)
written explanation of agency relationships presented to buyers and sellers
customer
third party in a transaction owed honest treatment but not owed fiduciary duties
disclosed dual agent
when broker represented both parties but both have been informed and have given consent
disclosure
notification of soemthing
dual agency
representing both parties to a transaction
employee
on a company’s payroll and receives wages and benefits in exchange for following the organization’s guidelines and remaining loyal
errors and omissions insurance (E&O insurance)
a form of malpractice insurance for real estate licensees
fiduciary
one legally placed in a position of trust and confidence
fiduciary relationship
a relationship of trust and confidence as between trustee and beneficiary, attorney and client, or principal and agent
law of agency
ability to act on behalf of another in a transaction
universal agent
has authority to represent the principal in all matters that can be delegated
general agent
can represent principal in a broad range of matters
special agent
authorized to represent principal in one specific capacity only
power of attorney
a legal written authorization that stipulates the specific areas of authority in which the agent may act
duties in a fiduciary relationship
- care
- obedience
- accounting
- loyalty (confidentiality)
- Disclosure
standard of care
degree of competence normally expected of a licensee
subagent
an agent who is appointed by another agent
independent contractor
salesperson who sets their own hours and is not covered by income tax withholding
negligent misrepresentation
fraud committed, not necessarily on purpose, by someone who should have known better
NJ Consumer Fraud Act
sets strict guidelines for anyone giving false or misleading information about real estate
ready, willing, and able
When a prospective buyer is fully prepared to render the consideration required to consummate a transaction
meeting of the minds
when parties agree on price, down payment, and financing method
national Association of REALTORS
organization for brokers to assist in improving business abilities and educate the public about qualified real estate brokers
New Jersey REALTORS
state branch of NAR
latent defect
hidden problems in a property
Megan’s Law
requires a community be alerted to presence of convected sex offenders
puffing
an exaggeration of fact bordering on falsehood.
fraud
all deceitful practices intended to harm or take advantage of another person
fraudulent misrepresentation
when a party makes a false claim regarding a contract or transaction but knows that it isn’t true.
innocent misrepresentation
false statement by someone who believes the information to be true but isn’t expected to have expertise in the subject
