Agency & Federal Law Flashcards
Vocabulary
Agent
Anyone who represents the interests off another
Salesperson/Broker salesperson
A person who has a valid real estate license. A real estate licensee can generally be a salesperson or broker, active or inactive, or an individual, corporation or partnership.
Licensee
Salesperson or broker-salesperson representing their employing broker’s client
Subagent
Someone authorized by the principal to work for or assist the primary agent
Not practiced in NV
Subagent broker
Broker from another firm who represents the listing broker’s client
Subagent salesperson or broker-salesperson
Relationship to their broker’s client
Broker
Someone acting as an intermediary between parties in a transaction
Listing agent
Someone contracted by a property owner to find buyers or tenants
Buyer’s agent
Licensed agent who represents the buyer of real property
Single agent
Represents either the buy or the the seller NEVER both
Dual agent
Agent represents both buyer and seller
Special agent/Limited agent
Agent that performs one act or series of acts for one specific purpose on behalf of the principal
General agent
Authorized to perform a wide variety of acts for the principal that are continuous in nature
Universal agent
Authorized to do all types of transactions on behalf of the client
Third party/customer
Someone who talks about buying, selling, or exchanging real estate with any agent
Client/principal
Someone who signs an agency contract or the Duties Owed form with any licensed agent
Care/”Reasonable care”
Agent must be knowledgeable and educated in the field of real estate and be able to provide beneficial services to the client using expertise
Confidentiality
Agent has duties to protect client’s interest and keep certain info confidential
Agent must disclose all material facts regarding property or the transaction to all parties
Obedience
Agent must act in “good faith”
Agent’s actions must reflect good and honest intention in “obeying” instructions of the principal within the limits of the law
Accounting
Agent must keep accurate records of all funds exchanged from or to the principal ad disclose to the principal any compensation received from the transaction
Loyalty
Agent has duties to serve the clients interest and put the client’s interest above that of the agent’s
Diligence
Agent should conduct all responsibilities and tasks in a timely and professional manner
Agent should “exercise reasonable skill and care” in handling the business matters with the client
Disclosure
Agent must disclose any relevant information and provide any material fact to the client whether the information is favorable or unfavorable
Agency
Relationship developed between the principal and the broker
Expressed agency
Created when broker and client enter into a contract with formal agreement
Agency by ratification
Created when agent acts without authority, and the principal confirms the agent’s actions after the fact
Agency coupled with an interest
Formed when agent has an interest in the property
Implied agency
May be formed even though the parties did not enter into a formal agreement
Most common between agents and buyers
How is implied agency formed?
Ostensible
Estoppel
Necessity
Ostensible agency
Formed when the actions of the agent lead someone to belie the agent is the representing agent
Estoppel
Once a third party believes the broker is an authorized agent, and the owner of the property does not take any action to deny it, the broker and the owner form an implied agency
Agency by necessity
Forms when an unforeseen event demands an immediate action in order to prevent destruction of property
Listing contract
Personal contract of employment between the seller and the broker
4 types of listing contracts
Exclusive right to sell
Exclusive agency
Open listing
Net listing
Exclusive right to sell
Appoints only one broker to represent the seller
If the owner finds the buyer, the broker still gets commission
Exclusive agency
Agreement to contract only one broker, BUT if the owner sells the property without the broker, the broker does not receive any commission
Open listing
Non exclusive listing
When more than one broker is employed to sell a property and commission is paid to the broker with procuring cause
Net listing
Flexible amount of commission
Sherman Antitrust Act
Brokerage firms and local real estate boards cannot set fixed commission rates
Commission rates are always negotiable between broker and client
Procuring cause
The reason the property sold
Protection clause
Clause in listing agreements that says the broker is entitled to commission if the property sells to someone who only looked at it during the listing period but buys it after the listing expires
Puffing
Way of marketing by exaggerating facts
Parole Evidence Rule
Says that only a written contract is valid and anything else made orally is not valid
REALTORS
members of the National Association of REALTORS (NAR)
Multiple Listing Service (MLS)
Listing service provided by the board of REALTORS.
Option
An agreement for the seller to give the buyer the right to buy the property within a certain period of time
Installment contract/land contract/contract for deed
An agreement in which the vendor takes mostly payments from the vendee for a period of time and at the end of the term legal title is given to the vendee
Offer
A gesture to show the willingness to enter into a contract ad fulfill certain promises
Earnest money
Cash deposit made by the buyer when making an offer
Meeting of the minds (M&M)
Agreement between parties to enter into a contract, acknowledging and accepting the terms of the contract
