Agency Relationships Flashcards
The Principal-Agent relationship is a
Fiduciary Relationship
What is a Fiduciary Relationship?
relationship is based on trust
What governs the relationship between a Broker and their Principal?
Common Law of Agency
The principal is also known as
The Client
What must be presented at the time of the first meaningful contact with a party or prospect?
Disclosure of information about Agency
As an agent, we must treat everyone with ________ and ___________.
Honesty and Fairness
When is the disclosure of agency typically given to the seller and the buyer?
With a Seller, this is often at the listing presentation. With a Buyer, this is often on his/her first visit to your office.
What are the two levels of responsibility an agent has?
Public Responsibility and Fiduciary Responisbility
What is an agent’s Public Responsibility, and who does it apply to?
Duties to Customers and third parties in a transaction: Honesty, integrity, fairness, disclosure of material facts, and accounting of funds
What is an agent’s Fiduciary Responsibility, and who does it apply to?
Clients; Being honest and acting with integrity, give full disclosure, be loyal and competent
Agency SHOULD be created by ____________. However, agency CAN be created _______ or by ___________.
Written Agreement, Orally, Ratification
What does Agency by ratification occur?
When a principal accepts actions that were not authorized by the agency agreement
What type of agency Occurs due to actions, and there is NO written or oral agreement?
Implied Agency
A person with power of attorney is called an
Attorney-in-Fact
What are the three levels of agency?
- Universal
- General
- Special
Which agency gives the agent the authority to represent their client in all business and personal matters, the equivalent of having unlimited power of attorney and is very rare in real estate?
Universal Agency
What agency gives the agent the power to bind their principal in a particular trade or business?
General Agency
True or false: In an general Agency an agent can sign a legally binding agreement in the name of their principal
True
What are two examples of General Agency?
Owner - Property Manager
Broker - Sales Agent
Which agency gives the agent the power to perform only specific acts and NO others and does NOT have the power to bind their client/principal in a transaction?
Special Agency
What is the preferred method of creating an agency relationship?
written agreement
What contract Employs the Broker to act as a fiduciary to the Buyer? (Creates a SPECIAL Agency relationship).
Buyer’s Representation Agreement
What contract Employs the Broker to act as a fiduciary to the Seller? (Creates a SPECIAL Agency relationship)
Listing Agreement
What contract Employs the Broker/Property Manager to act as a fiduciary to the Owner? (Creates a GENERAL Agency relationship).
Management Agreement
An independent contractor agreement between a broker and a license holder also creates a …
General Agency
What is a Single Agency Broker?
One who does NOT act as a dual agent, the broker recommends that one of the parties (usually the buyer) either find another broker or continue in the transaction unrepresented
single agency is the practice of representing _________ the buyer or the seller but ___________ in the same transaction
EITHER ; never both
True or false: An example of a single agency is am apartment locator
True
What is a Transactional Broker/Facilitator/?
a licensee who assists a buyer and seller in reaching an agreement in a real estate transaction but does not have an agency relationship with either party
A middleman in a transaction is also known as ?
Transactional Broker/Facilitator
What is a broker who agrees to represent BOTH parties with their written permission?
Dual Agency Broker
In Texas, a broker who agrees to represent both parties in a single transaction must do so as an.?
Intermediary
Intermediary is a _________ Law concept
Statutory
True or False: Statutory Law ALWAYS takes precedence over Common Law
True
Dual Agency or Intermediary may only be permitted if
BOTH the buyer and seller agree in writing
A Principal’s (or Client’s) Duties to an Agent are:
CRIP
Compensation
Reimbursement
Indemnification
Performance
What is Indemnification?
the principal is to Defend the agent when the agent acts on the client’s instruction
