Brokerage Relationships Flashcards
The common law of agency
I mean the body of laws affecting agency that result from custom and/or case law, as opposed to statutory law introduced at the state or federal level.
What is caveat emptor?
“Caveat emptor” is a Latin term that means “let the buyer beware.” In real estate, it means that when you’re buying a property, you must be careful and ensure you’re getting a good deal. The seller might not tell you everything, so you must do your research and inspections to avoid later surprises. So, be thoughtful and cautious when buying real estate!
In North Carolina, agency relationships can only be created through
a written agreement
These individuals generally participate in the transaction under one of the following roles:
Client (your principal)
Customer (the “other” principal)
Third-party (anyone other than your client, including customers)
In the world of real estate, a principal can be understood as:
An individual who authorizes a brokerage firm
A party to a real estate transaction (a buyer, seller, landlord, or tenant)
For real estate license holders, who is considered your principal?
client
This type of nonagency relationship is not allowed in North Carolina. 🚫
A facilitator (also called a transactional broker) assists both the buyer and seller in a real estate transaction and treats them both as customers.
Special agents have limited authority, which restricts an agent’s scope of authority to
one or more specific acts as directed by the principal
Special agents are unable to make decisions that would
Bind or obligate their principals.
A general agent is authorized to
Manage all of a principal’s affairs within certain specified areas.
And since the general agent is assumed to have broad authority within the specific area of concern, any limits to that authority need to be
Explicitly defined.
General vs. universal agency
This is different from the general agency. A general agent has broad authority to act, but only regarding a specific business concern of the principal. Universal agency, on the other hand, gives the agent the scope of authority to act on the principal’s behalf for ALL business concerns.
Power of attorney is…
This is a legal instrument used to confer the right of one individual to act on behalf of another.
Attorney-in-fact is…
Armed with a power of attorney, the agent
the brokerage firm and its affiliated brokers’ relationship
general agency
When working with a seller, the brokerage firm must put the agency agreement in writing.
immediately
When working with a buyer, however, the agency agreement can be made orally at first, but the agreement.
It must be put in writing before the buyer makes an offer to purchase a property.
North Carolina __ recognizes implied agency.
does not
Agency by ratification (also known as apparent authority) is
In some states, when an agent takes an unauthorized action on behalf of a principal, which the principal then accepts after the fact
In-House Brokerage Employment Contract:
an agreement between a broker and a brokerage firm that defines their relationship
Cooperation Agreements:
agreements between brokers or brokerage firms that defines their relationship and compensation-sharing
explain each termination contract:
Performance (fulfillment of purpose)
Expiration
Mutual agreement
Breach of agreement
Destruction or condemnation
Death or incapacitation
Operation of law
- Performance (fulfillment of purpose): “Hey there, I’m Performance! I’m like the superhero of contracts. When I’m in action, it means everything is going according to plan. Think of me as the high-five moment between parties where we all say, ‘We did it!’”
- Expiration: “Hi, I’m Expiration, and I’m the party pooper of contracts. You see, contracts have a shelf life, just like that carton of milk in your fridge. When I come around, it’s like yelling, ‘Time’s up!’ to a game of hide and seek. Contract’s over, folks!”
- Mutual agreement: “Howdy, I’m Mutual Agreement, and I’m all about that sweet harmony in contracts. When both parties agree, it’s like a duet in perfect harmony. We’re basically the contract version of a dynamic duo, sealing the deal with a smile.”
- Breach of agreement: “Hey, I’m Breach of Agreement, and I’m the troublemaker of the contract world. When you see me, someone messed up big time. It’s like catching your friend eating your secret stash of cookies - not cool, right?”
- Destruction or condemnation: “Greetings, I’m Destruction or Condemnation, the dramatic exits of contracts. Picture me as the ‘mic drop’ moment in a contract’s life. Sometimes things just go south, and it’s time to call it quits with a bang!”
- Death or incapacitation: “Hello, I’m Death or Incapacitation, the serious side of contracts. When a party can’t fulfill their end due to, well, life’s unpredictabilities, I step in. Think of me as the ‘get out of contract free’ card, but for serious reasons.”
- Operation of law: “How’s it going? I’m Operation of Law, the contract’s silent referee. When things get messy, and nobody’s playing fair, I jump in to make sure justice is served. I’m like the judge in the courtroom of contracts, keeping things in order.”
an agent-initiated termination
renunciation
a client-initiated termination
revocation
