Chapter 04 Flashcards
Agent
The individual who is authorized and consents to represent the interest of another person
Principal
The individual who hires the agent
Agency
The fiduciary relationship between the client and agent
Fiduciary
The relationship in which the agent is held in a position of special trust and confidence by the principal
Client
The principal
Customer
A third party non-represented consumer for whom some level of service is provided
Nonagency. Aka
Transactional broker, facilitator, coordinator, or contract broker
Helps both parties navigate through the process of a real estate transaction without representing either
Express agency
A formal agreement usually written but sometimes oral, of a principal and agent to work together
Implied agency
An agency relationship created by the actions of both parties without any formal expressed agreement
Compensation
The source of the compensation does not determine agency
Puffing
Exaggeration of a properties benefits
Negligent misrepresentation
When a broker knowingly or unknowingly makes a mistake
Fraud
Intentionally misrepresentation of the facts or failing to disclose important facts
Latent Defect
A Structural defect that is not discovered by ordinary inspection.
Must be disclosed by law
Universal Agent
A person who is empowered to do anything the principal can do personally.
Real estate agents don’t have this status
General Agent
Represents the principal in a broad range of matters related to a particular business or activity.
- Most agents are general agents for their brokers
- Property managers are general agents for the owner
Dual Agency
Represents both parties in a real estate transaction.
- Not legal in some states.
- if they are legal, both parties must consent
Law of agency
Defines the rights and duties of both agent and principal
Disclosure of agency
Real estate licensees are required by law to disclose the parties they represent
Designated agency
When both parties have the same broker but two separate salespeople
Designated agent
The person authorized by a real estate broker to act as the agent of a specific principal
Fiduciary Relationship
The duties the broker owes the principal by law.
- Care
- Obedience
- Loyalty
- Disclosure
- Accounting
- Confidentiality
Termination of Agency (Reasons)
- Completion
- Death
- Destruction or condemnation of property
- Expiration of agreement
- Breach of one of the parties
- Operation of law ( bankruptcy foreclosure)
Single Agency
The agency represents only one party in any single transaction
Special Agent
Authorized to represent the principle in one act or business transaction.
This is usually the relationship between the client and broker
