Chapter 2 Flashcards
Agent
One who undertakes to transact some business or to manage some affair for another by authority of the latter
Broker’s Agent
A broker’s agent is an agent that cooperates or is engaged by a listing agent or a buyer’s agent (but does not work for the same firm as the listing agent or buyer’s agent) to assist the listing agent or buyer’s agent in locating a property to sell or buy, respectively, for the listing agent’s seller or the buyer agent’s buyer
Buyer’s Agent
An agent who represents the buyer of real property
Client
The one by whom a broker is employed
Implied Agency
Form of agency that occurs when the words and actions of the parties indicate that there is an agency relationship
Landlord’s Agent
A person who has oral or written authority, either express or implied, to act for or on behalf of a landlord
Principal
The employer of an agent or broker; the broker’s or agent’s client
Seller’s Agent
An agent who represents the seller of real property
Sub-Agent
An agent of a person already acting as an agent of a principal
Tenant’s Agent
A licensed real estate agent who acts on behalf of a tenant in a commercial property transaction
Confidentiality
An agent is obligated to safeguard his/her principal’s lawful confidences and secrets. Therefore, a real estate broker must keep confidential any information that may weaken a principal’s bargaining position. The duty of confidentiality precludes a broker who represents a seller from disclosing to a buyer that the seller can, or must, sell a property below the listed price. Conversely, a broker who represents a buyer is prohibited from disclosing to a seller that the buyer can, or will, pay more than what has been offered for a property. The duty of confidentiality does not include an obligation by a broker who represents a seller to withhold know material facts about the condition of the seller’s property from the buyer, or to misrepresent the property’s condition. To do so constitutes misrepresentation and may impose liability on both the broker and/or the seller
Disclosure
The release of relevant information about a property that may influence the final sale, especially if it represents defects or problems
Fiduciary
A person who on behalf of or for the benefit of another transacts business or handles money or property not the person’s own; such relationship implies great confidence and trust
Fiduciary Duties
The legal duty of a fiduciary to act in the best interests of the beneficiary. One common duty includes confidentiality.
Obedience
The fiduciary relationship obligates the agent to act in good faith at all times, obeying the client’s instructions in accordance with the contract.
Loyalty
The fiduciary duty that prohibits the agent from advancing any interests adverse to the principal’s interest or conducting the principal’s business in such a way as to benefit a customer, a sub-agent, the agent or any other party to the detriment of the principal’s interest unless required by statute, regulation or common law – e.g., disclosing material facts and defects of a property
General Agent
An agent with the full authority over one property of the principal, such as a property manager
Special Agent
An agent with limited authority to act on behalf of the principal, such as created by a listing
Informed Consent
An agreement to do something or to allow something to happen only after all the relevant facts are disclosed
Misrepresentation
Making an intentionally false statement to induce someone to contract
Sub-agent
An agent of a person already acting as an agent of a principal
Misrepresentation
Making an intentionally false statement to induce someone to contract
Vicarious Liability
A situation in which one party is held partly responsible for the unlawful actions of a third party
Expressed Agency
An actual agency created by written or oral agreement between the principal and the agent
Implied Agency
Form of agency that occurs when the words and actions of the parties indicate that there is an agency relationship
Estoppel
The principle which prevents a person from asserting something contrary to what is implied by a previous action or statement of that person
Price Fixing
Conspiring to establish fixed fees or prices for services or products.
Group Boycott
An agreement between members of a trade to exclude other members from fair participation in the trade.
Market Allocation
Market Allocation - An agreement between members of a trade to refrain from competition in specific market areas.
Tie-in Arrangement
A contract where one transaction depends upon another.
Dual Agency
Representing both principals (seller and buyer) to a transaction.
Designated Sales Agent
Appointing one or more individual agents in a firm to represent only the interests of the seller and one or more different individual agents in the firm to represent only the interests of the buyer when a firm has an “in-house” dual agency situation.
Undisclosed Dual Agency
A relationship in which the real estate agent is found to be the agent of both the buyer and seller in a transaction, but without the knowledge and informed consent of both parties. Undisclosed Dual Agency is illegal in all states.
Designated Sales Agent
Appointing one or more individual agents in a firm to represent only the interests of the seller and one or more different individual agents in the firm to represent only the interests of the buyer when a firm has an “in-house” dual agency situation
Accountability
To be responsible
Advance Consent to Dual Agency
The seller or buyer agrees to dual agency before it occurs by indicating the same on the agency disclosure form.
Cooperating Agent
A real estate agent who sells a property. The selling agent may be (1) the subagent or listing agent of the seller; (2) a buyer’s agent; or (3) a dual agent. Also called a selling agent or participating agent.
Reasonable Care
The degree of caution and concern for the safety of himself/herself and others an ordinarily prudent and rational person would use in the circumstances. This is a subjective test of determining if a person is negligent, meaning he/she did not exercise reasonable care.
Customer
The party the agent brings to the principal as seller or buyer of the property.
