Chapter 2 Section 2 Flashcards
When one person (client) delegates another (agent) the right to act on his behalf in buisness transaction
Agency Relationship
A body of laws based on social traditions and common practices modified by English court cases
Common Law
Who is authorized to perform a particular act or transaction?
Special Agent
Who is authorized to perform any and all acts required for a job or business.
General Agent
When a RE agent performs property management functions for a client, he/she is acting as:
General Agent
Who is given legal power to transact matters of all types on behalf of the principal? Unlimited power of attorney
Universal Agent
Someone who performs tasks for primary agent’s clients
Subagent “agent of agent”
Person placed in a position of trust to act for someone else’s benefit
Fiduciary
True or False: Any info concerning a buyers willingness to increase an offer must be disclosed
True
What are the duties of clients to agents?
- Availability
- Informed
- Compensation
- Indemnification
When is compensation usually earned when client is the seller?
When a ready, willing and able buyer offers to purchase the property on terms acceptable to sller.
When is compensation usually earned when client is the buyer?
When buyer purchases acceptable property
What are the 4 creations of agencies?
- By express agreement
- By implied agreement
- By ratification
- By estoppel
How can an agency be terminated?
- Death or incapacity of either party
- Destruction or condemnation of the property
- Expiration of agency
- Mutual Agreement
- Renunciation by agent/licensee
- Revocation by principal/client
- By operation of law
- By completion of the agency (performance)
What is it called when a broker represents both the buyer and seller in RE transaction and owes agency duties to both parties?
Dual Agency
When one salesperson that works for the firm is represending the seller and another salesperson from that firm represents the buyer
In-House Sales –> Becomes dual agent
The process whereby $ and documents related to a real estate transaction are held in safekeeping until all terms and conditions of transactions have been met
Escrow
Act of mixing and mingling personal funds with funds that should be held in trust for others in sep. escrow account
Commingling
Neutral 3rd party hired to handle a property transaction , exchange of $ or related documents.
Escrow
When applied to escrow means misappropriation of entrusted funds
Conversion
Commingling will not be constituted if:
- Broker can clearly identify the total funds that belong to him with accounting
- withdrawls made at least every 6 months
What is the term that means that the title passes when the deed is delivered into escrow
Doctrine of Relationback
Delivery of deed to the grantee is said to what to the date it was deposited into escrow?
Relate Back
What are the laws required for escrow accounts?
- Deposited in a federally insured banking institution in the state of the business
- Be maintained in the same name by which firm is licensed
- Be designated as an excrow account by use of term escrow
- Be used for funds as down payments, earnest $ deposits, rental collected
What needs to happen if an escrow account is interest bearing?
Written disclousure at contract writing shall be made to the principals involved regarding disbursement of interest
What happens in an escrow account violation?
State licensing boards may suspend or revoke brokers license, fine broker, or petition court to enjoin the licensee from any activity in account
Person granting authority
Client
Person receiving authority
Agent
Can a broker buy and sell in his name?
Yes
What is the sole job of a broker?
To find a ready, willing and able buyer
A listing agreement can be terminated by:
- Seller
- Broker
- Mutual consent
