Chapter 3 - Agency, Brokerage, and Ethical Considerations Flashcards
Violations such as price-fixing and allocations of customers to markets. Under the Sherman Act, people who fix prices may be subject to a misdemeanor and punishable by a maximum $1,000,000 fine and 10 years in prison. In a civil suit may recover triple the value of actual damages plus attorney fees. The laws that govern these violation are ___ ___.
Antitrust laws
Person authorized to act for another in a legally binding capacity. Agency created by a power of attorney, a legal written authorization that stipulates specific areas of authorization. The agent acting in such capacity is known as ___-_-___
Attorney-in-fact
In the real estate business, a ___ is defined as a person who is licensed to assist others in real estate transactions and to receive compensation for those services.
Broker
A prospective buyer or a person seeking property to rent can also be a principal and hire a broker as a buyer’s broker or a ___ ___. In this type of relationship, the buyer is the client and the seller is the representative for the customer.
Buyer’s Agent
Code of conduct adopted by members of the National Association of REALTORS*. All members of NAR are expected to subscribe to this ___ __ ___.
Code of Ethics
Payment to a broker for services rendered, such as in the sale or purchase of real property is called a ___.
Commission
Statement real estate agents are required to furnish before any discussion of a seller’s/landlord or buyer’s/tenant’s motivation or financial situation is initiated. If no motivation or discussion has taken place, the agent must furnish before any property is listed. Does not require it to be signed to acknowledge receipt - if signed must be retained for six years. Sellers and buyers must acknowledge receipt of the ___ ___ ___ on all offers, contracts and leases.
Consumer Information Statement(CIS)
Third party in a transaction owed honest treatment but not owed fiduciary duties, this is a ___.
Customer
___ __ ___ means that the broker is representing both parties in the same transaction at the the same time. Not illegal, but undisclosed dual agency is. Dual agency in NJ is legal if the broker: explains the duties that may not be available, discloses any other business relationships, obtains the buyer’s and sellers written informed consent (in addition to the CIS), and advises that each party may want to consult an attorney.
Dislosed dual agent
In new Jersey licensees must ___ to a buyer any defects of a material nature that effect the physical condition of the property, this is act of ___
Disclose/disclosure
Real estate industry’s equivalent to medical malpractice insurance. Subject to limitations, it defends against many circumstances but does not cover fraud, This is known as ___ _ ___ Insurance.
Errors and Omissions (E&O) Insurance
One legally placed in a position of trust is a ___
This relationship as between trustee and beneficiary, attorney, and client, or principal and agent. The confidential relationship carries with it certain duties that an agent must perform the following duties:
Fiduciary
- Obedience,
- Loyalty.
- Disclosure,
- Resonable Care
- Accounting
Intentional deception that harms another is ___.
Fraud
One authorized to act for his or her principal in a wide range of matters is a ___ Agent.
General Agent
Designation awarded by the National Association of REALTORS* after specific study.
Graduate, REALTOR* Institute (GRI)
Unintentional misleading of a buyer committed in ignorance is an ___ ___.
Innocent misrepresentation
Return of part of the commission as gifts or money to sellers are prohibited. Illegal for broker to share commission with anyone who is not licensed as a salesperson or broker except in certain circumstances to a buyer, this is known as a ___.
Kickback
Problem with property not discoverable by ordinary prudent inspection is a ___ defect. Licensees must disclose defects that are uncoverable. These defect would include such things as water seepage, unused oil tanks in the basement, and sloping floors.
Latent
A contract between a property owner (as principal) and a licensed real estate borker (as agent) by which a the broker is employed as agent to sell real estate on the owners terms within a given time, for which service the landowner agrees to pay a fee. Must state whether subagency is being offered to cooperating firms and whether seller has authorized sharing of commission with subagents, buyer’s brokers or transaction brokers. An “Addendum to Real Estate Listing/Commission Agreement must be included with every listing contract. This is a ___ ___.
Listing agreement
___ __ __ ___ is said to have taken place when the parties are in agreement on price, payment and financing method.
Meeting of the minds
___ ___ requires that a community be alerted to the presence of convicted sex offenders enacted in New Jersey in 1995. all contracts and leases on residential real estate that are prepared by a licensee must include a Megan’s law statement. Licensees are not permitted to inquire about or give any information regarding the presence of convicted sex offenders in the neighborhood. a buyer’s broker can suggest that a concerned client check the New Jersey police website.
Megan’s Law
The ___ ___ __ lists in detail all sorts of misleading, fraudulent acts and include penalties up to $10,000 for the first violation. Law offers exemptions from liabilities to licensees who can prove they had no actual knowledge, a diligent effort was made to learn the truth and the broker or salesperson was relying on information provided by q home,e inspector or similar specialist. government employee or sellers property disclosure statement.
Consumer Fraud Act
Fraud committed, not necessarily on purpose, by someone who should have known better. is ___ ___.
Negligent misrepreresentation
In New Jersey, licensees must disclose conditions beyond the limits of a property known as ___ conditions, such as a hazardous waste disposal site, that may be considered material facts by a prospective purchaser. Two discloures are required. One refers to new construction; the other, to resales. The new construction notice includes a five-day period for cancellation, the sale does not include a similar right of recission.
Offsite
A main party to a transaction for which the agent works is the ___.
Principal
The “___ ___” of a real estate transaction is the agent whose actions and efforts ultimately result in the sale of a proerty. It is the agent who ultimately caused the buyer to purchase the home.
Procuring cause
Extravagant statements of opinion (“this house has the most gorgeous view in the world are permissible, as long as they are offered as opinions without any intentions to deceive is ___.
Puffing
One who is prepared to buy property on seller’s terms and is ready to take positive steps to consummate the transaction is considered a ___, ____ and ___ ___.
Ready, willing and able buyer
One authorized by a principal to perform a single act or transaction, is a ___ Agent.
Special Agent
An agent must exercise a reasonable degree of care and diligence while transacting business on behalf of the principal also known as ___ _ ___. Brokers are expected to possess expertise in real estate matters above that of average persons, and may be liable to the principal for any loss resulting from negligence or carelessness.
Standard of care
A broker’s sales associate,or cooperating broker is known as a ___ in a multiple listing system, in relation to the principal who has designated the broker as an agent.
Subagent
A licensee who works with a buyer, seller, or both, without representing either one in an agency relationship is a ___ ___.
Transaction broker
Has authority to represent the principal in all matters that can be delegated. He or she can transact on behalf of the principal without prior permission, as a ___ agent.
Universal Agent
One who undertakes to transact some business or to manage some affair for another by authority of the latter is an ___.
Agent
