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Alpha Real Estate > Chapter 7: Brokerage, Agency, and Fair Housing > Flashcards

Chapter 7: Brokerage, Agency, and Fair Housing Flashcards

1
Q

What is an agency?

A

When someone gives another person permission to act on their behalf

  1. Can be a person or legal entity
  2. Can be a corporation
    3.
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2
Q

Who is the principal?

A

The principal is the client requesting someone else to represent them

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3
Q

Who are 3rd Parties (aka customers)?

A

Anyone outside of the client that I must work and/or negotiate with

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4
Q

What are the 3 levels of agency?

A
  1. Universal: Has same power as principal
  2. General: Has power to do a specific trade or business
  3. Special: Has power to do a specific act or transaction
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5
Q

What are the different types of agencies?

A
  1. Ostensible: Principle makes 3rd party believe someone is an agent w/o notifying the agent
  2. Agency by ratification: Established after the fact
  3. Agency coupled with interest: Agent holding interest in a property he is representing
  4. Dual Agency: one representative representing a buyer and seller at the same time.
  5. Designated agency: Broker assigns one client to an agent and a different client to another agent.
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6
Q

What is a subagent?

A

A regular agent.

The agent is under the broker who represents the client (principal) hence the name subagent.

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7
Q

Who is a cooperating broker?

A

The broker or agent who located the buyer.

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8
Q

How is an agency terminated by operation of law?

A
  1. Death or incapacitation of either party
  2. Destruction or condemnation of property
  3. Bankruptcy of either party
  4. Foreclosure of the principal
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9
Q

Agency is normally terminated by:

A
  1. Purpose of agency being completed
  2. Expiration of the term of the agency
  3. Mutual agreement
  4. Revocation: Revoked by either party at any time
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10
Q

What are an agent’s fiduciary obligations:

A
  1. Care: Exercise care in all dealings
  2. Obedience: Act in good faith & conformity with client’s wishes as long as legal and ethical
  3. Accounting: Accountable for all funds and documents
  4. Loyalty: Put principal’s interest above all else. Represents client’s best interest at all times
  5. Notice: Full disclosure (keep principal fully informed)
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11
Q

What are an agent’s responsibilities to 3rd parties?

A
  1. Avoid puffery: exaggerating

2. Avoid fraud: intentional misrepresentation

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12
Q

What is a latent defect?

A

A defect known to the seller, but not to the buyer.

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13
Q

What is indemnification?

A

one party in the contract is responsible for compensating another for loss, damages, and/or injury incurred as a result of that party’s actions

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14
Q

What is a listing agreement?

A

When a property owner hires a broker to find a ready, willing, & able buyer

  1. an employment or personal service contract
  2. creates a special agency
  3. Shows ready & willing through a purchase agreement
  4. Shows “able” through being approved for a loan
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15
Q

What is a procuring clause?

A

When a broker has produced a ready, able, and willing guyer

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16
Q

What are the 3 types of listings?

A
  1. Open (General):
    Multiple agents search for buyers, but only the procuring cause gets paid. Seller doesn’t have to pay if he finds buyer before agents. Doesn’t have to have a termination date.
  2. Exclusive agency
    Only one agent, but seller does not have to pay if he finds buyer before agent. It must have a termination date.
  3. Exclusive right to sell.
    Whether agent or buyer finds a buyer, the agent still gets his commission. Must be in writing and have a termination date.
17
Q

What is a safety clause (protection clause):

A

Agent uses clause to protect himself so that if the owner finds a buyer a specified period of time after agency ends, the agent still gets the commission.

18
Q

What is a net listing

A

A listing that allows the agent to keep the difference between the actual sales price and the seller’s desired price

19
Q

What is a multiple listing service (MLS)?

A

An organization made up of brokers who wish to exchange listing information

20
Q

What are the ways to terminate a listing agreement?

A
  1. Full performance
  2. Listing expires
  3. Revocation
  4. Mutual Agreement
  5. Death of either party
  6. Destruction or condemnation
  7. Bankruptcy
  8. Foreclosure
  9. Abandonment
21
Q

What the 3 types of buyer agency agreements?

A
  1. Exclusive:
    buyer’s legally responsible to pay agent no matter who located the property.
  2. Exclusive agency:
    Buyer’s not obligated to pay the agent if buyer finds the home first. Exclusive to 1 agent.
  3. Open: Buyers can enter into an agreement with multiple agents
22
Q

What are antitrust laws?

A

Laws that prohibit monopolies, contracts, combinations, and conspiracies that unreasonably restrain trade

23
Q

Examples of Antitrust breaches.

A
  1. Price fixing: Local agents set a fixed commission price
  2. Allocation: Brokers divided markets and agree not to compete with each other
  3. Boycotting: Brokers conspire against another broker, firm, or business
24
Q

Civil Rights Act of 1866

A

Prohibits any type of discrimination based on race

25
Q

Fair Housing Act of 1968

A

When selling or leasing residential property, it is illegal to discriminate on the basis of race, color, religion, set, or national origin.

Each brokerage must display an Equal Housing Opportunity poster in a conspicuous place.

26
Q

Exemptions to the Fair Housing Act of 1968

A
  1. Sale or rental of a single family home when seller doesn’t own 4 or more similar homes at the same time and when the following apply:
  • Broker, agent is not used
  • Discriminatory advertising is not used
  1. If owner occupies a one-to-four family dwelling and chooses to rent rooms
  2. Dwelling units owned by religious organizations may be restricted to people of the same religious if
    - membership in the organization is not restricted on the basis of race, color, or national origin
    - Must be non-commercial
    - Must be not for profit
  3. Private club that is not open to the public may restrict the rental or occupancy of lodging to that of its own members as long as:
    - Are not operated commercially
    - Not operated for profit
27
Q

What was the 1972 Amendment to the Fed. FHA of 1968?

A

Must display EHO poster with EHO slogan.

28
Q

What is blockbusting?

A

Panic selling. Using fear tactics to scare people into selling their homes due to an influx of minority groups entering their neighborhood.

29
Q

What is steering

A

Channeling of home seekers to specific areas to change or preserve homogeneity of an area to create a speculative situation.

30
Q

What is redlining?

A

the practice of refusing people mortgage loans due to the age of a neighborhood or its ethnic composition w/o regard to its economic qualifications of the client

31
Q

Who administers Fed. FHA?

A

Office of Equal Opportunity (OEO)

32
Q

Who manages and controls the Fed. FHA?

A

Department of Housing and Urban Development (HUD)

33
Q

Fed. FHA Violation Scale

A
  1. First offense: $16,000
  2. Third violation within 7 years: could be up to $65,000
  3. DOJ may issue a suit where penalty would be $50,000 for 1st violation and $100,000 for repeat violations.
34
Q

Fair Housing Amendments of 1988

A
  1. Added protection for handicapped
  2. Added protection for families with children
  3. Added protection for familial status
35
Q

What is the definition of handicap?

A

a physical or mental impairment which substantially limits one or more major life activities

illegal users of controlled substances are not considered to be handicapped.

Transvestites are not considered handicapped.

36
Q

What are the exemptions for familial status that target older people?

A
  1. Community must be provided for the elderly by state or federal agencies
  2. Must be intended for an occupied solely by persons 62 years of age or older.
  3. Community intended to provide housing for persons 55 and older in which 80% of the units must be occupied by at least one person 55 or older.
  4. Must be policies, procedures, and significant facilities and services specifically designed to meet the physical or social needs of the older residents.
37
Q

How long does a person have to file a FHA claim?

A

1 year

Alpha Real Estate (20 decks)

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