Chapter 7: Real Estate Brokerage and the Law of Agency Flashcards
the fiduciary (involving trust) relationship between the principal and the agent
agency
the individual who is authorized and consents to represent the interests of another person. One who acts or has the power to act for another.
agent
a person who is lecensed to list, lease, buy, exchange, auction , negotitate, or sell interest in real property for others and to charge a fee for services
broker
the business of bringing buyers and sellers together in the marketplace
brokerage
Required for each brokerage firm and each branch office, the full broker responsible for displaying all licenses properly, notifying the NC Real Estate Commission of any change of business address or trade name, ensuring that all advertising and agency compliance is done properly, maintaining the trust account and trust account records properly, retaining and maintaining all real estate trascation records properly, and supervising all provisional brokers associated with the firm or office.
broker-in-charge (BIC)
“Let the buyer beware”. States with this do not have to disclose any facts about their property when selling.
caveat emptor
the principal
client
term used to describe when trust funds and the firm/broker’s personal/business funds are placed in the same account
commingling
payment to a broker for services renered, as in the sale or purchase of real property; traditionally, a percentage of the gross sales price of the property but can be a flat fee or some other calculation. The principal usually compensates the firm contingent on the firm successfully performing the service for which it was employed.
commission
members of the MLS through agreement with the listing firm may act as subagents of the seller-principal and may in turn emply their own brokers
cooperating broker
the third party for whom some level of service is provided by an agent of another party, but who is not represented by the agent
customer
Appointing one or more brokers of a firm to exclusively represent the seller as an agent and appointing another broker of the same firm to exclusively reprsent the buyer as an agent in the same real estate trasaction. However, it must be done with prior express approval of both the seller and the buyer.
designated dual agency
the broker/firm represents the buyer and the seller in the same transaction. Requires that the agent be equally loyal to two separate principals at the same time.
dual agency
Someone who works as a direct employee of an employer and has employee status. The employer is obligated to withold income taxes and Social Security taxes from the compensation of the employee
employee
An oral or written contract in which the parties state the contract’s terms and express their intentions in words
express agreement
a relationship in which the gaent is placed in the position of turst and confidence to the principal. Relationship based on trust
fiduciary
occurs when conversation between a broker and a consumer shifts from facts about the property to possible confidential information about the consumer’s needs, wishes, and abilities or when the consumer or broker begins to act as if there is a fiduciary relationship.
first substantial contact
the intentional misrepresentation of a mterial fact in such a way as to harm or take advantage of another person. In addition to false statements about a property, this concept covers intentional concealment or nondisclosure of important facts.
fraud
One who is authroized to represent the principal in a broad range of matters related to a specific business or activity; a property manager might have this power
general agent
when principal and agent, without formally agreeing to the agency, act as if one exists.
implied agreement
Someone who is retained to perform a certain act but who is subject to the control and direction of another only as to the end result and not as to the way in which the act is performed. Unlike an employee, an _______________ peforms pay sall expenses and Scoail SEcuirty and income taxes and receives no employee benefits. Most real estate licensees are this.
independent contractor
A real estate transaction where the listing firm actulaly produces the buyer for their lising, as opposed to a co-brokered or cross sale that involves two firms
in-house sale
n facts that might affect the principal’s decision in a transaction. Any fact that is important or relevant to the issue at hand; mandatory disclosure by all agents in a transaction to all parties of the transaction
material facts
A marketing organization composed of member broers who agree to share their listing agreements with one another in the hope of procuring ready, willing, and able buyers for their properties more quickly than they could on their own.
multiple listing service (MLS)
unintentionally misinforming any party involved in a transaction about a mterial fact
negligent misrepresentation
takes place when brokers do not have actual knowledge of a material fact but should reasonably have known of such fact. If they fail to disclose this fact to a buyer, seller, tenant, or landlord, they may be guilty of negligent ommision, even though they acted in good faith in the transaction.
negligent omission
Acronym. In a fiduciary relationship, the broker, by law, owes the principal specific duties-the duties of Obedience, Loyalty, Disclosure, Confidentiality, Accounting, Reasonable skill and care
OLD CAR
A non-exclusive verbal agency agreement between a firm and a buyer-client. There can be no time limit on oral agency, but it must be reduce to writing prior to presentation of first offer. Zunder this agency agreement, a buyer is free to enter into similar agreements with other firms and brokers. Can be terminated at the will of either party at any time.
oral buyer agency
the person who hires and delegates to the agent through a brokerage contract the responsibility of representing that person’s best interests. In the real estate business, this an be the buyer, seller, landlord, or tenant.
principal
works under direct supervision of the BIC.
provisional broker
opinion statements that exaggerate a property’s benefits
puffing
A method of creating an agency relationship in which the principal accepts/ confirms the conduct of someone who acted without prior authorization as the principal’s agent
ratification
One who is authorized by a principal to perform a single act or transaction. A real estate broker is usually a special agent of the seller authorized to find a ready, willing, and able buyer for a particular property, or a ________ agent of the buyer to find a specific type of property to purchase. Has limited authority and cannot bind his principal.
special agent
properties branded by society as undesirable because of events that occurred there. Some properties are typically marked by a criminal event: a homicide, suicide, or other violence; illegal drug or gang-related activity
stigmatized properties
one who is employed by a person already acting as an agent. An agent of an agent.
subagent
A wrongful act, injury or violation of legal right to the person or property of another
tort
a person who is empowered to do anything the principal could do personally; unlimited authority; unusual in real estate
universal agent
when brokers who have actualy knowledge of a amaterial fact deliberately misinform a buyer, seller, tenant, or landlord concerning such fact. Also takes place when a broker who does not have actual knowledge of a matter material to the transaction intentionally provides information converning such matter to a buyer, seller, tenant,or landlord without regard for the truthfulness of the information.
willful misrepresentation
intentionally failing to disclose a material fact to any party involved in a transaction
willful omission
A mandatory agency information brochure that a licensee must give to and review with consumers in all reale estate sales trasactions no later than firs tsubstantial contact; it does ntot create agency
Working with Real Estate Agents
