Chapters 2-4 - Law of Agency Flashcards
Accountability
Documentation! Right everything down.
Actual Fraud
Intentional fraud - knowingly making false statements
Agency
Trust created when one person gives another the right to represent them in dealings with third parties.
Agency Disclosure Form
Form stating who agent is representing in a transaction
Agency Relationship
Representation of a party in a real estate transaction
Antitrust
x
Brokerage
Business of bringing buyers and sellers together and assisting in sale of real estate.
Broker’s Agent
Works directly for the broker - not a subagent of the principal but still owes them the same fiduciary duties
Broker Protection Clause
Provides broker is still entitled to commission if the property is sold in a certain amount of time under certain circumstances
Buyer Broker Contract
Written agreement between buyer and broker stipulating broker will receive a commission when the buyer purchases real estate.
Buyer’s Agent
Represents/owes all loyalty to buyer
Client
Principal
Confidentiality
x
Consensual Dual Agency
Buyer and seller consent to representation by the same agent or broker
Constructive Fraud
Intentional concealment - knowingly failing to disclose
Cooperating Broker
Broker from another company who brings the other party to the transaction.
Customer
Third party in transaction - agent does not have fiduciary duty but agent must still be fair and honest with them
Designated Agency
When supervising broker assumes role of dual agent and each affiliated licensee represents their own client
Disclosure
Points or facts in a real estate transaction that must be revealed.
Dual Agency
Representing both the principal and customer - ok as long both parties agree in writing.
Estoppel
Legal doctrine preventing person from asserting rights inconsistent with earlier actions/statements
Exclusive Agency
Provides that broker will receive commission if any broker finds a buyer (will not if the buyer finds buyer on their own)
Exclusive Right to Sell
Listing agreement entitling broker to commission if anyone (including seller) finds a buyer
Expressed Agency
Agency relationship based on an expressed agreement - written or spoken.
Fiduciary Duties
OLDCAR: Obedience Loyalty Disclosure Confidentiality Accountability Reasonable Care
Fiduciary Relationship
Relationship of trust and confidence, where one party owes the other loyalty and a higher standard of good faith than owe to third parties.
First Substantive Contact
Event that triggers agency disclosure
Fraud
Intentional or negligent misrepresentation or concealment of a material fact (fact that would greatly affect decision-making)
General Agent
Authorized to represent the principal in a range of matters.
Implied Agency
Agency created by actions and or behavior
Listing Agreement
Written agreement between agent and seller stating the agent will receive a commission for selling the seller’s property
Loyalty
x
Misrepresentation
False or misleading statements - fraud.
Negligence
Failure to exercise adequate care.
Net Listing
Seller sets amount they’d like to make and agent keeps everything above that - ILLEGAL in New York.
Nonsolicitation Orders
Prohibits the solicitation of residential property listings and applies to all brokers and agents.
Obedience
x
Offer of Compensation
Commission to be paid by property’s sale.
Open Listing
Nonexclusive listing given by seller to multiple brokers. Commission goes to agent who sells the property (procuring cause).
Ostensible Agency
Occurs when agent is perceived as fiduciary by a third party and principal does not say otherwise.
Price Fixing
Setting a standard rate of commission amongst agents - ILLEGAL
Principal
Person who grants agent the authority to represent them in dealings with third parties.
Procuring Cause
Agent who is primarily responsible for bringing about a sale.
Renunciation
Someone who has been granted something gives it up - EX: agent withdraws from relationship with principal
Revocation
Someone who granted/offered something withdraws it - EX: principal withdraws authority granted to agent.
Self-Dealing
Broker has an undisclosed interest in the property.
Stigmatized
x
Subagent
Broker and seller agree that other MLS members will be working for the seller - some fiduciary responsibility.
Tie-In Arrangement
Requires consumer to use or not use certain services
Undisclosed Dual Agency
Dual agency without consent from both parties
Undivided Loyalty
Given up by buyer and seller when they consent to dual agency
