Fiduciary Duties Flashcards
What actions demonstrate exercising care when representing a buyer?
Helping the buyer locate appropriate housing
Evaluating property values and property conditions
Determining financing alternatives
Presenting offers and counteroffers with the buyer’s interests in mind
What exception exists to the duty of obedience when working with a client?
An agent is not bound by the duty of if the principal’s directions are not legal.
An agent’s fiduciary responsibilities to a client usually end when the transaction closes. This is not true of which duty?
Confidentiality. This duty extends beyond the termination of the relationship. No personal information gained during the term of the agreement can ever be disclosed to another party.
What is the name of the Texas’ disclosure statement?
Seller’s Disclosure of Property Condition
What can a licensee not provide to a customer?
Avice and counsel to the customer.
List at least three things that an agent for a seller must disclose?
Purchase offers
Who the prospective purchasers are and if the agent has a relationship with them in any way
Ability of the purchaser to complete the transaction
Ability of the purchaser to offer a higher price
Purchaser’s intention to resell the property for a profit
What are the three disclosure requirements of a principal?
Availability
Information
Compensation
List three actions a broker is not usually authorized to do?
Signing contracts for the seller
Initialing changes to an offer
Permitting early occupancy
In what point type must a Texas Agency Disclosure be printed?
10 Point
Why should the listing agent disclose an existing relationship with a buyer, to the seller?
Perceived conflict of interest
What disclosure action should the licensee take, when more than one offer comes in on the same listing?
The listing agent should disclose to all buyers about the existence of the other offer or offers.
Why is a seller not allowed to counter offer at the same time to all competing bids.
If all buyers accept, the property would be sold more than once.
The duties that the agent owes his or her principal are:
Care (Reasonable care) Obedience Accountability Loyalty Disclosure or Notice
COALD or COALN.
an agent is bound to
inform the client of all facts that might affect the client’s interests in the transaction. This includes the reason for the sale as well as both the facts that the agent knows and those that the agent should have known.
Agent can be liable for….
damages if he or she failed to disclose such information.
Just as an agent owes duties and responsibilities to his or her principal……
so does the principal owe duties to the agent: availability, information, and compensation.
Texas law requires that seller agents provide to a party to a real estate transaction at the time of the first substantive dialogue
a “written statement” that explains in general terms the positions of seller representation, subagency, buyer representation, and the intermediary position. This statement does not require any signatures, dates, or licensee names. However, it must be printed in at least 10-point type.
Approved Form
Information About Brokerage Services (IABS)
When more than one offer comes in on the same listing…..
the listing agent must inform all buyers about the existence of the other offer or offers, but not reveal their content. This will give the buyer who made the offer a chance to improve his or her bid.
Brokers are required
to tell their clients about how a commission will be split. This is not the split between the broker and his agents. This is the split between the broker and other brokers.
Licensees are required to tell all buyers and sellers…..
that they should retain an attorney.
This is done when filling out the earnest money contract while making an offer. There is a line for the buyer’s attorney and that will remind the licensee to ask the buyer if she wants an attorney.
The law expects an agent to do his or her job with
a reasonable degree of care, skill and diligence. Since the principal hires an agent because of his or her expertise in the field, the principal expects the agent to use that expertise on the principal’s behalf.
If the agent represents the seller, exercising care and skill includes:
Helping the seller set a realistic asking price
Discovering and disclosing facts that affect the seller
Presenting contracts properly
Marketing the property effectively
Helping the seller evaluate purchase offers
If the agent represents the buyer, exercising care and skill includes:
Helping the buyer locate appropriate housing
Evaluating property values and property conditions
Determining financing alternatives
Presenting offers and counteroffers with the buyer’s interests in mind
If an agent fails to exert reasonable efforts to represent his client’s interest…
the agent could be found guilty of negligence in court. An agent is liable to the principal for any loss that results from carelessness or negligence.
