General Principles of Agency Flashcards
someone who uses or purchases a product or service.
consumer
someone who’s working with a real estate licensee but who isn’t represented by that licensee (nor owed the full range of agency responsibilities); the customer may or may not be represented by another licensee.
customer
usually the party to the transaction who is represented (the client).
principal
someone who’s represented by a real estate licensee (and owed certain agency responsibilities).
client
someone in a position of trust who owes loyalty to another.
fiduciary
someone who acts on behalf of someone else.
agent
has broad authority to act for the principal, such as someone who has power of attorney.
universal agent
has limited authority to act on a client’s behalf, such as a real estate agent or an escrow officer. This type of agent can’t bind a client to a contract.
special agent (aka limited agent)
responsible for handling all dealings in a given area for a client, such as a property manager. This type of agent may bind a client to a contract.
general agent
when a licensee represents one party, either the buyer or the seller, in a transaction.
Single agency
the representation of both the buyer and the seller in the same transaction.
Dual agency
when two separate licensees from a single firm each represent one party (buyer or seller) in the same transaction.
Designated/appointed agency (aka dual-license dual agency)
traditionally been recognized as a situation in which a licensee brings an unrepresented buyer to a transaction.
Sub-agency
relationships in which the licensee doesn’t represent the consumer in an agency capacity but instead provides non-agency assistance that doesn’t require the licensee to exercise judgment or discretion.
Non-agency relationships (aka transactional or facilitator roles)
what is a licensee’s fiduciary responsibilities?
Old Car
Obedience
Loyalty
Disclosure
Confidential
Accounting
Reasonable skill and care
a legal document that grants legal rights and powers from one person (the principal) to another (the agent or attorney-in-fact) to make decisions on behalf of the principal.
power of attorney (POA
an agency relationship that’s understood and agreed to by the parties.
Express agency
an agency that should be avoided
refrain from making statements that may be taken as your expert opinion.
implied agency
acceptance after the fact, either through signing paperwork or through the parties’ actions.
Ratification
prevents one party from suing another, because the party’s actions or statements implied that he or she agreed with the other party
Estoppel
the broker contracts with the seller to receive all net proceeds from a sale above a specified sale price.
net listing
An agency agreement that allows only one brokerage to market and sell the property.
Exclusive agency
An agency agreement that provides the listing agent with a commission no matter who brings the buyer to the transaction.
Exclusive right-to-sell
Allows the seller to work with multiple agents.
Open listing
This agency agreement allows the buyer to work with many agents during the home search process.
Non-exclusive/open buyer representation
the agent has some form of ownership of, security interest in, or possession of the principal’s property.
Agency coupled with interest
The agency relationship will end if the agency agreement between agent and client expires.
Expiration
If the real estate transaction with which the agent was assisting closes, then the agency relationship terminates.
Completion/performance
Force of law terminations include events that are beyond the control of the parties, such as bankruptcy of the broker or principal, property destruction, or incapacitation of the agent or principal.
Termination by force of law
If the property is destroyed, or if the broker or principal dies or becomes incapacitated, then the agency relationship ends.
Destruction of property/death of principal
The principal(s) and agent may mutually agree to terminate an agency agreement.
Mutual agreement
