General Principles Of Agency 6 Flashcards
What is a fiduciary relationship
A fiduciary relationship is one of trust and confidence between an employer (principal) and an employee (broker/agent).
In real estate, when representing the seller, the employer is who?
The Seller
In real estate, when representing the seller, the employee is who?
Broker/Agent
The broker representing the seller is referred to as the?
The listing broker
To DISCLOSE means?
To disclose means to allow something to be seen, to reveal something that is hidden or secret. In a real estate transaction, there are many things that principals do not want the other side to know, like their reason for selling or how much purchasing power they have.
When acting as an agent for the seller, the agent’s fiduciary duties are to: 1
Market the property for the seller.
Present all offers to the seller.
Share the identity of prospective buyers and agent’s relationship to them.
Share the ability of the buyer to complete the sale.
Share the ability of the buyer to possibly offer a higher price.
When acting as an agent for the seller, the agent’s fiduciary duties are to: 2
Disclose the agent’s interest, if any.
Disclose the buyer’s intention to resell the property for profit.
Share correct market data and guesstimate value of the property.
Advise seller on listing price based on true market data.
Advise seller on the preparation of the property for market.
The above duties will be further clarified by state law.
Some states may allow the principal to waive certain duties in writing.
How is Seller Representation Terminated?
When the broker has sold the property
or Breach of listing agreement
Broker becomes unavailable
Seller’s Agency can be terminated for any of the following reasons: 1
The agreement’s purpose is fulfilled by the transfer of title to the buyer.
The agreement’s term expires.
The property is destroyed, or its use is changed by some force outside the owner’s control, such as a zoning change or condemnation by eminent domain.
Title to the property is transferred by operation of law, for instance, if an owner files for bankruptcy protection or their property is foreclosed on.
Seller’s Agency can be terminated for any of the following reasons: 2
The broker and the homeowner mutually agree.
Either the broker or the seller (or both) breaches the agreement, such as by the seller’s refusal to consider an offer or the broker’s refusal to present an offer to the seller.
Either the broker or the seller dies or becomes incapacitated in some way so that they can no longer perform.
If a sales associate dies or becomes incapacitated, the agreement is still valid as the agreement is ultimately between the principal and the broker.
The listing period expires; this is called an expired listing or “an expired” for short.
However, there is a Protection Clause in the listing agreement that states for a certain number of days after the listing expires, if the property is purchased by a buyer who viewed the property during the listing contract period, then the listing agent will get paid, unless it is relisted with another agent
