Key Content (Ch. 2) 17% Flashcards
Agency Disclosure Law
Addresses misconceptions about the duties licensees owe to members of the public. (1988) (must be disclosed to all parties for a term greater than one year)
Agent
One who is authorized to act for or in place of another; an individual or corporation who represents another, called the principal/client, in dealing with a 3rd party.
Agency in Real Estate transactions take place between the following;
Brokers, Sales Agents, and Finders
Dual Agency
Arises when a broker represents both parties in a transaction concurrently. (e.g. both the buyer and the seller) *must be disclosed to each client
Agency Relationship
Created in a real estate transaction when a principal employs a broker to act on their behalf.
Agency may be created by
Express agreement (orally or in writing)
Implied agreement (by acts and conduct)
Ratification (principle approves of and confirms)
Estoppel (principle leads a third party to believe that another person is their agent through words or action)
Written Employment Agreement
AKA listing agreement; signed by client and broker so broker may have an enforceable fee agreement
Listing Agreement Necessities
Names of parties Identity of the subject property Terms of sale or lease Amount of commission to be paid (with fee amount statement) Expiration date of agency Signatures of all parties
Agency Confirmation Provision
Contained in documents signed by principals used to negotiate the purchase or leasing or real estate and lease agreements with a term exceeding ONE year.
Termination of Agency completed upon the following;
The purpose of the employment, such as close of escrow Mutual consent Expiration Extinction Death or Incapacity Renunciation
Fee amounts
are negotiable and are not fixed by law ( yet commonly structured as 6%)
