Law of Agency Flashcards
KNOW THAT A BROKER WORKS FOR AND ON BEHALF OF
THE CLIENT, BUT THEY ONLY WORK WITH CUSTOMERS.
THE INITIAL RELATIONSHIP WE HAVE WITH ALL POTENTIAL BUYERS AND SELLERS IS
A CUSTOMER, AND THE RELATIONSHIP DETERMINES THE LEVEL OF SERVICE THAT CAN BE PROVIDED TO THEM
License holder
A person licensed by the Texas Real Estate Commission (TREC) to act as
a broker or sales agent in a real estate transaction.
Subagent
A license holder not associated with the seller’s broker, but who is representing
the seller through a cooperative agreement, often through membership in a Multiple Listing Service (MLS), with the seller’s broker.
Cooperative Broker
A broker selling the listing of another broker. A cooperative broker
may complete the transaction as a subagent of the listing broker or may represent the buyers under an agency agreement; he or she is also known as the other broker
Broker license holder
- An individual holding a broker’s license issued by TREC. Brokers
may act independently in conducting real estate transactions or may engage other broker
or sales agent license holders to represent them in the conduct of their real estate business
Sales Associate
A sales agent or broker license holder associated with and conducting
business as an agent of his or her sponsoring broker
Seller’s Agent
A broker representing the seller in a real estate transaction, also referred to
as a Seller’s Broker, Listing Broker, or Listing Agent
Client
A person, sometimes called a principal, who engages the professional advice or
services of another, called an agent, and whose interests are protected by the specific duties
and loyalties of an agency relationship. Many of these duties are outlined in a listing or buyer/tenant representation agreement
. Customer
A person who receives limited brokerage services without establishing an agency relationship.
C-R-I-P
Compensation, Reimbursement, Indemnification, Performance
REIMBURSEMENT
THE AGENT SHOULD BE REIMBURSED BY THE PRINCIPAL FOR EXPENSES THEY HAVE INCURRED ON BEHALF OF THE PRINCIPAL
INDEMNIFICATION
THE PRINCIPAL WILL PROTECT THE AGENT FROM DAMAGES OF LOSS DUE TO THE AGENT’S RELIANCE ON INFORMATION RECEIVED FROM THE PRINCIPAL
IF THE CLIENT FAILS TO PERFORM
THEY MAY STILL OWE COMPENSATION TO THE BROKER IF THE BROKER PROVIDED A FULL PRICE OFFER ON THEIR PROPERTY AND IT WAS CASH WITH NO CONTENGENCIES
The main focus of the Commission is
to protect the public
O-L-D-C-A-R
Obedience Loyalty Disclosure Confidentiality Accounting Reasonable care
AGENCY BY ESTOPPEL IS CREATED WHEN
HE AGENT IS NOT BEING PROPERLY SUPERVISED BY THE PRINCIPAL AND THE AGENT TAKES ON POWERS OR AUTHORITY THAT THEY DO NOT HAVE, AND IT CAUSES THIRD PARTIES TO BELIEVE THE AGENT HAS THESE POWERS.
EXPRESS AUTHORITY COMES FROM
THE WRITTEN LISTING AGREEMENT AND THE WRITTEN BUYER REPRESENTATION AGREEMENT.
IMPLIED AUTHORITY COMES FROM
WHAT IS TYPICAL OR NORMAL FOR THE MARKET AREA YOU DEAL WITH, SUCH AS WHEN YOU CAN SCHEDULE APPOINTMENTS, ETC RESIDENTIAL SHOW HOMES MORE ON WEEK-ENDS COMMERCIAL SHOW PROPERTY MAINLY DURING THE WEEK
GENERAL AGENCY GIVES THE AGENT THE AUTHORITY TO
REPRESENT THE PRINCIPAL IN A PARTICULAR TYPE OF TRANSACTION OR BUSINESS.
OBEDIENCE MEANS
THE AGENT IS OBLIGATED TO FOLLOW ALL LAWFUL INSTRUCTIONS OF THE CLIENT, BUT YOU WOULD NEVER FOLLOW ANY INSTRUCTION THAT WOULD VIOLATE THE LAWS OF DISCLOSURE OR FAIR HOUSING, ETC. YOU MUST TERMINATE THE RELATIONSHIP WITH THEM.
Commingling
is mixing clients’ funds with
a broker’s business, operating, or personal funds, and TRELA prohibits it
conversion
When a broker spends his or her client’s funds without authorization, that
broker is guilty of conversion. Both commingling and conversion are serious violations of TRELA.
ACCOUNTING MEANS
YOU WILL HANDLE THE CLIENT’S MONEY WITH CARE AND MAKE SURE YOU DO NOT COMMINGLE THE CLIENT’S MONEY WITH YOUR MONEY OR WITH THE COMPANY’S MONEY.
ALL POTENTIAL BUYERS, SELLERS, LANDLORDS AND TENANTS ARE
CUSTOMERS UNTIL AN AGENCY RELATIONSHIP HAS OFFICIALLY BEEN CREATED.
THE LISTING SIDE,
HERE THE SELLER RETAINS THE SERVICES OF A BROKER TO HELP THEM MARKET THEIR PROPERTY
THE SELLING SIDE
WHERE THE BUYER RETAINS THE SERVICES OF A BROKER TO ASSIST THEM
