Module 1 Flashcards
_________ is generally defined as a “standard of practice” equal to the level of real estate marketing skills and knowledge of other practitioners in the area.
Competence
The agent is hired to do a job, and is therefore expected to do it with __________ and reasonable ___________.
diligence & competence.
A listing agent must disclose in writing to a buyer or tenant that the agent represents the owner in the transaction. This disclosure must occur before or at the first “________ _______” with the customer prospect.
substantive contact
In a _________ agency, the principal delegates to the agent ongoing tasks and duties within a particular business or enterprise. Such delegation may include the authority to enter into contracts.
general agency
An agent who intends to represent a seller or owner must disclose the import of the proposed agency ____________ in writing before the listing agreement is ________.
relationship
executed
In a _________, a broker or licensed salesperson works as the agent of a broker who is the agent of a client.
subagency
_________ might include a cooperating licensed broker, that broker’s licensed salespeople, and the listing broker’s licensed salespeople, all of whom agree to work for the listing broker on behalf of the client
Subagents
__________ requires the agent to keep the principal informed of all material facts that the agent knows or should have known that can influence the principal when deciding on a course of action. The material facts the agent should disclose include those that are either favorable or unfavorable to the principal. Court cases have even expanded the duty to disclose to include what “should have been known in the exercise of reasonable diligence.”
Disclosure
_________ requires the agent to act in good faith according to the instructions and wishes of the principal. However, this duty is not absolute, and the agent does not have to and should not act in an illegal or unethical manner if so instructed by the principal.
Obedience
___________ means that at all times the agent must be able to account for all funds received from or on behalf of the principal. This duty also requires the agent to keep accurate records of all documents relating to a transaction, an engagement to sell a property, or agreements relating to leasing real property.
Accounting
_______________ means the agent is prohibited from communicating personal information about the principal that is given to or acquired by the agent within the scope of the employment. Unless the client releases the agent, personal information must be kept confidential.
Confidentiality
________ requires the agent to place the interests of the principal above all others, including the interests of the agent. Some of the implications of this duty are:
• Information relating to confidential matters gained from the principal may not be disclosed. The buyer’s agent may not disclose the buyer’s willingness to pay a higher than offered price, the buyer’s willingness to buy, etc., unless specifically authorized by the buyer.
• The agent must disclose the agent’s interest in a property that is for sale, or disclose when the licensee is making an offer on a property for the licensee’s own account.
• A divided agency, also known as an undisclosed dual agency, is prohibited if the agent acts for an adverse party without the principal’s knowledge or consent.
• The agent cannot compete with the principal on the agent’s own account, or for another, in matters relating to the subject of the agency. For example, a real estate licensee cannot make an offer on a property the licensee knows a client would also be interested in purchasing.
Loyalty
____ means that the agent must protect the principal from foreseeable risks of harm. It also means that the real estate agent is expected to have expertise and skill superior to that of the average person. The agent is to use that expertise and skill to the advantage of the principal.
When the principal’s needs are outside the scope of that agent’s expertise, the agent is to recommend that the principal obtain expert advice or assistance. Examples may include financing issues, legal matters, or property condition issues.
As an agent representing a buyer, ____ and skill may include:
• Locating of property meeting the buyer’s criteria
• Assisting the buyer in the evaluation of the property and neighborhood
• Financing alternatives available to the buyer
• The terms and implications of the buyer’s offer and responses to counter offers
• Negotiating for the buyer
• Diligent attention to all the details necessary to facilitate a closing
Care
The agent must use reasonable ____ while working for the principal
Care
The person who hires the agent and delegates to that agent the authority of representing their interests.
Principal
One who represents the principal in dealings with third parties.
Agent
The ___________ ______ , also called the transaction facilitator, is allowed in some states that allow nonagency relationships with the public.
transaction broker
The __________ agent, sometimes called the appointed agent, is the licensee chosen by the managing licensee to act as the agent for the buyer or seller when the same firm is in a dual agency and representing both clients in a transaction.
designated
In Oregon, the _________ ___ _____ is called the disclosed limited agent.
disclosed dual agent
The _________ ___ _____ is a licensee who has disclosed and received permission to act as the agent for more than one party to a real estate transaction (the buyer and seller or two buyers who are competing for the same property).
disclosed dual agent
The _______ is the agent of an agent. For example, in Oregon, the principal broker is the agent of the client (the buyer or seller or both) and the brokers associated with the principal broker are the _________ of the principal broker’s clients.
subagent
The _______ agent, also called the selling agent, is the licensee representing a buyer in finding a property to buy and throughout the subsequent purchase transaction.
buyer’s
An agent enters into a listing agreement with a homeseller, but then becomes too busy to professionally fulfill the terms of the agreement. To solve the dilemma, the agent assigns the agreement to another licensee in the office. Would this course of action be legal? why or why not?
No, the agent can not assign the listing agreement.
When must a listing agent disclose his or her agency relationship to prospective tenants or buyers?
Whenever substantive contact is made beyond casual conversation.
The standard of care and competence that a principal can expect from an agent is generally that which is
comparable to that of other practitioners in the area.
Audrey wants to take a vacation. To do so, she authorizes an agent to conduct the operations of one of her business enterprises. The kind of agency she has established is
general.
A subagent is the agent of
a broker who has an agency relationship with a client.
The meaning and salient characteristics of the agency relationship should be disclosed to the client……
prior to completing a listing agreement.
A property seller empowers an agent to market and sell a property on his behalf. The kind of agency represented is
special.
An agent is operating as a disclosed dual agent on a transaction. In this case, the agent…..
must not represent one party’s interests to the detriment of the other.
An agent has the duty to inform the client of all material facts, reports, and rumors that might affect the client’s interests in the property transaction. This includes:
the agent’s opinion of the property’s condition; information about the buyer’s motivations and financial qualifications; discussions between agent and buyer regarding the possibility of the agent’s representing the buyer in another transaction.
The degree of authority granted by a residential brokerage listing agreement generally allows the agent to……
market, sell and show the property.
The __________ standard is one of the duties that extends beyond the termination of the listing: at no time in the future may the agent disclose confidential information.
confidentiality
Involuntary termination of the relationship may create _____ & ________ _________ for a party who defaults or cancels. For example, a client may renounce an agreement but then be held liable for the agent’s expenses or commission.
legal and financial liability
It is important to understand that the agency relationship does not require ____________ or any form of consideration. Nor does ____________ define an agency relationship: a party other than the principal may __________ the agent.
compensation
An agent informs a buyer that a provision in a contract is very commonplace. After explaining the clause, the agent assures the buyer that the clause does not mean anything significant. If something goes wrong with the transaction, the agent could be liable for
practicing law without a license.
An agent should not act or speak outside the agent’s ____ __ _________ . A customer may rely on anything an agent says, and the agent will be held accountable. For example, an agent represents that a property will appreciate. The buyer interprets this as expert investment advice and buys the property. If the property does not appreciate, the buyer may hold the agent liable.
area of expertise
Jensen Manufacturing Corp wants to buy land for a distribution center in a new industrial park near Portland International Airport. They made their offer in the name of Western Associates, LLC so as to not alert their competitors of the attempted purchase. This is an example of a/an _____________ principal.
partially disclosed
Randy Gillmore, as President of Century Corporation, makes an offer to purchase Morning View Business Park. This is an example of a/an _____ principal.
disclosed
Raul Ruiz contacts his broker to purchase a house in Sunriver. Because he is so famous, he does not want to make the offer in his name and asks the broker to make the offer in her name. This is an example of a/an _____ principal.
undisclosed
types of principals
Disclosed, Undisclosed, and Partially Disclosed
Principal Broker Jason represents Marty Lucas, a well-known NBA basketball player. Marty is attempting to buy an ocean front home on the Salishan spit and asks Jason to keep his existence and identity hidden. This is an example of a/an ___________ principal.
undisclosed
Niko Corporation wants to buy a large parcel of land in Eugene and build a manufacturing plant. Niko will pay cash for the property. Because of their well-known financial prosperity, they do not want the seller to know they are the purchaser. Niko Corporation contacts Broker Jason and instructs him to prepare a cash offer in the name of SM LLC, an LLC owned by Niko. This is an example of a/an_____ principal.
partially disclosed
Principal Broker Fred received an earnest money check from Broker Ethel for an offer made by Lucy and Ricky. Fred was in a hurry so he deposited the check into his operations account. After a few days, Fred remembered what he had done with the money and moved it over to his trust account. Fred is guilty of:
commingling.
Willow has Zander’s ranch listed for sale. Zander isn’t making his mortgage payments and is facing a foreclosure action. Without Zander’s consent, Willow tells buyers that Zander is desperate to sell and encourages them to make any offer. Which fiduciary duty did Willow violate?
Confidentiality
The fiduciary duty of _____________ requires the agent not to disclose ___________ matters about the client. ____________ is one of the duties that extends beyond the agency contract (listing, property management, buyer broker) and at no time in the future may the agent disclose __________ information.
confidentiality/confidential
____________ is the misdeposit of trust funds.
Commingling
_________ is the duty of an agent to put the interest of the client above that of all others, especially that of the agent.
Loyalty
While preparing a CMA to help her client decide on an offering price, Isabel finds that the average sales price for closed comparable properties is $4,000 less than the listed price of the home in question. Isabel feels her clients are willing to pay full price for the home. Because she has spent so much time finding her client a suitable property and feels she deserves a little extra commission, she removes the lower priced sales statistics from the CMA and recommends to her client to make a full price offer.
Isabel is in violation of her fiduciary duty of:
Loyalty
Which fiduciary duty requires an agent to obey the lawful instructions of a client relating to the transaction?
obedience
_____________ is the duty of an agent to obey all lawful instructions of the client relating to the transaction.
Obedience
The fiduciary duty of __________ requires the agent to follow the instructions of the client, provided the instruction are legal.
obedience
Willow knows from the city planner, a friend of hers, that the road in front of the building Spike is offering to buy may be widened within the next five years, but the project has not yet been formally approved by the city council. Willow withholds information about the street widening from Spike and violates which of her fiduciary duties?
disclosure & loyalty
Isabel received a full price offer on Roxie and Franklin’s townhouse from cooperating broker Paul. The offer is contingent on the sale and closing of the buyers’ existing house. Isabel takes the time to make sure that Roxie and Franklin understand the details of the offer, as well as what it means to accept an offer that is contingent on the sale of the buyer’s property.
Isabel’s actions are an example of the fiduciary duty of:
care