Principles - Chapter 6 Agency Flashcards
Agency Relationship
Principal=Seller
Agent=Broker (Real Estate Agent is a salesperson of Broker)
Third Party=Buyer
Agent
Not employee of Broker
Operates in own name
Must obey the lawful instruction of the Princpal
Actual Authority
When agent is employed by the principal
Ostensible
causes person to believe agent is employed by them??
General Agency
Agency that gives agent authority to do anything and everything that the principal can do in a particular area
ex: salesperson is a general agent of employing broker
Specific Agency
Agency that gives agent authority to do a specific act or matter for principal
ex: Broker
Agency Relationship
relationship of agency and principal wither by express contract (listing agreement), ratification or estoppel
Ratification
adoption or approval of act performed without previous authorization
Estoppel
person barred from asserting or denying a fact because of previous acts of work
Listing Agreement
authorizes broker to solicit offers to buy property on accepted terms and establishes principal-agent relationship between owner and broker
must be in writing
if broker procures qualified buyer willing to meet exact terms of listing agreement and owner refuses, broker is entitled to a commission
Fiduciary relationship
good faith, loyalty and honesty based on trust and confidence
full disclosure
Dual Agency
Agent represents both buyer and seller and collects commission for each
Discrimination
race, creed or color is not a material fact and should not be disclosed even at request of owner
Misrepresentation
False misleading statement with intent of inducing another party to act.
Comingling
mixing a clients funds with those of an agent by failing to place all funds in a special trust account
Secret Profit
when agent makes a profit without owners knowledge
Trust Accounts
monies received must be placed in escrow accounts or trust funds the next business day following receipt
Broker must keep record of all deposits
withdrawls only made by borker
retained 3 years
Duration and Termination
termination by acts of one or both of the parties, operation of law, expiration of term, extinction of subject matter, death or incapacity of principal or agent
De facto revocation
withdrawl of property by owner prior to expiration date
Exclusive Listing Contract
must contain definite specified date of final and complete termination
Commission
paid by principal to broker after sale
% of final sales price
must be licensed broker, broker who procured the sale and employed by the seller to make the sale
Breach of Contract
unexcused failure to perform
injury or damages
Breach of Fiduciary Duty
performing personally
following principals instruction
disclosing pertinent facts
Grounds for license revocation
1.misrepresentation=innocent, negligent, fraudulent
2.false promise
commingling
conversion
secret profit
dual agency
