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Real Estate > Real Estate Agency > Flashcards

Real Estate Agency Flashcards

1
Q

Principal

A

Person hiring an agent

In context client can be principal when hiring brokerage, and broker is principal to agent hired for client

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2
Q

Universal Agent

A

May represent their principal on any matter

Ex.: CEO of a business who has been given full board approval to make any decision for any aspect of business

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3
Q

General Agent

A

Represents their principal on matters related to one particular business or activity

Ex. property manager, someone who handles all aspects of clients real estate

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4
Q

Special Agent

A

May only represent their principal on a particular matter or transaction.
Could be: - Real estate broker or property manager who handles a single apartment

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5
Q

Subagent

A

An agent’s agent, so may work for the salesperson or co-broker. Works indirectly for the transaction’s principal

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6
Q

Express Agency

A

Explicitly stated verbally or in writing e.g. listing contract

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7
Q

Apparent/Ostensible Agency

A

Authority that does not exist, even though it appears to

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8
Q

Implied Agency

A
  • Authority that exists because of the principal and agent’s actions
  • Must have same formality as the required normally
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9
Q

Equal dignities rule

A

An authorization of agency must have the same formality as the services rendered

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10
Q

Vicarious liability

A

Principal has vicarious liablilty for their clients actions, meaning they are doing things on behalf of the client if hired

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11
Q

What are the three types of agencies that might exist between Agents and principals

A
  1. Express Agency
  2. Implied Agency
  3. Apparent.Ostensible Agency
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12
Q

Define Fiduciary Obligations

A

Obligations of trust from the real estate agents (both broker and salespeople) to their principals

O.L.D. C.A.R

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13
Q

Define Acronym O.L.D C.A.R.

A

O.
Obedience - you must do everything the principal tell you to do and can’t exceed the authority they give you; not an acceptable defense for unlawful of unethical behavior

L.
Loyalty - You must put the prinicipal’s interest ahead of all others, including your own

D.
Disclosure - Your must affirmtively disclose all information about the transaction that might affect the prinicpal’s best interests

C.
Confidentiality - You must not disclose any information about the principal to others that you are not legally required to disclose

A.
Account - You must account for and return any money belonging to principal

R.
Reasonable Care - You must protect the principal from foreseeable risks of harm, exercise care, and competence, and recommend expert advice when the principal’s needs are beyond your expertise or area of competence

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14
Q

Clients

A

People you represent and owe fiduciary obligations

O.L.D. C.A.R. (know what they stand for)

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15
Q

Material Facts

A

Impacting the subject property, anything that would objectively impact a buyer’s decision to purchase a piece of real estate.

  • Disclosure is required even if the seller wants to keep the defects confidential, both property and land.
  • Buyer must be informed regardless of when it was discovered, ex. even after purchase contract is signed
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16
Q

Caveat Emptor - “As is”

A

“let the buyer beware”

Any defects the property may have the buyer must disclose even if they are selling at “as is”

17
Q

Disclosure of Information by buyers agent __________.

A

must be disclosed. Any information about the buyer that would materially impact the buyer’s ability to purchase the property needs to be disclosed.

-example i the buyer doesn’t have sufficient funds to purchase property.

18
Q

Information that must not be disclosed

A

information about the parties to the transaction that does not materially impact the property or ability to conduct the transaction must never be disclosed

e.g. the lowest price a seller will take, the highest prices a buyer will pay, or why the seller is selling

19
Q

Tristram’s Landing v. Wait

A

Massachusetts court case establishes the criteria to determine when real estate brokers are entitled to

Rules of brokers earning commission:

  1. They produce a purchaser ready, willing, and able to buy on the terms provided by the owner
  2. The purchaser enters into a binding contract with the owner as a result of the agent’s efforts
  3. Purchaser completes the transaction by closing title in accordance with the provisions of the contract.

Notes: if there’s a default with buyer then no commission
if interference with seller then commission still has to be paid

20
Q

Stimagtized Property

A

Properties where the site of deaths, murders, suicides, criminal activity, and paranormal activity
Every stte is different laws around this

MA Laws: agents are not obligated to disclose information but if the buyers or buyer’s agent directly asks the seller agent about a property stigma then they must disclose information truthfully.

21
Q

Megan’s Law

A

Issues surround sex offender registries,

  • MA punishes misuse or misinterpretation of those registries
  • It’s advised the agent provide the buyer with information to access the registry and check the information themselves, rather than represent the contact themselves.
22
Q

Real Estate Commission Formula

A

Sales Price x Commission % = Commission $
Sales Price - Costs ( Including Commission ) = Seller’s Net Profit
(Net Sales Price + Costs) / (1 - Commission %) = Sales Price

23
Q

FTC (Federal Trade Commission) Do Not Call

A

Prohibits unsolicited business calls to residential and mobile phone numbers on the Do Not Call List.

  • Fines are up to $43,792 per call
24
Q

Telephone Consumer Protection Act (TCPA) and Junk ax

A

Prohibits most unsolicited fax advertisements

you must have an existing relationship with the recipients

25
Q

CAN-SPAM

A

Controlling the Assault of Non-Solicited Pornography and Marketing Act (CAN-SPAM) of 2003 prohibits commercial electronic messes that do not provide adress of sender

26
Q

Children’s Online Privacy Protection Act (COPPA)

A

It strictly prohibits the collection of personal information from children under the age of 13 even if website is targeted towards children

27
Q

Interstate Land Sales Disclosure Act

A

Sellers of subdivisions to file their intent to sell those lots on an interstate basis with the consumer Financial Protection Bureau if they meet one of the following:

  1. subdivision contains more than 100 lots or condominiums
  2. They are offering more than 25 lots or condo for sale simultaneously
    3 subdivision contains lots sized 20 or more acres

Act prevents fraud when properties are sold without purchasers seeing them

Need a purchaser’s written property report detailing issues, development details, utility costs, soil conditions, etc.

28
Q

Sherman Anti-Trust Act

A

The act forbids price fixing, group boycotting of consumer or non-competitor, contingent sales, (also known as tying or tie-in arrangements)

29
Q

Conspiracy

A

when two or more people agreeing to act (either explicitly or implicitly, and the agreed-upon act having the effect of restricting trade (limiting competition)

30
Q

What is the real estate board made up of?

A

5 members all appointed by the Governor - each has 5 year term

  • Brokers (3 people) - with at least 7 years of experience
  • Unlicensed members and rep the public (2 people)
  • One person is appointed the chairperson
  • Each person serves a five-year term and meet at least four times a year
31
Q

Fiduciary Obligations

A

Obligations of trust that real estate agents owe to their principals

  • Salesperson signing a listing will NOT have the agency relationship with the principal; it is between the firm and the principal
32
Q

Material Defects

A

Agents must inform buyer of any material defect that impact the property sale; disclosure is required even if the seller wants to keep defects confidential

33
Q

Info not to be disclosed

A
  1. Buyer’s ability to buy
  2. Information about parties that don’t materially impact their ability to conduct transactions.
  3. The highest or lowest a buyer is willing to pay
34
Q

Info you must affirmatively disclose

A
  1. Material defects
  2. Any material defects rooted to the land such as environmental hazards, nuances to airports, highways, cell towers, etc.
  3. Buyer must still be informed even if defect happens after P&S
  4. Buyer’s agents must affirmatively disclose information about the buyer that would materially impact the buyer’s ability to purchase property
  5. information discovered like if seller is trying to move and sell fast buyer must be informed.
35
Q

List 3 categories of info under confidentiality:

A
  1. Information that must be affirmatively disclosed
  2. Information that must not be disclosed
  3. Information that might have to be disclosed
36
Q

Stigmatized Property disclosure

A

Handled differently in every state
In MA seller’s agent is not obligated but if the buyer asks the sellers agent they must respond with the info they know of

37
Q

When is a real estate broker supposed to seek out commission

A
  1. They produce a purchaser ready, willling and able to buy
  2. The purchaser enters into a binding contract with the owner as a result of the agent’s effort.
  3. purchaser completes the transaction by closing title in accordance with the provision of the contract

Real Estate (20 decks)

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