Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Real Estate > Real Estate Brokerage > Flashcards

Real Estate Brokerage Flashcards

Chapter 2

1
Q

Real Estate Brokerage

A

Governed by the law of agency - the business of bringing buyers and sellers together for a negotiable fee.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Fiduciary relationship

A

a relationship of trust, confidence, and mutual good father. It is voluntary and with consent of all parties

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Agency

A

A fiduciary relationship between an agent and a principal where respective rights and duties are prescribed by the laws of agency and the agency agreement

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Broker in Charge (B.I.C)

A

the broker who is designated as having the responsibility over the actions of all associated licensees. Usually hired through a listing, buyer brokerage agreement or property management agreement.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Broker

A

an individual who has obtained a broke license but is not the broker in charge. note: the terms “broker”, “listing broker”, “buyers broker”, “cooperating broker” and “employing broker” refer to the real estate company, though the certainly involve the individuals who are engaged in the agency process

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Client

A

a person with whom the licensee has established an agency relationship

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Agent

A

party hired by the principal to perform certain duties and act in their behalf with third parties. A real estate B.I.C is the agent of the client (seller, owner, buyer).

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Customer

A

a person with whom a licensee has not established an agency relationship. The term is used in traditional agency discussions as well as transaction brokerage

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Sub-Agent

A

an agent of a broker already acting as an agent for a principle such as a salesperson or broker, but not the broker in charge. They represent the principle in a like manner as the agent.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Cooperating Broker

A

Usually the one who does not have the listing but provides the buyer or a tenant in a transaction. It is common practice for brokers and salespersons to “cooperate” with a listing broker in finding buyers or tenants. The listing broke in return agrees to share the commission.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Fiduciary Duties

A

Duties of an agent to a principal in an agency relationship including care, diligence, obedience, accountability, loyalty, disclosure and confidentiality.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

South Carolina Disclosure of Real Estate Brokerage Relationship Form

A

SC requires this form. to explain the relationship between the agent and customer or client. It is a 2 page document that should be provided at the first substantive contact

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Substantive Contact

A

Seller - when the listing is obtained and signed. Buyer - at the time the agency agreement is signed or a0 prequalifying by requesting certain info in order to determine the ability to conduct a real estate transaction b) prior to showing real estate other than open house

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Seller Agency

A

Established by a written agreement called the “listing agreement” (employment contract). The BIC is hired by the seller to marker the sellers real estate.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Buyer Agency

A

practice of the buyer hiring the BIC. Usually established by a written agreement called a “buyers agency agreement” or “buyers brokerage agreement” prescribing a finders fee. May be called a “finders agreement”

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Dual Agency

A

(limited agency) involves the representation by the broker of both the seller and the buyer in the same transaction. Informed consent is a disclosed dual agency and is legal. If parties are not aware this exists, it is undisclosed and illegal.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Designated Agency

A

viable alternative to Dual agency. The BIC can assign or designate one agent to work for the buyer and one agent to work for the seller. It became legal in SC in January 2005.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Transaction Broker

A

(facilitator, middleman, coordinator). Broker represents no one in a transaction and the duties would be limited to care, accounting, confidentiality, disclosure and due diligence. Advice and counsel regarding negotiation is not allowed. This was legal in January 2017 in SC.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Caveat Emptor

A

Latin meaning “Let the buyer beware”. Brokers and salespersons must be aware the the seller is responsible to disclose all latent defects. These are defects are known to the seller but not discoverable by the buyer through ordinary reasonable inspections

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Agent duties to Principal (CcOALDd

A

Care & Confidentiality, Obedience, Accounting, Loyalty, Disclosure and Diligence

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Principal obligations to agent

A

Opportunity, Good conduct, Good faith and honesty, indemnification, compensation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

Agent obligations to customers

A

Act in good faith, accounting, honest and fair dealing, disclosure of agency relationship, care

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Compensation

A

Dependent on : 1. the agent has a valid license 2. the agent was employed by the seller or buyer 3. the procuring cause of the sale or transaction by a written listing agreement, transaction brokerage agreement or buyer agency/brokerage agreement

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

Procuring Cause

A

accomplished when a licensee started or caused an unbroken chain of events, which results in a sale.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

Sherman & Clayton Anti-trust acts

A

state and federal laws designed to prohibit conspiracies, monopolies, and practices that unreasonable restrain trade.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

Illegal Broker Acts

A

Price Fixing, Allocation of customers or markets, Collusion and group boycotting,Tie-In Arrangements

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

Types of Agents

A

Universal, General, Special or Limited, Expressed

28
Q

Universal Agent

A

an agent who has the power to represent the principal in all matter that can be delegated. Usually created by the power of attorney (document) to authorize the agent to act as an “attorney-in-fact” and grans the agent contractual authority.

29
Q

General Agent

A

An agent works on a continuous basis for the client in a specific range of matters and can bind principal within that range. Can be created by power of attorney or an employment contract. (salespersons, property managers)

30
Q

Special or Limited Agent

A

An agent authorized to represent the principal for one specific transaction or business activity only, after which the agency relationship terminates. Usually does not have power of attorney. (Real estate brokers. )

31
Q

Ostensible Agencies

A

created by the actions of the parties, rather than by expressed oral or written statements. They can be expressed or Implied. In SC, all listing agreements, buyer agency agreements and property management agreements must be in writing.

32
Q

Expressed Ostensible Agency

A

Terms and conditions of a contract are discussed orally or in writing. Most types of real estate relationships are expressed in writing.

33
Q

Implied Ostensible Agency

A

The contract or agency is demonstrated not by what was said orally or in writing but by the action of the parties.

34
Q

Safe Harbor Act

A

The IRS has outlined certain standards for real estate brokers to meet in treating salespersons as independent contractors. To operate under this act the broker must: 1. be a qualified real estate agent 2. have a real estate license 3. have remuneration based on sales (commission) 4. have a written employment agreement

35
Q

Blind Ads

A

describe the property and include the agents telephone number but do not mention the agent or real estate company name.

36
Q

Tort

A

Any wrongful act, damage or injury done willfully, negligently, or in circumstances involving strict liability but not involving breach of contract, for which a civil suit can be brought.

37
Q

Fraud

A

worst form of misinterpretation that involves the INTENT to deceive, harm or unfairly persuade. Th person involved in this act would also be liable for negligent misstatement, but not liable for puffing or innocent misstatement of facts.

38
Q

Puffing

A

exaggeration or opinionated statements

39
Q

Errors and Omissions Insurance

A

Covers liability for errors and negligence in the usual listing and selling activities of a real estate office. This does not normally cover fraud violations of fair housing laws, or violations of anti-trust laws.

40
Q

Types of Listing Agreements

A

Open Listing, Exclusive Agency, Exclusive Right to sell, Exclusive Right to Sell Transaction Brokerage, Net Listing, Multiple Listing

41
Q

Open listing

A

The seller retain the right to employ any number of brokerage companies and pays only the broker who produces a ready, willing and able buyer. If the seller find the buyer and sells the property, no commission is paid.

42
Q

Exclusive Agency

A

Only one brokerage is hired to sell the property; however, the seller retains the right to sell the property and not pay a commission. The listing broker also gets a commission if another broker sells it.

43
Q

Exclusive Right to Sell

A

one broker is sole agent of the seller. The owner must pay the commission regardless of who sells the property. This is the safest and most popular type of listing for the agent.

44
Q

Exclusive Right To Sell Transaction Brokerage

A

A listing agreement signed by a seller who wishes to imply a broker to facilitate the sale of property without becoming a client. The seller customer is provided limited duties and it does not create an agency relationship.

45
Q

Net Listing

A

(NOT LEGAL) a listing whereby the seller agrees to a fixed net amount and the broker is free to try to sell the property for any amount above that net figure. The broker would then receive the difference between the net amount and the sale amount as commission.

46
Q

Multiple Listing (MLS)

A

many brokerage firms in an area agree to pool and share their listings. It is usually a form of the Exclusive Right to Sell. If the property is sold, the seller pays the listing broker only, regardless of who actually secures the buyer.

47
Q

Contents of a Listing (SC License Law)

A
  1. property identification, 2. list price 3. Commission 4. Signatures of the seller and broker 5. Expiration Date 6. the type of listing must be included
48
Q

Buyer Agency Brokerage Agreement

A

an employment contract to find a suitable property where the broker is employed as the buyers agent. The buyer, rather than the seller, is the principal.

49
Q

Types of Buyer Agency Agreements

A

Open buyer agency agreement, exclusive agency buyer agency agreement, exclusive buyer agency agreement

50
Q

Open Buyer Agency Agreement

A

Nonexclusive agency contract between a broker and a buyer. It permits the buyer to enter into similar agreements with an unlimited number of brokers. The buyer is obligated to compensate only the broker who locates the property the buyer ultimately purchase

51
Q

Exclusive-Agency buyer agency agreement

A

an exclusive contract between the buyer and the agent, however, it limits the brokers right to payment. the broker is entitled to payment only if he or she locates the property that the buyer ultimately purchases. the buyer is free to find a suitable property with obligation to pay the agent

52
Q

Exclusive buyer agency agreement

A

completely exclusive agency agreement. The buyer is legally bound to compensate the agent whenever the buyer purchase a property of the type described in the contract. The broker is entitled to payment regardless of whether he or she located the property.

53
Q

Terminations by operation of the law

A

expiration of the time period stated in the contract, death or insanity of either party, destruction of the property, bankruptcy of the principal or agent, loss of title, change of law, impossibility of contract

54
Q

Termination by acts of the parties

A

nonperformance of the broker (broker neglects or doesn’t perform), breach by one of the parties, an owners or buyers revocation for agent violations of law, agents renunciation for good legal cause, mutual consent, completion or fulfillment of the purpose

55
Q

Agency coupled with an interest

A

An agency relationship in which the agent is given an estate or interest in the subject of the agency. example; developer and real estate broker entering into a partnership to build condominiums.The brokers listing cannot be revoked by the developer nor will it be terminated if the developer dies.

56
Q

Statute of Frauds

A

a common law doctrine in every state which requires certain types of contracts to be in writing in order to be enforceable. An exception in real estate is an oral lease for one year or less, which is enforceable by law.

57
Q

Agency Coupled with an Interest

A

an agency relationship in which the agent is given an estate or interest in the subject of the agency (the property)

58
Q

Automatic Extension

A

A clause in a listing agreement that states that the agreement will continue automatically for a certain period of time after its expiration date. In many states, the use of this clause is discouraged or prohibited.

59
Q

Closing

A

An event where promises made in a sales contract are fulfilled and mortgage loan funds are distributed to the buyer

60
Q

Closing Statement

A

a detailed cash accounting of a real estate transaction showing all cash received, all charges and credits made, and all cash paid out in the transaction.

61
Q

Escrow

A

A closing of a transaction through a third party who receives certain funds and documents to be delivered upon performance of certain conditions outlined in the escrow instructions. “under contract”

62
Q

Escrow Account

A

The trust account established by a broker under the provisions of the license law for the purpose of holding funds on behalf of the brokers principal or some other person until the consummation or termination of a transaction

63
Q

Megans Law

A

Federal legislation that promotes the establishment of state registration systems to maintain residential information on every person who kidnaps children, commits sexual crimes against children or commits sexualy violent crimes. Agents can notify clients there is a sex offender list but you do not have to supply the website.

64
Q

Option Listing

A

Listing with a provision that gives the listing broker the right to purchase the listed property.

65
Q

Principal

A

1) A sum loaned or employed as a fund or an investment, as distinguished from its income or profits. 2) The original amount (loan) of the totall due and payable at a certain date. 3) A main party to a transaction - the person for whom the agent works

66
Q

Statute of Limitation

A

Law pertaining to the period of time within which certain actions must be brought to court

Real Estate (13 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions