Unit 10 - part 1 Flashcards
Agency relationships in real estate transactions are governed by three kinds of law, including…
- common law, the rules established by tradition and court decisions;
- statutory law, the laws enacted by the legislature; and
- administrative law, the rules and regulations created by real estate commissions and departments, as authorized by the legislature.
Agent
The individual who is authorized and consents to represent the interests of another person.
Principal
The individual who hires the agent. (seller)
Agency
The fiduciary relationship between the principal and the agent.
Fiduciary
The relationship in which the agent is held in a position of special trust and confidence by the principal.
Client
The principal in a real estate transaction for whom a real estate broker acts as agent.
Customer
The third party or nonrepresented consumer.
Ako nije potpisan ugovor onda je customer.
Nonagent
(also referred to as transactional broker) - someone who works with a buyer and a seller, assisting one or both parties with the transaction without representing either party’s interests.
A broker may be considered a nonagent when dealing with a customer
Express Agency
The principal and the agent may enter into a contract, or an express agreement, in which the parties formally express their intention to establish an agency and state its terms and conditions.
A listing agreement (seller representation agreement) authorizes the broker to find a buyer or a tenant for the owner’s property.
An express agency relationship between a buyer and a broker is created by a buyer representation agreement.
Implied Agency
An agency may also be created by implied agreement. This occurs when the parties act as though they have mutually consented to an agency, even if they have not entered into a formal agency agreement.
The real estate professional may also be denied compensation on the grounds that there is no written agreement, as required by law.
