Unit 3: Agency, Brokerage, and Ethical Considerations Flashcards
agent
one who transacts business/manage affairs by another with authority from the latter
antitrust laws
laws designed to prohibit price fixing
attorney-in-fact
person authorized by another to act under a power of attorney
buyer’s agent
agent that works for the buyer
buyer’s broker
a real estate broker/agent who becomes the buyer’s principal
client
whom a broker is employed to in an agency relationship
Code of Ethics
standards of conduct adopted by RELATORS
commission
payment to a broker for for services rendered, such as in sale or purchase of real property
conflict of interest
problem when serving best interests of both the client and oneself
Consumer Information Statement (CIS)
written explanation of agency relationships presented to buyers and sellers
customer
third party in a transaction owed honest treatment but not fiduciary duties
disclosed dual agent
brokers taking both parties as principals
disclosure
revealing to another any relevant information
dual agency
representing both parties in a transaction (both the buyer and the seller)
errors and omissions (E&O) insurance
a form of malpractice insurance for real estate licensees
fiduciary
one placed in a position of trust and confidence
fiduciary relationship
a relationship of trust and confidence between trustee and beneficiary, attorney and client, or principal and agent
fiduciary responsibilities
Care: brokers must have more real estate knowledge than the average person
Obedience: agent must obey all of client’s lawful instructions
Accounting: agents must not take any secret profit, and must put all $ in escrow account
Loyalty: agent must place principal’s interest above others/their own
Disclosure: agent must pass on material information, all written information must be presented within 24hrs
fraud
intentional deception that harms another
fraudulent misrepresentation
intentional fraud/deliberate lying
general agent
one authorized to act for his/her principal
independent contractor
salesperson who sets their own hours and isn’t covered by income tax withholding; contrasted with an employee
innocent misrepresentation
unintentional misleading of a buyer done in ignorance
kickback
illegal sharing of a commission with seller
latent defect
problem not discoverable by normal prudent inspection
law of agency
rules governing conduct of agents
listing agreement
contract by which the owner retains a broker to find a buyer
meeting of the minds
when there is an agreement between the two parties
Megan’s Law
law requiring that communities be alerted to the presence of sex offenders
National Association of REALTORS (NAR)
private nationwide organization of brokers and salsespersons
New Jersey REALTORS
statewide group of real estate licensees who choose to join the organization
negligent misrepresentation
fraud committed by someone who should’ve known better (not necessarily on purpose)
off-site conditions
conditions beyond the limits of the property (i.e. hazardous waste disposal site)
power of attorney
written authorization allowing one person to act on behalf of another
principal
the one employing the agent; the client
procuring cause
the broker who brings about a sale
puffing
harmless exaggeration as salesmanship
ready, willing, and, able buyer
one qualified and prepared to purchase
REALTOR
a registered trademark for reserved for the sole use of members of the NATIONAL ASSOCIATOR of REALTORS
special agent
one authorized to act for another in a specific transaction
standard of care
competence normally expected by a licensee
subagent
agent of an agent
transaction broker
one who facilitates a transaction without functioning as an agent
universal agent
