Unit 4 - Real Estate Agency Flashcards
Agency
The relationship between a principal and an agent wherein the agent is authorized to represent the principal in certain transactions.
Agency Coupled With An Interest
An agency relationship in which the agent is given an estate or interest in the subject of the agency (the property).
Agent
One who acts or has the power to act for another. A fiduciary relationship is created under the law of agency when a property owner, as the principal, executes a listing agreement or management contract authorizing a licensed sponsoring broker to be his agent.
Brokerage Agreement
A brokerage agreement is a type of contract wherein one party agrees to act as a sales agent of another, who is called the principal.
Buyer Agency Agreement
A principal-agent relationship in which the sponsoring broker is the agent for the buyer, with fiduciary responsibilities to the buyer.
Client
A person who is being represented by a licensee; the principal.
Commingling
The illegal act by a real estate licensee of mingling client or customer funds with the licensee’s personal funds.
Compensation
The valuable consideration given by one person or entity to another person or entity in exchange for the performance of some activity or service.
Confidential Information
Information given by a client to a licensee during the term of a brokerage agreement that the client requests (in writing or verbally) the licensee keep in confidence; relates to the client’s negotiating position; or could do damage to the client’s negotiating position if disclosed.
Consumer
A person or entity seeking or receiving licensed activities.
Conversion
Unauthorized use or withholding of money or property that rightfully belongs to another person
Cooperative Commission
In Illinois, an arrangement whereby both the buyer’s and the seller’s real estate agents are paid by the seller.
Customer
A consumer who is not being represented by the licensee, but for whom the licensee is performing ministerial acts.
Designated Agent
A licensee authorized by a sponsoring broker to act as the agent for a specific principal in a particular transaction.
Dual Agency
Representing both parties to a transaction. In Illinois, this is illegal unless both parties agree to it in writing.
Express Agency
An agency relationship based on a formal agreement between the parties.
Universal Agent
A person empowered to do anything the principal could do personally.
Substantive Contact
Dialogue between a licensee and a consumer that moves to consumer’s motives, objectives, financial qualifications, and other confidential information that, if disclosed, could harm the consumer’s bargaining position.
Single Agency
The representation of a single principal.
Special Agent
One who is authorized by a principal to perform a single act or transaction; a real estate broker is usually a special agent authorized to find a ready, willing, and able buyer for a particular property.
Puffing
Exaggerated or superlative comments or opinions.
Principal
(1) A sum loaned or employed as a fund or an investment, as distinguished from its income or profits.
(2) The original amount (as in a loan) of the total due and payable at a certain date. (
3) A main party to a transaction—the person for whom the agent works.
Negligent Misrepresentation
Occurs when the broker should have known that a statement about a material fact was false.
Material Fact
Any fact that, if known, might reasonably be expected to affect the course of events.
Listing Agreement
A contract between an owner (as principal) and a real estate sponsoring broker (as agent) by which the sponsoring broker is employed as agent to find a buyer for the owner’s real estate on the owner’s terms, for which service the owner agrees to pay a commission.
Latent Defect
A hidden structural defect that could not be discovered by ordinary inspection and that threatens the property’s soundness or the safety of its inhabitants. Some states impose on sellers and licensees a duty to inspect for and disclose latent defects.
Implied Contract
A contract under which the agreement of the parties is demonstrated by their acts and conduct.
Implied Agency
Agency, intentional or otherwise, created by action or deed. AKA ostensible agency
General Agency
The relationship of a broker, managing broker, or leasing agent with a sponsoring broker.
Fraud
Deception intended to cause a person to give up property or a lawful right.
Fiduciary Duties
Certain duties owed by a real estate licensee to a principal, including the duties of care, obedience, loyalty, disclosure, accounting, and confidentiality.
Express Contract
An exchange of promises where terms by which the parties agree to be bound are declared either orally or in writing (or a combo of both) at the time it is made.
