UNIT 5 - AGENCY RELATIONSHIPS Flashcards
agency
legal relationship in which a principal authorizes an agent to act as the principal’s representative when dealing with third parties
fiduciary relationship
a position of trust or confidence. The agent has the fiduciary duty of loyalty, integrity, and utmost care to the principal.
special agent
employed to perform a specific task (e.g. real estate agent with a contract)
general agent
employed for any other tasks
actual authority
The authority given an agent, by the principal
power of attorney
a written document that gives a person legal authority to act on behalf of another person
special power of attorney
authorizes the agent to do certain specific acts
general power of attorney
allows the agent to transact all the business of the principal
attorney-in-fact
an agent with general power of attorney
dual agency
one broker represents both principals. Must have informed, written consent of both principals
subagent
a broker delegated by the listing agent (if authorized by the seller) who represents the seller in finding a buyer
cooperating broker
a selling agent who assists another broker by finding a buyer (may represent either seller or buyer)
agency relationship disclosure act
01/01/1988 became effective. It applies to every residential property transaction of 1-4 units. The law requires that an agent supply a written document called disclosure regarding real estate agency relationships.
disclosure process
disclose, elect and confirm
agency by ratification
acceptance of an act already performed. (i.e. ratified after the owner accepts an offer)
agency by estoppel
E.G. if a seller allows a buyer to believe, a broker represents the serller, and the buyer believes that to be so, the existence of an agency cannot be denied by the seller.
Terminating an Agency relationship
- Full performance
- Expiration of its term
- Agreement of the parties
- Acts of the parties
- Destruction of the property
- Death, incapacity, or insanity of the broker or principal
- Bankruptcy of the principal
Form RLA (residential listing agreement - exclusive) (Exclusive authorization and right-to-sell listing)
exclusive contract where the seller must pay the listing broker a commission if the property is sold within the time limit. (bilateral contract)
Form RLAA (residential listing agreement - agency) (exclusive agency listing)
exclusive contract where the seller must pay the listing broker a commission if any broker sells the property. (time limit)
Form RLAN (residential listing agreement - open) (Open Listing)
gives any number of brokers the right to sell a property. (time limit)
procuring cause
refers to a broker who produces a buyer ready, willing, and able to purchase the property for the price and on the terms specified by the seller. (no time limit)
Net Listing
employment contract in which the commission is not definite. the broker receives all the money from the sale of the property that is in excess of the selling price set by the seller.
Option Listing
gives the broker the right to purchase the property that is listed.
listing violations
- every exclusive listing must specify a definite termination date
- a listing broker must give a copy of the listing to the seller at the time the seller signs it
- a listingn broker cannot accept a deposit from the buyer, unless specifically authorized in the listing agreement.
- A listing broker may not return a buyer’s deposti after the seller accepts the offer, without the consent of the seller
- the acceptance of a check, rather than cash/promissory note, as an earnest money deposti must be disclosed to the seller at the time the offer is presented
- If the buyer instructs the listing broker to hold the check uncashed until the offer is accepted, the fact must be disclosed to the seller when offer is presented.
- any agent who puts a client’s money in his or her own personal bank account
commingling
depositing client’s funds into broker’s personal or general business account
tort
violation of legal right or civil wrong, such as negligence, libel, or nuisance
safety clause
protects the listing broker’s commission, if the owner personally sells the property to someone who was shown the property or made an offer during the term of the listing.
puffing
a statement of opinion that is not factual about a piece of property
