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Real Estate Principles > Unit 6: The Law of Agency > Flashcards

Unit 6: The Law of Agency Flashcards

1
Q

Agency

A

The act of representing someone else

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2
Q

Agent

A

Represents the principal and has a fiduciary duty (Broker)

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3
Q

Special Agent

A

Appointed to carry out a single act or transaction (Real Estate Agents)

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4
Q

General Agent

A

Has broad authority to act on behalf of the client

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5
Q

MLS

A

Multiple Listing Service

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6
Q

Pocket Listing

A

A listing that is deliberately withheld from the MLS. This is a violation of the MLS rules.

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7
Q

Cooperating Brokers

A

(Buyers Agent) Agents who try to sell a property that is currently listed for sale by a broker but who work for someone other than the listing broker.

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8
Q

Cooperating split

A

The cooperating broker’s share of the commission.

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9
Q

Salesperson Employment Status

A
  • For Tax, Compensation, and Work Hour Requirements real estate salespeople are generally treated as Independent Contractors.
  • In the eyes of the law or the department of real estate, salespersons are considered employees of the Broker.
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10
Q

Single Agency

A

An agent represents only one principal.

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11
Q

Dual Agency

A

The same agent represents two principals in the same transaction.

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12
Q

Fudiciary Duty

A

Duty of highest good faith and loyalty

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13
Q

3 Steps for Dual Agency

A

Disclose- That I am acting as a dual agent.
Elect - Choose consent
Confirm- Sign

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14
Q

Ratification

A

When your actions extend your existing relationship

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15
Q

Estoppel

A

Actions that prevent denial

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16
Q

Listing Agreements

A

An agreement establishing an agency relationship between the Broker and the Seller

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17
Q

Exclusive Authorization and Right to Sell listing

A

The most common contract in real estate. Protects the agent for payment. Regardless of who finds the buyer, the agent gets paid.

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18
Q

Exclusive Agency

A

Allows the owner to sell the house on their own and not pay a commission.

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19
Q

Open Listing

A

(procuring cause) A nonexclusive listing provides for a commission to the broker if the broker is the procuring cause of the sale.

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20
Q

Net Listings

A

The broker’s compensation is whatever amount the property sells for over a previously agreed (net) amount.

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21
Q

Option listing

A

An option listing gives the broker the right to purchase the property.

22
Q

Option Listing Disclosures

A
  • No longer just acting as an agent, acting as a principal also.
  • Other offers
  • Anticipated Profits
23
Q

All exclusive listings must include

A

A definite termination date

24
Q

The commission is earned when:

A

When the real estate broker finds a buyer who is ready, willing, and able to purchase a property.

25
Q

The commission is paid when:

A

Escrow is closed

26
Q

Duties to third persons

A

Full disclosure of material facts.

27
Q

Death on Property

A
  • Within the last 3 years, must disclose

- Beyond 3 years, disclose upon inquiry

28
Q

Unnecessary Death Disclosure

A

Do not disclose HIV or AIDs causes of death

29
Q

Easton vs. Strassburger

A

The case led to an inspection requirement. Every time you sell a house, both agents are required to conduct a visual inspection of normally accessible areas of the property. Only applies to residential 1-4 unit properties.

30
Q

Recovery Account

A

Protects the public and helps compensate victims of fraud, misrepresentation, deceit, or conversion of trust funds when they cannot collect a court-ordered judgment against a real estate licensee. Funded by 5% of all real estate license fees collected. Amount paid is limited to $50,000 per transaction and $250,000 per licensee.

31
Q

Termination of an Agency

A
  • Performance- Fulfillment of agreement
  • Expiration of term
  • Death of Agent or Principal
  • Destruction of property
  • Incapacity of seller or principal
  • Bankruptcy
  • Agreement of the parties
32
Q

Generally, an agent works for:

A

the principal

33
Q

A minor:

A

Is anyone younger than 18 years of age

34
Q

Somone appointed to carry out a particular transaction is:

A

A Special Agent

35
Q

An independent contractor is distinguished by:

A

Responsibility for Social Security and other payments.

36
Q

The California Real Estate Law treats a real estate salesperson as:

A

An employee of the broker

37
Q

A salesperson is a broker’s:

A

Agent

38
Q

An agency agreement to perform an act that requires a writing:

A

must itself be in writing

39
Q

To be enforceable, all real estate sales contracts:

A

Must be in writing

40
Q

As a contract, a real estate agency agreement:

A

Must meet the requirements for a valid contract

41
Q

Real estate commission rates:

A

Are not fixed by law

42
Q

All real estate agency agreements must:

A

Be in writing

43
Q

The MOST commonly used form of real estate listing agreement is:

A

The exclusive authorization and right-to-sell listing

44
Q

A real estate agent owes duties to:

A

The principal, the third person, and the subagent.

45
Q

The agent owes the principal the duty of:

A

Loyalty

46
Q

A real estate agent must make full disclosures of:

A

Material facts that are known by the agent or that would be revealed by a reasonable inspection of the property.

47
Q

The principal owes the agent

A

The duty of care.

48
Q

A real estate seller must disclose

A

Material facts concerning the property’s value or desirability.

49
Q

Exaggerating a property’s value or desirability:

A

is never permitted.

50
Q

The recovery account is available to:

A

people victimized by a real estate licensee.

51
Q

An agency relationship may NOT be terminated by:

A

Someone Outside the agency relationship.

Real Estate Principles (10 decks)

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