Unit 9 - Real Estate Agency Flashcards
What are the 3 kinds of laws that agency relationships in real estate transactions are governed by
-common law: rules established by tradition and court decisions
- statutory law: laws enacted by legislature
- administrative law: rules created by commissions and authorized
by legislation
In the Law of Agency, what is an Agent
individual who is authorized and consents to represent the interests of another person in dealins with a third person`
In the Law of Agency, what is a Principal
individual who hires the agent
In the Law of Agency, what is an Agency
the fiduciary relationship between the principal and the agent
In the Law of Agency, what is a Client
the principal in a real estate transaction for whom a real estate broker acts as agent
In the Law of Agency, what is a Customer
third party or nonrepresented consumer who is not a principal but for whom some level of service may be provided and who is entitled to fairness and honesty
In the Law of Agency, what is Nonagency
someone who works with a buyer and a seller, assisting one or both parties with the transaction without representing either party’s interests. (facilitator, intermediary, transactional broker, contract broker)
What are the 2 types of Agency
Express Agency- created by oral or written agreement
Implied Agency-created unintentionally, inadvertently, or accidentally by actions, not by oral or written agreement
What is an Express Agreement
Contract where principal and agent formally express their intention to establish agency and state its terms and conditions
What is a Listing Agreement
Written agreement/contract between a real estate seller and a broker (seller representation agreement)
What is a Buyer Representation Agreement
Express agency relationship between a buyer and a broker
What does a Fiduciary Relationship consist of
The broker owes the principal certain duties by common law and/or statutory law
What are the 6 common-law fiduciary duties of an agent COLD-AC
Care - Use skill and knowledge on principal’s behalf (look out for)
Obedience - act in good faith, obey lawful instructions
Loyalty - place principal’s interest above all others, including agents
Disclosure - keep principal informed of all facts/information that may
affect transaction
Accounting - be able to report status of all funds received for/from
principal (forever)
Confidentiality - may not disclose principal’s personal information
*most important (forever)
What are material facts
Relevant information the agent knows or should have known
What are 4 items that must be disclosed in a sales transaction according to state law
- identity of prospective purchaser’s, any relationship with agent
- purchaser’s ability to complete the sale or offer a higher price
- any interest agent ahs with buyer or buyer’s business
- incorrect market value of the property
What are 3 types of agency relationships
Universal Agent - (POA) empowered to do anything the principal could do personally
General Agent - (Property Manager) represent in a broad range of matters related to a particular business or activity
Special Agent (Limited Agent) - authorized to represent the principal in one specific act or business transaction only
Are real estate professionals required to disclose the parties they represent and what is it called
Yes, Disclosure of Agency (use written office policy)
What is Single Agency
Agent represents only one party to a transaction
If a seller enters a listing agreement with a broker, what type of agent is the broker
Listing Agent
If a buyer contracts with a broker to purchase property, what type of agent is the broker
Selling Agent
What is Dual Agency
Agent represents two principals in the same transaction , both parties must consent to the arrangement in writing
What are ramifications of undisclosed dual agency
violates licensing laws, can result in rescission of the sales contract, forteiture of a commission, a lawsuit for damages, and possible license problems.
What is Designated Agency
In-house sale, in which two sales associates of the same broker are involved. Broker designates one to represent the seller and one to represent the buyer (designated agent)
What is Designated Agency
In-house sale, in which two sales associates of the same broker are involved. Broker designates one to represent the seller and one to represent the buyer (designated agent)
