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Real Estate > Unit 9 - Real Estate Agency > Flashcards

Unit 9 - Real Estate Agency Flashcards

1
Q

What are the 3 kinds of laws that agency relationships in real estate transactions are governed by

A

-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

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2
Q

In the Law of Agency, what is an Agent

A

individual who is authorized and consents to represent the interests of another person in dealins with a third person`

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3
Q

In the Law of Agency, what is a Principal

A

individual who hires the agent

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4
Q

In the Law of Agency, what is an Agency

A

the fiduciary relationship between the principal and the agent

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5
Q

In the Law of Agency, what is a Client

A

the principal in a real estate transaction for whom a real estate broker acts as agent

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6
Q

In the Law of Agency, what is a Customer

A

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

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7
Q

In the Law of Agency, what is Nonagency

A

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)

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8
Q

What are the 2 types of Agency

A

Express Agency- created by oral or written agreement
Implied Agency-created unintentionally, inadvertently, or accidentally by actions, not by oral or written agreement

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9
Q

What is an Express Agreement

A

Contract where principal and agent formally express their intention to establish agency and state its terms and conditions

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10
Q

What is a Listing Agreement

A

Written agreement/contract between a real estate seller and a broker (seller representation agreement)

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11
Q

What is a Buyer Representation Agreement

A

Express agency relationship between a buyer and a broker

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12
Q

What does a Fiduciary Relationship consist of

A

The broker owes the principal certain duties by common law and/or statutory law

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13
Q

What are the 6 common-law fiduciary duties of an agent COLD-AC

A

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)

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14
Q

What are material facts

A

Relevant information the agent knows or should have known

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15
Q

What are 4 items that must be disclosed in a sales transaction according to state law

A
  • 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
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16
Q

What are 3 types of agency relationships

A

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

17
Q

Are real estate professionals required to disclose the parties they represent and what is it called

A

Yes, Disclosure of Agency (use written office policy)

18
Q

What is Single Agency

A

Agent represents only one party to a transaction

19
Q

If a seller enters a listing agreement with a broker, what type of agent is the broker

A

Listing Agent

20
Q

If a buyer contracts with a broker to purchase property, what type of agent is the broker

A

Selling Agent

21
Q

What is Dual Agency

A

Agent represents two principals in the same transaction , both parties must consent to the arrangement in writing

22
Q

What are ramifications of undisclosed dual agency

A

violates licensing laws, can result in rescission of the sales contract, forteiture of a commission, a lawsuit for damages, and possible license problems.

23
Q

What is Designated Agency

A

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)

23
Q

What is Designated Agency

A

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)

24
Q

What is nonagency

A

no an agent to either party. Simply hlep both buyer and seller with necessary paperwork and formalities. (Transaction Broker)

25
Q

What 7 reasons can terminate agency

A
  • Completion and fullfillment of purpose
  • Death of either party. Seller/buyer or the managing broker
    -Destruction or condemnation of the property
  • Expiration of the terms of agency
  • mutual agreement by all parties to cancel contract
  • Breach by one of the parties
  • Bankruptcy of the principal
26
Q

What is Puffing

A

Exaggeration of a property’s benefits. Cannot be fraudulent. For REALTORS, it’s considered unethical.

27
Q

What is Fraud

A

intentional misrepresentation of a material fact in such a way as to harm or take advantage of another person

28
Q

What is negligent misrepresentation

A

Occurs when the real estate professional should have known that a statement about a matieral fact was false.

29
Q

What is a Latent Defect

A

a hidden structural defect that would not be discovered by ordinary inspection. (termites, wood rot)

30
Q

What are stigmatized properties

A

properties that society has found undesirable because of events taht occurred there or because of proximity of the property to a known nuisance. Stigmas only disclosed if asked

31
Q

What are 5 common stigmas in properties

A

-Dies inside
- Illegal drug manufacturing
- Felony commited inside
- Gang related act
- Discharge of a firearm by police officer in line of duty

Real Estate (13 decks)

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