Chapter 3 Real Estate Agency Flashcards

Chapter 3 Real Estate Agency Flashcards Agency Disclosures RequirementsCalifornia law requires al real estate agents to disclose in writing the the buyer and seller wheather the real estate broker is the agent of the seller, the buyer or both.The buyer and seller must sign a disclosere form explaining the real estate agency status.The agency disclosre must be done before the seller signs the listing contract and before the buyer signs th epurchase contract,The disclosure and confirmation process is completed in three steps.MisrepresentationSection 10176(a)misrepresentation on the part of the broker or salesperson.This includes what was said but also the failure of a broker or sales person to disclose a material fact about the property.A misrepresentation is a false statementof fact.Failure to disclose is a type of misrepresentation!A listing agent owes the buyerA disclosure of known defects

A fiduciary relationship is best described as: loyalty and confidentiality

Definite termination dateSection 10176(f)Requires a specified termination date for all exclusive contracts between a real estate agent and a principal relating to tansactions for which a real estate agent license is required.If cannot be determined from the exclusive listing contract when the listing is to expire, then the real estate agent may be in violation of the the law.SubagentsIf given permission by the seller in the listing agreement, a real estate agent can assign some if his/her duties to other licensed agents. These other agents a called subagents.Due to change of MLS rules subagency was virtually elimanated.A home seller must inform his or her real state agent when the seller is aware of termite infestation discoved earliera leaky roofan in operative fireplace.all the above Example of secret profitBroker receives a reffal from a title company without telling the principals in the sales transaction.Trust fundsA broker is required to keep an official record of all deposits that pass through his/her real estate business.The account must be kept using acceptable proceduresAccount is subject to audit by the California real estate commissioner.A real estate broker is allowed to keep _______ of his/her on money in a trust fund to handle bank service charges.$200 By Estoppelmislead an innocent personIn an estoppel situation an individual knowingly allows another person to perform tasks beneficial to that individual. Later the individual determines that the person did not act properly and decides to pursue

legal recourse.

A real estate agency exists between the: broker and the principal

General AgencyBroad Powers

Actual AgentDirectly appointed by the principle where the agent is granted certain powers to act on behalf of the principle.Categories of AgencyGeneralSpecial Cooperating AgentsCooperating agents are agents that attempt tp find a buyer for the other broker's listing and then to act as the agent of the buyer, not the subagent of the seller.The maximum amount per individual claim against the Bureau of Real Estate Recovery Fund is

$50.000

Secret profitSection 10176(g)Agents must always disclose any self-interest they might have in a transaction and obtain their principals consent.The top producing salesperson Jane, at ABC Realty has become a broker and decided to open her own office. She currently has 10 listings with ABC Realty. What will happen to these listings when Jane opens her new office?Jane will have to leave the listings with ABC since they belong to the brokerage.Sellers Agency relationship is betweenThe seller and the broker.Real Estate Bkoker is legally bound to do the very best for the seller Dual AgencyReal Estate broker represents both seller and buyer in the same transaction with the knowledge and consent of both parties.(two real estate licensees working for the same broker will be a dual agency if one have the seller and the other has the buyer.The disclosure conformation is 3 steps:1. Disclosure: The agent discloses or presents the choice of being the agent for the seller, only the buyer, or both.2.

Election: The seller and /or buyer elect the type of

representation, single or dual.3. conformation: The agent,

seller, and buyer confirm the agency relationship and sign the required form.Under a buyer's agency, the fiduciary relationship is between the broker and the The fiduciary relationsship is between the broker and the buyer.Buyers Agencybuyer appoints a real estate broker to be the buyers agent False promiseSection 10176(b)This is not the same as misrepresentation.A false promise is a false statementabout what the promiser is going to do in the future.To prove false promise, the injured party must show that the promose was impossible to perform and that the person making the promise knew it to be inpossible.A real estate broker who has been appointed in writing to be a property owner's agent to find a buyer under a

specified set of terms is a:

Special, actual agent When a real estate agent mixes his or her personal funds with that of a principal, the agent is guilty commingling A real estate agent mistakenly states that the portable dishwasher is included in the sales price of the home. This

agent is guilty of:

misrepresentation

Ostensible AgencyWhen an agents purports to be representative of a principle but has not been authorized to act on behalf of the principle and knowingly allows innocent third parties to believe that the unauthorized person is the principals agent.Buyer AgencyThe practice of an agent representing only buyers is known as buyer agency.Buyers agents under buyer representation agreement, may negotiate with "For Sale by Owner" properties and owners of unlisted properties without concern about being paid.If the seller is not willing to pay a commission to the agent, the buyer representation agreement provides that the buyer will pay the commission.A real estate agency can ne created by all of the followingratificationagreementestoppel If a real estate salesperson decoes to work for a new broker, the existing listings obtained by the salesperson belong to whom The listings belong to the former broker Creation of Real Estate AgenciesThree ways1. agreement2. ratification3. estoppel In today's real estate market, when a real estate agent uses agents from other real state companies to help find a

buyer, the other agents are called:

cooperating agents All of the following are true, exceptdual agency does not required written confirmation from the buyer and seller Recovery FundThe public cab recover money when there are certain uncollectable court judgements obtained against a real estate licensee on basis of fraud, misrepresentation, deciet, or conversion of trust funds in a transaction.The maximum amount of money a person can receive from the fund is currently limited $50.000 per individualup to $250,000 maximum for multiple claims against any real estate licensee Fiduciary Relationshipis created when a real estate brokerage is appointed as an agent, by the principle (seller) to represent the seller in negotiations with a buyer.Fiduciary relationship is one of loyalty, obedience, and confidentiality, and obligates the agent to act in the principals best interest.Real Estate AgencyPrincipal = Seller (appoints) Agent = Broker (to find) third party ((Buyer) Unless instructed to hold the check unccashed, a b buyer's deposit must be placed with the appropriated party or account within how many business days three All of the following are methods of terminating a real estate agency except estopple Commingling and conversionSection 10176(e)Commingling takes place when a broker has mixed funds of his/her principles money with the brokers own money.Conversion is misappropriating and using a client's money. (This is a crime that carries a jail