General Principles of Agency Flashcards

General Principles of Agency Flashcards Ways to terminate listing agreements1. Purpose fulfilled2. agreement's term expires3. property destroyed4. Bankruptcy or death of either broker or seller only5. Broker & Seller mutually agree6. Broker losses license Assigned agencyOne company with two different agents. Broker assigns one of his salespersons to the buyer & another one of his salespersons to the seller.Agentis hired by principles to act on their behalf. Someone who represents the interest of another. Is authorized to represent the principal & the principal's real estate to consumers.Salesperson's compensationis set by mutual agreement of the employing broker & the salesperson.FiduciaryOne in whom trust & confidence is placed; a reference to a broker employed under the terms of a listing contract or buyer agency agreement.Real estate brokeris licensed to buy, sell, exchange, or lease real property for others for a fee and may operate as a sole proprietorship, partnership, or corporation.Buyer's brokerrepresents a buyer as an agent to find property that meets the buyer's specifications, as set out in the buyer-broker agreement.Net listingThe excess over the net from the sale will go to the listing broker as commission. Can be conflict of interest, seller's net vs agent's commission.Sellerhas the duty to discover & disclose any known latent defects.Single agencyis one in which an agent represents only one party in a transaction never both.Listing agreementis an employment contract between a broker and a seller.In all states, the agreement must be in writing to be enforceable in court.Broker's compensationmust be agreed upon before agency relationship is established & can be a commission based on sales price, flat fee, or hourly rate.Express agencyis based on a formal agreement between the parties.Written or verbal aka exchange of understanding.Universal agentis empowered to do anything the principal could do personally Customeris the non-represented party for whom some level of service is provided & who is entitled to fairness & honesty.

Exclusive right to sellBroker receives commission no matter who sells. Maximum protection; Maximum effort by broker.OptionsA seller (optionor) gives a buyer (optionee) the right to buy the realty within a certain time frame. Option means choice.COLD ACCare, Obedience, Loyalty, Disclosure, Accounting, Confidentiality Law of agencydefines the rights & duties of the parties in a real estate transaction-the principal, the agent & the customer.Exclusive agency listingBroker receives commission unless owner sells.Brokeragemay be independent or part of a regional or national franchise.Implied agencyresults from the behavior of the parties. Actions create agency, agree to do something; compensation discussed.Clientis the principle Fraudis the intentional misrepresentation of a material fact to harm or take advantage of another person.Open listing (nonexclusive listing)The seller retains the right to employ any number of brokers and only broker who is procuring cause receives a commission.SubagentRelation between client & salesperson Dual agency (aka limited agency)is one in which an agent represents two principals in the same transaction. One company & one agent.General agentis the salesperson of the broker & can carry out listing services only in the name of and under the supervision of

the broker. Has limited authority example: property

manager to owner / investor & salesperson or broker salesperson to broker.Agencyis the fiduciary relationship in which the agent is held in a position of special trust & confidence by the principle.Non-agent (aka facilitator, intermediary, transactional broker, transactional coordinator, or contract broker) assists one or both parties with the transaction without representing either party's interests & often is subject to specific statutory responsibilities.Designated agentis authorized by the broker to act as the agent of a specific principal.Salespersonis licensed to perform real estate activities ONLY on behalf of a licensed real estate broker.Termination of agencyCompletion, fulfillment, destruction, expiration, mutual agreement, breach and bankruptcy are examples of Brokeris liable for the actions of the salesperson within the scope of the employment agreement. An agent to their client or principal.Sherman Anti Trust ActPrice fixing, no set commission fees. All fees are negotiable. Kills competition.Multiple listing clausepermits cooperation with other brokers in the multiple listing service (MLS)

Broker protection clausepreserves a broker's commission if, within a certain number of days, the owner transfers the property to someone the broker introduced to them.Disclosures (continue sentence)of agency relationships and property condition are important consumer safeguards & may be required by state law.Puffingis legal exaggeration of a property's benefits.Special agent (aka limited agent)represents the principal in one specific act or business transaction only, under detailed instruction. Agent is hired to do one thing & cannot bind their client.Statutory law (Real estate agency relationships) which is passed by state legislatures & other governing bodies Misrepresentationoccurs when a broker should have known that a statement about a material fact was false.