Real Estate - Level 8, Chapter 3 - Classifications of Agency

Real Estate - Level 8, Chapter 3 - Classifications of Agency Flashcards usually given via a power of attorneyuniversal agency

Universal agency is usually granted via a(n): power of attorney

Agency created at the broker level has a number of

implications, such as:

• commission - rate is negotiated between principal and

broker2. listings - if a salesperson switches brokerages, their clients remain with their previously sponsoring broker as their agency relationships were with that sponsoring broker.universal agencyThe type of agency that gives agents the broadest scope of power, universal agency empowers agents to make decisions on behalf of their principals across a wide range of concerns. It is rarely used in real estate.power of attorneya legal instrument used to confer the right of one individual to act on behalf of another.the broker-customer relationshipno agency the broker-client relationshipspecial agency the broadest form of agencyuniversal agency Brokers have what kind of relationship with their sponsored agents?General Agency - which empowers those agents to fulfill the fiduciary duties that brokers owe their clients; that general agency relationship holds brokers responsible for the actions performed by their sponsored agents.general agencywhile somewhat limited, grants a broader scope of authority to the agent than special agency and is often ongoing in nature. It is the type of relationship that exists between brokers and sponsored licensees, and it is the agency needed for a licensee to work as a property manager.Do you have the authority to bind in a General Agency?Yes a general agency gives the agent the authority to bind What is an example of a general agency relationship?a broker and a sponsored agent A significant limitation in special agency relationships is that special agents are unable to make decisions that would bind or obligate their principals.What kind of relationship does the broker have with their client?Special Agency - the client has entrusted the broker to perform specific actions on their behalf (such as selling a home).Non-Binding Special Agency (example):When Seller Tim signs a listing agreement with broker Sally, he granted Sally special agency to list his house on MLS, negotiate with potential buyers, and host open houses at his residence on the weekends.Seller Tim does not, however, authorize Sally to make decisions that bind him. For example, Sally cannot accept an offer from a buyer on Tim's behalf. Tim still gets to make the decision to

accept a buyer's offer.general agencybroker entrusts sales agent to act as a special agent and perform fiduciary duties for their clients.a broad scope of authority within a limited area of concerngeneral agency general agencycan be found in the relationship between a broker (principal) and a sponsored licensee (agent). Interestingly enough, the general agency a broker extends to the

licensee allows the licensee to operate as a special agent on behalf of the broker's clients.Do you have the authority to bind in a Special Agency?No

How is universal agency granted to an agent? through Power of Attorney Universal Agencyis the broadest type of agency; it gives agents the power to act on behalf of the principal AND make decisions on behalf of the principal in all business matters of concern to the principal; it gives the agent the scope of authority to act on the principal's behalf for ALL business concerns.If Geni is Agent Andie's supervising broker, who is the principal in their general agency relationship?Geni; as the broker in the general agency relationship, Geni is the principal and she is responsible for the approved actions taken by her sponsored agent, Andie.Through power of attorney, the agent becomes the attorney-in-fact - has the actual power to sign legal documents on behalf of the principal.(example) when a principal is abroad and wishes to give their agent power of attorney to complete the sale of their property in their absence.special agency/limited agencyrestricts an agent's scope of authority to one or more specific acts as directed by the principal - usually towards a single, specific objective, end, or goal. Special agency, therefore, is typically not ongoing but ends upon completion of the goal for which the specifically authorized tasks were authorized.*the most limited in scope special agencybroker is authorized to perform specific actions for client The three classifications of agency by scope of authority

granted are:

• Special agency2. General agency3. Universal agency

The general agency that exists between a broker and a

sponsored licensee (does what?):

• Gives the licensee a broader (than special agency)

scope of authority to act2. Holds the principal (broker) responsible for actions performed by their agent (the sponsored licensee)*If a sponsored licensee poorly represents the interests of the broker's clients, the broker is ultimately responsible for that licensee's actions.agency is created on the (what level)?broker level; not the salesperson level*So when a client signs a listing agreement with a sponsored salesperson, they are actually signing an agency relationship with the salesperson's broker, not the salesperson themselves.general agencyis one in which the agent is given the power to bind the principal in a particular trade or business.*For example, a salesperson is a general agent of his or her employing broker. Another example is that of a property manager for a property owner.From the client's perspective, what kind of agent is their broker?their broker is a special agent the broker-sponsored salesperson relationship general agency most limited form of agencyspecial agency special agencyA limited agency that usually exists between brokers and clients. Special agents cannot make decisions that may bind or obligate their principals.