Unit 9: Real Estate Agency Flashcards

Unit 9: Real Estate Agency Flashcards

reasonable skill and care"A duty owed to a client by an agent, reasonable care requires the agent to act at the utmost professional level in serving the client.Ex. Jason showed reasonable skill and care when he recommended to his client that he have an HVAC specialist inspect the furnace; it looked old and in need of repair.true or falseIn a real estate transaction, the source of compensation does not determine agency. An agent does not necessarily represent the person who pays the agent's commission.true disclosure (to buyers)disclose to the principal and all parties all known material facts about the propertyfull disclosure to the principal of all knowledge about the transaction (including but not limited to material facts) If a principal asks an agent to participate in an illegal or

unethical act in selling a property, unlawful(ex: conceal a

property defect or refuse to show property to member of a

protected class: catholics/blacks)

the agent should decline the listing

true or false:A representative who does not make a

reasonable effort to properly represent the interests of the principal may be found negligent by a court of law. The representative is liable to the principal for any loss resulting from the representative's negligence or carelessness.true Implied AgencyBased on the actions of the parties that imply that they have mutually consented to an agency relationship, an implied agency relationship is formed.Depending on state law, information that must be discussed in a sales transaction could includethe identity of prospective purchasers, which may include any relationships the purchasers might have with the agent (such as when a relative or associate of the agent is a purchaser);the purchaser's ability to complete the sale or offer a higher price;any interest or prospective interest the agent has in the buyer or the buyer's business (such as the broker's agreement to manage the property after it is purchased); andan incorrect market value of the property.this represents what common law of agency?disclosure common law of agency specifies fiduciary duties to ___?principal (OLD CAR)obedienceloyaltydisclosureconfidentialityaccountabilit yreasonable car

While neither the real estate professional nor the represented party may have consciously planned to create an agency relationship, they can create one unintentionally, inadvertently, or accidentally by their actions Indicate the type of agency agreement created by each example.Buyer asks to see other homes at open house implied agency employment agreement of broker and sales associate must be in writing A real estate professional can represent a client as an agent, but in addition to the parties' assumptions and expectations, the real estate professional acts as a ____ and is subject to a wide range of legal and ethical requirements designed to protect the seller, the buyer, and the transaction itself.fiduciary general agencyagent is authorized to perform a series of acts associated with the continued operation of a particular business Buyer Representation Agreement (similar to listing agreement) the buyer representation agreement stipulates the activities and responsibilities the buyer expects from the broker in finding the appropriate property for purchase or rent.obedience(you have to do what your principal tells you to do)an agent must obey the lawful directions of the principal express agencyAgency relationship based on an expressed agreement, either written or oral.The agency agreement between a broker and client usually authorizes the broker to act on the principal's behalf The relationship between the principal and agent must be consensual meaning what?the principal delegates authority, and the agent consents to act. The parties must agree to form the relationship.true or falseThe fundamentals of general agency law have changed dramatically over the past two hundred years.false principalthe individual who employs the agent and delegates to that agent the responsibility of representing the his/her principal's interests.statutory lawthe laws enacted by the legislature agent legally replaces the?principal agent's authority comes from a legal form called power of attorney (POA)

loyalty: acts asan advocate for the principal

Buyer's AgentA real estate professional who is under contract to locate property for a buyer and represent the buyer's interests in a transaction.customerthe 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; may be represented by a separate agent.agent's duties to third parties (DAH)disclosure, disclosure at first substantive contact (inform customers to not share confidential information with agent)the agent's

fiduciary duties would require disclosure of that information to the their principal

loyalty(client before anything)an agent must place the interest of the principal (CLIENT) ABOVE ALL OTHERSincluding agent's own interest scope of an agent's authority created by written contractpyramid for general agency seller>>broker & salesperson>>general agencybuyer>>>broker & salesperson <<<