AGENCY RELATIONSHIPS and contracts Flashcards by Jessica Huff

CREATING AGNECY

listing, buyer agency and property management create an agency relationship.

PAYMENT OF MONEY DOES NOT

written contract or actions.

To earn a commission, agen must be licensed of transaction - have written compensation and the procuring cause.

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Express Agency

parties state the contracts terms and express their intention orally or in writing

example - LISTING AGREEMENT

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IMPLIED AGENCY

actions or conduct of the parties

example: “take this deal. it’s the best one for you”

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TYPES OF AGENTS

General Agent
Special Agent
Universal Agent

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Types of agencies

single agency
dual agency
facilitator or transaction broker
Designated agency

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Listing agreement

personal service contact securing the employment of a brokerage firm to find a ready willing and able buyer

TYPES - 
exclusive right to sell
exclusive agency
open 
and net

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Law of Agency

Outlines the duties and responsibilities of the principal and the agent

COALD -
LOADS
Loyalty - must be loyal
Obedience
Accountability 
Disclosure - disclosing facts and keep the principal
SKILL/CARE

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DISCLOSURE _ LAW OF AGENCY

if representing seller - the agent must disclose all if the BUYER is willing to offer more for the property

If representing the Buyer - an agent needs to disclose all DEFECTS and if the SELLER WOULD TAKE LESS FOR THE PROPERTY!!

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VALID CONTRACT

meets all essential elements and is an enforceable contract
legally and mentally competent and authorized to perform
legally at the age of 18
offer and acceptance(MUTUAL ASSENT OR MEETING OF THE MINDS)
CONSIDERATION
REALITY OF CONSENT

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offer must be made by one party

OFFEROR

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accepted w/out any qualifications or changes by second party

OFFEREE

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CONSIDERATION

promise or something of value

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REALITY OF CONSENT

contact was entered into with our duress, menace, misrepresentation or fraud.

IF HAVE BEEN TRICKED CONTRACT IS VOIDABLE BY THE INNOCENT PARTY BUT VALID AS THE WRONGDOER

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VOID

MISSING AN ESSENTIAL AND HAS NO LEGAL FORCE AND EFECT - EX -CONTRACT WAS NOT SIGNED BY THE PERSON WITH THE AUTHORITY TO PERFORM

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VOIDABLE

IT MAY BE RESCINDED BY ONE OR BOTH PARTIES

CONTRACTS are VOIDABLE by the innocent party if entered into under duress, under the influence, though misrepresentation through fraud , with a minor or with incompetent person.

A CONTRACT WITH A CONTINGENCY THAT CANNOT BE MET MAY BE VOIDABLE.

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PAYMENT OF COMPENSATION OR ITS SOURCE DOES NOT

CREAT THE AGENCY RELATIONSHIP. A CONTRACT OR THEA CTIONS OF THE PARTIES CREATES THE AGENCY RELATIONSHIP.

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EXPRESS AGENCY

-when the parties state the contract terms and express their intention, either ORALLY or in WRITING

example LISTING AGREEMENT

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IMPLIED AGENCY

actions or conduct of parties communicate that there is an agreement

TAKE THIS DEAL , ITS THE BEST ONE FOR YOU!

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ELEMENTS OF A CONTRACT

OFFER AND ACCEPTANCE
CONSIDERATION
LEGALLY COMPETENT PARTIES
CONSENT LEGAL PURPOSE

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SALES CONTRACT

expressly state in writing terms of the transfer of real property from the seller to the buyer

ID of SELLER AN BUYER
type of deed conveyed w/ restrictions
price of property/how purchaser will pay
amount of ernest money remedies for breach
provision for real estate taxes, insurance rent
securing loan, inspection, closing, possesion
person property to be left w/ real estate
personal property to seller inters to remove
payment of any special assessments
provision statin time period for acceptance
dated signatures OF ALL PARTIES

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EXCULPATORY CLAUSE

hold harmless clause that may be found in contacts relieving a party from liability for injuries to another

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INDEMNIFICATION CLAUSE

a clause in which one party agrees to compensate another for a loss or damage that is sustained

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FORFEITURE CLAUSE

in a contract would allow the ernest money to be given to SELLER if the buyer defaults

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FIDUCIARY RELATIONSHIP

legal relationship that creates a position of trust and confidence

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REALITY OF CONSENT

contact was entered into with out duress , menace, misrepresentation, or fraud

VOID

when a contract has no legal force

EXCULPATORY CLAUSE

relieve or excuse a party from liability for injuries of the party - hold harmless clause

UNENFORCEABLE

oral reals estate contract

VOIDABLE

CONTINGENCIES WOULD MAKE A CONTRACT

TIME OF ESSENCE

REQUIREMENT NOT MET THE CONTRACT HAS BEEN BREACHED

LISTING AGREEMENT

IS NOT A NOTIFICATION THAT MUST BE SENT TO REGULATORY AGENCY

ALL COMMISSION CHECKS

MUST BE GIVEN TO THE PRINCIPAL BROKER

OFFER CAN BE REVOKED

AT ANY TIME BEFORE ACCEPTANCE - BECAUSE THE AGENT HAD NO COMMUNICATION OF ACCEPTANCE OF THE SELLER, THE BUYER HAS NO RESPONSIBILITIES FOR THE OFFER ONCE THE REVOCATION WAS COMMUNICATED TO HIS AGENT.

A SALES CONTRACT

DOES NOT CREATE AN AGNECY RELATIONSHIP

VOIDABLE

a licensee who withhold or lies about material facts may be guilty of MISREPRESENTATION or fraud and the contract may be VOIDABLE.

A licensee may not inflate the sales price in hopes of securing a listing and ten lower the price later.

EXAMPLE OF UNETHICAL BEHAVIOR

Exclusive Right to sell listing

brokerage gets paid even if the seller or someone else finds a house. gives maximum broker proetection by eliminating procuring cause disagreements

Exculisve Agency listing

owner retains the right to sell w/o paying a commission if anyone other than broker obtains the buyer - then the brokerage gets paid agent would put into MLS and offer a co-op but would be less motivated due to compettion from the seller

Open Listing

nonexclusive listing owner may list with more than one broker listing broker gets paid if she retains the porcuring cause of the sale. may be terminated at anytime before acceptance of an offer.

LISTING AGREEMENT

EXPRESS AGREEMENTS - in writing and signed commission is negotiable on the listing agreement - price-fixing is a voiloation of sherman antitrust act Agent earns a commision when a ready willing buyer brings an offer that meets all the terms of the sellers listing agreement - EVEN WHEN THE PROPERTY DOES NOT CLOSE buyer agent would have earned a commision by finding a property that meets all the buyers requirements price and terms Specific termination date may not have an automatic rollover.

Listing terminates

closing of the sale expiration mutal recession death or incapaacity of either brokerage firm - THE DEATH OF THE INDIVIDUAL sales person/ broker assicate does not terminate a listing destruction of premises - HOUSE BURNS DOWN bankruptcy of either broker or seller breach or failure to uphold the agreemnt by either broker or seller

PROTECTION CLAUSE - EXTENSION CLAUSE - HOLDOVER CLAUSE - SAFTY CLAUSE

PROVIDES BOKER TO COLLET A COMMISSION FOR A CERTAIN LENGHT OF TIME AFTER THE TERMAINATION OF THE LISTING.

Valid Contract

contains all essential elements is binding on both parties and is enforcable by the courts

VOIDABLE CONTRACT

apperas to be valid but one party may disaffirm because that party is a minor or was subject to duress, fraud or misrepresntation

VOID CONTRACT

not enforcebale - beaus it does not contain all esstial elements

TENANT -LEASE

LESSEE

LANDLORD -LEASE

LESSOR

BUYER - PURCHASE AGREEMENT

VENDEE

SELLER - PURCHASE AGREEMENT

VENDOR

BUYER - CONTRACT FOR DEED

VENDEE

SELLER - CONTACT FOR DEEDN

VENDOR

MORTGAGE - BORROWER

MORTGAGOR

MORTGAGE - LENDER

MORTGAGEE

DEED OF TRUST LENDER

BENEFICIARY

DEED OF TRUST BUYER

TRUSTOR/GRANTOR

DEED OF TRUST - 3RD PARTY

TRUSTEE

DEED BUYER

GRANTEE

DEED SELLER

GRANTOR

UNILATERAL & BILATERAL

MAIND DIFFERENCE BETWEEN THE BOTH CONTRACTS IS THE OBLIGATIONS OF THE PARTIES

ASSIGNMENT -

TRANSFERS OBLICATIONS BUT NOT LIABILTY

NOVATION

NEW CONTRACT REPLACING AN OLD ONE - TRANSFER ALL ABOLICATIONS AND ALL LIABILTIY

CONTINGENCY CLAUSE

ALLWING THE BUYER TO TERMINATE UNDER CERTAIN CONDTIONS - BUYER WOULD GET EARNES MONEY BACK