Basics Of Common Law Agency/agency Terminology

Question 1

Express agency

Answer 1

The express mutual consent of the principal and agent creates an express agency. This express agreement can be by written or spoken words. Because all matters dealing with real estate need to be written, most agency agreements with real estate licensees must be written. This requirement to be in writing applies to listing and property management agreements.

George and Louise list their high-rise apartment with hairy using a MLS listing agreement. The MLS listing agreement creates their express agency agreement

Question 2

Disclosed dual agent

Answer 2

The disclosed dual agent is a licensee who has disclosed and received permission to act as the agent from more than one party to a real estate transaction, the buyer and seller or two buyers who are competing for the same property. In Oregon, the disclosed dual agent has called the disclosed limited agent

Question 3

Buyers agent

Answer 3

The buyers agent, also called the selling agent, is the licensee representing a buyer in finding a property to buy and throughout the subsequent purchase transaction

Question 4

Compensation and the creation of an agency relationship

Answer 4

Payment or the promise of payment of a real estate commission or other fee does not by itself create or deny an agency relationship between a licensee and a principal. For example a licensee can except a commission from a seller but representing a buyer or can even agreed to work for free. The agency relationship is independent of any compensation or compensation agreement.
-an agent who works for free it’s called a gratuitous agent. A gratuitous agent still owes all of the fiduciary duties to the client and must follow all the laws of agency.

-unless included in the agency agreement, the agency relationship does not require compensation, compensation does not define an agency relationship, a party other than the principal may compensate the agent, the agency relationship is independent of any compensation arrangement

Question 5

Fiduciary duty’s

Answer 5

A standard of care and a standard of practice that an agent owes his principal. These are duties that must be followed by an agent when he represents a principal

Question 6

Special agent

Answer 6

The special agent has limited and specific authority, usually to represent a principal and a single transaction. The principal retains most rights and responsibilities and authorizes the agent to perform limited and specific tasks, such as finding a buyer for a property and negotiating the purchase. Final authority to enter into any contract remains with the principal. The special agent is the most common type of agency relationship in real estate brokerage

The special agent can represent the principal and one business transaction, cannot normally contract for the principal, and is the type of agency that characterizes the real estate brokerage business

Question 7

Sub agent

Answer 7

A sub agent is an agent of the agent for the principal.
A real estate broker is an agent of their principal broker and a sub agent of the principal brokers client.
The sub agent, the broker, received authority from the principal, the buyer or seller client, but only through the agent, the principal broker.
Under Oregon law, a listing contract or a buyer broker contract must be between the principal broker and the client, not between the broker and client. As a result, the broker becomes a sub agent of the principal brokers client

Question 8

Dual versus single agency

Answer 8

If an agent is Representing one principal and a transaction, either the buyer or seller, Kennesaw there isn’t a single agency relationship. If an agent asked concurrently, at the same time for two principles in a transaction, either the seller and the buyer of a particular property, two buyers competing for the same property, or a tenant and owner of a particular property, then the agent is in a dual agency relationship.
-A dual agent first duty is to disclose the agency relationship to both principal parties or to withdraw from one side of the duality. After this closing, the agent must obtain the written consent of both parties. If both parties except the dual agency, the agent I was all the fiduciary duties to both parties except full disclosure, undivided loyalty, and exclusive representation of one principles interests

Question 9

Disclosed principal

Answer 9

In the case of the disclosed principal, both the existence and identity as a principal are known to the third-party there is no personal liability for the agent except in the case of negligence or intentional misrepresentation.
Disclosed principal representation is the most common type of representation in real estate brokerage

Question 10

General agent

Answer 10

The general agent represents a principal in a particular business or specified range of ongoing business matters that general agent can enter into binding contracts while operating within the scope of the authority given in the agency agreement. A general power of attorney is one way to create this type of agency relationship.

The general agency can represent the principal and all business matters and can contract on behalf of the principal

Question 11

Agency by necessity

Answer 11

Agency by necessity arises out of necessity by the agent. When circumstances prevent the agent from obtaining the principles consent to act, the agent can either excepted or disobey the authority agreed to with the principal. Agency by necessity happens when the situation, if not handled under this expanded authority, could harm the principal

Question 12

Subagent

Answer 12

The sub agent is the agent of an agent. For example, in Oregon, the principal broker is the agent of the client (the buyer or seller or both) and the brokers associated with the principal broker are the sub agents of the principal brokers clients.

Question 13

Agent

Answer 13

One who represents the principal in dealings with third parties

The agent is the individual who represents the principal and dealings with third parties, not a principal. The type of agency that is created is classified by the level of authority given to the agent. There are three types of agents. Universal, general, special

Question 14

Power of attorney

Answer 14

Another method used to appoint an agent is a legal document known as a power of attorney. A power of attorney is often given by a seller or buyer to grant authority to another person to sign contracts and closing documents on their behalf. The person signing under the authority of a power of attorney is known as an attorney in fact.

Question 15

Implied agency

Answer 15

And agency can be created by either intentional or unintentional implication. Implication means that the parties act as if they are in an agency agreement.
Actions or conduct that create an implied agency can also create an accidental agency. For this reason, the agent must be cautious about creating an implied agency. When more than one agency relationship exist with the same agent during the same transaction, whether it’s intentional or not, express or implied, it creates A conflict of interest for the agent. A conflict of interest prevents the agent from representing the best interest of the collective clients.

And implied agency relationship may be deemed to exist if the parties act as if there is a contract. The actions or conduct of the agent and principal create an implied agency

Question 16

Seller’s agent

Answer 16

The seller’s agent, also known as the listing agent or the sellers representative is the license he hired by a seller to sell the sellers property

Question 17

Agency by estoppel

Answer 17

Estoppel means a legal principle that bar is a person from denying that another person is their agent after applying for the person was their agent.

• Agency by estoppel is when no agency relationship exist between the principal and agent, but the principal causes a third-party to believe that an individual is their agent, and the third party deals with the agent believing that the agent is the agent of the principal. When this happens the principle is is stopped, legally barred from denying that the agency relationship existed
• Lucy told I thought that she wanted to sell her house but that she did not want to enter into a written listing agreement. Lisa give FL permission to market the property and to make and distribute marketing flyers. Listen even handed out at those business cards to potential buyers when they would look at the property. Eventually Ethel found a buyer who made an unconditional full price cash offer, but Lucy refused to sell to the buyer saying the Ethel wasn’t her agent. Lucy is is estopped from denying ethel as her agent and could be sued, even though no formal agency agreement exists

Question 18

Partially disclosed principal

Answer 18

When representing a partially disclosed principal, third parties will know that the principal exist but they won’t know the principles identity. Unless the agent and the third-party agreed to limit the liability of the agent, the agent has personal ability when representing the partially disclosed principal. A partially disclosed principal is sometimes necessary to protect the identity of the principal for the same reasons are as the undisclosed principal

Question 19

Transaction broker

Answer 19

The transaction broker, also called the transaction facilitator, is allowed in some states that allow non-agency relationships with the public

Question 20

Realtor

Answer 20

A realtor is not necessarily a licensee. A realtor is a member of the trade organization called the national Association of realtors or the NAR. The primary purpose of the Knarr is to self police its members and to implement a strict code of ethics to be followed by all members with it comes to interacting with the public or other realtor members. Realtor is a registered trademark and should always be written as shown. Because only members of the national Association of realtors can call themselves a realtor, realtor should not be used as a generic term for a real estate license

Question 21

Third-party

Answer 21

A third-party as a person and agent deals with as a representative of the principal. What a broker is hired to find a property for a buyer, the buyer is the client and the seller is the third-party. When the brokers hired to sell a property, the seller is the client and the buyer is the third-party. The distinction between a third-party relationship and a customer relationship comes down to representation responsibilities
Third-party is a legal term for anyone who does not have a direct connection with the legal transaction, such as the buyer and seller, but who might be affected by it, such as the buyers lender and the escrow company closing the transaction

Question 22

Customer

Answer 22

A customer is not represented by an agent, but the agent as to each customer honesty and fair dealing, reasonable care and a scale and proper disclosure

The agent does not represent the customer the agent does represent a client

Lucy an unrepresented buyer, a customer, call the listing agent for an appointment to view a house. The listing agent told Lucy that he is representing the seller, but is happy to make the appointment. Because there isn’t any agency relationship between Lucy and the listing agent, Lucy is the listing agent’s customer

Question 23

Universal agent

Answer 23

The universal agent represents a principal at all matters that can be delegated by a principal to an agent. This delegation is broad and includes the authority to enter into contracts and sign other legal documents on behalf of the principal. A power of attorney or court order give the authority to act as a universal agent. Typically, real estate license these are not given universal agency authority but sometimes work with the universal agent of the buyer or seller

Question 24

Principal

Answer 24

The person who hires the agent and delegates to the agent the authority of representing their interests.

The principle is the person who hires the agent and delegates to that agent the authority of representing the principles interest. In real estate the principal as a seller, fire, landlord, or a tenant

Different types of principles, undisclosed, partially disclosed, or disclosed

Question 25

Dual agency The riskiest agency situation when dealing with multiple offers is representing both the buyer and the seller under disclosed limited agency. -dual agency representing the buyer and the seller or two or more buyers for the same property, is legal in Oregon when disclosed and consented to by the involved parties in writing but is not legal in all states, candy voluntary by consent of the parties involved, candy involuntary when caused by the actions of the parties involved, and implied agency, requires all the fiduciary duties except confidentiality and loyalty

Answer 25

Disclosed limited agency is another name for dual agency - in Oregon a legally authorized dual agent is called a disclosed limited agent - hey disclosed limited agent goes to the buyer and a seller the same statutory duties owed by a single agent. Also, the disclose limited agent has a duty not to disclose either parties motivation or financial position or certain confidential information as defined by law. - confidential information, anything the agent learns from or about the client or the clients motivation. Things the clients want to have disclosed or the law requires being disclosed are not considered confidential information

Question 26

Agency by ratification

Answer 26

Ratify, to confirm or consent to something done or arranged by an agent. Agency by ratification is created when one individual, the principal, ratifies, approves, the previously an authorized acts of another individual, the agent, who had no prior authority, express or implied, to act for that individual. The agency is automatically created as soon as the agents actions are ratified by either the words or conduct of the principal. Once ratified, the principal is bound to the actions of the agent just as if the agency had been authorized before the acts were performed. -Phil listed Cameron and Mitchell's house just as they were leaving for Safari. A few days later feel received a call from Gloria, Cameron Mitchell's neighbor. Gloria told Phil that there was water running from under Cameron and Mitchell's garage door and into the street. To stop the damage and fix other problems caused by a burst hot water heater, Phil called a plumber. When Cameron and Mitchell return from Safari, they paid the plumber there by ratifying feels actions to fix the water heater and stop further damage

Question 27

Creating the agency relationship

Answer 27

Under the law of agency, agency relationships may be created by express or implied agreements. The following are common examples and express agency agreements used in the real estate business. Under the statue of frauds, the following express agreements must be in writing to be enforceable -Listing agreement, purchase and sale agreement, property management agreement, right to release property agreement Another express agreement that creates an agency relationship as a buyer broker agreement. The buyer broker agreement doesn't have to be in writing since it is not an agreement concerning real property. Agency relationships are defined by how they get created. These different types of agency relationships are -Express agency, implied agency, agency by ratification, agency by estoppel,Agency by necessity

Question 28

Undisclosed principal

Answer 28

Undisclosed principal means the identity and existence of the principal or kept secret and not disclosed by the agent. All of the parties involved and dealings with the agent representing an undisclosed principal or led to believe by the agent is the principal and is not representing a client. The agent has personal liability when acting for an undisclosed principal Example. For using the undisclosed principal relationship would be when a buyer client wants to conceal their identity to be protected from price increases or otherwise being taken advantage of by a seller.

Question 29

Licensee

Answer 29

Licensee refers to the individual who holds a state granted real estate license. Not all states use this name. Some of these names are broker, agent, sales person, principal broker, managing broker and the like. In Oregon we will use licensee to include principal broker, broker, or property management