Chapter 7 Flashcards Preview

Real Estate Licensing Vocabulary > Chapter 7 > Flashcards

Flashcards in Chapter 7 Deck (40):
1

Agency

The relationship between a principal and an agent wherein the agent is authorized to represent the principal in certain transactions

2

Agent

One who acts or has the power to act for another. A fiduciary relationship is created under the law of agency when a property owner, as the principal, executes a listing agreement or management contract authorizing a licensed real estate broker to be the property owner’s agent. See LOADS

3

Broker

(1) One who acts as an intermediary on behalf of others for a fee or commission.

(2) One who is licensed to list, lease, buy, exchange, auction, negotiate or sell interest in real estate for others for a fee

4

Brokerage

The bringing together of buyers and sellers in the marketplace

5

Broker-In-Charge

Required for each brokerage firm and each branch office, the full broker responsible for displaying all licenses properly, notifying the North Carolina Real Estate Commission of any change of business address or trade name, ensuring that all advertising and agency compliance is done properly, maintaining the trust account and trust account records properly, retaining and maintaining all real estate transaction records properly, and supervising all provisional brokers associated with the firm or office.

6

Caveat Emptor

A Latin phrase meaning “Let the buyer beware.” In a caveat emptor state, sellers do not have to disclose any facts about their property when selling

7

Client

A main party to a transaction—the person for whom the agent works

8

Commingling

The illegal act by a real estate broker of placing consumer funds with personal funds. By law, brokers are required to maintain a separate trust or escrow account for other parties’ funds held temporarily by the broker.

9

Commission

Payment to a broker for services rendered, as in the sale or purchase of real property; traditionally, a percentage of the gross sales price of the property but can be a flat fee or some other calculation

10

Cooperating Broker/Listing Agent

The broker/firm in a multiple-listing situation representing the seller, as opposed to the cooperating broker/firm, that brings the buyer to the transaction. The listing broker and the cooperating broker may be the same person/firm

11

Customer

A third party to whom is owed honesty and fairness; not a fiduciary relationship

12

Designated Dual Agency

An agency option under dual agency that allows the firm, with both clients’ permission, to appoint one or more licensees to exclusively represent the seller-client and one or more licensees to exclusively represent the buyer-client; also called designated agency

13

Dual Agency

Representing both parties to a transaction; must be consensual and reduced to writing prior to presentation of first offer

14

Employee

Someone who works as a direct employee of an employer and has employee status. The employer is obligated to withhold income taxes and Social Security taxes from the compensation of the employee

15

Express Agreement

An oral or written contract in which the parties state the contract’s terms and express their intentions in words

16

Fiduciary

One in whom trust and confidence are placed; a reference to a principal-agent relationship

17

First Substantial Contact

A flexible moment in time when conversation between a licensee and a consumer begins to address confidential needs, desires and abilities; latest moment to legally disclose agency choices to a consumer

18

Fraud

An intentional misrepresentation of material fact so as to harm or take advantage of another person

19

General Agent

One who is authorized to represent the principal in a broad range of matters related to a specific business or activity; a property manager might have this power

20

Implied Agreement

A contract under which the agreement of the parties is demonstrated by their conduct

21

Independent Contractor

Someone who is retained to perform a certain act but who is subject to the control and direction of another only as to the end result and not as to the way in which the act is performed. Unlike an employee, an independent contractor pays all expenses and Social Security and income taxes and receives no employee benefits. Most real estate licensees are independent contractors

22

In-House Sale

A real estate transaction where the listing firm actually produces the buyer for their listing, as opposed to a co-brokered or cross sale that involves two firms

23

LOADS

A mneumonic to remember the fiduciary duties of an agent to the principal:

Loyalty
Obedience
Accountability
Disclosure of information
Skill, care and diligence

24

Material Facts

Any fact that is important or relevant to the issue at hand; mandatory disclosure by all agents in a transaction to all parties of the transaction

25

Multiple Listing Service-MLS

A marketing organization composed of member brokers who agree to share their listing agreements with one another in the hope of procuring ready, willing, and able buyers for their properties more quickly than they could on their own. Most MLSs accept only exclusive-right-to-sell or exclusive-agency listings from their member brokers

26

Negligent Misrepresentation

Unintentionally misinforming any party involved in a transaction about a material fact

27

Negligent Omission

Unintentionally failing to disclose a material fact to any party involved in a transaction

28

Oral Buyer Agency

A non-exclusive verbal agency agreement between a firm and a buyer-client. There can be no time limit on oral agency, but it must be reduced to writing prior to presentation of first offer

29

Principal

Client; A main party to a transaction—the person for whom the agent works; the client

30

Provisional Broker

A real estate licensee who performs real estate activities under the supervision of a licensed real estate broker-in-charge. Must complete post-licensing courses to remove the provisional license status

31

Puffing

Exaggerated or superlative comments or opinions: e.g. “This house has the best view in town!

32

Ratification

A method of creating an agency relation- ship in which the principal accepts/confirms the conduct of someone who acted without prior authorization as the principal’s agent

33

Special Agent

One who is authorized by a principal to perform a single act or transaction. A real estate broker is usually a special agent of the seller authorized to find a ready, willing, and able buyer for a particular property, or a special agent of the buyer to find a specific type of property to purchase. Special agent has limited authority and can- not bind his principal

34

Stigmatized Properties

Property regarded as undesirable because of events that occurred there; also called psychologically impacted property. Some conditions that typically stigmatize a property are murder, gang-related activity, proximity to a nuclear plant, and even the alleged presence of ghosts

35

Subagent

One who is employed by a person already acting as an agent; typically a reference to a provisional broker licensed under a broker (agent) who is employed under the terms of a listing agreement. A subagent has the same duties to the client as the agent

36

Tort

A wrongful act, injury or violation of legal right to the person or property of another

37

Universal Agent

Person empowered to do anything the principal could do personally; unlimited authority; unusual in real estate

38

Willful Misrepresentation

Intentionally misinforming any party involved in a transaction about a material fact

39

Willful Omission

Intentionally failing to disclose a mate- rial fact to any party involved in a transaction

40

Working with Real Estate Agents

A mandatory agency information brochure that a licensee must give to and review with consumers in all real estate sales transactions no later than first substantial contact; it does not create agency