Chapter 7 Flashcards
(40 cards)
Agency
The relationship between a principal and an agent wherein the agent is authorized to represent the principal in certain transactions
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
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
Brokerage
The bringing together of buyers and sellers in the marketplace
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.
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
Client
A main party to a transaction—the person for whom the agent works
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.
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
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
Customer
A third party to whom is owed honesty and fairness; not a fiduciary relationship
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
Dual Agency
Representing both parties to a transaction; must be consensual and reduced to writing prior to presentation of first offer
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
Express Agreement
An oral or written contract in which the parties state the contract’s terms and express their intentions in words
Fiduciary
One in whom trust and confidence are placed; a reference to a principal-agent relationship
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
Fraud
An intentional misrepresentation of material fact so as to harm or take advantage of another person
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
Implied Agreement
A contract under which the agreement of the parties is demonstrated by their conduct
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
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
LOADS
A mneumonic to remember the fiduciary duties of an agent to the principal:
Loyalty Obedience Accountability Disclosure of information Skill, care and diligence
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
