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Flashcards in Levels and Classification Deck (30):
1

What are the two important factors of agency relationships?

The principal believes the agent to be an expert that the principal can go to for professional advice and counsel.
The agent has a fiduciary responsibility to the principal.

2

How is universal agency created?

Through a power of attorney

3

A broker’s relationship to an independent contractor is what type of agency?

General Agency

4

How does special agency work?

Under a special agency agreement, the principal delegates authority to conduct a specific activity, after which the agency relationship terminates.

5

What is the broker's responsibility to a client?

The broker is responsible for meeting the needs of the client above the needs of everyone else, including him or herself.

6

What is a licensee's responsibility to a client?

Since the licensee is representing the broker, he or she has the same responsibility to the client that the broker does.

7

What does having a buyer representation agreement in Texas mean?

The buyer's representation agreement used in Texas is an exclusive contract with the broker. This means the buyer may not enter into another contract with another broker to purchase a home.

8

What types of things is a broker NOT authorized to do for a client?

The broker does not have the authority to do certain things such as:

Accepting an offer on a listing even if it is for the full purchase price. Only the owner can decide whether or not to accept an offer
Allowing the buyer to move into the property before the closing without the owner's permission
Proposing an offer on a property on behalf of a buyer client without the client's permission

9

When a broker becomes a property manager, what is his or her agency relationship to the owner and to the tenants?

The broker has an agency relationship with the owner, who is the principal. The tenant is a customer, so there is no agency relationship between the broker and the tenants.

10

When a broker establishes an agency relationship with a buyer, what is one of the first things the broker will give the buyer-client?

The broker will give the buyer-client a market analysis on other homes that have sold which are similar to the property that the client has picked out.

11

In addition to the fact that a broker cannot make decisions for a client, what are three limitations that exist regarding a broker's authority when working with a seller client?

The broker may not hide a condition of the property.
The broker may not try to avoid selling the property to someone of a particular race.
The broker may not hide the sale of the property from the IRS.

12

Under what conditions might a broker be responsible for something someone else in a transaction stated to a client or customer?

The broker would be responsible for that information if he or she should have known the information because a reasonable person would have known it.

13

What responsibility does a broker have with regard to the listing agreements, buyer representation agreements, and other important documents that his or her affiliated licensees bring to the firm?

The broker should check listing agreements, buyer representation agreements, MLS sheets, and contracts for accuracy and potential errors.

14

What is a licensee's responsibility to TREC?

A licensee's responsibility to TREC consists of keeping his or her license active, following the license laws and statutes, and answering any complaints that might be filed against him or her.

15

What should a broker do if a client asks him or her to do something that breaks the law?

The broker should consider terminating the agency.

16

When does a broker's authority end?

When the agency relationship terminates

17

All agency relationships have two important factors:

The principal believes the agent to be an expert that the principal can go to for professional advice and counsel.
The relationship involves money or property and the agent must always work in the principal’s best financial interests. Or in other words, the agent has a fiduciary responsibility to the principal. Often the agent is called a fiduciary.

18

Universal Agency

very broad type of agency. In this type of agency, a person or court would give an agent full control over someone’s life and belongings to meet a specific need, through power of attorney.

For obvious reasons, this agency is rare.

19

General Agency

In this type of agency, the principal delegates to the agent ongoing tasks and duties within a particular business or enterprise.

20

Special Agency

also known as limited agency. Under a special agency agreement, the principal delegates authority to conduct a specific activity, after which the agency relationship terminates. In most cases, the special agent may not bind the principal to a contract. Listing contracts and buyer representation agreements create special agency relationships.

21

In most real estate situations, there are two types of agency existing at the same time:

The broker has special agencies with his or her clients, created through the listing and buyer representation agreements.

The broker has general agencies with his or her licensees, created by the independent contractor agreement.

22

With special agency, the broker does not have the authority to do certain things such as:

Accepting an offer on a listing even if it is for the full purchase price. Only the owner can decide whether or not to accept an offer.
Allowing the buyer to move into the property before the closing without the owner's permission.
Proposing an offer on a property on behalf of a buyer client without the client's permission.

23

Buyer's Rep Agreement

used in Texas is an exclusive contract with the broker. This means the buyer may not enter into another contract with another broker to purchase a home.

24

When a broker becomes a property manager

it is his or her job to represent the property owner. The tenant is a customer or third party outside this relationship.

25

When a broker is representing the buyer

the initial task performed is simply showing possible properties to the buyer.

26

The broker may not:

Hide a condition of the property.
Try to avoid selling the property to someone of a particular race.
Hide the sale of the property from the IRS.

27

A broker is not responsible for

something someone else in the transaction stated to a client or customer, unless he or she should have known it because a reasonable person would have known it.

28

The broker IS responsible to:

Affiliated Licensees- The broker should check his or her licensees listing agreements, buyer representation agreements, MLS sheets, and contracts for accuracy and potential errors.
The Community- The community can be enhanced by decisions made by real estate people, and the broker’s reputation will increase as well.
The Industry

29

A salesperson's responsibility to TREC

keeping his or her license active, following the license laws and statutes, and answering any complaints that might be filed against him or her.

30

When the transaction completes

the agency relationship is over. At that point, authority is over as well.