Real Estate Agency Flashcards
(37 cards)
Principal
Person hiring an agent
In context client can be principal when hiring brokerage, and broker is principal to agent hired for client
Universal Agent
May represent their principal on any matter
Ex.: CEO of a business who has been given full board approval to make any decision for any aspect of business
General Agent
Represents their principal on matters related to one particular business or activity
Ex. property manager, someone who handles all aspects of clients real estate
Special Agent
May only represent their principal on a particular matter or transaction.
Could be: - Real estate broker or property manager who handles a single apartment
Subagent
An agent’s agent, so may work for the salesperson or co-broker. Works indirectly for the transaction’s principal
Express Agency
Explicitly stated verbally or in writing e.g. listing contract
Apparent/Ostensible Agency
Authority that does not exist, even though it appears to
Implied Agency
- Authority that exists because of the principal and agent’s actions
- Must have same formality as the required normally
Equal dignities rule
An authorization of agency must have the same formality as the services rendered
Vicarious liability
Principal has vicarious liablilty for their clients actions, meaning they are doing things on behalf of the client if hired
What are the three types of agencies that might exist between Agents and principals
- Express Agency
- Implied Agency
- Apparent.Ostensible Agency
Define Fiduciary Obligations
Obligations of trust from the real estate agents (both broker and salespeople) to their principals
O.L.D. C.A.R
Define Acronym O.L.D C.A.R.
O.
Obedience - you must do everything the principal tell you to do and can’t exceed the authority they give you; not an acceptable defense for unlawful of unethical behavior
L.
Loyalty - You must put the prinicipal’s interest ahead of all others, including your own
D.
Disclosure - Your must affirmtively disclose all information about the transaction that might affect the prinicpal’s best interests
C.
Confidentiality - You must not disclose any information about the principal to others that you are not legally required to disclose
A.
Account - You must account for and return any money belonging to principal
R.
Reasonable Care - You must protect the principal from foreseeable risks of harm, exercise care, and competence, and recommend expert advice when the principal’s needs are beyond your expertise or area of competence
Clients
People you represent and owe fiduciary obligations
O.L.D. C.A.R. (know what they stand for)
Material Facts
Impacting the subject property, anything that would objectively impact a buyer’s decision to purchase a piece of real estate.
- Disclosure is required even if the seller wants to keep the defects confidential, both property and land.
- Buyer must be informed regardless of when it was discovered, ex. even after purchase contract is signed
Caveat Emptor - “As is”
“let the buyer beware”
Any defects the property may have the buyer must disclose even if they are selling at “as is”
Disclosure of Information by buyers agent __________.
must be disclosed. Any information about the buyer that would materially impact the buyer’s ability to purchase the property needs to be disclosed.
-example i the buyer doesn’t have sufficient funds to purchase property.
Information that must not be disclosed
information about the parties to the transaction that does not materially impact the property or ability to conduct the transaction must never be disclosed
e.g. the lowest price a seller will take, the highest prices a buyer will pay, or why the seller is selling
Tristram’s Landing v. Wait
Massachusetts court case establishes the criteria to determine when real estate brokers are entitled to
Rules of brokers earning commission:
- They produce a purchaser ready, willing, and able to buy on the terms provided by the owner
- The purchaser enters into a binding contract with the owner as a result of the agent’s efforts
- Purchaser completes the transaction by closing title in accordance with the provisions of the contract.
Notes: if there’s a default with buyer then no commission
if interference with seller then commission still has to be paid
Stimagtized Property
Properties where the site of deaths, murders, suicides, criminal activity, and paranormal activity
Every stte is different laws around this
MA Laws: agents are not obligated to disclose information but if the buyers or buyer’s agent directly asks the seller agent about a property stigma then they must disclose information truthfully.
Megan’s Law
Issues surround sex offender registries,
- MA punishes misuse or misinterpretation of those registries
- It’s advised the agent provide the buyer with information to access the registry and check the information themselves, rather than represent the contact themselves.
Real Estate Commission Formula
Sales Price x Commission % = Commission $
Sales Price - Costs ( Including Commission ) = Seller’s Net Profit
(Net Sales Price + Costs) / (1 - Commission %) = Sales Price
FTC (Federal Trade Commission) Do Not Call
Prohibits unsolicited business calls to residential and mobile phone numbers on the Do Not Call List.
- Fines are up to $43,792 per call
Telephone Consumer Protection Act (TCPA) and Junk ax
Prohibits most unsolicited fax advertisements
you must have an existing relationship with the recipients
