Unit 9 Flashcards
Agent
Hired by a principal to act on their behalf
Principal
The client
Real estate relationships are governed by
Common Law, which is established by tradition and court decisions and statutory law, which is passed by state legislatures and other governing bodies
Agency
The fiduciary relationship in which the agent is held in a position of special trust and confidence by the principal
Customer
The nonrepresented party for whom some level of service is provided and who is entitles to fairness and honesty
Nonagent/ facilitator/ intermediary/ transaction broker, transaction coordinator/ contract broker
Assists one or both parties with the transaction without representing either party’s interests and often is subject to specific statutory responsibilities
Express agency
Express agreement between parties
Implied agency
Created when the actions of the parties indicate that they have mutually consented to an agency
6 common-law fiduciary duties
COLD-AC
Care
Obedience
Loyalty
Disclose
Accounting
Confidentiality
Universal Agent
Empowered to do anything the principal could do personally
General Agent
Represents the principle in a broad range of matter
Special Agent
Represents the principal in one specific act or business transaction only under detailed instruction
Single Agency
Agent represents only one party in a transaction
Buyer’s broker
Represents a buyer as an agent to find property that meets the buyer’s specifications
Dual agency
Agent represents 2 principals in the same transaction. Requires informed consent of both principals
Undisclosed dual agency
May occur inadvertently, can result in rescission of the sale’s contract, forfeiture of a commission, a lawsuit for damages, and possibly license suspension or revocation
Designated agent
A Sales associate authorized by the broker to represent one party to a transaction, while a different sales associate in the same firm represents the other party.
Agency coupled with an interest
Cannot be revoked by the principal or terminated upon principal’s death
Termination of agency
-completion, performance, fulfillment of agency
-destruction or condemnation of property
-expiration of the terms
-mutual agreement of all parties to contract
-breach, who may be liable for damages
-operation of law, as in the bankruptcy
Puffing
Legal exaggeration of a property’s benefits
Fraud
Intentional misrepresentation of a material fact to harm or take advantage of another person
Negligent misrepresentation
Occurs when a real estate professional should have known about a statement of material fact was false and was due to careless negligence rather than accidental negligence
Stigmatized properties
