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CLI Prelicensing > Unit 9 > Flashcards

Unit 9 Flashcards

1
Q

What does agency mean in real estate

A

representation

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2
Q

What is agency governed by

A

common, statutory, and administrative law

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3
Q

what does statutory mean

A

state law

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4
Q

what does caveat emptor mean?

A

let the buyer beware; the seller is always the one paying the agent; now seller and buyer representation

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5
Q

Agent

A

the individual who is authorized and consents to represent the interests of another person in dealings with a third person; person giving representation to the consumer is the BROKER; affiliate broker represents the broker

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6
Q

principal

A

person who hires the agent and delegates to the agent the responsibility of representing the principal’s interests

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7
Q

agency

A

a fiduciary relationship between the principal and the agent where the agent is authorized to represent the principal

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8
Q

fiduciary

A

one where the agent is held in a position of special trust and confidence by the principal

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9
Q

client

A

the principal in a real estate transaction for whom the real estate broker acts as an agent (more commonly used in TN)

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10
Q

customer

A

a third party or nonrepresented consumer who is not a principal but for whom some level of service may be provided and who is entited to fairness and honesty; just needs professional assistance not contractual representation

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11
Q

Facilitator

A

person who has the real estate license but they are working in a nonrepresentational capacity; one who is assisting a customer

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12
Q

what are some other terms for a facilitator?

A

nonagent, intermediary, transactional broker, trasnaction coordinator, contract broker

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13
Q

common law

A

the rules established by trandition and court decisions

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14
Q

statutory law

A

laws enacted by the legislature

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15
Q

administrative law

A

rules and regulations created by real estate commissions and departments, as authorized by the legislature

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16
Q

what is the difference between a client relationship and a customer relationship?

A

client is the principal whom the agent must under law advise and sometimes the client will entrust the agent with confidential information which must be confidential forever; customer is the person who we are assisting professionally and they are entitled to fair and honest dealings but they do not receive advice and cannot expect to be given information that would weaken the client’s side of the transaction

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17
Q

Two ways agencies can be created

A
  1. express agency

2. implied agency

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18
Q

Express agency

A

we are creating an agnecy with our words that are either oral or written

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19
Q

Implied agency

A

agency is created by actions and conduct

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20
Q

In TN how can you express agency?

A

written, not orally

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21
Q

Does TN recognize implied agency?

A

No

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22
Q

Listing Agreement

A

written employment contract authorizing the broker to find a buyer or a tenant for the owner’s property

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23
Q

Buyer Representation Agreement

A

an express agency relationship between and buyer and a broker

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24
Q

does the source of compensation determine agency?

A

no

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25
Who is a real estate associate paid by?
real estate associate can only be paid by their broker
26
Gratuitous Agency
no fee involved in agency
27
Fiduciary duties of an agent
``` Care obediance loyalty disclosure accounting confidentiality ```
28
Care
we have to exercise a reasonable degree of care while transacting the business entrusted to us by the client
29
What does care look like towards the seller?
helping the seller come up with an appropriate and realistic listing price, doscover and disclose facts that affect them, propertly present the contracts
30
What does care look like toward the buyer
locate suitable properties and evaluate them, present their offers and counteroffers, negotiate in the buyer's interest of the transaction
31
Obedience
obey clients instructions at all times according to the contract and acting in good faith at all times, unless the instruction is illegal or discriminatory
32
Loyalty
the client's interest is the most important interest in the entire transaction
33
Disclosure
agent must inform the client of all facts or information that might affect a transaction
34
Accounting
agent must be able to report the status of all funds received from or on behalf of the principal
35
Confidentiality
an agent may not disclose the principal's personal information
36
what does duty of disclosure influce?
relevant information or material facts that the agent knows or should have known
37
what does duty of disclosure influce?
relevant information or material facts that the agent knows or should have known
38
Earnest Money
attach money to the offer to let them know they are sincere in making the offer
39
Conversion
spending money that does not belong to you
40
Conversion
spending money that does not belong to you
41
Comingling
mixing money that does not belong to you with your own
42
Escrow (trust) accounts
money that comes in that does not belong to the company
43
Dual agency
when a seller's agent also represents the buyer
44
3 Types of Agency Relationships
1. Universal Agent 2. General Agent 3. Special Agent
45
Durable Power of Attorney
can make all the decisions for someone else they can normally make on their own
46
Universal Agent
person empowered to do anything the principal could do personally
47
General Agent
may represent the principal in a broad range of amtters that are related to a particular business or activity (ex: property manager)
48
Special (limited) Agent
authorized to represent the principal in one specific act or business transaction only
49
What type of agent are most people in real estate?
special agent
50
Disclosure of agency
real estate professionals must disclose to everyone what their agency position is in a transaction
51
Confirmation of agency form
disclose what your agency position is
52
Single Agency
agent represents only one party to a transaction; decision made by broker; in any one real estate transaction, only one party (buyer or seller) will be represented
53
Seller Representation
if a seller enters a listing agreement with a broker to market the seller's real estate, the broker becomes the agent of the seller; the seller is the principal, the broker's client
54
Buyer Representation
a buyer who contracts with a broker to located property and represent the buyer's interests in a transaction is the principal with teh broekr as the agent
55
Property Management
a broker employed by an owner to market, lease, maintain or manage the owner's property; form of single agency
56
Dual Agency
the agents represnts two principals in the same transaction
57
Disclosed dual agency
must disclose dual agency to both principal's; intended to minimize the risk of the broker
58
What type of agency is property management?
single agency
59
Can you have undisclosed dual agency in TN?
no
60
Undisclosed dual agency
broker creates a dual agency unintentionally or inadvertently
61
Designated Agency
accomodates an in-house sale in which two sales associates of the same broker are involved
62
Designated agent/representative
the only sales associate in the company who has a fiduciary responsibility toward the principal
63
Nonagent
not an agnet of either party in a transaction
64
What are some other terms for a nonagent?
transaction broker, facilitator, transaction coordinator, contract broker
65
What are other tmers for designated agency
assigned agency, appointed agency
66
How does an affiliate broker become a designated broker?
Appointed by their broker
67
nonagency
do not have a contractual representation for buyer and seller
68
ministerial acts
assisting someone wiht paperwork and formalities but not giving representation
69
How to terminate agency
1. Competition, performance or fulfillment of the purpose for which the agency was created 2. Death or incapacity of either party (agent or client) 3. Destruction or condemnation of the property 4. Expiration of the terms of the agency 5. Mutual agreement by all the parties to cancel the contract 6. Breach by one of the parties (agent or client) 7. Operation of Law, such as bankruptcy of principal
70
Best way to terminate agency
completion, performance or fulfillment
71
Do all contracts have defined beginning and ending dates?
yes
72
Agency coupled with an interest
cannot revoke by the principal acting alone and is not terminated upon the principal's death
73
Customer Level Duties
1. reasonale care and skill in performance 2. honest and fair dealing 3. disclosure of all facts that the real estate professional should know or should reasonably by expected to know that materially affect the value or desirability of the property
74
Opinion vs. fact
must make sure the consumer understands the difference between opinion vs. fact
75
customer
third party a real estate professional might work with
76
Puff
expressing an exaggerated personal opinion
77
Fraud
intentional misrepresentation fo a material fact in such a way as to harm or take advantage of another person
78
2 ways to behave in fraud
1. lying | 2. withholding information that should have been disclosed
79
Negligent misrepresentation
when a real estate professional should have kown that a statement about a material fact was false
80
3 things that have to be disclosed in every listing
1. Property condition (seller discloses) 2. Enviornmental condition (seller discloses) 3. Agency
81
Environmental hazards
health hazards that can render properties unusuable for the buyer's intended purpose
82
Property conditions
must disclose any known defects that threaten structural soundness or personal safety
83
Latent defect
hidden structural defect that would not be discovered by ordinary inspection
84
Whose responsibility is it to discover any material problems with the property?
Buyer
85
Stigmatized properties
those that society has found undesirable because of events that occured there or because of proximity of the property to a known nuisance
86
Who is the agent on duty?
rookie agent
87
Megan's Law
federal legislation that promote the establishment of state registration systems to maintain residential information on every person who kidnaps children, commits sexual crimes against children, or committs excually violent crimes
88
What is TN's laws on disclosure on stigmatized properties?
1. not required to disclose it 2. if you feel you should disclose it you may 3. if you are asked directly about the sigma by someone, then you have to state what you know
89
What are TN's laws on disclosure on Megan's Law?
1. not required to disclose it 2. if you feel you should disclose it you may 3. if you are asked directly about the sigma by someone, then you have to state what you know
90
In real estate, who is the agent?
the broker
91
What is the only way you can become a designated agent?
appointed by their broker

CLI Prelicensing (23 decks)

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