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39 Cards in this Set
- Front
- Back
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Agency duties |
In SC, fiduciary duties are called this. |
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Disclosure of Brokerage Relationships Form |
Licensees are supposed to give a meaningful explanation of agency
Licensees should give form
Acknowledgement of receipt of this form should be in each agency and sales contract
Additionally, each sales contract must require the buyer and seller to acknowledge whether they've received customer or client-level services |
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When does SC require Agency disclosure be presented to buyers and sellers? |
At first practical opportunity, at which there is substantive contact.
Practical opportunity - first opportunity in which disclosure can be accomplished without major inconvenience
Substantive contact - contact in which discussion or dialogue between consumer and associated licensee moves from a casual introductory talk to a meaningful conversation regarding selling or buying motives or objectives, financial qualifications, and other confidential information that, if disclosed, could harm the consumers bargaining position
At this time it is assumed that they are in transaction brokerage.
If first contact is not in person form may be sent electronically. |
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Broker's Policy |
Written office policy, readily available to licensees. BIC decides what type of Agency will be practiced
-Who broker will cooperate with and compensate -Services that will be provided to clients -Services that will be provided to customers -When and how Agency disclosure is conducted -Explanation of dual agency, designated agency, and/or transaction brokerage -Fair housing policies |
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Seller's Agent's Duties to Seller Client |
-Seek a sale at price and terms stated in Listing agreement -Present all offers and counteroffers--even after property is under contract--in multiple offers--submit all; order not important -Disclosing all adverse material facts -Accounting for money and property -Tell seller to get expert advice |
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Buyer's Agent's Duties to Buyer Client |
-Seek a property at price and terms stated -Present all offers and counteroffers -Disclosing all adverse material facts known to licensee -Accounting for money and property -Tell buyer to get expert advice |
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Role and duties of transaction brokers SHALL include |
It gives limited confidentiality to all customers, not an agency relationship.
1. Honesty, fair dealing, accounting for all funds, using skill, care and diligence 2. Disclosure of adverse material facts that affect the transaction, value, or condition of the real property that is not readily ascertainable 3. Prompt presentation of all written offers and counteroffers 4. Limited confidentiality, unless waived in writing. Prohibits disclosing any of the following: a) information concerning a buyer's motivation to buy or willingness to make a higher offer b) factors motivating a seller or willingness to except an offer less than the list price c) that seller or buyer will agree to financing terms other than those offered d) information requested by a party to remain confidential, except information required by law to be disclosed e) additional duties separately spelled out in a separate agreement. If this happens a written transaction broker agreement is required |
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Optional services for customers |
1. Identify and show property 2. Provide statistics and information 3. Provide pre-printed contracts, etc. 4. Act as a scribe and write offers, etc. (not to offer suggestions) 5. Provide a list of professional service providers 6. Identify schools, etc. |
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Mandatory services provided to customers |
1. Present all offers to and from the parties involving the sale, lease, and exchange of property 2. Account for all funds received on the half of a party 3. Provide a meaningful explanation of brokerage relationships 4. Explain the scope of services to be provided by the licensee 5. Proceed fairly and honestly providing accurate information in all dealings 6. Keep information confidential if requested in writing by the customer 7. Disclose known material facts |
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Ministerial Acts |
Writing and conveying offers and providing information about other professional services to a customer while representing a client does not create an agency relationship |
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Broker & Salesperson Agreements |
Employee: broker must withhold FICA (social security and Medicare), Federal and state income tax. Broker must also contribute to Social Security and Medicare and pay unemployment tax.
Independent Contractor: broker doesn't withhold nor match taxes
Either situation creates an agency relationship |
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Torts |
Wrongful acts
Brokers are held accountable for all acts of their agents, agents are held accountable for their own actions.
1. Physical damage caused by negligent physical activity 2. Deceit – whether intentional or ignorant |
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Actual conflict of interest |
Occur when one has an obligation to more than one in which the interests of each are opposite. Divided loyalty
Exist when licensee is acting as an agent and principal in the same transaction, for example buying a property listed with licensee's brokerage firm
SC Supreme Court weighed in on this: -if license he discloses everything it is still risky -if license he discloses nothing it may be fraud |
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Absolutely illegal and/ or unethical practices when representing clients |
Undisclosed bonuses, referral fees, finders fees, secret profits
Agent must always disclose to client and have written permission to keep the bonus |
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Allowed conflicts of interest |
In the license law:
"A licensee acting as a seller's agent may offer alternative properties to perspective buyers. A licensee acting as a seller's agent also may list for sale competing properties"
"A licensee acting as a buyers agent may offer properties which interest his buyer client to other potential buyers. However, if the licensee has two competing buyer clients in a single real estate transaction, the agent will give written notice to each buyer client that neither will receive the confidential information of the other."
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Answering legal questions... |
Just because a real estate licensee knows the answer to a legal question, answering the question may be the unauthorized practice of law and therefore unethical |
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No specialized licenses |
In the situation of not having specialized licenses, just because it is legal it still may be unethical |
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Lead-based paint |
LBP disclosure form required on most housing built before 1978
Lead is a metallic element found in rocks and soils. One of the problems with lead is that it tends to accumulate in the blood, bones, and soft tissue of the bodies of those who ingest it. When the accumulation gets great enough it can cause damage to the nervous system, the brain, and red blood cells. It can cause elevated blood pressure and adults. High concentrations in the body can cause death.
The residential lead based paint hazard reduction act of 1992, went into effect in 1996 and requires disclosure to buyers and tenants prior to buying or renting homes or apartments built prior to 1978.
Certain types of housing are exempt. These include housing for senior citizens and/ or disabled and zero bedroom studio apartments, unless children under the age of six live there |
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Electromagnetic fields |
EMFs
Controversial, some believe these present a health hazard |
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Antitrust Laws WHY? HOW? |
Primary purpose is to promote competition.
Sherman and Clayton Acts form the basis of antitrust laws |
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Antitrust Laws WHAT THEY PREVENT |
When two or more competitors get together and agree to any of the first four things on the list below it is considered to be a conspiracy: 1. Price-fixing – commission rates and splits must be determined by each company individually. Commissions are negotiable 2. Group boycotts – two or more companies get together and decide not to cooperate with another. Don't talk about competitor's methods or practices 3. Allocation of markets or territories – agreement not to compete 4. Allocation of customers - agreement not to compete 5. Tie-in contracts - A requirement to do something not related to the original transaction. Not always illegal. The perpetrator must control the market for it to be illegal |
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Disclosure of stigmatized properties |
Federal fair housing law prohibits agents from disclosure of many things. For example, race, color, national origin, religion, sex, familial status, or handicap status.
The fact that the property is one in which a death has occurred, or the cause of her death, is not a fact that must be disclosed.
However, owners and/or their agents may have liability for intentional misrepresentation's in response to a direct question regarding psychological impacts or stigmas associated with real state
Other psychological stigmas are not a material fact the last asked about them |
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Residential property |
Single-family, duplex to quadruplex, and multifamily communities |
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Commercial/income property |
All types of retail and wholesale shopping and offices, restaurants, hotels, theaters |
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Industrial property |
Mini warehouses, regular warehouses, manufacturing, and land that is zoned for industrial |
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Agricultural property |
Farms, timberland, ranches and orchards |
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Special purpose property |
Churches, schools and other government buildings and government held land, cemeteries |
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Settling commission spilt disputes between companies |
Procuring cause (referring to one that is actually responsible for the sale) cases are determined by arbitration hearing at the REALTOR Association
No predetermined rules are allowed:
"Threshold" rule - The understanding that the person who takes a buyer inside the property first is the procuring cause
"Contract-writer" rule - The belief that the person who writes the contract to buy is the procuring cause |
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Subdivision |
Splitting a parcel of land into smaller parcels
* subdivision regulations – what local government requires before you are allowed to build a subdivision |
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Developing |
Construction of improvements. Off site improvements are water and sewer lines on public land. On site improvements are homes, offices, swimming pools etc. on individual parcels |
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Mixed use property |
Property that allows for different uses, commercial and residential, in the same building |
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Property condition and disclosures |
The licensee should learn about material defects in a property while speaking with the owner about listing
The licensee should ask the owner about property condition and location, questions relating to building structures and soil conditions
Encourage owner to be honest about the property condition, do not specifically coach the owner and have to answer specific questions on the disclosure form
If agent believes owner is not being truthful, the agent should ask questions.
Agent has liability when silent on known discrepancies
Ask about problems with environmental hazards |
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Types of subjects to be discussed with the owner when getting the listing agreement |
Any additions or alterations? If yes – when? Who did the work? Was there a building permit? Does the property have any plumbing or electrical problems? Do you know of any problems that would show up in a wood infestation report? What is the condition of the HVAC system and appliances that are fixtures? Do you know of any encroachments or easements on the property? How is the property zoned and what restrictions are in force? Any problem getting standard insurance on the property? Is it in a flood zone?
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List environmental issues |
Mold Radon Asbestos Super Fund Exterior insulating and finishing system Lead-based paint disclosure |
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Mold |
Buildings with water leaks and high humidity are at risk for toxic mold problems.
When mold occurs there are steps that must be taken: 1. Solve the water problem 2. Have the mold tested 3. Get professional remediation help
There are no EPA standards |
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Radon |
An odorless, colorless, radioactive gas, produced by the decay of uranium and radium. It is present in varying quantities in the atmosphere and in soils
Max EPA standard = 4 pCi
Radon is measured at the level of one part per trillion which is called a picocurie--named after Madame Curie who was instrumental in many important discoveries concerning radiation. One part per trillion would be analogous to one drop of vermouth in 5000 carloads of gin
Randon that is present in surrounding soil or in well water can be a source of radon in a home. It enters a home through small spaces and openings such as cracks in concrete, floor drains, sump pump openings, Wall/floor joints in basements, and the pores in hollow block walls.
It generally concentrates most officially in the areas of the home closest to the ground. The concentration level usually decreases the higher one moves in a structure. |
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Asbestos |
Asbestos is a fibrous mineral found in rocks and soil. It has been used in architectural and construction applications because it is strong, durable, fire retardant, and an efficient insulator.
Can be found in a variety of products that have numerous applications within the building industry – such as flooring, Walls, ceiling tiles, exterior housing shingles, insulation or fire retardant for heating and electrical systems, etc.
Generally if material containing this mineral is in good condition in an area where it is not likely to be disturbed, it is probably best to leave it in place. When asbestos containing products are crumbled by hand and produce fibers, said fibers can be released into the air--The phenomenon known as friability |
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Exterior insulating and finishing system |
"artificial stucco", "Dryvit", or EIFS
A system that can and often is used as an exterior siding and finish on the residential homes and commercial buildings. The system provides insulation, weatherproofing, and aesthetics in an integrated, composite system.
Problem: water and moisture may be able to penetrate the exterior of your home through window frames, doors, hose bibs, dryer vents, a/C lines, gutter straps, mailboxes, railings, meeting of dissimilar services, joints at the foundation, wood trim, window trim, stone, brick, concrete doors, joints, cracks, tub overflow, shower leaks, washer overflow, hot water heater overflows, etc. Water retention is the true issue because these systems are designed to be water tight, thus do not allow moisture to escape
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Super Fund |
The Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) or the Superfund Act established liability for all property owners in the chain of title, prohibitions, requirements and liabilities concerning closed and abandoned hazardous waste sites, and established a trust fund to provide for cleanup if the responsible party could be found. This act, created in 1980 was amended in 1986 by the superfund Amendments and Reauthorizations Act |
