Nc Real Estate - Chapter 7

Front 1

North Carolina is a Caveat Emptor State. This Means?

Back 1

Buyer Beware -- Principles have NO affirmative duty to disclose known defects in property.

Front 2

Agent

Back 2

one who is authorized to and consents to represent the interest of another

person; in real estate, the firm is the agent

Front 3

Sub-agent

Back 3

one who is employed by someone already acting as an agent; an agent of an agent

Front 4

Principle

Back 4

the individual who hires and delegates to the

agent the responsibility of representing his or her interests; this may be the buyer, seller, landlord, or tenant

Front 5

Agency

Back 5

the fiduciary relationship between the principal and the agent

Front 6

Sub-Agency

Back 6

the fiduciary relationship between the principal and the sub-agent

Front 7

Fiduciary

Back 7

the relationship of trust in which the agent must do what is best for the principal, even if it is not best for the agent

Front 8

Client

Back 8

is the principal; agents work for

clients to give advice and counsel.

Front 9

Customer

Back 9

is the third party to whom fairness and honesty is provided but who is not owed fiduciary; agents work with customers.

Front 10

Brokerage

Back 10

the business of bringing parties together for the purpose of selling, renting, or exchanging property that requires licensing by an

appropriate government authority

Front 11

Broker

Back 11

a person who is licensed to list, lease, buy, exchange, auction, negotiate,

or sell interest in real property for others and charges a fee for his or her services

Front 12

Provisional broker

Back 12

a North Carolina licensee that must work under the

supervision of a broker-in-charge; has not completed 90 hours of post-

licensing education to remove provisional status

Front 13

Cooperating broker/firm

Back 13

listing firm is authorized to employ and/or compensate other firms, usually members of the local MLS

Front 14

Commission

Back 14

financial compensation for the successful completion of the contracted service

Front 15

Universal agent

Back 15

a person empowered to do anything the principal could do personally, such as a universal power of attorney. The universal agent's authority is virtually limitless regarding actions taken on behalf of the principal; seldom seen in typical real estate transaction

Front 16

General Agent

Back 16

One who represents the principal in a broad range of matters related to a particular business or activity

Front 17

General Agent

Back 17

May be created by a general power of attorney; makes the agent an attorney-in-fact

Front 18

The broker typically does not have this scope of authority in a real estate sales transaction for a consumer; property manager might be a general agent for the landlord.

Back 18

General Agent

Front 19

Special Agent

Back 19

One who represents the principal in only one specific transaction or one business activity with limited detailed instructions.

Front 20

The agent has limited authority; cannot enter into contracts on behalf of the principal and cannot bind the principal to any act

Back 20

Special Agent

Front 21

The Listing Contract is between?

Back 21

The Seller and The Firm

Front 22

Buyer Agency Contract is Between

Back 22

The buyer and the Firm

Front 23

Dual Agency agreement is between?

Back 23

The Firm and the buyer and seller in the same transaction.

Front 24

Property Management Contract is Between?

Back 24

The Firm and the Owner (Landlord) or Property.

Front 25

In-House Brokerage Employment Agreement is between?

Back 25

The Firm and the Real Estate Agent

Front 26

Express Authority

Back 26

The parties state the terms of the agreement and express their intentions either orally or in writing

Front 27

Implied Authority

Back 27

an agency created by implication because of the actions of both of the parties involved; not allowed by NC real estate license law

Front 28

Apparent Authority

Back 28

Although no agreement in place, person

acts as agent and principal accepts the actions of the agent through ratification; agency agreement created after the fact

Front 29

Termination of Agency

Back 29

Commpletion or fulfillment of the purpose for which the agency was created

Front 30

Termination of Agency

Back 30

Expiration of the terms

Front 31

Termination of Agency

Back 31

Mutual Agreement to Terminate

Front 32

Breach by one of the parties, such as abandonment by the agent or revocation by the principal (the breaching party might be liable for

damages)

Back 32

Termination of Agency

Front 33

By operation of law, as in a bankruptcy of the principal (since title to the property would be transferred to a court-appointed receiver)

Back 33

Termination of Agency

Front 34

Termination of Agency

Back 34

destruction or condemnation of the property by eminent domain

Front 35

death or incapacity of either party (notice of death is not necessary); death of individual agent will not terminate agency agreement if licensee worked for a brokerage firm since agency is with the firm, not the individual licensee

Back 35

Termination of Agency

Front 36

Single Agency

Back 36

The firm represents either the seller or

the buyer, not both in the same transaction; any third party is not a client

Front 37

Possibility of Sub-Agency

Back 37

The broker appoints other cooperating

firms/brokers who have the same fiduciary responsibilities as the listing broker; typical in MLSs

Front 38

Can not sell own firm’s listings when working as buyer’s agent

Back 38

Single Agency

Front 39

Buyer Agency

Back 39

The firm exclusively represents the buyer

and does not list property for sale

Front 40

SubAgency

Back 40

Listing firm appoints cooperating firms to assist in providing fiduciary duties for seller client

Front 41

Undisclosed Dual Agency

Back 41

In real estate, the actions of the parties may

create an agency relationship unintentionally, inadvertently, or accidentally where none was intended, leading to a ___________________.

This is not permissible under NC license

law.

Front 42

Disclosed Dual Agency

Back 42

both principals must be informed and consent

to the dual representation in writing. Parties must understand how the dual representation could affect their respective interests when the agent is essentially trying to impartially serve two masters.

Front 43

Designated Dual Agency

Back 43

The firm acts as the dual agent and the BIC may appoint (designate) one in-house agent to represent only the buyer and another agent to represent only the seller.

Front 44

True

Back 44

T/F An agent cannot be appointed as a designated agent if they have any prior confidential knowledge of the other party in the transaction. The agent's duty of confidentiality cannot be breached

Front 45

False

Back 45

T/F Property Management Agreements can be Oral in the beginning.

Front 46

When Must "Working With Real Estate Agents" Brochure be given to prospective client?

Back 46

First Substantial Contact

Front 47

Agent's responsibilities to the principle under the Law of Agency

Back 47

Loyalty

Obedience

Accounting

Disclosure of Information

Skill, Care, Diligence

Front 48

Agents responsibilities to Third Parties

Back 48

- Honesty & Fair Dealing

- Disclosure of Material Facts that are or should be known by agent.

- Compliance with Licensing Law and NCREC Rules

Front 49

Puffing

Back 49

exaggeration of a property's benefits; legal as

long as statements are not considered fraudulent

Front 50

Material Fact

Back 50

is any fact that is important or relevant to the issue at hand and must be voluntarily disclosed to all parties to the transaction

Front 51

Latent Defect

Back 51

a hidden defect that would not be uncovered by

ordinary inspection; there is a duty to attempt to discover any latent defects that threaten structural soundness or personal safety

Front 52

Willfull Misrepresentation

Back 52

intentionally misinforming a party about a

material fact when agent has actual knowledge of the fact; also occurs when agent makes an incorrect informational statement without regard for the truth

Front 53

Negligent Misrepresentation

Back 53

unintentionally giving inaccurate information

to a party due of error or inaccurate information being known by the agent who should have reasonably have known the information to be in error.

Front 54

Willful Omission

Back 54

intentionally withholding material fact that is known by the agent

Front 55

Negligent Omission

Back 55

intentionally withholding material fact of which the agent is unaware but should reasonably have known even if agent is acting in good faith; agents have obligation to discover and disclose all material facts that any prudent agent should have discovered

Front 56

Stigmatized Properties

Back 56

Society has branded property as undesirable because of events that occurred there, such as criminal events or other tragedies

Front 57

True

Back 57

T/F

Per NC law, the death or serious illness of an owner or resident of residential property is NOT a material fact.

Front 58

True

Back 58

T/F

The presence of a registered sex offender in or near a property is not considered by NC law to be a material fact

Front 59

An agent who breaches duties to either the principal or third parties may be subject to

Back 59

1. Disciplinary action by the North Carolina Real Estate Commission

2. A civil action in court brought by the injured party

3. Criminal prosecution brought by the district attorney