Real Estate Class Chapter 7

Front 1

Agency

Back 1

The relationship between a principal and an agent where in the agent is authorized to represent the principle in certain transactions.

Front 2

Agent

Back 2

One who acts or has the power to act for another. A fiduciary relationship is created under the law of agency when a property owner, as the principal, executed the listing agreement or management contract authorizing a licensed real estate broker to be the property owner's agent.

Front 3

Broker

Back 3

1. One who acts as an intermediary on behalf of others for a fee or commission.
2. One who is licensed to list, lease, by, exchange, auction, negotiate or cell interest in real property for others for a fee.

Front 4

brokerage

Back 4

the bringing together of buyers and sellers in the marketplace.

Front 5

broker in charge (BIC)

Back 5

required for each brokerage firm and each office branch, the full broker responsible for displaying all licenses properly, notifying the NC Real Estate Commission of any change of business address or trade name, ensuring that ads and agency compliance is done properly, maintaining the trust account and trust account records properly, retaining and maintaining all real estate transaction records properly, and supervising all provisional brokers associated with the firm or office.

Front 6

caveat emptor

Back 6

Latin phrase meaning "let the buyer beware." in a caveat emptor state sellers do not have to disclose any facts about their property when selling.

Front 7

client or principal

Back 7

a main party to a transaction - the person for whom the agent works

Front 8

commingling

Back 8

the illegal act by a real estate broker of placing consumer funds with personal funds.

Front 9

commission

Back 9

payment to a broker for services rendered, as in the sale or purchase of real property.

Front 10

Cooperating broker

Back 10

The broker / firm in a multiple listing situation representing the seller, as opposed to the cooperating broker/ firm that brings the buyer to the transaction. The listing broker and the cooperating broker may be the same person / firm.

Front 11

Customer

Back 11

A third party to whom is owed honesty and fairness. Not a fiduciary relationship.

Front 12

Designated dual agency

Back 12

An agency option under dual agency that allows the firm, with both clients permission, to appoint one or more licensees to exclusively represent the seller / client and one or more licensees to exclusively represent the buyer / client. Also called designated agency.

Front 13

Dual agency

Back 13

Representing both parties to a transaction. Must be consensual and reduced to writing prior to presentation of first offer.

Front 14

Employee

Back 14

Someone who works as a direct employee of an employer and his employee status. The employer is obligated to withhold income taxes and social security taxes from the compensation of the employee.

Front 15

Express agreement / contract

Back 15

An oral or written contract in which the party state the contract terms and express their intentions in words.

Front 16

Fiduciary

Back 16

One in whom trust and confidence are placed. A reference to a principal / agent relationship.

Front 17

First substantial contact

Back 17

A flexible moment in time when conversation between a licensee and a consumer begins to address confidential needs, desires and abilities. Latest moment to legally disclose agency choices to a consumer.

Front 18

Fraud

Back 18

An intentional misrepresentation of material fact so as to harm or take advantage of another person.

Front 19

General agent

Back 19

One who is authorized to represent the principal in a broad range of matters related to a specific business or activity. A property manager might have this power.

Front 20

Implied agreement

Back 20

A contract under which the agreement of the parties is demonstrated by their conduct.

Front 21

Independent contractor

Back 21

Someone who is retained to perform in your neck and it was subject to the control and direction of another only as to the end result and not as to the way in which the act is performed. unlike an employee, an independent contractor pays all expenses and Social Security and income taxes and receives no employee benefits. Most real estate licensees are independent contractors.

Front 22

In house sale

Back 22

A real estate transaction where the listing firm actually produces the buyer for their listing, as opposed to a co brokered or cross sell that involves two firms.

Front 23

Material fact

Back 23

Any fact that is important or relevant to the issue at hand. Mandatory disclosure by all agents in a transaction to all parties of the transaction.

Front 24

Multiple Listing Service

Back 24

A marketing organization composed of member brokers who agree to share their listing agreements with one another in the hope of procuring ready, willing, and able buyers for their properties more quickly than they could on their own. Most MLS accept only exclusive right to sell or exclusive agency listings from their member brokers.

Front 25

Negligent misrepresentation

Back 25

unintentionally misinforming any party involved in a transaction about a material fact.

Front 26

Negligent omission

Back 26

Unintentionally failing to disclose a material fact any party involved in a transaction.

Front 27

Agent's responsibilities to principal old car

Back 27

Obedience, loyalty, disclosure of information, confidentiality, accounting, reasonable skill and care

Front 28

Oral buyer agency

Back 28

A non-exclusive verbal agency agreement between a firm and a buyer / client. There can be no time limit on oral agency, but it must be reduced to writing prior to presentation of first offer.

Front 29

Principal

Back 29

A main party to a transaction. The person for whom the agent works. The client.

Front 30

Provisional broker

Back 30

A real estate licensee who performs real estate activities under the supervision of a licensed real estate broker in charge. Must complete post licensing courses to remove the provisional license status.

Front 31

Puffing

Back 31

Exaggerated or superlative comments or opinions. Example this house has the best view in town!

Front 32

Ratification

Back 32

A method of creating an agency relationship in which the principal accept / confirms the conduct of someone who acted without prior authorization as the principal's agent.

Front 33

Special Agent

Back 33

One who is authorized by a principal to perform a single act or transaction. A real estate broker is usually a special agent of the seller authorized to find a ready, willing, and able buyer for a particular property, or a special agent of the buyer to find a specific type of property to purchase. Special agent has limited authority and cannot bind his principal.

Front 34

Stigmatized property

Back 34

Property regarded as undesirable because of events that occurred there. Also called psychologically impacted properties. Some conditions that typically stigmatize a property or murder, gang related activity, proximity to a nuclear plant, and even the alleged presence of ghosts.

Front 35

Subagent

Back 35

One who is employed by person already acting as an agent. Typically a reference to a provisional broker licensed under a broker who is employed under the terms of a listing agreement. A sub agent has the same duties to the client as the agent.

Front 36

tort

Back 36

A wrongful act, injury or violation of legal right to the person or property of another.

Front 37

Universal agent

Back 37

Person empowered to do anything the principal could do personally. Unlimited authority. Unusual in real estate.

Front 38

Willful misrepresentation

Back 38

Intentionally misinforming any party involved in a transaction about a material fact.

Front 39

Willful omission

Back 39

Intentionally failing to disclose a material fact any party involved in a transaction.

Front 40

Working with real estate agents

Back 40

A mandatory agency information brochure that a license the must give to and review with consumers in all real estate sales transactions no later than first substantial contact. It does not create agency.