Real Estate Unit 10

Front 1

Agency relationships in real estate transactions are governed by three kinds of law, which have been mentioned earlier, including

Back 1

common law, the rules established by tradition and court decisions;

statutory law, the laws enacted by the legislature; and

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

Front 2

How was the MLS Created

Back 2

By Brokers starting to share information about properties they listed, which often resulted in two brokers cooperating to sell a property.

Front 3

What expedited sales by increasing a single property's exposure to more brokers, and thus more potential buyers.

Back 3

MLS multiple listings service

Front 4

How where state laws and regulations changed to help a buyer

Back 4

a broker to represent a buyer and share in the commission paid to the seller's broker.

Front 5

Who writes a large number of sales contracts

Back 5

Buyer agents

Front 6

The law of agency, whether expressed in the common law or statutes, typically includes the following definitions:

Back 6

1. Agent

2. Principal

3. Agency

4. Fiduciary

5. Client

6. Customer

7. Non Agent

Front 7

Agent

Back 7

—the individual who is represents the interests of another person in dealings with a third person.

Front 8

Principal—

Back 8

the individual who hires the agent and delegates to that agent the responsibility of representing the principal's interests.

Front 9

Agency—

Back 9

the fiduciary relationship between the principal and the agent

Front 10

Fiduciary—

Back 10

the relationship in which the agent is held in a position of special trust and confidence by the principal.

Front 11

Client

Back 11

—the principal in a real estate transaction for whom a real estate broker acts as agent.

Front 12

Customer—

Back 12

the third party or nonrepresented consumer who is not a principal but for whom some level of service may be provided and who is entitled to fairness and honesty.

Front 13

Nonagent

Back 13

someone who works with a buyer and a seller

assisting one or both parties with the transaction without representing either party's interests.

Front 14

express agency

Back 14

Is an agency relationship that may be created by an oral or written agreement between the parties.

Front 15

implied agency

Back 15

Is an agency relationship that is created when the actions of the parties indicate that they have mutually consented to work together

Front 16

listing agreement

Back 16

Is an agency relationship between a real estate seller and a broker is generally created by a written employment contract.

which authorizes the broker to find a buyer or a tenant for the owner's property.

Front 17

Express agreement

Back 17

Is a contract btw the principal and the agent where they establish and agency and state its terms and conditions

It might be oral or written unless a written agreement is required by law

Front 18

The employment agreement of broker and sales associate must be in .

Back 18

writing

Front 19

buyer representation agreement.

Back 19

Is An express agency relationship between a buyer and a broker.

Similar to a listing agreement, the buyer representation agreement stipulates the activities and responsibilities the buyer expects from the broker in finding the appropriate property for purchase or rent.

Front 20

implied agreement.

Back 20

This occurs when the parties act as though they have mutually consented to an agency, even if they have not entered into a formal agency agreement.

Front 21

gratutious agency

Back 21

Is an agency that can exist even if no fee is involved

Front 22

Under the common law of agency, an agent owes the principal the six duties

Back 22

1. Care

2. Obedience

3. Loyalty

4. Disclosure

5. Accounting

6. Confidentiality

Hint 22

COLD-AC

Front 23

Care

Back 23

Using a reasonable degree of skill and expertise in acting on a principal’s behalf

Front 24

A real estate broker who represents the buyer is expected to

Back 24

help the buyer locate suitable property and evaluate property values and neighborhood and property conditions, and complete offers and counteroffers, as allowed by law, with the buyer's interest in mind.

Front 25

Obedience

Back 25

obeying the principal's lawful instructions in accordance with the contract.

Front 26

Loyalty

Back 26

loyalty requires that the agent place the principal's interests above those of all others, including the agent's own self-interest.

Front 27

Disclosure

Back 27

An agent is duty-bound to inform the principal of certain relevant facts concerning the transaction, particularly those mandated by state law.

Front 28

Accounting

Back 28

Following state law regarding the receipt of funds from clients and customers

Front 29

Confidentiality

Back 29

An agent may not disclose the principal's personal information

Front 30

universal agent

Back 30

is a person empowered to do anything the principal could do personally

Front 31

general agent

Back 31

may represent the principal in a broad range of matters related to a particular business or activity

Front 32

special agent, or limited agent

Back 32

is authorized to represent the principal in one specific act or business transaction only

Front 33

single agency

Back 33

, the agent represents only one party to a transaction.

The customer is the party not represented by the agent

Front 34

dual agency

Back 34

the agent represents two principals in the same transaction. Dual agency requires equal loyalty to two different principals at the same time—a high burden that means neither principal has the full, undivided loyalty of the agent. Dual agency arises, for example, when a real estate broker is the agent of both the seller and the buyer.

Front 35

Designated agency, also called assigned agency or appointed agency,

Back 35

Is an in-house sale in which two different agents are involved. The broker designates one agent to represent the seller and one agent to represent the buyer.

Front 36

Designated agent

Back 36

A person authorized by the real estate professional to act as the agent of a specific principal

Front 37

A nonagent (also called a transaction broker, facilitator, transaction coordinator, or contract broker)

Back 37

Helps both the buyer and the seller with paperwork and formalities in transferring ownership of real property, but who is not an agent of either party.

Front 38

ministerial acts.

Back 38

Transferring ownership of real property

Front 39

An agency may be terminated for any of the following reasons:

Back 39

Completion, performance, or fulfillment of the purpose for which the agency was created

Death or incapacity of either party

Destruction or condemnation of the property

Expiration of the terms of the agency

Mutual agreement by all parties to cancel the contract

Breach by one of the parties

By operation of law, as in bankruptcy of the principal (bankruptcy terminates the agency contract and title to the property transfers to a court-appointed receiver)

Hint 39

CDDEMBB

Front 40

Who is the third party in a real estate transaction

Back 40

Customer

Front 41

the real estate professional's duties to the customer typically include

Back 41

reasonable care and skill in performance,honest and fair dealing, and

disclosure of all facts that the real estate professional knows or should reasonably be expected to know that materially affect the value or desirability of the property.

Front 42

puffing

Back 42

Is the Exaggeration of a property's benefits

Front 43

Fraud

Back 43

is the intentional misrepresentation of a material fact in such a way as to harm or take advantage of another person.

Front 44

negligent misrepresentation

Back 44

occurs when the real estate professional should have known that a statement about a material fact was false.

Front 45

latent defect

Back 45

Is a hidden structural defect that would not be discovered by ordinary inspection.

Front 46

Megan's Law

Back 46

requires states to make available to the public information about how they can determine where persons convicted of sexual offenses live in the community.

Front 47

buyer's broker

Back 47

represents a buyer as an agent to find property that meets the buyer's specifications, as set out in the buyer representation agreement.

Front 48

A broker's agreement to represent a property buyer may be terminated for the following reasons:

Back 48

The agreement's purpose is fulfilled by the transfer of title to the buyer.

The agreement's term expires.

The broker and the buyer mutually agree to cancel the agreement.

Either the broker or the buyer breaches the terms of the agreement, such as by the buyer failing to pay an agreed-upon retainer fee to the broker.

Either the broker or the buyer dies or becomes incapacitated. If a sales associate dies or becomes incapacitated, the agreement is still valid.

Hint 48

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