Agency - 13% of questions
Agency - Occurs when one individual hires another to represent their best interests.
Agency Termination -
An agency relationship can be terminated in several ways:
• Completion of the purpose for which the agency was created, such as the sale of a property.
• Expiration of the term of the agency as all contracts are required to have an expiration date.
• By Force of Law in the following circumstances can end an agency relationship:
• Bankruptcy: The trustee in the bankruptcy may choose to continue or terminate the agency relationship.
• Change in law: If changes in the law would make the agent’s duties illegal, the agency relationship would be terminated.
• Loss of license: If the licensee loses a required license which is necessary to perform the tasks for which he was hired, the agency relationship would be terminated.
• Death or incapacity of either party.
• Destruction or condemnation of the property.
• Mutual agreement by all parties to the contract
Agency by Estoppel - An agency relationship that was created when the licensee was acting on the consumer’s behalf without the consumer’s direct consent, but to the consumer’s benefit.
Agency by Ratification - An agency representation agreement that was created AFTER a licensee did something on the consumer’s behalf without the consumer’s permission, but since the consumer is OK with what the licensee has done or has committed him to do, he accepts the actions done on his behalf.
Buyer agency agreement -When an individual buys a home and decides to use the services of a real estate agent, the buyer and the broker (via the salesperson) sign this.
Commingling - Mixing or pooling funds, most likely from different sources.
Conflict of interest - A situation in which an individual or organization is involved in potentially competing interests creating a risk that one interest might unduly influence another interest.
Designated Agency - A situation where the broker appoints one licensee to represent the seller and another licensee to represent the buyer in the same transaction.
Disclosure - Is the act of making it clear who an individual represents. In all states, brokers are required to make known to all parties involved in a real estate transaction exactly who they are representing via agency relationship disclosures.
Disclosure of a special relationship with either the buyer or the seller - When any type of special relationship exists between the licensee and any party of the transaction, all parties to the transaction must be informed.
Disclosure of agency relationships - While laws vary per state on the timing of the disclosure, licensees are required to disclose to all parties involved whom the licensee represents.
Disclosure of material facts - A material fact is information that, if known, would be significant enough to influence an individual’s decision as to whether to enter into a contract on the specified terms.
Dual Agency - A situation where the licensee represents both sides of a transaction, the buyer and seller OR where different licensees from the SAME brokerage each represent the buyer and the seller. Dual agency must be disclosed to both the buyer and the seller and each side must consent to the dual agency situation in writing before the transaction may proceed.
Exclusive-Agency Buyer Agreement - The broker will only receive a commission payment if he discovers the property that the buyer ultimately purchases.
Exclusive-Buyer Agency Agreement (Exclusive Right to Represent) - Regardless of who discovers the suitable property that the buyer ultimately purchases, the buyer is legally obligated to pay a commission to the broker when the sale closes.
Exclusive listings - The seller has listed the property with one broker.
Exclusive-Right-To-Sell - The seller is legally obligated to pay the listing broker a commission when the sale of the listed property closes regardless of who finds the buyer.
Express agreement - An agency relationship that has been created between a licensee and a consumer via either a written service agreement or oral service agreement. The agreement outlines the duties and expectations of both sides and the compensation to be paid to the licensee.
Fiduciary - Is one whom trust and confidence has been placed and is expected to be loyal to the client, putting the interests of their client above their own interest. A fiduciary has specific responsibilities to his client that can be remembered with the acronym: COLD AC Fiduciary Responsibilities as “COLD AC”
Care - Possess skill and expertise in real estate matters superior to that of the average person.
Obedience - Must obey all LEGAL instructions from the principal.
Loyalty - Must place his client’s interests above everyone else’s, including his own.
Disclosure - Disclose all material facts that would be adverse or detrimental to the client’s interest.
Accountability - Return all property coming into his possession within a reasonable time period.
Confidentiality - Keep confidential any information given in confidence
Flat Fee Listing - The practice in the real estate industry of a seller entering into an “à la carte service agreement” with a real estate broker who accepts a flat fee rather than a percentage of the sale price for the listing side of the transaction.
General agency - An agency relationship that gives the agent limited power to bind the principle/client to a contract. The agent is authorized by the client to perform several acts associated with the on-going operation of a single business.
Implied agreement - An agency relationship that has been formed based on the conduct of the licensee and the consumer. It is not an agreement that the two have made orally or in writing, but instead was formed by their conduct.
Letter of Authorization - A letter of authorization is a document that gives another person, known as an “agent,” the authority to act on another person’s behalf, known as the “principal.”
listing agreement - Hiring a broker (via the salesperson) as his agent with the task of selling the property.
Net Listing - When a brokerage sells a property and gives the seller the amount he wished to net from the sale and keeps the rest of the profit as a commission.
Non-agent/transaction broker/facilitator or intermediary - When an agency agreement is not in place, the licensee is referred to as this.
Non-exclusive listings - The seller may enter into contracts with multiple listing brokers at the same time.
Ostensible Agent - A person who has been given the appearance of being an agent (representative) for another (client), which would make anyone dealing with the ostensible agent reasonably believe he was an actual agent of the client.
Open-Buyer Agency Agreement - The buyer works with multiple brokerages to locate a suitable property and only pays a commission to the brokerage that discovers the property that the buyer ultimately purchases.
Power of Attorney - A document, signed by a principal and typically notarized, that gives another person the power to make decisions on behalf of the principal in accordance with the terms of the document.
Sales Commissions - When a seller agrees to hire a broker to sell his or her property, typically the seller will agree to compensate the broker with a percentage of the sales price. This compensation is commonly referred to as a sales commission or just commission.
Single Agency - A “one-on-one” agency relationship in which the licensee represents only one side of the real estate transaction, either the buyer or the seller.
Special agency (specific agency) - An agency relationship that gives the agent no power to bind the principle/client to a contract. The agent is authorized to perform a specific set of tasks for a specific amount of time but cannot agree to a contract on their client’s behalf.
Subagency - A type of representation that occurs when a cooperating sales associate from another brokerage, who is not the buyer’s agent, shows property to a buyer that is listed by another brokerage.
Universal agency - Occurs when one person is holding a power-of-attorney over another person. In a universal agency situation, the agent-in-fact (the person holding the power of attorney) has unlimited power to bind and act in place of the principle/client and to perform ALL tasks as if her or she what that person. A universal agent is considered to be the most powerful forms of representation.
written service agreement - Is a written contract between the two parties that outlines the duties and expectations of each side, plus the compensation to be paid.