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40 Cards in this Set
- Front
- Back
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The Law of Agency |
The law that governs how one person can represent another in business or legal |
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Principal |
the party that wants representation |
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Agent |
The person or entity giving the representation |
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Client |
someone who is represented by an agent |
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Customer |
someone that we do business with and DO NOT represent |
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Fiduciary |
A person acting in a relationship of trust and in the best interest of the principle |
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Most basic duties of a fiduciary |
Care Obedience Accounting Loyalty Disclosure Confidentiality |
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Care |
exercise care with clients property |
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Obedience |
obey all lawful instructions of their clients |
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Accounting |
Accountable handling of money, property, and documents. |
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Loyalty |
100% loyalty, must put clients interests before their own |
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Disclosure |
keep their clients informed of facts that could affect their position. |
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Confidentiality |
of information that could affect the clients negotiating position |
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Expressed Agency |
when discussed and agreed to orally or in writing |
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Implied Agency |
when a licensee says or does something that leads the consumer to believe they are representing them in their best interest. |
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FACT |
Agency is not determined by compensation |
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Special Agency |
agent represents the client in one limited range of transactions. agent cannot bind the principle to any contracts. Ex: Real Estate |
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General Agency |
agent can bind the client to contracts within scope of agreement. Ex: Property Management |
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FACT: In PA all agency agreements are between the broker and the consumer. When a salesperson or associate broker gets an agency agreement it is in the name of their employing broker (company) |
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Types of Real Estate Arrangements |
Seller Agency: represent the seller Buyer Agency: represent buyer though a buyer agency agreement Dual Agency: Company and licensee represent buyer and seller. Must be disclosed in writting. Designated Agency: reduces conflicts |
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Transaction Licensee |
Licensee does not represent either party and does not act as an advocate or agent for either party. |
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Types of Seller listings |
Open Listing, Exclusive Agency Listing, Exclusive Right to Sell Net Listing |
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Open Listing |
Seller hires multiple brokers to find a ready, willing, and, able buyer. No knowledge of others efforts. Frowned Upon...often by FSBO's |
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Exclusive Agency Listing |
Seller hires one broker, but if they sell they do not pay a commission. |
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Exclusive Right to Sell: |
one broker and the commission is paid. RE Commission Required wording: "the broker will earn a commission on the sale of the property if sold during the listing period by whoever including the owner" |
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Net Listing |
Seller wants a certain (net) amount from the sale. Broker must add their desired commission. Presents risk if seller is not fully aware of what their property is worth. |
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Buyer Agency |
licensee would owe the fiduciary responsibility of COALDC and would: find a suitable property, prepare offer, represent for negotiations, assist with financing, and others to bring to a close. May be exclusive or non-exclusive |
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Multiple Listing Service |
information about listings resulting in a coop sale. |
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Cooperating Brokers: |
2 different companies involved in a sale of a property. 3 Capacities: Buyers Agent, Transaction Licensee, Subagent of the seller. |
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Not disclosing Dual Agency could: |
contract rescission forfeiture of commission suit for damages discipline by the PA RE Commission |
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Entitlement to a commission |
1) must have proper license 2) must have a sales agreement authorizing representation 3) was the agent the procuring cause that initiated and completed the sale. |
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Consumer Notice |
Given to all consumers at first interview where a substantive discussion about real estate needs occurs. Discussion about property facts does not count. |
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Consumer Notice Includes: |
Notice defines: Seller/Buyer/Dual Agent, Designated Agent, Transaction licensee. Wording for disclaimer should be stated in the initial interview if not in person. |
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Real Estate Seller Disclosure Act |
ALL sellers are required to disclose all known material defects. Material Defects=a problem that would have significant impact on the value or involves unreasonable risk to people on the land. |
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FACT: Sellers Disclosure Act Must be given to a prospective buyer prior to signing a written agreement. |
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FACT: Sellers Disclosure Act requires agents to provide sellers a copy and inform them of their obligations. |
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Puffing |
Exaggeration |
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Latent Defects |
defect not found through typical property inspection |
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Stigmatized Property |
Where an event considered negative socially happened. |
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Commission Facts |
SP x CR = Comm C C -- = SP OR -- = CR CR SP |
