Law of agency
defines the rights & duties of the parties in a real estate transaction-the principal, the agent & the customer.
Agent
is hired by
... [Show More] principles to act on their behalf. Someone who represents the interest of another. Is authorized to represent the principal & the principal's real estate to consumers.
Agency
is the fiduciary relationship in which the agent is held in a position of special trust & confidence by the principle.
Client
is the principle
Customer
is the non-represented party for whom some level of service is provided & who is entitled to fairness & honesty.
Non-agent (aka facilitator, intermediary, transactional broker, transactional coordinator, or contract broker)
assists one or both parties with the transaction without representing either party's interests & often is subject to specific statutory responsibilities.
Statutory law (Real estate agency relationships)
which is passed by state legislatures & other governing bodies
Express agency
is based on a formal agreement between the parties. Written or verbal aka exchange of understanding.
Implied agency
results from the behavior of the parties. Actions create agency, agree to do something; compensation discussed.
Fiduciary
One in whom trust & confidence is placed; a reference to a broker employed under the terms of a listing contract or buyer agency agreement.
COLD AC
Care, Obedience, Loyalty, Disclosure, Accounting, Confidentiality
Termination of agency
Completion, fulfillment, destruction, expiration, mutual agreement, breach and bankruptcy are examples of
Universal agent
is empowered to do anything the principal could do personally
Special agent (aka limited agent)
represents the principal in one specific act or business transaction only, under detailed instruction. Agent is hired to do one thing & cannot bind their client.
Designated agent
is authorized by the broker to act as the agent of a specific principal.
Single agency
is one in which an agent represents only one party in a transaction never both.
Dual agency (aka limited agency)
is one in which an agent represents two principals in the same transaction. One company & one agent.
Buyer's broker
represents a buyer as an agent to find property that meets the buyer's specifications, as set out in the buyer-broker agreement.
Puffing
is legal exaggeration of a property's benefits.
Fraud
is the intentional misrepresentation of a material fact to harm or take advantage of another person.
Misrepresentation
occurs when a broker should have known that a statement about a material fact was false.
Seller
has the duty to discover & disclose any known latent defects.
Real estate broker
is licensed to buy, sell, exchan [Show Less]