What are the duties of an agent
Fiduciary Duties (OLD CAR)
- Obedience
- Loyalty
- Disclosure
- Confidentiality
- Accounting
- Reasonable
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Types of Agents
- Universal Agency; power to act for the principal in all transactions.
- General Agency; represents principal in a particular type of transaction (property manager or broker and real estate agent
- Special Agency; most limited, agent performs limited duties for the principal.
IRS Independent Contractor Status rules :
- Commission must compensate sales agents.
- Sales agent shall pay own business expenses
- Sales agent cannot be made to attend sales meetings.
- Sales agent cannot be made to attend sales seminars.
- Sales agent cannot be made to work set hours.
- Sales agent should not be offered participation in broker's insurance or retirement program.
How is agency terminated
- When the purpose of the agency is completed; property is sold
- Expiration of the period stated in the listing contract.
- Anytime by mutual agreement
- Death or incapacity of either party
- Condemnation or destruction of the property
- Bankruptcy
- Operation of law
- Revocation of broker's license
- Abandonment by the agent
- Revocation of the agreement at any time by principal
- Termination of agreement at any time by broker.
Sherman Anti-Trust Act and commission rates
Commission rates must be a matter of negotiation between broker and client. A "standard" or "goin rate" could be evidence of violation
Details in a valid listing
-Paragraph 1. Parties
- Paragraph 2. Property
-Paragraph 3. Listing Price
- Paragraph 4. Term
- Paragraph 5. Broker's Compensation
- Paragraph 6. Listing Services
- Paragraph 7. Access to The Property
- Paragraph 8. Cooperation with other Brokers
- Paragraph 9. Intermediary
- Paragraph 10. Confidential Information
- Paragraph 11. Broker's Authority
- Paragraph 12. Seller's Representations
- Paragraph 13. Seller's Additional Promises
- 14. Limitation of Liability
- 15. Special Provisions
- 16. Default
- 17. Mediation
- 18. Attorney's Fees
- 19. Addenda and other Documents
- 20. Agreement of Parties
- 21. Additional Notices
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What are the duties of the Principal
- COMPENSATION; agents should be paid on the completion of the agency
- REIMBURSEMENT; agent should be reimbursed by principal for expenses incurred on behalf of principal
- INDEMNIFICATION ; Principal will protect agent form suffering loss due to agent's reliance on information received from principal.
- PERFORMANCE ; Principal is expected to perform as promised in agency agreement.
What are the requirements of a valid listing agreement
- Signatures of all owners and listing agent
- Legal description of property, including street address
- List price of property as set by seller
- Definite starting and ending date
- Agreement to pay a stated commission to broker
What are the disclosure requirements for the agent to customers and clients.
Disclosure of all Material Facts, they know or should reasonably be expected to know that materially affect the value of or desirability of property. Disclosure of agency, property condition, and environmental hazards.
Types of Authority
Express Authority; comes from specific instructions, either oral or written, (listing agreement or buyer representation agreement signed)
Implied Authority ; customary to business (the norm)
What are the permitted activities of unlicensed assistants?
- Manage and office; answer calls, register prospects, type correspondence, schedule, tele-market if not soliciting for listings of buyers.
- accompany license holder on showings, and open houses.
- train and motivate license holders
- act as on-site apartment manager
- assist in arranging financial direction of a license holder in administrative way.
- Place for sale signs on property, accompany an inspector, place ads as directed by license holder.
Trust accounts, commingling and conversion
Funds that are held for a client or customer are held in trust and must be placed in a separate account.
Commingling is mixing client's funds with the business or personal funds.
Conversion is when a broker spends client's funds without authorization.
Commingling and Conversion are serious violations of TRELA
Stigmatized Properties; Conditions and Disclosure requirements
-psychological stigma; house is haunted, murder, death, infectious disease.
-physical stigma; results from environmental or natural conditions near or on property. previous flood, foundation, landfill, power plant
-license holder IS NOT required to disclose AIDS-HIV, or death on property , stigma relating to material defect in property MUST be disclosed. (land/soil conditions, pest infestation, structural, electrical/plumbing, known alterations, latent or hidden defects must also be disclosed , encroachment, zoning, deed restrictions) [Show Less]