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Chapter 8

Chapter 8 Mass Real Estate

TermDefinition
Accountability One of the duties of an agent under the law of agency, that deals with the handling of escrow funds.
Agency The relationship between one person (Principal) and another (Agent) who is authorized to act in the first person's behalf.
Agency Disclosure The Mass regulation (2 54 C M R 2.05) that regulates the real estate broker sales person in informing, and obtaining consent as to the agency representation to be utilized.
Agent One who is authorized to act for another, who is called the principal.
Attorney in Fact One who is authorized to act for another. In real estate transactions this is done through a power of attorney. Does not need to be an attorney at law.
Broker An individual who for consideration sells, rents, exchanges, or negotiates options of real property.
Buyer's Agent A real estate broker, who represents the buyer not the seller, and therefore has a fiduciary responsibility to the buyer.
Care The part of the law of agency, that requires that the agent use his or her expertise in the principal's best interest.
Client The one who has hired an agent to perform a service for a fee.
Comingling of Funds To combine deposit funds received as an agent with broker's business, or personal funds.
Confidentiality That part of the responsibility of loyalty in agency law, that deals with matters of disclosure. The broker must disclose material facts about the property, but not personal facts about the principal, that may not be in the principal's interest.
Customer The third party in law of agency, between a principal, and an agent for whom some service is performed. When a seller (principal) hires a broker (agent) to sell a house; the buyer is the customer.
Designated Agent An agent appointed by another agent, within an office to represent either the seller, or buyer.
Disclosed Dual Agent An agent of both parties to a transaction, who represents each one and has informed each of this relationship.
Disclosure One of the duties of agency (also known as duty of notice) that requires an agent to keep his or her principal informed of any matter, that is in the principal’s interest.
Dual Agency Agency where the real estate broker, or sales person represents both the buyer and the seller. The law requires this dual agency to include informed consent, and to be in writing.
Dual Agent An agent of both parties to a transaction, who represents each one.
Estoppel Agent An agency, that exists when a third party has reason to believe that an agency exists, even though a formal principal-agent relationship has not been established.
Escrow Agent A neutral third party in a transaction, who holds documents, or monies, until certain acts are completed by the individuals involved in a contract.
Exclusive Agency Owner gives one broker the right to sell a parcel of property, but retains the right to sell himself, without paying a commission.
Exclusive Office Listing The same as “exclusive agency”.
Exclusive Right to Sell Owner gives one broker the right to sell a parcel of property, and agrees to pay a commission, when sold by anyone including the owner.
Express Agency An agency relationship created by mutual consent, between a principal and agent. Maybe either oral or written.
Facilitator (Transactional Agent) An agent who assist the seller, and buyer in reaching an agreement, but does not represent neither the seller, or buyer in the transaction.
Fiduciary One who is in a position of trust and confidence.
General Agent (Universal Agent) One who represents a principal within a single broad area. EXAMPLE: A property manager for an apartment building.
General Power of Attorney One was authorized to act for another in all matters. Also known as a universal power of attorney.
Implied Agency The agency that results by deduction, or inference as opposed to an expressed (verbal or written) relationship.
Imputed Notice Knowledge by an agent, that is binding on the principal due to the principal-agent relationship, even though the principal does not have first hand knowledge. EXAMPLE: Notice under a purchase and sales agreement requirement.
Independent Contractor One who is employed to perform an act, but is not controlled as to how they accomplish the objective.
Independent Contractor An independent contractor is not an employee, and as such in real estate brokerage the principal (broker) does not have to withhold taxes, and Social Security.
Loyalty That part of the law of agency, that requires that the agent must act in the best interest of the principal (even when it is not the best interest of the agent).
Multiple Listing A listing placed in a Multiple Listing Service (M L S) where member brokers agree to share a listing with one another.
Net Listing A listing where the seller is to receive a certain amount, and the broker retains anything above that amount as a fee. Illegal in Mass.
Obedience That part of the law of agency, that requires that an agent follow the principal's direction. (Requirement to violate the law is excluded.)
Open Listing A type of listing where 2 or more brokers are given a listing. The selling broker receives the total commission. The seller retains the right to sell.
Option Listing A listing to sell property, where the broker retains the right to purchase the property.
Power of Attorney A written document authorizing one person, to act for another to do whatever extent specified.
Principal (1) A) One of the main parties in the transaction (as in seller and buyer). B) In an agency relationship, one who engages another (the agent) to act in his or her behalf.
Principal (2) In financial matter, the amount of debt owed, which added to interest constitutes the amount paid.
Procuring Cause The effort that brings about the desired result. In real estate the broker in an open listing, that brings about the ready willing, and able buyer is the procuring cause, and is entitled to the commission.
Puffing Exaggerated representations.
Realtor® A registered trademark, and maybe used only by licensed broker, or salesman who is a member of the state, and local real estate board chartered, by the National Association of Realtors.
Seller’s Agent A real estate broker who represents the seller, not the buyer, and therefore has a fiduciary responsibility to the seller.
Sherman Antitrust Act Federal act passed in 18 90, aimed at prohibiting monopolies, and promoting competition in the market place.
Single Agent One who represents one principal, either the buyer or seller, but not both.
Special Agent Limited agent. One who is authorized to perform one specific task.
Special Power of Attorney One who is authorized to act for another in a limited range of matters.
Sub-Agent One acting as an agent for someone, who is already acting as an agent for a principal. In a co-broke situation, where both brokers are sellers agents, the listing broker is the agent of the seller principal, and the selling agent is the sub agent.
Tristram's Landing Mass. legal case, that defined “procuring cause” in matters of real estate brokerage.
Undisclosed Dual Agent Agency where a real estate broker or salesperson, represents both the buyer and the seller, but has not disclosed this to both parties. Illegal in Mass.
Universal Agent General agent. One who is authorized to act, for a principal in all matters pertaining to one general area. EXAMPLE: Property Agent.
Vicarious Liability The risk that a buyer or seller assumes, when extending sub-agency representation in the transaction.
Created by: sunaecm4