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REP
Section 6: Real Estate Agency Basics
| Question | Answer |
|---|---|
| Law of Agency | Rules governing the relationship between the real estate professional and the person being represented |
| Agency | Relationship between the real estate professional and the person being represented |
| Law of Agency | Rules governing the relationship between the real estate professional and the person being represented |
| Agency is the relationship between the real estate professional and the person being represented. But who's the person being represented? | Client |
| Agent | One who acts on behalf of another in a business transaction |
| Client | A person who enlists the services of a real estate licensee to aid in a property transaction |
| Fiduciary | A person in whom another’s trust and confidence are placed |
| Principal (Agency) | The person represented by an agent in a real estate transaction |
| Customer | A person related to the transaction whom the agent does not represent |
| Consumer | One who purchases services or products, such as real estate services |
| Non-agent | A licensee acting as a facilitator but not in a representative capacity in a transaction |
| Facilitator | One who assists but does not represent the parties |
| Transaction Broker | A licensee acting as a facilitator but not in an agency capacity in a transaction |
| Sub-Agent | A licensee from a competing firm who brings the buyer to the deal, but instead of representing the buyer, works under the listing agent as a representative of the seller |
| Client vs Customer: True or False? A real estate licensee works with customers but doesn't represent them. | True |
| Client vs Customer: True or False? An agent can only represent a client. | True |
| Client vs Customer: True or False? You can perform additional duties for customers, like negotiating on their behalf or helping them decide how much to offer, as long as the other party in the transaction isn't your client. | False |
| Clerical (Ministerial) Acts | Services performed that are routine and do not involve judgment, advocacy, or negotiation |
| General Agent | A person who is authorized to act for another (the principal or client) in a range of matters |
| Special Agent | An agent whose scope of authority is limited to a specific area |
| Limited Agent | One who acts on a principal's behalf, but within a very limited scope |
| Non-agent | A licensee acting as a facilitator but not in a representative capacity in a transaction |
| Due Diligence | The care a reasonable person should take to investigate and confirm all facts before entering into an agreement with another party. |
| Vicarious Liability | A person’s lability for another person’s actions when the other person is acting on the original party’s behalf |
| Imputed Notice | Notice that a party to an agency transaction is deemed to have had due to the agency relationship. |
| Universal Agent | A licensee with broad authority to act in all matters. An example of this would be someone who acts in the role of a conservator, or who holds a broad power of attorney. |
| Power of Attorney | The right to act for someone else in a legal transaction. |
| General or Special Agent? Has the responsibility to handle all dealings for a specific piece of client property | General agent |
| General or Special Agent? Has limited authority to act on a client’s behalf | Special agent |
| General or Special Agent? Most real estate transactions involving a buyer and seller deal with this type of agency | Special agent |
| Other Types of Agents: True or False? A universal agent is a facilitator. | False |
| Other Types of Agents: True or False? A transactional broker is a limited agent to the seller. | False |
| Other Types of Agents: True or False? An escrow officer is a limited agent. | True |
| Other Types of Agents: True or False? A non-agent is a facilitator. | True |
| What four duties does a non-agent owe the parties in the transaction? | Disclosure, Confidentiality, Accounting, Reasonable skill and care |
| Fiduciary Duty? Loyalty | Fiduciary duty |
| Fiduciary Duty? Confidentiality | Fiduciary duty |
| Fiduciary Duty? Accounting | Fiduciary duty |
| Fiduciary Duty? Reasonable profit | Not a fiduciary duty |
| OLD CAR | Obedience, Loyalty, Disclosure, Confidentiality, Accounting, Reasonable skill and care |
| Define the "OLD" Fiduciary Duties: Follow client instructions (just the lawful ones, though). | Obedience |
| Define the "OLD" Fiduciary Duties: Put clients' interests ahead of all others. | Loyalty |
| Define the "OLD" Fiduciary Duties: Divulge all facts pertinent to the transaction. | Disclosure |
| Define the "CAR" Fiduciary Duties: Keep information shared by the client private. | Confidentiality |
| Define the "CAR" Fiduciary Duties: Properly handle all money or property entrusted to you. | Accounting |
| Define the "CAR" Fiduciary Duties: Provide clients with quality, knowledgeable, and prudent service. | Reasonable skill and care |
| Agent's Fiduciary Duty? Obedience | Fiduciary Duty |
| Agent's Fiduciary Duty? Loyalty | Fiduciary Duty |
| Agent's Fiduciary Duty? Accounting | Fiduciary Duty |
| Agent's Fiduciary Duty? Disclosure | Fiduciary Duty |
| Agent's Fiduciary Duty? Confidentiality | Fiduciary Duty |
| Agent's Fiduciary Duty? Right to profit | Not a Fiduciary Duty |
| The Truth About Accounting: T/F? If your buyer client gives you an earnest money check, you must deposit it immediately. | False |
| The Truth About Accounting: T/F? Your duty of accounting ends with the agency relationship. | False |
| Obey, Question, or Can't Obey? A seller client asks to have at least two hours' notice before a showing if possible. | Obey |
| Obey, Question, or Can't Obey? A seller works from home and would like to remain in the house during showings. | Question |
| Obey, Question, or Can't Obey? A seller asks that the home not be shown to any same-sex couples. | Can't Obey |
| Obey, Question, or Can't Obey? A seller client would like prospective buyers to remove their shoes in the house. | Obey |
| Obey, Question, or Can't Obey? A seller doesn't want a lockbox placed outside the home. | Question |
| Obey, Question, or Can't Obey? A seller going through a divorce is handling the sale of the former family home and says his soon-to-be ex-partner (whose name is on the title) doesn't need to be involved in the process. | Can't Obey |
| Loyal or Disloyal? Clients are selling home & moving out of state. Keira gives them name of agent she knows there. In return, agent will give referral fee if clients buy new home through him. Keira discloses fee to her clients before recommending agent. | Loyal |
| Loyal or Disloyal? A friend of Keira's represents sellers of a two-bedroom bungalow that would be perfect for Keira's buyer client. She shows the buyer the property, but doesn't tell them she knows the seller's agent. | Loyal |
| Loyal or Disloyal? Keira's brother brings potential buyers to the table for a property being sold. Keira represents sellers. A better offer is present, but Keira encourages sellers to take brother's lesser offer b/c it seems like a "better fit." | Disloyal |
| Loyal or Disloyal? Keira has a buyer looking at condos downtown, but she shows him a condo in the same price range slightly farther away from his desired area so he can see the difference in what his money will buy. | Loyal |
| Loyal or Disloyal? Keira shows her buyer two houses, one 2.5% commission and low end budget price, one 3% commission and high end budget price. Buyer asks which to choose. Instead of answering, she tries to help client decide by comparing qualities. | Loyal |
| Disclose or Not? The seller is moving due to a divorce. | Don't Disclose |
| Disclose or Not? The seller lost his job and won't be able to afford the house payments soon. | Don't Disclose |
| Disclose or Not? The property has lead paint. | Disclose |
| Disclose or Not? The roof leaks. | Disclose |
| Disclose or Not? A buyer is the seller's agent's brother. | Disclose |
| Disclose or Not? The seller is willing to accept $15,000 less than list price. | Don't Disclose |
| Keep Confidential or Not? Keira's seller is moving because he doesn't like his neighbors. | Confidential |
| Keep Confidential or Not? Keira's seller's house was featured in a movie in the early 1980s. | Not Confidential |
| Keep Confidential or Not? Keira's seller is flexible in her price. | Confidential |
| Keep Confidential or Not? Keira's listing backs up to an open space that will soon be developed into a retail site. | Not Confidential |
| Keep Confidential or Not? Keira's former buyer client was a strong believer in numerology and refused to look at any houses unless the address added up to three. | Confidential |
| Within or Outside Expertise? Agents may perform appraisals to determine a home's value. | Outside expertise |
| Within or Outside Expertise? Agents may perform a market analysis to determine a price range for a property. | Within expertise |
| Within or Outside Expertise? Agents may give advice on how to finance a home purchase. | Outside expertise |
| Within or Outside Expertise? Agents may search for properties on the MLS. | Within expertise |
| Within or Outside Expertise? Agents may perform property inspections. | Outside expertise |
| Within or Outside Expertise? Agents may market their listings through flyers. | Within expertise |
| Express Agency | An agency agreement entered into when both parties agree to and understand the arrangement via written or oral communication between the parties |
| Implied Agency | Agency that is created from the actions of the parties rather than an express agreement |
| Express or Implied Agency? An agency relationship that is understood and agreed to by both parties | Express agency |
| Express or Implied Agency? An agency relationship that exists because you behaved in a way that led the consumer to believe you're her agent | Implied agency |
| Express or Implied Agency? You receive a call from a friend of a friend. He'd like you to show him some condos this weekend. After looking at a few options, he decides to make an offer, which you help present to the seller. |
Created by:
StaRacer94
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