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Brokerage and Agency
Terms and Questions from Ch. 5 of Michigan RE Test Book
| Question | Answer |
|---|---|
| Agency | Relationship between agent or broker and principal |
| Agent | Salesperson hired on another's(principal) behalf |
| Principal | Buyer/Seller who hires an agent to act on their behalf |
| Subagent | Assists in accomplishing purpose of an agency |
| What is the difference between a client and a customer? | Client has a written agreement, customer does not. |
| What does fiduciary mean? | One who holds a position of trust. |
| What are the 3 classifications of agents? | 1. Universal(handles all affairs)Power of attorney 2. General(handles all affairs of a certain matter) Property manager 3. Special (narrow authorization) most RE agencies |
| Express Agency | Agency by oral or written agreement |
| Implied Agency | Agency by words or actions that indicate an agreement. |
| Accidental Agency | Buyer is led to believe by an agent they are being represented. |
| Agency by Estoppel | a false claim is made that someone is their agent and a third party relies on this information. The person who made claim is "estopped" from later claiming otherwise and is responsible. |
| Seller Agency and Listing Contract | Allows broker to market seller's real property for a period of time. Employment contract between seller and listing broker. |
| Buyer Agency and Buyer Agency Agreement | Allows agent/broker to represent a buyer in the purchase of real property. Sets terms and conditions for broker and purchaser relationship. |
| Dual Agency | When a Real estate firm represents both buyer and seller in same transaction. |
| Designated Agency | Client has an agency relationship with only certain persons listed in a contract. |
| Transaction Coordinator | a licensee who is involved in a transaction but does not have an agency relationship with buyer/seller |
| What is the importance of the Michigan Uniform State Antitrust Act? | Mirrors Sherman Anti-Trust Act(federal) protects fairness in Real Estate transactions. Price fixing, boycotts, territorial limitations, tying agreements |
| What are the 6 agent duties in an agency relationship? | Obedience, Loyalty, Diligence, Care, Accounting, Reasonable Skill. |
| Disclosure of Information | Communication of any information pertaining to a transaction in which an agency was created. |
| Negligent Misrepresentation | Purposefully hiding or omitting information |
| Innocent Misrepresentation | Mistakenly/Unknowingly provide bad information. |
| Latent defect | Structural defect able to be discovered by ordinary inspection. Seller has a duty to disclose any information. |
| Patent defect | Unknown defects only discovered upon inspection. No duty to disclose. |
| Seller's disclosure statement | Comprehensive checklist of condition of property provided by seller. |
| Michigan's Seller Disclosure Act | Requires a Seller's disclosure statement. |
| Multiple Listing Service(MLS) | Facilitates orderly dissemination of listing information for better service. |
Created by:
jenkij