Chp 4 Agency
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The relationship between a principal and an
agent wherein the agent is authorized to represent the principal in certain
One who acts or has the power to act for
another. A fiduciary relationship is created under the lay of agency when a
property owner, as the principal, executes a listing agreement or management
contract authorizing a licensed real estate broker to be his or her agent.
A residential real estate broker or salesperson
who represents the prospective purchaser in a transaction. The buyers agent
owes the buyer. The broker represents the buyer under the law of agency.
The third party or nonrepresented consumer for
whom some level of service is provided.
A licensee authorized by a broker to act as the
agent for a specific principal in a particular transaction.
A process that accommodates an in house sale in
which two different agents are involved. The broker designates one agent to
represent the seller and one agent to represent the buyer.
Representing both parties to a transaction. This
is unethical unless both parties agree to it, and it is illegal in many states.
An agency relationship based on formal agreement
between the parties.
An oral or written contract in which the parties
state the contract’s terms and express their intentions in words.
One in whom trust and confidence is placed; a
reference to a broker employed under the terms of a listing contract or buyer
A relationship of trust and confidence, as
between trustee and beneficiary, attorney and client, or principal and agent.
Deception intended to cause a person to give up
property or a lawful right.
One who is authorized by a principal to
represent the principal in a specific range of matters.
the actions of the parties that imply that they have mutually consented to an
agency relationship, an implied agency relationship is formed.
A contract under which the agreement of the parties
is demonstrated by their acts and conduct.
A hidden structural defect that could not be
discovered by ordinary inspection and that threatens the property’s soundness
or the safety of its inhabitants. Some states impose on sellers and licensees a
duty to inspect for and disclose latent defects.
Law of agency
A contract between an owner (as principal) and a
real estate broker (as agent) by which the broker is employed as agent to find
a buyer for the owner’s real estate on the owner’s terms, for which service the
owner agrees to pay a commission.
Occurs when the broker should have known that a
statement about a material fact was false.
An intermediary between a buyer and a seller, or
a landlord and a tenant, who assist one or both parties with a transaction
without representing either. Also known as a facilitator, transaction broker,
transaction coordinator, and contract broker.
(1) A sum loaned or employed as a fund or an
investment, as distinguished from its income or profits. (2) the original
amount (as in a loan) of the total due and payable at a certain date. (3) A
main party to a transaction – the person for whom the agent works.
Exaggerated or superlative comments or opinions.
One who is authorized by a principal to perform
a single act or transaction: a real estate broker is usually a special agent
authorized to find a ready, willing, and able buyer for a particular property.
A person empowered to do anything the principal could do personally.
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