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Level 10

Authorized Relationships: Duties & Disclosures


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the seller. this is a case of:
undisclosed dual agency and is illegal in FL
is a 5 unit apartment house a residential property defined by FL law?
no, its more than 4 units
an agent:
the person who is empowered to act on behalf of another
law of agency
laws governing agency laws
a universal agent:
has power of attorney; handles all delegated business of the principal
which agent usually has power of attorney?
universal agent
any request for a multiple license for a broker must be:
justified as necessary to the brokers business
this?
subagency relationship
T/F. disclosure paperwork must be kept by a broker for 3 years
false
which agency is NOT allowed under fl law?
dual agency
an agency relationship is created when:
the seller asks to be represented and the broker agrees
statutory law
agency relationship governed by this; the laws that are currently on record in the country
common law
procedures that have been precedent of cases that have gone before
Brokers Relationship Disclosure Act
law provides provisions in order to clarify the relationship of brokers to
written or expressed agency
created when a written or oral contract is entered into where the parties state the
implied agency
cerated by Act of the Parties; like getting in a cab both driver and person have an implied
ratification of agency
always created AFTER the fact; the principal accepts the conduct of the person who acted w
statute of frauds
its purpose is to prevent fraud among the parties by requiring that all contracts be in
Arms-length transaction
transaction where the seller is informed and knowledgable about what theyre selling and the
dual agency
representing both buyer and seller at the same time; ILLEGAL in FL
disclosed dual agency
mean both the buyer and seller are aware of the agency relationship and both agree to it
undisclosed dual agency
one of the parties is unaware of the dual agency
general agent:
handles multiple transactions of a client/principal; ex: property manager
agency occupied with an interest:
when the re licensee is a partner in the ownership of the property as well
special agent:
handles one transaction for one seller of one property; the most common type of re representation
brokerage relationship:
when the agent represents one side or the other in a transaction but not the party whos
single agent broker:
agent who represents either buyer or seller
transaction broker:
agent provides limited representation to a buyer a seller or both
designated sales associate:
a special case for non residential transactions where 2 licensees under the
Presumption of transaction brokerage:
475.278 states it shall be presumed that all licensees are operating as
the principal
the buyer or seller who hired the agent
can a sales associate create an agency relationship?
no, the broker must do it
how long must a broker keep records and disclosures for?
at least 5 years; documents must be kept for 2 years
Special
In agency law, an agent that is empowered to perform a single act on behalf of his or her principal has a
General
In agency law, and agent whose continuing authority is limited to a a single trade or business has a blank
Subagent
A sales associate is a blank of the brokers principal .
Accidentally
A licensee can create an agency relationship
Single Agency, No Brokerage
Before showing a property, allowing a buyer to sign an offer to buy, or a seller to
Transaction, Broker, Single, Agency and Non resonation
A member of the public may select from one of the three
$1 million
In a nonresidential transaction, a broker may assign one or more sales associates to represent a
Initialed, Signed
The consent to transaction broker notice is required to be blank or blank or transition to
Single Agent
If the principal refuses to sign or initial the consent to transition to transaction broker notice
Five
Brokers are required to retain copies of all disclosure documents for transactions that have resulted in a
Single , Agency
The only brokerage relationship that includes fiduciary duties is blank
Designed Sales Associate
A licensee assigned by a broker to act as a single agent of a buyer or seller in a
Written Discloser
Brokers in a nonresidential sale are not required to use blank.
Impaired agency
Licensee using words or actions that mislead a member of the public can result in the creation of an
Trust and Confidence
Agency relationships are legally based on blank and blank.
License , Advised
For a broker to legally be paid a kickback or rebate, he or she must have performed a blank
Representing both buyer and seller at the same time with the consent of both is referred to as
Disclosed Dual
Single Agents may represent
either a buyer, or a seller, but not both
Transaction Brokers provide a limited form of
Non-Fiduciary representation to a buyer, a seller, or both in a real
it is said that he hires an
Agent
A person wishing to buy a home can hire a
buyer's Agent to represent him or her when seeking, negotiating,
The relationship of an Agent and Principal is called a
Fiduciary Relationship
When one person is empowered by another to represent him in any transaction, it is called an
agency relationship
The law that defines agency relationships is called
The Law of Agency
To create an agency relationship you must have a
Principal, or Principals, a task to be done, and an Agent
What are the four types of agencies called?
Universal Agency, General Agency, Agency, and Special Agency
The Universal Agent handles
All delegated business of the Principal
A Universal Agent is
a person who is hired or appointed by an estate to handle the real estate affairs of a
A General Agent handles
multiple transactions of a Client. The best example in real estate would be property
agency relationship the licensee relationship is referred to as
Agency coupled with an Interest
Which agency handles one transaction for one seller of one property?
A Special Agent
What are the three ways that agency relationships are created?
Written or Expressed Agency, Implied Agency, or
intent of their relationship in a contract?
Written or Expressed Agency
Usually a contract is in writing with specific terms to comply with
the Statute of Frauds to prevent a
indicate that they have a relationship?
Implied Agency
The clearest example of an Implied agency is when
a person hires a taxi, gets in the taxi, tells the driver
What kind of agency is always created after the fact?
Ratification of Agency
parties to be charged
Statute of Frauds
An Arms Length Transaction is a
transaction where the seller is informed and knowledgeable about what he is selling
In an Arms Length Transaction the buyer and seller are not
related to each other. Their independent knowledge
In an Arms Length Transaction if Brokers are involved, one Broker represents
the seller and a different Broker
Caveat Emptor means
Let the Buyer Beware
When an Agent represents the seller as a Principal
a fiduciary relationship is created
A fiduciary relationship is a relationship of
utmost trust
When an agency relationship is created the Principal is called a
Client
the
buyer
Dual Agency means
representing both buyer and seller at the same time with the same commitment and dedication
Disclosed Dual Agency means
both the seller and buyer are aware of the agency relationship and both agree to be
Undisclosed Dual Agency means
one of the parties, either the buyer, or seller, is unaware that a Dual Agency
A Sub-Agent is one who
assists in some or all of the duties as assigned by the Agent to do a job for a Principal
listings, a Sub-Agency relationship can be
created under certain circumstances
An example of a Sub-Agency
In this case the second Broker acts as a Sub-Agency of the first Broker, with all
Many Brokers do not like the arrangement of Sub-Agency, since the primary Broker, the Agent, retains
all the
All parties in a residential transaction have the right to
disclosure
Residential sales mean
the sale of improved residential property of four units or fewer, the sale of unimproved
Disclosure rules do not apply to
Non-Residential transactions
Non-Residential transactions include
the rental or leasing of real property, unless an Option is given to
to sign the disclosure under Florida law, but if he refuses to sign, the Broker should
include a copy of the
Florida law allows for four types of agency relationships. These are
No Representation Broker, Single Agent
refers to
No Representation Broker
An Agent who represents either a buyer or a seller in a transaction, but not both is a
Single Agent Broker
not represent either in a fiduciary capacity is a
Transaction Broker
than $1 million
Designated Sales Associate
Whatever the agency relationship held in Florida, it must be conveyed to
all parties
A Single Agent is
a Broker who represents, as a fiduciary, either the buyer or seller, but not both in the
The buyer or seller who has hired the Agent is called the
Principal
Due Care, sometimes called due diligence, is
that care that a reasonable person exercises to avoid harm to
Due Care, sometimes called due diligence, means
persistent and vigilant care. This is the opposite of carelessness
A Transaction Broker is a
Broker who provides limited representation to a buyer, a seller, or both, in a real
Chapter 475 defines a Customer as a
member of the public who is or may be a buyer or seller of real property and
Both buyer or seller is a Customer when
he chooses a limited representation under Transaction Broker status
Law Change. As of July 1, 2008, Florida law requires no written disclosure of
the Transaction Brokerage
Transaction Brokerage is the default relationship unless
another type of Brokerage relationship is agreed
Transaction Broker duties include
dealing honestly and fairly
for
one party to the detriment of the other
Occasionally, for a variety of reasons, it becomes necessary for a Single Agent to
become a Transaction Broker
The change from a Single Agent to a Transaction Broker can be done provided the Agent gives the
transition
Example of Transition From Single Agent to Transaction Broker
Suppose that a Single Agent represents the seller in
A Single Agent must make the Single Agent Disclosure before, or at the time of
entering into a listing agreement,
disclosure or included as a part of another document such as
a listing agreement or other agreement for
The first sentence of the Transition from Single Agent to Transaction Broker Disclosure must be
printed in uppercase
The change from Single Agent to Transaction Broker relationship cannot occur without prior
written consent
or more, the Broker may
honor the request of the parties and designate Sales Associates to act as Single Agents for
Customers in the same transaction
have the duties of a Single Agent including disclosure requirements
both
sign disclosure stating that the Broker used the Designated Sales Associate form of representation
If a licensee or applicant fails to provide or adhere to the provisions of disclosure, the Commission may
deny
The Florida Real Estate Commission will prosecute a licensee for failure to
give the agency disclosure form(s)
Department to determine if such a Broker is
in compliance with Florida real estate Statutes
at least _______ from the date of the document
5 years
to inspect and audit in a lawful manner at all reasonable hours any Broker or
Brokerage office
One way Agency is terminated is when
the fulfillment of the purpose of agency is completed
The Listing Agent who shows a property to a willing, ready, and able buyer has the obligation to
disclose to
is a case of what?
Undisclosed Dual Agency and is illegal in Florida
Residential property include
a Condominium unit, a single family home, and undeveloped agricultural land of 10
Laws governing Agency Laws are called
Laws of Agency
commission, what should Gail do?
She should have Suzie sign a Ratification of Agency contract as well as a
A Sub-Agency relationship would most likely occur when
a Broker accepted a Sub-Agency relationship as part of his
A Single Agency is
an Agent who represents a buyer or seller in a real estate transaction but not both
Brokerage relationship exist. An agency relationship is created when
the seller ask to be represented and the
Transaction Agents do not represent either party in a transaction and do not
protect the interest of the seller
authorization as the Principal's Agent, such as
a licensee who shows a property without a current listing agreement
A Special Agency is
the most common type of real estate representation. The Broker can represent several sellers
forces, for instance,
a change in zoning or condemnation, etc.
One of the many duties that an Agent owes to his Principal is to
deal honestly and fairly
One of the many duties that an Agent owes to his Principall is to
provide the required information on the
improved with four or fewer residential units is a
Non-Residential transaction
In every state, a body of law, generally called the Law of Agency, defines and regulates the
legal roles of
The parties to an agency relationship are the
Principal, Agent, and the Customer
The Customer in an agency relationship is also called the
third party
The laws of agency are distinct from
laws of contracts, although the two groups of laws interact with each other
In a listing agreement, the contract establishes an agency relationship. The relationship is subject to
Contract
The essence of an agency relationship is
trust, confidence, and mutual good faith
The Principal trusts the Agent to
exercise the utmost skill and care in fulfilling the authorized activity,
The Agent undertakes to strive in good faith to achieve the desired objective, and to fulfill the
fiduciary
An agency relationship does not require
compensation or any form of consideration
In an agency relationship, a Principal hires an
Agent as a fiduciary to perform a desired service on the Principal's
As a fiduciary, the Agent has a legal obligation to
fulfill specific fiduciary duties throughout the term of the
The Principal or Client is
the party who hires the Agent. The Agent works for the Client
The Principal may be a
seller, a buyer, a landlord, or a tenant
duties. In real estate Brokerage the Agent must be a
licensed Broker
A Customer or Prospect is a
third party in the transaction whom the Agent does not represent
A seller, buyer, landlord, or tenant may be a
Customer
A third party who is a potential Customer is a
Prospect
agency
three
According to the level of authority delegated to the Agent, there are three types of agency, they are
Universal,
In a Universal Agency relationship, the Principal empowers the Agent to
perform any and all actions that may be
In a General Agency, the Principal delegates to the Agent
ongoing tasks and duties within a particular
Under a Special or Limited agency agreement, the Principal delegates authority to
conduct a specific activity,
In most instances, real estate Brokerage is based on
a Special Agency
The Principal hires a licensed Broker to
procure a ready, willing, and able buyer, or seller. When the
An agency relationship may arise from an
expressed, oral, or written agreement between the Principal and the
from the actions of the parties by
Implication
The most common way of creating an agency relationship is by
a listing agreement, which may be oral or written
A listing agreement sets forth the various authorizations and duties, as well as requirements for
compensation
A listing agreement sets forth
the various authorizations and duties, as well as requirements for compensation
A listing agreement establishes an
agency for a specified transaction and has a stated expiration
An agency relationship can arise by
Implication, intentionally or unintentionally. Implication means that the
Implied Agency Relationship Example
If an Agent promises a buyer to do everything possible to find a property at
Whether intended or accidental, the creation of an Implied Agency obligates the Agent to
fiduciary duties and
Full performance of all obligations by the parties terminates
an agency relationship
Parties may terminate an agency relationship at any time by
mutual agreement
The agency relationship automatically terminates on
the expiration date, whether the obligations were performed
One way that an agency relationship may terminate contrary to the wishes of the parties is by reason of
death or
cancels. For example,
a Client may renounce an agreement but then be held liable for the Agent's expenses or
The agency relationship imposes
fiduciary duties on the Client and Agent, but particularly on the Agent. An Agent
must also observe
certain standards of conduct in dealing with Customers and other outside parties
Agent's duties to the Client include
skill, care, and diligence
The Agent is hired to
do a job, and is therefore expected to do it with diligence and reasonable competence
Competence is generally defined as
a level of real estate marketing skills and knowledge comparable to those of
A Conventional listing agreement does not authorize an Agent to
obligate the Client to contracts, and it does not
Since a Client relies on a Broker's representations, a Broker must exercise care not to
offer advice outside of his
The duty of loyalty requires the Agent to
place the interests of the Client above those of all others,
Obedience means
that an Agent must comply with the Client's directions and instructions, provided they are legal. An
An Agent must hold in confidence any personal or business information received from
the Client during the term
An Agent may not disclose any information that would
harm the Client's interests or bargaining position, or
The confidentiality standard is one of the duties that extends beyond the termination of
the listing. At no
required disclosures. If such a conflict cannot be resolved, the Agent must
withdraw from the relationship
Customer. State license laws regulate the
Broker's accounting obligations and escrow practices
Full disclosure means that
an Agent has the duty to inform the Client of all material facts, reports, and
If an air conditioner has a problem, the Agent may be held liable for failing to disclose the material fact, if
a
There is no obligation to obtain or disclose information related to a Customer's
race, creed, color,
prospective buyer. This disclosure may or may not relieve the Agent of
some liabilities for disclosure
The traditional notion of Caveat Emptor, let the buyer beware, no longer applies unequivocally to
real estate
Agents do have certain obligations to Customers, even though
they do not represent them
an Agent owes to a third party is
honesty and fair dealing
An Agent has a duty to deal fairly and honestly with a Customer. An Agent may not
deceive, defraud, or
Reasonable care and skill means
that an Agent will be held to the standards of knowledge, expertise, and ethics that
Proper disclosure primarily concerns disclosure of
agency, property condition, and environmental hazards
violation of
license laws and regulations
Agents should be particularly careful about
misrepresenting and offering inappropriate expert advice when
An Agent may intentionally or unintentionally defraud a buyer by
misrepresenting or concealing facts
is a fine line that divides promotion from
misrepresentation
the Agent should have known such facts. For example,
if it is a common standard that Agents inspect property,
says, and the Agent will be held accountable. For example,
an Agent represents that a property will appreciate.
In a Special Agency, the power and decision making authority of the Agent is limited. Therefore,
the
One of the obligations of a Principal in an agency relationship is that
the Principal must provide the Agent with a
One of the obligations of a Principal in an agency relationship is
if an agreement includes a provision for
An Agent is liable for a
breach of duty to a Client or Customer
authority. Regulatory agencies and courts aggressively enforce
agency laws, standards, and regulations
A breach of duty in a listing agreement may result in
rescission of the listing agreement (causing a loss of a
A breach of duty may result in
forfeiture of any compensation that may have already been earned
In a Transaction Brokerage relationship
No Agency relationship exists in the transaction
Forms of real estate agencies are
Single Agency, Sub-Agency, Dual Agency, No Agency, and No Sub-Agency
The primary forms of agency relationship between Brokers and Principals are
Single Agency, Dual Agency, and
Some states are beginning to disallow a
Sub-Agency relationship altogether
Students are advised to ascertain which agency relationships are allowed and practiced in their
particular state
Single Agency is when
the Agent represents one party in a transaction. The Client may be either a seller or buyer
Seller Agency is in the traditional situation whereas
a seller or landlord is the Agent's Client. A buyer or
Buyer Agency has recently become common for
an Agent to represent a buyer or tenant. In this relationship, the
Vernacular means
of, relating to, or using the language of ordinary speech rather than formal writing
Real estate vernacular calls an Agent of the seller or owner the
Listing Broker
An Agent who works for the Listing Broker and who obtained the listing is the
Listing Agent
A Broker who represents a buyer is the
Buyer's Broker
A Broker who represents a buyer as a specialization is a
Buyer Broker
A Broker or Salesperson who represents tenants is a
Tenant Representative
In a Sub-Agency, a Broker or licensed Salesperson works as the
Agent of a Broker who is the Agent of a Client
Client might include
a cooperating licensed Broker, that Broker's licensed Salespeople, and the Listing Broker's
A Sub-Agent is
an Agent of the Broker who is Agent of the client
The Sub-Agent owes the same duties to the Agent as
the Agent owes to the Client. By extension, a Sub-Agent owes
It is cooperating Brokers who form Multiple Listing Services to facilitate the process of
bringing together
All of the Listing Broker's Salespeople who have agreed to work for the Broker to find a Customer are
Sub-Agents
Dual Agency Example
If a Salesperson completes a Buyer Agency agreement with a party on behalf of a Broker, and
Prevalent means
widely or commonly occurring, existing, accepted, or practiced
Advent means
coming into
Dual Agency has become
increasingly prevalent with the advent of Buyer and Tenant Representation
much like
Implied Single Agency
Dual Agency contains
an inherent conflict of interest. Many of an Agent's fiduciary duties can only be rendered
writing to proceed with the Dual Agency relationship. This refers to
written informed consent
forms, and sale contract forms. This refers to
Voluntary Disclosed Dual Agency
Voluntary Disclosed Dual Agency Example
An Agent represents a buyer who becomes interested in a property that the
Dual Agency has potentially been created. This refers to
Implied and Undisclosed Dual Agency
Implied and Undisclosed Dual Agency Example
A buyer makes confidential disclosures to the Agent who works for
Duties of a Disclosed Dual Agent
A Dual Agent's first duty is to disclose the agency relationship to both
If both parties accept a Dual Agency, the Agent owes all the fiduciary duties to both parties except
full
In the role of a Transaction Broker, one of the Broker's duties and standards of conduct is to
keep the parties
Customers as opposed to
Clients
The standards that a Transaction Broker are held to include are
honesty, fair dealing, and reasonable care
The Transaction Broker is under no obligation to
inspect the property for the benefit of a party or verify
No Sub-Agency
The problem of `who works for whom,' some states have recently moved in the direction of disallowing
traditional ethic now, in many states, is
required by law
Agents must know what agency disclosures they have to
make, to whom, and when in the business relationship they
Disclosure removes confusion about
who an Agent is working for
Obviate means
to eliminate the need for something or to prevent something from happening
Disclosure may obviate complaints arising from
Customers and Clients who feel they have been deceived
One of the requirements for Disclosure is to
notify Clients and Customers about whom the Agent represents
Recent legislation requires an Agent to
disclose to all parties the fact that the Agent represents one party and
An Agent must inform the Client and Customer that
the Agent represents the Client and does not represent the
An Agent must disclose agency relationships whenever there is a
transfer of a real estate interest, whether the
Depending on state regulations, an Agent who intends to represent a seller or owner must
disclose the bring
fiduciary, and will not be representing the interests of any
potential buyer
A Listing Agent must disclose in writing to a buyer or tenant that the Agent represents
the owner in the
excluded from the requirement of disclosure is
attendance at, or supervision of, an open house, providing the Agent
disclosure, the Agent must
make the disclosure orally and follow up with a written disclosure at the first
in writing before the representation agreement is executed. This refers to
Client disclosure
An Agent who desires to operate in a Dual Agency capacity must obtain
the informed written consent of all parties.
State regulations prohibit a Dual Agent from making certain disclosures. For instance,
a Dual Agent, unless
Agents must provide written notice to all parties or their Agents on first becoming
a Transaction Broker or on
A Principal or Client hires an Agent (Broker) to
find a ready, willing, and able Customer (buyer, seller,
Universal Agents represent in
business and personal matters and can contract for the Principal
A General Agent represents
business matters
Special Agents represent in
single business transactions
Creating an agency relationship is created by
Express, Written, or Oral agreement or as an Implied agreement by
Causes for terminating an agency relationship are
fulfillment, expiration, mutual agreement, incapacity,
Agent's duties to the Customer include
honesty and fair dealing, exercise of reasonable care, skill, and proper
Breach of duty liabilities include
loss of listing, compensation, license, or suit for damages
Single Agency include
Seller Agency, Buyer Agency, and Tenant Representation
Sub-Agency includes
outside Brokers and Agents who help Listing Agent and Listing Broker's own Agents
Types of Dual Agency
voluntary by consent, involuntary by actions of parties (Implied Agency)
Dual Agency duties include
all but full disclosure and loyalty
No Agency is a
Facilitator or Transaction Broker, representing neither party in the transaction. Duties to both
A listing agreement, the document that puts an Agent or Broker in business, is a
legally enforceable real
The unique characteristic of a listing agreement is that it is governed by both
Agency Law and by Contract Law
Agency Law in the context of a listing agreement are
definition of the roles of parties involved, fiduciary
One Agency Law in the context of a listing agreement is
definition of the roles of parties involved
The Principal parties to a listing agreement contract are the
Listing Broker and the Client
The Client of a listing agreement may be a
buyer, seller, landlord, or tenant in the proposed transaction
A Broker or Salesperson who assists the Listing Broker in finding a Customer is an
Agent of the Listing Broker
A Broker who represents the party on the other side of the transaction is an
Agent of that party, and not an
A listing agreement establishes
an agency relationship between an Agent and Client that commits the Agent to the
A listing agreement is a
Special Agency or Limited Agency agreement
Special Agency limits the scope of
the Broker's authority to specific activities, generally those which
A Special Agency Agreement usually does not authorize a Broker to
obligate the Client to a contract as a
offeror that the offer is accepted would be
a serious breach of a listing agreement
Under Agency Law, a Client is liable for actions the Broker performs that are
within the scope of authority
A Client is not liable for acts of the Broker which go beyond
the stated or Implied scope of auhority
A Broker who exceeds the scope of authority in the listing agreement risks
forfeiting compensation and perhaps
A listing agreement is a unilateral agreement because
it requires the Agent to perform the stated service but does
A listing agreement is a unilateral agreement because it requires
the Agent to perform the stated service but
A listing agreement must meet the requirements for a
valid contract to be enforceable
A listing agreement, like any contract, may terminate for any of the following causes
performance, infeasibility,
A valid listing agreement may be
oral or written. However, many states consider only a written listing to be
A Broker may not be able to sue a Principal for damages incurred under an
Oral listing agreement
An Expressed listing agreement, verbal or written, manifestly authorizes the Broker to
pursue certain actions for
Clients and Agents may also create an Implied Agency listing agreement based on
substantive actions rather than on
Conversely, the Agent may be held responsible for
fulfilling fiduciary duties imposed by the Implied Agency
Since a listing agreement is a personal service contract, it is not
assignable. In particular, a Broker cannot
Types of listing agreements are
Exclusive Right-to-Sell (or lease) listing agreement, Exclusive Agency listing
One type of listing agreement is the
Exclusive Right-to-Sell (or lease) listing agreement
A Broker may represent any Principal party of a transaction. This may include
seller, landlord, buyer, or tenant
An owner listing agreement authorizes a Broker
to represent an owner or landlord
There are three main types of owner listing agreement. They are
Exclusive Right-to-Sell (or lease) listing
A type of listing, rarely used today and illegal in many states, is a
Net listing agreement
conditions under which the Broker
will be paid
The Net listing is a
variation on how much the Broker will be paid
A Buyer Agency listing agreement or Tenant Representation listing agreement authorizes a Broker to
represent a
The most commonly used form in real estate is an
Exclusive Right-to-Represent listing agreement or the
The most commonly used form is an Exclusive Right-to-Represent agreement, the equivalent of an
Exclusive Right-to-
Though not a distinct type of listing agreement, a Multiple Listing Agreement is a
significant feature of a
The Exclusive Right-to-Sell listing agreement is also called the
Exclusive Authorization-to-Sell listing
A Multiple Listing Agreement is an authorization to
enter a listing in a Multiple Listing Service
exclusive listing agreement, are
the most widely used owner agreement
Under the terms of an Exclusive Right-to-Sell, also called Exclusive Authorization-to-Sell
a seller contracts
If a buyer is the procured during the Exclusive Right-to-Sell listing agreement period
the Broker is entitled to a
In an Exclusive Right-to-Sell listing agreement
if anyone, the owner or another Broker sells the property, the owner
agreement for a leasing transaction. Under the terms of this listing, the owner or landlord must
pay the
The Exclusive listing agreement gives the Listing Broker the greatest assurance of
receiving compensation for
In some states, an Exclusive Right-to-Sell listing is only enforceable if it is
in writing and has an expiration
Some states do not require an Exclusive listing agreement to be
in writing, but if it is in writing, it must have an
An Exclusive Agency listing agreement authorizes a single Broker to
sell the property and earn a commission, but
of the property, including another Broker, the contracted Broker has
earned the commission
The arrangement of an Exclusive Agency listing agreement, may also be used in a leasing transaction if
any party
An Exclusive Agency listing generally must have an
expiration date. Most states allow either oral or written
An Open listing agreement, or, simply, Open agreement, is a
Non-Exclusive Authorization to sell or lease a
Broker who is the first to perform under the terms of the listing is the
sole party entitled to a commission
In an ______ listing agreement, if a transaction occurs without a procuring Broker, no commissions are payable
Open
Open listings are rare in residential Brokerage. Brokers generally shy away from them because
they offer no
Open listings cause commission disputes. To avoid such disputes, a Broker has to
register Prospects with the
An Open listing may be
oral or written
A Net listing agreement is a listing agreement in which
an owner sets a minimum acceptable amount to be received
Buyer and Tenant Agency agreements create
a fiduciary relationship with the buyer or tenant just as seller
Buyer and Tenant Representation agreements are subject to
the same laws and regulations as those applying to
A Buyer and Tenant Representation agreement may be an
Exclusive, Exclusive Agency, or Open listing
As with owner listings, the most widely used Buyer and Tenant Representation agreement is the
Exclusive Tenant
An Exclusive Tenant Representation agreement generally must have an
expiration date along with other
Net listing agreement example
A seller requires $75,000 for a property. A Broker sells the property for $83,000
State laws require a Exclusive Tenant Representation agreement authorization to be
in writing
At the formation of an Exclusive Tenant Representation agreement, the Buyer Agent has the duty to
explain how
diligently locate a property that meets the Principal's requirements. In addition, the Agent must comply with
his
In terms of agency, a Transaction Broker is in a Non-Agency relationship with the
seller or buyer. The Agent
may be
Exclusive or Non-Exclusive
Like conventional listings, the Transaction Brokerage agreement binds the Principal to a
compensation
Transaction Broker agreements contain
expiration dates, and describe the terms of the agreement, such as the type
Broker to
place the listing into a Multiple Listing Service
A Multiple Listing Service is an
organization of member Brokers who agree to cooperate in the sale of
a timely fashion so that members in the organization can participate in the sale of the property as
Sub-Agents
A listing agreement may terminate in many ways. The only desirable and favorable way is by
fulfillment of the
Fulfillment of a listing agreement results when
both parties have performed the actions they have promised to
achieved, the Agent's performance is
complete
A listing generally specifies the result to be either finding a Customer or
effecting a completed transaction
Finding a Customer means locating a party who is ready, willing, and able to
transact under the Client's terms
makes
an acceptable offer
A ready, willing, and able Customer is one who is
amenable to the terms of the transaction (ready and
Authorized activities usually include
show or seek property, locate buyer, seller, tenant, or landlord,
liability in the event that
the property is not as represented or that the Client cannot perform as promised
In the normal course of business, a Listing Broker delegates marketing responsibilities to
Salespeople
A Sales Associate may not seek compensation directly from
a Client. Only the Broker can obtain and disburse
The main item in a listing agreement of performance for the Client is
payment of compensation, if the agreement
A Broker's compensation is earned and payable when the Broker has
performed according to the agreement
The amount of a Broker's commission is
whatever amount the Client and Broker have agreed to
vary for
different geographical areas, types of property and transaction, and services performed
the Client's liability for multiple commissions are matters that
a listing agreement should address
numerous Agents are
working to find Customers for the Principal, and none has a clear claim on a commission
The two principal determinants of procuring cause are
being first to find the Customer and being the one who
Principal Determinants of Procuring Cause
Broker A and Broker B each have an Open listing with a property
Buyer Agency agreements stipulate
how an Agent will be compensated in an agency relationship
Compensation to Agents for the sale of a property may be
a Client-paid retainer fee or a commission
Compensation to Agents for the sale of a property may be a Client-paid retainer fee or a
commission
Buyer Broker. This might occur, for example,
in the case of a for-sale-by-owner transaction
defines
when the compensation is in fact earned and will be paid
Customarily, the commission is earned when
a sales contract is completed by the transacting parties
An Agent may be entitled to compensation even if
the buyer defaults on the terms of the sales contract.
A listing may terminate on the grounds of
performance, infeasibility, agreement, mutual agreement, revocation,
In most states, Open listings expire after
a "reasonable" period of time as locally defined
Most types of listing agreements must specify a termination date and may not have an
automatic renewal mechanism
Courts in many states construe any listing that has no expiration as an
Open listing. However, some states make
Both Principals to a listing agreement have the power to
revoke the contract at any time. They do not,
If a Client revokes a listing agreement after the Broker has already earned a commission, the Client must
pay
An agreement that is included in a written listing agreement is assumed to exist and is generally
enforceable
If a written agreement in a listing agreement contains mistakes, it is probably not
valid or enforceable. For
reason it is important to ascertain the
legal requirements and required clauses for certain types of listings,
requires as a minimum of the following clauses
names of all owners, address or legal description of the listed
If an agreement in a written listing agreement is left out, it is assumed
not to exist
A written listing agreement, particularly an Exclusive, is a
formal contract which contains the entirety of all
The Parties and Authorization agreement in a listing agreement should name
all legal owners of the property, or
example,
the type of listing
Misnomer means
a wrong or inaccurate use of a name or term
without proper Power of Attorney. The usual right is to
effect a sale or find a buyer
It is critical to identify both the real property and any personal property that are
for sale and included in the
Typical listing agreements list
what fixtures are included in the sale specifically, and "all other things attached
A listing agreement should include all
personal property that is to be included in the transaction and listing
states, failure to name a termination date in a written listing is grounds for
revocation of the real estate
The Listing Price clause may also state the seller's agreement to pay customary
closing costs
The full listing price does not have to be obtained for the Broker to
earn a commission
The listing price in a listing agreement is the
seller's asking price for the property. This may or may not be the
the owner will accept, particularly if
a seller financing or assumption of the seller's loan is involved
To protect the Broker, some listings contain a provision to extend the listing period in the event
an
The Agent's Duties clause specifies the Broker's
responsibilities and authorization to carry out certain
The Agent's Compensation clause will identify
the Broker's fee and the necessary conditions for the fee to be
listed the property with another Broker. The clause that relates to this is the
Protection Period clause
The Multiple listing provision in a listing agreement obtains the seller's consent to
placing the listing in a
property, under what terms, and whether the seller agrees to compensate these parties?
Cooperation With Other
Most Exclusive listing agreements contain an affirmation that the Agent will
conduct all affairs in compliance
In the absence of disclosure and consent, Dual Agency represents a
conflict of interest for the Broker
In the Seller's Representations and Promises clause in a listing agreement, the owner represents that
he or she in
marketable title. The clause may further require the owner to warrant that he or she will not
lease the property
In addition to agency, other disclosures might be included to cover
any direct or indirect interest the Broker
convey the property using a General Warranty Deed to a buyer. Without this covenant, the Broker has
no assurance
The Flood Hazard Insurance clause in a listing agreement requires the seller to
disclose whether he or she is
duties, the requirement to
complete and provide the Agent with a Lead Paint Hazard addendum. A copy of the
marketable title. The clause may further require the owner to warrant that he or she
will make the property
An Exclusive listing agreement may include
mediation. In the event of a dispute, the owner agrees to arbitrate
percentage of the sale price for the IRS. This refers to the
IRS requirements; Alien Seller Withholding clause in
instructions to do so. This refers to the
Escrow Authorization clause in a listing agreement
necessarily absolve a Broker from liability. This refers to the
Limitation of Liability clause in a listing
Some listing agreements include notices to the seller concerning
fee negotiability. The Broker's fee is the
Some listing agreements include notices to the seller concerning a
Legal Advice Disclaimer. The Broker cannot
The Exclusive Buyer Agency agreement is very similar to the
Exclusive Right-to-Sell agreement, the only
notable exception is
how the Agent is paid
buyer acknowledges an understanding of the agency relationship. This refers to the
Buyer's Representation of
The Agent Compensation clause sets forth
how the Agent is to be paid, whether by retainer or commission, who
competition for any property the buyer is shown by the Agent. This refers to
Other Buyers Acknowledged
Like other listings, the Transaction Broker Duties clause define
what activities the Agent will undertake to
The Non-Agency Declaration agreement clearly sets forth that
it is a Non-Agency personal services contract with a
The Agent's Authorized Activity clause gives the Agent
the Exclusive right and authority to sell or locate property
buyer, a description of the property desired. This refers to
Parties and Property Identification
The Compensation clause stipulates
what the Agent will be paid, by whom, and upon what circumstances, much like
The Buyer or Seller Duties part of a listing agreement states
what the buyer or seller commits to do during the
original expiration date. This refers to the
Agreement Term
The Non-Discrimination agreement affirms that
the Agent will conduct all affairs in compliance with state and
the Principal has received a copy of the agreement. This refers to
Signatures of Parties
Creed means
a formal statement of Christian beliefs
Danger areas of an Agent include
misrepresentation and advising beyond expertise
Inherent means
existing in something as a permanent, essential, or characteristic attribute
Substantive means
having a firm basis in reality and therefore important, meaningful, or considerable
It is important to understand that the agency relationship does not require
compensation or any form of
Compensation does not define
an agency relationship. A party other than the Principal may compensate the Agent
With regard to Dual Agency, a good agreement specifically asks the owner to
consent to or refuse to allow the
If a seller accepts a Dual Agency relationship, the Broker May
represent both parties under the restrictions set
Restrictions that are in a Dual Agency agreement are to
protect the confidentialities of either party, particularly
In a Dual Agency agreement, the Broker covenants to deal
honestly and impartially with the parties
In a listing agreement the relationship is subject to
Contract Law. However, Agency Law dictates how the
In a listing agreement the relationship is subject to Contract Law. However, Agency Law dictates
how the
Undisclosed Dual Agency may lead to
the unfair disclosure of information that one party does not want the other
The Compensation clause will likely include that
compensation may be partially or wholly provided by the
within a certain amount of time following the listing's expiration date, then the Agent is owed
the commission
Normally a Special Agent cannot contract for a
Principal. The Brokerage relationship is usually Special Agency
With regard to Cooperation With Other Agents,
there may be a warning to the seller not to disclose confidential
disclose their relationships to the buyer upon
initial contact and subsequently in writing
The Non-Agency Declaration provision expressly states that the Broker is Not an
Agent of the buyer or seller and is
In the Non-Agency Declaration provision, the Principal agrees that
the Agent is not working for the benefit of
level approved document describing and explaining the
forms of Agency or Non-Agency relationships practiced in
The Agent Compensation clause establishes
the circumstances under which the Agent has earned the commission.
The Agent Compensation clause provides that
the Agent will be paid in the event the buyer defaults on a sale
The Representations and Promises clause may require the owner to
warrant that he or she is not represented by
The Agent's Duties clause specifically bars the Broker from
executing any contract on behalf of the owner
A listing agreement is
binding and enforceable
The Buyer or Seller Duties part of a listing agreement states that
the seller typically agrees to show the
Rescission means
the revocation, or cancellation of a law, order, or agreement
A Special Agent is
an agent whose authority is limited to the special undertaking which he or she is instructed
Fiduciary
A person in a position of trust & confidence, having a duty to act for another's benefit.
Special Agent
Is authorized by the employer to perform a single act.
Sub-Agent
An extension of another agency and has been granted authority to act on behalf of another agent
Customer
Is a member of the public who is or may be a buyer or a seller of real estate property
General Agent
Has the principals authority to act for him or her on a continuous basis, but within authority
Universal Agent
Is authorized to act for and represent the principal in all meters, with out limitation. This agency
of $1 million or more and sign disclosures stating their assets meet the required threshold
Designated Sales
Representing both principals in a transaction
Dual Agent
A person in a position of utmost trust and confidence with respect to another person
Fiduciary
of activities
General Agent
duties
Limited Representation
brokers. If a buyer or seller chooses not to be represented, a licensee can still work with them
Non-
property of 10 acres or less
Residential Sale
the party that is being represented
Single Agent
transaction or activity only
Special Agent
the sales associate as an agent
Sub-agency
The "No Brokerage Relationship Notice" must be provided ______ showing property.
before
before showing property, which ever occurs first.
Single Agent Notice
the _____ to ______ Consent Form which must be signed.
Transition to Transaction
Real estate brokers are considered to be ________ Brokers unless contracted otherwise
Transaction
A ______ _____ is an agent that is authorized to perform only a specific duty or task.
SPECIAL AGENT
someone else.
power of attorney
best judgment while representing the principal.
general
co-brokers).
SUB-AGENCY
agent.
prospect;
written _______ forms.
disclosure
Disclosure requirements do not apply to the following situations:
1. If the licensee is acting as a
is known as:
Nonrepresentation
unrepresented ______ to showing property.
prior;
The following duties are owed to the customer by the broker under the NONREPRESENTATION relationship:
1. Dealing
occurs first.
Single Agent
party to remain confidential
confidentiality
provide the Principal with a _____ to ______ form.
Consent to Transition;
that are present in Single Agency that are not present in Transaction Broker. They include:
1. Full Disclosure
the buyer and seller.
non-residential
associates, not as an advisor to the buyer and/or seller.
DESIGNATED SALES;
could result in:
suspension,
Agency relationships can terminate in any one of the following methods:
1. Performance of agent's duties
that result in a _______.
contract