Chapter 7

Express Agreement

Agreement written or oral to ensure all parties have a clear understanding of the agency relationship.

Working with Real Estate Agents

NCREC brochure that must be given to a buyer or seller no later that first substantial contact.

Subagent

One who is employed by a person already acting as an agent(such a a provisional broker licensed under a broker-in-charge)

Buyer Agency

Or tenant-agency,relationship established by express contract or agreement may be oral initially,but must be reduced to writing no later than the time an offer is extended by any party to the transaction.

Agent

The individual who is authorized and consents to represent the interests of another person

Customer

The third party for whom some level of service is provided by an agent of another party, but who is not represented by the agent.

Fiduciary

A relationship in which the agent is placed in the position of trust and confidence to the principal

Ratification

Apparent authority

Designated Dual Agency

Appointing one or more licensees of a firm to exclusively represent the seller and appointing another licensee of the same firm to to exclusively represent the buyer in the same real estate transaction.Must be done with prior express approval of both parties.the firm continues to act as a dual agent, the individually designated licensees do not. Advantage:Both of the firms clients (buyer and seller)receive a .fuller and direct representation from their respective designated agent

Fiduciary relationship

LOAD: Loyalty Obedience Accounting Disclosure Skill

Caveat Emptor

Let the buyer beware.

Client

Principal

Implied Agreement

when principal and agent, without formally agreeing to the agency, act as if one exists

Agents fiduciary role

Act under the legal direction and control ofthe principal Act in the principals behalf Act in the principals best interest

Termination of Agency

Completion or fulfillment of the purpose expiration of the terms of the agency Mutual agreement to terminate the agency Breach by one of the parties,such as abandonment by the agent or revocation by the principal By operation of law, such as bankruptcy of the principal Destruction or condemnation fo the property Death or incapacity of either party.

Universal Agent

Is a person who is empowered to do anything the principal could do personally. There are virtually no limits to the universal agents authority to act on behalf of the principal. An unlimited power of attorney would be an example of universal agency. This type of agency is seldom practiced in a typical real estate transaction.

Special Agent

Is authorized to represent the principal in only one specific act ofr business transaction, and under limited, detailed instructions. A real estate broker is usually a special agent. If hired by a seller, the brokers duty is limited to finding a "ready, willing and able buyer" for the property. A special agent for a a buyer has the limited responsibility of finding a property that fits the buyers criteria. As a special agent, the broker cannot bind the principal to any contract. A special power of attorney is another means of authorizing an agent to carry out only a specified act or acts. It is important to remember that a special agency gives limited authority.

General Agent

May represent the principal in a broad range of matters related to a particular business or activity. The general agent may, for example, bind the principal to any contracts within the scope of the agent's authority. This type of agency can be created by a general power of attorney, which makes the agent an attorney-in-fact. A real estate broker typically does not have this scope of authority as an agent for a consumer in a real estate sales transaction. A licensee usually serves as a general agent of their real estate brokerage firm. A property manager may be hired to be a general agent for the landlord in the management of certain properties.

Dual Agency

The broker/firm represents the buyer and the seller in the same transaction. Dual agency requires that the agent be equally loyal to two separate pricipals at the same time. The challenge is to fulfill the fiduciary obligations to each principal without compromising fiduciary obligations to the other.

Agency

The fiduciary relationship between the principal and the agent

Subagency

The fiduciary relationship between the subagent and the principal.

Single Agency

The firm/broker exclusively represents either the buyer or the seller in a transaction.The broker never represents both parties in the same transaction.

Pricipal

the person who hires and delegates to the agent through a brokerage contract the responsibility of representing that persons best interests.