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Module 1: Agency

Pataasin ang iyong marka sa homework at exams ngayon gamit ang Quizwiz!

Broker Mary and Broker Sandra work for Principal Broker Hillary. Mary listed the Baker residence. Sandra's buyer, Dr. Dennis, made an offer to purchase Mary's listing. Which agency relationship does Hillary have with the Bakers?

-*Disclosed limited agency. -Single agency.

The type of agreement that would entitle the buyer's agent to a commission if the buyer purchased a For Sale By Owner property is known as what?

-*Exclusive Right Agency Agreement. -Open Agency Agreement. -FSBO Agency Agreement. -Exclusive Agency Agreement.

What is a property profile report?

-A written analysis, opinion, or conclusion by a licensee relating to the probable sale price of a specific piece of real estate in an identified real estate market at a specified time. -A report that lists recent marketing and promotion efforts, recent showings, and any feedback given by potential buyers and buyers' agents. -*A report, presented in notebook format, with detailed information about the property as well as utility and neighborhood information to leave at the property for the perusal of potential buyers. -A report on comparable properties in the area.

List the fiduciary duties. Hint: AC is COLD

-Accounting -Care (also sometimes referred to as skill, care, and diligence or reasonable care and diligence) -Confidentiality -Obedience -Loyalty -Disclosure (also sometimes referred to as full disclosure)

A broker listed a house and then died before the listing was either fulfilled or had expired. What should the broker's principal broker do in this situation?

-Ask the seller to sign a new listing contract. *-Continue with the listing. -Let the deceased broker's estate decide what happens to the listing. -Suggest the seller list with another brokerage.

Raul Ruiz contacts his broker to purchase a house in Sunriver. Because he is so famous, he does not want to make the offer in his name and asks the broker to make the offer in her name but to disclose that she is buying for a client. Which type of agency is created by this scenario?

-Disclosed *-Partially disclosed -Undisclosed

Which is most correct when describing the responsibilities of a dual agent?

-Must obtain informed, written consent from both parties to be a dual agent; may not disclose the price at which the seller will sell or the buyer will buy. -Dual agency is always against the law. -Verbal consent from both parties to be a dual agent is acceptable; may not disclose the price at which the seller will sell or the buyer will buy. -*Must obtain informed, written consent from both parties to be a dual agent; may not disclose price or financing position or the motivations of either party unless authorized.

Which is the most effective form of advertising in most markets?

-Other newspaper advertising. -A listing in a free publication devoted to real estate listings in a particular area, city, or county. -A flyer located at the property. -*A classified ad in the newspaper.

Broker Gary and Broker Jim work for Principal Broker Stuart. Gary is working with Dr. Elliot, who is interested in purchasing a duplex in the Ruby district. Jim's client, Phil Slump, is also looking to purchase a duplex in the Ruby district. A very well priced duplex has recently been listed by a competing brokerage. Gary and Jim present the duplex to their buyers and both Dr. Elliot and Phil Slump are interested in making an offer. Which type of agency relationship is Principal Broker Stuart in with Dr. Elliot?

-Single agency. -*Disclosed limited agency.

An agent enters into a listing agreement with a homeseller, but then becomes too busy to professionally fulfill the terms of the agreement. To solve the dilemma, the agent assigns the agreement to another licensee in the office. Which of the following is true about this situation?

-The new broker has to split any commission that results with the assigning broker. -*The agent cannot assign the listing agreement. -The new listing agent acquires the full set of fiduciary duties owed to the client. -The original broker has to disclose the assignment to the seller.

The affirmative duties owed by a licensee to a seller, buyer, or in disclosed limited agency situations as set forth in ORS, Chapter 696 are

-common law duties. -optional duties to be exercised by licensee discretion. -suggested conduct. -*statutory requirements.

All of the actions of the buyer's agent are dedicated to

-communicating directly with the seller. -promoting only the interests of the buyer. -self-promotion, creating signs, and locating future referrals. -developing and maintaining a web presence.

A licensee preparing a CMA must be careful to

-use the term "market value" whenever possible. -*avoid creating a false impression that the licensee is a certified appraiser. -show a low suggested selling price to avoid a complaint of misrepresenting the value. -include the results of a certified appraisal in the analysis.

What is the difference between a customer and a client?

A customer buys goods or services and is not owed fiduciary duties, generally. A client hires the services of a professional such as a lawyer or real estate broker and is owed fiduciary duties.

Power of Attorney

A legal document known as a power of attorney is another method used to appoint an agent. A power of attorney is often given by a seller or buyer to grant authority to another person to sign contracts and closing documents on their behalf. The person signing under the authority of a power of attorney is known as an attorney-in-fact.

Estoppel

A legal principle that bars a person from denying that another person is their agent after implying that the person was their agent.

Third Party

A third party is a person an agent deals with as a representative of their principal. When a buyer hires a broker to find a house, the broker is their agent, the buyer is the client, and the seller is the third party.

Implied Agency

Either intentional or unintentional implications can create an agency. Implication means that the parties act as if they are in an agency agreement.

A seller who agrees in the listing agreement to pay a percentage of the sale price of their property as commission to the licensees involved in the transaction has automatically created an agency relationship with both the listing agent and the selling agent. True or False

False

What is another term for dual agency?

In Oregon, a legally authorized dual agent is called a disclosed limited agent.

ORS stands for what

Oregon Revised Statutes.

Can affirmative duties be contracted away?

The affirmative duties provided for by Oregon law cannot be contracted away by any agreement between the buyer and the buyer's agent.

Does the broker have to disclose everything they know that pertains to the property?

The agent must disclose any information the agent knows about, or should have known about, if a failure to disclose would constitute a fraudulent misrepresentation.

Can the broker show the same house to different clients?

The buyer's agent may show properties that the buyer is interested in to other prospective buyers without breaching an affirmative duty to the buyer.

Express Agency

The express mutual consent of the principal and agent creates an express agency. This express agreement can be by written or spoken words (verbal).

General Agent

The general agent represents a principal in all business matters of a particular kind, business matters of a specified range, or business matters in a particular place and can contract on behalf of the principal.

What did middle men or optioneers do in the past?

The optioneer would "list" property by entering into an option to purchase agreement with the seller, finding a buyer willing to pay more than the optioneer was obligated to pay under the option contract, and then exercising the option and simultaneously reselling the property to the buyer at the higher price.

Special Agent

The special agent can represent the principal in one business transaction, cannot normally contract for the principal, and is the type of agency that characterizes the real estate brokerage business.

Universal Agent

The universal agent can represent the principal in all matters that can be delegated (that the principal can legally entrust to another person).

Should the broker investigate matters outside of their expertise?

Unless agreed in writing, a buyer's agent has no duty to investigate matters that are outside the scope of the agent's expertise.

Does the agency relationship require compensation?

Unless included in the agency agreement, the agency relationship does not require compensation; compensation does not define an agency relationship; a party other than the principal may compensate the agent. The agency relationship is independent of any compensation arrangement.

Subagent

a subagent is the agent of the principal broker who has the agency relationship with the client; must receive compensation from the employing principal broker; is a fiduciary of the principal broker and their clients.

Open agency buyer broker agreement

allows the buyer to work with more than one agent at the same time; only the agent whose services were used to facilitate the transaction will get compensated; the agreement could be express or implied. This type of agreement does not provide much protection for the broker, and there is no incentive for buyer loyalty.

Facilitator

also known as a non-agent or transaction broker; doesn't represent either party in a transaction; owes to all parties accounting; skill, care, and diligence; honest and fair dealing; disclosures affecting property value; must disclose on first substantive contact.

Agency by Necessity

arises out of the agent's necessity to act when circumstances prevent obtaining the principal's consent.

The fiduciary duty of confidentiality

extends beyond the term of the contract (listing or buyer broker agreement) and means the agent is not to disclose things that can weaken or harm their client.

The duties owed to the customer are

honesty and fair dealing, reasonable care and skill, and proper disclosure of material facts.

Void contract

invalid when created; CANNOT be performed.

A listing agreement

is a personal service contract that employs a principal broker to sell a property and facilitate a sale.

Specific Performance

is a suit to force a party to fulfill a contract promise. A personal service contract cannot be enforced by specific performance.

personal service contract definition

is a type of contract used to create an employer-employee relationship whereby the employer hires an employee with unique abilities. Cannot be assigned.

Agency coupled with an interest

is also known as power coupled with an interest or power given as security and means that the agent has some legal right in the property.

Agency by Ratification

is created when one individual (the principal) ratifies (approves) the previously unauthorized acts of another individual (the agent) who had no prior authority, express or implied, to act for that individual.

Commingling

is depositing trust funds into any account that is not a designated trust account. Breach of Accounting Fiduciary duty

Renunciation

is the voluntary act of total divestment from the agency relationship. It terminates agency relationships.

Agency by Estoppel

is when someone (the principal) causes another party (the third party) to believe either by words or actions that an individual has the authority to represent the principal (is their agent), and the third party has no reason to doubt the individual is an agent.

Codified

laws and rules that are arranged into a systematic code.

Real estate contracts that are not personal service contracts

may be assigned. are exempt from the statute of frauds. are not assignable. must be in writing.

Real property

means any estate in real property, including condominiums and timeshares as defined by Oregon law, and the granting of an option or right of first refusal

The fiduciary duty of obedience

means the agent is to act as instructed, provided the acts and instructions are legal.

Exclusive agency buyer broker agreement

more protection for the broker than the open agency agreement; the broker will be compensated if an agent is used to facilitate a property purchase; no compensation if the buyer buys a property without using a broker.

Ostensible authority

not in writing, but necessary for the performance of the expressed authority.

Conversion

occurs when the agent converts the personal property of the client to personal use. Breach of Accounting Fiduciary duty

Exclusive right agency buyer broker agreement

provides the most protection for the broker getting compensated; requires the buyer to pay the broker if the buyer buys any property during the term of the agreement; the property purchased may originate from any source such as the MLS or a For Sale by Owner.

Disclosed limited agent

representation of a buyer and seller or two competing buyers for the same property within the same real estate business.

Single agency

representation of one client in the transaction; seller or buyer agency; landlord or tenant representation.

The fiduciary duty of loyalty

requires the agent to always place client interests above all others, including the agents.

Death or the incapacity of either the principal or agent will

terminate agency relationships.

A breach of the agency relationship by either party