Agency

Uniform Vendor and Purchaser Risk act 1935 (UVPRA)

Uniform Vendor and Purchaser Risk Act (UVPRA) was drafted by the National Conference of Commissioners on Uniform State Laws (NCCUSL) in 1935. According to this act innocent losses occurring during the contract period are allocated to the vendor, unless the purchaser has taken possession prior to closing. The UVPRA negates the doctrine of Equitable Conversion as it relates to the risk associated with loss. The risk of loss is on the person in possession because that person is in the best position to take care of the property.

Informal description

Use of a street address to describe property.

Boycotts

When a competitor in the market please put another fellow competitors out of business.

Interpleader Action

When the title company turns earnest money over to court due to a dispute between buyer and seller

Responsibility for Risk ( UVPRA)

Which party is responsible while under construction (Uniform Vendor and Purchaser Risk Act (UVPRA) was drafted by the National Conference of Commissioners on Uniform State Laws (NCCUSL) in 1935.)

Cancellation by client

client has the right to withdraw/cancel the listing under certain circumstances. It's an employment contract.

statue of limitations

state laws setting time limit for bringing a lawsuit

sue for specific performance

the seller sues the buyer for some specific action to occur -the suing party wants the other party to comply with the agreement. Make the buyer buy the property.

rescind a contract

to cancel a contract . If vendor ( seller) defaults then vendee ( buyer) May rescind contract

Imputed Notice

under this concept, an offer is presumed to have been delivered to the principal when it is delivered to the agent and client.

Option Contract

A contract under which the offeror cannot revoke the offer for a stipulated time period (because the offeree has given consideration for the offer to remain open). a real estate option is a specially designed contract provision between a buyer and a seller. The seller offers the buyer the option to buy a property by a specified period of time at a fixed price. The buyer purchases the option to buy or not buy the property by the end of the holding period. Must be in writing, signed by both parties and have a termination date & specific price. Must have valuable consideration. Enforceable against one party only. Unilateral contract. Optionor ( seller) makes the promise . Death has no effect on the contract. Recorded not required but should be as constructive notice.

Customer

A customer is a person who is interested in buying a house or selling a house but has not signed a written agreement

Dual Agency

A dual agent is a broker brokerage firm who represents the seller and buyer as agent in same transaction. Not recommended because of potential legal liability.

Facilitator (also called transaction broker no -agency)

A facilitator is a non-agent who represents no one in a real estate transaction. The clients agent is usually the facilitator.

brokerage firm

A firm is who you work for not a broker. Tennessee is an all firm state.

monuments

A fixed natural or artificial object used to establish real estate boundaries for a metes-and-bounds description.

Multiple Listing Service (MLS)

A listing service whereby local members of the Board of REALTORS agree to share listings and commissions on properties sold jointly. Members of the public may have access to the MLS, but not to all of the features and content. If a broker is a member of the multiple listing service the broker typically has an obligation to put the listing in the MLS database so it's shared with all members.

sue for damages

A remedy for breach of contract whereby a party sues the breaching party for cash damages. Non defaulting party sues. (In this case seller)

Seller Agency

A seller agent has a agreement with seller. Brokerage firm represents only seller in the transaction.

Earnest Money

A sum of money given to bind an offer or agreement. It's desired by the seller but not an essential element. The amount varies from contract to contract. Belongs to the buyer but broker must hold in an escrow or trust account and applied as a credit to the buyer.

Patent Defect

A visible, apparent defect that can be seen in a reasonably thorough inspection of property.

Who does the agent represent?

Agency has to do with duties you perform

vendor

(n.) a person who sells something.. If seller defaults then buyer may rescind contract and or sue for damages

Brokerage firm (only)

An affiliate broker may receive real estate compensation only from a brokerage firm.

agency

An agency is hired by someone called the client to represent them in a negotiating contract

Sub agency

An agent of an agent. Both the agent and the agent represents the client. It obligates a firm to represent our client. Not common today.

Assignee

An assignee is a person or entity to which property rights or powers are transferred. An assignee is the one to whom assignments are made. Liability still rest with original party ( assignor) if assignee defaults

allocation of markets

An illegal division of territories to avoid competition.

Working relationship with Principal Broker

1. Employee- independent contractor 2. Independent contractor TEFRA- The Tax Equity and Fiscal Responsibility Act of 1982 was the biggest tax increase in U.S. history, when adjusted for inflation The Tax Equity and Fiscal Responsibility Act (TEFRA) is a Medicaid program that can help families with children younger than 19 years old who have a disability receive care in their homes rather than. an institution. The TEFRA program can help pay for the cost of those services for eligible children.

Listing Agent

A broker who obtains a listing from a seller to act as an agent for compensation ( is a special agent)

Single Agency

A broker who represents only 1 client in a transaction, buyer or seller not both.

Buyer Agency

A buyer agency only represents the buyer in the same transaction

Client

A client is only a client after they have signed a written agreement in the state of Tennessee.

Disclosure

Disclose any conflicts of interest. Disclose any bad things about property

Disposition of earnest money by licensee

Dispersed at closing and is generally applied to the purchase price by broker or other holder.

Care

Do a good job for a client

Common law duties owed to client/principal

Duties owned to a client under common law (COLAD) These are call Fiduciary duties ⬇️ next 5

eminent domain

Eminent domain is the right of the government to seize property and transfer from private to public ownership

Principal Broker

Every licensee is affiliated with a firm who has one.

implied or assumed consent

Not allowed in Tennessee. TN is under statutory agency not common law agreements must be in writing

Obedience

Obey lawful instructions a client

Assignment of Contract

One party in a contract substitutes another party in his place. The original party retains secondary liability for the performance of the contract. It does not require the agreement of the other original party in the contract. Must be done before closing . Must be in writing and signed by all parties to be enforceable in court. Almost all contract except deeds can be assigned unless prohibit in contract

Universal Agent

One to whom a principal delegates the power to act in all matters that can be delegated in place of the principal.

mutual consent

Parties agree to terminate listing

*How are commission rates established?

They are determined by negotiating. The parties are the broker and the seller.

UVPRA

The lawyer that draws the form must provide a clause in the sales contract that specifically states that the seller is responsible otherwise the buyer is responsible.

Property Management

The leasing, managing, marketing, and overall maintenance of property for others. The relationship is created by written contract called a management agreement.

price fixing

The market sets the rate. The violation is to set an artificial rate.

Optionor

The seller of the option. The property owner who gives the option.

Expiration of term

The specified time for the listing to be in effect has elapsed

What is a listing contract?

A. A listing is an employment contract between the seller and broker. B. The listing creates a fiduciary relationship. The listing is owned by broker. Must be written must have expiration date and a commission rate.

What are adverse effects? Must be disclosed to all parties irrespective of agency.

A. An agent must disclose to everyone the negative effect on a property B. Anything that has a significant negative affect on the health of the occupants.

Affiliate Broker

Cannot sell on their own. Their role is to represent their broker. In some states brokers run the show,the firm does not.

Commission

Commission is earned when the broker finds a willing, ready buyer acceptable to the seller when it's under contract. Commission is collected at closing.

Common law of agency

Common law agency can be a oral/verbal contract. Tennesse does not have a common law agency everyone is affiliated with a firm

Customer/Client relationship

Common law of agency relationships can be created by oral/verbal contract,written contract, implied/assumed

Formal description

Completely identify the property enough for an independent surveyor to locate and find it 3 types of legal description A. Meets and bounds- Metes and bounds are the boundaries of a parcel of real estate that identified by its natural landmarks. Metes and Bounds landmarks are often used in a "legal description" of a land. Legal description is the geographical description of a land that identifies its precise location, and is kept with the deed of the land. B. Lot # & Block # description ( also called plat description)-The lot and block format of legal land description is used on maps and plats of recorded subdivided land. This form of describing land also goes by the names the filed map system, the recorded plat system, the recorded map system, the lot block tract system and the recorded survey system. C. Government Rectangular Survey ( not used in the state of TN) - was established in 1785 by federal government. Originated by Thomas Jefferson. 6 miles by 6 miles 36 square miles in a township. a rectangular system of land survey that divides a district into 24-square mile quadrangles from the meridian (north-south line) and the baseline (east-west line); the tracts are divided into 6-mile-square parts called townships, which are in turn divided into 36 tracts, each 1 mile square, called sections.

Condemnation

Condemnation is the legal process utilized by the government to seize property via eminent domain.

What are material facts?

Conditions of anything that could or would cause you not to buy the property. Examples are schools not in the zone that you or goats near the home you prefer to buy.

Closing Date with time is the essence

Contract must have an expiration date, usually 45 days in the future

Closing Date without time is the essence

Contract terms must be completed within a reasonable time.

Fiduciary

Holds a position of trust and confidence

Common law duties owed to customer

Honesty and good faith

Earnest Money Default to Seller

If buyer backs out without cause

Earnest money Returned to Buyer

If contingency not fulfilled

Abandonment by agent

If firm went out of business and could no longer provide services contracted or government has take over sellers home due to unpaid taxes. By operation of law- Death of either party, destruction of property, insanity of either party, bankruptcy of either party, loss of license( brokers or firms), foreclosure or tax sale, condemnation under right of eminent domaine.

Undisclosed

Illegal

Commingling

Illegally mixing deposits or monies, collected from a client, with one's personal or business account. Taking money out too soon or putting it into escrow too late (10 banking days). It is prohibited.

Govern by Statue

In TN the relationship is govern by statue and written agency agreement

Common Law

In other states it may be govern by common law & agency agreement may be oral or implied

imputed knowledge

Information that is learned by the agent that is attributed to the principal.and all parties

Customer

Is a principal who has not signed an agency agreement

Client/Principal

Is a principal who has signed an agency agreement

Disclosed Dual Agency

Is legal in Tennessee as long as full disclosure is given to both clients and written consent is received from both clients.

A property manager

Is legally classified as a general manager and is required to be licensed.and usually paid a % of gross rents collected. Find tenants,negotiate leases,collect rent,pay bills,keep books,handle maintenance & repairs, keep tenants happy, handle evictions when necessary, hire and supervise employees, provide a monthly statement of income and expenses.

Assignor

Is the seller of the assignment. An assignor is a person who transfers property rights or powers to another.

Net listing

It is illegal in Tennessee. This type of agreement may be illegal in your state. The agent gets to keep everything he can get that's more than the sale price the owner wants.

Vicarious Liability

Legal doctrine under which a party can be held liable for the wrongful actions of another party. A client can be held liable for the actions of his agent

Realtors

Licensed real estate brokers and salespersons who are members of the National Association of Realtors. Realtors pay dues to the trade associates. We are considered Affiliate brokers until then.

Loyalty

Loyal to the interest of the client

A Broker

May share commission with the firms Affiliates . Only the broker can collect the commission. A Commission can be paid to a broker or a brokerage firm. We can even pay when broker is in another state as long as long as broker does not conduct any negotiations in the state for which a commission is paid.

Sales Price or Purchase Price

Must be stated in the contract

Contracts

Must be written and signed by both parties to be enforceable in a court of law because of the statue of limitations.

Full Performance ( by acts of all parties}

Properties sold and closed as result listing is terminated

Contract

Sales price stated in the contract ,must have an expiration date, it must be completed within the time frame in the agreement closing date. If not completed within the time frame the contract needs to be amended and change closing date.

Open Listing

Seller hires a number of brokers. The seller agrees to pay only on a commission to the broker who produces a a ready, willing and able buyer. If the seller finds a buyer the seller owes no commission.

Anti-trust laws

Sherman antitrust act 1890 this one was the 1st, Clayton act 1914, Robinson Pattman act 1936

Signatures Required

Signatures must be signed by all parties.

Affiliate Broker

The Tennessee title for a realtor unless you have joined an association

The affiliate

The affiliate pays for the advertising not the seller.

Renunciation by agent

The agent has the power to put an end to the agency by notice to the principal that she renounces the authority given her by the principal. If the parties have contracted that the agency continues for a specified time, an unjustified renunciation prior to the expiration of the time is a breach of contract. Fair housing is an example. The seller asks the agent not to sell to a certain class of people.

brokerage

The buisness of bringing buyers and sellers together

Procuring Cause ( types of listings)

The effort that brings about the desired result. Under an open listing, the broker who is the procuring cause of the sale receives the commission. People that put buyer and seller together on the procuring cars.

Accounting

You have to account for the money that the Brokage holds

Contract

a binding agreement between two or more persons that is enforceable by law. Fail to do so results in a law suit. If breach the remedy is to get the law involved.

Latent Defect

a hidden structural defect that would not be discovered by ordinary inspection

Exclusive right to sell

a listing that gives the broker the right to collect a commission no matter who sells the property during the listing period. The principal broker appoints his or her exclusive agent for a designated period of time to sell the property.. Only one broker

Vendee

buyer. If buyer defaults then seller may rescind, sue for damages, keep earnest money ( called liquidated damages)

termination of listing contracts

death or insanity of owner; dissolution of the brokerage firm; death or insanity of individual broker working alone; destruction of the property; breach of the contract; property is sold and transaction is closed.

Commissions

incentive pay calculated as a percentage of sales