The CE shop: Law of Agency

Leashold title insurance

Assures a lessee (tenant) that their lease is valid

Owner's Title Insurance

Assures the buyer that the title is as stated Provides for reimbursement up to the purchase price named on the owner's policy

Mortgagee's title insurance policy

Assures the lender that it has a valid first lien against the property Reimbursement is limited to the current outstanding loan balance

When should the seller's disclosure form be completed?

Before entering into a sales contract

Agency by estoppel

Principal causes a third person to believe that another person is the Principal's Agent, and the third person acts to her detriment in reasonable reliance on that belief.

Policies and Procedures Manual

Provides guidance on all activities—not just agency-related activities—that occur within the brokerage and its business.

Customer

Someone involved in the transaction, but whom you don't represent

Agent

Someone who acts on someone else's behalf

How many days does the Texas seller have to deliver a "commitment for title insurance" to the buyer under the terms of the TREC One To Four Family Residential Contract (Resale)?

20

Sub-Agent

An agent working under the main agent such as a salesperson for a listing broker.

Exclusive Agency Listing

An agreement between a seller of property and a broker in which the seller agrees to pay a commission to the broker if anyone other than the owner finds a buyer, during the period of the agreement.

Fiduciary

What does a real estate agent become after agreeing to work with a client?

1996

- Intermediary Broker Introduced - Texas Legislature eliminated statutory dual agency and amended TRELA to put intermediary brokerage in the place of statutory dual agency with Senate Bill 489.

Principal

-A Client represented by a real estatw agent -A party to a transaction

1980s

-Agency Disclosures were required. -Growth in Buyer Agency

A Non-Agent/ Facilitator/ Transaction Broker

A licensee who has a unique relationship with a consumer, generally acting as a "middle man" in a transaction.

Designated/Assigned/Appointed Agent

A licensee who's appointed by a brokerage's broker to represent one party in an in-house transaction. This form of agency is allowed in some states where two clients of the same agency are involved in a single transaction.

Exclusive Right-to-Sell

A listing agreement that allows the listing agent to list the property and receive a commission, no matter who brings the buyer to the seller. Even when the owner finds a buyer, a commission is owed to the listing agent, provided the sale occurs during the term of the listing agreement.

Consumer

A person who might use a product or service (like an open house) without actually being involved in the transaction in any way.

What is a marketable title?

A title free of encumbrances (easements, restrictive covenants, mortgages, violation of zoning ordinances).

Renunciation by Agent

Agent may decide to discontinue representation of the client to terminate agency.

What Client's Duties are owed to the Agent?

C-compensation I- information I- indemnification A- Availability

Revocation by Client

Client may revoke the authority of the agent to represent the client to terminate agency.

2005

Dual Ageny was Outlawed

1993

Dual Agwncy became subject to statutory law when Texas legislature amended the TRELA

When the representation agreement expires and the goal has not been met, agency terminates.

Expiration

Clerical/Ministerial Tasks

Factual-based tasks that don't require you to use your judgment as a licensee

Certificate of Sale title insurance

Issued to a purchaser in a court sale Ensures that the purchaser's interest in a property sold under a court order

What must title insurance include?

Insured party's name Property's legal description Covered estate or interest Schedule of all exceptions, as found in the public record Any conditions and stipulations under which the policy will be issued

Statutory Law

Laws enacted by a legislature or other governing bodies

Common Law

Laws that evolved from case laws or customs

OLDCAR

Level of Service owed to Clients Obedience Loyalty Disclosure Confidentiality Accounting Reasonable Care

DRHP

Level of Service owed to Customers Disclosure of material facts Reasonable skill and care Honesty and fair dealing Prompt presentation of all written offers and counter-offers

Open Listing

Non-exclusive agreement in which a seller may contract with many real estate agents to locate a buyer. Only the agent who brings in the buyer earns the commission.

The Intermediary Relationship Notice

Notice establishing Intermediary Consent from both parties

Agency Coupled With Interest

Occurs when an agent is a co-owner in a property, and while you could sell the property in your own right, selling it as an agent requires a license per TREC Rule 525.5c

Subrogation

The process by which an insurer can, after it has paid a loss under the policy, recover the amount paid from any party (other than the insured) who caused the loss or is otherwise legally liable for the loss.

What is Agency?

The relationship between a buyer or seller and a real estate licensee

Mutual Agreement

When both the client and the agent agree, agency can be terminated.

Implied Agency

When the actions of the principal and agent indicate that they have an agency agreement.

Completion

When the goal of the agency agreement is met, agency terminates.

Express Agency

You and and your client have expressed, agreed to, and understand the terms of the relationship. This can be accomplished written of orally.

Special Agent/Limited Agent

You don't make any decisions or enter into any contracts on your client's behalf, but you simply act as an intermediary, liaison, and negotiator, conveying and representing your client's wishes

Latent Defect

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

The Information About Brokerage Services Brochure

an informational brochure or form that explains the different types of agency representation available to consumers. This form does not create or establish an agency relationship, and it is not an agency disclosure. Texas real estate licensees are required by law to provide this form.

Net Listing

an agreement in which the seller specifies a price desired for the property and agrees to pay the broker a commission that's any amount received above that price

Agency by Ratification

occurs when a party to the transaction accepts the benefits from the previously unauthorized act of the agent after the fact.

General Agent

responsibile for all of the dealings of a specific piece of your client's property

Policies

rules in which a business operates

Universal Agent

someone who's empowered to do anything the principal could do personally. This type of agent has the most authority. Authority is Virtually unlimited

Procedures

ways in which tasks are carried out

Substantive dialogue

written or verbal communication in which a discussion about a specific real property is discussed. This includes conversations held in face-to-face meetings, or via email, phone, and/or text.