TLofA ch 11

Which 2 people in the office can the broker not appoint to an intermediary position?

The broker him or herself and the agent already working for the other client.

What occurs if the broker is absent and appointments are necessary?

The broker is allowed to delegate someone else the responsibility to make appointments.

What position must the broker take when intermediary with appointments is in effect?

The broker steps out of the transaction and lets the agents do all of the negotiating.

What are the results of an agent splitting a commission?

The listing agent is dictating the amount of the fee to be earned by the selling agent. The listing agent creates a substantial roadblock for the selling agent to freely negotiate a fee with the buyer. By accepting the split, the selling agent is accepting a subordinate role in the transaction.

What practice does intermediary brokerage maintain?

The practice of keeping the buyer as a customer throughout the transaction.

What action have some brokers taken because intermediary relationships seem just too complicated?

They practice non-agency.

Define intermediary with appointments.

This occurs when the broker appoints one agent to represent the seller and another agent to represent the buyer.

Which transaction model has been used to replace dual agency?

Transaction brokerage.

Most brokers have an appointment system that

allows pre-appointments to be made when appointments are necessary

Since sellers and buyers have conflicting interest, it made sense for agency law to evolve and allow

both the seller and the buyer to create an exclusive relationship with an agent of their choosing.

Common law

evolves through a series of steps that allow for gradual change.

If a broker has a buyer client and wants to remain as the listing agent on the property, the broker must become an

intermediary without appointments

When the same salesperson is working with both parties under an intermediary relationship, it is called

intermediary without appointments

In order for the broker to stay neutral during an intermediary transaction, the broker must

not give advice or opinions to either side.

While the practice of subagency allowed brokers to cooperate with each other, many buyers

questioned the fairness of subagency

Before exclusive buyer representation was common practice, buyers essentially

shopped around to find brokers with listings they were interested in buying

What two items must be present for the broker to act as intermediary?

A written consent for it to happen and a description of what the compensation will be.

What is the Notification of Intermediary Relationship called when it is attached to a sales contract?

An addendum.

When must an agent obey a client's instructions?

An agent must obey instructions that are legal and in accordance with the contract.

Who has been most affected by the intermediary relationship?

Brokers

How does an agent become an undisclosed dual agent?

By conduct that misleads a buyer into thinking that the agent represents him or her.

What confidential information can agents share when acting as an intermediary agent?

Condition of the property or information that a client has authorized to tell the other client.

What is the person called that is allowed to receive a commission that is offered by the listing broker?

Cooperating broker.

Which agency represents a conflict of interest for both the buyer and seller?

Dual agency

Define dual agency.

Dual agency occurs when the same brokerage represents both the seller and the buyer under a written agreement.

What is the best way for a broker to avoid intermediary relationships?

Establish a policy that when one person in the transaction is a client, then the other one will be a customer.

What does an agent owe the principal?

Fiduciary duties

A wise licensee will

Follow the practice of business first and commission second.

What is the goal of turning intermediary without appointments to intermediary with appointments?

For all clients to receive maximum representation.

How long does confidentiality last in an intermediary relationship?

Forever

Under an intermediary arrangement, what is the broker forbidden to do?

Give advice to the buyer or seller

Which of the following statements would be inappropriate for an appointed sales agent to make to a buyer?

I know that the seller will take $20,000 less than the listed price.

What transaction model was developed to replace dual agency?

Intermediary

What is it called when the broker represents no one in an intermediary relationship?

Intermediary without appointments.

Why was MLS created?

It helped one broker sell another broker's listing.

Name 4 of the 7 fiduciary duties?

Loyalty, Diligence, Confidentiality, obedience, disclosure, accounting and reasonable care

MLSs use what type of compensation system?

MLSs required that compensation be based on the cooperating broker acting as a subagent of the listing broker, rather than an agent of the buyer.

Why did agency laws evolve to include exclusive buyer representation as a common practice in real estate transactions?

Many buyers were providing confidential information to agents without realizing the agents represented the sellers.

What sales model was developed to allow one broker to sell another broker's listings?

Multiple Listing Service (MLS)

A transaction broker has fiduciary responsibilities towards which party?

Neither side of the sale.

Under what circumstance in an intermediary relationship can one agent be appointed to both the buyer and seller?

Never

Which agency is sometimes practiced when brokers decide intermediary transactions are too compicated?

Non-agency

When an agent is writing a contract for a listing represented by his or her brokerage office, what ford will he or she attach to the offer contract?

Notification of Intermediary Relationship

Which document is used to notify clients that intermediary has happened?

Notification of Intermediary Relationships.

What population segment does an exclusive buyer firm represent?

Only buyers of real estate.

In the early 1980's, the Federal Trade Commission found what percent of home buyers who believed that the agent they worked with was representing them?

Over 70% of all buyers.

Why would a broker appoint more than one salesperson to the same side of a transaction?

Some agents work in teams, such as husband and wife agents.