Chapter 2

Market Allocation

An agreement between members of a trade to refrain from competition in specific market areas.

Tie- In Arrangement

A contract where a transaction depends upon another.

Independent Contractor

A person that provides services to another under terms specified in a contract or within a verbal agreement. An independent contractor is not an employee.

Subagent

A person upon whom the powers of an agent have been conferred, not by the principal, but by an agent as authorized by the agent's principal.

Ostensible Agency

A person who has been given the appearance of being an employee or acting (an agent) for another (principal), which would make anyone dealing with the ostensible agent reasonably believe he/she was an employee or agent.

Implied Agency

Agency that exists as a result of actions of the parties.

Express Agency

An agency relationship created by oral or written agreement between principal and the agent.

Dual Agency

An agency relationship in which the agent acts concurrently for both of the principals in a transaction.

Single Agent

An agent who works only for the buyer or the seller.

General Agent`

An agent with full authority over one property of the principal, such as a property manager.

Special Agent

An agent with limited authority to act on behalf of the principal, such as created by a listing contract.

Commission

An agent's compensation for performing the duties of agency; in real estate practice, a percentage of the selling price of property, percentage of rentals, etc.

Group Boycott

An agreement between members of a trade to exclude other members from fair participation in the trade.

Redlining

An illegal lending policy of denying real estate loans on properties in older, changing urban areas, usually with large minority populations, because of alleged higher lending risks without due consideration being given by the lending institution to the credit worthiness of the individual loan applicant.

Price Fixing

Conspiring to establish fixed fees or prices for services or products.

Sherman Anti-Trust Act

Federal legislation including imposition of civil and punitive damages for anti-trust activities.

Ethics

Moral principles that govern a person's or group's behavior.

Agent

One who acts for and with authority from another called the principal.

Universal Agent

The agent who has complete authority over any activity of the principal; for example, power of attorney.

Principal

The employer of an agent, such as a buyer or seller.

Steering

The practice in which real estate brokers guide prospective home buyers towards or away from certain neighborhoods based on their race. Steering is highly illegal.

Blockbusting

The practice on the part of unscrupulous speculators or real estate agents of including panic selling of homes at prices below market value, especially by exploiting the prejudices of property owners in neighborhoods in which the racial make-up is changing or appears to be on the verge of changing.

Agency

The relationship between principal and the principal's agent, which arises out of a contract, either expressed or implied, written or oral, wherein the agent is employed by the principal to do certain acts dealing with a third party.

Law

The system of rules that a particular country or community recognize as regulating the actions of its members and may be enforced by the imposition of penalties.

Testers

Volunteers from state or private agencies who enforce fair housing by claiming to be home seekers, thereby finding out if brokers deal fairly with all clients/customers.