Texas Principles of Real Estate 1: Chapter 4 Terms

True

(T,F) A broker as a fiduciary owes certain loyalty, which cannot be breached under the rules of agency...?

False

(T,F) Real estate agents cannot be held liable for any false or misleading information about a property...?

Two Ways That Agency Can Be Created

1. Express Agency 2. Implied Agency

Three Types of Agency

1. Universal Agent 2. General Agent 3. Special Agent

Listing Contract

A contract in which a property owner employs a real estate broker to market the property described in the contract.

Agent

A person authorized to act on behalf of another.

Real Estate Broker

A person who is licensed to buy, sell, exchange, or lease real property for others and to charge a fee for these services.

Implied Agency

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

Obedience

Agents are required to obey instructions given by the Principal.

Accounting

Agents must account for all funds they receive on behalf of their clients. Agents must also keep accurate records of all receipts and expenditures regarding their client's funds.

Disclosure

Agents must disclose all pertinent information to their client.

Loyalty

Agents must work in the best interests of their client. This includes putting their client's interests above their own.

Care

Agents should only offer/perform services for which they have an expertise.

Express Agency

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

Universal Agent

An agent who is authorized to perform all tasks or duties his/her principal is empowered to perform.

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.

Fiduciary Duties

C.O.A.L.D. 1. Care 2. Obedience 3. Accounting 4. Loyalty 5. Disclosure

CIIA

Compensation Information Indemnification Availability

Caveat Emptor

Let the buyer beware. The buyer must examine the goods or property and buy at his or her own risk.

Indemnification

Reimbursement or compensation paid to someone for a loss already suffered.

Fiduciary Duty

That duty owed by an agent to act in the highest good faith toward the principal and not to obtain any advantage over the latter by the slightest misrepresentation, concealment, duress or pressure.

Brokerage

The business of bringing buyers and sellers together and assisting in negotiations for the terms of sale of real estate.

Principal

The employer of an agent.

Puffing

The exaggeration of the good points of a product, or real property, and the prospects for future rise in value, profits,and growth.

Fraud

The intentional and successful employment of any cunning, deception, collusion, or artifice, used to circumvent, cheat or deceive another person whereby that person acts upon it to the loss of property and to legal injury.

Customer

The party the agent brings to the principal as seller or buyer of the property.

Agency

The relationship between the 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.

Termination

The sale of the property results in the ............................ of the agency relationship?

-Reasonable care and skill -Honesty -Disclosure of any known material facts

What is owed to a customer by an agent...?