Chapter 5- General Principals of Agency

Completion or performance

This means the agreement ends when the goals of the contract are met.

Eminent domain

This refers to ending an agreement when property is destroyed or taken by the government.

Expiration of terms

This is when a client agreement ends because the specified time in the contract has passed.

Breach

This happens when one party does not do what they promised in the contract.

Bankruptcy

This is a legal reason for ending a seller agreement.

Automatic Extension Clause

This clause requires a seller to notify their broker before the agreement ends; it's illegal in Iowa.

Iowa Listing Agreement Requirement

Agreements need a clear start and end date, but can be extended with an amendment.

Broker Protection Clause

This clause protects the broker for a few days after the agreement ends, regarding buyers they found during the listing.

Procuring cause

This means an agent helped make a sale; the Broker Protection Clause prevents sellers from avoiding paying commissions.

Broker Protection Clause Requirement 1

In Iowa, this clause must be in the original listing agreement to be valid.

Broker Protection Clause Requirement 2

In Iowa, the original agreement must specify a set time after the listing ends for the clause to be valid.

Broker Protection Clause Requirement 3

In Iowa, the seller must be given a list of buyers before the listing expires for the clause to be valid.

Fiduciary

A special trust relationship where an agent must act honestly to represent their client.

Laws of Agency Relationships

Legal rules that define how an agent should treat their client with trust, covering care, obedience, loyalty, disclosure, accounting, and confidentiality.

Care

An agent must show a high level of skill and care beyond that of an average person.

Obedience

An agent needs to follow the lawful orders given by their clients.

Loyalty

An agent must put the client's best interests first.

Disclosure

Agents must keep clients informed about important facts that could affect their transactions.

Accounting

Agents must keep clients updated on the progress of their transactions whenever asked.

Confidentiality

Agents should not share any confidential information that could harm their clients during negotiations.

Agency

A relationship where an agent represents a buyer or seller in real estate, prioritizing their needs.

Single Agency

An agent represents either the buyer or the seller, but not both.

Dual Agency

An agent represents both the buyer and seller in the same transaction.

Caveat Emptor

A warning meaning "buyer beware!"

Client

The person you have a special relationship with in a real estate transaction.

Customer

The person you do not represent in a real estate transaction.

Fiduciary

A trust-based relationship between the agent and their client.

Principal

The person who hires the agent to represent their interests.

Real Estate Brokerage

The process of connecting buyers and sellers.

Real Estate Broker

A licensed person who helps others buy, sell, or lease property for a fee.

Salesperson

A licensed person who can conduct real estate transactions but must work under a broker.

Appointed agent

A salesperson chosen by a broker to represent a client.

Real Estate Assistant

A support role, often unlicensed, that helps with office tasks.

Independent Contractor

A worker who sets their own hours, pays their own taxes, and doesn't receive employee benefits.

Non-Agent

A person who helps with real estate tasks without a license or agency relationship.

Power of Attorney

A written permission for someone to act on another person's behalf.

Principal

The person who authorizes another to act for them.

Implied Agency

Going through the motions of representation without having a clear definition set up with a buyer or seller.

Express Agency

An oral or written agreement outlining the agency relationship.

Universal Agent

Someone authorized to transact every kind of business for the principal, including signing legal documents; an example is power of attorney.

General Agent

Someone who can represent a principal in an array of matters related to a specific business activity, such as a property manager.

Special Agent

Someone who represents a principal in a single specific transaction, such as when a single or dual agency occurs.

Completion or Performance

The first opportunity to end an agency relationship with a client, which occurs when there is a closing.

Destruction or Condemnation

A condition for terminating an agency relationship via eminent domain.

Death or Incapacity

A condition for terminating an agency relationship specifically regarding the seller or broker.

Expiration of Terms

The termination of an agency relationship when the date range specified in the agreement, such as January 1st to June 30th, has passed.

Breach

The termination of an agency relationship caused by either party failing to uphold the agreement.

Bankruptcy

A legal condition listed as a reason that an agency relationship between a broker and client may be terminated.

Broker Payment Requirement

All payments, including commissions, must go to the broker first before being given to the salesperson since salespeople can't work alone.

Agency Relationship Determination

The person who pays the commission does not determine the agency relationship.

Procuring Cause

The series of events that lead directly to the sale of a property.

Ready, Willing, and Able Buyer

A buyer who has the money and desire to buy a property.

Comparative Market Analysis (CMA)

A service by an agent to help assess property value for earning a commission.

Multiple Listing Service (MLS)

A system for agents to list and market properties.

Listing Agent

The agent who represents the seller in a real estate deal.

Selling Agent

The agent who represents the buyer in a real estate deal.

Buyer representation agreements

An agreement between a buyer and a real estate agent to help the buyer purchase a property.

Exclusive Buyer Representation Agreement

An agreement where the buyer works only with one agent, and the agent is paid regardless of which property the buyer buys.

Provisions of a buyer representation agreement

Parts of the agreement including the names of all parties, details about the property, and what each party is responsible for.

Brokerage services only clause

Part of the agreement that explains what the broker will do.

Nondiscrimination clause

A requirement to ensure fair treatment in the agreement.

Completion or performance

Ends the agreement when a buyer successfully buys a property.

Death or incapacity of seller or broker

The agreement can end if the seller or broker passes away or cannot continue.

Expiration of terms

Ends the agreement when the time period specified in the contract is over.

Breach by either party

The agreement can end if either side fails to meet the terms.

General desired property information

Describes what type of property the buyer wants.