Real Estate Unit 9

Virginia

Agency

A fiduciary legal relationship where a broker or agent is authorized to represent a client (the principal) in dealings with third parties to buy, sell, or lease property.

Agent

A licensed professional who facilitates the buying, selling, or leasing of residential or commercial property.

Buyer Representation Agreement

A legally binding contract between a homebuyer and a real estate agent/broker that defines their working relationship, including the agent’s fiduciary duties, service provided, and compensation structure.

Buyer’s Agent

A licensed real estate professional who exclusively represents the homebuyer’s interests throughout the property acquisition process.

Client

Someone who receives limited services from an agent without a formal, fiduciary (trust-based) agreement.

Customer

Someone who receives limited services from an agent without a formal, fiduciary (trust-based) agreement.

Designated Agency

Occurs when a managing broker appoints two separate agents within the same firm to represent the buyer and the seller independently in the same transaction.

Designated Agent

Occurs when two separate agents from the same brokerage represent the buyer and seller in the same transaction, acting as individual agents with full fiduciary duties to their respective clients, rather than a single agent representing both (dual agency).

Dual Agency

Occurs when one agent or broker represents both the buyer and the seller in the same transaction.

Express Agency

A formal, legally binding relationship is created when a principal (buyer or seller) and an agent explicitly agree, either in writing or orally, to the terms of representation.

Express Agreement

A contract where all terms and conditions, such as price, dates, and contingencies, are clearly stated and agreed upon, either verbally or in writing, leaving no doubt about the parties’ intentions, unlike an implied agreement formed by actions.

Fiduciary Relationship

A legal, confidential, and binding partnership where a licensed agent (fiduciary) acts on behalf of a client (principal-buyer or seller), placing the client’s best interests, confidentiality, and loyalty above all others, including their own.

Fraud

Any deceptive scheme in property transactions (buying, selling, renting, financing) where criminals steal money, property, or personal data by using false information, forged documents, or impersonation.

General Agent

Grants an agent broad authority to handle various ongoing tasks for the principal (like a property owner) within a specific area or business, differing from a special agency limited to one transaction.

Implied Agency

A legal relationship formed by the actions, conduct, or behavior of a principal and an agent, rather than a formal written or oral agreement.

Implied agreement

A legally binding agreement formed by the parties’ actions, conduct, or circumstances, not by a written or verbal agreement, creating mutual obligations like a tenant paying rent without a formal lease, implying a landlord-tenant relationship.

Latent Defect

a hidden flaw or problem in property that isn’t discoverable through a reasonable visual inspection but can cause significant issues later, like faulty wiring, hidden mold, or structural problems.

Law of Agency

A common law doctrine establishing a fiduciary relationship where a real estate licensee (agent) acts on behalf of a client (principal-buyer or seller) to negotiate with third parties.

Listing Agreement

A legally binding contract between a property owner and a licensed real estate broker (or agent) that authorizes the broker to market and sell the property.

Negligent Misrepresentation

Occurs when a seller, agent, or other party makes a false statement about a property, not with the intent to deceive, but without proper grounds to believe it’s true, causing a buyer to rely on it and suffer damages.

Nonagent

A licensed professional who assists in a property transaction without acting as a fiduciary for either party.

Principal

The buyer or seller in a transaction (the party represented by an agent), the original amount of money borrowed for a mortgage (excluding interest), or the managing broker responsible for a real estate agency’s legal operations.

Puffing

The act of making exaggerated, subjective, or superlative statements about a property to enhance its appeal, such as calling a house “the best on the block.”

Single Agency

A relationship where an agent or broker exclusively represents only one party, either the buyer or the seller, in a transaction.

Special Agent

A broker or salesperson authorized by a client to perform a single, specific, and limited task rather than providing continuous service.

Subagent

A licensed broker or salesperson authorized by a listing agent to assist in finding a buyer for a property.

Transaction Broker

A licensed real estate professional acting as a neutral, third-party facilitator to help both buyers and sellers complete a transaction without representing either party exclusively.

Universal Agent

A person authorized to act on behalf of another person (the principal) in all matters, with the ability to perform any act that the principal could legally perform.