Unit 7

In-house sale

A real estate transaction where the listing firm actually produces the buyer for their listing, as apposed to a co-brokered or cross sale that involves two firms.

Agency

The relationship between a principal and an agent wherein the agent is authorized to represent the principal in certain transactions.

Agent

One who acts or has the power to act for another.

Apparent authority

When someone claims to be an agent but there is no express agreement, the principal can establish an agency relationship by performing any act that accepts (ratifies) the conduct of the agent as that of an agent.

As is

A description of the physical condition of the property where no promises are made regarding its quality or condition.

Broker

(1) One who acts as an intermediary on behalf of others for a fee or commission. (2) One who is licensed to list, lease, buy, exchange, auction, negotiate or sell interest in real estate for others for a fee.

Brokerage

The bringing together of buyers and sellers in the marketplace.

Broker in charge (BIC)

Required for each brokerage firm and each branch office, the full broker responsible for displaying all licenses properly, notifying the NCREC of any change of business address or trade name, ensuring that all advertising and agency compliance is done properly, maintaining the trust account and trust account records properly, retaining and maintaining all real estate transactions records properly, and supervising all provisional brokers associated with the firm or office.

Caveat emptor

A Latin phrase meaning "let the buyer beware". In states where this is active, sellers do not have to disclose any facts about their property when selling.

Client

A main party to a transaction; the person for whom the agent works for.

Co-brokered transaction

A real estate transaction involving two or more brokerage firms, one firm representing the seller and the other representing the buyer.

Commingling

The illegal act by a real estate broker of placing consumer funds with personal funds. By law brokers are required to maintain a separate trust or escrow account for other parties' funds held temporarily by the broker.

Commission

Payment to a broker for services rendered, as in the sale or purchase of real property; traditionally, percentage of the gross sales price of the property but can be a flat fee or some other calculation.

Common law of agency

The basic framework of law that governs the legal responsibilities of the broker to the people the broker represents.

Cooperating broker

Broker/firm that brings the buyer to the transaction.

Customer

A third party to whom is owed honesty and fairness; not a fiduciary relationship.

Designated dual agency

An agency option under dual agency that allows the firm, with both clients' permission, to appoint one or more licensees to exclusively represent the seller-client and one or more licensees to exclusively represent the buyer-client; also called designated agency.

Dual agency

Representing both parties to a transaction; must be consensual and reduced to writing prior to presentation of first offer.

Employee

Someone who works for an employer.

Express agreement

An oral or written contract in which the parties state the contract's terms and express their intentions in words.

Express authority

An agent's power to act on behalf of a principal, explicitly granted by an agreement between the agent and principal.

Facilitator

The real estate licensee who assists buyers and sellers in reaching an agreement in a real estate transaction without representing interests of either party. The licensee treats both parties equally as customers.

Fiduciary

One in whom trust and confidence is placed; a reference to a principal-agent relationship.

First substantial contact

A flexible moment in time when conversation between a licensee and a consumer begins to address confidential needs, desires and abilities; latest moment to legally disclose agency choices to a consumer.

Fraud

An intentional misrepresentation of material fact so as to harm or take advantage of another person.

General agent

One who is authorized to represent the principal in a broad range of matters related to a specific business or activity.

Implied agreement

A contract under which the agreement of the parties is demonstrated by their conduct.

Implied authority

An agency relationship created when principals and agents, without formally agreeing to the agency, act as if one exists.

Independent contractor

Someone who is retained to perform a certain act but who is subject to the control and direction of anther only as to the end result and not as to the way in which the act is performed. Pays all expenses and social security and income taxes and receives no employee benefits.

Material fact

An fact that is important or relevant to the issue at hand; mandatory disclosure by all agents in a transaction to all parties of the transaction.

Multiple listing service (MLS)

A marketing organization composed of member brokers who agree to share their listing agreements with one another in the hope of procuring ready, willing, and able buyers for their properties more quickly than they could on their own. Most MLSs accept only exclusive right to sell or exclusive agency listings from their member brokers.

Negligent misrepresentation

Unintentionally misinforming any party involved in a transaction about a material fact.

Negligent omission

Unintentionally failing to disclose a material fact to any party involved in a transaction.

Non-agency

A relationship between a licensee and consumers where the licensee represents neither the buyer nor the seller; this relationship is not allowed in North Carolina.

OLD CAR

The mnemonic for fiduciary duties of obedience, loyalty, disclosure of information, obedience, confidentiality, accounting, disclosure of information, and reasonable skill, care, and diligence.

Oral buyer agency

A non-exclusive verbal agency agreement between a firm and a buyer-client. There can be no time limit on oral agency, but it must be reduced to writing prior to presentation of first offer.

Principal

(1) A sum loaned or employed as a fund or an investment, as distinguished from its income or profits. (2) The original amount (as in a loan) of the total balance due and payable at a certain date, (3) A main party to a transaction - the person for whom the agent works; the client.

Provisional broker

a real estate licensee who performs real estate activities under the supervision of a licensed broker-in-charge.

Puffing

Exaggerated or superlative comments or opinions: e.g. "This house has the best view in town!"

Ratification

A method of creating an agency relationship in which the principal accepts/confirms the conduct of someone who acted without prior authorization as the principal's agent.

Self-dealing

Also known as a secret profit, an illegal act by a licensee who takes advantage of clients by failing to disclose the appropriate value of property.

Special agent

One who is authorized by a principal to perform a single act or transaction. A real estate broker is usually a special agent of the seller authorized to find a ready, willing, and able buyer for a particular property, or agent of the buyer to find specific type of property to purchase. Has limited authority and cannot bind his principle.

Stigmatized property

Property regarded as undesirable because of events that occurred there; also called psychologically impacted property. Some conditions that typically stigmatize a property are murder, gang-related activity, proximity to a nuclear plant, and even the alleged presence of ghosts.

Subagent

One who is employed by a person already acting as an agent—typically a reference to a provisional broker licensed under a broker (agent) who is employed under the terms of a listing agreement. Has the same duties to the client as the agent.

Tort

A wrongful act, injury, or violation of legal right to the person or property of another.

Transaction broker

The real estate licensee who assists buyers and sellers in reaching an agreement in a real estate transaction without representing intrests of either party. The licensee treats both parties equally as customers.

Undisclosed dual agency

An illegal agency relationship where buyers and/or sellers are unaware of an individual broker or firm's conflicting duties to their clients.

Universal agent

A person empowered to do anything the principal could do personally; unlimited authority; unusual in real estate.

Willful misrepresentation

Intentionally misinforming any party involved in a transaction about a material fact.

Willful omission

Intentionally failing to disclose a material fact to any party involved in a transaction.

Working with Real Estate Agents (WWREA)

A mandatory agency information brochure that a licensee must give to and review with consumers in all real estate sales transactions no later than first substantial contact; it does not create agency.