Chapter 2 Real Estate

General Agent

Someone authorized to transact every kind of business for the principal

Special Agent

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

Universal Agent

A universal agent has complete authority over any activity of the principal

Principal or Client

The buyer and/or seller is known as principal or client

Agent

The broker is known as the Agent

Sub-agent

the salesperson is a Sub-agent of their broker

Buyer agency

occurs when a purchaser/renter hires a broker to represent them

Obedience

Agent shall follow the legal instructions of their client

Loyalty

Agent shall work in the best interests of their client

Disclosure of Information

Agent shall promptly communicate all information about the transaction to their client. this includes presenting all offeres to the client

Condidentiality

Agent shall not reveal confidential information about the client to prospective buyers, without the express consent from the client

Accountablitly

the agent must account for and promptly remit all money or property entusted to the agent

Reason Care and Duty to Account

Agent shall possess the necassary skills and trainging to perform their requested services

Agency Disclouse Form

• the agents duties to the client

• explains that and agent owes a fiduciary duty to the client

• Allows for advance consent to dual agency

• shown at first substantive contact

Dual Agency

Occurs when a broker represents both buyer and seller in a trasnaction

Estoppel

An agency by estoppel exists when a principal does not stop an individual fdromfromesenting his or her interests, thus creating an agency relationship between the two

Listing contracts

• Between the seller and broker (NOT salesperson)

• creates an express agency

Exclusive Right To Sell Agreement

The listing contract offers the most security to the broker. the seller must work exlusively with the broker to sell their property. the broker is entitled to a commission ven if the seller finds a buyer themeselves

Exclusive Agency Agreement

The seller must work exclusively with the broker to sell their property, BUT the seller does not have to pay the broekr commission if they find a buyer themselves

Open Listing Contract

The seller is allowed to work with any broker who brings them a buyer. Only the broker who brings a buyer is entitled to a commission. This is the riskiest type of listing contract for a broker. Am open listing contract is an example of a unilateral contract

Net Listing

a net listing is not technically a listing agreement, but a method of establishing the listing broker’s commission as all money above a specified net amount to the seller

Net listings are illegal in New York

Commissions

• Real estates salespersons/agent DO NOT collect money or commissions

• Any commission enarned are paid to the slaesperson’s broker, who in turn pays the slalesperson his/her portion of commission

Vicarious Liability

A situation in which one party is held partly responsible for the unlawful actions of a third party

Sherman Anti-Trust Act

Made the following illegal

• Price Fixing

• Group boycotts

• Market allocation

• Tie-in arrangements

Misrepresentation

consists of

• a false representation of a material fact

• a person making the false representation knew or should have known it to be false

• a person acts or does not act based on the misrepresentation

• a person who relies on the misrepresentation in acting or not acting

Property Condition Disclosure Statement

The Property Condition Disclosure Act requires the seller to submit to the buyer, a Property Condition Disclouse Statement, prior to signing the contract of sale