Unit 4: Real Estate Agency

Agency

A strict, defined legal relationship. In real estate, it refers to that a broker, managing broker, or leasing agent may have with the buyers, sellers, or tenants.

Agency Coupled with an Interest

An agency relationship in which the agent is given an estate or interest in the subject of the agency (or property).

Agent

The individual who is authorized and consents to represent the interests of another person. In the real estate business, a firm’s sponsoring broker is the agent and shares this responsibility with the licensees that work for him.

Brokerage Agreement

An agreement, written or oral, between a sponsoring broker and a consumer for licensed activities to be provided to a consumer in return for compensation of the right to receive compensation from another. In Illinois, exclusive brokerage agreements must be in writing.

Buyer Agency Agreement

A principal-agent relationship in which the sponsoring broker is the agent for the buyer, with fiduciary responsibilities to the seller.

Client

A person who is being represented by the licensee.

Commingling

The illegal act by a real estate licensee of mingling client funds with thee licensee’s personal fund.

Compensation

The valuable consideration given by one person or entity to another person or entity in exchange of some activity or service. Can include commissions, referral fees, bonuses, prizes, merchandise, finder’s fee, retainer’s fee, and much more

Confidential Information

Information obtained by the licensee during the term of a brokerage agreement that (i) was made confidential by the written request or instruction of the client, deals with the negotiation position of that client, or information the disclosure of which could materially harm the negotiation process.

Consumer

A person or entity seeking or receiving licensed activities

Conversion

The practice of using escrow funds as a licensee’s own money.

Cooperative Commission

In Illinois, an agreement whereby both the buyer’s and seller’s real estate agents are paid by the seller.

Customer

A customer not being represented by the licensee

Designated Agent

A licensee authorized by a sponsoring broker to act as the agent for a specific principal in a particular transaction

Dual Agency

Representing both parties to a transaction. This is illegal in IL unless both parties agree to it in writing.

Express Agency

An agency relationship based on a formal agreement between both parties

Express Contract

An oral or written contract when in which the parties state the contract’s terms and express their intentions in words. Aka Express Agreement

Fiduciary Duties

The agency agreement usually authorizes the real estate licensee to act for the principal. These duties include care, obedience, loyalty, disclosure, accounting, and confidentiality (Acronym = COLDAC)

Fraud

Deception intended to cause a person to give up property or a lawful right.

General Agency

General Agent

Gratuitous Agency

Implied Agency

Implied Contract

Latent Defect

Listing Agreement

Material Fact

Negligent

Misrepresentation

Principal

Puffing

Single Agency

Special Agent

Substantive Contract

Universal Agent