post license class

Agent

One with authority to act on behalf of, and to obligate, another.

Principal

Aka Client! One who has conferred authority on an agent to act on his behalf (may include authority to execute legal decisions.

Person, also known as a principal, who has an agency relationship with an agent. A buyer may be the client of a buyer’s agent, a seller may be the client of a seller’s agent, and a property owner may be the client of a property manager. 

Customer

Person who is not in a brokerage relationship with respect to a particular broker, but for whom a real estate agent may perform ministerial acts in a real estate transaction. Example: Buyer where the agent represents the seller.  

Customer – EXAMPLE: For a broker that represents a seller, any actual or potential buyer is the customer. A customer could also be the seller where the agent represents the buyer, or the renter where the agent is a property manager.  

Ministerial Acts

Routine acts that do not involve discretion or the exercise of significant independent judgment. Many state real estate license laws permit real estate agents to perform ministerial acts for non-clients in real estate transactions without creating an agency relationship.  

Independent Contractor:

Person hired to perform a specific task, who uses independent discretion and judgment to select a method of completion. An independent contractor is not an agent, and is therefore not subject to the default fiduciary duties.

Fiduciary

A position of trust and confidence, such as that between an agent and a principal. The common law imposes specified fiduciary duties that the agent owes the client.

Power of Attorney

Written document in which one person appoints another to be their attorney-in-fact, authorizing the attorney-in-fact to act on their behalf. The death of either party automatically revokes the power of attorney because it is a personal authorization. Thus, when an attorney-in-fact is conveying property on behalf of a grantor, proof is usually required that the grantor is alive at the time of the signing. 

Single Agency

Agency representation where a broker represents only one party in a transaction—either the buyer or the seller, but not both. The party the agent represents is called the client and the other party to the transaction is called the customer. 

Dual Agency

Situation where the same agent (broker or firm) represents multiple parties (buyer and seller) with competing interests in the same transaction. Requires Written Consent! Most of the states that permit dual agency require an agent to obtain proper client consent before entering into the relationship.

Designated Agency

 Agency relationship where a single broker represents both the buyer and the seller in the same real estate transaction. However, the broker appoints one salesperson to represent Client A and another salesperson to represent Client B.

Special Agent

Person authorized to perform a particular act or transaction pursuant to an agency agreement. In most brokerage transactions, the broker acts as a special agent. Special agency limits the broker to certain activities specified in the listing agreement. Special agents cannot legally obligate clients (cannot accept an offer on the client’s behalf). 

EXAMPLE: If the seller is the client, the broker can offer the property for sale, but cannot actually sell it. A special agent has authority to carry out one specific act only. 

General Agent:

Agent authorized to perform any and all acts associated with a specific service (property manager). General agents have authority to legally obligate clients (may contract on client’s behalf). 

Universal Agent

One who is authorized to perform a variety of acts necessary to effectuate a variety of transactions on behalf of another. Universal agency is a much broader grant of authority than either the special (authorized to complete a specific act) or general agent (authorized to complete any and all acts necessary for a specific transaction). An unlimited power of attorney is an example of universal agency. Courts do not view universal agency favorably due to the broad scope of power vested in the agent. Universal agents have authority to legally obligate clients. 

Subagent

Agent of an agent who may perform for the client’s benefit under primary agent’s authority (requires client approval; salesperson is an example).