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Unit 10: Brokerage Relationships
Terms in this set (47)
A representative; one who is authorized to act on behalf of another; a person entrusted with another's business.
at arm's length
People dealing at arm's length conduct negotiations on their own behalf without trusting the other's fairness or integrity and without being subject to the other's control or influence.
A member of the public who is or may be a buyer or seller of real property and may or may not be represented by a real estate licensee in an authorized brokerage relationship.
designated sales associate
In a nonresidential real estate transaction where the buyer and the seller each have assets of $1 million or more, the broker, at the request of the buyer and the seller, may designate two sales associates to act as single agents for the buyer and the seller in the same transaction.
An agent representing both buyer and seller in a transaction (not legal in Florida).
A person in a position of trust and confidence with respect to another person.
Authorized by the principal to perform only acts related to a business or to employment of a particular nature.
no brokerage relationship
a person who delegates authority to another
The party employing the services of a real estate broker as a single agent.
The sale of improved residential property of four units or fewer, the sale of unimproved residential property intended for use as four units or fewer, or the sale of agricultural property of 10 acres or less.
A broker who represents, as a fiduciary, either the buyer or seller but not both in the same transaction.
Authorized by the principal to handle only a specific business transaction or to perform only a specific act by the government.
Subagents are persons authorized to assist and represent the agent.
A broker who provides limited representation to a buyer, a seller, or both in a real estate transaction, but does not represent either in a fiduciary capacity or as a single agent.
Authorized by the principal to perform all acts that the principal can personally perform and that may be lawfully delegated to another.
Law of agency
Agency relationships fall within the body of law
Common law- unwritten, is law based on usage, general acceptance, and custom.Statutory law-statutes and rules enacted by legislatures and other governing bodies.
real estate license law and the Florida Real Estate Commission (the FREC) rules directly affect and regulate the brokerage relationships among real estate licensees, buyers and sellers, and the public.
Brokerage Relationship Disclosure Act
is intended to inform and educate the public regarding the types of authority (brokerage relationships) that can be granted to a broker and the duties brokers have in each type of brokerage relationship.
three basic options in all real estate transactions
The brokerage firm may work as a transaction broker for the buyer and/or the seller.
The brokerage firm may work as a single agent of either the buyer or the seller (but not for both buyer and seller in the same transaction).
The parties may agree that the brokerage firm will not represent the buyer or the seller at all. This situation is called a no brokerage relationship. The brokerage firm simply facilitates the transaction.
Disclosure requirements does not apply
the rental or leasing of real property, unless an option to purchase all or a portion of the property improved with four or fewer residential units is given;
dispositions of any interest in business enterprises or business opportunities, except for property with four or fewer residential units.
Nine duties a real estate licensee owes to buyer & seller
-Deal honestly and fairly
- Full disclosure
- account for all funds
- skill, care, and diligence in the transaction
- present all offers and counteroffers in a timely manner
- Disclose all known facts that materially affect the value of residential real property and are not readily observable to the buyer.
expiration or terms
death of seller
death of buyer
fulfillment of relationship
broker renounces the single agent
destruction of property
Transaction brokers have the duty of loyalty to the party with whom they are working.
False. Only single agents have the duty of loyalty to their principals. Transaction brokers must be fair to all parties.
A single agent broker for the seller must work with the buyer in a no brokerage relationship or must transition to transaction broker with both parties.
True. A single agent broker for the seller could not be a transaction broker for the buyer unless the seller signs the consent to transition to transaction broker notice.
A fiduciary relationship is similar to dealing at arm's length with the principal.
False. An arm's-length transaction is one between persons with adverse interests. A fiduciary relationship is one of trust and confidence.
Florida law requires written disclosures of brokerage relationships in all real property transactions.
false. Written brokerage relationship disclosures are required only in the sale of residential property as defined by statute.
Dual agency is legal in Florida provided both the buyer and the seller give their informed consent in writing.
False. Dual agency is illegal in Florida, even if the parties agree to be represented in that way.
An agent working with a buyer in a no brokerage relationship is NOT required to disclose to the buyer all known facts that materially affect the value of residential property.
false. One of the duties a broker has to a customer in a no brokerage relationship is the disclosure of all known facts that materially affect the value of residential property.
The buyer's signature on a single agent notice is NOT required.
true. The buyer is not required to sign a single agent notice; the licensee may enter on the form that the buyer declined to sign and continue working with the buyer.
A general agent may perform all acts that the principal can personally perform and that may be lawfully delegated to another.
false. The definition given was for a universal agent. A general agent can perform only acts related to a specific business or employment of a particular nature.
If a buyer, when making an offer, tells the transaction broker that he will pay the full asking price if his first offer is turned down, the broker must disclose this information to the seller when presenting the offer.
false. A transaction broker may not disclose that a seller will accept less than the listed price or that a buyer will pay more than the offered price.
A transaction broker represents both the buyer and the seller in a fiduciary capacity.
false. A transaction broker is not a fiduciary to either party and provides limited representation.
Effective July 1, 2008, which brokerage relationship disclosure form will no longer need to be presented?
transaction broker notice. Because under Florida law it is presumed that all licensees are operating as transaction brokers unless another brokerage relationship is established, effective July 1, 2008, the requirement to give a written transaction broker disclosure notice to the buyer and the seller as applicable expires.
A brokerage relationship is terminated under which circumstance?
Fulfillment of the broker relationship's purpose
A real estate transaction fails to close. Does the broker have to keep the property documents on file for this failed transaction, and if so, for what period of time?
The copy of the transaction documents must be kept in the broker's files for five years.
In general business dealings, what type of agent is authorized to handle all the financial, medical, and legal decisions for a resident of a nursing home?
universal. A universal agent is authorized by the principal to perform all acts that the principal can personally perform and that may be lawfully delegated to another.
Which type of agency relationship has been repealed in Florida?
Dual Agent, It is illegal in Florida for a real estate licensee to operate as a dual agent.
The brokerage relationship disclosure requirements in Chapter 475, Florida Statutes, apply to which transaction?
The answer is contract to purchase four acres of undeveloped land zoned for one-acre residential sites. The brokerage relationship disclosure requirements apply to residential property. Residential property includes the sale of unimproved residential property intended for use as four or fewer units.
What type of agency relationship is a fiduciary relationship?
Which brokerage relationship duty is owed to the principal or customer regardless of the brokerage relationship chosen?
account for all funds. Account for all funds in the broker's trust is a brokerage relationship duty required of the broker regardless of the brokerage relationship chosen.
Which statement applies to designated sales associates?
designated sales associates have the duties of a single agent. Designated sales associates act as single agents in commercial real estate transactions.
A property manager usually works as which type of agent?
general agent. A property manager acts as a general agent. A general agent is authorized by the principal to perform acts related to a business or to employment of a particular nature.
On which brokerage relationship disclosure form must a licensee secure the signatures of the buyer and the seller?
designated sales associate notice. The buyer and the seller must sign the designated sales associate notice indicating that their assets meet the threshold and requesting that the broker use the designated sales associate form of representation.
A transaction broker has which duty?
present all offers and counteroffers. A transaction broker has seven duties: deal honestly and fairly; account for all funds; use skill, care, and diligence in the transaction; disclose all known facts that materially affect the value of the residential property and are not readily observable to the buyer; present all offers and counteroffers in a timely manner; exercise limited confidentiality; and perform any additional duties that are mutually agreed to
A broker is an agent of the seller. The seller has disclosed to the broker that the in-ground pool leaks, requiring the owner to top off the pool weekly. The broker has satisfied his legal obligation if he tells the buyer
the pool leaks water. Licensees have a duty to disclose to buyers all known facts that materially affect the value of residential property.
A transaction broker discloses to a buyer that seller is anxious to receive any reasonable offer because he recently was laid off from his job. Which duty (if any) has the licensee violated?
exercise limited confidentiality. A transaction broker must exercise limited confidentiality, unless waived in writing by a party.
Which duty applies only to single agent brokers?
full disclosure. Full disclosure applies exclusively to single agent brokers. Limited confidentiality is a transaction broker duty. Dealing honestly and fairly and disclosing all known facts that affect the value of residential property are duties of all three types of brokerage relationships.
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