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23 terms

CH 4: Agency

STUDY
PLAY
Agent
Person who is hired to act for another. Hired by the principal
Negligent Misrepresentation
Misrepresentation occurring when the broker should have know that the statement about a material fact was false
Errors and Omissions Insurance
Liability insurance to cover broker for errors and negligence in general business; usually does not cover civil rights or antitrust violations
Puffing
Exaggerated comments about a property: "This is the best view of the valley."
Fiduciary Relationship
Relationship of trust and confidence between principal and agent; agent owes duties of care, obedience, accounting, loyalty and disclosure
Principal
One who hires; in real estate, the broker (principal) hires salespeople; seller (principal) hires the broker/agent; or buyer (principal) hires broker/agent
Fraud
Intentional misrepresentation of a material fact in order to harm or take advantage of another person
Special Agent
Agent hired by principal to perform a single act. In real estate, broker is special agent hired by seller to find ready, willing, able buyer
General Agent
Agent hired to represent principal in specific range of matters: long-term broad authority
Stigmatized Property
Property branded as undesirable because of an event that happened there, such as murder, suicide, drug dealing
Latent Defect
Hidden structural defect that would not be discovered by ordinary inspection
Subagent
Agent working for an agent; in real estate, the salesperson is the broker's agent and the subagent to the seller (or buyer) Note - Not permitted in some states
Agency
describes a special relationship between a real estate licensee and the person he or she represents
Universal Agent
someone authorized to transact every kind of business for the principal
Listing Agreement
A contract between an owner (as Principal) and a real estate broker (as agent) by which the broker is employed as agent to find a buyer for the owner's real estate on the owner's terms, for which service the owner agrees to pay a commission
Law of Agency
The law that governs the relationship between a principal and his or her agent
Implied Agreement
A contract under which the agreement of the parties is demonstrated by their acts and conduct
Express Agreement
An oral or written contract in which the parties state the contract's terms and express their intentions in words
Express Agency
Agency created through words, written or oral, between the principal and the agent, such as a listing agreement.
Dual Agency
Representing both parties to a transaction. This is unethical unless both parties agree to it, and it is illegal in many states
Designated Agent
A license authorized by a broker to act as the agent for a specific principal in a particular transaction
Customer
The third party or non represented consumer for whom some level of service is provided
Client
The principal