Agent
One who acts/holds the power to act for another. A fiduciary relationship is created under the law of agency when a property owner, as the principal, executes a listing agreement or management contract authorizing a licensed real estate broker to be his or her agent. A prospective property buyer may authorize a real estate broker to act as the buyer’s agent to find a suitable property
Fiduciary
One in whom trust and confidence is placed; a reference to a real estate professional employed under the terms of a listing contract or buyer representation agreement
Agency
The relationship between a principal and an agent is authorized to represent the principal in certain transactions
Principal
1. A sum loaned or employed as a fund or an investment, as distinguished from its income or profits
2. The original amount (as in a loan) of the total due and payable at a certain date
3. A main party to a transaction — the person for whom an agent works
Client
The principal in an agency relationship or other form of representation
Customer
The third party or non-represented consumer for whom some level of service is provided
Non-agent
An intermediary between a buyer and a seller, or a landlord and a tenant, who assists one or both parties with a transaction without representing either, also known as a facilitator, transaction broker, transaction coordinator, and contract broker
Agency relationships in real estate transactions are governed by 3 kinds of law
Common law, statutory law, administrative law
Common law
The rules established by tradition and court decisions
Statutory law
The laws enforced by the legislature
Administrative law
The rules and regulations created by real estate commissions and departments, as authorized by the legisltaure
The fundamentals of agency law have ___ for hundreds of years
Remained largely unchanged
Particularly those provided in residential ___, has ___ in the last half-century
Sales transactions; changed significantly
In 1990s
Buyers began to demand that they be represented too
They came to expect not only accurate
Factual information but also objective advice, particularly in the face of increasingly complex real estate transactions
The brokers formalized this exchange of information by creating the
Multiple listing agreement (MLS)
The MLS quickly became
A widely used industry service
Agent
The individual who is authorized and consents to represent the interests of another person in dealings with a third person
Principal
The individual who hires the agent and delegates to that agent the responsibility of representing the principals interest
Agency
The fiduciary relationship between the agent by which the agent is authorized to represent the principal in one or more transactions
Fidicuary
The relationship in which the agent is held in a position of special trust and confidence by the principal
Client
The principal in a real estate transaction for whom a real estate broker acts as an agent
Customer
The 3rd party or non-represented consumer who is not a principal but for whom some level of service may be provided and who is fair and honest
Non-agnet
(Also known as facilitator, intermediary, transactional broker, transaction coordinator, or contract broker) someone who works with a buyer and a seller (or a landlord and a tenant), assisting one or both parties with the transaction without representing either party’s interest
The agent is entrusted with certain ___ and has ___ to the principal
Confidential information; fiduciary responsibilities
A real estate professional should be familiar with
Specific terms of any agency adopted by the legislative of the state in which the real estate professional does business
The ___ is entitled to factual information and fair and honesty ___
Customer; dealings as a consumer
The agent works ___ the principal and ___ the customer
For; with
This means
That the agent supports and defends the principals interest and NOT the customers
The relationship between the principal and agent must be ___
Consensual
The principal ___ authority
Delegates
The agent ___ to act
Consents
The parties must ___ to form the relationship
Agree
The principal’s primary duty
Is to comply with the agency agreement and cooperate with reasonable expectations of the agent
The principal must ___ hinder the agent and ___ deal with the agent in good faith
NOT; must
The principal must ___ the agent according to the terms of the agency agreement
Compensate