Podcast
Questions and Answers
What happens to the commission when one agent lists a property and another agent sells it?
What happens to the commission when one agent lists a property and another agent sells it?
- The commission is split between the broker and the subagent.
- The commission is kept entirely by the listing agent.
- The commission is split between the listing agent and the selling agent. (correct)
- The commission is kept entirely by the selling agent.
What is a referral fee?
What is a referral fee?
- A payment made by a broker to a salesperson for a successful sale.
- A payment made by an agent to a broker for referring a client.
- A payment made by a client to a broker for referring a property.
- A payment made by a broker to another party for referring a client. (correct)
What is the purpose of antitrust laws?
What is the purpose of antitrust laws?
- To protect trade and commerce from unlawful restraints and unfair business practices. (correct)
- To protect the interests of real estate brokers.
- To protect the interests of buyers and sellers.
- To regulate the amount of commission that real estate agents can charge.
What is an example of an illegal business practice in real estate?
What is an example of an illegal business practice in real estate?
What is a tie-in arrangement?
What is a tie-in arrangement?
What is a designated sales agent?
What is a designated sales agent?
What role does a broker's agent play in a real estate transaction?
What role does a broker's agent play in a real estate transaction?
What is the primary duty of a landlord's agent?
What is the primary duty of a landlord's agent?
What is the difference between a general agent and a special agent?
What is the difference between a general agent and a special agent?
What is the principle of caveat emptor?
What is the principle of caveat emptor?
What is the principal's duty to an agent?
What is the principal's duty to an agent?
What is implied agency?
What is implied agency?
What is vicarious liability?
What is vicarious liability?
What is the difference between a single licensed broker and a national broker?
What is the difference between a single licensed broker and a national broker?
What is the role of a subagent in an agency structure?
What is the role of a subagent in an agency structure?
What is the difference between expressed agency and agency by ratification?
What is the difference between expressed agency and agency by ratification?
Flashcards
Referral Fees
Referral Fees
Payments made by an agent to others for customer referrals, to be paid to brokers first.
Antitrust Liability
Antitrust Liability
Laws protecting trade from unlawful restraints and unfair practices.
Price Fixing
Price Fixing
Conspiring to set fixed fees or prices for services or products.
Group Boycott
Group Boycott
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Market Allocation
Market Allocation
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Dual Agency
Dual Agency
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Designated Sales Agent
Designated Sales Agent
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Seller's Agent
Seller's Agent
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General Agent
General Agent
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Special Agent
Special Agent
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Informed Consent
Informed Consent
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Misrepresentation
Misrepresentation
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Vicarious Liability
Vicarious Liability
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Expressed Agency
Expressed Agency
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Implied Agency
Implied Agency
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Compensation
Compensation
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Study Notes
Agency Relationships in Real Estate
- General Agent: Full authority over a single property (e.g., property manager).
- Special Agent: Limited authority, typically for a specific transaction (e.g., listing agreement).
- Informed Consent: Agreement to a transaction after full disclosure of relevant facts.
- Misrepresentation: Intentionally false statement to induce a contract (fraudulent).
- Caveat Emptor: "Buyer Beware" - a legal principle that the buyer is responsible for examining the property. The seller has no duty to tell them about problems.
Principal's Duties
- Cooperation: Principal must not obstruct the agent.
- Compensation: Principal must pay the agent for services.
- Indemnification: Principal must defend the agent if sued while acting on their behalf (include legal fees).
Types of Agents
- Subagent: Agent of another agent acting on behalf of the principal.
- Brokerages: Different types exist: Single Licensed Broker, Independent Broker, National Broker
- Agency Structure: Client, Broker (client's agent), Subagent (agent of the broker, employee of the brokerage) Salesperson
Types of Agency
- Expressed Agency: Formal written or oral agreement between principal and agent.
- Implied Agency: Agency relationship inferred from conduct of the parties.
- Agency by Ratification: Existing unauthorized act becoming authorized by the principal's later consent.
- Estoppel: Prevents a party from denying an agency relationship that was previously implied.
Compensation
- Agents are compensated through flat fees or percentages of the transaction price.
- Commissions are often split between listing and selling agents.
- Referral fees are paid to the broker, not directly to the salesperson.
- NYS requires client consent for referral fees.
Liability and Legal Considerations
- Vicarious Liability: One party held responsible for another's unlawful actions.
- Antitrust Liability: Laws preventing restraints on trade and unfair business practices.
- Price Fixing: Illegal agreement on fixed prices
- Group Boycott: Illegal agreement to exclude competitors.
- Market Allocation: Illegal agreement to avoid competing in specific areas.
- Tie-in Arrangement: Illegal tying of one transaction to another.
Agency in Real Estate Transactions
- Dual Agency: Representing both buyer and seller; complex and ethically sensitive—requires multiple subagents, or designated representations.
- Designated Sales Agent: A form of dual agency where different agents within the firm represent the buyer and seller—protects both parties.
- Seller's Agent: Represents the seller.
- Buyer's Agent: Represents the buyer.
- Broker's Agent: A cooperating agent who assists a listing or buyer's agent but does not work for the same firm.
- Landlord's Agent: Agent acting on behalf of the landlord.
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