Real Estate 1 Flashcards

Key Real Estate Terms

• Agent: Represents the interests of another person in a transaction.
• Subagent: An agent of an agent, usually referring to the selling agent under the listing broker; limited in Louisiana unless written agreement exists.
• Principal: The person who hires the agent, typically the buyer or seller.
• Agency: The fiduciary relationship that exists between the principal and agent.
• Client: Synonymous with principal, the one who enlists the agent's services.
• Customer: A third party involved in the transaction whom the agent does not represent.
• Co-operating Broker: The broker responsible for finding a buyer.

Types of Agency Relationships

• Express Agency: Established through a formal agreement with specified terms, which may be written or oral, but must be in writing per Louisiana law.
• Implied Agency: Formed through the actions of the parties, indicating agreement to an agency; can involve granting power of attorney.
• Single Agency: Representation of one party in a transaction with fiduciary duties owed solely to that party.
• Disclosed Dual Agency: Representation of both the buyer and seller with their informed consent; requires disclosure.
• Undisclosed Dual Agency: Representing two parties without their knowledge; generally illegal and may occur unintentionally.

Duties of the Agent

• Obedience: The agent must follow all lawful instructions from the principal.
• Loyalty: The agent must prioritize the principal's interests and avoid conflicts of interest.
• Disclosure: Any relevant information must be disclosed to the client; failing to do so is a breach of duty.
• Confidentiality: Personal information disclosed by the client must remain confidential, even after the agency relationship ends.
• Accountability: Agents must manage the principal's assets responsibly and maintain separate accounts.
• Reasonable Care: Agents must act in the principal's best interests and communicate important information promptly.

Legal Concepts

• Fiduciary Relationship: Built on trust and confidence; the agent owes specific duties to the principal.
• Power of Attorney: A document granting another person the authority to act on one's behalf.
• Attorney-in-fact: The individual designated to act under a power of attorney.
• Conversion: The misuse of a client's funds for personal use, considered a serious violation.

Types of Property Agreements

• Exclusive Buyer Agency Agreement: The buyer must compensate the agent if they purchase any property outlined in the contract.
• Exclusive Agency Buyer Agreement: The agent earns a commission only if they locate the property purchased.
• Open Buyer Agency Agreement: Allows buyers to engage multiple brokers; compensation is due only to the broker who finds the purchased property.

Property Disclosures and Liabilities

• Latent Defect: Hidden defects in property not discoverable through ordinary inspection should be disclosed.
• Caveat Emptor: Historical principle of "let the buyer beware," placing the burden on buyers to uncover defects.
• Fraud: Intentional misrepresentation of material facts in a transaction.
• Negligent Misrepresentation: Misstatements made by an agent who should have been aware of the inaccuracies.
• Puffing: Exaggeration of a property's advantages without legal consequences unless misleading.

Environmental Hazards

• Radon: A hazardous gas that is colorless, odorless, and derived from radioactive decay.
• Abatement: The process by which environmental hazards are reduced.
• Encapsulation: A safer method of managing asbestos compared to removal.
• Stigmatized Properties: Properties considered undesirable due to past events affecting their reputation.

Test your knowledge of essential real estate terminology with these flashcards. Each card provides a definition for key terms such as 'Agent,' 'Subagent,' and 'Principal.' Perfect for anyone looking to deepen their understanding of the real estate industry.