Questions and Answers
What is the individual who represents the interests of another person called?
Agent
What do you call the agent of an agent?
Subagent
Who is the party that hires the agent?
Principal
What is the fiduciary relationship between the principal and the agent called?
Signup and view all the answers
What term describes the principal in a transaction?
Signup and view all the answers
What do you call a third party that the agent does not represent?
Signup and view all the answers
Who is the broker that finds the buyer called?
Signup and view all the answers
What is based on a formal agreement between the parties regarding agency?
Signup and view all the answers
What happens in an implied agency?
Signup and view all the answers
What must the broker do according to the duty of obedience?
Signup and view all the answers
What does the duty of loyalty require from the broker?
Signup and view all the answers
What must an agent disclose to the client?
Signup and view all the answers
What is the agent required to keep confidential?
Signup and view all the answers
What is a relationship based on trust and confidence called?
Signup and view all the answers
What document gives another person the power to act on one's behalf?
Signup and view all the answers
What is an attorney-in-fact?
Signup and view all the answers
Under what circumstances can an agent disclose confidential information?
Signup and view all the answers
What is the broker held accountable for in a fiduciary relationship?
Signup and view all the answers
What does reasonable care require of a broker?
Signup and view all the answers
What is the practice of using commingled funds as the broker's own money called?
Signup and view all the answers
Which of the following can terminate an agency agreement? (Select all that apply)
Signup and view all the answers
What is an agency relationship where the agent has an interest in the subject called?
Signup and view all the answers
What is a designated agent?
Signup and view all the answers
What does single agency mean?
Signup and view all the answers
In what situation does a seller become the principal?
Signup and view all the answers
When a buyer contracts with a broker, who is the client?
Signup and view all the answers
What is undisclosed dual agency?
Signup and view all the answers
What does disclosed dual agency entail?
Signup and view all the answers
What is a latent defect?
Signup and view all the answers
What does 'caveat emptor' mean?
Signup and view all the answers
What obligates a buyer to compensate an agent?
Signup and view all the answers
When does a broker only get paid if they find the property purchased?
Signup and view all the answers
What kind of agreement allows the buyer to use multiple brokers?
Signup and view all the answers
What does it mean for a buyer to be 'ready, willing, and able'?
Signup and view all the answers
What is known as broker cooperation?
Signup and view all the answers
What is fraud in the context of real estate?
Signup and view all the answers
What does negligent misrepresentation involve?
Signup and view all the answers
What is negligent omission?
Signup and view all the answers
What does puffing mean in real estate?
Signup and view all the answers
What is encapsulation in the context of asbestos?
Signup and view all the answers
What is radon?
Signup and view all the answers
What is abatement?
Signup and view all the answers
What are stigmatized properties?
Signup and view all the answers
Study Notes
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.
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
Description
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.