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| someone who represents the interest of another |
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an agent to their client or principal
*person who hired you |
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| Salesperson or Broker/Salesperson |
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an agent to the broker they work under
*Seller-Broker-Salesperson |
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| a broker from another firm who represents the listing broker's client |
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| subagent salesperson or broker/salesperson |
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| a salesperson or broker/salesperson relationship to their broker's client |
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| represents only buyer or seller in a transaction, NEVER both |
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*one brokerage, two salespeople(In House transaction)
- one salesperson assigned to buyer, one assigned to seller, same brokerage
- DOES NOT require written consent |
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- one brokerage, one salesperson
- broker represents BOTH buyer and seller in same transaction
- *DOES require written consent
- *conflict of interest |
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agent is hired to do ONE THING
- CANNOT bind their client (cannot sign for their client) |
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agent is hired to do SERIES OF ACTS
- CAN bind their client (can sign for their client)
- *property manager to owner/investor
- *salesperson to broker |
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Owe them:
-fair
-honest
-disclosure of all material facts
-skill and care |
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| agent's fiduciary duties to client |
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Definition
-skill and care (education and research)
-confidentiality (does not disclose motivation, price, time, terms to other side)
-obedience - obey client within boundaries of law
-accountability
-**loyalty
-diligence - making sure you are driving the deal
-disclosure - must disclose representation of somebody else's interest
-agency |
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written or verbal
ex. listing agreement |
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**ostensible
-actions create agency
(agree to do something; compensation discussed) |
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| contracts employment between seller and broker (how you earn commissions) |
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broker receives commission NO MATTER WHO SELLS
**Maximum protection for broker, maximum effort from broker |
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| broker receives commission UNLESS OWNER SELLS |
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only broker who is procuring cause receives commission
- **only company who brings the buyer |
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broker receives any and all monies over a set selling price
**Conflict of interest, seller's net vs. agent's commission |
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| **each listing contract must have a specific termination date |
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| Ways to terminate listing agreements |
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Definition
-*bankruptcy or death of either broker or seller, NOT salesperson (the listing would still stay with the brokerage if salesperson dies)
-broker loses license
-realty is destroyed
-agreement to terminate |
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Definition
price fixing, *no set commission fees
- all fees are negotiable
- **price fixing is illegal because it kills competition
-**every commission is negotiable |
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if a buyer goes to seller and cuts you out, you get commission still
- *the clause will not continue if the seller lists with another brokerage |
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an EXAGGERATED statement
- purely opinion, subjective = puffing
- puffing is not misrepresentation |
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a seller (optionor) gives a buyer (optionee) the right to buy the realty within a certain time frame
-unilateral contract (one promise for performance) |
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one promise for performance
ex. reward for dog |
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| installment contract/land contract/contract for deed |
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| **owner carries title while buyer financing |
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| seller, retains legal title until vendee pays entire debt in an installment contract/land contract/contract for deed |
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buyer, takes possession and makes periodic payments in an installment contract/land contract/contract for deed
- has equitable title |
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| an INTENTIONAL misstatement of fact |
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| an UNINTENTIONAL misstatement of fact |
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| owner is aware of defect, but agent and buyer CANNOT SEE it with the naked eye |
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| Status of contracts - valid |
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Definition
-offer acceptance
-capacity
-legality
-consideration |
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| Status of contracts - void |
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Definition
-no offer of acceptance
-an act of God or gov.
-not legal (zoning)
-no consideration |
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| Status of contracts - voidable |
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Definition
disadvantaged party involved
-minor
-under the influence
-fraud
-menace (force or threat)
-duress
-under influence(position of power) |
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| Status of contracts - unenforceable |
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Definition
-all realty sales contracts must be in writing to be enforceable
-statute of frauds
-exception - a lease of one year or less |
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| Classification of contracts - bilateral |
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| Classification of contracts - unilateral |
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| a promise in exchange for performance |
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| Classification of contracts - executory |
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| something remains to be done |
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| Classification of contracts - executed |
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| terminating a sales contract |
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Definition
-agreement
-novation
-completion
**death will not terminate |
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| Results of a breach of contract - rescission |
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Definition
| return the parties to their original position (return buyer's earnest money) |
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| Results of a breach of contract - liquidated damages |
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| stated in the contract (seller retains buyer's earnest money) |
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| Results of a breach of contract - damages (court) |
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| Results of a breach of contract - specific performance |
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| sue to complete the contract |
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prohibits discrimination based on race
- Jones vs. Mayer |
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| prohibits discrimination based on race, color, religion, or national origin |
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| lending institutions denying loans because of location of realty |
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| channeling people to certain areas |
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| Exemptions to Law of 1968 |
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Definition
-owner owns 3 or less homes, has not sold one in 2 years, and not selling the one they're living in
-rental of rooms in an owner occupied 1-4 unit dwelling
-religious organizations
*These exemptions do not apply to:
-use of a broker
-discrimination based on race
-discriminatory advertising |
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| Federal Fair Housing 1974 - covers |
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Definition
-fair housing poster must me displayed (prima facie)
-sex (gender) |
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| Federal Fair Housing 1988 - covers |
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Definition
-familial status (pregnant women, children under 18, adoption, etc.)
-Handicap (mental or phys impairment, AIDS, alcoholism, etc.)
*does not apply if ever convicted of selling illegal drugs |
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| 1 or more persons over 55 years of age, 80% |
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- have 1 year to file a complaint with HUD
- have 2 years to file a civil suit in federal court |
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| American Disabilities Act of 1992 |
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Definition
-15 or more employees
-Gov buildings, public transportation
-private businesses open to public |
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Definition
-constructed before 1978
-lead most likely to be found in the soil surrounding the property
- least likely in walls
-seller and listing agent are responsible to get all disclosures to buyers |
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| Equal Credit Opportunity Act (ECOA) |
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Definition
| -lenders may not discriminate based on protected classes (age, marital status, public assistance, source of income) |
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| Real Estate Settlement Procedures Act (RESPA) |
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Definition
-consumers are aware of the closing costs in the purchase of a 1-4 unit dwelling
-settlement booklet
-good faith estimate upon application or w/in 3 business days
-settlement statement (HUD 1) 1 day prior to closing
-prohibits kickbacks |
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| Truth and Lending Law (Regulation Z) |
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Definition
lenders must provide understandable finance information including APR, interest, points, etc.
-any type of information, except APR and price, that are advertised will trigger a complete disclosure. vague references are ok. |
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Definition
-no capital gains if you have owned and occupied the home as a principal
-residence for at least 2 of the previous 5 years
-single $250,000, married $500,000 |
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- Realty is exchanged for like realty to delay capital gains tax (boot)
-intermediary is the person who handles the exchange |
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| paid anytime realty is transferred |
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| hand written text will take priority over typed |
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| existing zoning at time of contract will be binding |
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| interest rate capped in contract, market rates exceed then contract is terminated |
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| a listing is an example of a bilateral agency |
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| seller makes counter offer giving buyer a few more days - if a better offer comes in as long as the seller cancels the counter first he can accept the new offer |
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| under ANY circumstance discrimination on race is prohibited |
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| Main reason for a broker to have a trust account... |
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Definition
| to avoid commingling or conversion |
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| licensee part owner of a title company... |
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| must disclose relationship in company |
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| commission is negotiable between broker and client |
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