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| 6720076335 | Agency | the representation of another person called a principal, by an agent, in dealings with third persons | 0 | |
| 6720076336 | Agent | is empowered to represent a principal in negotiating with a third party for the principal's bene t | 1 | |
| 6720085560 | General Agency | one who has broad powers to act on behalf of the principal | 2 | |
| 6720085561 | Special Agency | has limited or well-de ned powers, frequently con ned to a single transaction. Most real estate agencies are special in nature, with powers normally limited to the sale of a specific property | 3 | |
| 6720100480 | Independent Contractor | when an individual is hired to accomplish results and little or no supervision is required (no SS, income taxes paid by an employer, etc.) | 4 | |
| 6720108482 | How is an agency created? | by agreement, by ratification, and by estoppel | 5 | |
| 6720114091 | Creation by Agreement | The principal (usually the seller) appoints a real estate agent in writing, or by their mutual actions. The authorization to sell (listing agreement) is the document most frequently used to appoint real estate agents. The authorization to sell speci es the powers del- egated to the agent, the terms and conditions of the proposed sale of the property, and the circumstances under which a brokerage commis- sion is earned, as well as the brokerage amount. | 6 | |
| 6720114092 | Creation by Ratification | Under this concept, no agency is currently in existence; however, a series of events then occurs that creates an agency relationship. In other words, an unauthorized agent performs a service on your behalf of which you are unaware. Upon learning of the service, which turns out to be beneficial, you accept the responsibility for the agent's act. As an example, assume Chang, a real estate broker, approaches Johnson with an offer from a buyer to buy Johnson's store when Johnson had not previously considered selling the store. Johnson likes the price and terms and decides it would be advantageous to sell the property. By accepting the offer and agreeing to pay a commission, Johnson has created an agency with broker Chang. In essence, Johnson ratified broker Chang's unauthorized actions by accepting the buyer's offer. | 7 | |
| 6720123102 | Creation by Estoppel | In an estoppel situation, an individual knowingly allows another person to perform tasks beneficial to that individual. Later, the individual determines that the person did not act properly and decides to pursue legal recourse but may be prevented from doing so because there was no legal duty to care for that individual. For example, say Dang was selling his own home. Agent Jones offered Dang a price that was clearly below market value, but Dang was not aware of the market value of his property. During the transaction, Jones assisted Dang with the paperwork but never formally became Dang's agent. After the close of escrow, Dang discovers he underpriced his property and wants to sue Jones. Dang would only be able to recover from Jones if he could prove Jones had a duty to care for him. Such a duty exists between an agent and his or her principal, which you will learn is a fiduciary duty. In order to recover from Jones, Dang would have to show that Dang relied on the efforts of Jones and that Jones in fact performed the actions of an agent. This legal theory is called agency by estoppel. | 8 | |
| 6720136577 | Actual v. Ostensible Agent | Actual agent: directly appointed by a principal where the agent is granted certain powers to act on behalf of the principal. Ostensible agency: exists when an agents purports to be the representative of a principal but has not been authorized to act on behalf of the principal and knowingly allows innocent third parties to believe that the unauthorized person is the principal's agent. | 9 | |
| 6720144894 | Fiduciary Relationship | one of loyalty, obedience, and confidentiality, and it obligates the agent to act in the principal's best interest. This relationship is probably the agent's most important duty. An agent cannot act in a manner that is detrimental to this fiduciary relationship. The agent (1) cannot pro t from the agency without the consent of the principal, (2) must obey all lawful instructions of the principal, and (3) must keep all information told to the agent by the principal con dential unless instructed to disclose or such disclosure is required by law. | 10 | |
| 6720150661 | Seller's Agency | When a seller appoints a RE broker to find a buyer for the seller's property. The relationship between broker and seller, not broker and buyer. Legally bound to do what is best for the seller. Responsibility to accurately represent the property to the buyer as well. | 11 | |
| 6720152122 | Buyer's Agency | RE broker appointed to help a buyer find property. The relationship is between the broker and the buyer, not the broker and the seller. | 12 | |
| 6720176233 | Single Agency | An agency for either buyers or sellers. | 13 | |
| 6720178399 | Dual Agency | A RE broker may represent the buyer and the seller, but all parties must be aware. Considered by many attorneys as a conflict of interest with high potential for lawsuits (errors and omissions insurance covers for possible issues) | 14 | |
| 6720199358 | Agency Disclosure Agreements | Broker must disclose in writing to the buyer and seller whether the agent is the seller's agent, the buyer's agent, or both. Must be signed before seller signs the listing contract, and before the buyer signs the purchase contract. 3 step process: disclosure (presentation of the choice to be the agent for the buyer, seller, or both), election (seller and/or buyer elect single or dual representation), and confirmation (by signing required form). | 15 | |
| 6720230776 | California Civil Code 2079.14 | requires the listing agent to disclose only to the seller and the selling agent to disclose to both the seller and the buyer, unless one agent represents both seller and buyer | 16 | |
| 6720239214 | Subagents | If the seller gives permission in the listing agreement, a real estate agent can assign some of his or her duties to other licensed agents | 17 | |
| 6720267985 | Trust-fund Handling Problems (10145) | defined as money or other items of value that an agent receives on behalf of a principal in the course of a real estate transaction that requires a license. General trust fund rules are out- lined in the next section, but the point stressed here is that the most common agency violation is the failure to handle trust funds in an appropriate manner | 18 | |
| 6720271024 | Misrepresentation (10176a) | This includes not only what was said but also the failure of a broker or salesperson to disclose a material fact about the property | 19 | |
| 6720272875 | False Promise (10176b) | A false statement about what the promiser is going to do in the future. To prove false promise, the injured party must show that the promise was impossible to perform and that the person making the promise knew it to be impossible. An example might be "Buy this home and it will double in value in six weeks!" | 20 | |
| 6720281207 | Commingling and Conversion (10176e) | Commingling takes place when a broker has mixed the funds of his or her principal with the broker's own money. Conversion is not the same thing as commingling. Conversion is misappropriating and using the client's money. This is a crime that carries a jail sentence. | 21 | |
| 6720288205 | Definite Termination Date (10176f) | Law requires a specified termination date for all exclusive contracts between a real estate agent and a principal relating to transactions for which a real estate license is required. What a de nite termination date is has been the subject of a number of lawsuits. Generally, if a de nite date is specified in the contract or if a de nite period of time is indicated, the requirement is satisfied. However, if it cannot be determined from the exclusive listing contract when the listing is to expire, then the real estate agent may be in violation of the law. | 22 | |
| 6720294508 | Secret Profit (10176g) | Usually arise when the broker, who already has a higher offer from another buyer, makes a low offer, usually through a "dummy" purchaser. The difference is the secret pro t. This is sometimes referred to as divided agency; agents must always disclose any self-interest they might have in a transaction and obtain their principal's consent. Many attorneys contend that an agent is guilty of secret profit or divided agency if the real estate agent derives any profit other than the agreed commission without disclosing the nature of the profits to the principal. | 23 | |
| 6720306857 | If a broker received payment from a buyer (who doesn't express that the money remain uncashed) they must do one of the following within 3 business days: | 1. Give the deposit to the principal (the seller) 2. Put the deposit in escrow 3. Put the deposit in a trust fund account | 24 | |
| 6720322015 | Double-Entry Accounting | Every business transaction will involve two accounts (or more). For example, when a company borrows money from its bank, the company's Cash account will increase and its liability account Loans Payable will increase. If a company pays $200 for an advertisement, its Cash account will decrease and its account Advertising Expense will increase. | 25 | |
| 6720328174 | Recovery Fund | Public can recover money when there are certain uncollectable court judgments obtained against a real estate licensee on the basis of fraud, misrepresentation, deceit, or conversion of trust funds in a transaction. Limited to $50,000 per claim. $250,000 max against one agent. | 26 | |
| 6720341306 | Caveat emptor | The Latin phrase meaning "let the buyer beware," is no longer a defense in court in a real estate transaction. If a seller withholds material facts about the property, such as structural defects known to the seller, the seller can be sued by the buyer. | 27 | |
| 6720346407 | "As is" sales | California laws and regulations require that the buyer be fully informed as to the condition of the property, including any known defects, before the buyer becomes bound by a purchase contract. If the buyer is fully informed and still wishes to proceed with the sale, then an "as is" transaction is permissible. | 28 | |
| 6720365989 | Broker vs. Salesperson | - Salesperson must work for a broker - Salesperson must use brokers name when signing listing agreement with seller - Salesperson responsible for final results, not the method used to achieve those results - Salesperson functions as an independent contractor - Commission must be in writing within an agreement | 29 | |
| 6720734268 | Regulation of Agents | - Regulated by gov't and trade organizations - CalBRE enforces real estate law | 30 | |
| 6720800961 | 6 Ways to Terminate an Agency | 1. Termination by completion of the agency agreement 2. Termination by expiration of time 3. Termination by death of the principal or death of the agent 4. Termination by destruction of the property 5. Termination by mutual consent. The principals and the agent can mutually agree to terminate the agency 6. Termination by unilateral action of the agent or the principal | 31 |
