RE Law

mutual consent of principal and agent

Agent acts ON BEHALF of principal

Princpal has RIGHT to CONTROL the agent

Authority expressly given to agent by principal

Agency is implied form conduct of parties, custom of trade, or act incidential to carrying out the agent's duties

Principal leads 3rd party into believeing the agent has authority

Agent commits acts outside the scope of his authority, but thereafter is authorized by principal

ex. finds home outside desired school district.  Principal loves homes and waives the act

• 1. Employed as agent for real estate dealings
• 2. Listings in Broker's name
• 3. Employs and supervises salesperson

• 1. RE agent licensed by the state
• 2. Required to work for licensed RE broker

Contract where owner employes agent to sell his property

• 1. IN Writing (oral agreements are unenforceable)
• 2. State Price and Terms
• 3. state duration of listing agreement
• 4.Amount and structure of comission

Listing: Works for seller

Buyer

One Agent represents both buyer and sellers.

Both parites must be AWARE and SIGN off

Punishment: Lose or pay back commission

One firm represents both buyer and seller in transaction

Broker designates one person to represent seller and another to represent buyer

intrascation involving MLS, buyers agent is the Cooperating broker

entitled to commission

Do not represent either seller or buyer as agent

Assists and facilitates CLOSING the transaction

NO FIDUCIARY duties to the parties

• Open
• Exclusive Agency
• Exclusive Right to Sell
• Net Listings

1. Seller can list property with MORE THAN ONE broker

2. First agent to sell gets comission

3. Seller Retains right to sell property themselves and owes not commission

Seller pays commission to broker if broker sells property

Seller can self sell property, and NO commission is paid

If a 2nd broker is hired, original broker gets a commission NO MATTER WHAT. (aka seller may have to pay two commissions)

Broker entitled to commission regardless of who produces buyer (even if sale by owner)

Network of RIGHT-TO-SELL listings

1. members list and show properties to other members

2. if sale is made, commission is paid to members

When broker brings READY, WILLING, and ABLE buyer at the listing price

borker must bring seller and buyer together (need not actually close to the deal to receive commission)

Seller sets predetermined amount of money they wish to receive from the sale after expenses

Broker receives anything paid above seller determined amount

• 1. Must work for broker
• 2.

• 1. 2 years as salesperson or two year RE experience
• 2. Pass Exam
• 3. 18 yrs old
• 4. No Felonies
• 5. Pay Fees
• 6. Honesty Requirement

• 1. Selling own home
• 2 . LIcensed attorneys
• 3. Finders

• 1. Act as salesperson or broker without license
• 2. Contract between unlicensed broker and seller is void

• 1. Act in best interest of princapl
• 2. not lead seller to unsound transactions
• 3.disclose all known material information

Broker Must:

• 1. Due diligence and pricing
• 2. Communicate and present all offers
• 3. Evaluate offers and inform of strengths and weakness
• 4. Explain customs and practices of RE industry
• 5. NO supply legal advice

Cannot limit duty of care responsibilities through contract clauses

• Broker must not:
• '1. Act as dual agent w/o consent
• 2. Make Secret Profit (full disclosure of related interests wher eborker may profit at expense of principal)
• 3. Disclose confidential information
• 4. withhold material facts

Typically have no duties except:

• 1. Mispresentation
• 2. Sales puffing
• 3. Disclosure

broker knows of material fact and either:

1. intentionall misstates to 3rd party

or 

2. knowingly fails to disclose to 3rd party

broker states a Material FAct w/o reasonable knowledge of its truthfulness

3rd party relies on that statement

1. Opinon describing greatest of a property

• 2. Misrepresentation when:
• Statements inflate value and desirability of property without being "marketing"

Broker knows of material problems or defects UNLIKELY to be discovered and fails to disclose them to potential buyers

Buyer accepts property w/ all existing defects and no promise of repair


Still must know:

• latent defects
• Broker can stil be liability for intentional misrepresentation

• 1. Compensation
• 2. reimburse costs incurred
• 3. indemnify: when principal fails to disclose a material fact and broker is sued for that fact

* Principal owes no fiduciary duties to broker

• commingling of funds
• discrimiantion
• felony convictions
• split commissions w/unlicensed party
• failure to deliever documnets
• failure to submit all offers to seller
• breach of fiduciary duties/unethical conduct
• unauthorized practice of the law

Equal Opprotunity to buy, rent and live in properties

Prohibits discrimination

When Owner sells his own home

No agent

No discriminatory advertising allowed

Unit contains four or fewer units

Owner resides in residential dwelling

blockbusting: telling people to move because a particular race, religion, etc. is moving in