Alabama Real Estate

Alabama Real Estate Exam Already Graded A+ Special or Specific Agency ️The Principal gives the agent authority to do one specific thing-sell property. They enter into a contract that stipulates how the task will be done-multiple listings of the property, commission paid etc. General ️Principal and agent enter into a contract giving the agent the authority to conduct several activities-show property to renters, check references and negotiate leases. Designated agency ️A dual agent cannot fully represent both parties so the agent designates another agent in their office to respresent either party-usually the buyer. Nonagency ️transaction or facilitative-the agent faciliates the transaction by showing properties and assisting with paperwork. Both parties are on their own when it comes to their interests. Listing contract ️it is not between the agent and the seller but between the seller and the broker Exclusive Right to Sell ️Most advantageous type of listing-gives the broker the sole right to market a property. Regardless of who finds a ready, willing and able buyer, the broker receives a commission. Exclusive Agency ️agent markets the property but if the principal sells it then the agent does not receive a commission Open listing-general ️gives the right to market the poperty to a number of brokers. The principal can sell it themselves and only the broker that brings a ready, willing and able buyer recieves commission. Net listing ️broker receives the difference between the selling price and the price that the owner wants Multiple listings ️Multiple listing systems or services are marketing tools. Allows brokers to share listings and commissions. Buyer agency ️binds the broker to look out for the buyers best interests. With a dual agency the broker is not able to tell the buyer if the property is overpriced or if another property is better. Exclusive buyer agency-exclusive right to represent ️gives the broker the exclusive right to help a buyer find a property. The broker is paid a commission even if the buyer buys a property during the time period of the agreement without the brokers help. Exclusive Agency Buyer Agency ️does not guarantee a commission. The broker is given exclusivity over other agents to find a property for the buyer, but if the buyer finds a property he does not have to pay the broker a fee. Open buyer agency ️buyer enters into an agreement with a number of brokers to find a property. only the broker that finds the property that the buyer purchases receives a commission. no commission is paid if the buyer finds his own property. Termination of agency ️PERFORMANCE- happy seller and happy buyer at closing expiration of the listing, mutal agreement, RENUNCIATION- resignation of the agent REVOCATION-principal firing agent Real estate settlement procedures act (RESPA) ️a federal law requires certain disclosures such as a standard Good Faith Estimate (GFE) that explains key loat terms and escribes a best estimate of closing costs Mandated disclosures ️presence of lead paint in homes built before 1978. A seller does not have to test for lead paint, but must disclose the fact if known. if property is in a flood zone as designated by the Federal Emergency Management (FEMA) the need for the buyer to purchase flood disaster insurance, b/c the current owner has received flood disaster insurance from the federal govt other disclosures ️some states require disclosures of sex offenders due to Megan's Law Property stigmas ️seller and seller's agent need to be honest about anything int he history of the property that could hinder the sale; such as criminal acts or deaths that are associated with the property. Fiduciary responsiblities of agents ️loyalty, obedience, disclosure, confidentiality and resoanable care and diligence and accountablility fiduciary notes ️disclosure responsibilities are for both buyer-agent and seller-agent. The agent has a fiduciary responsibility to disclose any relationships or fees he has that affect the seller or buyer. The agent must also disclose any known financial issues the buyer might have. Standards for commission ️there is no standard percentage for commission. Any attempt to standardize commission rates among brokers is considered price fixing according to federal law Bundle of Rights ️Occupy, use and enjoy your property including the land, water and air. Right to employ the property in productive ways such as farming or leasing and to sell, bequesth, give or lease the property in part or in total. Sole Owner ️an individual's ownership of property is called sole ownerhsip or tenancy in severalty. No one else has an iterest int hat particular property except that individual Joint Tenancy ️Right of survivorship, if one dies, the other tenants automatically take ownership of the deceased's share. The person's heirs do not inherit the interest. Four requirements: Unities of time, title, interest and possession. Tenancy in Common ️No right to survivorship. Most often used form of co or joint ownership. Interests does not have to be 50/50 Each tenant holds ownership in severalty, which means that each tenant may dispose of that interest as he or she chooses without the consent of the other. One tenant may put a second mortgage on his itnerest, sellt he itnerest, or leave it to a third party in his will. Owning as a married couple ️tenancy by the entirety-owned by two parties ina marriage, they each have undivided and equal interest and the right of survivorship. If divorced, tenancy by entirety is replaced by tenancy in common. Community property- no right of survivorship. A spouse may leave his or her half to the surviving spouse, to a child, or to anyone he/she wishes. Trusts ️a legal arrangement in which the owner (trustor) conveys the ownership of the propertyto the trust, thus giving another (trustee) the power to manage the poperty/trust for the benefit of a third party (beneficiary) Living trust-inter vivos ️a trustor creates the trust to be effective during his or her lifetime testamentary trust ️a trustor leaves instructions in his or her will about establishing a trust that will not be effective until after he or she dies condo ownership ️a deed changes hands. buyer owns a specific unit as well as interests in common areas, pays taxes and a homeowners fee Co-op ️owns shares in the underlying corporation and therefore does not get a deed. Pays fees that