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PERRY REAL ESTATE MODULE TWO UNIT 1 STUDY GUIDE
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PERRY REAL ESTATE MODULE TWO UNIT 1 STUDY GUIDE
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PERRY REAL ESTATE MODULE TWO UNIT 1 STUDY GUIDEHistory of Brokerage 1950s - Answers- Formally one-office, a family ran operation.
Common law dictated "caveat emptor" which means "let the buyer beware."
History of Brokerage 1960s - Answers- MLS came into play and opened up the
industry. This was a momentous shift in the industry
History of Brokerage 1980s - Answers- Buyers began to question and demand
representation. This increases the need for specific buyer's agents.
History of Brokerage 1990s - Answers- Internet accessibility changed the game. The
dawn of the consumer Information Age. Consumers begin to have much more power.
Broker - Answers- This is the individual who is licensed to buy, sell, exchange or lease
property for others and charge a fee for service.
Brokerage - Answers- This is a business of bringing buyers and sellers together.
Principal Broker - Answers- The individual who hires and delegates to the agent the
responsibility of representing his or her interests. They can designate an agent to
represent a buyer, seller, owner, or tenant
Duties of a principal broker - Answers- Manage the business and set policies, maintain
the space and equipment, direct the staff and sales activities, master real estate
transactions.
Transaction Broker - Answers- They are known as the facilitator, intermediary,non-
agent, or contact broker. They assist two parties in a real estate transaction but
represent neither.
principal client - Answers- A buyer or seller, landlord or tenant that: signed an
agreement with the agent; this agreement obligates the agent to perform a service for
the client; and it creates a fiduciary relationship
customer service - Answers- To the buyer, the agent must use reasonable care and
skill. They must use honesty and fair dealing. They must disclose all facts that materially
affect the value of the property. You must use property disclosure forms and suggest pre
purchase inspections.
Law of Agency - Answers- The law that governs the relationship between a principal
and his or her agent. This is known as the "common law" law of agency.
fiduciary relationship - Answers- A relationship of trust and confidence, as between
trustee and beneficiary, attorney and client, or principal and agent. Here are duties:
, care/confidentiality, obedience, accounting, loyalty, disclosure. USE the memory jogger
COALD
Implied Agency - Answers- Implied by the actions of the parties rather than a signed
contract. It may create an undisclosed dual agency unintentionally, inadvertently, or
accidentally
Single Agency - Answers- the agent represents only one party to a transaction, Either
the buyer or the seller
agency coupled with an interest - Answers- A broker agrees to provide the financing for
a condominium building being constructed by a developer in exchange for the exclusive
right to sell the units once the building is completed. The developer may not revoke the
listing agreement once the broker has provided the funding
Dual Agency - Answers- Representing both parties to a transaction. This is unethical
unless both parties agree to it, and it is illegal in many states
Termination of Agency - Answers- An agency relationship can be terminated by any of
the following: Completion, performance, or fulfillment of purpose of agency; destruction
or condemnation of the property; expiration of the terms of the agency, mutual
agreement of all parties to the contract; breach by one of the parties, who may be liable
for damages; and opinion of law, as in the bankruptcy of the principal.
Liability of Termination - Answers- A seller who terminates a contract before expiration
is liable for all expenses incurred by the broker such as advertising, postage, etc.
Compensation - Answers- The source of compensation does not determine agency.
Agency exists even if no commission is paid (gratuitous agency). The listing agreement
must state how the agent is being compensated and state all the alternatives. (%, flat
fee, hourly, or free)
License Law - Answers- Purpose is to protect the public by: establishing basic
requirements for licensure and continuing education; defining activities which require
licensing; setting standards for conduct and ethics; and enforcing those standards
through discipline.
National Association of of Realtors (NAR) - Answers- The largest real estate
organization in the world; NAR members subscribe to a strict code of ethics. Active
members are allowed to use the trademarked designation, REALTOR.
NAR Code - Answers- The national association of realtors regulates and enforces the
Code of Ethics
legal rights and obligations - Answers- You should consult an attorney to protect
yourself. Licensees are usually not also attorneys; therefore, you should refrain from
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