Unit 4: Authorized Relationships, Duties, and Disclosures Flashcards Preview

Florida Real Estate Pre-Licensing 63-hour Class > Unit 4: Authorized Relationships, Duties, and Disclosures > Flashcards

Flashcards in Unit 4: Authorized Relationships, Duties, and Disclosures Deck (21)
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1
Q

Administrative Law

A

The body of law created by administrative agencies in the form of rules, regulations, orders and decisions.

2
Q

Agent

A

A representative; one who is authorized to act on behalf of another.

3
Q

At Arm’s Length

A

An arm’s length transaction refers to a business deal in which buyers and sellers act independently without one party influencing the other.

Arm’s length transactions are commonly used in real estate deals because the sale affects not only those directly involved in the deal but other parties as well, including lenders.

If two strangers are involved in the sale and purchase of a house, the final agreed-upon price is likely close to fair market value, assuming that both parties have equal bargaining power and equal information about the property. The seller would want a price that’s as high as possible, and the buyer would want a price that is as low as possible. Otherwise, the agreed-upon price is likely to differ from the actual fair market value of the property.

Whether the parties are dealing at arm’s length in a real estate transaction has a direct impact on financing by a bank of the transaction and municipal or local taxes, as well as the influence the transaction could have on setting comparable prices in the market.

4
Q

Caveat Emptor

A

The principle that the buyer alone is responsible for checking the quality and suitability of goods before a purchase is made.

5
Q

Common Law

A

Common law is a body of unwritten law established by the court. Unusual cases that cannot be determined based on existing written laws will be influenced by common law in order to make a decision. For example, in real estate very often you will hear about the common law property system, which is a system used to determine ownership of property during marriage. This is fairly important in distributing wealth after one of the spouses passed away or during a divorce.

6
Q

Consent to Transition

A

Transition to transaction broker disclosure.—A single agent relationship may be changed to a transaction broker relationship at any time during the relationship between an agent and principal, provided the agent first obtains the principal’s written consent to the change in relationship. This disclosure must be in writing to the principal either as a separate and distinct document or included as part of other documents such as a listing agreement or other agreements for representation. When incorporated into other documents, the required notice must be of the same size type, or larger, as other provisions of the document and must be conspicuous in its placement so as to advise customers of the duties of limited representation, except that the first sentence of the information identified in subparagraph (c)2. must be printed in uppercase and bold type.

7
Q

Customer

A

A customer uses the services of a real estate licensee but has not signed an agreement with an agent.

8
Q

Designated Sales Associates

A

Two real estate licensees assigned to represent the buyer and seller as single agents in a nonresidential transaction. The buyer and seller must have assets of $1 million or more and sign disclosures declaring their assets meet the mandatory threshold.

9
Q

Dual Agency

A

When a single agent represents both the buyer and seller in a real estate transaction. This brokerage relationship is illegal in the state of Florida

10
Q

Fiduciary

A

A fiduciary is a person who holds a legal or ethical relationship of trust with one or more other parties. Typically, a fiduciary prudently takes care of money or other assets for another person.

11
Q

General Agent

A

A representative authorized to by the principal to perform only acts related to a business or to employment of a particular nature

12
Q

Limited Representation

A

Transaction brokers provide a limited form of nonfiduciary representation to a buyer, or seller or both in a real estate transaction

13
Q

No Brokerage Relationship

A

A seller or a buyer can choose not to be represented by a real estate broker. Florida law does not require a buyer or seller to be represented. A broker working in a no broker relationship may enter into a listing agreement with a seller and be paid a commission.

14
Q

Nonrepresentation

A

A legal brokerage relationship in which brokers do not represent either buyers or sellers in a transaction. Under Florida law all brokers are presumed to be transaction brokers unless the client or customer requests in writing to have another form of representation; that is, single agent or non-representative broker.

15
Q

Principal

A

A principal is any person involved in a contract, such as a seller, buyer, principal broker, or an owner who has hired an agent as a property manager.

16
Q

ADD

A

Mnemonic device to remember the duties in all three brokerage relationships - No Brokerage Relationship, Transactional Broker and Single Agent
A- Account for all funds
D- Deal honestly and fairly
D- Disclose all material facts related to the value of residential property.

17
Q

COLD

A
Mnemonic device to remember the duties of a single agent brokerage relationship.  In addition to ADD in all three brokerage relationships, single agents are held to 
C - Confidentiality
O - Obedience
L - Loyalty
D - Disclosure (full)
18
Q

Residential Sale

A

The sale of improved residential property of four or fewer units , the sale of unimproved residential property intended for use as for or fewer units, or the sale of agricultural property of 10 or fewer acres

19
Q

Single Agent

A

An agent who is in a fiduciary relationship with either the buyer or seller of a real estate transaction, but not of both parties

20
Q

Special Agent

A

A special agent in real estate is an agent hired to perform a specific duty for a client. The agent’s authority is limited to the specific job for the client. … The agent only has the authority to act as the client’s listing agent; once the home is sold, the relationship between the agent and the client ends.

21
Q

Transactional Broker

A

A transaction broker provides limited representation to a buyer, seller, or both in a real estate transaction but does not represent either in a fiduciary capacity or as a single agent. Limited representation allows a licensee to facilitate a real estate transaction by assisting both the buyer and the seller, but a licensee will not work to represent one party to the detriment of the other party when acting as a transaction broker to both parties.