Humber Real Estate Course 2, Module 1, Explaining Services Available to a Seller or BuyerQuestions and Answers with complete solution

A brokerage representing only a seller would consider a buyer as a _________ or a customer? - Third Party A buyer completes the purchase of a property, but shortly after taking possession discovers there is a latent defect to the land or improvements. Is the brokerage liable? - No. The brokerage should be indemnified as the buyer was required to make their own enquiries to confirm the condition of the property. This is an example of 'Duty of Indemnification'. Note: If the agent acts unlawfully or negligently, or is in breach of duty, the principal has no duty to indemnify the agent. A buyer grants express authority to the brokerage to seek out suitable properties for the buyer to view. What are some examples of a buyer's express authorities to a brokerage? - - To locate a suitable property - The brokerage's entitlement to receive and retain a commission paid by the seller or the listing brokerage - Providing information as needed to third parties retained by the buyer to assist in the transaction A Listing (Seller Agency) Agreement / Buyer Agency Agreement is also known as ... - Representation Agreement A seller grants express authority to a brokerage to offer their property for sale. What are some examples of a seller's express authorities to a brokerage? - - Allowing buyers to fully inspect the property - Placing a 'For Sale' or 'Sold' sign on the property - Giving the exclusive authority to make all advertising decisions to the brokerage A seller or buyer representation agreement is required to have both an ___________ date and an _____________ date. - Effective & ExpirationAfter an agreement is terminated, there are continuing responsibilities to the principal based on the __________ obligations owed under the relationship. - Fiduciary Agency is also known as ... - Representation Agreement of Purchase and Sale is also know as ... - Agreement (Conveyance of Interest in Real Estate) An agent (brokerage) as a __________ has the legal obligation to act in the principal's (seller's or buyer's) best interests. - Fiduciary Can a salesperson encourage a buyer to break an existing agreement of purchase and sale if it means that buyer might buy their own listing instead? - No. This is forbidden by The Code. Can you verbally promise a client something? - No. It must be in writing, signed by the person making the guarantee and delivered to the party to whom the guarantee is made. Define 'Authority' in legal terms - The legal power or right given by a principal, and accepted by the agent, to act on the principal's behalf in business transactions with a third party, and is typically analyzed in terms of actual and implied authorities. Define 'Brokerage' according to REBBA - The agent who is authorized to trade in real estate on behalf of others. Define 'Duty of Indemnification' - The agent must act according to the lawful instructions of the principal, and in doing so, may not be held responsible for any liability, claim, loss, cost, damage or injury resulting from these acts. As a general rule of agency, the principal must compensate an agent for loss or damage incurred in carrying out lawful acts. Define 'Duty of Remuneration' - The obligation of the principal to pay the brokerage for the services agreed to and provided as part of the agency relationship between the parties.Define 'Duty regarding any other obligations agreed to' - The principal must perform any other obligations as agreed to by both parties in the representation agreement. Note: It's strongly recommended that any other obligations be formally documented in the representation agreement rather than agreed to verbally in order to avoid any misunderstandings) Define a 'Dual Agency' relationship - There is one agent (brokerage) representing two or more principals (sellers and/or buyers) within the same transaction. Define a 'Single Agency' relationship - There is one agent (brokerage) representing one principal (seller or buyer) within a transaction with a third party. Define an agency relationship by 'Estoppel' - When a principal leads a third party to believe they are being represented by the agent, and that the agent has the authority to act on behalf of the principal. (i.e. Principal acts like they already have the relationship with a brokerage. Must be provable by words or actions that the brokerage has the authority) Define an agency relationship by 'Operation of Law' - When a duty created by circumstance is imposed on an agent to act on behalf of the principal, where previously no agency relationship existed. This relationship is based on established legal principles rather than by a formal agreement. This is rare but happens in emergency situations. Define an agency relationship by 'Ratification' - When the authority is granted retroactively (i.e. the agent has acted without authority OR in excess of the authority granted). The principal then agrees to be bound by such unauthorized acts. Define the 'Irrevocable Time Period' - A time and date included in an offer which identifies the length of time the party has to accept an offer. Does a brokerage or a salesperson have the authority to sign a contract on behalf of a principal? - No, unless precise and clear authority is granted.Note: ... BUT even with approval, this can put a brokerage in a position with legal ramifications, so a brokerage would first ask for an extension to the offer so the seller can sign themselves as this is much less risky. Dual Agency is also known as ... - Multiple Representation During a private sale of a property, when is a customer service agreement typically signed by a brokerage and the seller? - Before showing the property to a buyer