National Real Estate Principles and Practice
Agency is created by agreement, not by activity
A licensee's duties run to the client, not the customer. Know the difference between the two and the fiduciary duties commonly tested: care, obedience, loyalty, disclosure, confidentiality, and accounting. Dual agency arises when one brokerage represents both sides and requires informed written consent.
Trap: stems that imply agency from conduct ("the agent showed the buyer twelve homes, so she represents the buyer") or from compensation ("the seller pays the commission, so the buyer has no representation"). Neither creates agency; look for the written agreement.
Contracts and the transaction
Know the elements of a valid contract (offer, acceptance, consideration, capacity, lawful purpose, and writing for land under the statute of frauds), the function of contingencies, earnest money, and time-is-of-the-essence clauses.
Trap: confusing the purchase agreement, which gives the buyer equitable title, with the deed, which passes legal title at closing.
Title, ownership, and financing
Review deeds and title insurance, forms of co-ownership, easements, and recording. On financing, know conventional, FHA, and VA basics, the three-business-day rules for the Loan Estimate and Closing Disclosure, and RESPA's prohibition on referral fees.
Trap: "the agent may accept a fee from the lender for the referral" - RESPA Section 8 forbids it.
Fair housing and disclosures
Federal law protects race, color, religion, sex, national origin, familial status, and disability. Steering, blockbusting, and refusing reasonable accommodations are violations. Sellers must disclose known material latent defects.
Worked example: a $412,000 sale at 6% total commission equals $24,720. If the listing side is 3.5% ($14,420) and the cooperating side 2.5% ($10,300), adding the two back confirms the total - a quick check when a stem gives one side only.