FINA 210 Lecture Notes - Lecture 4: Multiple Listing Service, Mortgage Loan, Listing Contract
25 Apr 2016
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Document Summary
The legal environment in real estate transactions includes two parties: principal and agent. They are governed by the law of agency. Entails rules set forth when another individual is doing something on one"s behalf. In real estate, a principle hires an agent to sell his house, or a principal can hire an agent to purchase a house on his behalf. Agency is created when one person is given the right to act on behalf of, or under the control of, another. The law of agency concerns the legal rights, duties and liabilities of the principal, the agent and a third party based on contracts and/or the relationship between them. The person for whom an agent acts is a principal; therefore, in signing a listing agreement an owner becomes a principal. A disclosed principal is identified to the third party. An undisclosed principal is secretly represented by an agent who appears to be acting in self-interest.
