Final answer:
The three types of authority commonly used in business deals, such as in real estate, are legal, expert, and referent authority.
Step-by-step explanation:
In business deals, it is essential to establish authority to ensure that agreements are made and followed through properly. The three types of authority commonly used are legal, expert, and referent authority.
Legal authority refers to the power given by law or government to a person or organization to make decisions and enforce them. In real estate, legal authority is crucial as it allows individuals or companies to enter into contracts and make binding decisions. For example, a real estate agent has legal authority to represent a seller and negotiate on their behalf.
Expert authority is based on knowledge, skills, and experience in a particular field. In real estate, this could be seen in the expertise of a home inspector or a property appraiser. These professionals have the knowledge and skills to provide accurate assessments and evaluations, which can be relied upon by both buyers and sellers in a real estate transaction.
Referent authority, on the other hand, is based on personal relationships and trust. In real estate, this could be seen in the influence and reputation of a real estate agent or broker. Buyers and sellers may choose to work with a specific agent because they trust and value their expertise and personal connections.
These three types of authority are crucial in business deals, especially in real estate, as they establish credibility, trust, and accountability. Having a combination of legal, expert, and referent authority can lead to successful and mutually beneficial agreements in the world of real estate.