Section 7 Unit 3: Responsibilities of Agents

What are the duties are owed to other parties in a transaction?

- Treat honestly and fairly - Disclose all material facts - Correct inaccurate material facts - Cooperate with buyer agents on showings, offers, and paperwork - Present offers from other parties to the seller

An inspection of the house didn't mention the roof leak that your seller client told you about. What should you do? 1- Make sure the roof leak is disclosed to all parties. 2- Maintain client confidentiality about the roof leak. 3- Pay for a new inspection.

1- Make sure the roof leak is disclosed to all parties. Right! It's your duty to make sure this information is known to others, even if it may seem to hurt your client's position.

Buyer Agent Duties

1. Advocate for the interests of the buyer. 2. Seek the best price available or a price that's acceptable to your buyer.

What are the seller's agent duties?

1. Advocate for the seller. 2. Seek a sale of the property at the best price available or a price acceptable to the seller. 3. Need to inform buyers that you represent the seller.

As a seller's agent negotiating a buyer's offer, you'll have a relationship with both the seller and the buyer, but in what capacity? Identify your relationship with both the buyer and seller. 1. Customer 2. Client

1. Buyer 2. Seller

Which types of agency relationships are permitted in South Carolina?

1. Buyer agency 2. Seller agency 3. Designated dual agency 4. Disclosed dual agency 5. Transaction brokerage

As a single agent, on what topics can you advise your clients? 1. Real estate 2. Mortgage qualifying 3. Legal items related to the transaction 4. Appraisal amount

1. Can Advise On 2. Cannot Advise On 3. Cannot Advise On 4. Cannot Advise On

Although a dual agent may represent both parties in a transaction, the agent must keep certain information shared by each party confidential. Determine whether each of the following pieces of information needs to remain confidential, or if it can be shared with the other party. 1. The property is listed for $265,000, but the seller is willing to go as low as $250,000. 2. The seller wants to move because of an ongoing dispute with the neighbor. 3. The buyer is going to offer $245,000, but is willing to go as high as $250,000. 4. The seller originally paid $235,000 for the property. 5. The buyer wants to buy the home so he can rent it to his sister. 6. The seller recently replaced the roof due to hail damage.

1. Confidential 2. Confidential 3. Confidential 4. Can Be Shared 5. Confidential 6. Can Be Shared

What are some of the prohibited disclosures under dual agency?

1. Disclosing to a buyer that the seller will accept an amount other than the asking or listed price 2. Disclosing to a seller that the buyer can pay a price other than or greater than the price submitted in a written offer to the seller 3. Disclosing the motivation of either the buyer or the seller for selling or buying the property 4. Disclosing to a buyer or seller that opposing parties will agree to financing terms other than those specified in their respective offering

Duties Owed by Clients (principals)

1. Disclosure of known latent defects - owed by sellers, not buyers 2. Must make property available for showings and inspections - owed by sellers, not buyers 3. Adherence to terms of the contract 4. Proceeding in a timely manner 5. Disclosure of material facts 6. Acting in good faith 7. Proceeding with financing - owed by buyers not sellers

Identify whether these statements related to statutory duties are true or false. 1. If common and statutory law conflict, common law prevails. 2. One duty a seller's agent owes is to present all offers and counter-offers in a timely manner, even if the property is already under contract. 3. Buyer's agents aren't permitted to show other buyers the same properties they've shown another buyer client. 4. When engaged as an agent, the licensee must treat other parties honestly. 5. When acting as a dual agent, agency duties are limited. 6. Written consent must be obtained from both parties when acting as a dual or designated agent. 7. Confidentiality is limited when acting as a transaction broker. 8. Licensees can't perform ministerial duties for one party if they're already engaged as an agent for the other party in the transaction.

1. False. Statutory law prevails. 2. True. 3. False 4. True 5. True. It's impossible, for instance, to provide undivided loyalty to both parties. 6. True. Written consent must be obtained prior to acting as a dual or designated agent. 7. True. However, a transaction broker must maintain information the assisted party asks to be kept confidential, unless disclosure is required by law. 8. False

What are the Seller Agent Tasks?

1. Invest your time and energy in marketing and selling the property 2. Inform the seller of the responsibility to make all required property condition disclosures. 3. Negotiate contract terms in accordance with the seller's wishes. 4. Ensure that the buyers earnest money is deposited by the contracted deadline 5. Communicate all offers and counter-offers to the seller.

Identify which of the following are examples of dual agency and which aren't. 1. You represent the buyer, and an agent from a different firm represents the seller in the same transaction. 2. You represent the buyer in a transaction, and another agent from your firm represents the seller in the same transaction 3. You represent the buyer in one transaction and the seller in a different transaction. 4. You represent the buyer and seller in the same transaction.

1. Not Dual Agency 2. Dual Agency 3. Not Dual Agency 4. Dual Agency

Read the four scenarios and determine whether each could be an example of sub-agency. Assume sub-agency is permitted by the firms and sellers involved. 1. Mack and Christina are licensees with Indy Realty. Zachary is selling his home and has enlisted Mack as his agent. Nathan is Christina's buyer client and is interested in seeing Zachary's home. 2. Ralph is a licensee with Camp Realty group. He has a client, Debbie, who is selling her house. He thinks Debbie's house is perfect for Stacy, a customer. 3. Pam is a licensee with SMS Agency and has just listed a property for her seller client, Bob. Dan is a licensee with DTWN Associates and is working under Pam on this listing to assist Bob. 4. Tim is represented by Kayla, an agent with Sarent Group Realty. Today, they are seeing Bonnie's house, which has been listed by her agent, Tiara, from the Truman Agency.

1. Not sub-agency (Mack and Christina are with the same firm and represent different parties as clients. This is an example of dual agency, but not sub-agency.) 2. Not sub-agency (Only one firm is involved in the scenario at this point. There is no sub-agency.) 3. Sub-agency 4. Not sub-agency (The licensees are from different firms and represent different clients. This is not sub-agency and Kayla must make it clear to Tiara that she represents the buyer, not the seller.)

Buyer Agent Tasks

1. Show the buyer properties that meet the criteria and fall within the budget. 2. Ensure that they receive all required property condition disclosures from the seller 3. Ensure the buyer understands the importance of due diligence, including a professional inspection of the property. 4. Review transaction documents with the buyer, clarifying anything that could be confusing, without stepping outside the scope of your license. 5. Negotiate contract terms that are fair and agreeable to them

What are the requirements to engage in dual agency?

1. State law allows its and you follow the state law 2. Your brokerage specifically allows it according to the written rules your broker has established 3. Both the buyer and the seller consent to you acting as a dual agent

What's a sub-agent?

A licensee who works for one firm but who is engaged by another firm to perform agency functions on behalf of that firm's client. (when a licensee from a competing firm works under the listing agent)

Describe single-license dual agency. Who fills the role of dual agent?

Exists when one licensee represents both the buyer and seller in a transaction. Both the licensee and the broker are dual agents

Describe dual licensed dual agency. What's another name for it? Who fills the role of dual agent?

Exists when two agents from the same brokerage represent the buyer and the seller in a transaction. Its sometimes called in-house agency. The two agents and the broker are dual agents.

What does dual agency mean?

It means that a real estate brokerage firm, and all the brokers and agents for that firm, can act in a fiduciary capacity for both the buyer and seller in the same transaction

Describe designated agency. What's it aka? Who fills the role of dual agent?

It's aka appointed agency. The BIC designates two of the brokerage's agents: one to represent the buyer and one to represent the seller. In this case, the two agents are designated agents, and the broker is a dual agent in the transaction.

What's the benefit of designated agency over the other dual agency types?

It's one way that states allow individual agents to avoid dual agency. It allows each client to have the benefit of single agency, but the brokerage earns the commission from both sides of the transaction.

Which fiduciary duty is not required for dual agency?

Loyalty bc undivided loyalty is a legal impossibility

What duty becomes most challenging when representing both the buyer and seller?

Loyalty. Undivided loyalty is impossible when representing both sides. One duty that isn't impossible is confidentiality.

What are the types of dual agency?

Single-license dual agency, Dual licensed dual agency, Designated agency

Remember that, while the state permits all the relationships you've identified, your brokerage may not. Limiting allowable brokerage relationships may reduce some of the risks the brokerage is exposed to. Where can licensees find which relationships the brokerage permits?

Written policy manual (You got it! Additionally, the manual should outline services available to clients and customers, as well as cooperation and compensation to other agents and transaction brokers.)

What is a single agency?

a firm that require the brokerage, and all the brokers and agents, act in a fiduciary capacity for either the buyer or the seller in a real estate transaction, but not for both. They prohibit their licensees from representing opposing sides in a transaction