Intermediary Brokerage

Both the buyer and the seller can expect full client level representation when they are represented by the same real estate agent

Boss. The agent cannot possibly offer for client level service to both the buyer and the seller in the same transaction. The positions of buyer and seller are inherently and conflict, at least on some issues. By law, a broker acting as an intermediary "shall act fairly and impartially." A broker who agrees to the intermediary role, therefore, may give required factual information to each party, but cannot give preferential advice or opinions to either.

In a transaction involving appointed associates, the broker is in compliance as long as the broker notifies the parties at the broker is going to make appointments.

False. Although the actual appointment of a license holder may be made orally, the notification to the parties announcing the appointments and identifying the appointees must be given to the buyer and the seller in writing.

If an intermediary situation arises, the broker can disclose to the seller that the buyer is willing to pay more.

False. As intermediary, the broker must act fairly and impartially. The broker, and any appointed license holder, is specifically prohibited from disclosing the highest price that the buyer will pay or the lowest price that the seller will accept.

The Texas real estate commission (TREC) does not prohibit common law to agency.

False. Dual agency, even under common law, is no longer permitted in a real estate transaction in Texas.

Undisclosed dual representation problems can arise only in residential sales transactions

False. Dual representation problems can arise in real estate exchanges syndications and commercial property transactions. Brokers can engage in intermediary representation in these specialized kinds of transactions as long as they obtain the appropriate consent and give the appropriate disclosures to both parties.

In an intermediary situation, license holders appointed by their broker must not provide any opinions or advice during negotiations to the party to whom the license holder has been appointed.

False. The license holder may provide opinions and advice during negotiations to the party to whom the license holder has been appointed. In fact, this is the most important distinction between dual agency and intermediary Brokerage.

A broker with only one sales associate may appoint that sales agent to work with one party, while the broker works with the other.

False. Under intermediary transaction, the broker cannot be appointed to work with either. In a single person office, or one with only one associate, the appointment process is not an available option.

A brokerage firm represents both the buyer and the seller and a real estate transaction, and both have authorized the broker act as an intermediary. The firm has one broker and three sales associates. What role does the broker play in the transaction?

The broker is the intermediary and must remain neutral.

Commercial leasing brokers may engage an intermediary brokerage.

True. A commercial leasing agent who represents a building owner may sometimes encounter situations when a potential tenant wishes to be represented. In such situations the commercial leasing agent may engage in intermediary Brokerage with the appropriate consent and disclosure of both parties.

Appointed license holders may give their respective principles services similar to those given when acting as a single agent

True. An appointed license holder may give the party to whom she has been appointed advice and opinions that may not be in the best interest of the other party. Like the intermediary, however, the appointed license holder is still prohibited from disclosing (without written consent) that the seller might except more than the list price, that the buyer might pay more than the price submitted in the written offer, or confidential information about the other client.

Even though a transaction closed without any issues and everything leading up to the transaction proceeded smoothly, the buyer and the seller, who had agreed to participate in dual agency, we're often dissatisfied.

True. Even though no problems arose during the transaction, the buyer and or seller often felt that they didn't receive what they had expected when they entered into the transaction; each party believe that they would receive all the advantages of agency representation from the brokerage and perhaps wondered if their positions would have been better in the negotiations have the representation not been so badly diluted by dual agency.

In an intermediary transaction, if the broker appoints an associate to the seller, an associate also must be appointed to the buyer.

True. If an appointment is made to one client, then an appointment must be made to the other client; otherwise, the broker has not provided equal service to both clients. The broker remains the intermediary and cannot appoint herself.

No potential or need for an intermediary transaction exist until the buyer who is represented by the firm wants to negotiate on a property listed by that firm.

True. If the buyer is looking at properties listed by another firm, there is no need for an intermediary transaction because the broker is performing as a single agent. The need for intermediary arises only during in-house transactions involving a represented buyer and a represented seller.

The former statutory dual agency require that the license holders involved in representing a buyer and a seller and an in-house transaction completely balance the interest of the buyer and the seller.

True. The absolute balance that needed to be maintained in the information and assistance given the two parties me dual agency very difficult to properly administer.

Under intermediary brokerage, the broker is the intermediary and may not appoint himself to work with either the buyer or the seller.

True. The broker must maintain the impartial role of intermediary. Because the function of the appointed license holder is to afford both clients the opportunity to continue receiving preferential advice and opinion, the broker with only one associate, cannot make appointments and must conduct the transactions as an intermediary without appointments.

The ability of the broker to make appointments is the key difference between statutory dual agency and intermediary brokerage.

True. When appointments are made, the buyer-client and seller-client have greatly enhanced service during in-house transactions because they can now be assisted with opinions and advice during negotiations—something that was not possible in the practice of statutory dual agency

The fiduciary duty of loyalty will not be fulfilled when attempting to represent both the buyer and the seller in a dual agency agreement

True. When the buyer is purchasing a property listed by the same brokerage that represents the buyer, the buyer and the seller have adverse interest. Under the circumstances, it is impossible for the agents who represent these parties to place both the buyers and the sellers interest about the interest of all others