unit 25: agency overview

The statement is true. The MREC form is required to create a disclosed dual agency.

A disclosed dual agency requires use of a MREC form called Dual Agency Confirmation.

The answer is the active listings remain the property of the old real estate firm. On the termination of employment, licensees are not allowed to take or use any brokerage agreements because they are the property of the broker.

A licensee employed by a real estate firm decides to terminate his employment and transfer his license to a different real estate firm. If the licensee has six active listings with the current real estate firm, what happens to them after the transfer?

The answer is by imputation of knowledge between the principal and the agent. An agency relation can be created by one of three means: by an express agreement of the parties, by implication through the words or actions of the agent, or by ratification by the principal following an agent's previous acts.

An agency relationship can be created by each of these methods, with the exception of

net listing

An agreement that specifies a net sales price to be received by the owner, with the excess over that price to be received by the broker as commission.

The statement is true. Dual agency is allowed under Mississippi license law if the brokerage company's policy permits it for in-house transactions, and if full disclosure (both oral and written) is given in order to obtain informed consent from the consumer.

Dual agency is illegal without informed consent.

The answer is both parties give written authority to move forward under dual agency. A written agreement allowing the brokerage to go forward under a dual agency arrangement is necessary for the dual agency to be legal. In addition, the real estate licensee should be careful to make sure the consumers understand the limitations of a dual agency arrangement.

Dual agency is legal in Mississippi when

referral fee

Fees paid between brokers.; a legal, agreed-upon fee paid between brokers

The statement is false. This situation presents a potential conflict of interest for the broker, and such listings are prohibited in Mississippi.

Net listings are allowed in Mississippi.

fiduciary

One in whom trust and confidence is placed; a reference to a real estate professional employed under the terms of a listing contract or buyer representation agreement.

The answer is fully negotiate and be the advocate for either party. In a dual agency, the agent or agents involved cannot give undivided loyal to their client and, as a result, they are unable to be the advocate of their party in negotiations to the detriment of the other party.

One limitation on disclosed dual agency is the duty to

The answer is a listing or buyer agency representation agreement. The broker's compensation is determined by a brokerage agreement, not by an agency disclosure document. In addition, the contract of sale for property is between buyer and seller and the brokerage is not a party to that document. Though a buyer agents may often agree to accept the listing agent's offer of compensation, there is no requirement that they do so. The terms of the buyer agency representation agreement would prevail.

The broker's compensation is determined by

substantive contact

The initial contact with the seller, or a seller's agent, before or just immediately prior to the first showing of the property of a seller to a represented buyer, eliciting any confidential information from a seller concerning their real estate needs, motivation, or financial qualification, or the execution of any agreements.

The answer is both oral and written disclosures should be made at first substantive contact with the consumer. Both an oral and a written disclosure must be made at first substantive meeting and before any confidential information regarding the potential client is shared with the licensee.

Which type(s) of disclosure are required regarding agency relationships in Mississippi?

duties to the client

a real estate licensee shall immediately (at the time of signing) deliver a true and correct copy of any instrument to any party or parties executing the same

transferring listings

taking listing clients from one broker when leaving to work for a second broker

confidentiality

the agent must keep private information provided by the principal and information which would give a customer an advantage over the principal strictly confidential, unless the agent has the principal's permission to disclose the information

reasonable skill, care and diligence

the agent must perform all duties with the care and diligence which may be reasonably expected of someone undertaking such duties

full accounting

the agent must provide a full accounting of any money or goods coming into the agent's possession which belong to the principal or other parties

loyalty

-the agent must put the interest of the principal above the interests of the agent or any the party

may disclose

-the licensee is the agent of both parties -the name of the seller of the buyer -material defects in the property

client

-the person to whom the agent owes a fiduciary duty -can be a seller, buyer, landlord, tenant, or both

disclosed dual agency

-A situation in which one agent represents both parties to a real estate transaction with the informed consent of both parties. -the agent representing both parties to a real estate transaction with the informed consent of both parties, with written consent of both parties, with written understanding of specific duties and representation to be afforded each party

agency relationship

-consumers shall be fully informed of the agency relationships in real estate transactions -this rule places specific requirements on brokers to disclose their agency relationship -compliance will be necessary in order to protect licensees from impositions of sanctions against their license by the Mississippi Real Estate Commission

general agency

-most often used by agent representing a broker -most often exercised by a property manager

agent

-one who is authorized to act behalf of and represent another

special agency

-representing a buyer or a seller

dual agency

-requires initial disclosure and written consent -greater change of a conflict of interest -representing buyer and seller in same transaction

obedience

-the agent agrees to obey any lawful instruction from the principal in the execution of the transaction that is the subject of the agency

dual agency

-the broker must confirm that the buyer(s) understands and consents to the consensual dual agency relationship prior to the signing of an offer to purchase -the buyer shall give his/her consent by signing the MREC dual agency confirmation form which shall be attached to the offer to purchase

may not disclose

-the client's motivation for selling -the buyer will pay more than the amount in offer -the seller will accept less than the listed price

fiduciary responsibilities

-the duties due the principal (client) in a real estate transaction: ---loyalty; obedience; disclosure; confidentiality; reasonable skill, care and diligence; full accounting

The answer is undivided loyalty and full disclosure. The dual agent has all fiduciary duties to both clients with the exception of undivided loyalty and full disclosure. The dual agent cannot be the loyal advocate to both parties in the transaction to the detriment of the other. In addition, because the dual agent continues to be bound by the duty of confidentiality, neither client in the transaction will receive disclosure of the other client's motivation or their bargaining position.

A dual agent has all the duties of the fiduciary with the exception of

The answer is that she is not speaking to her in confidence until the neighbor becomes a client of the brokerage. Though the potential seller is a neighbor and the licensee may have a previous relationship with her, the neighbor must be treated like any other consumer. The licensee should tell the neighbor that she is not her client, and therefore is not due the duty of confidentiality, until she agrees to hire the company through entering into a listing agreement.

A licensee is planning to make a listing presentation to a neighbor. She is hoping to enter into a representation agreement on behalf of her brokerage to sell the property. To do so, however, she must speak to her neighbor about her motivation to sell and her reasons for listing the property. To stay in compliance with license law, the licensee should tell her neighbor

The answer is the seller gives expressed consent. It is illegal to place a sign on any property offering it for sale, rent, or lease without the owner's consent.

A listing broker may place a For Sale sign on the property when

The answer is a subagent. A subagent is an agent of a person already acting as an agent for a client. Subagency can be offered by one company to another company and is always present within the company as the associated licensees are the subagents of the company's clients.

A person who is the agent of an agent is called

The statement is true. Most listing agreements have a provision that allows the broker to place a For Sale sign on the property.

A property owner's approval is required for a real estate licensee to place a For Sale sign on the property.

The answer is disclosure. The agent must disclose to his client any material facts regarding the property or the transaction. The fact that the zoning change is under consideration might affect the owner's decision of whether to sell and/or how much to take for the property.

An agent learned that there was talk about the city changing the zoning of a listed property. The agent did not want to worry his client, so did not tell him of what he had heard. The agent has violated his duty of

general agent

An agent who is empowered to represent the principal in a broad range of matters related to a particular business or activity.

special agent

An agent who is hired to perform a specific task or transaction and has limited authority.

The answer is listing brokers must obtain written authorization from their clients to decline cooperation with other brokers. In this situation, the seller benefits from the listing broker agreeing to share the compensation with the broker who actually procures the buyers, thus opening the property to more potential buyers. Although this practice facilitates the transaction, the license law does not require a broker to compensate another broker. However, brokers must obtain written authorization from their clients to decline cooperation from and with other brokers.

Brokers recognize that while one brokerage has the listing, another broker may already be working with buyers. The buyers want to continue to work with their own agent, not the listing agent. In this situation,

The answer is confidentiality. The duty of confidentiality is only owed to a client. Customers are owed honesty, fair dealing, and disclosure of all facts known to the agent that materially affect the value of the property, which are not know to, or readily observable by, the parties to the transaction.

Duties to a customer include all of the following EXCEPT

The answer is brokers and clients. Listing agreements are the employment contracts executed between the responsible broker and the client for services to be provided in a real estate transaction. They can be agreements to list the property for the seller or the landlord, to represent the buyer or the tenant, property management agreements, or options.

Listing agreements are employment contracts between

solicitation of another's client

inducing a party to break an exclusive agency listing for the purpose of substituting a new contract motivated by the personal gain of the licensee

single agency

-An agency situation in which a broker has chosen to represent only one party to a real estate transaction. It may be either the buyer, seller, lessor or lessee. -a broker who has chosen to represent only one party to a real estate transaction

customer

-An individual not represented in a real estate transaction. -the person not represented in a real estate transaction -may be the buyer, seller, landlord or tenant

subagent

An agent of a person already acting as an agent for a client.

The answer is not be assigned or canceled without the broker's and client's written permission. Brokerage agreements are the property of the principal broker and can be canceled or assigned only by the broker and the seller.

Brokerage agreements in Mississippi may

The statement is true. Mississippi's license law requires disclosure of agency relationships in all transactions.

Disclosure of agency relationships on prescribed forms in Mississippi is required in all transactions.

The statement is true. Single agency means that there is one client and one customer in a single transaction.

Single agency means that there is one client and one customer in a single transaction.

principal

The client in an agency relationship involving a real estate transaction.

The answer is fiduciary duties. Another name for the duties owed to the client is fiduciary duties and includes loyalty, confidentiality, accounting, reasonable care, obedience to lawful instructions, and full disclosure of information that is relevant as well as material.

The duties owed by the agent to the client are called

The answer is whether a fee will be offered to subagents or buyer agents or both. This language must be included in the listing agreement.

The listing agreement must contain language stating

agency

The relationship created when one person, an agent, is authorized to act on behalf of another person, called the principal.

The answer is duties owed only to clients. Fiduciary duties are those duties due to a client (the principal) in a real estate transaction.

What are fiduciary duties?

The answer is paying a referral fee to an out-of-state real estate broker with an agreement in writing to do so. If the broker is a licensed broker in another state, the Mississippi Cooperative Agreement must be executed and filed with MREC prior to the payment of the referral fee. Requesting referral fees from agents who have already been engaged by a client is contractual interference, and paying a fee to someone who is unlicensed for the referral of a prospect is unlawful.

Which of the following is a lawful act?

The answer is compensation does not determine the agency relationship. The Mississippi Agency Rule says that compensation, when considered alone, is not the determining factor in an agency relationship because the relationship can be created regardless of who pays the fee.

Which statement is TRUE regarding compensation in a real estate transaction?

The answer is disclosed dual agency, single agency, and subagency. Several forms of agency and nonagency types of relationships that are allowed in some states are not recognized in Mississippi. These include transactional agency, facilitator services, nonagency, and designated or appointed agency.

Which types of agency relationships are recognized in Mississippi?

broker cooperation

assists clients or customers to reach their objectives of selling or buying real estate offered by another company

disclosure

the agent must disclose to the principal any information the agent becomes aware of in connection with the agency