Agency and who a licensee can represent!
what're the special duties owed to a principal?
)Loyalty. Disclosure of conflicts of interest. Advice to seek expert counsel. Confidentiality (even after the agency agreement is terminated -- unless the agent is ordered to disclose the information by a subpoena or court order.) Good faith and continuous effort to fulfill the terms of the agency agreement.
Dual Agency
A form of agency representation in which a licensee has entered into an agency relationship with both the buyer and seller in the same transaction. Dual agency is only legal if the licensee obtains the written consent of both parties to the transaction. Any licensee or broker who acts as a dual agent without first obtaining the written consent of both parties to the transaction can face disciplinary actions for this violation of Washington law.
Explain the difference between an agent and a licensee.
A licensee is a broker who has a valid license to practice real estate in Washington. An agent is a licensee who has established an agency relationship with a seller or a buyer.
legal agent definition
A licensee who has entered into an agency relationship with a buyer or seller.
A licensee can represent:
A seller A buyer A landlord A tenant
once the relationship has been terminated, the licensee is no longer considered the principal's agent. As such, the licensee does not owe any further duties to the principal, except for the following:
Accounting: The licensee must account for all moneys and property received during the relationship. Confidentiality: The licensee must not disclose confidential information he or she obtained during the relationship.
According to general or common law, some agency basics include the following:
An agent is a person who is empowered by contract to represent the interests of a client, also known as the principal. The principal could be a seller, a buyer, a landlord or a tenant. The agent represents the principal in dealings with third parties, who are known as customers. For example: Alicia Hampton asks Broker Tim to help her find her first home. Broker Tim takes Alicia to see a home listed by Broker Sam. In this scenario, Broker Tim is Alicia's agent, Alicia is Broker Tim's client or principal, and the seller of the home listed by Broker Sam is the customer. Important Note: According to common law, in order for a licensee to be considered the agent of the buyer, the licensee and buyer would enter into a written agency agreement. However, Washington agency law supersedes common law in that a written agreement is NOT REQUIRED to establish an agency relationship with a buyer.
In what type of agency can the agency relationship be created automatically simply by providing brokerage services to a party?
Buyer Agency
A licensee could perform any number of services for a customer which would result in the creation of an automatic buyer agency. Some of these services would include, but are not limited to:
Collecting information about a buyer's needs or wants. Performing an MLS search of available properties. Setting up showing appointments. Printing out specifications on homes in a particular area. Giving information about where to obtain financing. Helping a buyer understand the sections of a loan application. Matching buyer specifications to available homes.
Even though Mandy is not acting as an agent for either party, she still owes the following duties to both parties.
Exercising reasonable care and skill. Acting with honesty and good faith. Presenting all written communications in a timely manner. Disclosing of all material facts about a property of which he or she has knowledge. A material fact is defined as information that substantially adversely affects the value of the property or a party's ability to perform its obligations in a real estate transaction. Accounting for funds received from or for any party. Providing an agency law pamphlet. Disclosing any existing agency relationship.
The required agency law pamphlet must follow these rules.
It must consist of the entire text of RCW 18.86.010 through 18.86.030 and 18.86.040 through 18.86.110 with a separate cover page. The pamphlet must be 8 1/2 by 11 inches in size. The text print can be no smaller than 10-point type. The print on the cover page can be no smaller than 12-point type. The title of the cover page, "The Law of Real Estate Agency," must be in 18-point type or larger.
Washington law defines confidential information as any information from or concerning a principal that meets the following criteria.
It was acquired by the licensee during the course of an agency relationship with the principal. The principal reasonably expects it to be kept confidential. The principal has not disclosed or authorized it to be disclosed to third parties. Information that would operate to the detriment of the principal if it was disclosed. The principal personally would not be obligated to disclose to the other party.
An agency relationship is terminated when one of the following occurs (whichever occurs first or earliest):
Performance, which means the licensee has performed the tasks set forth in the agency agreement - that is, helped the buyer find a home for purchase or helped the seller find a ready, willing, and able buyer to purchase his or her home. Expiration of the agreement term, which is stated in writing when the relationship is initiated. Termination of the relationship by mutual agreement of the parties. Termination of the relationship by one party, in which case the terminating party must provide notice to the other party that he or she is terminating the relationship. Note: This type of termination does not affect either party's rights under their contract.
In order to collect a commission, these three requirements must be met.
The person must be a licensed designated broker, managing broker, or broker under a designated broker. Remember, a designated broker can only pay his or her affiliated licensees or another designated broker. A designated broker can never make a direct payment to a licensee licensed to another company. The person must have been employed by the principal under a valid contract, such as a listing agreement, a buyer agency agreement or a dual agency agreement. The person must have been the procuring cause of the sale. Generally, if a broker produces a ready, willing, and able buyer under the terms and conditions of a listing or management agreement, he or she is entitled to a commission.
Which of the following would be considered a "material fact" that must be disclosed in a real estate transaction?terial fact" that must be disclosed in a real estate transaction?
The prospective buyer filed for bankruptcy after the loan pre-approval process was complete.
How does Washington law differ from common law in how a buyer's agency can be created?
Under Washington law, any licensee who performs any brokerage services for a buyer automatically becomes the buyer's agent - unless the licensee has a written agreement in place that says otherwise.
non agency
Used in transactions in which the real estate licensee wants to avoid the confusion that sometimes results from the other forms of agency representation. In non-agency transactions, licensees are involved only as facilitators or intermediaries and not in any type of agency capacity. In a non-agency situation, the licensee has NO fiduciary duties to any party to the transaction. However, he or she still must provide the general duties to all parties in the transaction as he or she would to a customer in any agency situation.
Agency relationship:
created under the law or by written agreement between a licensee and a buyer and/or seller relating to the performance of real estate brokerage services by the licensee.
On the other hand, the licensee can impart what to the customer?
factual knowledge
Which of the following types of agency is used in transactions in which a real estate licensee is involved only as a facilitator?
non agency
A licensee must give the Law of Real Estate Agency pamphlet to any parties for whom the licensee
renders real estate brokerage services.
In Washington, there are four forms of agency representation:
seller agency buyer agency dual agency non agency 5th - designated agency
Under Washington law, any licensee who performs any brokerage services for a buyer automatically becomes
the buyer's agent - unless the licensee has a written agreement in place that says otherwise.
A fiduciary relationship is one of
utmost trust
d
while not addressed within the Washington statutes, is a form of agency that is also used in the practice of real estate in Washington. Designated agency is commonly used to handle "in-house transactions." Under an in-house transaction, two separate licensees who are affiliated with the same managing broker represent the two parties in a real estate transaction. In this case, the listing licensee is the seller's agent, the selling licensee is the buyer's agent and the managing broker becomes the dual agent. Under this arrangement, both parties to the transaction reap the benefits of having their "own" agents.
in 1997, the Real Estate Brokerage Relationships Act went into effect, replacing the fiduciary duties
with statutory duties
No matter whom the licensee represents, he or she needs
written agreement that clearly defines the relationship of the parties.
