Section 10: Agent Roles and Obligations in Maryland
Sub-Agent
Works for a real estate company that isn't the seller's agent's company Though not a buyer's agent, assists the buyer in purchasing a property; duty of loyalty is to the seller. Note: Maryland requires either a signed buyer agency agreement OR buyer acknowledgement of sub-agency (via the Understanding Whom Real Estate Agents Represent form) before a licensee may show a prospective buyer a property. Property showings are NOT ministerial acts in Maryland
Seller's Agent
Works for the real estate company Enters into a written representation agreement with the seller Lists and markets the seller's property Exclusively represents the seller
intra-company agent
is a licensee who is appointed by the brokerage's broker to represent one party in a dual agency (in-house) transaction. This form of agency, where two clients of the same agency are involved in a single transaction, is allowed in Maryland subject to very specific requirements. The broker appoints one licensee to act as the ICA for one party (the buyer, for example) and a different licensee to act as the ICA for the other party (the seller). In these situations, only the licensee appointed to the client owes fiduciary duties to that client.
Sub-Agent
A licensee who works for Firm A but who is engaged with Firm B to perform agency functions on behalf of Firm B's client.
Informed Consent for Dual Agency
All parties fully understand the ramifications and purpose of dual agency and give their written consent to be represented by the ICA
Buyer's agent duties
As a fiduciary, you're obligated to complete certain tasks for your buyers over the course of a transaction, such as: - Show them properties that meet their criteria and fall within their budget. - Ensure that they receive all required property condition disclosures from the seller. - Ensure that they understand the importance of due diligence, including a professional inspection of the property. - Review transaction documents with them, clarifying anything that could be confusing, without stepping outside the scope of your license (in other words, refer buyers to an attorney for interpreting any legal consequences or language). - Negotiate contract terms that are fair and agreeable to them.
Buyer's Intra-Company Agent
Exclusively represents the buyer in a dual agency situation
seller agency
It's your duty to advocate solely for the seller and seek a sale of the property at the best price available or a price that's acceptable to the seller (your client). The buyer, when you represent the seller in a single agency relationship, is your customer.
Unit 2 Exam: Buyer Kristin has a buyer agency agreement with Carlotta, a licensee. Kristin's brother, Dalton, is going to showings with Kristin and helping her decide which house is the best fit. Who is/are Carlotta's client(s)? Kristin Kristin and Dalton Kristin and the seller The seller
Kristin
Unit 1 Exam: Claudia is a new licensed assistant working for salesperson Monica. Claudia takes Monica's phone calls, answers basic questions about listings using the MLS sheet, and scans copies of paperwork when clients need it. What kind of tasks is Claudia performing for these parties? Customer acts Fiduciary duties Ministerial acts Non-agent duties
Ministerial acts
Kim is a sub-agent in a transaction involving a buyer customer, a seller, and a listing agent. Who is Kim a sub-agent for? Both buyer and seller The buyer The listing agent The listing agent and seller
The listing agent and seller
special agent
limited authority to act on behalf of your client. In most transactions, you will act as a special, or limited, agent. This means you don't make any decisions or enter into any contracts on your client's behalf, you act as an intermediary, liaison, and negotiator, conveying and representing your client's wishes. A special agent doesn't offer continuity of service. Your role is to find the house, sell the house, etc. You do not continue to represent that client once the transaction is closed.
Buyer Agency
you exclusively represent the buyer. In the past, buyer agency was not properly practiced in residential real estate. The licensee's commission was drawn from the sale of a property, so it was assumed that buyers didn't need to be represented in the transaction and were regarded only as customers.
Dual Agent (Real Estate Broker or Designee)
Assigns licensees as intra-company agents to represent seller and buyer clients who have consented to dual agency representation
Exam: Which one of these statements describes informed consent as it relates to dual agency? Both buyer and seller understand what dual agency is and agree in writing to dual agency representation. The broker informs the buyer and seller for a transaction that he will represent both parties. The licensee explains dual agency to the buyer and must inform the sellers that he is a buyer's agent. The licensee explains dual agency to the seller and must inform all buyers that he is a seller's agent.
Both buyer and seller understand what dual agency is and agree in writing to dual agency representation.
Dual Agency
Consenting to dual agency is required regardless of whether it's a buyer/seller or tenant/landlord transaction. There are also no secrets when it comes to representation. You must make clear to all parties who you represent in a transaction. Under no circumstances can a broker act as an ICA in a dual agency situation.
Exam: Which one of the following statements about dual agency disclosure and informed consent in Maryland is true? Dual agency applies to seller/buyer transactions only; not landlord/tenant. Dual agency consent and disclosure must be in writing Dual agency is illegal. Maryland license law allows single-license and dual-license agency, as long as the clients give written consent.
Dual agency consent and disclosure must be in writing
Seller's Intra-Company Agent
Exclusively represents the seller in a dual agency situation
Unit 1 Exam: Margaret has been working periodically with Bill, a lukewarm prospective buyer who can't seem to make up his mind about what kind of home he wants. Though he's signed the agency disclosure form, they've never signed an agency agreement, but he calls Margaret up every couple of months, tells her what he's looking for, and she sends him some listings. What other duties does Margaret owe Bill? Confidentiality and honesty Confidentiality and reasonable skill and care Fairness and reasonable skill and care Honesty and fairness
Honesty and fairness
Seller's agent duties
Invest your time and energy in marketing and selling the property. Inform the seller of the responsibility to make all required property condition disclosures. Negotiate contract terms in accordance with the seller's wishes. Ensure that the buyer's earnest money is deposited by the contracted deadline. Communicate all offers and counter-offers to the seller.
Camille has a listing for a townhome, and appoints Ivy as her sub-agent. Ivy brings a buyer customer to the transaction, and the buyer purchases Camille's listing. What's true about the agency relationships in this situation? Camille owes her loyalty to Ivy. Ivy is Camille's sub-agent and owes loyalty to the seller. Ivy owes her loyalty to the buyer. The buyer is the sub-agent to the seller.
Ivy is Camille's sub-agent and owes loyalty to the seller.
Exam: Terry, Roberta, Rhonda, and George are on the same real estate team. The broker has designated Terry and Roberta as intra-company agents (ICAs) for a transaction. Can George serve as the dual agent? No. Only the broker can be the dual agent. No. The dual agent can't be on the same team as the ICAs. Yes, as long as he's also the broker. Yes, as long as the buyer and seller consent.
No. The dual agent can't be on the same team as the ICAs.
Which of the following describes sub-agency? A listing agent accepts an offer from a buyer written by Cali, who does not represent the buyer. Cali and the listing agent work for the same firm. Chico is a listing agent and is helping Tuti write an offer on her listing, but Tuti does not want representation. Lance listed Max's house. Brenda, who is under a buyer agency agreement with Tim, helps Tim buy Max's house. Norm is a listing agent. He allows Stu, an agent from another firm, to present an offer from an unrepresented buyer.
Norm is a listing agent. He allows Stu, an agent from another firm, to present an offer from an unrepresented buyer.
Exam: Orla represents the seller, and Pardeep, an agent from a different firm, represents the buyer in the same transaction. What type of agency relationship does Orla have with her client? Buyer agency Dual-licensee dual agency Seller agency Single-licensee dual agency
Seller agency
Unit 1 Exam: Which agent role is designated by a dual agent and exclusively represents the seller in a dual agency situation? Broker Broker's designee Buyer's intra-company agent Seller's intra-company agent
Seller's intra-company agent
Unit 2 Exam: Madeline works for a single-agency firm. If she wants to represent both the buyer and seller in a transaction, what must she do? She can't do this at her firm. She may act as a designated agent for one client and a representative agent for the other. She should get informed consent from both sides to represent them. She should have her broker act as a dual agent, and she can be a single agent for each party.
She can't do this at her firm.
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 has a buyer customer interested in seeing the property. Sub-agency Not Sub-agency
Sub-agency
Sara, a licensee with Homestead Realty, has listed a house for Jon, her client. Regina has asked Carla, a licensee with Metro Realty, to show her Jonathan's house. Regina refuses to sign a buyer representation agreement. Sub-agency/Not Sub-agency
Sub-agency
Exam: In addition to completing the Consent for Dual Agency form, what information about dual agency in teams must be provided to the buyer and seller? The fact that the team could have a financial interest in the transaction's outcome The name of the specific team The names of all real estate team members involved in the transaction The regulations regarding who may serve as a dual agent in Maryland
The fact that the team could have a financial interest in the transaction's outcome
Unit 2 Exam: If you've shown Suzie three properties, and she decides to put an offer in on one of them but hasn't signed an agency agreement with you, who do you represent? Both Suzie and the seller No one Suzie The seller
The seller
Unit 2 Exam: Without a buyer agency agreement in place, which party does the agent who's assisting the buyer represent? No one The agent The buyer The seller
The seller
Unit 2 Exam: Licensee Randy is in a seller agency relationship with Brent, a seller. The buyer is Tim. Who is Randy's client? Both the seller (Brent) and the buyer (Tim) Randy's broker The buyer (Tim) The seller (Brent)
The seller (Brent)
To whom do sub-agents working with buyer customers owe their duties? No one The buyers The buyers and sellers equally The sellers and the seller's agents
The sellers and the seller's agents
Sellers should be advised of an important drawback of sub-agency. What is this? No one is representing their interests in the transaction. They will be vicariously liable for the actions of the sub-agent. They will get broad market exposure for their listing. They will have to pay double commission.
They will be vicariously liable for the actions of the sub-agent.
Single-License Dual Agency
exists when one licensee represents both the buyer and seller in a transaction. In that case, the licensee is the dual agent, and his broker is also a dual agent. undivided loyalty is a legal impossibility. Dual agents may not advocate for one party to the other's detriment. Dual agents owe both parties fiduciary duties that include utmost care, integrity, honesty, and confidentiality.
Single agency
firms require that the brokerage, and all the brokers and agents within that firm, act in a fiduciary capacity for either the buyer or the seller in a real estate transaction, but not for both. Single agency firms prohibit their licensees from representing opposing sides in a transaction. if your client asks for advice that's outside the scope of your expertise, your duty as a fiduciary dictates that you refer the client to an expert. It's sometimes tempting to try to be all things to a client, but acting outside your license is a mistake that can have serious repercussions. When faced with a situation that you're unsure of, refer
Dual agency
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; such a transaction is often referred to as "in-house." Dual agency can take one of two forms: single-license dual agency or dual-license dual agency.
general agent
responsible for all dealings with a specific piece of your client's property ex: Property Manager, because you would collect rent, evict tenants, and enter into leases with tenants on behalf of your client, the property owner. This is similar to the duties the holder of a power of attorney would have, but a power of attorney may not be required. The property management agreement will spell out the scope of your authority to act on the principal's behalf. A general agent in this capacity does offer continuity of service, because the agent is authorized to conduct a series of transactions.
Universal Agent
someone who is empowered to do anything the principal could do personally. This type of agent has the most authority; a universal agent's authority is virtually unlimited. One example of a universal agent would be a court appointed guardian, whose authority would likely be over a person and the person's property. As a real estate agent, it is highly unlikely you'd be appointed as a client's universal agent.
Unit 2 Exam: At a sales meeting you learn that one of your firm's listings must sell that week. "Get 'er sold!" your broker tells you. "The clients must move out in 40 days." You'd really like to get that sale. What can you tell prospective buyers? "I'd love to show you one of my firm's listings." "The negotiating power is all in your hands." "The seller is highly motivated." "The seller must sell this week."
"I'd love to show you one of my firm's listings."
Exam: Devon and Courtney both consented to dual agency when they signed their listing agreement with Chad from Crab Shack Homes, the Eastern Shore's premiere vacation home brokerage. But when another licensee from Crab Shack presented Chad with an offer, the couple got cold claws and decided they didn't want the potential conflict of interest with dual agency and withdrew their consent. Which of the following is NOT a potential outcome? Crab Shack may terminate the listing agreement. Devon and Courtney may terminate their agency relationship with Crab Shack and find another broker. Devon and Courtney will be held to their previous dual agency consent and the transaction will continue unhindered. The buyers may find another broker to represent them.
Devon and Courtney will be held to their previous dual agency consent and the transaction will continue unhindered.
Dual-License Dual Agency
Dual-license dual agency (aka designated agency) exists when the broker—or the broker's designee—assumes the role of dual agent and designates two agents, one to represent the buyer and one to represent the seller. In such a scenario, the two agents are designated agents, and the broker (or designee) is a dual agent in the transaction.
Unit 2 Exam: A licensee must perform which of the following tasks for a buyer client? Ensure the buyer understands the importance of due diligence, including a professional inspection of the property. Review the seller's property disclosures and show the buyer the ones that you believe are important. Show the buyer properties that you are listing for other sellers. Tell the buyer how much earnest money she should put down to ensure the deal goes through.
Ensure the buyer understands the importance of due diligence, including a professional inspection of the property.
Buyer's Agent
Enters into a written representation agreement with the buyer Assists a buyer in evaluating properties, preparing offers, and negotiating the sale on the buyer's behalf Exclusively represents the buyer Note: Maryland no longer recognizes presumed buyer's agency. Buyers must now sign a buyer's representation agreement or the agent who works with the buyer will be considered a sub-agent.
Unit 1 Exam: Lauren, a Maryland licensee, has been working with buyer Steven for a few days. She's asked him about what types of homes he's interested in and has sent him listings based on his criteria. The two of them are about to meet for the first time so Lauren can show him the three properties he's most interested in. What does Lauren need to do? Cancel the appointment since they don't have an agency agreement. Get her broker's permission to show Steven the properties even though they don't have an agency agreement. Have Steven sign either a buyer agency agreement or an Understanding Whom Real Estate Agents Represent form. Make sure that she's printed out at least three additional listings for them to see if he wants to keep viewing properties.
Have Steven sign either a buyer agency agreement or an Understanding Whom Real Estate Agents Represent form.
Which of the following is an example of sub-agency? Kayla is a licensee with ABC Realty and lists a property for seller Devon. Maurice is a salesperson with XYZ Realty Group and brings a buyer to the table, but owes fiduciary duties to the seller. Kermit is represented by Bert, an agent with Street Realty. Today they're seeing Oscar's house, which has been listed by Oscar's agent, Ernie, from Energy Realty. Rita is a licensee with Hawthorne Realty. She has a client, Dinah, who's selling her condo. Rita thinks Dinah's house will be perfect for Ruby, a customer. Tim and Tom are both licensees with Acme Realty. Tim is the listing agent on a home where Tom represents the buyer.
Kayla is a licensee with ABC Realty and lists a property for seller Devon. Maurice is a salesperson with XYZ Realty Group and brings a buyer to the table, but owes fiduciary duties to the seller.
Which of these is an example of a sub-agency relationship? Aldrich accepts a designated agency appointment from his broker so his firm can represent both the buyer and the seller. Blaine represents the buyer in a transaction with an unrepresented seller. Greta refers a buyer client to a more experienced colleague, asking for a referral fee from the colleague. Morris, who's licensed independently, finds a buyer customer for Greg's listing with Marvel Homes and is obligated to act in the best interest of Marvel Homes' client.
Morris, who's licensed independently, finds a buyer customer for Greg's listing with Marvel Homes and is obligated to act in the best interest of Marvel Homes' client.
Mike and Christina are licensees with IndyRealty. Zachary is selling his home and has enlisted Mike as his agent. Nathan is Christina's buyer client and is interested in seeing Zachary's home. Sub-agency Not Sub-agency
Not Sub-agency
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. Sub-agency Not Sub-agency
Not Sub-agency
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. Sub-agency Not Sub-agency
Not Sub-agency
Unit 2 Exam: Ned represents Sofia in the sale of her townhome. Luciana represents Sofia's buyer, Arturo. What is Sofia's relationship to Luciana? Luciana is Sofia's customer. Luciana is Sofia's fiduciary. Sofia is Luciana's client. Sofia is Luciana's customer.
Sofia is Luciana's customer.
Unit 2 Exam: When a licensee represents a seller, which one of the following statements is true about the licensee's ability to list other properties that are for sale? The licensee isn't permitted to list other properties for sale. The licensee is permitted to list other properties for sale as long as they're not competing properties. The licensee is permitted to list other properties for sale, even if they're competing properties. The licensee must list the seller's property only for the first 90 days, after which the licensee may list other properties.
The licensee is permitted to list other properties for sale, even if they're competing properties.
Kim is a sub-agent in a transaction involving a buyer customer, a seller, and a listing agent. Who is Kim a sub-agent for? Both buyer and seller The buyer The listing agent
The listing agent and seller Sub-agents who work with buyer customers are the sub-agent of the seller and listing agent
Unit 2 Exam: In a buyer agency relationship, what relationship does the seller have to the licensee? The seller is the licensee's client. The seller is the licensee's customer. The seller is the licensee's fiduciary. The seller is the licensee's nemesis
The seller is the licensee's customer.
Dual Agency and the Duty of Confidentiality
When you act in a dual agency role, confidential information about price, terms, motivation for pursuing a transaction, or previous offers made must remain confidential unless one party instructs you in writing to disclose specific information. Anything that is disclosed to one party which could be a disadvantage to the other is prohibited in dual agency. Examples include: Disclosing to a buyer that the seller will accept an amount other than list price Disclosing to a seller that the buyer can pay more than the submitted offer price Disclosing either party's motivation Disclosing either party's willingness to accept financing terms other than those in the offer Dual agency involves an inherent conflict of interest.
