Unit 2 Agency relationships and disclosuresResidential real property

dual agency must be disclosed at the time it

arises, so the seller does not need to agree to dual agency at the time he or she signs the listing. The seller can make that choice if and when the dual agency situation actually arises.

is the document that creates the seller agency

The listing agreement

What obligations does a subagent of the seller owe to the seller and what obligations does the subagent owe to the buyer?

The subagent owes the seller the same fiduciary responsibilities he or she would owe to any client. The subagent owes customer level services to the buyer - honesty, fair dealing and the proper disclosure of pertinent facts that affect the value of the property

(T/F) A seller can choose whether or not subagency will be offered for his or her transaction

True

(T/F)A seller can agree to accept or reject the option of subagency when he or she signs the listing contract

True

(T/F)listing a property in the MLS may permit subagency, it does not automatically create it or require it.

True

Advantages of a buyers agent

Tailored buyer agreement, Access to a larger market, Stronger negotiating strategy

in the event of involuntary termination of an agency relationship, what duties are still owed the client

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

What is the definition of a single agent?

An agent who represents only one person in the transaction, either the buyer or the seller

occurs when two agents in the broker's firm represent both the seller and the buyer in a single transaction. Even though the parties are represented by two different agents, the broker is a dual agent

Broker Duel Agency

Involuntary termination of an agency relationship may occur in the event of

Death or incapacity of either party - if the contract does not pass to heirs or assigns Agent abandonment Condemnation of the property Destruction of the property through fire, vandalism or natural disaster Renunciation by the client Breach of the contract Bankruptcy Revocation of the agent's license

What is designated agency and why is it important?

Designated agency means that a broker may designate one or more licensees to act exclusively as the agent of the seller or landlord, and designate one or more licensees to act exclusively as the agent of the buyer or tenant in the same transaction. This arrangement must also be disclosed to both parties and the broker must obtain the written consent of both the buyer and the seller. This is important because it can eliminate the potential conflict involved in a consensual dual agency arrangement

(T/F) a cooperating broker cannot choose to work with a buyer as a principal (be the buyer's broker) and thereby reject the offer of subagency

False

How does a cooperating broker accept a unilateral blanket offer of subagency?

If a unilateral offer of subagency is in place, the cooperating broker accepts it by showing the property to a buyer customer

can brokerage be conducted without the unilateral offer of subagency?

It can - by both using the MLS to make the blanket offer of subagency AND offering compensation to any cooperating brokers working as agents for the buyers

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.

is property improved by a one-to-four family dwelling used or occupied, or intended to be used or occupied, wholly or partly, as the home or residence of one or more persons

Residential real property

A broker can enter into a single agency agreement with a

Seller Buyer Landlord Tenant

______________________ is the most common form of agency relationship

Seller agency

There are four common types of agency relationships that exist:

Single agency Seller/Landlord agency Buyer/Tenant agency Consensual dual agency

occurs when real estate licensee tries to represent the seller as a client and the buyer as a client in the same transaction.

Single licensee dual agency

How is subagency created?

Subagency is created by the agreement of the people who are involved in the transaction.

A real estate transaction starts when

a seller writes a listing agreement with a broker to market his or her property

Even though the broker may invite some number of other brokers to act as subagents in a particular transaction, only the subagent who ____________________________ will share in the commission.

actually procures a buyer

With regard to compensation in cooperative sales, the _____________________ will be the person who handles the commission splits for the transaction

listing broker

If a cooperating broker accepts the offer of subagency, that broker is then working through the listing broker and is the subagent of the

seller

In some cases, the purchase and sale agreement may include the required disclosure as long as it is set out in a

separate paragraph

Since a buyer's agent CANNOT be the subagent of the listing broker and seller, any licensee acting as a buyer's agent must make their agency status known to the listing broker before

showing the property

_______________ is an agent who represents only one person in the transaction, either the buyer or the seller. The other party to the transaction would be the single agent's customer

single agent

A broker who brings the buyer to the listing agent is a

subagent of the listing broker

Even if the seller chooses to allow the broker to offer subagency, a cooperating broker may reject the offer and work as

the buyer's broker or agent

Subagency is created by the agreement of

the people who are involved in the transaction

Any broker who is not the listing broker is known as the

the selling or cooperating broker

In most states, a licensee must provide a ______________________ of any existing agency relationships to all parties for whom he or she provides real estate brokerage services

written disclosure