RE: Real Estate Agency

Agency: Relationship between a buyer or seller of real estate and the licensee who represents that person is an agency relationship

Agent: Individual who is authorized and consents to represents the interests of another person.

Fiduciary duty to the principal. Putting the principal's interests above your own.
Principal is the person on whose behalf the agency acts.

Distinguishing between Client and Customer
Client: Agent owes a fiduciary duty
Customer: Agent owes honesty and fair dealing

Single Agency; Dual Agency and Transaction Brokers
Single agency: Agent represents only one party in any single transaction

Subagency is created when one broker appoints other brokers or salespersons to help perform client-based functions on the principal's behalf.

MLS typically make participating brokers subagents of the seller unless a separate agency agreement has been set up.

Subagent has same obligations to the principal as the original agent

Dual Agency: Agent represents TWO principals in the same transaction

Eg: What does an agent do if a client wants to purchase or lease a property from another client. Agent may assume the role of a transaction broker and facilitate the sale without being an agent for either party

Larger office may assign Designated Agent to each principal to provide client-based services. The broker then functions as transaction broker

Duties of a seller's agent
Promote interests of the client with utmost good faith, loyalty and fidelity
Present all offers to the seller ina timely manner
Disclose all facts about the buyer or tenant
Advise the client to obtain outside expert advise regarding problems or questions which are present but outside the agent's expertise
Account in a timely manner for all money and property received
Protect the client's confidences, unless disclosure is required

Types of disclosures
- Environmental hazards
- Physical condition of property
- Material defects in property
- Material defects in the title to property
- Material limitation on the client's ability to perform under the terms of the contract

Duties of transaction broker
Same as above
Protect confidences of both parties to the transaction
Disclose material adverse facts that they know

Listing Agreements, MLS Systems and Commissions
Listing agreement is contract that creates agency relationship between seller and broker

Exclusive right to sell listing - Broker is paid commission regardless of how the sale is made
Exclusive-Agency listing - Seller works with only one agent but may sell property on his own
Open Listing - Any number of brokers. Only the one bringing a buyer is paid
Net listing - Fixed minimum price. Anything paid above that goes to the broker

MLS: Mechanism by which brokers make their listings available to one another
The amount of and who pays the commission are determined by the listing agreement

Commissions are split between the seller's agent the seller's broker the buyer's agent and buyer's broker. The amount of split is determined by the salesperson's contract with the broker and the MLS agreement.