Understanding Agency, Introduction

Component 1: Facilitator Talking Points

Component 2: Agenda

Component 3: Handout 1, How is an Agency Relationship Created?

Component 4: Activity 1, Does This Make You an Agent Quiz

Component 5: Activity 1, Answer Sheet for Agent Quiz

Component 6: Handout 2, The Fiduciary Duties of an Agent

Component 7: Handout 3, Types of Agency Brokerage Relationships with Consumers

Component 8: Creating a Company Policy on Agency

Component 9: Activity 2, What Sellers’ Subagents Can and Can't Do for Buyers

Component 10: Activity 3, Scenarios for Recognizing Breaches in Fiduciary Duties

Component 11: Activity 3a: Explanations of Scenarios on Fiduciary Duties

Component 12: Other Resources
 Understanding Agency Relationships:
How Is an Agency Relationship Created? (Handout 1)

The type of relationship created between the licensee and the consumer establishes a legal framework of duties and responsibilities. Frequently, this is an agency relationship.

An agency relationship is created when:

One person — the agent — agrees to represent the interest of another person — the principal — in a specific transaction. For an agency relationship to exist, the principal must delegate responsibility to the agent, and the agent must consent to accept that responsibility.

Generally, in real estate sales, the listing broker (and through the broker, the salesperson) is the agent, and the seller is the principal.

An agency relationship doesn't require:
  • A written contract. Unless your state law specifically states otherwise, no written, or even oral, contract is required to create an agency relationship, although a written contract is always a good idea. However, an agency relationship is consensual, meaning that generally no formalities are required to establish it. In the absence of a written contract, there is a danger that an agency relationship may be implied by the conduct of the parties. Implied agency means that if you act like an agent, you may in fact be creating an agency relationship.
  • Compensation. No compensation — neither money nor any other form of payment— is required to create an agency relationship. At the same time, a person is not necessarily an agent of those paying compensation.

Component 4: Does This Make You an Agent Quiz

This information provides general legal information and should not be relied upon as legal guidance. Before acting, both the relevant laws and legal counsel should be consulted. This information should not be construed as specific legal advice nor as an opinion on particular facts, cases, or situations.


 



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07/29/2014 02:47 AM