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REALTOR® Emeritus |  | Risk management Controlling Transaction Risks | | ||
|  Three Lines of Defense Against Risk Keeping Risks Under Control Controlling Transaction Risks Agency Disclosure Avoiding Antitrust Risks Minimizing Liability from Contracts Fair Housing Risks Controlling Personnel Risks Communications Policies to Minimize Risks Insuring Against Risks More Resources: Controlling Business Risks Code of Ethics: Controlling Business Risks | 3 Potential Agency Conflicts 1. Sellers’ representative works with buyers as customer and provides advice on how much to offer for the home (creates an undisclosed dual agency). 2. A buyer’s representative working as a designated agent learns confidential information at the brokerage office about the sellers’ need to sell rapidly (could create a breach of fiduciary responsibility for the brokerage company if the representative passes on the information to the buyers). 3. Sellers who will not authorize cooperating brokers to function as subagents but want the property listed on the MLS (could create a problem if the cooperating broker wants to show the property but doesn't have an agency relationship with the buyers and the state doesn't permit transaction brokerage). Conflicts in the Field Where do brokers most often encounter confusion or conflicts over agency relationships? Disclosed dual agency. Even though Georgia law permits it, we discourage our associates from using disclosed dual agency relationships. You can’t serve two masters. —Jenny Pruitt, Jenny Pruitt & Associates, Atlanta Procuring cause. Buyer’s agents who come into a transaction late may not understand that they aren't entitled to a commission from the seller if they were not responsible for the bringing the buyer into the transaction. —Lee Finch, RE/MAX Greater Atlanta, Atlanta Cooperating brokers. Associates who bring buyers into the transaction but don’t have a buyer’s agency agreement with them can confuse the consumer, who might not recognize that the associate may not be representing them. —Dick DeWolfe, DeWolfe, Lexington, Mass. Buyer’s agency. Many salespeople are reluctant to have buyers sign an exclusive agreement. The best associates use the agreement as a tool to convince buyers that they are gaining a trusted adviser, but too often the contract never gets signed. —Chip Roach, Prudential Fox & Roach, Devon, Pa. Unrevealed buyer representation. Consumers often fail to alert a salesperson that they are working with a buyer’s representative until late in the transaction; the associate spends time meeting with the buyer and then has no way of being compensated. —Dick Cahill, Jack Conway & Co., Norwell, Mass. Agency Disclosure > | |