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Architecture Guide
Cost vs. Value Report
Good Neighbor Awards
Handouts for Customers
Top 100 Companies
Take a Quiz
30 under 30
Young Professionals
REALTOR® Emeritus |
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 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 Explanation Sheet 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: Activity 3 Scenarios for Recognizing Breaches of Fiduciary Duties in Agency Relationships Read each of the following scenarios to participants. Then ask them to answer the questions that follow the scenario. Scenario One: Sally is a sales associate for Vantage Real Estate, a company that practices only seller representation. Sally makes a listing presentation to Mr. and Mrs. Smith and learns that the Smiths are eager to sell because they have already closed on another house. Before the Smiths sign the listing contract, Sally ask them for and receives permission to make a blanket offer of subagency and buyer’s agency through the MLS. The next day, Sally drops by the Smiths and gets them to sign a listing agreement with Vantage.
Meanwhile, Sally’s friend Frank, who also works for Vantage, shows the Smith’s house to the Elliots. The Elliots are in a hurry to get settled so that their four children can start school in six weeks. They love the house and are prepared to pay full list price to close the deal in a hurry, even though it is more than they wanted to pay. Frank tells the Elliots that they should only offer what they originally planned, since the Smiths need to sell the house and get out from under two mortgage payments. The Elliots offer $10,000 less than the list price, and the Smiths accept. 1. What did Sally do wrong? What should she have done? 2. What did Frank do wrong? What should he have done? Scenario Two Jack and Joanie are both sales associates with Towering Pines Brokerage, a company that practices both seller and buyer representation, with disclosed dual agency for in-house sales. Jack takes a listing for a two-bedroom condominium from Ralph, which he knows will be perfect for Pat, a buyer-client of Joanie’s.
Joanie is delighted when she hears about the condo from Jack and calls Pat immediately. She explains to Pat about Towering Pines’ company policy and how the dual agency relationship would work. Pat agrees to a dual-agency relationship. Joanie calls Jack to express her thanks and say she’d like to show the condo to Pat first thing tomorrow. Jack calls Ralph, explains the company’s policy on dual agency, and gets Ralph’s agreement to a dual agency. However, Ralph gets Jack’s promise that Jack will handle the negotiation if Ralph is out of town. Joanie shows the condo to Pat, who loves the view, but is concerned because the windows look cloudy and may be defective. Joanie tells Pat that when she saw Ralph at the office yesterday, he was complaining to Jack about the fact that condo association may want to replace the windows. Pat makes an offer, but offers a lower price because she’s concerned about the windows. 1. What did Jack do wrong? 2. What did Joanie do wrong? Scenario Three George sells a small starter home to the Prescotts, who are very satisfied with his service. Three years later, they ask George if he will look for another home for them. George finds a new, larger house for the Prescotts, a listing that he has taken from Bill Kipper. Bill asks George how much he thinks the Prescotts will offer. George tells Bill that the Prescotts have just made a killing in the stock market and will probably pay top dollar if they like the house. The Prescotts go with George to see the house, love it, and pay Bill’s full asking price.
What did George do wrong? Component 11: Explanations of Scenarios for Recognizing Breaches of Fiduciary Duty 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. |