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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 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: Explanations for Scenarios for Recognizing Breaches of Fiduciary Duty in Agency Relationships Scenario One 1. What did Sally do wrong? Answer: Sally offered compensation to buyer’s agents before she received signed permission from the sellers (in the form of the listing contract). Sally also failed to explain the company’s policy on brokerage relationships with consumers and what it meant to the sellers. 2. What did Frank do wrong? Answer: Frank was a subagent of the seller, since his brokerage company does not permit dual agency or buyer’s representation. He breached his duties to the sellers when he revealed the Smiths’ eagerness to sell to the Elliots and encouraged the Elliots to offer less. In doing so, he also developed an agency relationship with the buyers and therefore, created an undisclosed dual agency, which is illegal. Frank should not have shared information about the sellers with the Elliots. Scenario Two 1. What did Jack do wrong? Answer: Jack did not bring up the possibility of dual agency with Ralph until after he informed Joanie, a buyer’s agent, about the property. The limitations of the fiduciary duties imposed by a dual-agency relationship make it impossible for Jack to negotiate on Ralph’s behalf. 2. What did Joanie do wrong?Answer: She did not recognize the limitations on loyalty imposed by a dual-agency relationship when she disclosed confidential information received from the seller to the buyer. Scenario Three 1. What did George do wrong? Answer: George assumed that because he did not have a buyer’s representation agreement with the Prescotts, he no longer owned them any fiduciary duties. However, he failed to disclose his new status as a seller’s agent for Bill Kipper to the Prescotts. Because of their past relationship with George, the Prescotts might reasonably expect that George was still working on their behalf. Component 12: Other Resources 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. |