Ch. 6 Representing More Than One Party in a Transaction:

Ch. 6 Representing More Than One Party in a Transaction:

Intermediary Brokerage Flashcards Subagent.A licensee who provides services to a buyer but actually represents the seller.Dual agency.When the same brokerage represents both the seller and the buyer under a written agreement.Under what circumstances will an intermediary relationship take place?If both the buyer and seller are clients Under Section 1031 of the United States Internal Revenue Code, the exchange of certain types of property may defer the recognition of capital gains or losses upon sale and hence defer any capital gains taxes otherwise due.Licensees selling their own property must disclosetheir license status. The licensee should make it clear that they are not acting as an agent for the buyers.What happens to the net sale proceeds from a relinquished property while the taxpayer finds a replacement property?They are paid to the qualifying intermediary to be deposited or invested in a short-term account on behalf of the taxpayer.As part of the many steps in a 1031 exchange, the sale proceeds from the closing on the sale of the relinquished property are paid to the qualified intermediary at closing to be deposited and/or invested in a short-term account on behalf of the taxpayer.Beginning in September of 2005, TRELA no longer permitted brokers to act as common law dual agents. Brokers are now required to act as intermediaries when representing more than one party.There is one restriction to intermediary with appointments.It is about confidentiality. In many cases, neither one of the agents will have information about the seller's lowest selling price or the buyer's highest offer price, but if they do, it must not be shared.The sales person appointed to the buyer cannot tell the buyer how low the seller is willing to go.What is MLS's basic principle?Help me sell my property and I'll help you sell yours.The MLS is based on the simple principle of "Help me sell my property and I'll help you sell yours." MLS allows a real estate broker to establish contractual offers of compensation with other brokers.A specialized real estate transaction usually involvesthree or more parties and a number of party representatives. Often a person involved in a transaction incorrectly assumes that everyone in the transaction knows the role of everyone else.With regard to knowledge of the intermediary relationship, it seems new agents have "book knowledge" and brokers have "application knowledge."Quite often new agents have "book knowledge" and brokers have "application knowledge" of the intermediary relationship.A broker working as an intermediary is required to:treat each party fairly and honestly.

Being too "helpful" to the other side in a transaction is aslippery slope. An agent that is intent on making everything happen may inadvertently cross over the line and take on the role of a dual agent.Another name for a transaction broker is a professional coordinator.Representation of more than one party is not just limited toresidential transactions. The broker should also be familiar with dual agency issues relating to exchanges, syndications, farm sales, and leases of industrial and commercial properties.What is an important component of deciding whether dual agency exists?Agents and brokers are considered the same entity.To better understand the intermediary duties of a broker, we must first review some common law, subagency, and dual agency history.The collective term used to identify these types of transactions is called specialized real estate transaction.Exclusive buyer firm.A brokerage that only represents real estate buyers and never take listings and never represent the seller in a real estate transaction.Law of agency.A set of contractual, quasi-contractual, and fiduciary duties that involve a person, called the agent.The broker will usuallypreappoint salespeople before an intermediary situation arises.Appointing a salesperson is usually done by pre-appointment, whereby the broker pre-appoints any listing agents to the sellers and any buyer's agents to the buyers.If a broker gets the clients' permission and selects an agent to represent the buyer and an agent to represent the seller, that is called intermediary WITH APPOINTMENTSA broker may appoint (with the both parties' permission) one or more agents to represent the seller and one or more agents to represent the buyer. This is known as intermediary with appointments.An intermediary relationship may be a better option forthe broker to follow to maintain fairness and remain honest Specialized real estate transaction.Transaction involving three or more parties and a number of party representatives.Transaction brokers have nofiduciary responsibility towards either party in a transaction.Real estate transactions are heavily based on common law and practices.When two brokers agents from one company represent different parties in a transaction, the broker is considered the intermediary.An Intermediary Relationship Notice form will inform clients that this intermediary relationship is occurring.The benefit of intermediary relationships comes when the broker appoints at least one salesperson to represent the seller and another - or other - salesperson(s) to represent the buyer. This is called intermediary with appointments.Common lawevolves through a series of steps that allow for gradual change.Common law, also known as case law, can be reinterpreted and revised without legislative intervention,

and can evolve through a series of steps that allow for gradual change, thereby reducing disruptive effects.A transaction brokerage is one thatprovides third-party real estate services to buyers and sellers. A transaction broker must remain legally neutral,

but can assist the buyer and the seller in a transaction. The transaction broker might be described as a professional coordinator.Transaction brokers have no fiduciary responsibility towards either party in a transaction.