Chapter 4 - Agency Positions and Disclosures Flashcards

Chapter 4 - Agency Positions and Disclosures Flashcards Intermediary Relationship in TexasThe Texas Real Estate Commission rules state that the broker can never be appointed to anyone and must always be neutral in an intermediary relationship.Intermediary Without AppointmentsAll of that does not mean that the broker cannot stay involved in a transaction that became an intermediary situation. The broker might be the listing agent and one of the sales agents may have created agency with the buyer.The broker can continue working in the transaction but it would be considered intermediary without appointments.In this situation, both the broker and the sales agent would have to be neutral. And since this is the case, it might be better if the broker would appoint someone else in the office to the seller and leave the buyer's agent appointed to the buyer.Subagency on the Listing SheetThe way that a sales agent knows whether or not the other office (listing broker) is accepting subagents is indicated on the multiple listing sheet. The software you use may differ, but typically, it will have fields that require information to be entered by the listing agent. Search for a field that indicates the subagent commission to find out the brokerage's stance on subagency.For example, if the MLS information sheet says "SC: 0" (Subagent Commission: 0), the brokerage is indicating that they will not share a commission with a subagent.What do you call a person who is representing someone else in a transaction?buyerclientsubagentagent *Agents in real estate aren't quite as cool as the secret agents in spy movies, but they do have the power to represent other people who may be involved in a sale.Substantive CommunicationOnce substantive communication occurs between an agent and a potential client or a third party, the agent must give the person a written statement that outlines Texas agency law (IABS Notice).TRELA indicates that a substantive communication is communication that involves a substantive discussion relating to specific real property.Material Fact in a real estate transaction Is any fact that is significant or essential to the transaction - that is, any piece of information that could reasonably be expected to influence a prudent individual's decisions regarding the transaction.This duty requires the agent to disclose latent or hidden defects in the property that may not be identified by an ordinary inspection but could alter the customer's decision regarding the property.

Can the sales agent act as an agent without a broker.Brokers are the only Texas real estate professionals who can officially enter into an agency relationship with a buyer or seller. Any sales agent involved in a transaction then represents the broker - the sales agent cannot act as an agent without a broker.May a broker who works by themself and has no agents practice an intermediary relationship?The answer is yes, but only as an intermediary without appointments.If that broker has one sales agent, intermediary with appointments cannot take place because the company must have at least two agents for appointments, but the transaction could still be done without appointments. In addition, appointments must also be made before any advice or opinions are given to either party by anyone at the representing brokerage.HIV and AIDS DisclosureA potential buyer may want to be informed about whether the previous or current occupant of a home has AIDS or HIV. This information is private and should not be disclosed.Part of the reason that this topic is not required to

tell to a third party is because:It has nothing to do with the

property.Disclosing that information could be a violation of Fair Housing Laws and the privacy of the person in question.Listing Broker LiabilityAnd it's not just brokers who do not want their sponsored agents acting as subagents; many listing brokers do not want to collaborate with subagents as well.Most listing brokers do not want sales agents from other offices showing their listings as a subagent. The problem is that if the other agent is a subagent, the listing company and the seller are also liable for any mistakes that may be made by that subagent. That's a liability that many listing brokers do not want to risk.Agency Is a Broker-Client RelationshipAgency is always created at the broker level when a sales agent signs an agency agreement on behalf of the broker.Therefore, agency is between the client and the broker, and yet the sales agent is performing the acts necessary in the transaction. It can be said then that the broker represents all of the clients and all of the sales agents represent the broker.What an Intermediary Relationship Isn'tIf the buyer is a customer to someone at the listing company, it is not an intermediary relationship.If the buyer is represented by someone at a different office than the listing company, it is not an intermediary relationship.If the agent at another office is working as a subagent with a buyer, it is not an intermediary relationship.The only way an intermediary transaction can take place is if the broker is representing both the seller and the buyer as clients.

The Third Party- listing agent & buyerIf a listing agent is dealing with a buyer who wants to purchase one of their listed homes, the buyer would be the third party and only the seller would have representation.A client is never a third party to the company that is representing them.The agent works FOR the principal and works WITH (but not for) the third party.The third party negotiates with the principal through the agent. In these negotiations, the agent is obligated to represent the principal's interests. It is not the agent's task to look out for or act on behalf of the third party. The third party should have an agent of their own, whose job it is to act in the third party's best interest.Intermediary relationships!Intermediary relationships occur when the same real estate office is representing both the seller and the buyer as clients in the same transaction. The broker appoints associated license holders to work with both parties.Test Question-Brokerage A charges clients a 6% commission, while Brokerage B charges only 5%. Is this legal? Why or why not?No, 6% is standard across the industry. Undercharging clients creates illegal competition.No, commissions for each county are set by TREC and cannot be negotiated or changed.Yes, brokerages can charge whatever commission they choose. Commissions are negotiable.*Yes, but only if the supervising brokers at the two agencies discussed it beforehand and agreed that it was appropriate.Answer-Commissions vary! There is no set percentage a residential agent "should" earn. This is why it is important to clarify commission ahead of time so all parties are on the same page.In order for a brokerage to be able to represent both the buyer and seller In order for a brokerage to be able to represent both the buyer and seller in a real estate transaction, the brokerage needs to have the permission of BOTH PARTIES.Buyer's Agency on the Listing SheetThe other field will say "BC" (short for "buyer representative commission") followed by a number. The number that goes in that field is a percentage of the sales price that the buyer's broker will receive. For example, if the field said

"BC: 4," when this transaction closes, the company that

brought the buyer-client to the table would receive 4% of the sales price as their commission.That 4% would then be split between the broker and buyer's agent at whatever breakdown the broker and agent have agreed to.Test Question-Jamie is an agent representing a seller. She holds an open house to find a buyer for the home. What is she legally required to do?Verify that none of the buyer agents share a brokerage with herprominently post the asking price of the housedisclose that she represents the homeowner *collect the names of the potential buyers and their agentsAnswerA license holder must disclose orally or in writing to others of their representation of a party to a real estate transaction at the

first contact, including at an open house.As defined in the Texas Real Estate License Act, what is a subagent?A license holder who represents a principal through cooperation with the principal's broker. *A license holder who represents both the buyer and the seller in the