Chapter 7: Types of Agency and Agents in Real Estate Flashcards

Chapter 7: Types of Agency and Agents in Real Estate Flashcards

Facilitators & Transaction Brokeragefacilitator practices transaction brokeragesimply assist both parties in completing the transaction without representing or favoring either party involvedform of non-agencydoes NOT involve an agency relationship nor the fiduciary duties that come with agency relationshipsreferred to as non-agents or transaction brokersfacilitator must put in

writing that:-They are not the customer's agent.-They are

not an advocate on the customer's behalf.-They will only provide limited confidentiality.a facilitator non-agency relationship is the default relationship until there is a written record saying otherwisewhile the licensee is allowed to work with both parties to a transaction, they are NOT allowed to serve as a facilitator to one and an agent to the other The Designated Agentthe licensee designated to represent a single client in a transaction looks out for that client's best interests exclusivelyprincipal broker is saying that the designated agent for this client is the ONLY licensee in the firm with an agency relationship with that clientoperates as though they were a one-person brokerage with one client, treating all other license holders as though they were representing the other principal in the transaction Which form of agency involves an agent enlisting unaffiliated agents to accomplish their client's goal?subagencysingle agencydesignated agencydual agency subagency Which of these would be considered a form of non-agency?dual agencydesignated agencytransaction brokeragesingle agency transaction brokerage Single Agent Duties: Buyer's Agent-Performing the specific duties as outlined in the buyer representation agreement-Seeking a suitable property at a sales price and terms as stated in the agreement or which are acceptable to the buyer-Presenting all written offers and counteroffers in a timely manner-Disclosing all material adverse facts concerning the transaction-Advising the buyer to obtain expert advice on matters beyond the expertise of the buyer's agent-Accounting of all money and property received in a timely manner-Complying with all federal, state, or local laws-Exercising reasonable skill and care-Maintaining buyer confidentiality

The Single Agentpractices single agency-an agency arrangement in which one agent represents one party in a real estate transactionrepresent ONLY one side in a given transactiona popular form of agency because there are very few conflicts of interest or areas of confusioncould represent buyer, seller, landlord, or tenantworks for the client and with the customershould be documented in writing with either a listing agreement or a buyer representation agreement

A license holder operating as a facilitator:does NOT have

an agency relationship or fiduciary duties with either partywill fulfill all fiduciary duties to both parties equallyinspects the property once on behalf of both partiesprovides advice and offers judgement to clients before the transaction closes does NOT have an agency relationship or fiduciary duties with either party The Dual Agentboth the buyer and the seller are represented by the same broker in an in-house real estate transactiontricky, problematic, and even illegal in some states (legal in TN)Both parties are legally required to give informed consent to dual agency because representation is compromised, specifically regarding the fiduciary duties

of:-Full disclosure-Undivided loyalty

The Subagentpractices subagency-arises when an agent enlists the use of other agents to accomplish a client's goala subagent is an agent of an agent Affiliate Broker Aki is operating as a single agent for Buyer-Client Raul. Once Raul expresses interest in a

lakefront condo, Aki can:prohibit all other affiliate brokers

from showing that property to their clientsno longer show other properties to Raulcontinue to show that property to other buyer-clientsno longer show that property to other buyer-clients continue to show that property to other buyer-clients Seller Alonzo and Buyer Trisha are both being represented by the same affiliate broker in their in-house transaction.Landlord Leslie and Tenant Terrance are also in an in-house transaction but are each working with their own separate affiliate brokers who are operating as designated agents.What is true about these two Tennessee real estate transactions?All in-house transaction are handled by dual agents.Only Leslie and Terrance's transaction is being handled by dual agents.Neither transaction is being handled by dual agents.Only Alonzo and Trisha's transaction is being handled by a dual agent.Only Alonzo and Trisha's transaction is being handled by a dual agent.Tennessee Agent TypesSingle agentsDesignated agentsDual agentsSubagentsFacilitators

Why is it rare these days to see cooperating brokers operating as subagents?Brokers don't like being vicariously liable for the actions of unaffiliated license holders.Subagency is more expensive than other forms of agency.Subagency is more complex than other forms of agency because it involves multiple brokerages.Brokers don't like having to pay the higher commission that subagents earn.Brokers don't like being vicariously liable for the actions of unaffiliated license holders.What type of agency is being described wherein one agent represents only one party in a real estate transaction?vicarious agencysingle agencyfiduciary agencydual agency single agency Bob the buyer has an agent. Sally the seller has an agent.Larry the landlord has an agent. Tina the tenant has an agent. The agents for these individuals are different examples of what?subagentsnon-agentsdual agentssingle agents single agents In-House Transactionwhen both principals to a real estate transaction are represented by the same brokeragetwo common

scenarios:-A buyer enters into an agency agreement with a

broker and later decides to look at properties listed with the same brokerage.-A seller enters into an agency agreement with a broker and decides to allow buyers represented by the same brokerage to view their property.EVERY licensee is obligated to try to represent the best interests of BOTH clients in that transaction Although Affiliate Broker Sally brought both the buyer and the seller to the brokerage, Principal Broker Jenny assigned Sally as the designated agent for the seller and assigned a different affiliate broker as the designated agent for the buyer.What is the most likely explanation for Principal Broker Jenny's actions?Jenny likely didn't think Sally could handle more than one client at a time.Jenny wanted to ensure commission would be earned on both sides of the transaction.Jenny was required by law to handle the situation that way.Jenny's brokerage operates under designated agency (as opposed to dual agency) for in-house transactions.Jenny's brokerage operates under designated agency (as opposed to dual agency) for in-house transactions.Single Agent Duties: Seller's Agent-Performing the specific duties as outlined in their listing agreement-Seeking a sales price and terms as stated in the agreement or which are acceptable to the seller-Presenting all written offers and counteroffers in a timely manner-Disclosing all material adverse facts concerning the transaction-Advising the seller to obtain expert advice on matters beyond the expertise of the seller

agent-Accounting of all money and property received in a timely manner-Complying with all federal, state, or local laws-Exercising reasonable skill and care-Maintaining seller confidentiality Facilitator Duties-Handle funds, documents, and other materials-Present all offers and counteroffers-Keep parties informed of progress in the transaction-Assist in closing the transactionexpected

to provide both parties:-Reasonable care and skill-Honesty

and fair dealing-Confidentiality and impartiality-Disclosure of material facts regarding the property