Subagency and No Agency Flashcards

Subagency and No Agency Flashcards Here are some major points to remember about

subagency:A subagent is an agent of an agent.A subagent

can be an unaffiliated cooperating broker.Subagency offers are typically communicated to cooperating brokers via the MLS.The subagent owes all the same fiduciary duties to the principal that the principal's representing broker owes.A buyer brought to a real estate transaction by a seller's subagent has no one looking out for their interests.Disclosing the nature of subagency relationships and shifts in the fiduciary duties is especially important in subagency relationships with cooperating brokers. Because relationships shift and change, agents should be extra aware of the conflict and confusion this could cause for their clients.There are no fiduciary duties involved in no agency, but customer-level duties still apply, as always.In a no agency transaction, the facilitator will be expected to

provide:Reasonable care and skillHonesty and fair

dealingConfidentiality and impartialityDisclosure of material facts regarding the property On the other hand, the transaction coordinator is NOT expected to inspect the property on behalf of either party or vouch or verify the accuracy of statements made by either party. This only comes with other kinds of agency.Transaction coordinators will remain fair and impartial, not represent either party either positively or negatively, and they will advise both parties to seek expertise and/or legal representation if they so choose.Compensation can be a bit funky when it comes to cooperating brokers. If cooperating brokers are NOT operating as subagents of a seller, they can still get compensated by the seller for bringing a buyer to the transaction.When subagency involves subagents who are NOT affiliated with each other (cooperating brokers), things get a little complex. For that reason, it is critical that agents disclose agency relationships and obtain informed consent before taking any action.A cooperative sale can involve a cooperating broker with or without the use of subagency.The seller has ultimate control over that decision. When a seller agrees to list their property through a broker, they can stipulate which types of cooperative brokers - subagents or buyer's agents - they are willing to work with.This is usually communicated through an MLS listing.When a cooperating broker responds to such a listing, they should immediately disclose the role they will play.no matter the situation, subagents always owe their principals the same fiduciary duties a "normal" agent would owe that principal.Cooperating brokerage is an agency arrangement in which two unaffiliated brokerages collaborate to achieve a real estate transaction for a specific piece of property.Breck, a broker, works for Casa Brokerage.Breck is the listing agent for Seller Simone.Dillon, a broker, works for Haus Brokerage.Dillon is the buyer's agent for Buyer Janine.Broker Dillon sees Seller Simone's property and just knows Buyer Janine will love it. Broker Dillon (who originally worked with Buyer Janine) enters into a subagency agreement with Broker Breck to help bring Buyer Janine to the transaction and realize the transaction.When Broker Dillon enters into a subagency relationship with Broker Breck, Broker Dillon is now a subagent of Seller Simone, NOT Buyer Janine's agent. Broker Dillon will need to immediately disclose this information to Buyer Janine and ensure he gives Seller Simone all fiduciary duties.

Ministerial actsMinisterial acts are acts that are purely fact-based. They don't require judgment, and they don't provide any counsel, advice, or moral guidance.Ministerial acts for license

holders include:Showing propertiesDisclosing actual facts

about property conditionComparing a property to other properties on the market It makes sense that agents who practice no agency are called transaction coordinators, facilitators, or

intermediaries:They ONLY coordinate or facilitate a

transaction and don't involve those complicated and binding fiduciary duties.They act as ONLY intermediaries between buyers and sellers, landlords and tenants.they fulfill ministerial acts to assist in the completion of the

transaction. So, a transaction coordinator will:Handle funds,

documents, and other materialsPresent all offers and counteroffersKeep parties informed of progress in the transactionAssist in closing the transaction Broker Dillon will likely still feel loyal to Buyer Janine even though his duties have shifted to another party. And Buyer Janine will need to know she is no longer represented.most unaffiliated brokers find each other through their local MLS, or multiple listing service. think of an MLS as a collective internet database that lists an area's available properties.A subagent is an agent of an agentIt is important to note that subagency is legal in Georgia, but it is barely practiced.If a cooperating broker is a subagent of the seller and shows a buyer a property, no one is representing that buyer while both the broker and the subagent (from an unaffiliated brokerage) are representing the seller.The broker or agent working as a subagent is working WITH the buyer, but FOR the seller. This means that the broker or agent represents the seller.Agents need to look out for buyers to make sure they know they are NOT represented.Brokers who enter into subagency agreements with (unaffiliated) cooperating brokers assume vicarious liability for those cooperating broker's actions.There are two ways cooperating brokers can do

this:Operating as a subagent for the other brokerage

involved (rare)Operating as the agent for the other party (common)Most transactions involving two brokerages do so

in the second way described above: two brokerages, each

representing a different party to the transaction.Either way, an unaffiliated broker who brings a buyer to a

listing broker is a cooperating broker:If the broker bringing

the buyer to the transaction is representing the interests of the buyer, that broker is the buyer's agent (and not a subagent of the listing broker or seller).If the broker bringing the buyer to the transaction is representing the interests of the seller, that broker is the seller's subagent (as well as the subagent of the listing broker representing the seller).some brokers will NOT offer subagency opportunities to cooperating brokers in the MLS listings they place for their clients.Some states are moving away from subagency and are doing so to remove potential confusion about who

represents whom in a transaction. This makes sense: it is a

confusing concept both for agents and for clients.That's why it's key to remember, and disclose to clients, that if a cooperating broker accepts an offer of subagency in an MLS listing, any buyer the broker brings to the transaction is NOT represented. States that choose to move away from subagency mandate the use of seller-only and buyer-only agency (that's the single agency we just learned about!). A

broker can represent one party or the other in a transaction, but no subs are allowed.Under this requirement, an MLS listing would only allow cooperating brokers to enter the transaction as buyer's agents, NEVER as subagents to the seller.Subagencya form of agency that arises when an agent enlists the use of other agents to accomplish a client's goal Transaction brokers must disclose their agency relationship, and obtain informed consent to that agency relationship in writing, on their first substantive contact with their soon-to-be-clients (or when they initially become the transaction coordinator, whichever event occurs first).The broker designated to assume liability for the activities flowing from the brokerage involved has a vested interest in making sure that all license holders are competent relative to the specific agency relationship types in which the brokerage chooses to participate.

transaction coordinator, a.k.a. facilitator or intermediarya broker who facilitates a transaction absent of any agency relationship with either party to the contract.The broker has no fiduciary duties for ministerial acts they perform. When this occurs, it is known as no agency.In Georgia, a transaction coordinator is sometimes called a middleman, and the theory of no agency is sometimes called the middleman principle.