1. Creation of Agency Relationship

2. Creation of Agency Relationship
Express authority
Written agreement (more common) or verbal agreement between salesperson/broker created immediately once conveyed or executed (signed)
Brokerage must prove that contract existed to receive commission, if the buyer or seller refuses to pay commission and they sue for damages
Written agreement – SRA or BRA is signed
Oral agreement – Buyer/seller allows salesperson to show property and represent their interest verbally without signing a contract

3. Creation of Agency Relationship
Implied authority
Implied authority results from an agency relationship that is deemed to exist based on facts and circumstances
This kind of agency is not written or conveyed orally
For instance, if you treat a customer like a client by negotiating with other clients/customers on their behalf, courts may infer that an agency relationship exists (based on facts and circumstances)
It is advisable to reduce agency agreements to writing instead of having courts or a Governing Body imply the relationship

4. Creation of Agency Relationship
Ratification
This kind of agency is created if the agent acts without authority or has exceeded authority granted to them and the principal (customer/client) agrees to be bound by the acts of the agent
For example, a salesperson shows a property without authority. Following this, he drafts offer and negotiates on behalf of the seller with the buyer’s representative. The seller, who had no intention of selling the property, signs the Agreement of Purchase and Sale, thereby ratifying the agency relationship

5. Creation of Agency Relationship
Estoppel conduct
This relationship arises if the principal acts in a manner such that the third party is led to believe that the agent has authority to act on behalf of the principal
For example, the seller tells the buyer that a broker is acting for him, and has the authority to sign an Agreement of Purchase and Sale with the buyer on behalf of the seller. In actuality, the broker and seller have no agency agreement. If the buyer enters into an agreement with the broker based on the seller’s representation, the seller will be ESTOPPED (prevented) from stating that the broker did not have authority to do the same

6. Creation of Agency Relationship
By operation of law
This agency relationship is created through necessity
Agencies by operation of law are created when an emergency occurs
Unlikely in real estate situations
For example, an person may face a situation where they have to save someone’s property in their absence and are unable to contact them. They may become an agent by operation of law and take immediate action necessary to save the property