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© 2015 OnCourse Learning Texas Real Estate Brokerage and Law of Agency, 6 th Edition
AGENCY DISCLOSURE BUYER AGENCY SINGLE AGENCY DUAL AGENCY © 2015 OnCourse Learning Chapter 9
Agency Relationship Several alternatives to traditional seller agency relationship presently utilized – receiving increased interest and discussion – NAR has even modified its Code of Ethics to allow new forms of representation – Licensees must take a new look at the way they practice real estate particularly residential real estate. © 2015 OnCourse Learning
Disclosure Initial disclosure is still required at first contact with a party – at the time of the first substantive dialogue Substantive dialogue is defined as a meeting or written communication that involves a substantive discussion relating to specific real property © 2015 OnCourse Learning
Disclosure Not Required A licensee is not required to provide this written information if: the proposed transaction for a residential lease is not more than one year and no sale is being considered; or the party is represented by another licensee © 2015 OnCourse Learning
The Next Disclosure The IAB must be given at the time of the licensee’s first contact with: – another party to the transaction or – another licensee who represents another party to the transaction. The disclosure may be oral or in writing. © 2015 OnCourse Learning
Exclusive Buyer/Tenant Agency Buyers and tenants have the same opportunity for representation as the seller/landlord – can freely disclose their needs – ask for and receive information about market conditions, and answers to specific questions – from their agent, who has no conflicting fiduciary duty to the seller © 2015 OnCourse Learning
Commercial Transactions Historically have never involved sub-agency One agent represents the seller/landlord, the other represents the buyer/tenant – The seller/landlord almost always paid the commissions – Courts have ruled that the money going to the buyer/tenant agent, though paid by the seller/landlord, was paid by buyer/tenant © 2015 OnCourse Learning
Residential Transactions Agency Policy of Listing Agents – Agents should be sure sellers understand advantages and disadvantages of dealing with a buyer’s agent – some prepared forms such as the TAR® MLS® forms help Seller and agent should know immediately if showing agent is a buyer agent. © 2015 OnCourse Learning
Initial Interview Many buyer’s brokers use a buyer information checklist for the buyer to sign, acknowledging that the buyer has received all of this information. – A sample buyer interview checklist is shown in Figure 9-2 in the text © 2015 OnCourse Learning
Earning the Commitment A prudent agent should ultimately complete the initial consultation by having the buyer(s) execute a Buyer/Tenant Rep Agreement As a buyer’s broker, different skills are also required. – Go over list on page 173 and 174 of the text © 2015 OnCourse Learning
Buyer’s Agent –Duties of Care- What are They? Duties of care might be the same (performance, accounting, reasonable care, loyalty) but will follow the legal dictates of the buyer – Wyrick v. Tillman & Tillman Realty Inspectors – Let the buyer make the decision as to whom to choose © 2015 OnCourse Learning
Agency Issues Conflict with Buyers Superfluous Contingencies Disclosing Subagency Disclosures to the Principal Compensation Presenting Offers © 2015 OnCourse Learning
Additional Cases Regarding Buyer’s Brokers Lee Hawkins Realty Inc. v. Moss Field v. Century 21 Klowden-Forness Realty Brown v. Roth Wyrick v. Tillman & Tillman Realty Saiz v. Horne © 2015 OnCourse Learning
Single Agency When representing the Buyer – Do not sign an agreement to be a buyer’s representative until the buyer has seen and rejected all of the in-house listings – After the in-house listings have been rejected, you are free to represent the buyer in acquiring other properties © 2015 OnCourse Learning
Single Agency When representing the Seller – Deal with all buyers as customers and retain your status as an agent/ subagent for in-house company listings – Most serious conflicts occur when representing the buyer, since the agent may have to withdraw from the representation © 2015 OnCourse Learning
Dual Agency A broker must agree to act as an intermediary if broker represents a buyer/tenant and a seller/landlord What is the difference between an intermediary who is not appointed to represent the parties and a dual agent? – As a practical matter, they are probably the same © 2015 OnCourse Learning
Duties of Care A dual agent has an unusual (and not well- defined) standard of care – How can you give 100 % of your loyalty to two parties? In dual agency, you place yourself in the position of representing potentially adverse parties, and there are many possible conflicts of interests © 2015 OnCourse Learning
Broker Acting as an Agent for More Than One Party Dismuke v. Edina Realty, Inc Lewis v. Long & Foster Coldwell Banker v. Camelback Office Park Baldasarre v. Butler © 2015 OnCourse Learning
Broker Acting as an Agent for More Than One Party Enright v. Jonassen Harry Brown v. F.S.R. Brokerage, Inc. Bazol v. Rhines © 2015 OnCourse Learning
Conflicts Regarding Sales Contracts How much earnest money? How many contingencies? How many and which addenda should be used? © 2015 OnCourse Learning
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