The seller accepts this action on the part of the agent and receives rental

The seller accepts this action on the part of the

This preview shows page 60 - 63 out of 361 pages.

agent was extremely risky and unprofessional. The seller accepts this action on the part of the agent, and receives rental income in addition to the sales price. In accepting the rent payment, this seller has ratified the unauthorized action of the agent. Agency coupled with an interest occurs when a license holder is the owner of a property that is being sold, or is interested in buying a property. A license holder must always disclose this dual role. A real estate license holder is obligated to advise a property owner as to the license holder’s opinion of the market value of a property when negotiating a listing or offering to purchase the property for the license holder’s own account as a result of contact made while acting as a real estate agent. If a family or business relationship exists between an agent and a property owner or buyer, this should be disclosed also.
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Copyright © 2017 Champions School of Real Estate ® 61 Chapter 4 Law of Agency and Real Estate Brokerage HOW AGENCY RELATIONSHIPS ARE ESTABLISHED Consider the seller, Seller Mary, who wants to sell a property and decides to list with Broker Bob, who is the owner of Acme Realty. In this example (Figure 4-1), let’s assume that Bob works alone, having no license holders working for him at this time. When Seller Mary listed her property with Broker Bob, a fiduciary relationship was created between Mary and Bob. Bob agreed to market the property according to the terms of the listing agreement, and Mary agreed to cooperate with Bob’s mar- keting efforts and to compensate Bob when the property is sold. The written listing agreement created the special agency relationship. What happens when Broker Bob expands the firm and hires an agent? A general agency relationship is created when a bro- ker hires his first agent. The new agent becomes a general agent of the broker (Fig- ure 4-2). In other words, when you go to work for a real estate firm, you become an agent of your broker. In our next example, Agent Sue is going to get her first listing. The listing will be taken in the name of Broker Bob. Broker Bob will be the owner of the listing, and Sue will be referred to as the listing agent. When Seller Steve signed the listing agreement (Figure 4-3), he became Broker Bob’s client. Agent Sue signed the agreement, but she signed on behalf of Broker Bob. Broker Bob has a fiduciary duty of repre- sentation to Seller Steve. Agent Sue has a duty to represent the interests of Steve as well because she is a general agent of her broker; Sue is representing Broker Bob, and has a duty to all of the clients of the firm. Figure 4-2 Figure 4-1 Your text here Figure 4-3
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Copyright © 2017 Champions School of Real Estate ® 62 Chapter 4 Law of Agency and Real Estate Brokerage What happens when the broker hires more agents to work for the firm? Broker Bob now has two additional agents, Agent Megan and Agent Bill (Figure 4-4). All agents of the firm are representing the broker.
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