5. A. Agency and Non-Agency Relationships
The fiduciary relationship results when one party (principal) gives another party (agent) the authority to act on the principal’s behalf to transact business.
Agency is created by Delegated Authority and Consent to Act.
The most common agency relationships are:
- Buyer’s Agency;
- Seller’s Agency;
- Dual Agency.
Buyer Agent (Specific Agent)
Works with buyers
Seller Agent (Specific Agent)
An agent employed by the Seller.
Dual Agency (Specific Agent)
Works with buyers
Real Estate Broker
Any licensed person, firm, partnership, association, or corporation who, in consideration of valuable compensation or intending to receive such compensation, acts as a special agent for parties in the sale or lease of real estate.
Real Estate Salesperson (Specific Agent)
One who is employed by a real estate broker, usually as an independent contractor.
Associate Broker – Affiliate Broker
A salesperson with a broker’s license.
One working with or representing the buyer or tenant; Cooperates with the listing broker by providing a prospective buyer/tenant for the listed property.
Types of agents
Special Agent (Buyer’s Agent or Seller’s Agent)
One authorized by the principal to perform a narrow or specific task. A listing broker employed to sell one home is a special agent. Opposite of General Agent
General Agent (Property Manager)
A Property Manager. An agent is given a broad scope of authority to handle a variety of things. A property manager is a general agent because of the wide range of activities necessary to rent and maintain it. Opposite of Special Agent.
A non-agent. The closing attorney.
Practice under the law in some states, which the employing broker ‘designates’ a licensee as the exclusive company representative (agent or facilitator/transaction broker) to a seller(s), buyer(s), landlord(s), or tenant(s); This enables another licensee in the firm to be designated to the other side of the transaction without creating dual agency.
Other Brokerage Relationships (non-agents)
A facilitator may assist the Buyer and Seller in the same transaction without creating a dual agency.
Power of Attorney
A written document appointing an “attorney-in-fact” to act independently and with signature authority on behalf of another person in matters specified. It May be either specific (e.g., attend a closing and sign on behalf of a seller) or general (e.g., manage extensive business and personal matters).
General Power of Attorney
Appointment of an attorney-in-fact with signature authority and with wide-ranging discretion in handling the delegated matters in the appointment.
Attorney in Fact
A person named in a written power of attorney document acts on behalf of the person who signs the document. The attorney-in-fact’s authority and responsibilities depend on the specific powers granted in the power of attorney document. An attorney-in-fact is an agent of the principal.
One authorized to act independently (and sign for) another person for either a specific or general-purpose or power. A real estate broker is NOT an attorney-in-fact unless specifically appointed separately from the listing agreement.
Holds Power of Attorney
A Customer is someone you work with. A customer is not represented.