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HISTORY
OF AGENCY
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| The laws of agency vary by state. This is a general
overview. Be sure to check with your agent on the laws for your
state. |
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AGENCY
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| Real
Estate Brokerage began with a seller listing their home with a real estate
broker. Anyone who wished to see that home had to contact the listing
broker. If the house next door was listed with another broker a potential
buyer had to contact that listing broker in order to see or buy that
property. A broker could only show his listings. |
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| To
better serve the buyer-customer, brokers conceived the idea of a multiple
listing service (MLS) where each member broker would share information
about their listings and invited other brokers to sell them. This way they
they would be able to sell any house listed
in the MLS and share in the commission. By virtue of the MLS, both the
buying and selling brokers became agents of the seller. Agency remained
intact. |
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ability to have other brokers show and sell property worked so well that brokers
decided to hire real estate agents to work for them and share in the
commission. Because the real estate agent worked directly for the listing broker, they too became agents of the seller. |
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SUB-AGENCY
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| Sub-agency is where one real estate company represents
the seller and another real estate company represents a buyer without a buyer's
agency agreement. The agent working with the buyer who represents the seller;
thus the term "sub-agency." |
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BUYER
AGENCY
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| Prior
to the formation of Buyer Agency, every person involved in the real estate
process was an agent of the seller and all fiduciary duties were owed
strictly to
the seller. Buyers, feeling that the deck was stacked against them,
started demanding that they have equal representation in the transaction;
therefore, Buyer Agency was formed. Certain fiduciary duties are owed to the buyer under
Buyer Agency. |
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| The
real estate agent must disclose the form of agency that he/she is working
under when scheduling appointments to show property. In some states, if a buyer cannot
decide about agency representation, the appointment is scheduled as a
non-agent or other agent. (see below) |
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| NOTE:
No matter what agency relationship is formed all parties have a right to
full disclosure of all material facts, plus fair and honest treatment. |
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DUAL
AGENCY
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| Dual Agency is not allowed in all states. Dual Agency
means that one office represents two principals in the same real estate
transaction. One agent has the listing agreement with the seller. This
agent or another agent with the same real estate firm has a buyer under a
buyer agency agreement, thus dual agency is formed. The intention of the
various laws is to insure fairness to both parties. Discuss this with your
Realtor to insure that you understand the laws in the state where you are
conducting a real estate transaction. |
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NON-AGENCY
/ OTHER AGENCY
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| A
non-agency or other agency is created when a real estate agent is working
with a buyer that has not made a decision on agency. This buyer is not
entitled to any information about the sellers and should not give any
information to the real estate agent that the buyer would not want the
seller to know. |