4 Selling Agent:
By legal definition, selling agent includes the following four types of broker relationships with buyers:
The 1. seller’s listing broker, when acting as the seller’s exclusive agent, has direct contact with the buyer and no broker is acting on behalf of the buyer as the buyer’s representative. [See Figures 2 and 4] Another broker2. collaborating with the seller’s listing broker on behalf of the seller to locate a buyer, acting not as an employee of the listing broker but independently as a subagent of the seller. [See Figure 5] 3. Brokers locating property on behalf of a buyer, often referred to as fee-splitting (cooperating) brokers. [See Figure 3] Brokers locating buyers4. for an unlisted property, a For Sale by Owner (FSBO) situation where the seller will not employ the broker and the broker does not represent the buyer. [CC §2079.13(n)] |
Conflict of Interest
It is at the moment the conflict arises that it must be disclosed no later than the time the purchase agreement is prepared and submitted.
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Agent of Client = Broker only
For example, by statutory definition, an agent retained by a client is always a broker, usually represented through the efforts of licensed sales agents employed by the broker. However, in the jargon of the real estate industry, a sales agent employed by the broker is always called an “agent.” In practice, a licensed broker never refers to himself or other brokers as an agent.
By statute, the agent employed by a broker is defined as an associate licensee — an agent of the agent, not an agent of the client. Yet, sales agents semantically identify themselves on their business cards as a “broker associate.” [CC §2079.13(a), 2079.13(b)] |
Contract / conduct = Create agency
The mere membership of a buyer’s broker in a multiple listing service (MLS) never creates a dual agency or subagency relationship with any seller whose property is listed for sale with other brokers in the MLS.
Agency, whatever the type, is created either by contract or by the conduct of each broker (and his agents) when interacting with a buyer or seller, not by trade memberships or the seller’s payment of the broker fee. [CC §2307] |
SubagencyFor example, the words real estate agent, as used in the brokerage industry, mean a real estate salesperson employed by and representing a real estate broker. Interestingly, real estate salespeople rarely refer to themselves as sales agents. Instead, they call themselves “realtors” or “broker associates.”
Legally, however, a client’s real estate agent is defined as a real estate broker who undertakes representation of a client in a real estate transaction. A salesperson is legally an agent of the agent. The word “subagency” suffers from even greater contrasts. Subagency serves both as: jargon for fee-splitting agreements between Multiple Listing Service (MLS) member brokers in ••some areas of the state; and a legal principle for the authorization given to one broker by another (listing) broker to also act as ••an agent on behalf of the listing broker’s seller. |
Refusal Need to be Documentated
Documenting a refusal to sign
On occasion, a seller may accept a purchase agreement offer or enter into a counteroffer without signing an Agency Law Disclosure form as requested. If the seller should refuse to return a signed copy of the Agency Law Disclosure, the broker or his agent must document the refusal to preserve his right to receive a fee from the seller. [CC §2079.15] |