Agency
Agency defines the legal relationship between a licensee and the person they represent. This topic covers how agency is created, the fiduciary duties owed, and the different representation options.
Creating Agency and Fiduciary Duties
An agency relationship is usually created by an express agreement (a listing or buyer agreement) and empowers the agent to represent the principal. The agent owes fiduciary duties often summarized as OLD CAR: obedience, loyalty, disclosure, confidentiality, accounting, and reasonable care and diligence. The agent must put the client's interests first and disclose all material facts affecting the transaction.
Types of Agency Relationships
A single agent represents only one party. A subagent works for the principal through the listing broker. Dual agency arises when one broker represents both buyer and seller, creating a conflict that generally requires informed written consent from both parties. Some brokerages use designated agency, assigning different licensees to each side. A non-agent facilitator or transaction broker assists without representing either party as a fiduciary.