Agency
Agency defines whom a licensee represents and what duties are owed. This topic covers creation of agency, fiduciary duties, and representation options.
Fiduciary Duties
An agency relationship empowers a licensee to represent a principal and imposes fiduciary duties: obedience, loyalty, disclosure, confidentiality, accounting, and reasonable care (OLD CAR). For example, confidentiality prevents the agent from revealing the lowest price a seller will accept, while disclosure requires sharing material facts with the client. The agent must place the client's interests above the agent's own.
Types of Representation
A single agent represents one party. Dual agency means one broker represents both buyer and seller, a conflict that generally requires informed written consent. Designated agency assigns separate licensees to each side. A non-agent, transaction, or independent relationship provides services without fiduciary representation. Licensees must disclose their relationship so all parties understand who is represented.